HARRISBURG – United States Attorney David J. Freed for the Middle District of Pennsylvania, Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and Acting Assistant Attorney General Jeffrey H. Wood of the Justice Department’s Environment and Natural Resources Division announce that 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.
According to the superseding indictment, Ben Wootton, age 52, of Pennsylvania, and Race Miner, age 48, 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 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.
U.S. Attorney Freed, Principal Deputy Assistant Attorney General Zuckerman, and Acting Assistant Attorney General Wood, 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 Stewart of the Justice Department’s Environmental and Natural Resources Division, Environmental Crimes Section, who are prosecuting the case.
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Perry Santillo, age 39, of Rochester, New York, pleaded guilty on November 4, 2019, to mail fraud.
According to United States Attorney David J. Freed, Santillo admitted to defrauding investors around the country as part of a Ponzi scheme that included victims in the Middle District of Pennsylvania. Santillo admitted as part of his plea that the scheme took in approximately $115 million in fraudulent investments, and resulted in a total loss to investors of $70.7 million.
Perry Santillo was a founder, member, manager, and CEO of First Nationle Solution, LLC. Santillo offered and sold securities in First Nationle, Percipience Global Corporation, United RL Capital Services LLC, and other issuers to investors. Santillo also provided investment advice to those same investors.
In fact, First Nationle, Percipience Global and United RL did not conduct their purported businesses. Rather, Santillo and others working with him operated each business primarily as a Ponzi scheme by issuing securities in the form of promissory notes, soliciting and then misappropriating substantial amounts of investor funds, and using some remaining investor funds to pay off redeeming investors.
As part of the scheme, Santillo and others travelled the country and bought books of business from investment professionals such as registered representatives and investment advisors.
In the Middle District of Pennsylvania, Santillo and those who aided and abetted him purchased a book of business from an investment advisor and conducted their fraud scheme under the guise of an “investment business” located in Scotrun, Monroe County, using various business names, including Advice and Life Group, Poconos Investments, First American Securities, and Financial Planners Group of America.
Santillo, with the help of others, then solicited investors from within those acquired books of business to withdraw money from traditional investments such as annuities, and reinvest the funds in issuers controlled by Santillo and others, including First Nationle, Percipience, and United RL, sometimes without disclosing that Santillo and his confederates controlled those issuers.
Through offering documents, company websites, and in-person pitches, Santillo and his confederates falsely indicated that investments would be used to fund legitimate businesses. However, rather than use investors’ funds for purported legitimate business purposes, Santillo and his confederates misappropriated vast amounts of the funds for their personal use and used some of the funds to pay redeeming investors to perpetuate the Ponzi scheme.
Santillo and his associates also misrepresented the ongoing performance – or lack thereof – of investors’ investments. Santillo and others provided account statements to investors falsely stating that investor funds were invested, falsely stating investment returns, and in some cases falsely stating that a bonus had been credited to investor accounts. In certain instances, Santillo and others provided investors with bonus funds or interest payments, and in other cases Santillo and others provided redeeming investors with all or part of their funds, at times with returns. These were Ponzi payments derived from new investor funds rather than actual investment returns. In other cases, Santillo and others failed to fulfill the requests of investors to redeem their investments.
Among the victim investors defrauded in the Middle District of Pennsylvania was an individual with the initials “JP.” Victim JP first invested $159,000 in First Nationle in September 2015, and invested another $380,000 in June 2016. In 2017, JP also invested twice in United RL, the first an investment of $20,000 and the second $52,000. Santillo and confederates also induced JP to invest $325,000 in a third fraudulent issuer. JP was repaid only $15,000, and was defrauded of the remainder of the $936,000 total investment. The specific charge in the information to which Santillo pled guilty related to a mailing sent in relation to the fraudulent investments JP was sold by Santillo and his confederates.
“As he did in districts throughout the country, Perry Santillo came to the Middle District of Pennsylvania and purchased a business from a trusted investment advisor for the sole purpose of finding new victims to exploit,” said U.S. Attorney Freed. “This massive nationwide fraud was committed for one simple reason – to enrich Santillo and his confederates. This was a scam from day one, and Santillo and the others knew it. Thankfully, federal law enforcement was on the case. I want to particularly thank my friend and colleague U.S. Attorney J.P. Kennedy and his team for their hard work on this case and commend all of the federal agencies involved for their industry and cooperative efforts.”
Santillo had previously pled guilty in the Western District of New York to a three-count information in a related case in October 2019. The investigation is continuing in the Middle District of Pennsylvania, as well as, the Western District of New York with respect to others who may have participated in the scheme.
The case was investigated by the U.S. Federal Bureau of Investigations; the Securities and Exchange Commission; United States Postal Inspection Service; the Internal Revenue Service, Criminal Investigation Division; the U.S. Department of Labor, Office of Inspector General, Office of Investigations – Labor Racketeering and Fraud; the New York State Department of Financial Services; and the Harrisburg Police Department. Assistant U.S. Attorney Sean A. Camoni in Scranton, and Assistant United States Attorney John Field in Rochester are prosecuting the case.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for this offense is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr., of the Western District of New York, together with David J. Freed, U.S. Attorney for the Middle District of Pennsylvania, announced today that Perry Santillo, 39, of Rochester, NY, pleaded guilty, before Chief U.S. District Judge Frank P. Geraci, Jr. for the Western District of New York, to conspiracy to commit mail fraud, mail fraud, and conspiracy to launder money. The charges carry a maximum penalty of 20 years in prison and a $1,000,000 fine. As part of his plea in the Western District of New York, Santillo has also agreed to plead guilty to a mail fraud charge, which is also relating to his Ponzi scheme activities, that is currently pending against him in the Middle District of Pennsylvania. That charge carries a maximum penalty of 20 years and a $500,000 fine.
Assistant U.S. Attorney John J. Field, who is handling the case in the Western District of New York, and Assistant U.S. Attorney Sean A. Camoni, who is handling the case in the Middle District of Pennsylvania, stated that between January 2008 and June 2018, the defendant conspired with an individual identified as C.P., and others, to obtain money through an investment fraud commonly known as a Ponzi scheme. Specifically, in 2007, Santillo and C.P., as equal partners, formed a business known as Lucian Development in Rochester. Prior to approximately July 2007, Lucian Development raised millions of dollars from investors in Rochester, and elsewhere, by soliciting investments for City Capital Corporation, a business operated by Ephren Taylor. In July 2007, Santillo and C.P. were advised by Ephren Taylor that their investors’ money had been lost. In response, in August 2007, Santillo and C.P. agreed to acquire the assets and debts of City Capital Corporation. The acquisition proved financially ruinous, with the amount of the acquired debt far exceeding the value of the acquired assets. Taylor was later prosecuted and convicted of operating a Ponzi scheme.
Subsequently, Santillo and C.P. chose not to disclose the truth to investors that their money, entrusted to Lucian Development for investment in City Capital Corporation, was gone. Instead, the defendant and C.P. continued to solicit ever-increasing amounts of money from new investors in an unsuccessful attempt to recoup the losses. In order to find potential investors to solicit and defraud, Santillo and C.P. purchased businesses from established investment advisors or brokers who were looking to exit their businesses. Between approximately 2008 and September 2017, Santillo and C.P., using money obtained from prior investors, purchased the businesses of at least 15 investment advisors or brokers, located in Tennessee, Ohio, Minnesota, Nevada, California (5 businesses), Florida, South Carolina (2 businesses), Texas, Pennsylvania, Maryland, and Indiana.
The investment offerings pitched by Santillo and C.P. consisted principally of unsecured promissory notes and preferred stock issued by various entities controlled by Santillo and C.P. Potential investors were offered an apparent array of investment options to create the illusion of a diversified investment portfolio. Those investment options included products issued by purported issuers such as First Nationle Solutions (FNS), Percipience Global Corporation, United RL Capital Services, Boyles America, Middlebury Development Corporation, and NexMedical Solutions, among others. None of these issuers had substantial bona fide business operations or used investor money in the manner and for the purposes represented to investors. To the extent that an issuer may have had some minor legitimate business activities, it was not profitable and insufficient revenues were generated to pay investors any returns (let alone return the principal amounts of their investments). Santillo, and others, sold fraudulent investments from these issuers to investors who were told that the money received would be used to conduct the purported business of each respective issuer. In fact, however, such issuers were the defendant’s various Ponzi schemes. Santillo, and others working with him, fraudulently induced investors to invest at least $46,000,000 in the First Nationle offering since February 2012, $22,000,000 in the Percipience offering since July 2012, and $25,000,000 in the United RL offering since March 2015.
Over the years, to keep the Ponzi scheme from being detected, a substantial portion of incoming new investor monies were depleted by making promised interest and other payments to earlier investors. Most of the rest of incoming investor money was used by Santillo, C.P. and other co-conspirators: to finance lavish lifestyles of the conspirators, their families and associates; to expand the scheme by purchasing investment advisor/brokerage businesses to obtain access to fresh investors; and to pay operating expenses – salaries for a sales force and administrative staff, office rents and related expenses, housing for employees, and interest on loans—all of which were used to keep the scheme going and maintain a façade of legitimate business operations.
Very little investor money was deployed in productive investments, and when so deployed, the investments yielded meager income and were not profitable, or failed altogether. The Ponzi scheme was headquartered and based out of locations in Rochester, with a number of satellite offices around the country. Administrative and banking functions were largely performed out of Rochester. The conspiracy employed a variety of sales people, including Santillo and C.P., who traveled around the country to meet with and solicit new investors. In the Middle District of Pennsylvania, Santillo, and others, conducted their fraud scheme under the guise of an investment business located in Scotrun, Monroe County, using various business names, including Advice and Life Group, Poconos Investments, First American Securities, and Financial Planners Group of America.
Between January 2012 and June 19, 2018, Santillo and C.P. obtained at least $115.5 million from approximately 1000 investors. By the time the scheme collapsed in late-2017/early 2018, Santillo and C.P., doing business through an array of corporate entities, had returned approximately $44.8 million to investors as part of their scheme, but continued to owe investors approximately $70.7 million in principal.
Among the Rochester/Pennsylvania victims area victims of the Ponzi scheme were the following:
A resident of Webster, NY with a total asset value of $94,341.89 with a fictitious company known as First Nationle Solutions (FNS), which, as of December 31, 2017, was worthless or close to worthless, and
A resident of Victor, NY and his wife invested approximately $221,758.67 with FNS and Middlebury Development. The couple received three payments of $2500 but lost approximately $214,258.67.
Since May 2015, Santillo and others fraudulently raised at least $3,000,000 from approximately 30 investors in Pennsylvania, including the MDPA.
Santillo and C.P. controlled hundreds of different business bank accounts opened under numerous different business names at various financial institutions, including but not limited to Bank of America, Citizens Bank, Genesee Regional Bank and ESL Federal Credit Union. Santillo and C.P. directed and authorized the transactions that occurred in the accounts, including deposits, withdrawals, check writing and funds transfers. The various bank accounts were used to transfer money from one account to another. Incoming investor money was routinely transferred through several accounts before the funds were finally spent on whatever purpose Santillo and/or C.P. authorized. By moving investors funds through various accounts in various entity names, Santillo and C.P. were able to, conceal and obscure the fact that new investor money was being used to repay earlier investors, finance the operations of the Ponzi scheme, and fund their lifestyles.
“Today’s announcement reaffirms the shared commitment that United States Attorney’s Office’s across the country have to discovering those who hide behind deceptive fraud schemes in an effort to bilk investors out of their hard earned money and savings,” noted U.S. Attorney Kennedy. “This investigation and these pleas should make clear to fraudsters everywhere that you cannot hide and that we will work together across jurisdictions to find you and to bring you to justice.”
“As he did in districts throughout the country, Perry Santillo came to the Middle District of Pennsylvania and purchased a business from a trusted investment advisor for the sole purpose of finding new victims to exploit,” said U.S. Attorney Freed. “This massive nationwide fraud was committed for one simple reason – to enrich Santillo and his confederates. This was a scam from day one, and Santillo and the others knew it. Thankfully, federal law enforcement was on the case. I want to particularly thank my friend and colleague U.S. Attorney J.P. Kennedy and his team for their hard work on this case and commend all of the federal agencies involved for their industry and cooperative efforts.”
“The United States Postal Inspection Service is committed to protecting consumers from falling victim to fraud, including illegitimate investment schemes,” stated Postal Inspector-in-Charge Joseph W. Cronin. “Along with our law enforcement counterparts, Postal Inspectors will always pursue individuals who utilize the US Mail to steal the hard earned money of our customers through false and misleading representations."
“Greed fueled Perry Santillo’s crimes and became the common thread throughout this investigation,” said Gary Loeffert, Special Agent-in-charge of the FBI Buffalo Office. “Everyone touched by his greed will forever feel the painful consequences. Santillo’s plea serves as a teachable moment for those criminals who believe they can stay ahead of their Ponzi schemes.”
“Defendants like Perry Santillo lure innocent investors by taking full advantage of their trust and hopes for a better financial future,” said Michael T. Harpster, Special Agent- in-Charge of the FBI’s Philadelphia Division. “As victims envision their nest eggs growing, these scammers are diverting, even pocketing, that hard-earned money. The FBI and our law enforcement partners will continue to bring such financial fraud to light, and its perpetrators to justice.”
IRS-CI Special Agent in Charge Jonathan D. Larsen said, “Tracing the complex flow of money between hundreds of bank accounts is vital in unraveling a Ponzi scheme such as the one perpetrated by Mr. Santillo, and we are proud of the excellence displayed by our team. The collaboration and partnership of our skilled financial investigators and prosecutors provides a formidable adversary in the fight for victims as seen in this case.”
“Perry Santillo, Jr., conspired with his co-defendants by engaging in a Ponzi scheme that swindled unwitting investors out of tens of millions of dollars in retirement savings. The investors liquidated their retirement accounts to invest with companies Santillo and his-co-conspirators operated. We will continue to work with our law enforcement partners to protect the integrity of employee benefit plans,” said Michael C. Mikulka, Special Agent-in-Charge, New York Region, U.S. Department of Labor Office of Inspector General.
“The alleged acts by the perpetrator endangered the financial security of hard-working, innocent New Yorkers and their families,” said Superintendent of Financial Services Linda A. Lacewell. “Anyone who commits insurance fraud by definition is acting against the interest of consumers. I commend the investigative work by DFS in coordination with fellow law enforcement agencies for apprehending the suspect.”
The plea is the result of an investigation by the United States Postal Inspection Service, under the direction of Inspector-in-Charge Joseph W. Cronin of the Boston Division; the Federal Bureau of Investigation, Buffalo Division, under the direction of Special Agent-in-Charge Gary Loeffert, and FBI Scranton Division; the Internal Revenue Service, Criminal Investigation Division, under the direction of Jonathan D. Larsen, Special Agent-in-Charge; the U.S. Department of Labor, Office of Inspector General, Office of Investigations – Labor Racketeering and Fraud, under the direction of Michael C. Mikulka, Special Agent-in-Charge, New York Region, the New York State Department of Financial Services, under the direction of Superintendent Linda A. Lacewell; and the Securities and Exchange Commission.
Sentencing in the Western District of New York is scheduled for March 6, 2020, before Chief Judge Geraci. The arraignment date in the Middle District of Pennsylvania has not yet been set.
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY
Description: The code of the federal judicial circuit where the case was located
Format: A2
Description: The code of the federal judicial district where the case was located
Format: A2
Description: The code of the district office where the case was located
Format: A2
Description: Docket number assigned by the district to the case
Format: A7
Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3
Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3
Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5
Description: Case type associated with the current defendant record
Format: A2
Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18
Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15
Description: The status of the defendant as assigned by the AOUSC
Format: A2
Description: A code indicating the fugitive status of a defendant
Format: A1
Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD
Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD
Description: The date when a case was first docketed in the district court
Format: YYYYMMDD
Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD
Description: A code used to identify the nature of the proceeding
Format: N2
Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD
Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2
Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE1
Format: N2
Description: The four digit AO offense code associated with FTITLE1
Format: A4
Description: The four digit D2 offense code associated with FTITLE1
Format: A4
Description: A code indicating the severity associated with FTITLE1
Format: A3
Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5
Description: The date of the last action taken on the record
Format: YYYYMMDD
Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD
Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD
Description: The date upon which the case was closed
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Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8
Description: A count of defendants filed including inter-district transfers
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Description: A count of defendants filed excluding inter-district transfers
Format: N1
Description: A count of original proceedings commenced
Format: N1
Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants terminated including interdistrict transfers
Format: N1
Description: A count of defendants terminated excluding interdistrict transfers
Format: N1
Description: A count of original proceedings terminated
Format: N1
Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1
Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1
Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10
Description: A sequential number indicating the iteration of the defendant record
Format: N2
Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD
Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
WASHINGTON – Moises Humberto Rivera-Luna, also known as Viejo Santos, 55, an alleged international leader of the violent MS-13 drug gang, made an initial appearance today in U.S. District Court following his extradition from Guatemala to the United States to face a racketeering charge connected to at least one murder. U.S. District Court Judge Royce Lamberth ordered Rivera-Luna held without bond. The extradition was announced today by U.S. Attorney Edward R. Martin, Jr., Supervisory Official Antoinette T. Bacon of the Justice Department’s Criminal Division, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations Acting Special Agent in Charge Christopher Heck of the Washington Field Office, and Chief Pamela Smith of the Metropolitan Police Department (MPD).Rivera-Luna is one of seven defendants charged in a fourth superseding, nine-count indictment, which was returned on May 3, 2013 alleging a racketeering conspiracy, murder in aid of racketeering, kidnapping in aid of racketeering, assault with a deadly weapon in aid of racketeering and other offenses. Rivera-Luna is charged only with committing racketeering conspiracy. The government alleges that Rivera-Luna, while incarcerated in El Salvador, supervised operations of MS-13 cliques in the Washington, D.C. area. Upon release, he traveled to Guatemala where he was subject to extradition. “The decade-long pursuit of this alleged violent gang member illustrates our office’s resolve to remain focused and bring to justice those who violate the law no matter where they are, no matter how long it takes,” said U.S. Attorney Edward R. Martin, Jr. “Keeping Americans safe from transnational criminal gangs is one of the Department’s top priorities,” said Supervisory Official Bacon. “This defendant’s appearance in federal court in Washington today demonstrates our relentless commitment to seeking justice for victims, no matter how long it takes. Thanks to the incredible work by our federal prosecutors and law enforcement partners, we are one step closer to bringing closure for the many victims of this defendant’s alleged brutal violence.” “Moise Humberto Rivera-Luna will have his day in court, but he stands accused of very serious crimes. His alleged criminal activity combined with his leadership of the MS-13 transnational criminal organization, makes Rivera-Luna a significant threat to the safety of the American people,” said Acting Special Agent in Charge Christopher Heck. “We are grateful for the strong relationships we enjoy with our local, state, federal and international law enforcement partners. Without their cooperation, none of this would be possible. ICE HSI Washington, D.C. will continue to work relentlessly and exhaust all resources to investigate and apprehend anyone who presents a threat to national security or the residents of our communities.” The indictment alleges that MS-13 engages in racketeering activity to include murder, narcotics distribution, extortion, robberies, obstruction of justice and other crimes. The indictment specifically states that some of the defendants allegedly participated in assaults against persons they believed to be rival gang members, made threats against persons they believed to be cooperating with law enforcement, and carried out extortions. The range of criminal activity alleged in the indictment includes acts committed in the District of Columbia, Maryland, Virginia and other states. The indictment alleges that there was frequent contact between MS-13 members in the Washington, D.C.-metropolitan area and El Salvador, and that persons incarcerated in El Salvador encouraged or ordered assaults and murders. Rivera-Luna is alleged to be an international leader of MS-13 who was sending orders and advice to an MS-13 clique operating in the Washington area, via cellular telephone calls from his prison cell in El Salvador. The indictment alleges that he and another MS-13 leader, Marvin Geovanny Monterrosa-Larios, also incarcerated in El Salvador, directed that a coalition of MS-13 cliques be formed in the Washington area. They advised local clique members that the coalition’s aim was to seek and kill MS-13 members who were found to be cooperating with law enforcement officials. Among other allegations, the indictment charges Rivera-Luna with ordering the murder of Louis Alberto Membreno-Zelaya, 27. Membreno-Zelaya was found stabbed to death on Nov. 6, 2008, near 11th Street and Otis Place, in Northwest Washington, D.C. The indictment also alleges that Rivera-Luna authorized the murder of Felipe Enriquez, 25, whose body was found on March 31, 2010, in Montgomery County, MD. This case is being prosecuted by Trial Attorney Lakeita F. Rox-Love of the Criminal Division’s Violent Crime and Racketeering Section (VCRS) and Assistant U.S. Attorney Nihar Mohanty of the Violence Reduction and Trafficking Offenses (VRTO) Section of the U.S. Attorney’s Office for the District of Columbia. The case is being investigated by the Immigration and Customs Enforcement Homeland Security Investigations Washington Field Office and the Metropolitan Police Department (MPD). The Justice Department’s Office of International Affairs provided significant assistance in securing the extradition of Rivera-Luna from Guatemala. Assistance was provided by the Montgomery County and the Prince George’s County, MD. Police Departments, the State’s Attorney’s Office for Montgomery County, MD., the U.S. Attorney’s Office for the District of Maryland, and the U.S. Attorney’s Office for the Eastern District of Virginia. The prosecution grew out of the efforts of the federal Organized Crime Drug Enforcement Task Force, a multi-agency team that conducts comprehensive, multi-level attacks on major drug trafficking and money laundering organizations. The principal mission of the nationwide program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply. An indictment is merely an allegation and is not evidence of guilt. Every defendant is presumed innocent until, and unless, proven guilty in a court of law.
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that on May 26, 2021, Herman Cabral, age 62, of Cranston, Rhode Island, was sentenced to 10 months’ imprisonment and three years of supervised release by United States District Court Judge Malachy E. Mannion for a wire fraud conspiracy offense.
According to Acting United States Attorney Bruce D. Brandler, Cabral was convicted of processing false invoices for nonexistent automobile repairs through his Providence, Rhode Island automobile repair shop, A Plus Collision Center. Cabral pleaded guilty on July 23, 2019, to causing between $150,000 and $250,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company. Judge Mannion also ordered Cabral to pay restitution of $211,644.03 to the victim of his crime.
Three of Cabral’s coconspirators were convicted and are awaiting sentencing:
Brian Larry, age 59, of Clark’s Summit, Pennsylvania, was convicted on May 10, 2021, following a jury trial, of mail fraud, wire fraud, aggravated identity theft, and false statement offenses. Larry was convicted of defrauding his former employer, the Wilkes-Barre based automobile warranty company, from approximately January 2014 through October 2018. Larry also was convicted of stealing the personal information of warranty policy owners and providing it to his coconspirators, who created false invoices for nonexistent automobile repair work supposedly performed at various garages in Rhode Island, Massachusetts, and Pennsylvania, including by forging the policy owners’ signatures on the paperwork. The false and forged documentation was then sent to the warranty company, where Larry approved payment of the invoices. During the course of the scheme, Larry and his coconspirators obtained approximately $400,000 paid out by the warranty company pursuant to the false invoices, including thousands of dollars in repair work for Larry’s personal vehicle that he charged to other policy owners. The evidence at trial showed that Larry then falsified internal warranty company documents in an attempt to conceal his crimes.
Matthew Gershkoff, age 64, of North Providence, Rhode Island, pleaded guilty to conspiring to commit wire fraud, and to aggravated identity theft, and is awaiting sentencing. Gershkoff was convicted of preparing false invoices for nonexistent automobile repairs at multiple automobile repair shops located in Rhode Island and in Massachusetts, and for forging policy owners’ signatures. Gershkoff pleaded guilty on May 18, 2020, to causing between $250,000 and $550,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and has agreed to repay restitution.
Jason Pannone, age 39, of North Providence, Rhode Island, pleaded guilty to conspiring to commit wire fraud and mail fraud, and to aggravated identity theft, and is awaiting sentencing. Pannone was convicted of processing false invoices for nonexistent automobile repairs through his Providence, Rhode Island automobile detailing shop, Platinum Auto Services, and through a North Attleboro, Massachusetts automobile repair shop, Ultra Auto Services. Pannone pleaded guilty on March 23, 2021, to causing between $150,000 and $250,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and he has agreed to repay over $128,000 in restitution.
The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorneys Phillip J. Caraballo and Jeffrey St John prosecuted the case.
HARRISBURG – Two biofuel company owners were sentenced to prison for conspiracy and making false statements to the U.S. Environmental Protection Agency (EPA) and conspiracy to defraud the IRS and preparing a false tax claim announced U.S. Attorney David J. Freed for the Middle District of Pennsylvania, Principal Deputy Assistant Attorney General Jonathan D. Brightbill of the Justice Department’s Environment and Natural Resources Division, Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, Jessica Taylor, Director of the EPA’s Criminal Enforcement Program, Chief Jim Lee, IRS Criminal Investigation, and Special Agent in Charge Michael J. Driscoll of the FBI's Philadelphia Field Office.
On October 20, 2020, U.S. District Judge John E. Jones III sentenced Ben Wootton, 55 of Savannah, Georgia, to 70 months and Race Miner, 51, of Marco Island, Florida, to 66 months, after a jury convicted both defendants and their company, Keystone Biofuels Inc. (Keystone), in April 2019. The company was originally located in Shiremanstown, Pennsylvania, and later in Camp Hill, Pennsylvania. Miner was the founder and chief executive officer of Keystone. Wootton was president of Keystone, and a former member of the National Biodiesel Board. The court ordered both men to pay restitution of $4,149,383.41 to the IRS and restitution of $5,076,376.07 to the Pennsylvania Department of Environmental Protection. Wootton and Miner will also have to serve a three-year term of supervised release after their term of imprisonment. Keystone was sentenced to five years’ probation and ordered to pay restitution of $4,149,383.41 to the IRS and restitution of $5,076,376.07 to the Pennsylvania Department of Environment Protection criminal fine.
“The EPA and IRS renewable fuels incentive programs are important components of the Congressional program to increase the use of biofuels to benefit the environment,” said Principal Deputy Assistant Attorney General Jonathan D. Brightbill of the Justice Department’s Environment and Natural Resources Division. “Today’s sentences are a strong reminder that the federal government will not allow supposed “green” conmen to illegally take advantage of federal and state programs that are meant to offer financial incentives to enhance the environment and energy sustainability.”
“The complex fraud perpetrated by the defendants in this case struck directly at the heart of a government program that was specifically created to benefit the environment, business owners and the community at large,” said U.S. Attorney David J. Freed of the Middle District of Pennsylvania. “Encouraging companies to develop and provide for sale clean renewable fuels is truly a win-win proposition for everyone. Unfortunately, the defendants used this program to benefit only themselves. Today’s sentences send a clear message that my office, our federal partners and the United States Department of Justice will not tolerate renewable fuels fraud and related offenses.”
“The defendants defrauded the IRS and sought to profit from a system intended to protect the environment,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. “The Tax Division will continue to aggressively investigate and prosecute with our partners such tax crimes.”
“Today’s sentencing demonstrates there are real penalties for those defrauding the Renewable Fuel Standard (RFS) program,” said Jessica Taylor, Director of the EPA’s criminal enforcement program. “With this action EPA and its enforcement partners are continuing to protect both the integrity of the RINs program and the American taxpayer.”
“Wootton and Miner actively engaged in a multimillion-dollar scheme designed to rob the government and line their own pockets. Today, they learned there is a steep price to be paid for such greed,” said Jim Lee, Chief, IRS Criminal Investigation (IRS-CI). “It is the partnerships between IRS-CI and other federal agencies like the EPA that allow cases like this to come to fruition, holding accountable those who seek to enrich themselves through fraudulent means.”
“The only green resource these two cared about was money, and they told lie after lie to perpetuate their fraud,” said Special Agent in Charge Michael J. Driscoll of the FBI's Philadelphia Field Office. “Fair warning to anyone else seeking to scam the U.S. government and taxpayers like this: the FBI and our partners stand ready to investigate and hold you accountable as well.”
Wootton, Miner, and Keystone falsely represented that they were able to produce a fuel meeting the requirements set by the American Society for Testing and Materials (ASTM) for biodiesel (a renewable fuel) and adopted by the EPA, and as such were entitled to create renewable fuel credits, known as RINs, based on each gallon of renewable fuel produced. The fuel and the RINs have financial value and could be sold and purchased by participants within the federal renewable fuels commercial system.
Wootton and Miner were also convicted of fraudulently claiming federal tax refunds based on IRS’s Biofuel Mixture Credit. The Biodiesel Mixture Credit is a type of “blender’s credit” for persons or businesses who mix biodiesel with diesel fuel and use or sell the mixture as a fuel. Wootton and Miner caused Keystone to fraudulently claim tax refunds based on non-qualifying fuel and, in at least some instances, non-existent or non-mixed fuel. In an attempt to hide their fraud scheme, the men created false corporate books and records and sham financial transactions to account for the nonexistent and non-qualifying fuel, and to create the appearance of legitimacy.
The prosecution of Wootton, Miner and Keystone is the first prosecution of a case under the federal renewable fuels program based on fuel that did not meet the program renewable fuel quality standards.
The case was prosecuted by Senior Litigation Counsel Howard P. Stewart of the Environment and Natural Resources Division’s Environmental Crimes Section, Assistant U.S. Attorney Geoffrey MacArthur, Special Assistant U.S. Attorney David Lastra, and Trial Attorneys Mark Kotila and Michael C. Vasiliadis of the Tax Division. EPA Region III Criminal Investigation Division, IRS Criminal Investigation and the FBI Philadelphia’s Harrisburg Resident Agency investigated the matter.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced that on May 4, 2022, Itcace Abramovici, age 72, of Montreal, Quebec, was sentenced to 30 months’ imprisonment by U.S. District Court Judge Christopher C. Conner following his conviction for conspiracy to commit mail and wire fraud. Judge Conner also ordered Abramovici to make restitution to victims in the amount of $461,886.49, and to serve one year of supervised release following his release from prison.
According to United States Attorney John C. Gurganus, Abramovici played a leadership role in a Montreal-based telemarketing and money laundering organization that targeted elderly victims in the United States, including those living in central Pennsylvania. Abramovici and his co-conspirators informed prospective victims that they had won a substantial amount of money in a lottery or sweepstakes and then directed those victims to send money in order to obtain their winnings. The victims’ payments were falsely characterized as taxes, customs fees, processing fees, and legal and insurance fees. None of the victims received any money, and many of their losses were substantial, with more than $460,000 in victim losses being attributed to Abramovici’s role in the fraud, and with losses to victims of the broader fraud at more than $1.3 million. As part of his guilty plea, Abramovici admitted to playing a leadership role in the scheme. The investigation that led to Abramovici’s prosecution identified at least 17 individual victims.
The case was investigated by the United States Postal Inspection Service – Harrisburg Office. Assistant U.S. Attorney Christian T. Haugsby prosecuted the case.
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced the unsealing of an indictment charging Earl Marshawn Washington, age 60, and his wife, Zsanett Nagy, age 31, both residents of Honolulu, HI, with conspiracy to commit wire fraud, mail fraud, and money laundering, and charging Washington separately with bank fraud and conspiracy to commit bank fraud.
According to United States Attorney Gerard M. Karam, the indictment alleges that from 2018 to 2021, Washington and Nagy sold counterfeit artistic goods known as “woodblocks” or “woodcuts” to various buyers and then laundered the proceeds from the sale of those goods. According to the indictment, xylography is the art of making “woodcuts,” or engravings made from wooden blocks, especially for printing using historical techniques. In traditional xylography, an artist uses a sharpened tool to carve a design into the surface of a woodblock. The raised areas that remain after the block has been cut are inked and printed, while the recessed areas that are cut away do not retain ink and will remain blank in the final print. Woodblock images can be printed onto paper, fabrics, textiles, or other materials. The technique has been used in different geographic regions at different times. One woodblock tradition stems from Germany starting around the 14th century and continuing for several hundred years thereafter.
The indictment also alleges that Washington and Nagy sold inauthentic woodblocks and prints made from woodblocks that they advertised as being from between the 15th and early 20th centuries. The buyers included a pair of woodblock collectors residing in France, as well as a buyer of a woodblock print who then resided in Hummelstown, PA. The buyers of the woodblocks in France allegedly made $84,350.91in PayPal payments to Nagy before learning that the woodblocks they purchased were not from the 15th and 16th centuries, as advertised. According to the indictment, Nagy received these payments through PayPal, moved the proceeds to a bank account in her name, and then quickly converted the proceeds to cash through withdrawals of several thousand dollars at a time. It is alleged that Washington admitted to one of the French buyers as being the creator of the woodblocks sold to the French buyers.
Washington is also charged with defrauding a collector of woodblocks from York, PA. The indictment alleges that this collector paid Washington, who used the alias “River Seine,” and his then girlfriend, $118,810 from 2013 to 2016 in exchange for approximately 130 woodblocks, again advertised as being several centuries old. The indictment alleges that at least some of these woodblocks were, in fact, made in the second half of the twentieth century.
“If you promise people one thing and sell them another, that’s fraud, plain and simple,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “Here we had collectors paying for what they believed were old, rare, and valuable woodblocks and prints, but what they allegedly received were none of the above. The FBI’s Art Crime Team is uniquely positioned to investigate matters like this and committed to holding art fraudsters accountable.”
The indictment contains forfeiture allegations seeking over $200,000 from Washington and Nagy collectively, which is allegedly the amount they received from buyers of their counterfeit artistic goods.
This case was investigated by members of the FBI's Art Crime Team assigned to the Philadelphia Division. Assistant U.S. Attorney Ravi Romel Sharma is prosecuting the case.
The maximum penalty under federal law for conspiracy to commit wire fraud, mail fraud, and money laundering is 5 years of imprisonment, a term of supervised release following imprisonment, and a fine. The maximum penalty under federal law for wire fraud is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. In addition, Washington faces a maximum penalty under federal law for conspiracy to commit bank fraud and bank fraud of 30 years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
Harrisburg - The United States Attorney’s Office for the Middle District of Pennsylvania announced that it withdrew an appeal of an April 20, 2017 district court decision that included findings of fact and conclusions of law, and its verdict and judgment on May 9, 2017.
In this FTCA medical malpractice action, the district court entered a verdict in favor of Plaintiffs Christina Late and Nathan Armolt, individually, and as parents and natural guardians of D.A., a minor. The court awarded plaintiffs $103,967.10 in past medical expenses; $5,000,000 in past and future noneconomic damages; and $3,553,616 in lost earnings and fringe benefits. The court also awarded plaintiffs future medical expenses at a present value of $9,309,503.90 and at a future value of $32,984,383.50.
The future value payment of $32,984,383.50 will be provided to the Clerk’s Office for the Middle District of Pennsylvania. The Clerk will deposit the money in an interest bearing account. The Clerk will then make yearly payments to the Plaintiffs per the Court’s schedule for the next 74 years. All interest earned in the account will be returned to the United States at the end of the 74 years or when the minor dies, whichever occurs first.
According to United States Attorney David J. Freed, the United States often files protective notice of appeal, while the Solicitor General’s Office determines whether an appeal should be continued. In this case, the Solicitor General’s Office determined that an appeal should not proceed. Because of attorney-work product and deliberative-process considerations, no further information can be provided about this decision.
“The United States Attorney’s Offices throughout the country are tasked with defending government employees accused of medical malpractice, and there are times when district courts will find our employees negligent,” said U.S. Attorney Freed. “Our mission, however, is to defend the government’s employees and to limit damages with the assistance of medical and economic experts. We respect the court’s decision in this matter, and wish nothing but the best for the minor child and his parents.”
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced that Darryl Corradini, age 63, and Vicki Hackenberg, age 57, both of Bloomsburg, Pennsylvania, were charged on April 13, 2021, by a federal grand jury with perpetrating a bank fraud and money laundering scheme that included nearly $300,000 in COVID-19 relief guaranteed by the Small Business Administration through the Paycheck Protection Program (PPP).
The PPP is designed to help small businesses facing financial difficulties during the COVID-19 pandemic. Funded by the March 2020 CARES Act, PPP funds are offered in forgivable loans, provided that certain criteria are met, including use of the funds for employee payroll, mortgage interest, lease, and utilities expenses.
According to Acting United States Bruce D. Brandler, the indictment alleges that Corradini, Hackenberg, and other coconspirators created a shell corporation, CGM Realty LLC, and opened bank accounts and a Bitcoin trading account in the corporation’s name, by using false and forged documents. The conspirators allegedly used the accounts to receive over $135,000 in fraudulently obtained funds, and over $296,000 from a PPP loan that was obtained with false and forged documentation. That documentation included false information and certifications about CGM Realty LLC’s employee payroll obligations, and intention to use the funds for approved purposes, when in fact CGM Realty LLC had no employees or legitimate business operations. Forged IRS documentation also was included with the PPP application, containing false information about CGM Realty LLC’s nonexistent payroll obligations. Over $350,000 was then used to purchase Bitcoins, a type of cryptocurrency.
Corradini and Hackenberg are charged with conspiring to commit bank fraud and with two counts of committing bank fraud for submitting false and fraudulent documentation to obtain the PPP loan. They also are charged with two counts of making false statements on loan applications, with conspiring to commit money laundering, and with three counts of engaging in unlawful monetary transactions by purchasing Bitcoins with the fraudulently obtained PPP loan. Corradini is charged with one count of making false statements to IRS agents that he did not have access to CGM Realty LLC’s bank account. Hackenberg is charged with two counts of making false statements to IRS agents that she had no knowledge of CGM Realty LLC, and that she had not communicated with other coconspirators in over a year.
The case was investigated by the IRS, Criminal Investigations. Assistant U.S. Attorney Phillip J. Caraballo is prosecuting the case.
Criminal indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the most serious offenses is 30 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Natural Advantage LLC a/k/a Taste Advantage LLC (“Natural Advantage”), a chemical manufacturer headquartered in Oakdale, Louisiana, entered a deferred prosecution agreement and was charged in a criminal information with the unregistered distribution and exportation of regulated List 1 chemicals. Carol Callahan Byrne, age 65, and Dr. Brian Byrne, age 74, both of Oakdale, Louisiana, also were charged in a criminal information with the failure to report List 1 chemical manufacturing to the Attorney General.
Natural Advantage entered a three-year deferred prosecution agreement, under which the United States has agreed to defer prosecution of the company unless it fails to comply with the terms of the agreement. Pursuant to the deferred prosecution agreement, Natural Advantage has agreed to forfeit $1,938,650.10, which represents the gross revenue of its List 1 chemical sales. The company also has agreed, among other things, to undergo annual audits for List 1 chemical compliance, the results of which will be reported to the United States.
According to United States Attorney David J. Freed, Carol Callahan Byrne served as the Chief Financial Officer and Dr. Brian Byrne served as the Chief Executive Officer of Natural Advantage, a company that manufactured chemicals for customers in the flavor, fragrance, and cosmetics industries. Among the chemicals manufactured by Natural Advantage were Piperonal, Heliotropine, Phenylacetic Acid, Isoamyl Phenylacetate, and Ethyl Phenylacetate, all of which were List 1 chemicals that, in addition to legitimate uses, are also precursor chemicals for manufacturing methamphetamine and ecstasy. List 1 chemicals are subject to extensive regulations, including licensing requirements for distributors and regular reporting to the United States.
As alleged, beginning in approximately January 2011, and continuing until January 2017, Natural Advantage distributed and exported in excess of 1,550 kilograms of List 1 chemicals to customers in the United States and worldwide, without obtaining the requisite registration from the U.S. Drug Enforcement Administration (DEA), and despite being warned by the DEA not to distribute List 1 chemicals. None of the chemicals are alleged to have been diverted to narcotics traffickers.
Company executives are alleged to have known of Natural Advantage’s unlicensed distribution of List 1 chemicals, and of arrangements to use other domestic companies as intermediaries to sell List 1 chemicals to foreign customers who discovered that Natural Advantage was not licensed and refused to purchase the chemicals. Company executives also are alleged to have concealed Natural Advantage’s List 1 chemical activities, including, as alleged against Carol Callahan Byrne and Dr. Brian Byrne, by failing to file annual manufacturing reports with the Attorney General.
“The defendants in this case violated the law when they sold and exported nearly $2 million-worth of precursor chemicals, without following the regulations and procedures designed to ensure that these chemicals do not end up on the black market,” said U.S. Attorney Freed. “As part of our responsibility to help protect the public from dangerous drugs, this office will continue to ensure that companies properly handle List I chemicals.”
“By intentionally evading the regulations in place for List I chemicals, Natural Advantage greatly increased the possibility that these chemicals could end up in the hands of cartels for the production of methamphetamine, ecstasy, and other dangerous and illicit substances,” said Jonathan A. Wilson, Special Agent in Charge of the DEA’s Philadelphia Field Division. “In light of the rise of methamphetamine use in the United States and the damage it causes to our families and our society, DEA will continue to enforce these regulations and seek out these violators.”
The case was investigated by DEA Diversion Investigators. Assistant U.S. Attorney Phillip J. Caraballo, and the Financial Litigation Unit of the U.S. Attorney’s Office are prosecuting the case.
Criminal informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the charge against Natural Advantage is up to five years of probation, and the maximum penalties for the charges against Carol Callahan Byrne and Brian Byrne are up to one year of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY
Description: The code of the federal judicial circuit where the case was located
Format: A2
Description: The code of the federal judicial district where the case was located
Format: A2
Description: The code of the district office where the case was located
Format: A2
Description: Docket number assigned by the district to the case
Format: A7
Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3
Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3
Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5
Description: Case type associated with the current defendant record
Format: A2
Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18
Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15
Description: The status of the defendant as assigned by the AOUSC
Format: A2
Description: A code indicating the fugitive status of a defendant
Format: A1
Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD
Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD
Description: The date when a case was first docketed in the district court
Format: YYYYMMDD
Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD
Description: A code used to identify the nature of the proceeding
Format: N2
Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD
Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2
Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE1
Format: N2
Description: The four digit AO offense code associated with FTITLE1
Format: A4
Description: The four digit D2 offense code associated with FTITLE1
Format: A4
Description: A code indicating the severity associated with FTITLE1
Format: A3
Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5
Description: The date of the last action taken on the record
Format: YYYYMMDD
Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD
Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD
Description: The date upon which the case was closed
Format: YYYYMMDD
Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8
Description: A count of defendants filed including inter-district transfers
Format: N1
Description: A count of defendants filed excluding inter-district transfers
Format: N1
Description: A count of original proceedings commenced
Format: N1
Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants terminated including interdistrict transfers
Format: N1
Description: A count of defendants terminated excluding interdistrict transfers
Format: N1
Description: A count of original proceedings terminated
Format: N1
Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1
Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1
Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10
Description: A sequential number indicating the iteration of the defendant record
Format: N2
Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD
Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Natural Advantage LLC a/k/a Taste Advantage LLC (“Natural Advantage”), a chemical manufacturer headquartered in Oakdale, Louisiana, entered a deferred prosecution agreement and was charged in a criminal information with the unregistered distribution and exportation of regulated List 1 chemicals. Carol Callahan Byrne, age 65, and Dr. Brian Byrne, age 74, both of Oakdale, Louisiana, also were charged in a criminal information with the failure to report List 1 chemical manufacturing to the Attorney General.
Natural Advantage entered a three-year deferred prosecution agreement, under which the United States has agreed to defer prosecution of the company unless it fails to comply with the terms of the agreement. Pursuant to the deferred prosecution agreement, Natural Advantage has agreed to forfeit $1,938,650.10, which represents the gross revenue of its List 1 chemical sales. The company also has agreed, among other things, to undergo annual audits for List 1 chemical compliance, the results of which will be reported to the United States.
According to United States Attorney David J. Freed, Carol Callahan Byrne served as the Chief Financial Officer and Dr. Brian Byrne served as the Chief Executive Officer of Natural Advantage, a company that manufactured chemicals for customers in the flavor, fragrance, and cosmetics industries. Among the chemicals manufactured by Natural Advantage were Piperonal, Heliotropine, Phenylacetic Acid, Isoamyl Phenylacetate, and Ethyl Phenylacetate, all of which were List 1 chemicals that, in addition to legitimate uses, are also precursor chemicals for manufacturing methamphetamine and ecstasy. List 1 chemicals are subject to extensive regulations, including licensing requirements for distributors and regular reporting to the United States.
As alleged, beginning in approximately January 2011, and continuing until January 2017, Natural Advantage distributed and exported in excess of 1,550 kilograms of List 1 chemicals to customers in the United States and worldwide, without obtaining the requisite registration from the U.S. Drug Enforcement Administration (DEA), and despite being warned by the DEA not to distribute List 1 chemicals. None of the chemicals are alleged to have been diverted to narcotics traffickers.
Company executives are alleged to have known of Natural Advantage’s unlicensed distribution of List 1 chemicals, and of arrangements to use other domestic companies as intermediaries to sell List 1 chemicals to foreign customers who discovered that Natural Advantage was not licensed and refused to purchase the chemicals. Company executives also are alleged to have concealed Natural Advantage’s List 1 chemical activities, including, as alleged against Carol Callahan Byrne and Dr. Brian Byrne, by failing to file annual manufacturing reports with the Attorney General.
“The defendants in this case violated the law when they sold and exported nearly $2 million-worth of precursor chemicals, without following the regulations and procedures designed to ensure that these chemicals do not end up on the black market,” said U.S. Attorney Freed. “As part of our responsibility to help protect the public from dangerous drugs, this office will continue to ensure that companies properly handle List I chemicals.”
“By intentionally evading the regulations in place for List I chemicals, Natural Advantage greatly increased the possibility that these chemicals could end up in the hands of cartels for the production of methamphetamine, ecstasy, and other dangerous and illicit substances,” said Jonathan A. Wilson, Special Agent in Charge of the DEA’s Philadelphia Field Division. “In light of the rise of methamphetamine use in the United States and the damage it causes to our families and our society, DEA will continue to enforce these regulations and seek out these violators.”
The case was investigated by DEA Diversion Investigators. Assistant U.S. Attorney Phillip J. Caraballo, and the Financial Litigation Unit of the U.S. Attorney’s Office are prosecuting the case.
Criminal informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the charge against Natural Advantage is up to five years of probation, and the maximum penalties for the charges against Carol Callahan Byrne and Brian Byrne are up to one year of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY
Description: The code of the federal judicial circuit where the case was located
Format: A2
Description: The code of the federal judicial district where the case was located
Format: A2
Description: The code of the district office where the case was located
Format: A2
Description: Docket number assigned by the district to the case
Format: A7
Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3
Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3
Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5
Description: Case type associated with the current defendant record
Format: A2
Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18
Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15
Description: The status of the defendant as assigned by the AOUSC
Format: A2
Description: A code indicating the fugitive status of a defendant
Format: A1
Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD
Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD
Description: The date when a case was first docketed in the district court
Format: YYYYMMDD
Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD
Description: A code used to identify the nature of the proceeding
Format: N2
Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD
Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2
Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE1
Format: N2
Description: The four digit AO offense code associated with FTITLE1
Format: A4
Description: The four digit D2 offense code associated with FTITLE1
Format: A4
Description: A code indicating the severity associated with FTITLE1
Format: A3
Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5
Description: The date of the last action taken on the record
Format: YYYYMMDD
Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD
Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD
Description: The date upon which the case was closed
Format: YYYYMMDD
Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8
Description: A count of defendants filed including inter-district transfers
Format: N1
Description: A count of defendants filed excluding inter-district transfers
Format: N1
Description: A count of original proceedings commenced
Format: N1
Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants terminated including interdistrict transfers
Format: N1
Description: A count of defendants terminated excluding interdistrict transfers
Format: N1
Description: A count of original proceedings terminated
Format: N1
Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1
Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1
Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10
Description: A sequential number indicating the iteration of the defendant record
Format: N2
Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD
Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Angela Castillo, age 39, of Freeland, PA, pleaded guilty on August 9, 2023, before United States District Judge Robert D. Mariani, to a wire fraud scheme involving the preparation and submission of numerous false Economic Injury Disaster Loan (EIDL) applications.
According to United States Attorney Gerard M. Karam, the criminal Information to which Castillo pleaded guilty alleges that between June 2020 and September 2020, on behalf of other individuals and in exchange for payment, Castillo prepared and submitted to the United States Small Business Association (SBA) at least 40 false EIDL applications containing material misrepresentations. Castillo’s conduct resulted in the SBA paying out approximately $163,000.00 in COVID-19 relief funds to individuals, none of whom actually owned a qualifying small business, and who therefore were not entitled to receive such funds under the program. Pursuant to the terms of her plea agreement, Castillo acknowledged that the monetary loss attributable to her conduct was between $150,000.00 and $250,000.00, and she agreed to make restitution to the SBA.
The case was investigated by the Internal Revenue Service – Criminal Investigations. Assistant U.S. Attorney Jeffery St John is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The maximum penalty under federal law for this offense is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Darryl Corradini, age 63, was sentenced by United States Chief District Judge Matthew W. Brann, to 18 months’ imprisonment for a bank fraud and money laundering scheme that included nearly $300,000 in COVID-19 relief guaranteed by the Small Business Administration through the Paycheck Protection Program (PPP).
The PPP is designed to help small businesses facing financial difficulties during the COVID-19 pandemic. Funded by the March 2020 CARES Act, PPP funds are offered in forgivable loans, provided that certain criteria are met, including use of the funds for employee payroll, mortgage interest, lease, and utilities expenses.
According to United States Attorney John C. Gurganus, Corradini pleaded guilty to a money laundering conspiracy involving his codefendant, Vicki Hackenberg, age 57, and others. Corradini created a shell corporation, CGM Realty LLC, and opened bank accounts and a Bitcoin trading account in the corporation’s name, by using false and forged documents. The conspirators used the accounts to receive over $135,000 in fraudulently obtained funds, and over $296,000 from a PPP loan that was obtained with false and forged documentation. That documentation included false information and certifications about CGM Realty LLC’s employee payroll obligations, and intention to use the funds for approved purposes, when in fact CGM Realty LLC had no employees or legitimate business operations. Forged IRS documentation also was included with the PPP application, containing false information about CGM Realty LLC’s nonexistent payroll obligations.
Over $350,000 of the fraudulent proceeds was used to purchase Bitcoins, a type of cryptocurrency. Although Corradini and Hackenberg were to each receive $40,000 for their participation in the offense, they ultimately received less than $10,000 of the fraudulent proceeds.
During sentencing, Chief Judge Brann highlighted Corradini’s lies to law enforcement officials and concealment of a separate bank account used to receive fraudulent proceeds. In addition to the Corradini’s sentence of imprisonment, Chief Judge Brann also ordered him to perform 20 hours of community service, and to pay $431,289 to the victims of his crimes. That restitution obligation is shared by Hackenberg, who previously was sentenced by Chief Judge Brann to serve 12 months’ imprisonment.
The case was investigated by agents with the Internal Revenue Service’s Criminal Investigations Division. The matter was prosecuted by Assistant U.S. Attorney Phillip J. Caraballo.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that William Freeman, IV, age 45, of Tobyhanna, PA, was charged by criminal information with one count of wire fraud and one count of making and subscribing a false tax return. According to Acting United States Attorney John C. Gurganus, over a multi-year period between 2020 and 2021, Freeman submitted at least 10 applications seeking pandemic stimulus funds through both the Economic Injury and Disaster Loan (EIDL) program, as well as the Paycheck Protection Program (PPP) on behalf of several entities under his control, including, Second Haven Services for Youth, Inc., Phoenix Behavioral Health Network, LLC, Pocono Wing Hut, LLC, and Legacy Group Real Estate Company. The applications submitted by Freeman were filed on behalf of corporate entities that did not, in fact, have actual business operations, and that bore false employee headcount information, fabricated gross revenues, and costs of goods sold. Freeman additionally made material misrepresentations on these applications about his criminal history, representing that he had none when, in fact, he did. Freeman obtained over $300,000 dollars in stimulus funds through filing the fraudulent applications, which he spent on unapproved personal expenses and which was never repaid. Additionally, and in support of that fraud, Freeman filed a falsified Form 1040 and a falsified W-3 in 2020 for the 2019 tax year claiming thousands of dollars in taxes that were withheld and paid over to the IRS which never happened. In addition to his failure to pay over those taxes, he also attempted to obtain thousands of dollars of tax refund money. Mr. Freeman did this for the purpose of creating a filed tax return in an attempt to obtain additional stimulus funds.The case is being investigated by the Internal Revenue Service – Criminal Investigations and is being prosecuted by Assistant United States Attorney Luisa Honora Berti. “IRS Criminal Investigation agents will continue to be on the front lines to fight fraud.” Stated Yury Kruty, Special Agent in Charge, IRS-Criminal Investigation, Philadelphia Field Office.The maximum penalty under federal law for this offense is up to 23 years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.# # #
The Justice Department today announced criminal charges in five cases from four U.S. Attorney’s offices in connection with the multi-agency Disruptive Technology Strike Force (Strike Force).
The Strike Force is co-led by the Departments of Justice and Commerce to counter efforts by hostile nation states to illicitly acquire sensitive U.S. technology to advance their authoritarian regimes and facilitate human rights abuses. Launched in February 2023, the Strike Force’s work has led to the unsealing of charges against 34 defendants in 24 cases involving alleged export control violations, smuggling, theft of trade secrets, and other charges by actors connected to Russia, China, and Iran.
The cases announced today took place over the course of multiple weeks, culminating in the arrest today of a Russian national allegedly seeking to illegally export electronics for use in Unmanned Aerial Vehicles (UAVs) to Russia. The other cases also cover spearfishing of U.S-based scientists by an employee of a state-owned Chinese defense company and the smuggling of laser welding machines used in nuclear munition production to Russia.
“The prosecutions of these cases under the Disruptive Technology Strike Force reflects the joint efforts of five agencies across the government focused on the shared goal of stopping the transfer of sensitive, cutting-edge technologies to Iran, China, and Russia,” said Assistant Attorney General Matthew G. Olsen of the Justice Department's National Security Division. “The Justice Department, through the work of the Strike Force, will continue to do all we can to prevent advanced technologies from falling into the hands of our adversaries and protect our national security.”
“We launched the Disruptive Technology Strike Force a year and half ago to advance the vital mission of safeguarding U.S. technology,” said Assistant Secretary for Export Enforcement Matthew S. Axelrod of the U.S. Department of Commerce. “As today’s announcements make clear, our efforts to protect sensitive U.S. technologies – which to date have yielded 24 publicly charged criminal cases, millions of dollars in administrative penalties, and multiple Entity List additions – remain relentless and unyielding.”
“It’s no secret that the threats we face today are more complex and severe than ever before,” said Executive Assistant Director Robert Wells of the FBI’s National Security Branch. “The best way – and the only way – we can stay ahead of current and emerging threats is by working together. With these indictments, the Disruptive Technology Strike Force is an excellent example of the power of partnerships in practice.”
“Those who facilitate the illegal proliferation of sensitive technologies and material to hostile nations and terrorist groups pose a serious threat to the safety and security of the United States,” said Executive Associate Director Katrina W. Berger of Homeland Security Investigations (HSI). “HSI is committed to working with our partners to disrupt and dismantle the criminal networks that aid and abed U.S. adversaries.”
“Disrupting the efforts of foreign nations, international criminal organizations, and other potentially hostile entities that seek to illegally obtain sensitive DoD technology and weapon systems that could potentially be used against our military forces remains a top priority of the Defense Criminal Investigative Service, the criminal investigative arm of Department of Defense (DoD) Office of Inspector General,” said Inspector General Robert P. Storch of DoD. “We will continue to work with the Justice Department and our strike force partners to thwart the efforts of criminal elements whose activities threaten the security of the United States.”
United States v. Postovoy (District of Columbia)
A federal grand jury returned a seven-count indictment charging Denis Postovoy, a Russian citizen living in the United States, with conspiring to violate the Export Control Reform Act, commit smuggling, commit money laundering and defraud the United States. HSI arrested Postovoy this morning in Sarasota, Florida.
According to court documents, beginning in at least February 2022, following Russia’s full-scale invasion of Ukraine, Postovoy procured and illicitly exported from the United States to Russia microelectronic components with military applications. The exported microelectronics can be used in UAVs or drones. Through a web of companies that he owns or operates in Russia, Hong Kong, and elsewhere, Postovoy and individuals in his network purchased the microelectronics from U.S.-based distributors and exported them to Russia without the required licenses from the Department of Commerce.
As alleged, Postovoy’s companies included WowCube HK Limited, JST Group Hong Kong, Jove HK Limited, all based in Hong Kong, and the Vector Group in Russia. Postovoy repeatedly concealed and misstated the true end users and end destinations of the microelectronics by submitting false information on export-related documents. He transshipped items that were ultimately destined for Russia through intermediary destinations, including Hong Kong, Switzerland and elsewhere, and received payments in U.S. dollars from foreign bank accounts. His companies transferred funds for the purchase and shipment of the goods through bank accounts in Hong Kong, Russia, and elsewhere to bank accounts in the United States, including bank accounts maintained by the U.S. suppliers of microelectronics and other sensitive technologies.
HSI is investigating the case.
Assistant U.S. Attorney Stuart Allen for the District of Columbia and Trial Attorney Sean Heiden of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
United States v. Song Wu (Northern District of Georgia)
Today, a federal court in Atlanta, unsealed an indictment charging Chinese national, Song Wu, 39, with wire fraud and aggravated identity theft arising from his efforts to fraudulently obtain computer software and source code created by the National Aeronautics and Space Administration (NASA), research universities, and private companies. Song remains at large.
According to the indictment, Song allegedly engaged in a multi-year “spear phishing” email campaign in which he created email accounts to impersonate U.S.-based researchers and engineers and then used those imposter accounts to obtain specialized restricted or proprietary software used for aerospace engineering and computational fluid dynamics. This specialized software could be used for industrial and military applications, such as development of advanced tactical missiles and aerodynamic design and assessment of weapons.
In executing the scheme, Song allegedly sent spear phishing emails to individuals employed in positions with the U.S. government, including NASA, the Air Force, Navy, and Army, and the Federal Aviation Administration. Song also sent spear phishing emails to individuals employed in positions with major research universities in Georgia, Michigan, Massachusetts, Pennsylvania, Indiana, and Ohio, and with private sector companies that work in the aerospace field. Song’s spear phishing emails appeared to the targeted victims as having been sent by a colleague, associate, friend, or other person in the research or engineering community. His emails requested that the targeted victim send or make available source code or software to which Song believed the targeted victim had access.
According to the indictment, while conducting this spear phishing campaign, Song was employed as an engineer at Aviation Industry Corporation of China (AVIC), a Chinese state-owned aerospace and defense conglomerate headquartered in Beijing. AVIC manufactures civilian and military aircrafts and is one of the largest defense contractors in the world.
In total, Song is charged with 14 counts of wire fraud and 14 counts of aggravated identity theft. If convicted, Song faces a maximum statutory penalty of 20 years in prison for each count of wire fraud. Song also faces a mandatory, two-year consecutive penalty in prison for aggravated identity theft. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI and the NASA’s Office of Inspector General are investigating the case.
Assistant U.S. Attorney Samir Kaushal for the Northern District of Georgia and Trial Attorney Tanner Kroeger of the National Security Division's Cyber Section are prosecuting the case with assistance from the Counterintelligence and Export Control Section.
United States v. Teslenko (District of Massachusetts)
Massachusetts resident, Samer Bhambhani, 55, and Russian national, Maksim Teslenko, 35, have been charged with smuggling and one count of conspiracy to violate and evade export controls, commit smuggling, and defraud the United States. Bhambhani was arrested on Sept. 9 and was released on conditions following an initial appearance in federal court in Boston. Teslenko remains at large overseas.
It is alleged that from in or around 2015 through at least 2021, Bhambhani and Teslenko conspired to export laser welding machines from Bhambhani’s employer in the United States to the Ural Electromechanical Plant (UEMZ) in Yekaterinburg, Russia, while falsifying the export documentation submitted to the U.S. government in order to conceal the fact that the UEMZ was the true end user of the machines. The UEMZ is a subsidiary of Rosatom, a Russian state corporation headquartered in Moscow, that oversaw Russia’s civilian and military nuclear program. According to the indictment, Teslenko knew that the laser welding machines were intended for the portion of the UEMZ involving the Russian nuclear weapons program.
The charge of smuggling provides for a sentence of up to 10 years in prison, three years supervised release and a fine of up to $250,000. The charge of conspiracy provides for a sentence of up to five years in prison, three years supervised release and a fine of up to $250,000. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorneys Timothy H. Kistner and Laura S. Kaplan for the District of Massachusetts and Trial Attorney Sean O’Dowd of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
United States v. Goodarzi (Southern District of Texas)
Gholam Reza Goodarzi, also known as Ron Goodarzi, 76, a dual U.S. and Iranian citizen who resides in Porter, Texas, was arrested at the George Bush International Airport on Aug. 30 based on a criminal complaint alleging he smuggled parts and components used in the production of unmanned aerial vehicles (UAVs), as well as other manned aircraft, from the United States to Iran.
According to court documents, from December 1, 2020, through July 5, Goodarzi illegally exported aircraft-related parts, in addition to oil and drilling components, to Iran. As alleged, Goodarzi purchased U.S.-origin aircraft components from U.S.-based suppliers and then exported them to Iran – typically through Dubai, UAE. He also traveled to and from Iran multiple times per year and concealed aircraft parts and other items in his checked luggage. Goodarzi exchanged multiple emails with suppliers and customers, acknowledging that parts could not be shipped to Iran because of sanctions.
The complaint alleges that on several occasions, authorities searched Goodarzi’s luggage and found numerous aircraft parts and components hidden within articles of clothing. Some of the items had characteristics consistent with parts for the production of UAVs, as well as parts with electrical motor and generator applications. Goodarzi does not have the required licenses to export such items to sanctioned countries, including Iran, according to the complaint.
The FBI, with assistance from and Customs and Border Protection, is investigating the case.
Assistant U.S. Attorney Heather Winter for the Southern District of Texas and Trial Attorney Christopher Cook of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.
United States v. Nader (District of Columbia)
U.S.-Iranian national Jeffrey Chance Nader, 66, of Arcadia, California, was arrested on Aug. 13, 2024, based on an indictment charging him with crimes related to the procurement of U.S.-manufactured aircraft components, including components used on military aircraft, in violation of U.S. economic sanctions and other federal laws.
According to the indictment, beginning at least in 2023, Nader and others conspired to purchase and export – and attempted to export – from the United States to Iran four types of aircraft components, totaling nearly three dozen individual pieces. Some of these components are for use on military aircraft operated by Iran’s armed forces, including the F-4 fighter jet.
Nader, acting on purchase orders he received from customers in Iran, would coordinate the purchase of relevant aircraft components with business associates in Iran, by which they would reach out to U.S.-based suppliers of such components. In several instances, Nader identified himself and his company, California-based Pro Aero Capital, to these U.S.-based suppliers as the end-user of these items. Victim companies in this procurement scheme were located across the United States.
Once the aircraft components were obtained, Nader attempted to export the items on multiple separate occasions. The items were then transshipped to the ultimate customer in Iran. None of the transactions discussed in the indictment were successfully exported; they were detained on export by a Special Agent with the Department of Commerce.
This case is being investigated by the FBI’s Washington Field Office and the Commerce Department's Bureau of Industry and Security. Significant assistance was provided by the FBI’s Los Angeles Field Office.
The case is being prosecuted by Assistant U.S. Attorney Steven B. Wasserman for the District of Columbia and Trial Attorney Sean Heiden of the National Security Division’s Counterintelligence and Export Control Section. Significant assistance was provided by the U.S. Attorney’s Office for the Central District of California.
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Today’s actions were coordinated through the Justice and Commerce Departments’ Disruptive Technology Strike Force. The Disruptive Technology Strike Force is an interagency law enforcement strike force co-led by the Departments of Justice and Commerce designed to target illicit actors, protect supply chains and prevent critical technology from being acquired by authoritarian regimes and hostile nation states. The Postovoy and Teslenko investigations were also coordinated through the Justice Department’s Task Force KleptoCapture, an interagency law enforcement task force dedicated to enforcing sanctions, export controls and economic countermeasures imposed in response to Russia’s unprovoked military invasion of Ukraine.
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Also today, the Department is announcing the unsealing of an indictment in Chicago, Illinois, charging Chinese national Jia Wei with unlawfully accessing the computer network of a U.S. communications company to steal proprietary information for the benefit of the China-based entities.
As alleged, Wei was a member of the People’s Liberation Army (PLA), the military of the People’s Republic of China, and assigned to a PLA unit tasked with obtaining communications and information of third parties through computer hacking. In March 2017, Wei and his co-conspirators accessed the U.S. company’s network without authorization approximately two days after the U.S. company filed a civil action against a China-based competitor for theft of communication-device trade secrets. Through this unauthorized access, Wei and his co-conspirators stole U.S. company documents relating to, among other things, the company’s civilian and military communication devices, product development, testing plans, internal product evaluations and commercial information about competitors. These documents pertained to some of the same technology and information that the China-based competitor stole from the U.S. company, as alleged in the civil action. In addition, Wei and his co-conspirators stole documents from the U.S. company discussing the China-based competitor.
During his unauthorized access, Wei and his co-conspirators attempted to install malicious software designed to provide persistent unauthorized access to the U.S. company’s network. Wei’s unauthorized access continued until approximately late May 2017.
The six-count indictment, returned in March 2022, charges Wei with wire fraud, conspiracy to commit computer intrusions, computer intrusions and aggravated identity theft. A warrant for his arrest has been issued. If convicted, Wei faces a maximum statutory penalty of 20 years in prison for each wire fraud count, five years in prison for each of the conspiracy and computer intrusion counts, and a mandatory, two-year consecutive penalty in prison for each aggravated identity theft count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The FBI Chicago Field Office is investigating the case.
Assistant U.S. Attorneys Melody Wells, Steven Dollear and Thomas Peabody for the Northern District of Illinois and Trial Attorney Brett Reynolds of the National Security Division are prosecuting the case. Significant assistance was provided by the National Security Division’s National Security Cyber Section.
An indictment, complaint or criminal information is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Note: This press release was updated on Sept. 16, 2024, to include two additional cases.
HARRISBURG—The United States Attorney’s Office for the Middle District of Pennsylvania announced that Christopher Gambrill, age 46, of Windsor, Pennsylvania, was sentenced yesterday to 3 years of probation by United States District Court Judge Jennifer P. Wilson for concealing assets during a bankruptcy proceeding. Gambrill was also ordered to pay a $7,200 fine.
According to United States Attorney John C. Gurganus, Gambrill previously admitted that in 2016 and 2017, while he was a petitioner in a bankruptcy proceeding, he fraudulently concealed a $125,000 inheritance from the bankruptcy trustee and creditors. Gambrill’s bankruptcy petition was ultimately dismissed, and none of his debts were discharged.
The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Carlo D. Marchioli prosecuted the case.
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that on May 11, 2021, Brian Larry, age 59, of Clark’s Summit, Pennsylvania, was convicted following a seven-day jury trial held before United States District Court Judge Malachy E. Mannion of mail fraud, wire fraud, aggravated identity theft, and false statement offenses.
According to Acting United States Attorney Bruce D. Brandler, Larry was charged with defrauding his former employer, a Wilkes-Barre based automobile warranty company, from approximately January 2014 through October 2018. Larry was convicted of stealing the personal information of warranty policy owners and providing it to his coconspirators, who created false invoices for nonexistent automobile repair work supposedly performed at various garages in Rhode Island, Massachusetts, and Pennsylvania, including by forging the policy owners’ signatures on the paperwork. The false and forged documentation was then sent to the warranty company, where Larry approved payment of the invoices. During the course of the scheme, Larry and his coconspirators obtained approximately $400,000 paid out by the warranty company pursuant to the false invoices, including thousands of dollars in repair work for Larry’s personal vehicle that he charged to other policy owners. The evidence at trial showed that Larry then falsified internal warranty company documents in an attempt to conceal his crimes.
The jury returned a guilty verdict after approximately two hours of deliberation. Larry was convicted of every count in his indictment: one count of conspiring to commit mail fraud and wire fraud; four counts of wire fraud, two counts of mail fraud; five counts of aggravated identity theft; and one count of making a false statement to the FBI when he denied receiving cash kickbacks in exchange for his participation in the scheme.
Three of Larry’s coconspirators previously pleaded guilty in connection with the scheme, and are awaiting sentencing:
Matthew Gershkoff, age 64, of North Providence, Rhode Island, pleaded guilty to conspiring to commit wire fraud, and to aggravated identity theft, and is awaiting sentencing. Gershkoff was convicted of preparing false invoices for nonexistent automobile repairs at multiple automobile repair shops located in Rhode Island and in Massachusetts, and for forging policy owners’ signatures. Gershkoff pleaded guilty on May 18, 2020, to causing between $250,000 and $550,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and has agreed to repay restitution.
Jason Pannone, age 39, of North Providence, Rhode Island, pleaded guilty to conspiring to commit wire fraud and mail fraud, and to aggravated identity theft, and is awaiting sentencing. Pannone was convicted of processing false invoices for nonexistent automobile repairs through his Providence, Rhode Island automobile detailing shop, Platinum Auto Services, and through a North Attleboro, Massachusetts automobile repair shop, Ultra Auto Services. Pannone pleaded guilty on March 23, 2021, to causing between $150,000 and $250,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and he has agreed to repay over $128,000 in restitution.
Herman Cabral, age 62, of Cranston, Rhode Island, pleaded guilty to conspiring to commit wire fraud. Cabral was convicted of processing false invoices for nonexistent automobile repairs through his Providence, Rhode Island automobile repair shop, A Plus Collision Center. Cabral pleaded guilty on July 23, 2019, to causing between $150,000 and $250,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and he has agreed to repay over $211,000 in restitution.
The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorneys Phillip J. Caraballo and Jeffrey St John prosecuted the case.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the fraud offenses are 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. The aggravated identity theft charges carry a mandatory, consecutive two-year minimum. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Delvin Hutchinson, age 33, of Stroudsburg, Pennsylvania, was convicted of three counts of making false statements in connection with the purchase of six firearms from a federally licensed firearms dealer following a four-day jury trial before U.S. District Court Judge Robert D. Mariani.
According to United States Attorney Gerard M. Karam, Hutchinson purchased six firearms in three separate transactions at Dunkelberger’s Sports Outfitter, in Stroudsburg, within a 19-day period in March 2019. When investigators from the Bureau of Alcohol, Tobacco, Firearms and Explosives later interviewed Hutchinson, he was in possession of none of the firearms and claimed that some of the firearms had been stolen. Testimony presented at trial showed that Hutchinson’s story regarding the theft was false and that he had “straw purchased” the firearms for one or more other individuals. In connection with the purchase of the firearms, Hutchinson completed federal forms in which he falsely stated that he was purchasing the firearms for himself, when in fact he was purchasing the firearms for one or more other individuals. Hutchinson was convicted of three counts of providing false information to Dunkelberger’s Sports Outfitter regarding the purchase of the firearms.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Pennsylvania State Police, and the Bensalem Police Department also participated in the investigation. Assistant United States Attorneys Robert J. O’Hara and Sarah R. Lloyd prosecuted the case.
This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.
The maximum penalty under federal law for each of the offenses is ten years’ imprisonment, a term of supervised release following imprisonment, and a fine.
WILLIAMSPORT- The United States Attorney’s Office for the Middle District of Pennsylvania announced that on October 18, 2021, Darryl Corradini, age 63, and Vicki Hackenberg, age 57, both of Bloomsburg, Pennsylvania, pleaded guilty before Chief District Court Judge Matthew W. Brann to conspiring to commit money laundering. The laundering activities involved hundreds of thousands of fraudulently obtained funds, including nearly $300,000 in COVID-19 relief guaranteed by the Small Business Administration through the Paycheck Protection Program (PPP).
The PPP is designed to help small businesses facing financial difficulties during the COVID-19 pandemic. Funded by the March 2020 CARES Act, PPP funds are offered in forgivable loans, provided that certain criteria are met, including use of the funds for employee payroll, mortgage interest, lease, and utilities expenses.
According to Acting U.S. Attorney Bruce D. Brandler, Corradini and Hackenberg admitted to assisting their coconspirators by creating a shell corporation, CGM Realty LLC, and opening bank accounts and a Bitcoin trading account in the corporation’s name, by using false and forged documents. Corradini and Hackenberg also assisted their conspirators in obtaining over $135,000 in fraudulently obtained funds, and over $296,000 from a PPP loan that was obtained with false and forged documentation. That documentation included false information and certifications about CGM Realty LLC’s employee payroll obligations, and intention to use the funds for approved purposes, when in fact CGM Realty LLC had no employees or legitimate business operations. Forged IRS documentation also was included with the PPP application, containing false information about CGM Realty LLC’s nonexistent payroll obligations. Over $350,000 was then used to purchase Bitcoins, a type of cryptocurrency, with Corradini and Hackenberg obtaining several thousand dollars for their efforts.
As part of their guilty pleas, Corradini and Hackenberg agreed to forfeit several checks to investigators, and to pay over $430,000 in restitution.
“COVID-19 relief fraud is a high priority for the Department of Justice and our office will continue to vigorously investigate and prosecute these offenses,” stated Acting United States Attorney Bruce D. Brandler. “These funds were intended to help people and businesses harmed by the pandemic, not to line the pockets of fraudsters. We will do everything in our power to make sure that individuals involved in this type of criminal behavior are prosecuted to the fullest extent the law allows.”
The case was investigated by the IRS, Criminal Investigations Division. The case is being prosecuted by Assistant U.S. Attorney Phillip J. Caraballo.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the offense is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania promotes the Department of Justice’s Elder Justice Initiative throughout the Middle District, announced U.S. Attorney Gerard M. Karam. On September 27, 2022, the Middle District partnered with the Federal Bureau of Investigation and AARP Pennsylvania to raise awareness and to educate older adults about the latest financial scams, so they do not fall victim. Approximately 4,000 seniors in the Middle District participated in the interactive telephone town hall as part of the Department of Justice’s Elder Justice Initiative.
Scammers are targeting seniors at an alarming rate. Statistics collected by the FBI’s Internet Crime Complaint Center show that victims of all ages lost approximately $6.9 billion dollars to fraud in 2021, with 92,371 victims over the age of 60 accounting for $1.68 billion of those losses. According to the same statistics, in Pennsylvania, over 17,200 people lost over $207 million dollars, putting Pennsylvania in the top ten states by number of victims.
“The elder fraud cases the FBI investigates are simply infuriating,” said Jacqueline Maguire, Special Agent in Charge of the FBI’s Philadelphia Division. “Anyone who targets vulnerable older folks for their assets lacks both a heart and a moral compass. The FBI will continue working to shut down these types of schemes and to educate the elders of our community about common fraud red flags.”
“Report, report, report. That's a good lesson for everybody on the line,” AARP Pennsylvania Consumer Issues Task Force Chair Mary Bach told listeners. “If you think you're the victim of a scam, you should contact the proper authorities." She also noted AARP’s commitment to helping those who think they’ve been the victim of a scam. “Scam artists are out there looking for new ways to scam their next victims, but you can protect yourself … Visit AARP.org/FraudWatchNetwork or call the AARP Fraud Watch Help Line at 1-877-908-3360.”
The DOJ Elder Justice Initiative aims to combat elder financial exploitation by expanding efforts to investigate and prosecute financial scams that target seniors; educating older adults on how to identify scams and avoid getting ripped off by scammers; and promoting greater coordination with law enforcement partners.
Some examples of financial frauds targeting seniors discussed during the town hall were:
Social Security impostor schemes: defraud victims by posing as Social Security Administration agent and claiming that there is an issue with the victims’ account;
IRS impostor schemes: defraud victims by posing as IRS agents and claiming that victims owe back taxes;
Lottery phone scams: callers convince seniors that a large fee or taxes must be paid before one can receive lottery winnings;
Romance scams: lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose;
Grandparent scams: convince seniors that their grandchildren have been arrested and need bail money;
Tech support scams: scammers offer assistance with viruses or malware they claim were detected on the victim’s computer; and
Below are some tips shared with participants during the town hall on how to avoid falling victim to a financial scam:
Don’t share personal information with anyone you don’t know.
Don’t pay a fee for a prize or lottery winning.
Don’t click on pop-up ads or messages.
Don’t send gift cards, checks, money orders, wire money, or give your bank account information to a stranger.
Don’t fall for a high-pressure sales pitch or a lucrative business deal.
Delete phishing emails and ignore harassing phone calls.
If a scammer approaches you, take the time to talk to a friend or family member.
Keep in mind that if you send money once, you’ll be a target for life.
Remember, it’s not rude to say, “NO.”
A good rule of thumb is, if it sounds too good to be true, it’s likely a scam.
In case you missed the Telephone Town Hall, you can view the recording via audio stream Vekeo.
Attacking exploitation and fighting fraud are two priorities of the Middle District, and the U.S. Attorney’s Office is committed to aggressively pursuing individuals who engage in such acts. Some recent prosecutions include:
The Middle District of Pennsylvania prosecuted Itcace Abramovici, a 72-year-old citizen of Canada, for his leadership role in a Montreal-based telemarketing and money laundering organization that targeted elderly victims in the United States, including those living in central Pennsylvania. Abramovici and his co-conspirators informed prospective victims that they had won a substantial amount of money in a lottery or sweepstakes and then directed those victims to send money in order to obtain their winnings. The victims’ payments were falsely characterized as taxes, customs fees, processing fees, and legal and insurance fees. None of the victims received any money, and many of their losses were substantial, with more than $460,000 in victim losses being attributed to Abramovici’s role in the fraud, and with losses to victims of the broader fraud at more than $1.3 million. Abramovici received a sentence of 30 months’ imprisonment on May 9, 2022.
The Middle District also charged five New York men, Josiah DeJesus, age 20, Jashua Noboa-Nival, age 20, Yeurys Peguero-Rosario, age 22, Ramon Peguero-Rosario, age 19, and Nelson Rivas-Bello, age 27, for their participation in a “Grandparent” mail fraud scheme. The indictment alleged that defendants traveled from New York to various locations in Pennsylvania, including addresses in Luzerne and Lackawanna County, and picked up UPS and Fed Ex packages containing thousands of dollars in cash sent by elderly victims under the false pretense that their grandchildren had been arrested and were in immediate need of money. The victims sent the money after receiving fraudulent phone calls made by the named defendants’ co-conspirators, who posed either as the victims’ grandchildren or as a public defender representing the victims’ grandchildren.
All persons charged are presumed to be innocent unless and until found guilty in court.
If you think you have fallen victim to a scam or need assistance, you can contact the National Elder Fraud Hotline at 1-833-FRAUD-11 (1-833-372-8311), the Victim Connect Hotline at 1-855-4VICTIM (1-855-484-2846), the FBI Internet Complaint Center at www.ic3.gov. Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 1-877-FTC-HELP. You may also contact the AARP Fraud Watch Network free helpline at 1-877-908-3360 to report a scam.
For more information about the Elder Justice Initiative, please visit: https://www.justice.gov/elderjustice.
HARRISBURG – The Justice Department announced today the results of its efforts over the past year to protect older adults from fraud and exploitation. During the past year, the Department and its law enforcement partners tackled matters that ranged from mass-marketing scams that impacted thousands of victims to bad actors scamming their neighbors. Substantial efforts were also made over the last year to return money to fraud victims. Today, the Department also announced it is expanding its Transnational Elder Fraud Strike Force to amplify efforts to combat scams originating overseas.
“We are intensifying our efforts nationwide to protect older adults, including by more than tripling the number of U.S. Attorneys’ offices participating in our Transnational Elder Fraud Strike Force dedicated to disrupting, dismantling and prosecuting foreign-based fraud schemes that target American seniors,” said Attorney General Merrick B. Garland. “This expansion builds on the Justice Department’s existing work to hold accountable those who steal funds from older adults, including by returning those funds to the victims where possible.”
“Every day across the Middle District of Pennsylvania - and across the country – scammers are using technology to steal money from our most vulnerable citizens,” said U.S. Attorney Gerard M. Karam. “Fighting fraud is a priority of the U.S. Attorney’s Office and we are committed to pursuing individuals who engage in such acts. We urge everyone who has been victimized to make a report so that we can continue this fight.”
During the period from September 2021 to September 2022, Department personnel and its law enforcement partners pursued approximately 260 cases involving more than 600 defendants, both bringing new cases and advancing those previously charged.
This past year, the Middle District prosecuted Itcace Abramovici, a 72-year-old citizen of Canada, for his leadership role in a Montreal-based telemarketing and money laundering organization that targeted elderly victims in the United States, including those living in central Pennsylvania. Abramovici and his co-conspirators informed prospective victims that they had won a substantial amount of money in a lottery or sweepstakes and then directed those victims to send money in order to obtain their winnings. The victims’ payments were falsely characterized as taxes, customs fees, processing fees, and legal and insurance fees. None of the victims received any money, and many of their losses were substantial, with more than $460,000 in victim losses being attributed to Abramovici’s role in the fraud, and with losses to victims of the broader fraud at more than $1.3 million. Abramovici received a sentence of 30 months’ imprisonment on May 9, 2022.
The Middle District also prosecuted Jabin Godspower Okpako, of Nigeria, and his wife Christine Bradley Okpako, of Sayre, Pennsylvania, for their roles in conspiring to launder approximately $1.89 million in mail and wire fraud proceeds. The scheme sought to defraud multiple female victims throughout the United States, ranging in age from 55 to 85. The victims had visited online game, relationship and dating web sites, including Instagram, Facebook, Words with Friends, and What’s App. The conspirators, located in the United States and West Africa, befriended the victims through interaction and exchanges of photos on the web sites via text and instant messaging. After cultivating online relationships with the victims, the conspirators fraudulently induced the victims to send and transmit funds for various fictitious reasons. Jabin Okpako received a sentence of 87 months’ imprisonment and Christine Okpako received a sentence of 37 months’ imprisonment.
The Middle District also charged five New York men, Josiah DeJesus, age 20, Jashua Noboa-Nival, age 20, Yeurys Peguero-Rosario, age 22, Ramon Peguero-Rosario, age 19, and Nelson Rivas-Bello, age 27, for their participation in a “Grandparent” mail fraud scheme. The indictment alleged that defendants traveled from New York to various locations in Pennsylvania, including addresses in Luzerne and Lackawanna County, and picked up UPS and Fed Ex packages containing thousands of dollars in cash sent by elderly victims under the false pretense that their grandchildren had been arrested and were in immediate need of money. The victims sent the money after receiving fraudulent phone calls made by the named defendants’ co-conspirators, who posed either as the victims’ grandchildren or as a public defender representing the victims’ grandchildren.
As part of the Middle District’s elder fraud efforts, it engages in outreach to the community and industry to raise awareness about scams and exploitation and preventing victimization. This year, we partnered with the FBI and AARP to reach approximately 4,000 seniors during an interactive telephone town hall which discussed the facts of the latest financial scams targeting seniors. The Middle District also took part in various senior expos in the district to help educate seniors on financial scams.
The Department also highlighted three other efforts: expansion of the Transnational Elder Fraud Task Force, success in returning money to victims and efforts to combat grandparent scams.
The Department announced that as part of its continuing efforts to protect older adults and bring perpetrators of fraud schemes to justice it is expanding the Transnational Elder Fraud Strike Force, adding 14 new U.S. Attorney’s Offices. Expansion of the Strike Force will help to coordinate the Department’s ongoing efforts to combat largest and most harmful fraud schemes that target or disproportionately impact older adults.
In the past year, the Department has notified over 550,000 people that they may be eligible for remission payments. Notifications were made to consumers whose information was sold by one of three data companies prosecuted by the Department and were later victims of “sweepstakes” or “astrology” solicitations that falsely promised prizes or individualized services in return for a fee. More than 150,000 of those victims cashed checks totaling $52 million, and thousands more are eligible to receive checks. Also notified were consumers who paid fraudsters perpetrating person-in-need scams and job scams via Western Union. In the past year, the Department has identified and contacted over 300,000 consumers who may be eligible for remission. Since March of 2020 more than 148,000 victims have received more than $366 million as a result of a 2017 criminal resolution with Western Union for the company’s willful failure to maintain an effective anti-money laundering program and its aiding and abetting of wire fraud.
Over the past year, the Department pursued cases against the perpetrators of “grandparent scams,” otherwise known as “person-in-need scams.” These scams typically begin when a fraudster, often based overseas, contacts an older adult and poses as either a grandchild, other family member or someone calling on behalf of a family member. Call recipients are told that their family member is in jeopardy and is urgently in need of money. When recently sentencing one of eight perpetrators of a grandparent scam indicted under the Racketeer Influenced and Corrupt Organizations Act, a federal judge described such scams “heartbreakingly evil.” The Department is working with government partners and others to raise awareness about these schemes.
Reporting from consumers about fraud and fraud attempts is critical to law enforcements efforts to investigate and prosecute schemes targeting older adults. If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available the National Elder Fraud Hotline: 1-833 FRAUD-11 (1-833-372-8311). This Department of Justice Hotline, managed by the Office for Victims of Crime, is staffed by experienced professional who provide personalized support to callers by assessing the needs of the victim and identifying next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting or connect them with agencies, and provide resources and referrals on a case-by-case basis. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m.[ET]. English, Spanish and other languages are available. More information about the Department’s elder justice efforts can be found on the Department’s Elder Justice website, www.elderjustice.gov.
Some of the cases that comprise today’s announcement are charges, which are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Brian Larry, age 60, of Clarks Summit, Pennsylvania, was sentenced to 94 months’ imprisonment by United States District Court Judge Malachy E. Mannion for fraud, aggravated identity theft, and false statement offenses. A federal jury previously convicted Larry of all 13 charges in his indictment on May 10, 2021.
According to United States Attorney John C. Gurganus, Larry defrauded his former employer, a Wilkes-Barre based automobile warranty company, out of over $400,000. From January 2014 through October 2018, Larry, the manager of the claims department, stole the personal information of warranty policy owners. Larry then provided it to his coconspirators, who created false invoices for nonexistent automobile repair work supposedly performed at various garages in Rhode Island, Massachusetts, and Pennsylvania. The scheme included the forgery of the policy owners’ signatures on the paperwork. The false and forged documentation was then sent to the warranty company, where Larry approved payment of the invoices, in exchange for cash kickbacks. During the course of the scheme, Larry and his coconspirators obtained approximately $400,000 paid out by the warranty company pursuant to the false invoices, including thousands of dollars in repair work for Larry’s personal vehicle that he charged to other policy owners. The evidence at trial showed that Larry then falsified internal warranty company documents in an attempt to conceal his crimes. When confronted by FBI special agents, Larry denied receiving cash kickbacks in exchange for his participation in the scheme.
In pronouncing the sentence, Judge Mannion highlighted that Larry had expressed no remorse for his illegal conduct. Judge Mannion also ordered Larry to pay $394,701.96 to the victim of his crimes, and to serve three years of supervised release following service of his imprisonment term.
Three of Larry’s coconspirators also were convicted in this investigation:
Matthew Gershkoff, age 64, of North Providence, Rhode Island pleaded guilty to conspiring to commit wire and mail fraud, and to aggravated identity theft, and was sentenced to 30 months of imprisonment and three years of supervised release. Gershkoff was convicted of preparing false invoices for nonexistent automobile repairs at multiple automobile repair shops located in Rhode Island and in Massachusetts, and for forging policy owners’ signatures. Gershkoff pleaded guilty on May 18, 2020, to causing between $250,000 and $550,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and was ordered to pay restitution of $385,352.19.
Herman Cabral, age 62, of Cranston, Rhode Island, pleaded guilty to conspiring to commit wire fraud, and was sentenced to 10 months of imprisonment and three years of supervised release. Cabral was convicted of processing false invoices for nonexistent automobile repairs through his Providence, Rhode Island automobile detailing shop, A Plus Auto Services. Cabral pleaded guilty on July 23, 2019, to causing between $150,000 and $250,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and was ordered to pay $211,644.03 in restitution.
Jason Pannone, age 40, of North Providence, Rhode Island pleaded guilty to conspiring to commit wire and mail fraud, and to aggravated identity theft, and was sentenced to 18 months of imprisonment and two years of supervised release. Pannone was convicted of processing false invoices for nonexistent automobile repairs through his Providence, Rhode Island automobile detailing shop, Platinum Auto Services, and through Ultra Auto Services, where he was employed. Pannone pleaded guilty on March 23, 2021, to causing between $95,000 and $150,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and was ordered to pay restitution of $128,667.16.
The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorneys Phillip J. Caraballo and Jeffrey St John prosecuted the case.
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY
Description: The code of the federal judicial circuit where the case was located
Format: A2
Description: The code of the federal judicial district where the case was located
Format: A2
Description: The code of the district office where the case was located
Format: A2
Description: Docket number assigned by the district to the case
Format: A7
Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3
Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3
Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5
Description: Case type associated with the current defendant record
Format: A2
Description: Case type associated with a magistrate case if the current case was merged from a magistrate case
Format: A2
Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18
Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15
Description: The docket number originally given to a case assigned to a magistrate judge and subsequently merged into a criminal case
Format: A7
Description: A unique number assigned to each defendant in a magistrate case
Format: A3
Description: The status of the defendant as assigned by the AOUSC
Format: A2
Description: A code indicating the fugitive status of a defendant
Format: A1
Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD
Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD
Description: The date when a case was first docketed in the district court
Format: YYYYMMDD
Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD
Description: A code used to identify the nature of the proceeding
Format: N2
Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD
Description: A code indicating the event by which a defendant appeared before a judicial officer in the district court where a charge was pending
Format: A2
Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2
Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE1
Format: N2
Description: The four digit AO offense code associated with FTITLE1
Format: A4
Description: The four digit D2 offense code associated with FTITLE1
Format: A4
Description: A code indicating the severity associated with FTITLE1
Format: A3
Description: The title and section of the U.S. Code applicable to the offense committed which carried the second highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE2
Format: N2
Description: The four digit AO offense code associated with FTITLE2
Format: A4
Description: The four digit D2 offense code associated with FTITLE2
Format: A4
Description: A code indicating the severity associated with FTITLE2
Format: A3
Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5
Description: The date of the last action taken on the record
Format: YYYYMMDD
Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD
Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD
Description: The date upon which the case was closed
Format: YYYYMMDD
Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8
Description: A count of defendants filed including inter-district transfers
Format: N1
Description: A count of defendants filed excluding inter-district transfers
Format: N1
Description: A count of original proceedings commenced
Format: N1
Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants terminated including interdistrict transfers
Format: N1
Description: A count of defendants terminated excluding interdistrict transfers
Format: N1
Description: A count of original proceedings terminated
Format: N1
Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1
Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1
Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10
Description: A sequential number indicating the iteration of the defendant record
Format: N2
Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD
Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
The Hazleton City Police Department received a check in the amount of $295,787.11 today from Homeland Security Investigations Philadelphia office.
HARRISBURG – U.S. Attorney David J. Freed of the United States Attorney’s Office for the Middle District of Pennsylvania joined Special Agent in Charge of Homeland Security Investigations (HSI) Philadelphia, Marlon V. Miller, in presenting a check in the amount of $295,787.11 today to the Chief of Police for the Hazleton City Police Department, Jerry Speziale.
A HSI New York Darknet investigation identified Joshua Sweet, age 26, of Hazleton, Pennsylvania, as a prolific Darknet vendor who manufactured and distributed substantial quantities of narcotics including cocaine, alprazolam, fentanyl, and marijuana, on the Darknet. He laundered his illicit proceeds on the Darknet in an attempt to conceal his illegal activities from law enforcement. Over the course of the yearlong probe, HSI and the Hazelton City Police Department seized evidence including significant quantities of narcotics, equipment to make counterfeit pills, cash, and bitcoin as drug trafficking proceeds.
The U.S. Attorney’s Office for the Middle District of Pennsylvania in conjunction with HSI Philadelphia special agents, charged Sweet in a criminal complaint on May 16, 2018, with possession with intent to distribute controlled substances.
“Homeland Security Investigations is proud to return a significant portion of the money seized in this case to the police department, where it will be put to good use improving the public safety for all citizens in this area," said Marlon V. Miller, special agent in charge of HSI Philadelphia. "We recognize the key role that our local law enforcement partners play in addressing the significant threat that narcotics pose on our communities. Sadly, the perils of narcotics trafficking do not just affect our big cities, they also having a significant impact on our smaller communities."
“While we can and will continue to focus on public safety, effective investigations allow us to also disrupt the business of crime by seizing ill-gotten gains,” said U.S. Attorney David J. Freed. “This presents the opportunity to share these assets with local partners and communities that have been negatively impacted by criminal activity. Because of the great work of HSI and Hazleton Police Department, the law-abiding citizens of Hazleton will benefit for years to come.”
“The collaboration between us has unleashed the power of us all to accomplish what none can do alone,” said Jerry Speziale, Chief of Police for the Hazleton City Police Department. “These funds will support future law enforcement endeavors and equipment so the taxpayer don’t shoulder the burden.”
The funds resulted from an investigation by HSI Philadelphia’s Cyber Crime Investigations Task Force (C2iTF), the Hazleton City Police Department, U.S. Postal Inspection Service, and the Pennsylvania State Police. Assistant United States Attorney Sean Camoni is prosecuting the case.
HSI’s asset forfeiture program exemplifies HSI’s efforts in the area of identification, seizure and forfeiture of assets that represent the proceeds of, and/or were used to facilitate federal violations under the investigative jurisdiction of HSI. The program adheres to the principal belief that the utilization of consistent and strategic application of asset forfeiture laws is necessary and vital in order to disrupt and dismantle the financial infrastructure of criminal enterprises and other national security threats. Asset forfeiture is an essential element of comprehensive and effective law enforcement as it deprives trans-national criminal organizations of their illicitly obtained assets. Accordingly, HSI brings to bear considerable authority, expertise and resources in the area of asset forfeiture. The forfeiture of assets can be and is utilized as a sanction in criminal, civil and administrative investigative activities. Please click here for more information on HSI Asset Forfeiture Branch.
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY
Description: The code of the federal judicial circuit where the case was located
Format: A2
Description: The code of the federal judicial district where the case was located
Format: A2
Description: The code of the district office where the case was located
Format: A2
Description: Docket number assigned by the district to the case
Format: A7
Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3
Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3
Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5
Description: Case type associated with the current defendant record
Format: A2
Description: Case type associated with a magistrate case if the current case was merged from a magistrate case
Format: A2
Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18
Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15
Description: The docket number originally given to a case assigned to a magistrate judge and subsequently merged into a criminal case
Format: A7
Description: A unique number assigned to each defendant in a magistrate case
Format: A3
Description: The status of the defendant as assigned by the AOUSC
Format: A2
Description: A code indicating the fugitive status of a defendant
Format: A1
Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD
Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD
Description: The date when a case was first docketed in the district court
Format: YYYYMMDD
Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD
Description: A code used to identify the nature of the proceeding
Format: N2
Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD
Description: A code indicating the event by which a defendant appeared before a judicial officer in the district court where a charge was pending
Format: A2
Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2
Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE1
Format: N2
Description: The four digit AO offense code associated with FTITLE1
Format: A4
Description: The four digit D2 offense code associated with FTITLE1
Format: A4
Description: A code indicating the severity associated with FTITLE1
Format: A3
Description: The title and section of the U.S. Code applicable to the offense committed which carried the second highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE2
Format: N2
Description: The four digit AO offense code associated with FTITLE2
Format: A4
Description: The four digit D2 offense code associated with FTITLE2
Format: A4
Description: A code indicating the severity associated with FTITLE2
Format: A3
Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5
Description: The date of the last action taken on the record
Format: YYYYMMDD
Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD
Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD
Description: The date upon which the case was closed
Format: YYYYMMDD
Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8
Description: A count of defendants filed including inter-district transfers
Format: N1
Description: A count of defendants filed excluding inter-district transfers
Format: N1
Description: A count of original proceedings commenced
Format: N1
Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants terminated including interdistrict transfers
Format: N1
Description: A count of defendants terminated excluding interdistrict transfers
Format: N1
Description: A count of original proceedings terminated
Format: N1
Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1
Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1
Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10
Description: A sequential number indicating the iteration of the defendant record
Format: N2
Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD
Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Angelo Pereyra, age 39, of Wichita, Kansas, and Andrew Ensanian, age 38, of Montgomery, Pennsylvania, were charged today by Criminal Information with interstate transport of stolen goods.
According to United States Attorney Gerard M. Karam, the information alleges that between 2018 and 2022, Pereyra and Ensanian caused stolen human remains to be transported between Kansas and Pennsylvania.
These charges resulted from a multi-year investigation into the nationwide trafficking of stolen human remains. Multiple defendants have been charged previously in the Middle District of Pennsylvania, and three have thus far entered guilty pleas. An additional defendant has been charged and convicted in Arkansas. None have yet been sentenced.
The case was investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service. Assistant U.S. Attorney Sean A. Camoni is prosecuting the case.
The maximum penalty under federal law for this offense is 10 years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Brian Larry, age 56, of Clark’s Summit, Pennsylvania, and Jason Pannone, age 39, of North Providence, Rhode Island, were indicted on July 28, 2020, by a federal grand jury on fraud and identity theft offenses.
According to United States Attorney David J. Freed, the indictment alleges that Larry and Pannone, along with other co-conspirators conspired to defraud a Wilkes-Barre based automobile warranty company from approximately January 2014 through October 2018. The conspirators are alleged to have created false invoices for nonexistent automobile repair work supposedly performed at various garages in Rhode Island, Massachusetts, and Pennsylvania, including by forging the policy owners’ signatures on the paperwork. The false and forged documentation was then sent to the warranty company to obtain payment for the nonexistent repairs, with the conspirators splitting the warranty company’s payments between themselves. Larry is alleged to have been a claims adjuster at the warranty company who approved of the fraudulent claims in exchange for kickbacks. Pannone is alleged to have been the owner or employee of three of the garages that submitted fraudulent claims.
Over the course of the conspiracy, the conspirators allegedly obtained in excess of $400,000 in fraudulent proceeds. In addition to the conspiracy charge, Larry and Pannone also are charged with several counts of wire fraud and aggravated identity theft. Larry further is charged with mail fraud and with providing false statements to federal agents during the course of the investigation.
Separately, the United States Attorney’s Office unsealed charges against two other alleged co-conspirators. Herman Cabral, age 61, of Cranston, Rhode Island, was charged in an information with conspiring to commit wire fraud. Cabral allegedly processed false invoices for nonexistent automobile repairs through his Providence, Rhode Island automobile repair shop, A Plus Collision Center LLC. Cabral pleaded guilty on July 23, 2019, to causing between $150,000 and $250,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and he has agreed to repay over $211,000 in restitution.
Matthew Gershkoff, age 63, of North Providence, Rhode Island, was charged in an information with conspiring to commit wire fraud, and with aggravated identity theft. Gershkoff allegedly prepared and forged false invoices for nonexistent automobile repairs at multiple automobile repair shops located in Rhode Island and in Massachusetts. Gershkoff pleaded guilty to the charges on May 18, 2020, to causing between $250,000 and $550,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and has agreed to repay restitution.
The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorney Phillip J. Caraballo is prosecuting the case.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for the fraud offenses are 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. The aggravated identity theft charges carry a mandatory, consecutive two-year minimum. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
Description: The fiscal year of the data file obtained from the AOUSC
Format: YYYY
Description: The code of the federal judicial circuit where the case was located
Format: A2
Description: The code of the federal judicial district where the case was located
Format: A2
Description: The code of the district office where the case was located
Format: A2
Description: Docket number assigned by the district to the case
Format: A7
Description: A unique number assigned to each defendant in a case which cannot be modified by the court
Format: A3
Description: A unique number assigned to each defendant in a case which can be modified by the court
Format: A3
Description: A sequential number indicating whether a case is an original proceeding or a reopen
Format: N5
Description: Case type associated with the current defendant record
Format: A2
Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
Format: A18
Description: A concatenation of district, office, docket number, case type, and reopen sequence number
Format: A15
Description: The status of the defendant as assigned by the AOUSC
Format: A2
Description: A code indicating the fugitive status of a defendant
Format: A1
Description: The date upon which a defendant became a fugitive
Format: YYYYMMDD
Description: The date upon which a fugitive defendant was taken into custody
Format: YYYYMMDD
Description: The date when a case was first docketed in the district court
Format: YYYYMMDD
Description: The date upon which proceedings in a case commenced on charges pending in the district court where the defendant appeared, or the date of the defendant’s felony-waiver of indictment
Format: YYYYMMDD
Description: A code used to identify the nature of the proceeding
Format: N2
Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
Format: YYYYMMDD
Description: A code indicating the event by which a defendant appeared before a judicial officer in the district court where a charge was pending
Format: A2
Description: A code indicating the type of legal counsel assigned to a defendant
Format: N2
Description: The title and section of the U.S. Code applicable to the offense committed which carried the highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE1
Format: N2
Description: The four digit AO offense code associated with FTITLE1
Format: A4
Description: The four digit D2 offense code associated with FTITLE1
Format: A4
Description: A code indicating the severity associated with FTITLE1
Format: A3
Description: The title and section of the U.S. Code applicable to the offense committed which carried the second highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE2
Format: N2
Description: The four digit AO offense code associated with FTITLE2
Format: A4
Description: The four digit D2 offense code associated with FTITLE2
Format: A4
Description: A code indicating the severity associated with FTITLE2
Format: A3
Description: The title and section of the U.S. Code applicable to the offense committed which carried the third highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE3
Format: N2
Description: The four digit AO offense code associated with FTITLE3
Format: A4
Description: The four digit D2 offense code associated with FTITLE3
Format: A4
Description: A code indicating the severity associated with FTITLE3
Format: A3
Description: The title and section of the U.S. Code applicable to the offense committed which carried the fourth highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE4
Format: N2
Description: The four digit AO offense code associated with FTITLE4
Format: A4
Description: The four digit D2 offense code associated with FTITLE4
Format: A4
Description: A code indicating the severity associated with FTITLE4
Format: A3
Description: The title and section of the U.S. Code applicable to the offense committed which carried the fifth highest severity
Format: A20
Description: A code indicating the level of offense associated with FTITLE5
Format: N2
Description: The four digit AO offense code associated with FTITLE5
Format: A4
Description: The four digit D2 offense code associated with FTITLE5
Format: A4
Description: A code indicating the severity associated with FTITLE5
Format: A3
Description: The FIPS code used to indicate the county or parish where an offense was committed
Format: A5
Description: The date of the last action taken on the record
Format: YYYYMMDD
Description: The date upon which judicial proceedings before the court concluded
Format: YYYYMMDD
Description: The date upon which the final sentence is recorded on the docket
Format: YYYYMMDD
Description: The date upon which the case was closed
Format: YYYYMMDD
Description: The total fine imposed at sentencing for all offenses of which the defendant was convicted and a fine was imposed
Format: N8
Description: A count of defendants filed including inter-district transfers
Format: N1
Description: A count of defendants filed excluding inter-district transfers
Format: N1
Description: A count of original proceedings commenced
Format: N1
Description: A count of defendants filed whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants terminated including interdistrict transfers
Format: N1
Description: A count of defendants terminated excluding interdistrict transfers
Format: N1
Description: A count of original proceedings terminated
Format: N1
Description: A count of defendants terminated whose proceedings commenced by reopen, remand, appeal, or retrial
Format: N1
Description: A count of defendants pending as of the last day of the period including long term fugitives
Format: N1
Description: A count of defendants pending as of the last day of the period excluding long term fugitives
Format: N1
Description: The source from which the data were loaded into the AOUSC’s NewSTATS database
Format: A10
Description: A sequential number indicating the iteration of the defendant record
Format: N2
Description: The date the record was loaded into the AOUSC’s NewSTATS database
Format: YYYYMMDD
Description: Statistical year ID label on data file obtained from the AOUSC which represents termination year
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Angela Castillo, age 39, of Freeland, PA, was sentenced on November 8, 2023, by United States District Judge Robert D. Mariani, to 10 months imprisonment, to be followed by a 3-year term of supervised release, with 5 months of electronic monitoring, in connection a wire fraud scheme involving the preparation and submission of numerous false Economic Injury Disaster Loan (EIDL) applications.
According to United States Attorney Gerard M. Karam, between June 2020 and September 2020, on behalf of other individuals and in exchange for payment, Castillo prepared and submitted to the United States Small Business Association (SBA) at least 40 false EIDL applications containing material misrepresentations. Castillo’s conduct resulted in the SBA paying out approximately $163,000.00 in COVID-19 relief funds to individuals, none of whom actually owned a qualifying small business and who therefore were not entitled to receive such funds under the program. At her sentencing, Castillo was ordered to pay $163,000.00 in restitution to the SBA.
The case was investigated by the Internal Revenue Service – Criminal Investigations. Assistant U.S. Attorney Jeffery St John prosecuted the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Marlon Valoy De La Rosa, age 23, of Bronx, New York, was sentenced on June 8, 2022, to 24 months in prison and ordered to pay $19,138.01 in restitution by U.S. District Court Judge Sylvia H. Rambo, after pleading guilty to aggravated identity theft.
According to United States Attorney John C. Gurganus, on January 4, 2020, at approximately 4:30 AM, Steelton Borough Police observed De La Rosa along with two other individuals tampering with a U.S. Mail blue collection box in the Borough of Steelton, Pennsylvania. One individual, later identified as Enrique Reyes, used what appeared to be a white rope with an object attached to it to “fish” into the mailbox’s opening while a second individual, later identified as Josue Peguero, stood nearby as a lookout. De La Rosa drove the vehicle in which the individuals arrived and left the scene.
Following a traffic stop, the individuals were found to be in possession of numerous debit cards in different names, none of which matched De La Rosa, Reyes, or Peguero. De La Rosa possessed a receipt from a fraudulent ATM transaction using a stolen check and a stolen, washed check belonging to a different individual.
The investigation showed that De La Rosa, Reyes, and Peguero had conducted multiple fraudulent debit card transactions in New York City just prior to traveling to the Harrisburg area and had also recently traveled to the Boston area, where they had gone mail fishing and obtained additional checks from the mail. Their debit card transactions involved the use of stolen, altered checks and debit cards belonging to other people. The investigation further determined that the three had been involved in the stealing of checks and the depositing of these checks in a fraudulent manner for several months leading up to the time of their arrest.
The case was investigated by the United States Postal Inspection Service and the Steelton Borough Police Department. Assistant U.S. Attorney Ravi Romel Sharma prosecuted the case.
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jason Pannone, age 40, of North Providence, Rhode Island was sentenced to 18 months’ imprisonment and two years of supervised release by United States District Court Judge Malachy E. Mannion for conspiring to commit wire and mail fraud, and for aggravated identity theft offenses.
According to Acting United States Attorney Bruce D. Brandler, Pannone was convicted of processing false invoices for nonexistent automobile repairs through his Providence, Rhode Island automobile detailing shop, Platinum Auto Services, and through Ultra Auto Services, where he was employed. The invoices were sent to and paid by an automobile warranty company in Wilkes-Barre, Pennsylvania. Pannone pleaded guilty on March 23, 2021, to causing between $150,000 and $250,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company. Judge Mannion ordered Pannone to pay restitution of $128,667.16 to the victim of his crime.
Three of Pannone’s coconspirators were convicted in this investigation:
Brian Larry, age 59, of Clark’s Summit, Pennsylvania, was convicted on May 10, 2021, following a jury trial, of mail fraud, wire fraud, aggravated identity theft, and false statement offenses. Larry was convicted of defrauding his former employer, the Wilkes-Barre based automobile warranty company, from approximately January 2014 through October 2018. Larry also was convicted of stealing the personal information of warranty policy owners and providing it to his coconspirators, who created false invoices for nonexistent automobile repair work supposedly performed at various garages in Rhode Island, Massachusetts, and Pennsylvania, including by forging the policy owners’ signatures on the paperwork. The false and forged documentation was then sent to the warranty company, where Larry approved payment of the invoices. During the course of the scheme, Larry and his coconspirators obtained approximately $400,000 paid out by the warranty company pursuant to the false invoices, including thousands of dollars in repair work for Larry’s personal vehicle that he charged to other policy owners. The evidence at trial showed that Larry then falsified internal warranty company documents in an attempt to conceal his crimes.
Matthew Gershkoff, age 64, of North Providence, Rhode Island, pleaded guilty to conspiring to commit wire fraud, and to aggravated identity theft, and is awaiting sentencing. Gershkoff was convicted of preparing false invoices for nonexistent automobile repairs at multiple automobile repair shops located in Rhode Island and in Massachusetts, and for forging policy owners’ signatures. Gershkoff pleaded guilty on May 18, 2020, to causing between $250,000 and $550,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and has agreed to repay restitution.
Herman Cabral, age 62, of Cranston, Rhode Island, pleaded guilty to conspiring to commit wire fraud, and was sentenced to 10 months of imprisonment and three years of supervised release. Cabral was convicted of processing false invoices for nonexistent automobile repairs through his Providence, Rhode Island automobile detailing shop, A Plus Auto Services. Cabral pleaded guilty on July 23, 2019, to causing between $150,000 and $250,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and was ordered to pay over $211,644.03 in restitution.
The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorneys Phillip J. Caraballo and Jeffrey St John prosecuted the case.
HARRISBURG – U.S. Attorney David J. Freed of the Middle District of Pennsylvania, today announced that more than $65 million in Department of Justice grants is available to help communities combat human trafficking and serve adults and children who are victimized in trafficking operations.
“While we have come a long way in our ability to recognize and prosecute cases of human trafficking, there is more work to be done especially in the area of both prevention of human trafficking and services to victims of human trafficking,” said U.S. Attorney Freed. “These grant opportunities will have a direct positive impact on those who have suffered at the hands of traffickers.”
“Our nation is facing difficult challenges, none more pressing than the scourge of human trafficking. Human traffickers pose a dire threat to public safety and countering this threat remains one of the Administration’s top domestic priorities,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs. “The Department of Justice is front and center in the fight against this insidious crime. OJP is making historic amounts of grant funding available to ensure that our communities have access to innovative and diverse solutions.”
The funding is available through OJP, the federal government’s leading source of public safety funding and crime victim assistance in state, local and tribal jurisdictions. OJP’s programs support a wide array of activities and services, including programs that support human trafficking task forces and services for human trafficking survivors.
A number of funding opportunities are currently open, with several more opening in the near future.
Missing and Exploited Children Training and Technical Assistance Program
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Brian J. Albelli, age 45, of Stroudsburg, Pennsylvania, and formerly of Deerfield Beach, Florida, was charged in a criminal information on July 27, 2023, with wire fraud and money laundering.
According to United States Attorney Gerard M. Karam, the information alleges that Albelli owned and operated multiple corporate entities in Pennsylvania and Florida. Albelli allegedly filed approximately 20 fraudulent applications for pandemic stimulus funds, including under the Payment Protection Program (PPP), and for Economic Injury and Disaster Loans (EIDLs). The applications allegedly submitted by Albelli were filed on behalf of corporate entities that did not, in fact, have actual business operations, and that bore inflated revenues and employee headcount, and nonexistent gross receipts and costs of goods sold. The applications also included a forged IRS income tax return, and forged federal employment tax documents.
Albelli allegedly obtained in excess of approximately $2,200,000 in PPP and EIDL funds, for himself and his family members, through filing the fraudulent applications. Instead of using the funds on business expenses, Albelli allegedly used them on purchasing boats and automobiles, real estate, retail shopping, and other personal expenses. Albelli also is charged with committing money laundering by concealing the fraudulent proceeds of his crimes.
The PPP and EIDL programs, both funded by the March 2020 CARES Act, were designed to help small businesses facing financial difficulties during the COVID-19 pandemic. PPP funds were offered in forgivable loans, provided that certain criteria are met, including use of the funds for employee payroll, mortgage interest, lease, and utilities expenses. EIDL funds are offered in low-interest rate loans, designated for specific business expenses, such as fixed debts, payroll, and business obligation.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
The case was investigated by the Internal Revenue Service’s Criminal Investigations. Assistant U.S. Attorneys Phillip J. Caraballo and Sean Camoni are prosecuting the case.
The maximum penalties under federal law for both charges are 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
HARRISBURG - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Rodney L. Yentzer, age 55, formerly of Carlisle, Pennsylvania and currently in Chuluota, Florida, was sentenced to 42 months imprisonment on charges of conspiracy to commit health care fraud, conspiracy to commit money laundering, and theft of public money. He was also ordered to pay an additional $2,993,386.19 in restitution after having paid $900,000 toward a civil settlement with the United States in 2022.According to Acting United States Attorney John C. Gurganus, Yentzer previously admitted to defrauding Medicare and the U.S. Department of Health and Human Services between 2016 and 2020 and pleaded guilty to the three offenses for which he was sentenced. Yentzer agreed with others to defraud Medicare by submitting medically unnecessary urine drug tests for chronic opioid patients at medical clinics he controlled, including a group of clinics known as Pain Medicine of York or “PMY” (also known as All Better Wellness).“This defendant’s only interest was in his own wealth, and he exploited patients and defrauded a state healthcare system designed to promote wellness for vulnerable residents in order to line his pockets,” Pennsylvania Attorney General Dave Sunday said. “I commend our federal partners for collaborating with our team on a comprehensive investigation that culminated in a significant prison sentence.”Yentzer assumed control of various medical practices between 2014 and 2018, including the original PMY location, which he acquired in 2014. The medical practices he later took control of included a group of clinics run by John H. Johnson, who was referred to as “Physician 1” in the February 2022 charges against Yentzer.In July 2015, John H. Johnson was indicted for various tax offenses in the U.S. District Court for the Western District of Pennsylvania. In September 2016, John H. Johnson was charged in the U.S. District Court for the Southern District of Florida with conspiracy to commit mail fraud and wire fraud in connection with a separate health care fraud scheme. Johnson was sentenced to 84 months in federal prison on June 30, 2017 for accepting kickbacks in exchange for referring patients for medically unnecessary tests and for failing to pay employment taxes. He was also ordered to repay to the U.S. Government over $3 million restitution payments for fraudulent health care billing and unpaid taxes. Johnson surrendered to federal custody that same day. Following Johnson’s incarceration, the operation of his medical clinics was transitioned to PMY, which was also under Yentzer’s control.Prior to Johnson’s incarceration, Yentzer took direction from Johnson on various issues, including clinical issues at PMY. In 2016, Johnson advised Yentzer to put in place the practice of ordering multiple urine drug tests for each patient at every PMY office visit, and Yentzer agreed. Yentzer understood that this practice did not constitute individualized care, as required by Medicare, and was subsequently confronted repeatedly with information about the unlawful nature of the billing practices for urine drug tests. Nonetheless, Yentzer decided to keep this practice in place until PMY was shut down in late 2019, following a law enforcement raid.PMY billed Medicare for more than $10 million in urine drug tests from mid-2017 through the end of 2019, and Medicare paid out over $4 million for these urine drug tests. Pennsylvania’s Medicaid program was also billed for urine drug tests during this same time period. The urine drug tests ordered by PMY were sent to an in-house laboratory at PMY whenever possible. As a result, when medically unnecessary tests were billed to Medicare, Medicaid, or, in some cases, private insurance companies, the proceeds from them went to PMY itself.The proceeds from the health care fraud scheme were then used for the benefit of Yentzer, Johnson, Johnson’s wife, and Florentina Mayko, the former CEO of PMY. Yentzer bought a number of luxury items with those funds, such as a Rolex Submariner with a retail price of almost $37,000 for himself and a four-carat diamond ring worth over $40,000 for his wife, in addition to a set of approximately $7,000 Rolex watches for himself, John H. Johnson, and another friend and business associate. Yentzer also bought luxury vehicles for himself and his family members, such as a Porsche Boxster, a custom-built car trailer for almost $290,000, and an RV for approximately half a million dollars. Yentzer also made substantial upgrades to his home in Carlisle, PA, which he sold for approximately $1.3 million in 2022 to make restitution and civil settlement payments to the United States.Before reporting to prison, Johnson asked Yentzer to place his wife, Paula Z. Johnson— known as “Physician 2” in the charges against Yentzer—on the PMY payroll. In order to make it appear that she was performing legitimate work—even though she had not practiced medicine in years—Yentzer and John H. Johnson agreed that Paula Z. Johnson would periodically send Yentzer an email containing summaries and excerpts of medical literature. She received a large salary and also had a PMY employee come to her home once a week to perform yardwork and other household duties. This financial arrangement allowed John H. Johnson to share in PMY’s financial success without his assets being seized by the federal government for purposes of restitution payments.John H. Johnson, Paula Z. Johnson, and Rodney L. Yentzer devised various other ways to funnel money to the Johnsons so that they could benefit from this wealth without the money being captured for John H. Johnson’s restitution payments. Among other things, Yentzer purchased a car for the Johnsons’ son and leased an Audi Q5 for Paula Z. Johnson, at her request. Yentzer also made $28,000 in contributions to their children’s 529 college savings accounts, paid over $40,000 in legal bills for “asset and estate planning,” made over $40,000 in payments toward personal loans, and covered other large bills, all with the knowledge of both John H. Johnson and Paula Z. Johnson. On a number of occasions, Paula Z. Johnson requested these payments directly from Yentzer or his assistant.PMY shut down abruptly in November 2019 after search warrants were executed because it was no longer able to retain medical providers to see patients.In April 2020, Yentzer received over $191,000 in U.S. Department of Health and Human Services stimulus money that was intended for health care providers who had health care related expenses and lost revenues attributable to COVID19. Yentzer obtained these funds even though after he had resigned from PMY the prior month and PMY had been closed since late 2019. Yentzer allegedly used these funds on various things unrelated to COVID19 relief, including personal expenses.In December 2023, Florentina Mayko, the former CEO of PMY, was sentenced to 30 months in prison for her role in the same health care fraud scheme. Mayko was also ordered to pay $1,408,976.48 in restitution and to forfeit to the United States several properties located in Ocean City, Maryland and Myrtle Beach, South Carolina that she had purchased used proceeds of the health care fraud scheme.In September 2024, John H. Johnson was sentenced to 97 months in federal prison and ordered to pay an additional $2.3 million in restitution on top of the restitution that he was ordered to pay in 2017. Paula Z. Johnson was sentenced to three years of probation, including six months of home detention with location monitoring, and was ordered to immediately pay $249,301.36 in restitution, fines, and assessments.The case was investigated by the U.S. Department of Health and Human Services Office of Inspector General, Federal Bureau of Investigation, Drug Enforcement Administration Diversion Control Program, and the Pennsylvania Office of Attorney General. Assistant U.S. Attorney Ravi Romel Sharma and Special Assistant U.S. Attorney Robert Smultkis prosecuted the case.# # #
SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced that Angela Castillo, age 38, of Freeland, PA, was charged yesterday in a criminal Information with wire fraud.
According to United States Attorney John C. Gurganus, the Information alleges that between June 2020 and September 2020, on behalf of other individuals and in exchange for payment, Castillo submitted to the United States Small Business Association (SBA) no fewer than forty Economic Injury Disaster Loan (EIDL) applications, all of which contained material misrepresentations. Castillo’s conduct resulted in the SBA paying out approximately $163,000.00 in COVID-19 relief funds to individuals, none of whom actually owned a qualifying small business, and who therefore were not entitled to receive such funds under the EIDL loan program.
The case was investigated by the Internal Revenue Service – Criminal Investigation. Assistant U.S. Attorney Jeffery St John is prosecuting the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
If convicted, the maximum penalty under federal law for this offense is 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
SCRANTON- The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Vicki Hackenberg, age 57, of Bloomsburg, Pennsylvania, was sentenced by United States Chief District Judge Matthew W. Brann, to 12 months of imprisonment for perpetrating a bank fraud and money laundering scheme that included nearly $300,000 in COVID-19 relief guaranteed by the Small Business Administration through the Paycheck Protection Program (PPP).
The PPP is designed to help small businesses facing financial difficulties during the COVID-19 pandemic. Funded by the March 2020 CARES Act, PPP funds are offered in forgivable loans, provided that certain criteria are met, including use of the funds for employee payroll, mortgage interest, lease, and utilities expenses.
According to United States Attorney John C. Gurganus, Hackenberg pleaded guilty to a money laundering conspiracy involving her codefendant, Darryl Corradini, and others. The conspirators created a shell corporation, CGM Realty LLC, and opened bank accounts and a Bitcoin trading account in the corporation’s name, by using false and forged documents. The conspirators allegedly used the accounts to receive over $135,000 in fraudulently obtained funds, and over $296,000 from a PPP loan that was obtained with false and forged documentation. That documentation included false information and certifications about CGM Realty LLC’s employee payroll obligations, and intention to use the funds for approved purposes, when in fact CGM Realty LLC had no employees or legitimate business operations. Forged IRS documentation also was included with the PPP application, containing false information about CGM Realty LLC’s nonexistent payroll obligations. Over $350,000 was then used to purchase Bitcoins, a type of cryptocurrency.
During sentencing, Chief Judge Brann highlighted Hackenberg’s prior state conviction for a similar fraud offense, noting that she was on probation at the time she committed the instant offense. In addition to the Hackenberg’s sentence of imprisonment, Chief Judge Brann also ordered her to pay $431,289 to the victims of her crimes. Hackenberg’s codefendant, Darryl Corradini, also pleaded guilty to a money laundering conspiracy and awaits sentencing.
The case was investigated by agents with the Internal Revenue Service’s Criminal Investigations Division. Assistant U.S. Attorney Phillip J. Caraballo prosecuted the case.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced that Matthew Gershkoff, age 64, of North Providence, Rhode Island was sentenced to 30 months’ imprisonment and three years of supervised release by United States District Court Judge Malachy E. Mannion, for conspiring to commit wire fraud, and for aggravated identity theft offenses. Judge Mannion also ordered Gershkoff to pay restitution of $385,352.19 to the victim of his crime.
According to Acting United States Attorney Bruce D. Brandler, Gershkoff was convicted of preparing false invoices for nonexistent automobile repairs at multiple automobile repair shops located in Rhode Island and in Massachusetts, and for forging policy owners’ signatures. The invoices were sent to and paid by an automobile warranty company in Wilkes-Barre, Pennsylvania. Gershkoff pleaded guilty on May 18, 2020, to causing between $250,000 and $550,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company.
Three of Gershkoff’s coconspirators were convicted in this investigation:
Brian Larry, age 59, of Clark’s Summit, Pennsylvania, was convicted on May 10, 2021, following a jury trial, of mail fraud, wire fraud, aggravated identity theft, and false statement offenses. Larry was convicted of defrauding his former employer, the Wilkes-Barre based automobile warranty company, from approximately January 2014 through October 2018. Larry also was convicted of stealing the personal information of warranty policy owners and providing it to his coconspirators, who created false invoices for nonexistent automobile repair work supposedly performed at various garages in Rhode Island, Massachusetts, and Pennsylvania, including by forging the policy owners’ signatures on the paperwork. The false and forged documentation was then sent to the warranty company, where Larry approved payment of the invoices. During the course of the scheme, Larry and his coconspirators obtained approximately $400,000 paid out by the warranty company pursuant to the false invoices, including thousands of dollars in repair work for Larry’s personal vehicle that he charged to other policy owners. The evidence at trial showed that Larry then falsified internal warranty company documents in an attempt to conceal his crimes.
Herman Cabral, age 62, of Cranston, Rhode Island, pleaded guilty to conspiring to commit wire fraud, and was sentenced to 10 months of imprisonment and three years of supervised release. Cabral was convicted of processing false invoices for nonexistent automobile repairs through his Providence, Rhode Island automobile detailing shop, A Plus Auto Services. Cabral pleaded guilty on July 23, 2019, to causing between $150,000 and $250,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and was ordered to pay over $211,644.03 in restitution.
Jason Pannone, age 40, of North Providence, Rhode Island pleaded guilty to conspiring to commit wire and mail fraud, and to aggravated identity theft, and was sentenced to 18 months of imprisonment and two years of supervised release. Pannone was convicted of processing false invoices for nonexistent automobile repairs through his Providence, Rhode Island automobile detailing shop, Platinum Auto Services, and through Ultra Auto Services, where he was employed. Pannone pleaded guilty on March 23, 2021, to causing between $95,000 and $150,000 of fraudulent loss to the Wilkes-Barre based automobile warranty company, and was ordered to pay restitution of $128,667.16 to the victim of his crime
The case was investigated by the Federal Bureau of Investigation. Assistant U.S. Attorneys Phillip J. Caraballo and Jeffrey St John prosecuted the case.
