Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL2NhbGlmb3JuaWEtbWFuLXBsZWFkcy1ndWlsdHktY29uc3BpcmFjeS1yaW90
  Press Releases:
CHARLOTTESVILLE, VIRGINIA – An associate of a violent extremist group the “Rise Above Movement” [RAM] pleaded guilty today to federal conspiracy-to-riot charges after admitting to traveling across the country to commit acts of violence at the torch-lit march on the University of Virginia grounds on August 11, 2017 and the Unite the Right Rally on August 12, 2017.  United States Attorney Thomas T. Cullen, Special Agent in Charges Adam S. Lee of the FBI’s Richmond Division, and Virginia State Police Colonel Gary T. Settle made the announcement.

 

Cole Evan White, 24, of Clayton, Calif., pleaded guilty today in U.S. District Court in the Western District of Virginia to one count of conspiracy to violate the federal riots statute. At sentencing, White faces a maximum statutory penalty of five years in prison and a fine of $250,000. White, Benjamin Daley, Thomas Gillen, and Michael Miselis were indicted by a federal grand jury in October 2018 and charged with one count of conspiracy to violate the federal riots statute and one count of traveling in interstate commerce with the intent to incite a riot. Federal charges remain pending against Daley, Gillen, and Miselis.

 

“As Mr. White has acknowledged as part of his guilty plea, he and members of the Rise Above Movement (RAM) traveled to the ‘Unite the Right’ Rally in Charlottesville in order to engage in riotous conduct,” U.S. Attorney Cullen stated today.  “Although the First Amendment protects the rights of individuals and groups to assemble and protest peacefully, it does not give license to commit, attempt, or threaten acts of violence or otherwise engage in criminal activity.  We are grateful for the hard work and dedication of the FBI and the Virginia State Police in bringing these defendants to justice.”

 

“Mr. White's guilty plea today should signal to our Virginia communities that the FBI and our law enforcement partners are committed to keeping them safe and ensuring the events of 2017 in Charlottesville never happen again.  The FBI is committed to protecting every American's exercise of their First Amendment rights - irrespective of their message.  This case is not about the nature of Mr. White's speech or expression; this case is about traveling from out of state to riot here in the Commonwealth,” SAC Lee said today. “I want to thank U.S. Attorney Thomas Cullen and his team in the Western District of Virginia for their professionalism and expertise and I want to thank the outstanding men and women of the Virginia State Police who worked with us to piece together this investigation.”

 

“The arrests, and subsequent plea by Cole White, demonstrate the continuing commitment of the Virginia State Police and our federal partners to investigate and pursue those who committed acts of violence in the City of Charlottesville during the weekend of August 11-13, 2017,” said Colonel Gary T. Settle, Virginia State Police Superintendent. “These investigations are very time and resource intensive, but are necessary to make certain individuals like this are held accountable for their criminal actions.”

 

According to evidence presented during today’s guilty plea by United States Attorney Cullen and Assistant United States Attorney Christopher Kavanaugh, White was associated with the Rise Above Movement, [RAM], an openly extremist group whose members engaged in physical training and mixed martial arts street-fighting techniques. RAM frequently posted photographs and videos of themselves engaged in these activities, as well as of their attendance at various political rallies and events in California and Virginia.

 

White admitted today that, on or about April 15, 2017, he attended a political rally in Martin Luther King Jr. Civic Park in Berkeley, Calif. At that event, White met and befriended Benjamin Daley, who was with a group of individuals identified as members of RAM. Throughout the day there were many violent clashes between some rally attendees and those protesting the rally. White, alongside RAM members, followed a group of protestors who were leaving the area. White chased one protestor and attacked him, punching him several times in the head. Immediately afterward, White stood over top of another individual who was on the ground and punched him in the head approximately four to five times.  White admitted that none of these acts was in self-defense.

 

After fighting together in Berkeley, White, Daley, and other members of RAM stayed in contact through phone calls. In one call in the summer of 2017, Daley asked White if he was going to attend the Unite the Right Rally in Charlottesville. Daley offered to pay for White’s flight and his stay in Charlottesville and encouraged him to attend the event. Daley told White: “It’s going to be like Berkeley again…It’s going to be the event of the year.”

 

On or about August 9, 2017, White used his credit card to purchase a round-trip ticket from Delta Airlines for commercial flights from San Francisco International Airport to Charlottesville-Albemarle Airport, departing on August 11, 2017 and returning on August 13, 2017. White admitted that at the time of his travel he expected to engage in violent confrontations with protestors or other individuals at the upcoming events in Charlottesville.

 

Upon arriving in Charlottesville on August 11, 2017, White took a cab from the airport and met RAM members and several hundred other white supremacists gathered on the grounds of the University of Virginia for a torch-lit march on the evening prior to the Unite the Right rally. Throughout the march, participants chanted, “Blood and Soil!” and “Jews will not Replace Us.” The march culminated at the statute of Thomas Jefferson, where the hundreds of white supremacists surrounded a small group of counter protesters. Violence erupted among the crowd, with some individuals punching, kicking, spraying chemical irritants, swinging torches, and otherwise assaulting others, all resulting in a riot.  Among that riot, White admitted today to swinging his torch and striking several individuals and that none of these acts of violence was taken in self-defense.

 

The following morning, White, and members of RAM, attended the Unite the Right rally in Emancipation Park in Charlottesville, Va. White, Daley, and other RAM members were part of a larger group attempting to gain entry into the park following a declaration of “unlawful assembly” by law enforcement.

 

As they made their way through a group of protestors, White, Daley, and other RAM members, collectively punched, pushed, kicked, choked, head-butted, and otherwise assaulted several individuals resulting in a riot. White admitted to personally committing multiple acts of violence.  For example, after having already made his way through a group, White turned around and observed a protestor blocking the sidewalk by holding onto a street sign. White walked back, grabbed the individual by the shoulders, and punched him until he released the sign.  White then head-butted a male who he perceived was in his way. Finally, White head-butted a female protestor who was present on the sidewalk, resulting in a laceration to her face.

 

The investigation of the case was conducted by the Federal Bureau of Investigation and the Virginia State Police. United States Attorney Cullen and Assistant United States Attorney Kavanaugh are prosecuting the case for the United States.

Score:   0.5
Docket Number:   WD-VA  5:19-cr-00017
Case Name:   USA v. Amnott
  Press Releases:
Harrisonburg, VIRGINIA – A Florida man, who conspired with others in a failed attempt to kidnap five children and kill their parents, pleaded guilty today in U.S. District Court in Harrisonburg to a series of charges related to his conduct, United States Attorney Thomas T. Cullen and David W. Archey, Special Agent in Charge of the FBI’s Richmond Division, announced today.

Frank Jesse Amnott, 31, pleaded guilty today to one count of conspiracy to commit the offense of kidnapping, one count of conspiracy to kill witnesses, and one count of brandishing, carrying, and using a firearm in commission of a federal crime of violence. The crime of conspiracy to kill witnesses carries a statuary sentence of mandatory life in prison.

“Although the facts of this case read like the script of a bad horror movie, the defendants’ murderous plot was real and it posed a grave risk to their intended victims,” U.S. Attorney Cullen stated today.  “I appreciate the diligence of the FBI and the Rockingham County Sheriff’s Office in investigating this case and bringing these conspirators to justice.”    

“If not for the quick thinking of a parent, and the immediate dispatch and response of a Rockingham County Sheriff's Office deputy this incident could have evolved into something much worse,” Special Agent in Charge Archey said today. “We are grateful for the partnership of the United States Attorney's Office (WDVA) and the Rockingham County Sheriff's Office, and the assistance of our international partners regarding the work on this case.”

According to court documents, in 2014 Frank Amnott and his wife Jennifer Amnott befriended Valerie Perfect Hayes. Hayes consistently claimed to the Amnotts and others that she worked for the U.S. government and that her work included services for the intelligence community or some other clandestine capacity.

In July 2018, the Amnotts were living in Florida when they were contacted by Hayes, who was living with her boyfriend, Gary Blake Reburn, in Maryland.   Hayes claimed to the Amnotts that three of her children had been kidnapped and were in the custody of two separate Mennonite families in Dayton, Virginia.  Hayes asked the Amnotts for assistance in recovering these children, as well as two additional children. Hayes knew the Amnotts could not conceive their own children and promised that if they helped Hayes kidnap the children, then the Amnotts could keep one of the other children as their own.

Frank Amnott, Jennifer Amnott, Hayes, and Reburn devised a plan to travel from Maryland to Dayton, Va. to kidnap the children from these two homes.  To effectuate the kidnapping, the conspirators planned to kill the parents.  According to the plan, Hayes, Reburn, and Frank Amnott would enter the first house and hold the parents at gunpoint.  After the two children were secured by Hayes, Reburn and Amnott would execute the parents.  Then, they would drive to the second house, force entry, and perform a similar execution. In planning to kill the parents at both houses, the conspirators sought to eliminate witnesses to the abductions.  Afterwards, all of the children would be taken from Virginia to Maryland and the Amnotts would return to Florida with the child promised to them by Hayes.   

All five children to be kidnapped were younger than eight years old.  The conspirators were not family members to any of the children.  Moreover, none of the conspirators had legal custody, nor did they have any colorable claim to legal custody – based on fact or law – over any of the children.

On the evening of July 29, 2018, the conspirators put their plan into action. Jennifer Amnott remained in Maryland watching Hayes’ other children, but remained in contact, receiving updates from Virginia.  Hayes, Reburn, and Frank Amnott waited until the evening, at which time they drove to the first house.  There, Parents A and B, who are husband and wife, were preparing to retire for the evening while their two young children were already asleep. 

Hayes approached the door, disguised in clothing to appear as a Mennonite.  After Parent A opened the door, the group forced their way inside and held Parent A at gunpoint.  With Parent A subdued, Hayes began to look for Parent B and the two children.  Unbeknownst to Hayes, Reburn, and Amnott, when they forced their way into the home, Parent B had grabbed the cordless phone and ran outside of the house, hiding in a cornfield near the home. Parent B dialed 9-1-1 to report the incident and a deputy with the Rockingham County Sheriff’s Office was immediately dispatched.

Inside the home, Amnott and Reburn took Parent A – at gunpoint – to the basement, where they bound his wrists together behind his back.  Reburn went upstairs as Amnott stayed and held Parent A at gunpoint.

Shortly after the 911 call, a deputy with the Rockingham County Sheriff’s Office arrived on the scene and was met by Parent B, who had emerged from the cornfield.  At the same time, Hayes, who was also outside the house and still disguised in Mennonite clothing, approached the deputy and falsely claimed to be a neighbor who was passing by and saw an armed man run inside the house. Parent B was confused and suspicious, as Hayes appeared to be the same woman who she saw at the front door and forced entry into her home. Reburn joined Hayes at the front of the house and the deputy told Parent B to go with Hayes and Reburn.   At the deputy’s direction, Parent B entered a vehicle with Hayes and Reburn, who drove her to a nearby convenience store and dropped her off. 

Meanwhile, the deputy entered the house and located the children, who were unharmed and still in their bedroom.  The deputy proceeded to the basement where he encountered the defendant, Frank Amnott, holding Parent A at gunpoint in the basement. Amnott was taken into custody without incident.

Because their planned abduction and murders at the first house were thwarted by Parent B and law enforcement, the conspirators did not make their way to the second house as planned.  Instead, Hayes and Reburn returned to Maryland where they re-joined Jennifer Amnott.  In early August 2018, Hayes, Reburn, and Jennifer Amnott all fled the United States to the United Kingdom. 

They have since been apprehended and are pending extradition to the United States.                                                                                                         

The investigation of the case is being conducted by the Federal Bureau of Investigation and the Rockingham County Sheriff’s Office.  Assistant United States Attorney Christopher Kavanaugh is prosecuting the case for the United States.

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/138nYg3kAdcPmZULva5xK7SnSsG3uCdQcYC0Y4C0OiCw
  Last Updated: 2024-02-11 19:35:54 UTC
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 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
Format: YYYY

Data imported from FJC Integrated Database
Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL2ZpbmFsLWRlZmVuZGFudC10YXgtc2NoZW1lLXNlbnRlbmNlZC1mZWRlcmFsLWNvdXJ0
  Press Releases:
Lynchburg, VIRGINIA – A Lynchburg-based tax preparer, who along with two of his employees were preparing false tax returns in order to claim fictitious Earned Income Tax Credits, was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg, Acting United States Attorney Rick A. Mountcastle announced.

 

Jackie G. Woodson Jr., of Lynchburg, previously pled guilty to one count of conspiracy to commit false claims. Today in District Court, Woodson was sentenced to 18 months in federal prison. Terry R. Rose was previously sentenced to 18 month in federal prison for her role in the conspiracy and Stella Hester-Jenkins was sentenced to 3 years’ probation.

 

According to evidence presented to the court during previous hearings by Assistant United States Attorneys C. Patrick Hogeboom III and Charlene R. Day, Woodson owned a Colbert/Ball Tax Service franchise in Lynchburg, Va., Rose and Hester-Jenkins were employed by Woodson as tax preparers.

 

Following an investigating by the Internal Revenue Service, it was determined that Woodson, Rose and Hester-Jenkins, were preparing and filing tax returns, which reported fictitious Schedule C income, which resulted in increased Earned Income Tax Credits and refunds. The conspirators often took these actions by claiming Schedule C income through babysitting or childcare income where none actually existed or by greatly exaggerating the amount of income being earned through these activities.

 

The Internal Revenue Service conducted the investigation of the case. Assistant United States Attorney C. Patrick Hogeboom III and Charlene R. Day prosecuted the case for the United States.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL293bmVyLXRlbm5lc3NlZS1kcnVnLXNjcmVlbmluZy1sYWItc2VudGVuY2VkLXByb2JhdGlvbi1ob21lLWRldGVudGlvbi1hbmQtY29tbXVuaXR5
  Press Releases:
ABINGDON, Va. – Regan Dube, who along with her husband Michael Dube formerly owned and operated American Toxicology Labs, was sentenced this week in U.S. District Court in Abingdon, Virginia to three years of probation, four months of home detention, and 400 hours of community service. Acting United States Attorney Daniel P. Bubar and Virginia Attorney General Mark G. Herring made the announcement today.

The Dubes, of Johnson City Tenn., previously pleaded guilty in U.S. District Court in Abingdon. Regan Dube pleaded guilty to one felony count of health care fraud in the Western District of Virginia.  Michael Dube pleaded guilty to two felony counts of health care fraud (one filed in the Western District of Virginia and one filed in the Eastern District of Kentucky). Michael Dube is scheduled to be sentenced February 11, 2021.

“Regan and Michael Dube repeatedly defrauded the health care system for their own greed,” United States Attorney Bubar said today. “I am grateful to our state and federal partners for quickly working together to investigate this case and for their continued efforts to remove fraud from the health care system.”

“Individuals who take advantage of the health care system to line their own pockets should be held accountable and this sentencing sends a message that this will not be tolerated in Virginia,” said Attorney General Herring. “I want to thank my Medicaid Fraud Control Unit for all of their hard work on this and I also want to thank our local, state, and federal partners for their continued collaboration on important cases like this one.”

According to court documents, in March 2011, Michael Dube pleaded guilty in the Eastern District of Tennessee to one count of intentionally omitting information from reports as required under the Controlled Substances Act. As a result of his conviction, the Department of Health and Human Services [HHS] informed Dube in a letter dated June 29, 2012, that he was excluded from participating in any federal health care program.

Nonetheless, in May 2013, Michael and Regan Dube established American Toxicology Labs [ATL] in Johnson City, Tennessee, with Regan Dube serving as the company’s registered agent, and using the couple’s home address as the principal office and mailing address. ATL then applied to participate in Medicare and Medicaid. On the applications, Regan Dube was listed as the owner of ATL, and Michael Dube’s name and participation in ATL was omitted.

ATL conducted urine screens for various entities who represented themselves to be opioid treatment facilities. Between May 1, 2014, and January 31, 2020, Medicare, Virginia Medicaid, Kentucky Medicaid and TennCare made payments to ATL that totaled approximately $8.5 million. During this time, Michael Dube made employment decisions, negotiated business arrangements with providers, and otherwise participated in the management of ATL.

In addition, Michael Dube also received kickback payments from third parties for referring individuals to those third parties for services for which payment was made (in whole or in part) by federal health care programs. These payments were deposited in Michael and Regan Dube’s personal checking account in a total amount of $441,646.

As a result of their guilty pleas, Regan and Michael Dube will pay a total of $9,015,046, plus interest, to be divided between special assessments, fines, restitution, and forfeiture. They will have to repay all of the money they received from Medicare and Medicaid programs.

The investigation of the case was conducted by the Food and Drug Administration Office of Criminal Investigations, Virginia Medicaid Fraud Control Unit of the Office of the Attorney General, the Department of Health and Human Services Office of the Inspector General, the Drug Enforcement Administration, the Virginia State Police, and Internal Revenue Service – Criminal Investigations, and the Tennessee Bureau of Investigation. The prosecution of the case was conducted by Special Assistant United States Attorney and Assistant Attorney General Janine Myatt, and Assistant United States Attorneys Krista Frith, Randy Ramseyer, and Whit Pierce of the United States Attorneys’ Offices for the Western District of Virginia. The United States Attorney’s Office for the Eastern District of Kentucky and the United States Attorney’s Office for the Eastern District of Tennessee provided valuable assistance.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL3dpbmNoZXN0ZXItbWFuLXNlbnRlbmNlZC1tYWtpbmctc3RyYXctcHVyY2hhc2VzLWZpcmVhcm1z
  Press Releases:
CHARLOTTESVILLE, Va. – A Winchester, Virginia man, who lied when he purchased a firearm that was later used by a close relative in a Washington, D.C. homicide, was sentenced recently to 24 months in federal prison.

Gerald Kendrick Oxner, 25, pled guilty in September 2022 to a one-count Information charging him with making a false statement during the purchase of a firearm.

According to court documents, when Oxner purchased a Smith and Wesson 9-millimeter handgun in January 2021, he failed to disclose that he was purchasing the weapon for someone else and also provided a false home address on the required forms.  Investigators obtained security camera footage and receipts from the store in Front Royal, Virginia, which show Oxner buying the firearm and using his relative’s debit card to make the purchase.

Law enforcement later recovered the firearm in Maryland, but its serial number had been obliterated.  Through forensic analysis, the serial number was restored, and the firearm was subsequently linked to evidence recovered from the scene of a January 2021 shooting in Southeast Washington D.C. where one person was killed and three others were injured.  Oxner’s relative was arrested and charged with first-degree murder in connection with the shooting.

Oxner further admitted that he made multiple other straw purchases in Virginia.  However, when law enforcement executed a search warrant at his residence, none of the firearms or related ammunition that he purchased were found in his possession or in the residence.  Later, another one of the firearms he bought was found during the execution of an unrelated search warrant in Washington, D.C.

United States Attorney Christopher R. Kavanaugh and Michael Weddel, Acting Special Agent in Charge of the Washington Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives, made the announcement.

The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case.

Assistant United States Attorney Melanie Smith,  Special Assistant United States Attorney Jessica Joyce, and Deputy United States Attorney Katie B. Medearis prosecuted the case.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL2Zvcm1lci1hZXAtZW1wbG95ZWUtcGxlYWRzLWd1aWx0eS13aXJlLWZyYXVkLXRheC1jaGFyZ2VzLWdvdmVybm1lbnQtZXN0aW1hdGVzLWxvc3MtMTY
  Press Releases:
ROANOKE, Va. – A former American Electric Power (AEP) employee pleaded guilty yesterday to wire fraud and filing false tax returns.

According to court documents, Gregory Thomas Holland, 63, of Roanoke, was employed at AEP from 1982 until January 2018, where he worked for many years in the credit department. Specifically, Holland was responsible for managing AEP’s interests during customer bankruptcies, filing claims, and reducing debts.

Holland admitted yesterday that in 2001 he opened a personal checking account using AEP’s name and address unbeknownst to anyone else at the company. Beginning in May 2002, Holland began depositing checks into this account, written on behalf of AEP customers, and made payable to AEP. Between May 2002 and January 2018, Holland admitted to depositing more than 300 checks into this account. All the money he deposited into this account belonged to AEP. Nonetheless, Holland used the money from the account for personal expenses such as dues at the Roanoke Country Club, car payments, and clothing purchase, among other things.

Holland did not report any of this additional income on his Form 1040 Individual Income Tax Returns for tax years 2011 through 2017.

In all, it is estimated Holland stole $1.6 million dollars from AEP. The court will determine the exact amount of loss at Holland’s sentencing hearing.

Acting United States Attorney Daniel P. Bubar made the announcement today.

Holland pleaded guilty to one count of wire fraud and one count of willfully filing a false tax return.  He is scheduled to be sentenced on September 10, 2021 and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The United States Secret Service, Internal Revenue Service-Criminal Investigations, and Virginia State Police are investigating the case.

Assistant U.S. Attorney Michael Baudinet is prosecuting the case.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL2Zvcm1lci1vZmZpY2VyLW1hbmFnZXItcGxlYWRzLWd1aWx0eS13aXJlLWZyYXVk
  Press Releases:
Harrisonburg, VIRGINIA – The former officer manager of a Winchester-based company that provides safety services to construction companies, pleaded guilty yesterday in U.S. District Court in Harrisonburg for stealing more than $200,000 during her employment. United States Attorney Thomas T. Cullen and Virginia Attorney General Mark Herring made the announcement.

Amy Jo Hansen, 44, of Inwood, West Virginia, waived her right to be indicted and pleaded guilty yesterday to one count of wire fraud. At sentencing, Hansen faces up to twenty years in prison and a $250,000 fine.

“Unfortunately, theft by trusted employees is more common than most people realize,” U.S. Attorney Cullen stated today.  “Where these type of embezzlement schemes involve the use of the mail, the internet, or other forms of electronic communication, they become federal crimes, and we will prosecute them.”

“So called ‘white collar’ crime is still crime and we will make sure that people who break the law like this are held accountable,” said Attorney General Herring.

According to court documents, Hansen was employed by Firstline Safety Management from 2001 until her termination in November 2018. During her tenure, Hansen worked as the office manager for more than 10 years. Her duties in that capacity included, but were not limited to, managing the office, ordering supplies, downloading credit card statements, coding purchasing for bookkeeping purposes, and sending invoices to another employee responsible for payroll and accounting.

At relevant times, Firstline utilized three access devices for the purchase of supplies and other work products. Hansen made numerous unauthorized, personal purchases on these devices. Initially, she submitted the credit card statements containing the unauthorized purchases to the company with the unauthorized purchases either miscoded to make them appear authorized or not coded at all.

Beginning in approximately January 2016, Hansen began altering credit card billing statements containing unauthorized purchases, using the edit function on Adobe software to modify the statements to falsely inflate charges from a vendor or create a nonexistent vendor charge, in order to cover up Hansen’s personal charges. The fraudulent charges increased throughout 2016, and by 2017 regularly involved unauthorized purchases of thousands of dollars a month.

The investigation of the case was conducted by the Office of the Virginia Attorney General.  Assistant United States Attorney Ronald M. Huber is prosecuting the case for the United States.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL2Zvcm1lci1vZmZpY2VyLW1hbmdlci1wbGVhZHMtZ3VpbHR5LXdpcmUtZnJhdWQ
  Press Releases:
Harrisonburg, VIRGINIA – The former officer manager of a Winchester-based company that provides safety services to construction companies, pleaded guilty yesterday in U.S. District Court in Harrisonburg for stealing more than $200,000 during her employment. United States Attorney Thomas T. Cullen and Virginia Attorney General Mark Herring made the announcement.

Amy Jo Hansen, 44, of Inwood, West Virginia, waived her right to be indicted and pleaded guilty yesterday to one count of wire fraud. At sentencing, Hansen faces up to twenty years in prison and a $250,000 fine.

“Unfortunately, theft by trusted employees is more common than most people realize,” U.S. Attorney Cullen stated today.  “Where these type of embezzlement schemes involve the use of the mail, the internet, or other forms of electronic communication, they become federal crimes, and we will prosecute them.”

“So called ‘white collar’ crime is still crime and we will make sure that people who break the law like this are held accountable,” said Attorney General Herring.

According to court documents, Hansen was employed by Firstline Safety Management from 2001 until her termination in November 2018. During her tenure, Hansen worked as the office manager for more than 10 years. Her duties in that capacity included, but were not limited to, managing the office, ordering supplies, downloading credit card statements, coding purchasing for bookkeeping purposes, and sending invoices to another employee responsible for payroll and accounting.

At relevant times, Firstline utilized three access devices for the purchase of supplies and other work products. Hansen made numerous unauthorized, personal purchases on these devices. Initially, she submitted the credit card statements containing the unauthorized purchases to the company with the unauthorized purchases either miscoded to make them appear authorized or not coded at all.

Beginning in approximately January 2016, Hansen began altering credit card billing statements containing unauthorized purchases, using the edit function on Adobe software to modify the statements to falsely inflate charges from a vendor or create a nonexistent vendor charge, in order to cover up Hansen’s personal charges. The fraudulent charges increased throughout 2016, and by 2017 regularly involved unauthorized purchases of thousands of dollars a month.

The investigation of the case was conducted by the Office of the Virginia Attorney General.  Assistant United States Attorney Ronald M. Huber is prosecuting the case for the United States.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL2ZlZGVyYWwtaGFsZndheS1ob3VzZS1hbmQtZm9ybWVyLXByZXNpZGVudC1wbGVhZC1ndWlsdHktd2lyZS1mcmF1ZC1hbmQtbWFraW5nLWZhbHNl
  Press Releases:
ABINGDON, Va. – The former president and director of Secor, Inc., a federal halfway house that contracted with the Federal Bureau of Prisons (BOP) to house inmates, pled guilty today to making false statements and committing wire fraud.  The corporation, through its attorney, also pled guilty to those charges.  The former president and director will serve at least one year in federal prison under the plea agreement.

Matthew Castle, 35, of Lebanon, Virginia, and Secor, Inc., each pled guilty today in federal court to one count of making materially false statements in a matter within the jurisdiction of the executive, legislative, or judicial branch of the United States and one count of wire fraud.

Under the plea agreements, Castle will serve between 12 and 21 months in prison, and Secor will serve a term of probation of one to five years.  Additionally, Castle and Secor will pay $208,105 in restitution, forfeit $40,000, and pay an additional $30,000 in fines. 

“This company and its former president and director were paid to house offenders for the Bureau of Prisons and instead of taking on that responsibility, they chose to defraud the American taxpayers and the Bureau of Prisons,” United States Attorney Christopher R. Kavanaugh said today. “This case was investigated internally using a U.S. Attorney’s Office financial fraud investigator and it represents a new beginning for the Western District of Virginia, one where financial crimes are investigated and prosecuted entirely within our Office.”

According to court documents, Secor was a residential reentry center, commonly referred to as a halfway house, for inmates from the BOP who were nearing the end of their federal prison sentences.

In 2018, Secor entered into a contract with the BOP that allowed some of the offenders under the care of Secor to be assigned to “home confinement,” meaning those offenders resided at an approved residence not owned by Secor.  BOP paid Secor a per diem rate for offenders who resided at Secor’s facilities and a different per diem rate for those on home-confinement.

Under the terms of the contract, Secor was required to outfit home-confinement offenders with GPS monitoring equipment so the offenders’ whereabouts could be determined at all times.  In addition, Secor personnel were required to personally visit each offender’s residence on at least a monthly basis to ensure the offender was living at the offender’s assigned residence, in a safe environment, and in accordance with applicable rules.

In fact, Castle and Secor failed to meet these requirements.  For example, Secor did not outfit many of the home-confinement offenders with GPS monitoring and failed to conduct home visits as required.  Nonetheless, Castle routinely completed documentation certifying that he had conducted such visits and noted no issues.  In addition to signing these phony documents himself, Castle often wrote false observations like “things were going well,” and the offender “had no questions or concerns to address at the time.” 

Each month, Castle submitted invoices to BOP for payments pursuant to the contract between Secor and the BOP.  BOP then issued payments to Secor based on Castle and Secor’s representations that Castle and Secor were providing home-confinement services in accordance with the contract.   

The case was investigated by the U.S. Attorney’s Office with the assistance of the Russell County Sheriff’s Office and the Bureau of Prisons.

Assistant U.S. Attorneys Whit Pierce and Randy Ramseyer are prosecuting the case.

Score:   0.5
Docket Number:   WD-VA  1:20-cr-00021
Case Name:   USA v. Dube
  Press Releases:
ABINGDON, VIRGINIA – Michael Norman Dube, 59, who operated American Toxicology Labs, pleaded guilty today in the Western District of Virginia to health care fraud charges. Dube’s wife, Regan Gran Dube, 40, also pleaded guilty. United States Attorney Thomas T. Cullen of the Western District of Virginia, United States Attorney Robert M. Duncan, Jr. of the Eastern District of Kentucky, and Virginia Attorney General Mark G. Herring made the announcement.

The Dubes, of Johnson City, Tennessee, pleaded guilty today in U.S. District Court in Abingdon. Michael Dube pleaded guilty to two counts of health care fraud (one filed in the Western District of Virginia and one filed in the Eastern District of Kentucky). Regan Dube pleaded guilty to one count of health care fraud in the Western District of Virginia. At sentencing, each defendant faces a maximum statutory term of imprisonment of up to 10 years. Regan Dube will be sentenced September 15, 2020 at 2:30 p.m. Michael Dube will be sentenced September 17, 2020 at 2:30 p.m.  

“The Dubes preyed upon a healthcare system that is supposed to help those in need. This is particularly egregious, given Michael Dube’s prior exclusion from federal health care programs,” First Assistant United States Attorney Daniel P. Bubar said today. “I am proud of the collaboration between our federal and state partners in Virginia, Kentucky, and Tennessee, which produced this just result.”

“Michael Dube defrauded Medicaid programs in two states, taking public money that he was not entitled to receive and furthering his own interests,” stated Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Today’s guilty pleas are the product of close cooperation between two United States Attorney’s Offices and several law enforcement agencies and show our resolve in preventing fraud, waste, and abuse of the essential resources of government programs.”

“Healthcare fraud not only wastes hundreds of thousands of taxpayer dollars, but it also undermines an important system that provides thousands of Virginians with critical medical services,” said Attorney General Mark Herring. “I am incredibly proud of the work my nationally-renowned Medicaid Fraud Control Unit has done and we will continue to work with our federal partners to pursue these egregious cases of fraud and abuse.”

“Opioid addiction continues to be a public health emergency and it is important that treatment providers act with honesty and integrity in combatting the crisis. In cooperation with our federal and state law enforcement partners, we will continue to investigate and bring to justice those who defraud federal programs of resources to fight this epidemic,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations, Metro Washington Field Office.

“The Medicare and Medicaid programs require providers to be truthful on all documents and claims submitted,” said Maureen R. Dixon, Special Agent in Charge of the Office of the Inspector General for the U.S. Department of Health and Human Services. “HHS-OIG will continue to work with our Federal and State partners to hold providers accountable for fraudulent actions and safeguard the Medicare and Medicaid programs from fraud, waste and abuse.”

According to court documents, in March 2011, Michael Dube pleaded guilty in the Eastern District of Tennessee to one count of intentionally omitting information from reports as required under the Controlled Substances Act. As a result of his conviction, the Department of Health and Human Services [HHS] informed Dube in a letter dated June 29, 2012, that he was excluded from participating in any federal health care program.

Nonetheless, in May 2013, Michael and Regan Dube established American Toxicology Labs [ATL] in Johnson City, Tennessee, with Regan Dube serving as the company’s registered agent, and using the couple’s home address as the principal office and mailing address. ATL then applied to participate in Medicare and Medicaid. On the applications, Regan Dube was listed as the owner of ATL, and Michael Dube’s name and participation in ATL was omitted.

ATL conducted urine screens for various entities who represented themselves to be opioid treatment facilities. Between May 1, 2014, and January 31, 2020, Medicare, Virginia Medicaid, Kentucky Medicaid and TennCare made payments to ATL that totaled approximately $8.5 million. During this time, Michael Dube made employment decisions, negotiated business arrangements with providers, and otherwise participated in the management of ATL.

In addition, Michael Dube also received kickback payments from third-parties for referring individuals to those third-parties for services for which payment was made (in whole or in part) by federal health care programs. These payments were deposited in Michael and Regan Dube’s personal checking account in a total amount of $441,646.

As a result of their guilty pleas, Michael and Regan Dube will pay a total of $9,015,046, plus interest, to be divided between special assessments, fines, restitution, and forfeiture. They will have to repay all of the money they received from Medicare and Medicaid programs.

The investigation of the case was conducted by the Food and Drug Administration Office of Criminal Investigations, Virginia Medicaid Fraud Control Unit of the Office of the Attorney General, the Department of Health and Human Services Office of the Inspector General, the Drug Enforcement Administration, the Virginia State Police, and Internal Revenue Service – Criminal Investigations, and the Tennessee Bureau of Investigation. The prosecution of the case was conducted by the United States Attorneys’ Offices for the Western District of Virginia (by Special Assistant United States Attorney and Assistant Attorney General Janine Myatt, Assistant United States Attorneys Whit Pierce, Krista Frith, and Randy Ramseyer) and the Eastern District of Kentucky (by Andrew Smith and Gregory Rosenberg). The United States Attorney’s Office for the Eastern District of Tennessee provided valuable assistance.

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1emRyd9261y_MP0DhMyzRA9lDX0r-Of2y2onURM_zx_Q
  Last Updated: 2023-11-03 18:00:04 UTC
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 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
Format: YYYY

Data imported from FJC Integrated Database
Score:   0.5
Docket Number:   WD-VA  1:20-cr-00022
Case Name:   USA v. Dube
  Press Releases:
ABINGDON, VIRGINIA – Michael Norman Dube, 59, who operated American Toxicology Labs, pleaded guilty today in the Western District of Virginia to health care fraud charges. Dube’s wife, Regan Gran Dube, 40, also pleaded guilty. United States Attorney Thomas T. Cullen of the Western District of Virginia, United States Attorney Robert M. Duncan, Jr. of the Eastern District of Kentucky, and Virginia Attorney General Mark G. Herring made the announcement.

The Dubes, of Johnson City, Tennessee, pleaded guilty today in U.S. District Court in Abingdon. Michael Dube pleaded guilty to two counts of health care fraud (one filed in the Western District of Virginia and one filed in the Eastern District of Kentucky). Regan Dube pleaded guilty to one count of health care fraud in the Western District of Virginia. At sentencing, each defendant faces a maximum statutory term of imprisonment of up to 10 years. Regan Dube will be sentenced September 15, 2020 at 2:30 p.m. Michael Dube will be sentenced September 17, 2020 at 2:30 p.m.  

“The Dubes preyed upon a healthcare system that is supposed to help those in need. This is particularly egregious, given Michael Dube’s prior exclusion from federal health care programs,” First Assistant United States Attorney Daniel P. Bubar said today. “I am proud of the collaboration between our federal and state partners in Virginia, Kentucky, and Tennessee, which produced this just result.”

“Michael Dube defrauded Medicaid programs in two states, taking public money that he was not entitled to receive and furthering his own interests,” stated Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Today’s guilty pleas are the product of close cooperation between two United States Attorney’s Offices and several law enforcement agencies and show our resolve in preventing fraud, waste, and abuse of the essential resources of government programs.”

“Healthcare fraud not only wastes hundreds of thousands of taxpayer dollars, but it also undermines an important system that provides thousands of Virginians with critical medical services,” said Attorney General Mark Herring. “I am incredibly proud of the work my nationally-renowned Medicaid Fraud Control Unit has done and we will continue to work with our federal partners to pursue these egregious cases of fraud and abuse.”

“Opioid addiction continues to be a public health emergency and it is important that treatment providers act with honesty and integrity in combatting the crisis. In cooperation with our federal and state law enforcement partners, we will continue to investigate and bring to justice those who defraud federal programs of resources to fight this epidemic,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations, Metro Washington Field Office.

“The Medicare and Medicaid programs require providers to be truthful on all documents and claims submitted,” said Maureen R. Dixon, Special Agent in Charge of the Office of the Inspector General for the U.S. Department of Health and Human Services. “HHS-OIG will continue to work with our Federal and State partners to hold providers accountable for fraudulent actions and safeguard the Medicare and Medicaid programs from fraud, waste and abuse.”

According to court documents, in March 2011, Michael Dube pleaded guilty in the Eastern District of Tennessee to one count of intentionally omitting information from reports as required under the Controlled Substances Act. As a result of his conviction, the Department of Health and Human Services [HHS] informed Dube in a letter dated June 29, 2012, that he was excluded from participating in any federal health care program.

Nonetheless, in May 2013, Michael and Regan Dube established American Toxicology Labs [ATL] in Johnson City, Tennessee, with Regan Dube serving as the company’s registered agent, and using the couple’s home address as the principal office and mailing address. ATL then applied to participate in Medicare and Medicaid. On the applications, Regan Dube was listed as the owner of ATL, and Michael Dube’s name and participation in ATL was omitted.

ATL conducted urine screens for various entities who represented themselves to be opioid treatment facilities. Between May 1, 2014, and January 31, 2020, Medicare, Virginia Medicaid, Kentucky Medicaid and TennCare made payments to ATL that totaled approximately $8.5 million. During this time, Michael Dube made employment decisions, negotiated business arrangements with providers, and otherwise participated in the management of ATL.

In addition, Michael Dube also received kickback payments from third-parties for referring individuals to those third-parties for services for which payment was made (in whole or in part) by federal health care programs. These payments were deposited in Michael and Regan Dube’s personal checking account in a total amount of $441,646.

As a result of their guilty pleas, Michael and Regan Dube will pay a total of $9,015,046, plus interest, to be divided between special assessments, fines, restitution, and forfeiture. They will have to repay all of the money they received from Medicare and Medicaid programs.

The investigation of the case was conducted by the Food and Drug Administration Office of Criminal Investigations, Virginia Medicaid Fraud Control Unit of the Office of the Attorney General, the Department of Health and Human Services Office of the Inspector General, the Drug Enforcement Administration, the Virginia State Police, and Internal Revenue Service – Criminal Investigations, and the Tennessee Bureau of Investigation. The prosecution of the case was conducted by the United States Attorneys’ Offices for the Western District of Virginia (by Special Assistant United States Attorney and Assistant Attorney General Janine Myatt, Assistant United States Attorneys Whit Pierce, Krista Frith, and Randy Ramseyer) and the Eastern District of Kentucky (by Andrew Smith and Gregory Rosenberg). The United States Attorney’s Office for the Eastern District of Tennessee provided valuable assistance.

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1sAWYBLQtVqiNre9TkqdRgZdWNHDRuPNg_79I6k3jrIA
  Last Updated: 2024-03-11 21:49:52 UTC
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 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
Format: YYYY

Data imported from FJC Integrated Database
Score:   0.5
Docket Number:   WD-VA  1:20-cr-00023
Case Name:   USA v. Dube
  Press Releases:
ABINGDON, VIRGINIA – Michael Norman Dube, 59, who operated American Toxicology Labs, pleaded guilty today in the Western District of Virginia to health care fraud charges. Dube’s wife, Regan Gran Dube, 40, also pleaded guilty. United States Attorney Thomas T. Cullen of the Western District of Virginia, United States Attorney Robert M. Duncan, Jr. of the Eastern District of Kentucky, and Virginia Attorney General Mark G. Herring made the announcement.

The Dubes, of Johnson City, Tennessee, pleaded guilty today in U.S. District Court in Abingdon. Michael Dube pleaded guilty to two counts of health care fraud (one filed in the Western District of Virginia and one filed in the Eastern District of Kentucky). Regan Dube pleaded guilty to one count of health care fraud in the Western District of Virginia. At sentencing, each defendant faces a maximum statutory term of imprisonment of up to 10 years. Regan Dube will be sentenced September 15, 2020 at 2:30 p.m. Michael Dube will be sentenced September 17, 2020 at 2:30 p.m.  

“The Dubes preyed upon a healthcare system that is supposed to help those in need. This is particularly egregious, given Michael Dube’s prior exclusion from federal health care programs,” First Assistant United States Attorney Daniel P. Bubar said today. “I am proud of the collaboration between our federal and state partners in Virginia, Kentucky, and Tennessee, which produced this just result.”

“Michael Dube defrauded Medicaid programs in two states, taking public money that he was not entitled to receive and furthering his own interests,” stated Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Today’s guilty pleas are the product of close cooperation between two United States Attorney’s Offices and several law enforcement agencies and show our resolve in preventing fraud, waste, and abuse of the essential resources of government programs.”

“Healthcare fraud not only wastes hundreds of thousands of taxpayer dollars, but it also undermines an important system that provides thousands of Virginians with critical medical services,” said Attorney General Mark Herring. “I am incredibly proud of the work my nationally-renowned Medicaid Fraud Control Unit has done and we will continue to work with our federal partners to pursue these egregious cases of fraud and abuse.”

“Opioid addiction continues to be a public health emergency and it is important that treatment providers act with honesty and integrity in combatting the crisis. In cooperation with our federal and state law enforcement partners, we will continue to investigate and bring to justice those who defraud federal programs of resources to fight this epidemic,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations, Metro Washington Field Office.

“The Medicare and Medicaid programs require providers to be truthful on all documents and claims submitted,” said Maureen R. Dixon, Special Agent in Charge of the Office of the Inspector General for the U.S. Department of Health and Human Services. “HHS-OIG will continue to work with our Federal and State partners to hold providers accountable for fraudulent actions and safeguard the Medicare and Medicaid programs from fraud, waste and abuse.”

According to court documents, in March 2011, Michael Dube pleaded guilty in the Eastern District of Tennessee to one count of intentionally omitting information from reports as required under the Controlled Substances Act. As a result of his conviction, the Department of Health and Human Services [HHS] informed Dube in a letter dated June 29, 2012, that he was excluded from participating in any federal health care program.

Nonetheless, in May 2013, Michael and Regan Dube established American Toxicology Labs [ATL] in Johnson City, Tennessee, with Regan Dube serving as the company’s registered agent, and using the couple’s home address as the principal office and mailing address. ATL then applied to participate in Medicare and Medicaid. On the applications, Regan Dube was listed as the owner of ATL, and Michael Dube’s name and participation in ATL was omitted.

ATL conducted urine screens for various entities who represented themselves to be opioid treatment facilities. Between May 1, 2014, and January 31, 2020, Medicare, Virginia Medicaid, Kentucky Medicaid and TennCare made payments to ATL that totaled approximately $8.5 million. During this time, Michael Dube made employment decisions, negotiated business arrangements with providers, and otherwise participated in the management of ATL.

In addition, Michael Dube also received kickback payments from third-parties for referring individuals to those third-parties for services for which payment was made (in whole or in part) by federal health care programs. These payments were deposited in Michael and Regan Dube’s personal checking account in a total amount of $441,646.

As a result of their guilty pleas, Michael and Regan Dube will pay a total of $9,015,046, plus interest, to be divided between special assessments, fines, restitution, and forfeiture. They will have to repay all of the money they received from Medicare and Medicaid programs.

The investigation of the case was conducted by the Food and Drug Administration Office of Criminal Investigations, Virginia Medicaid Fraud Control Unit of the Office of the Attorney General, the Department of Health and Human Services Office of the Inspector General, the Drug Enforcement Administration, the Virginia State Police, and Internal Revenue Service – Criminal Investigations, and the Tennessee Bureau of Investigation. The prosecution of the case was conducted by the United States Attorneys’ Offices for the Western District of Virginia (by Special Assistant United States Attorney and Assistant Attorney General Janine Myatt, Assistant United States Attorneys Whit Pierce, Krista Frith, and Randy Ramseyer) and the Eastern District of Kentucky (by Andrew Smith and Gregory Rosenberg). The United States Attorney’s Office for the Eastern District of Tennessee provided valuable assistance.

Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1mkZrLVKOATDMqBv_NT28rHKWjZSRkUefa__zanuZoc8
  Last Updated: 2023-11-03 18:00:09 UTC
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 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
Format: YYYY

Data imported from FJC Integrated Database
Magistrate Docket Number:   WD-VA  1:20-mj-00034
Case Name:   USA v Dube
Docket (0 Docs):   https://docs.google.com/spreadsheets/d/1pmMmbR951-UYvh2dbozFVMJZ5offKKpkhEvC83jqhQA
  Last Updated: 2023-11-03 17:57:29 UTC
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 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
Format: YYYY

Data imported from FJC Integrated Database
Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL2ZlZGVyYWwtaGFsZndheS1ob3VzZS1hbmQtaXRzLXByZXNpZGVudC1zZW50ZW5jZWQtd2lyZS1mcmF1ZC1hbmQtbWFraW5nLWZhbHNl
  Press Releases:
ABINGDON, Va. – The former president and director of Secor Inc., a federal halfway house that contracted with the Federal Bureau of Prisons (BOP) to house inmates, was sentenced last week to 15 months in federal prison for making false statements and wire fraud. Secor, Inc. was sentenced to one year of probation.   

Matthew Castle, 35, of Lebanon, Virginia, and Secor, Inc., through its counsel, pled guilty in November 2023 to one count of making materially false statements in a matter within the jurisdiction of the executive, legislative, or judicial branch of the United States, and one count of wire fraud.

Secor will serve a term of probation of one to five years. Additionally, Castle and Secor paid $208,105 in restitution, forfeited $40,000, and paid an additional $30,000 in fines.

“This sentence serves as another example to those doing business with the United States – if you commit fraud, you will be held accountable,” United States Attorney Christopher R. Kavanaugh said today.  “As one of the first cases investigated internally by the United States Attorney’s Office and our financial fraud investigator, this marks the beginning of a new era for corporate criminal enforcement in the Western District of Virginia.”

According to court documents, Secor was a residential reentry center, commonly referred to as a “halfway house,” for inmates from the BOP who were nearing the end of their federal prison sentences.

In 2018, Secor entered into a contract with the BOP that allowed some of the offenders under the care of Secor to be assigned to “home confinement,” meaning those offenders resided at an approved residence not owned by Secor.  BOP paid Secor one type of daily rate for offenders who resided at Secor’s facilities and a different monetary daily rate for those on home confinement.

Under the terms of the contract, Secor was required to outfit home confinement offenders with GPS monitoring equipment so the offenders’ whereabouts could be determined at all times.  In addition, Secor personnel were required to personally visit each offender’s residence on at least a monthly basis to ensure the offender was living at the offender’s assigned residence, in a safe environment, and in accordance with applicable rules.

In fact, Secor did not outfit many of the home confinement offenders with GPS monitoring and did not conduct home visits as required. Nonetheless, Castle routinely completed documentation certifying that he had conducted such visits, and in an effort to make it appear that such visits had occurred when they had not, he would make notations such as “things were going well,” and the offender “had no questions or concerns to address at the time.”

Each month, Castle submitted fraudulent invoices to BOP for payment, and BOP issued payments based on their representations that Castle and Secor were providing home confinement services in accordance with the contract.  

The case was investigated by the U.S. Attorney’s Office’s new Financial Fraud Investigator with assistance from the Russell County Sheriff’s Office and the Bureau of Prisons.

Assistant U.S. Attorneys Whit Pierce and Randy Ramseyer prosecuted the case.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL2Zvcm1lci1taWxpdGFyeS1jb250cmFjdG9yLWZvdW5kLWd1aWx0eS1mcmF1ZC1jaGFyZ2Vz
  Press Releases:
Danville, VIRGINIA – The former owner and chief executive officer of an armored vehicle company with offices in Danville and Canada, was found guilty yesterday evening in the United States District Court for the Western District of Virginia in Danville of all federal charges levied against him, Acting United States Attorney Rick A. Mountcastle announced.

 

William R. Whyte, 72, of Ontario, Canada, was found guilty yesterday following a two-week jury trial on three counts of major fraud against the United States, three counts of wire fraud and three counts of false claims.

 

“Today’s jury verdict was the result of the outstanding teamwork among the United States Attorney’s Office, the Department of Justice’s Fraud Section, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation.  It represents another step in the battle against fraud on the Department of Defense.  The defendant put his personal financial interests ahead of the safety of our brave men and women in uniform who risked their lives serving in Iraq,” Acting United States Attorney Mountcastle said. “I commend the outstanding work of AUSA Carlton, Trial Attorney Cottingham, the Defense Criminal Investigative Service, and the Federal Bureau of Investigation.”

 

“The Defense Criminal Investigative Service remains vigilant to detect and disrupt the contamination of the military supply chain with defective parts and equipment. The fraud perpetrated in this matter could have resulted in the death or injury of American service members, impacting military operations in Iraq.  Along with our investigative partners, DCIS continues to aggressively pursue those who place our warfighters at risk,” said Special Agent in Charge Robert E. Craig, Jr, DCIS Mid-Atlantic Field Office

 

“Stealing from taxpayers by defrauding the government is bad enough.  Doing it in a way that imperils our warfighters and delivers to them equipment which is faulty or insufficient - that's a special kind of despicable,” Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Division said today.  “Whyte exposed our heroes and knew his Armet Armored Vehicles weren't up to the task of protecting them.  I hope this case sends a message to those who contract with the government to provide essential equipment to our troops in support of their critical mission; the FBI will be on your trail if you betray them this way and steal from the taxpayers who fund them.  I want to thank our partners at DCIS, the Department of Justice, and the United States Attorney's Office for the Western District of Virginia for today's outcome in this case.”

 

According to evidence presented at trial by AUSA Heather L. Carlton and Trial Attorney Caitlin Cottingham, Whyte was the owner and chief executive officer of Armet Armed Vehicles, Inc. Armet entered into a $4.8 million contract in April 2006 to provide the Department of Defense with 24 armored vehicles for use in Iraq.  In June 2006, Armet entered into a second contract, valued at $1.6 million, to deliver an additional eight armored vehicles. These vehicles were to be used as security vehicles to Iraqi “Tier 1” dignitaries, who were part of the then-newly elected government to replace Saddam Hussein and who regularly traveled by motorcade through a “hostile and dangerous environment.”

 

Both contracts included specific requirements for the armoring of the vehicles, including that each vehicle be reinforced to a standard at which an armor-piercing bullet could not penetrate the passenger compartment and ceiling. In addition, the contracts required the undercarriage of each armored truck have mine plating protection that could withstand explosions underneath the vehicles. Finally, the contracts required the armored vehicles to have run-flat tires, so they could continue to operate should their tires be shot out or otherwise damaged.

 

Despite the requirement in the contract that the first 24 armored gun trucks be delivered by July 31, 2006, Whyte and Armet failed to ship a single vehicle by that deadline. Armet ultimately supplied six armored vehicles after the contract deadline and was paid $ 2,019,454, including an approximately $824,000 progress payment requested by Whyte.  The prosecutors also presented evidence that Whyte intentionally misrepresented other issues to United States military officers about the contracts and vehicles.

 

None of the armored trucks delivered by Armet and Whyte met the ballistic and blast protection requirements of the contracts, despite the defendant’s claims that the vehicles met the standards. Whyte knew that each of the six armored trucks failed to meet the required standards and that they were intentionally under armored.

 

The investigation of the case was conducted by the Defense Criminal Investigative Service, the Special Inspector General for Iraq Reconstruction, the Department of Justice’s Fraud Section, and the Federal Bureau of Investigation. The case was prosecuted by Assistant United States Attorney Heather L. Carlton and Department of Justice Fraud Section Trial Attorney Caitlin Cottingham.  

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL3VuaXRlZC1zdGF0ZXMtYXR0b3JuZXkta2F2YW5hdWdoLWFubm91bmNlcy1ncmFudC1mdW5kaW5nLXByb2plY3Qtc2FmZS1uZWlnaGJvcmhvb2Rz
  Press Releases:
Charlottesville, Va. – United States Attorney Christopher R. Kavanaugh announced today the availability of over $320,000 in grant funding for Project Safe Neighborhoods (PSN) initiatives. This funding opportunity will assist in implementing comprehensive, collaborative, and community-based approaches to reducing violent crime in the Western District of Virginia using a wide range of effective violent crime reduction strategies.

The grant money, distributed in partnership with the Virginia Department of Criminal Justice Services (DCJS) and the Bureau of Justice Assistance (BJA), will allow eligible organizations to support a broad range of activities to reduce gun and gang violence. Programs should address deterrence efforts aimed at potential offenders, the implementation of evidence-based programs and proven enforcement strategies to prevent and reduce gun and gang crimes, and/or the prosecution of significant firearm, controlled substance, and violent crime offenses.

“These funding opportunities will be used by local organizations who are doing important work at the grassroots level to reduce violence in our neighborhoods,” United States Attorney Christopher R. Kavanaugh said today. “Project Safe Neighborhoods continues to be the major source of funding for many of these organizations and we look forward to sharing more information about those partnerships in the future.”

In May 2021, Attorney General Merrick B. Garland announced a new effort to reduce violent crime, including the gun violence that is often at its core. Integral to that effort was the reinvigoration of PSN, a two-decade old evidence-based and community-oriented program focused on reducing violent crime. The updated PSN approach, outlined in the Department’s Comprehensive Strategy for Reducing Violent Crime issued by Deputy Attorney General Lisa Monaco, is guided by four key principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence, setting focused and strategic enforcement priorities, and measuring the results of our efforts.

The fundamental goal is to reduce violent crime, not simply to increase the number of arrests or prosecutions.

Guided by these principles, in October 2021, the United States Attorney’s Office for the Western District of Virginia (WDVA) implemented a strategic PSN plan. PSN is the collaboration of community organizations as well as federal, state, and local law-enforcement agencies to build evidence-based and intelligence-led approaches to identifying the most violent gangs and offenders in each affected community and deploying their combined resources not only to prevent violent crimes but also, through offender intervention and rehabilitation efforts, to help break the cycle of violence by addressing its underlying causes. United States Attorney Kavanaugh has assigned specific federal prosecutors to those areas in our District to help implement this strategy and coordinate with law enforcement as well as engaging with community partners.

The Grants Program is just one component of the multi-faceted efforts the U.S. Attorney’s Office has implemented in Danville, Roanoke City/County region, and Lynchburg. This funding opportunity is open to state and local law enforcement agencies, governmental entities, educational institutions, and 501(c)(3) non-profit organizations who are located in, or have the ability to serve, those areas. Applicants are expected to use the funds to support the WDVA’s PSN pillars, which include community engagement, prevention and intervention, focused and strategic enforcement, and accountability.

To select and administer its PSN grant funds, the United States Attorney’s Office will select community members to serve as members of an independent Grants Committee.  The Committee will be composed of individuals from the Danville, Lynchburg, and Roanoke areas with experience in community outreach, law enforcement, or who are otherwise qualified to fairly review and assess applications that will help achieve our PSN goals. None of the Committee’s members will be current federal employees, and no member will be eligible to apply for or receive PSN funding. 

The U.S. Attorney’s Office encourages those eligible organizations to apply for grant assistance by visiting the Virginia Department of Criminal Justice Services website at https://www.dcjs.virginia.gov/grants/programs/2023-project-safe-neighborhoods-grant-program-western. The website also has information related to the guidelines and application procedures. Completed applications should be submitted by 5:00 p.m. on April 26, 2023.

PSN programs are led by U.S. Attorneys’ Offices in collaboration with local public safety agencies, community stakeholders and other agencies and organizations that work to reduce violent crime.

For additional funding opportunities and awards that will further assist our efforts to reduce violent crime across our district, please visit The Office of Justice Programs website https://www.ojp.gov/funding/explore/current-funding-opportunities. The Office of Justice Programs provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, advance racial equity in the administration of justice, assist victims, and enhance the rule of law.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL21hbi1yZXNwb25zaWJsZS12aW9sZW50LWNyaW1lLXNwcmVlLWNlbnRyYWwtdmlyZ2luaWEtc2VydmUtMzAteWVhcnMtcHJpc29u
  Press Releases:
CHARLOTTESVILLE, Va. – A Gordonsville, Virginia man, who committed a series of armed robberies of commercial business in the City of Charlottesville, Albemarle County, and Stafford County in the Summer of 2020, was sentenced today to 30 years in federal prison.

Dominique Dejone Thurston, 23, pleaded guilty in October 2021 to seven counts of Hobbs Act robbery and two counts of brandishing and possessing a firearm during and in relation to a crime of violence.

“Throughout the summer of 2020, Thurston terrorized local businesses and endangered the lives of numerous store clerks during his armed robbery spree.  In many cases, his brutality was remarkable.  He pistol-whipped store employees who were not even resisting his demands.  This case shows how just one person can undermine how safe a community feels, and how important it is that federal, state, and local resources come together when the effects of violence are felt.  His violent spree ended as a direct result of the collaborative efforts of our law enforcement partners,” United States Attorney Christopher R. Kavanaugh said today.

 

“Today’s announcement sends a true message that acts of violence like those involved in this investigation will not be tolerated.  We are extremely thankful that none of the hardworking people who were victimized by this individual were killed.  We hope this sentencing will help calm fears and restore our community to some sense of normalcy.  I am proud that our agents and partnering agencies worked around the clock to bring justice to those responsible.  ATF is always honored to stand side by side with the U.S. Attorney’s Office, the Albemarle County Police Department, the City of Charlottesville Police Department, and the Stafford County Police Department as we collectively disrupt violent offenders,” ATF Special Agent in Charge Charlie J. Patterson said. “The ATF Washington Field Division will continue to collaborate with our partners to ensure citizens are protected against those individuals who have no regard for others or property within our communities.”

“Cases such as this one demonstrates the Albemarle County Police Department’s continued commitment to working with our federal, state, and local law enforcement partners, and is a prime example of how investigators have success when law enforcement agencies cooperate and share information. Due to the diligence and cooperation between our department, Charlottesville Police Department’s Criminal Investigations Division, the Bureau of Alcohol, Tobacco, and Firearms,  Stafford County Sheriff’s Office, District 9 Probation and Parole and the US Attorney’s Office, our community is that much safer,” said Colonel Sean Reeves, Chief of Albemarle County Police.

According to court documents, Thurston committed a series of armed Hobbs Act robberies at commercial businesses in Albemarle County and the City of Charlottesville. These robberies included the Oak Hill Market in Albemarle County, the 7-Eleven on Ivy Road in the City of Charlottesville, a BP gas station convenience store in the City of Charlottesville, the 7-Eleven on Greenbrier Drive in Albemarle County, a Kangaroo Gas station in Albemarle County, a 7 Day Junior Store in the City of Charlottesville, and the 7-Eleven on Boulderview Road in Albemarle County.

During each robbery, Thurston entered the store, placed an item on the checkout counter, and then brandished his gun at the clerks while demanding all the cash in their registers. In several of the robberies, Thurston pistol-whipped clerks even though none of them were resisting his demands.

The investigation of the case was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives, the Albemarle County Police Department, the City of Charlottesville Police Department, the City of Charlottesville Commonwealth’s Attorney’s Office, and the Stafford County Sheriff’s Office.  

Assistant United States Attorney Ronald M. Huber and Special Assistant United States Attorney Nina-Alice Antony with the Charlottesville Commonwealth’s Attorney’s Office prosecuted the case for the United States.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL3dpbmNoZXN0ZXItbWFuLXBsZWFkcy1ndWlsdHktbWFraW5nLXN0cmF3LXB1cmNoYXNlLWZpcmVhcm0
  Press Releases:
CHARLOTESVILLE, Va. – A Winchester, Virginia man, who lied when he purchased a firearm that was later used by a close relative in a Southeast D.C. homicide, pleaded guilty today in federal court.

Gerald Kendrick Oxner, 25, waived his right to be indicted and pleaded guilty today to a one-count Information charging him with making a false statement during the purchase of a firearm.

According to court documents, Oxner lied when he purchased a Smith and Wesson 9-millimeter handgun in January 2021 by not disclosing that he was purchasing the weapon for someone other than himself as well as providing a false home address on the required forms.  Investigators obtained security camera footage and receipts from the store in Front Royal, Virginia, which show Oxner buying the firearm and using his close relative’s debit card to make the purchase.

Law enforcement later recovered the firearm in Maryland, but its serial number had been obliterated.  Through forensic analysis, the serial number was restored, and the firearm was linked to evidence recovered from the scene of a January 25, 2021 shooting in Southeast Washington D.C. where one person was killed and three others were injured.  Oxner’s relative was arrested and charged with first-degree murder in connection with the shooting.

Oxner further admitted that he made multiple other straw purchases in Virginia, however, when law enforcement executed a search warrant at his residence, none of the firearms or related ammunition that he purchased were found in his possession or in the residence.  Subsequently, another one of the firearms he bought was found during the execution of an unrelated search warrant in Washington, D.C.

United States Attorney Christopher R. Kavanaugh and Charlie J. Patterson, Special Agent in Charge of the Washington Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives, made the announcement.

Oxner faces a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The Bureau of Alcohol, Tobacco, Firearms and Explosives investigated the case.

Assistant U.S. Attorneys Melanie Smith and Katie B. Medearis are prosecuting the case.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL293bmVyLXRlbm5lc3NlZS1kcnVnLXNjcmVlbmluZy1sYWItc2VudGVuY2VkLTM2LW1vbnRocy1mZWRlcmFsLWhlYWx0aC1jYXJlLWZyYXVkLWNoYXJnZQ
  Press Releases:
ABINGDON, Va. – Michael Dube, who formerly owned and operated American Toxicology Labs, was sentenced was today in U.S. District Court in Abingdon, Virginia to 36 months in federal prison. Acting United States Attorney Daniel P. Bubar and Virginia Attorney General Mark G. Herring made the announcement today.

Dube, 59, of Johnson City Tenn., previously pleaded guilty in U.S. District Court in Abingdon to two felony counts of health care fraud (one filed in the Western District of Virginia and one filed in the Eastern District of Kentucky).

“Michael Dube took advantage of health care funds, aimed at helping the most vulnerable, for his own greed,” Acting U.S. Attorney Bubar said today. “Today’s significant sentence demonstrates that health care fraud will not be tolerated, and is the product of close partnership between federal, state, and local law enforcement, whose collaboration brought the Dubes to justice.”

“Addressing the opioid crisis is an issue of great concern for our nation and remains a top public health priority for the FDA. It is crucial that treatment providers act with honesty and integrity in combatting the crisis,” said Special Agent in Charge Mark S. McCormack, FDA Office of Criminal Investigations, Metro Washington Field Office. “In cooperation with our federal and state law enforcement partners, we will continue to investigate and bring to justice those who defraud federal programs.”

According to court documents, in March 2011, Michael Dube pleaded guilty in the Eastern District of Tennessee to one count of intentionally omitting information from reports as required under the Controlled Substances Act. As a result of his conviction, the Department of Health and Human Services [HHS] informed Dube in a letter dated June 29, 2012, that he was excluded from participating in any federal health care program.

Nonetheless, in May 2013, Michael and his wife, Regan Dube, established American Toxicology Labs [ATL] in Johnson City, Tennessee, with Regan Dube serving as the company’s registered agent, and using the couple’s home address as the principal office and mailing address. ATL then applied to participate in Medicare and Medicaid. On the applications, Regan Dube was listed as the owner of ATL, and Michael Dube’s name and participation in ATL was omitted.

ATL conducted urine screens for various entities who represented themselves to be opioid treatment facilities. Between May 1, 2014, and January 31, 2020, Medicare, Virginia Medicaid, Kentucky Medicaid and TennCare made payments to ATL that totaled approximately $8.5 million. During this time, Michael Dube made employment decisions, negotiated business arrangements with providers, and otherwise participated in the management of ATL.

In addition, Michael Dube also received kickback payments from third parties for referring individuals to those third parties for services for which payment was made (in whole or in part) by federal health care programs. These payments were deposited in Michael and Regan Dube’s personal checking account in a total amount of $441,646. Regan Dube was previously convicted and sentenced in connection with the scheme. 

As a result of their convictions, Regan and Michael Dube will pay a total of $9,015,046, plus interest, divided between special assessments, fines, restitution, and forfeiture. They will have to repay all of the money they received from Medicare and Medicaid programs.

The investigation of the case was conducted by the Food and Drug Administration Office of Criminal Investigations, Virginia Medicaid Fraud Control Unit of the Office of the Attorney General, the Department of Health and Human Services Office of the Inspector General, the Drug Enforcement Administration, the Virginia State Police, and Internal Revenue Service – Criminal Investigations, and the Tennessee Bureau of Investigation. The prosecution of the case was conducted by the United States Attorneys’ Offices for the Western District of Virginia (Special Assistant United States Attorney and Assistant Attorney General Janine Myatt and Assistant United States Attorneys Whit Pierce, Krista Frith and Randy Ramseyer) and the Eastern District of Kentucky (Assistant United States Attorneys Andrew Smith and Gregory Rosenberg). The United States Attorney’s Office for the Eastern District of Tennessee provided valuable assistance.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL3VzLWF0dG9ybmV5LXMtb2ZmaWNlLWxhdW5jaGVzLXByb2plY3Qtc2FmZS1uZWlnaGJvcmhvb2RzLWdyYW50LXByb2dyYW0
  Press Releases:
ROANOKE, Va. – United States Attorney Thomas T. Cullen announced today his office’s plan to make available $178,759 in grant funds to help improve offender intervention and rehabilitation efforts in three areas of the Western District of Virginia. The grant money is part of the Department of Justice’s Project Safe Neighborhoods [PSN] a nationwide program designed to create and foster safer neighborhoods through a sustained reduction in violent crime by, among other means, addressing criminal gangs and the illegal use of firearms.  More information regarding the U.S. Attorney’s Office PSN program, the available grant funds, and the grant-application process can be found at www.vachiefs.org/psn-wdva.

“Community-focused prevention, outreach, and rehabilitation efforts play an important role in reducing violent crime and gang-related activity,” U.S. Attorney Cullen stated today. “I am excited that my friend and former U.S. Attorney Tim Heaphy has agreed to oversee our grant-selection process and am confident that he will deploy these resources wisely.” 

The PSN Grant Program is eligible to nonprofits, community organizations and services providers, faith-based groups, and units of local or state governments that operate or have the ability to serve one of the three PSN target enforcement areas for the Western District of Virginia- the City of Danville, the City of Lynchburg, and the Roanoke County/Roanoke City region.

In recent years, violent crime has risen in Roanoke, Danville, and Lynchburg.  For example, in 2016 the homicide rate in Danville spiked from an average of four murders per year to 16 total.  Per capita, this homicide rate exceeded that of major Virginia urban areas like Richmond and Hampton Roads.  Intelligence and evidence attributes this violence to increased street gang activity, which is consistent with statewide crime trends. 

In response, the United States Attorney’s Office for the Western District of Virginia implemented PSN.  Called Project Community Justice, the backbone of PSN is the collaboration of community organizations as well as federal, state, and local law-enforcement agencies to build evidence-based and intelligence-led approaches to identifying the most violent gangs and offenders in each community and deploying their combined resources not only to prevent violent crimes but also, through offender intervention and rehabilitation efforts, to help break the cycle of violence by addressing its underlying causes.  The Grants Program is just one component of multiple concerted efforts the U.S. Attorney’s Office has implemented in Danville, Roanoke, and Lynchburg.

The United States Attorney’s Office recognizes that local government leaders, social service providers, neighborhood leaders, and members of the faith community are an essential part of a successful PSN program, especially those focused on at-risk youth and gang intervention efforts, and hopes that the available grant funds will enable local entities and nonprofits to further their missions of crime prevention and offender intervention and rehabilitation.

Under the program, $178,759 is available to eligible entities in the Western District of Virginia. Those funds will be divided between Danville, Roanoke, and Lynchburg. 

In order to administer its PSN grant funds, the United States Attorney’s Office has selected community members to serve as members of an independent Grants Committee.  The Committee is chaired by Timothy J. Heaphy, a former United States Attorney for the Western District of Virginia and the current General Counsel for the University of Virginia, and is composed of community-outreach experts, grant experts, community leaders, and former law-enforcement personnel.  None of the members are current federal employees, and no member will be eligible to apply for or receive PSN funding.  This Grants Committee has selected the Virginia Association of Chiefs of Police and Foundation, Inc. (VACP) to serve as its Fiscal Agent for these funds. 

Complete applications should be submitted to suzanne@vachiefs.org by 5:00 p.m., on July 17, 2020.

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby13ZHZhL3ByL3VzLWF0dG9ybmV5LW1vdW50Y2FzdGxlLWRlbGl2ZXJzLXJlbWFya3MtZXRoaWNzLWNvbW1pdHRlZS12aXJnaW5pYS1zdGF0ZS1iYXItMQ
  Press Releases:
Roanoke, VIRGINIA – United States Attorney for the Western District of Virginia Rick A. Mountcastle, Assistant United States Attorney and Professional Responsibility Officer Michael Moore from the Eastern District of Virginia, and a delegation from the Virginia Association of Commonwealth’s Attorneys, consisting of Greensville County/City of Emporia Commonwealth’s Attorney Patricia T. Watson, Virginia Beach Commonwealth’s Attorney Colin Stolle, Arlington County/City of Falls Church Commonwealth’s Attorney Theophani K. Stamos, and Suffolk City Commonwealth’s Attorney C. Phillips Ferguson appeared before the ethics committee of the Virginia State Bar this morning to deliver remarks in opposition of the proposed VSB Legal Ethics Opinion 1888 [VSB LEO 1888].

 

U.S. Attorney Mountcastle’s remarks as prepared for delivery:

 

Good morning ladies and gentlemen. My name is Rick Mountcastle and I’m the United States Attorney for the Western District of Virginia.  I’m here with my colleague from the United States Attorney’s Office for the Eastern District of Virginia Assistant United States Attorney and Professional Responsibility Officer Mike Moore.  It’s my privilege to address you this morning on behalf of the United States Department of Justice and the two United States Attorney’s Office’s in Virginia about proposed Legal Ethics Opinion 1888.

 

After a careful review of the hypothetical facts, the analysis, and the proposed Opinion, as well as the applicable legal authorities, we respectfully request that you withdraw the proposed Opinion for the reasons set forth in our November 2, 2017 letter, as well as the many other reasons articulated by the Virginia Association of Commonwealth’s Attorneys and others.  I don’t want to repeat our written comments and I’m certain the Bar will give those comments careful consideration. 

 

I do want to emphasize a couple of points this morning.  First, the Department of Justice and the United States Attorney’s Offices take very seriously the requirement that our prosecutors comply with their discovery and disclosure obligations.  We expend considerable resources to ensure compliance with the Department’s mandate that we make broad disclosures of potentially exculpatory and impeaching material as required by the statutes, rules, and case law.  Further, we agree that prosecutors must not willfully and intentionally attempt to conceal exculpatory and impeaching evidence by hiding it within voluminous materials.

 

The proposed Opinion, however, does not provide clear guidance about this requirement but, instead, creates confusion.  As discussed in our written comments, the underlying hypothetical facts are so oversimplified that the proposed Opinion will apply to virtually none of the cases actually handled by federal and state prosecutors on a daily basis.  Every case will be different because every one of them will have more factual context than the facts set forth in the proposed Opinion.  We’ve listed some of the important factual context at page two of our letter and I’d like to add another very important factor to that list:  the tone of voice and inflexion of the defendant and the victim during the phone call.  As described in our letter, the factual context of each case is critical to a determination of whether a piece of evidence like the nine-word phone call “tends to negate guilt” as opposed to being inculpatory or merely ambiguous; it’s critical to a determination of whether the prosecutor “knows” that it “tends to negate guilt” when an equally fair reading based on all of the facts is that it’s inculpatory or ambiguous, and only defense counsel knows what material falls within the defense theory of the case; and it’s critical to a determination of whether producing it as a part of 200 hours of calls constitutes knowing and intentional concealment when the law only requires disclosure and the defendant knows about it or it’s readily identifiable from an index.

 

The substantial disparity between the hypothetical facts underlying the proposed Opinion, and the facts of the cases we actually prosecute will inevitably create the type of confusion described in our comments and in the comments of the Commonwealth’s Attorneys.  In our view, the proposed Opinion provides no meaningful guidance to the prosecutor because every case he or she prosecutes will be significantly different from the bare bones facts of the hypothetical.  At the same time, it’s likely that defense counsel, in zealously representing their clients, will argue that the proposed Opinion should apply to cases that have no factual similarity. As a result, the proposed Opinion, while providing no meaningful guidance, will simply cause collateral litigation distracting the courts and litigants from administering justice in criminal cases.

 

 For these reasons and the other reasons stated in our letter, we respectfully request that the proposed Opinion be withdrawn.  Thank you for this morning’s opportunity to provide additional comment.

 

End of Prepared Remarks

 

In addition to the remarks delivered this morning, the United States Attorneys and the Virginia Association of Commonwealth’s Attorneys previously sent the ethics committee letters objecting to VSB LEO 1888.

 

lettertovsb.pdf

vacaletter.pdf

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

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

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

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

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

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

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

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

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23-161

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

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

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

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

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

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

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

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

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

 





vaidya.complaint.pdf

(170.43 KB)







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

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

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

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

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

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

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

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

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

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

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

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

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

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

 





zonaroofing.information.pdf

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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



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



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

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

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

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

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

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

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

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

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

*                *                *

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

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

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

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

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





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





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

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

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

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

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

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

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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





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





Marcel Battle, 30, of Canton: drug trafficking;





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





Nathan Roby, 44, of Cleveland: drug trafficking;





Raymond Callahan, 34, of Cleveland: drug trafficking;





Raphael Deen, 30, of Cleveland: drug trafficking;





Terry Lyons, 33, of Cleveland: drug trafficking;





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

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

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

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

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

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

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





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



U.S. Attorney Philip R. Sellinger



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

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

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

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

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

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

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

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

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

 

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

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

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

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

 

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1jZGlsL3ByL3RocmVlLXBlb3JpYS1tZW4tc2VudGVuY2VkLXBheWNoZWNrLXByb3RlY3Rpb24tcHJvZ3JhbS1mcmF1ZA
  Press Releases:










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

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

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

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

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

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

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

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

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











Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2p1c3RpY2UtZGVwYXJ0bWVudC1vYnRhaW5zLTgwMDAwLXNldHRsZW1lbnQtYWdhaW5zdC1zdWJwcmltZS1hdXRvLWxlbmRlci1vcmFuZ2UtY291bnR5
  Press Releases:
The Justice Department today announced that California Auto Finance, a subprime auto lending company based in Orange County, California, has agreed to enter into a court-enforceable consent order to resolve allegations that it illegally repossessed two servicemembers’ cars without court orders while they were on active duty. The Justice Department filed a lawsuit against California Auto Finance and a related entity called 3rd Generation Inc., on March 28, 2018, alleging that their repossession practices violated the Servicemembers Civil Relief Act (SCRA). Under the proposed consent order, which is still subject to approval by the United States District Court for the Central District of California, California Auto Finance must adopt new repossession policies, pay one servicemember $30,000, which is the highest amount ever recovered by the Department for a single servicemember in an automobile repossession case, and pay a $50,000 civil penalty to the United States.

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

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

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

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

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

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

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

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2FyY2hkaW9jZXNlLW5ldy1vcmxlYW5zLWFncmVlcy1wYXktbW9yZS0xLW1pbGxpb24tcmVzb2x2ZS1odXJyaWNhbmUta2F0cmluYS1yZWxhdGVkLWZhbHNl
  Press Releases:
The Roman Catholic Archdiocese of New Orleans (Archdiocese of New Orleans) has agreed to pay more than $1 million to resolve allegations that it violated the False Claims Act by knowingly submitting false claims for payment to the Federal Emergency Management Agency (FEMA) for the repair or replacement of certain facilities damaged by Hurricane Katrina. The settlement, which is based on the Archdiocese of New Orleans’ financial condition, required final approval of the U.S. Bankruptcy Court for the Eastern District of Louisiana, which approved the settlement on Oct. 26. 

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

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

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

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

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

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

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

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

Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2FsZXJlLXBheS11cy0zMzItbWlsbGlvbi1zZXR0bGUtZmFsc2UtY2xhaW1zLWFjdC1hbGxlZ2F0aW9ucy1yZWxhdGluZy11bnJlbGlhYmxlLWRpYWdub3N0aWM
  Press Releases:
Massachusetts-based medical device manufacturer Alere Inc. and its subsidiary Alere San Diego (Alere) have agreed to pay the United States $33.2 million to resolve allegations that Alere caused hospitals to submit false claims to Medicare, Medicaid, and other federal healthcare programs by knowingly selling materially unreliable point-of-care diagnostic testing devices, the Justice Department announced today.

       

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

 

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

 

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

 

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

 

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

 

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

 

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

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

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

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

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

IRS-Criminal Investigation investigated the case.

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

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Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3YvdXNhby1uai9wci9sZWFkZXItcmVhbC1lc3RhdGUtaW52ZXN0bWVudC1maXJtLWFkbWl0cy1yb2xlLTY1OC1taWxsaW9uLXBvbnppLXNjaGVtZS1hbmQtbXVsdGltaWxsaW9u
  Press Releases:
NEWARK, N.J. – The shadow chief executive officer of National Realty Investment Advisors LLC (NRIA) today admitted orchestrating a scheme to defraud more than 2,000 investors in a $658 million Ponzi scheme and conspiring to evade millions of dollars in tax liabilities, U.S. Attorney Philip R. Sellinger announced.

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



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



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

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

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

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

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

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

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

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

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

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

 





salzano.indictment.pdf





Score:   0.5
Docket Number:   aHR0cHM6Ly93d3cuanVzdGljZS5nb3Yvb3BhL3ByL2RldXRzY2hlLWJhbmstYWdyZWVzLXBheS03Mi1iaWxsaW9uLW1pc2xlYWRpbmctaW52ZXN0b3JzLWl0cy1zYWxlLXJlc2lkZW50aWFsLW1vcnRnYWdlLWJhY2tlZA
  Press Releases:
The Justice Department, along with federal partners, announced today a $7.2 billion settlement with Deutsche Bank resolving federal civil claims that Deutsche Bank misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2006 and 2007.  This $7.2 billion agreement represents the single largest RMBS resolution for the conduct of a single entity.  The settlement requires Deutsche Bank to pay a $3.1 billion civil penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).  Under the settlement, Deutsche Bank will also provide $4.1 billion in relief to underwater homeowners, distressed borrowers and affected communities.

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

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

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

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

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

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

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

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

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

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

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

About the RMBS Working Group:

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

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