Sunday, December 27, 2015
CARDIOLOGIST GOES TO PRISON FOR 20 YEARS FOR OVERBILLING $5.7 MILLION
FROM: U.S. JUSTICE DEPARTMENT
Friday, December 18, 2015
Ohio Cardiologist Sentenced to 20 Years in Prison for Overbilling Medicare and Others of $5.7 Million for Unnecessary Procedures
A Westlake, Ohio, cardiologist was sentenced to 20 years in prison for performing unnecessary catheterizations, tests, stent insertions and causing unnecessary coronary artery bypass surgeries as part of a scheme to overbill Medicare and other insurers by $29 million, law enforcement officials said.
Dr. Harold Persaud, 56, was convicted earlier this year of one count of health care fraud, 13 counts of making false statements and one count of engaging in monetary transactions in property derived from criminal activity.
“This defendant used his medical license as a license to steal,” said First Assistant U.S. Attorney Carole S. Rendon. “He inflated Medicare billings, falsified cardiac care records and performing needless and sometimes invasive tests and procedures. This prison sentence is well deserved.”
“Dr. Persaud violated the sacred trust between doctor and patient by ordering unnecessary tests, procedures and surgeries to line his pockets,” said Special Agent in Charge Stephen D. Anthony of the FBI’s Cleveland Office. “He ripped off taxpayers and put patients’ lives at risk.”
“Dr. Persaud's systematic use of medically unnecessary tests and procedures, falsification of patient records and submission of false billings to health care insurers added up to a toxic mixture of fraud at the expense of patient safety and well-being and taxpayer dollars,” said Special Agent in Charge Lamont Pugh III of the U.S. Department of Health & Human Services, Office of Inspector General - Chicago Region. “The OIG, along with our law enforcement partners, will continue to identify, investigate and seek the criminal prosecution of those who choose to exploit federally funded health care programs and the patients these programs serve.”
Persaud had a private medical practice at 29099 Health Campus Drive in Westlake and had hospital privileges at Fairview Hospital, St. John’s Medical Center and Southwest General Hospital, according to court documents and trial testimony.
Persaud devised a scheme to defraud and obtain money from Medicare and other insurers. The scheme took place between 2006 and 2012. According to court documents and trial testimony, his activities in furtherance of the scheme included:
Persaud selected the billing code for each customer submitted to Medicare and private insurers and used codes that reflected a service that was more costly than that which was actually performed;
Persaud performed nuclear stress tests on patients that were not medically necessary;
He knowingly recorded false results of patients’ nuclear stress tests to justify cardiac catheterization procedures that were not medically necessary;
Persaud performed cardiac catheterizations on patients at the hospitals and falsely recorded the existence and extent of lesions (blockage) observed during the procedures;
He recorded false symptoms in patient records to justify testing and procedures on patients;
Persaud inserted cardiac stents in patients who did not have 70 percent or more blockage in the vessel that he stented and who did not have symptoms of blockage;
He placed a stent in a stenosed artery that already had a functioning bypass, thus providing no medical benefit and increasing the risk of harm to the patient;
He improperly referred patients for coronary artery bypass surgery when there was no medical necessity for such surgery, which benefitted Persaud by increasing the amount of follow-up testing he could perform and bill to Medicare and private insurers;
Persaud performed medically unnecessary stent procedures, aortograms, renal angiograms and other procedures and tests.
As a result of this scheme, Persaud overbilled and caused the overbilling of Medicare and private insurers in the amount of approximately $29 million, of which Medicare and the private insurers paid approximately $5.7 million, according to court records.
A hearing is scheduled for Jan. 27, 2016, to determine restitution.
This case is being prosecuted by Assistant U.S. Attorneys Michael L. Collyer and Chelsea Rice following an investigation by the FBI and the U.S. Department of Health and Human Services – Office of Inspector General
Wednesday, December 23, 2015
HOME HEALTH BUSINESS OWNERS, NURSES CHARGED FOR PARTICIPATION IN FRAUD OF OVER $13 MILLION
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, December 22, 2015
Dallas-Based Home Health Company Owners and Nurses Charged for Roles in $13.4 Million Medicare Fraud Scheme
The co-owners of a home health company in Dallas and two nurse employees were charged in an indictment unsealed yesterday for their alleged participation in a $13.4 million health care fraud scheme involving fraudulent claims for home health services.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John Parker of the Northern District of Texas, Special Agent in Charge CJ Porter of the Health and Human Services-Office of Inspector General’s (HHS-OIG) Dallas Region, Special Agent in Charge Thomas M. Class Sr. of the FBI’s Dallas Field Office and Director of Law Enforcement David Maxwell of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
Patience Okoroji, 57, Usani Ewah, 58, Kingsley Nwanguma, 45, all of Dallas County, Texas, and Joy Ogwuegbu, 39, of Collin County, Texas, were each charged with one count of conspiracy to commit health care fraud. In addition, Okoroji and Ewah are each charged with five counts of health care fraud; Nwanguma is charged with three counts of health care fraud and Ogwuegbu is charged with four counts of health care fraud.
Ewah, Nwanguma and Ogwuegbu were arrested yesterday and made their initial appearances before U.S. Magistrate Judge Renee H. Toliver of the Northern District of Texas. Okoroji was also arrested yesterday and will have her initial appearance today.
Okoroji and Ewah co-owned Timely Home Health Services Inc. (Timely), where Okoroji was also an administrator and licensed vocational nurse and Ewah was the director of nursing and a registered nurse. Nwanguma was a licensed vocational nurse working for Timely and Ogwuegbu was a registered nurse working for Timely.
The indictment alleges that from approximately January 2007 to September 2015, the defendants conspired to defraud Medicare by causing the submission and concealment of false and fraudulent claims to Medicare. According to the allegations, Okoroji and Ewah would in some cases pay recruiters, including Nwanguma, to recruit beneficiaries for home health services, regardless of whether the beneficiaries needed home health care. Okoroji, Ewah and Ogwuegbu allegedly prepared or caused to be prepared fraudulent Medicare documents that made it appear that the beneficiaries qualified for home health services. These documents were used by doctors to certify Medicare beneficiaries for home health care.
The indictment alleges that during the scheme, Okoroji and Ewah billed Medicare approximately $13,434,550 based on false and fraudulent claims for home health services.
An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
HHS-OIG, FBI and the Texas Attorney General’s MFCU investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Northern District of Texas. Trial Attorney Jason Knutson of the Criminal Division’s Fraud Section is prosecuting the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Monday, December 21, 2015
DETROIT-AREA MEDICARE FRAUDSTER SENTENCED FOR ROLE IN $7 MILLION HEALTH CARE FRAUD
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, December 16, 2015
Home Health Care Agency Owner Sentenced to 80 Months for Directing Detroit-Area Medicare Fraud Scheme
The owner and operator of a Detroit-area home health care agency who directed a $7 million health care fraud scheme was sentenced today to 80 months in prison.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.
Amer Ehsan, 44, of Canton, Michigan, was sentenced by U.S. District Judge Paul D. Borman of the Eastern District of Michigan, who also ordered Ehsan to pay $4,567,967.12 in restitution.
In connection with his guilty plea, Ehsan admitted that as he owner and operator of Advance Home Health Care Services Inc. (Advance), a home health care agency in the Detroit area, he conspired with physicians, physical therapists and patient recruiters to bill the Medicare program for unnecessary home health care and therapy services and that he paid co-conspirator physicians to refer Medicare beneficiaries to Advance and sign medical documents falsely certifying that they required home health care. Ehsan also admitted that at his direction, Medicare beneficiaries received cash kickbacks in exchange for signing multiple blank physical therapy records.
Additionally, Ehsan admitted that he owned and controlled Michigan Rehab and Management Services LLC, which he used to sell information about Medicare beneficiaries and corresponding fictitious patient files to other Detroit-area home health care agencies. Medicare paid a total of more than $4.5 million as a result of Ehsan’s conduct with these two companies.
Ehsan was part of a wide-ranging scheme that involved 12 defendants, all of whom have pleaded guilty.
The FBI and HHS-OIG investigated this case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan. Trial Attorney Elizabeth Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Katherine Wagner and Special Trial Attorney Katie R. Fink of the Eastern District of Michigan prosecuted this case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, HHS’ Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
Sunday, December 20, 2015
NATIONAL GUARD SOLDIER PLEADS GUILTY TO ATTEMPTING TO PROVIDE SUPPORT TO ISIL
FROM: U.S. JUSTICE DEPARTMENT
Monday, December 14, 2015
U.S. Army National Guard Soldier Pleads Guilty to Attempting to Provide Material Support to ISIL
A soldier in the U.S. Army National Guard pleaded guilty today to federal charges that he conspired with his cousin to provide material support to a foreign terrorist organization in the Middle East.
Hasan R. Edmonds, 23, of Aurora, Illinois, pleaded guilty to one count of conspiring to provide material support to ISIL, a designated foreign terrorist organization, and one count of attempting to provide material support to ISIL.
The charge was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois and Special Agent in Charge Michael J. Anderson of the FBI’s Chicago Division.
“Hasan and Jonas Edmonds conspired to provide material support to ISIL,” said Assistant Attorney General Carlin. “They admitted planning to wage violence on behalf of ISIL in the Middle East and to conduct an attack on our soil. Thanks to the efforts of many prosecutors, agents and analysts, we were able to ensure these plotters did not attain their violent endgames, and with these guilty pleas, they will be held accountable. Counterterrorism remains the department’s highest priority, and we will continue use all available tools to combat ISIL, a foreign terrorist organization that rapes, murders and enslaves Muslims and non-Muslims alike.”
“The top priority of federal law enforcement is to protect the safety of our citizens, both here and abroad,” said U.S. Attorney Fardon. “We will vigorously investigate and prosecute those who align themselves with ISIL and its mission of brutal violence.”
According to the plea agreement, Hasan Edmonds and his cousin, Jonas M. Edmonds, devised a plan for Hasan Edmonds to travel to the Middle East for the purpose of waging violence on behalf of ISIL. Hasan Edmonds admitted that on March 25, 2015, Jonas Edmonds drove Hasan Edmonds to Midway International Airport in Chicago so that he could board a flight to the Middle East. According to the plea agreement, after dropping off Hasan Edmonds, Jonas Edmonds went to Hasan Edmonds’ residence and retrieved several of Hasan Edmonds’ National Guard uniforms, which Jonas Edmonds planned to wear as a disguise during a planned attack at the National Guard base in Joliet, Illinois.
Hasan Edmonds is a member of the Army National Guard and had trained at the Joliet installation.
Law enforcement agents on the FBI’s Chicago Joint Terrorism Task Force arrested Hasan Edmonds at Midway Airport before he could board his flight. Shortly thereafter the agents arrested Jonas Edmonds at his home. The cousins are citizens of the United States.
The charges against Hasan Edmonds carry a combined maximum sentence of 30 years in prison and $500,000 fine. U.S. District Judge John Z. Lee of the Northern District of Illinois scheduled a sentencing hearing for March 18, 2016.
Jonas Edmonds, 30, of Aurora, pleaded guilty last week to one count of conspiring to provide material support to a designated foreign terrorist organization and one count of making a materially false statement to a law enforcement officer regarding an offense involving international terrorism. He faces a maximum sentence of 23 years in prison when he is sentenced by U.S. District Judge John Z. Lee on Jan. 27, 2016, at 2:00 p.m.
The case is being investigated by the FBI’s Chicago Joint Terrorism Task Force. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the Illinois State Police, the Aurora Police Department and the Illinois National Guard provided significant assistance in the investigation.
The case is being prosecuted by Assistant U.S. Attorneys Barry Jonas and John Kness of the Northern District of Illinois; and Trial Attorney Lolita Lukose of the National Security Division’s Counterterrorism Section.
Friday, December 18, 2015
APPREHENDED: MAN ON PUERTO RICO'S TOP 10 MOST WANTED LIST
FROM: U.S. MARSHALS SERVICE
December 15, 2015
U.S. Marshals Task Force Arrest one of Puerto Rico's Top Ten Most Wanted
Puerto Rico Violent Offenders Task Force logoSan Juan, PR - The United States Marshals Service Puerto Rico Violent Offenders Task Force announces the arrest of 27 year old, Robert Guzman Cruz, aka “Babi” who was wanted on several state warrants for murder, attempted murder and weapons law violations in the town of Ponce, PR. Guzman Cruz was featured by the Police of Puerto Rico as one of the top ten most wanted in Ponce, PR.
At the time of his arrest, Guzman Cruz was in the company of three other individuals in a rural area in the mountains of Cidra, PR. At the location a large quantity of currency, controlled substances and a firearm were recovered. The FBI assumed jurisdiction of the detainees and the scene. The arrest of Guzman Cruz was the result of a collaborative effort led by the Puerto Rico Violent Offenders Task Force and the Puerto Rico Police Department arrest unit.
United States Marshal Orlando Rivera commended the outstanding effort of the fugitive task force and stated, “This case is just another example of how the U.S. Marshals Service and the Puerto Rico Violent Offenders Task Force will not rest to bring fugitives to justice.”
The Puerto Rico U.S. Marshals Violent Offenders Task Force is comprised of investigators from the U.S. Marshals Service, the Puerto Rico Police Department, the San Juan Municipal Police, the Department of Corrections, PR State Marshals and the State Internal Revenue Service.
Thursday, December 17, 2015
ALABAMAN ARRESTED ROLE IN STOLEN IDENTITY THEFT FRAUD
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, December 15, 2015
Alabama Resident Indicted for Stolen Identity Tax Refund Fraud Scheme
An Alabama resident was arrested today after being indicted on Dec. 9 by a federal grand jury sitting in Montgomery, Alabama, on 15 counts of wire fraud, 15 counts of aggravated identity theft and two counts of passing U.S. Treasury checks with a false endorsement, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck, Jr. of the Middle District of Alabama.
According to the allegations in the indictment, James Vernon Battle, a resident of Montgomery County, used stolen personal identification information to prepare and file false federal income tax returns for tax years 2013 and 2014 for the purpose of obtaining fraudulent tax refunds. Battle directed the Internal Revenue Service (IRS) to issue the requested refunds by depositing the funds onto prepaid debit cards and by issuing U.S. Treasury checks.
If convicted, Battle faces a statutory maximum sentence of 20 years in prison for each count of wire fraud, a mandatory minimum sentence of two years in prison for aggravated identity theft and a statutory maximum sentence of 10 years in prison for each count of passing a U.S. Treasury check with a false endorsement. He also faces substantial monetary penalties and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck commended special agents of IRS-Criminal Investigation and the U.S. Secret Service, who investigated the case, and Trial Attorneys Michael C. Boteler and Robert J. Boudreau of the Tax Division and Assistant U. S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting this case.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Wednesday, December 16, 2015
34 FACE CHARGES RELATED TO TRAFFICKING METH ON MESCALERO APACHE RESERVATION
FROM: U.S. JUSTICE DEPARTMENT
Monday, December 14, 2015
34 Individuals Facing Federal and Tribal Charges Relating to Methamphetamine Trafficking on the Mescalero Apache Reservation
Thirty-four individuals are facing federal and tribal drug charges as the result of an 18-month multi-agency investigation spearheaded by the Drug Enforcement Administration (DEA) and Bureau of Indian Affairs (BIA) into methamphetamine trafficking on the Mescalero Apache Reservation. Eighteen defendants, including five members of the Mescalero Apache Tribe and 13 non-Natives are charged in six indictments and a criminal complaint filed in the U.S. District Court for the District of New Mexico in November and December 2015. Sixteen other members of the Mescalero Apache Tribe are charged in tribal criminal complaints approved by the Mescalero Apache Tribal Court.
The investigation leading to the federal and tribal charges was initiated in May 2014 in response to an increase in violent crime on the Mescalero Apache Reservation perpetrated by methamphetamine users. The investigation initially targeted a drug trafficking organization allegedly led by Lorenzo Saenz, a member of the Mescalero Apache Tribe, which distributed methamphetamine within the Reservation. It later expanded to include two other drug trafficking organizations in southern New Mexico that allegedly served as sources of supply for the methamphetamine distributed within the reservation.
In August 2014, the investigation was designated as part of the Justice Department’s Organized Crime Drug Enforcement Task Force (OCDETF) program, which combines the resources and unique expertise of federal agencies, along with their local counterparts, in a coordinated effort to disrupt and dismantle major drug trafficking organizations. The investigation is one of the first OCDETF investigations to utilize electronic surveillance (wiretaps) in Indian Country. More than ten kilograms of methamphetamine were seized during the course of the investigation.
“Methamphetamine has a disproportionate devastating impact on tribal communities, accounting for up to 40 percent of violent crime on reservations,” said U.S. Attorney Damon P. Martinez of the District of New Mexico. “This investigation is an example of the Justice Department’s commitment to working with Tribal Governments to improve the safety of Native communities and increase awareness of the dangers of methamphetamine use.”
“I want to thank the BIA’s Division of Drug Enforcement and Office of Justice Services, the DEA and the U.S. Attorney’s Office for the many, many hours they put forth during this investigation,” said President Danny Breuninger of the Mescalero Apache Tribe. “Before and since taking Office as the President of the Mescalero Apache Tribe, I heard complaints from our Tribal Members and saw the pain and suffering caused by illegal drug use and sales on our Reservation. Many of our young people are being poisoned by methamphetamine and lives are being shattered by senseless drug-related injuries and deaths. As the leader of my Tribe, it is my job to do all I can to preserve the safety and welfare of our people and to preserve our culture, traditions and customs. The great majority of our Tribal Members are great people who work hard every day to support their families and raise their children with the values and traditions that have been passed down generation after generation. But continuing to do this is very hard when our Tribal Members’ lives are being torn apart by illegal drug use. I call on the federal government, including the President, the Attorney General and Congress, to continue supporting and working with BIA and tribal police departments in these types of collaborative efforts throughout Indian Country. Thank you again for all of the support and dedication in serving the Mescalero Apache Tribe.”
Saenz and four other members of the Mescalero Apache Tribe are charged in four federal indictments with distributing methamphetamine within the Mescalero Apache Reservation. Saenz and a co-defendant are alleged to have participated in a methamphetamine trafficking conspiracy during which they sold methamphetamine to undercover agents on multiple occasions. Saenz was one of two federal defendants arrested on Dec. 11, when 13 of the 16 tribal defendants were also arrested. A third federal Mescalero Apache defendant is in state custody on unrelated charges and the remaining two have yet to be arrested.
Thirteen non-Natives, alleged members of two drug trafficking organizations that supplied the methamphetamine distributed within the Mescalero Apache Reservation, are charged in two other federal indictments and a federal criminal complaint. Eight of the non-Natives are charged with methamphetamine trafficking and money laundering offenses in a 24-count indictment; three are charged with methamphetamine trafficking offenses in a five-count indictment; and two are charged with methamphetamine trafficking offenses in a criminal complaint. Eight of the non-Natives have been arrested, two are in state custody on unrelated charges and three have yet to be arrested.
“The DEA and Bureau of Indian Affairs dismantled three drug trafficking organizations distributing methamphetamine on the Mescalero Apache Reservation and across southeastern New Mexico,” said Special Agent in Charge Will R. Glaspy of the DEA’s El Paso Division. “This is our warning to others who think they can hide their crimes on Tribal Lands: we are coming for you.”
“The BIA would like to thank the DEA and the U.S. Attorney’s Office for an outstanding collaborative effort that shows the resolve of our law enforcement partners to address the issue of illicit drug use in Indian Country and their dedication to provide safe communities for Indian people,” said Special Agent in Charge William McClure of District IV of BIA’s Office of Justice Services. “The many hours and resources that went in to this operation have increased the safety of tribal community members and reduced their fear of the danger posed by these individuals charged and their associates.”
“Methamphetamine continues to have a devastating effect on Native American families and communities throughout Indian Country,” said Regional Agent in Charge Gary Cunningham of BIA’s Division of Drug Enforcement. “The results of this multi-agency investigation are a great example of what can be accomplished when the Bureau of Indian Affairs and other federal, state and local law enforcement agencies combine efforts and resources to remove these drug trafficking organizations from our communities. Indian Country is grateful for these partnerships and BIA will continue to work with our law enforcement partners to aggressively remove these negative elements from our communities.”
The federal and tribal cases were investigated by the Las Cruces office of the DEA, District IV of the BIA’s Office of Justice Services (Mescalero Agency), BIA’s Division of Drug Enforcement, Mescalero Tribal Police Department, Hatch Police Department, FBI and Lea County Drug Task Force.
The following additional agencies assisted the investigating agencies with law enforcement operations on Nov. 20 and Dec. 11: U.S. Marshals Service, Homeland Security Investigations, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Border Patrol, New Mexico State Police, HIDTA Interagency Metro Narcotics, New Mexico National Guard, Chaves County Metro Narcotics Task Force, Pecos Valley Drug Task Force, Alamogordo Police Department, Ruidoso Police Department, Socorro Police Department Sunland Park Police Department and Tularosa Police Department.
Assistant U.S. Attorney Terri J. Abernathy of the U.S. Attorney’s Las Cruces Branch Office is prosecuting the federal cases and Mescalero Tribal Prosecutor Alta Braham is prosecuting the tribal cases.
Charges in indictments and criminal complaints are merely accusations and defendants are presumed innocent unless found guilty beyond a reasonable doubt.
Tuesday, December 15, 2015
U.S. ARMY SERGEANT RECEIVES 24 MONTH SENTENCE FOR ROLE IN BRIBERY SCHEME
FROM: U.S. JUSTICE DEPARTMENT
Thursday, December 10, 2015
Army Sergeant Sentenced to Prison for Conspiracy in Afghanistan Bribery Scheme
An Army sergeant was sentenced to 24 months in prison today for his role in a conspiracy to commit bribery in connection with supply contracts while serving in Afghanistan.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John E. Kuhn Jr. of the Western District of Kentucky, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office, Special Inspector General for Afghanistan Reconstruction (SIGAR) John F. Sopko, Director Frank Robey of the U.S. Army Criminal Investigation Command’s (CID) Major Procurement Fraud Unit, Acting Special Agent in Charge Paul Sternal of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Brigadier General Keith M. Givens, Commander of the Air Force Office of Special Investigations (OSI), made the announcement.
Ramiro Pena Jr., 43, of Fort Campbell, Kentucky, previously pleaded guilty to a one-count information charging him with conspiracy to commit bribery. In imposing sentence today, Senior U.S. District Judge Thomas B. Russell of the Western District of Kentucky also ordered Pena to forfeit $100,000, a Harley Davidson motorcycle and a Rolex watch.
From January 2008 through September 2009, Pena worked as a U.S. Army sergeant first class at the Humanitarian Assistance (HA) Yard at Bagram Airfield in Afghanistan. In connection with his guilty plea, Pena admitted that he and his supervisor, Army Master Sergeant Jimmy W. Dennis, were responsible for contracting with local vendors to purchase supplies to support humanitarian relief in Afghanistan, and they awarded approximately 217 such contracts totaling roughly $30,760,255. In return, Pena and Dennis received money and jewelry from some of the vendors. Specifically, Pena admitted that he received from the vendors, through Dennis, a Rolex watch and $100,000 in total bribe payments.
Pena admitted that he sent approximately $22,000 of the cash to his family in Kentucky, spread among numerous greeting cards to avoid drawing attention to the thickness of any particular envelope. Pena also used the bribe money to pay his family’s personal expenses both in Afghanistan and in the United States to purchase a Harley Davidson motorcycle.
Dennis also previously pleaded guilty in the Western District of Tennessee to conspiracy to launder bribe payments and was sentenced to 41 months in prison and ordered to forfeit $115,000.
This case was investigated by the SIGAR, FBI’s Washington Field Office, CID, DCIS and OSI. The case was prosecuted by Trial Attorney Daniel P. Butler of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Nute A. Bonner and Amy Sullivan of the Western District of Kentucky.
Monday, December 14, 2015
16 NAMED IN RACKETEERING INDICTMENT STEMMING FROM SCHEMES INVOLVING LAUNDERING DRUG MONEY USING CALIFORNIA BANK
FROM: U.S. JUSTICE DEPARTMENT
Thursday, December 10, 2015
Sixteen Named in Racketeering Indictment Alleging Money Laundering Schemes Orchestrated by Former President of Orange County Bank
Two Other Money Laundering Indictments Unsealed as Part of Operation “Phantom Bank”
Federal authorities today arrested 11 defendants named in a sweeping racketeering indictment alleging a series of money laundering schemes that revolved around the former head of Saigon National Bank, based in Westminster, California, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Eileen M. Decker of the Central District of California. Four other defendants, who are named in separate indictments, were also arrested today.
The majority of the defendants arrested today are named in a racketeering indictment that was returned on Dec. 1 by a federal grand jury and unsealed today along with two other indictments returned by the grand jury over the past year. The three indictments charge a total of 20 defendants.
Six of the defendants named in the main indictment are charged with violating the federal Racketeer Influenced and Corrupt Organizations Act (RICO) by playing key roles in a series of schemes to launder drug proceeds. At the center of the schemes is Tu Chau “Bill” Lu, 71, of Fullerton, California, who from 2009 through January 2015, was president and CEO of Saigon National Bank.
The indictment alleges that Lu and the other five defendants were members of a criminal organization that was involved in narcotics trafficking and international money laundering in countries that included the United States, China, Cambodia, Liechtenstein, Mexico and Switzerland. Lu allegedly used his insider knowledge, position as an official at Saigon National Bank and network of connections to promote and facilitate money laundering transactions involving members and associates of the enterprise. Several members of the organization established or engaged in separate money laundering schemes, but all of the defendants allegedly worked with Lu, through him or at his direction.
In one scheme, an undercover informant delivered cash represented to be drug proceeds to defendants, who allegedly arranged for the cash to be converted into cashier’s checks made out to a company the informant claimed to own. Other conspiracies alleged in the indictment also involved the delivery of cash from the informant and the defendants’ alleged conversion of that money into cashier’s checks.
As part of the racketeering enterprise, Lu and others named in the RICO count allegedly floated a plan in which the informant and his boss (who was an actually an undercover law enforcement officer) would purchase a controlling interest in Saigon National Bank so they could have a financial institution that could easily facilitate money laundering operations.
In another aspect of the racketeering conspiracy, Lu and others allegedly proposed setting up a foundation in Liechtenstein that would be used to move money around the world. The informant and an undercover law enforcement officer posing as an associate told those proposing the creation of the foundation that they would be laundering the proceeds of drug sales in Europe and that the drugs had been bartered for weapons in Nigeria.
In yet another aspect of the conspiracy, Lu allegedly played a critical role in introducing the informant and other defendants to operatives from the Sinaloa drug cartel who wanted to launder millions of dollars every month. According to the indictment, Lu had also discussed purchasing Saigon National Bank with the Sinaloa operatives, and one of the operatives said the cartel had already invested $1 million in the bank.
The RICO count is one of 28 counts in the indictment. The various money laundering schemes detailed in the RICO count are the subject of other charges, specifically conspiracy, money laundering and structuring transactions to avoid federal reporting requirements. Kim is additionally charged with evidence tampering for allegedly encouraging one of the undercover agents to destroy evidence.
The indictment alleges that members of the racketeering conspiracy discussed laundering hundreds of millions of dollars. The indictment details actual money transactions involving a total of $3.75 million.
The second indictment unsealed today charges Hung; Wei; Jian Sheng “Raymond” Tan, 48, of Temple City, California; and Derrick Cheung, also known as Chang Zhang Ying and Zhang Ying Chang, 39, of Rowland Heights, California, with conspiring to launder money that they believed to be the proceeds of narcotics trafficking and bank fraud. The defendants allegedly accepted money from an undercover operative and converted it to cashier’s checks and money orders, in exchange for a fee.
The third indictment unsealed today charges Tan; Ruimin Zhao, 45, of Temple City; and Vivian Tat, of Hacienda Heights, California, with conspiring to launder money that they believed to be the proceeds of narcotics trafficking. An undercover operative allegedly delivered the money to the defendants, who converted into cashier’s checks.
The 15 defendants taken into custody today will be arraigned this afternoon in U.S. District Court in Los Angeles.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.
The FBI, the Office of the Special Inspector General for the Troubled Asset Relief Program and Internal Revenue Service-Criminal Investigation are conducting the investigation in Operation Phantom Bank. Trial Attorney Andrew Creighton of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Kim Meyer of the Central District of California are prosecuting these cases.
Sunday, December 13, 2015
FORMER STATE DEPARTMENT EMPLOYEE PLEADS GUILTY TO CRIMES RELATED TO COMPUTER HACKING
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, December 9, 2015
Former U.S. State Department Employee Pleads Guilty to Extensive Computer Hacking, Cyberstalking and "Sextortion" Scheme
A former U.S. State Department employee pleaded guilty today to perpetrating a widespread, international e-mail phishing, computer hacking and cyberstalking scheme against hundreds of victims in the United States and abroad.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John A. Horn of the Northern District of Georgia, Director Bill A. Miller of the U.S. Department of State’s Diplomatic Security Service and Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office made the announcement.
Michael C. Ford, 36, of Atlanta, was indicted by a grand jury in the U.S. District Court for the Northern District of Georgia on Aug. 18, 2015, with nine counts of cyberstalking, seven counts of computer hacking to extort and one count of wire fraud. The names of the victims are being withheld from the public to protect their privacy.
Ford pleaded guilty to all charges and admitted that between January 2013 and May 2015, he used various aliases that included “David Anderson” and “John Parsons” and engaged in a widespread, international computer hacking, cyberstalking and “sextortion” campaign designed to force victims to provide Ford with personal information as well as sexually explicit videos of others. Ford targeted young females, some of whom were students at U.S. colleges and universities, with a particular focus on members of sororities and aspiring models.
Ford posed as a member of the fictitious “account deletion team” for a well-known e-mail service provider and sent phishing e-mails to thousands of potential victims, warning them that their e-mail accounts would be deleted if they did not provide their passwords. Ford then hacked into hundreds of e-mail and social media accounts using the passwords collected from his phishing scheme, where he searched for sexually explicit photographs. Once Ford located such photos, he then searched for personal identifying information (PII) about his victims, including their home and work addresses, school and employment information, and names and contact information of family members, among other things.
Ford then used the stolen photos and PII to engage in an ongoing cyberstalking campaign designed to demand additional sexually explicit material and personal information. Ford e-mailed his victims with their stolen photos attached and threatened to release those photos if they did not cede to his demands. Ford repeatedly demanded that victims take sexually explicit videos of “sexy girls” undressing in changing rooms at pools, gyms and clothing stores, and then send the videos to him.
When the victims refused to comply, threatened to go to the police or begged Ford to leave them alone, Ford responded with additional threats. For example, Ford wrote in one e-mail “don’t worry, it’s not like I know where you live,” then sent another e-mail to the same victim with her home address and threatened to post her photographs to an “escort/hooker website” along with her phone number and home address. Ford later described the victim’s home to her, stating “I like your red fire escape ladder, easy to climb.” Ford followed through with his threats on several occasions, sending his victims’ sexually explicit photographs to family members and friends.
Ultimately, Ford sent thousands of fraudulent “phishing” email messages to potential victims, successfully hacked into at least 450 online accounts belonging to at least 200 victims, and forwarded to himself at least 1,300 stolen email messages containing thousands of sexually explicit photographs. Ford sent threatening and “sextortionate” online communications to at least 75 victims.
During the relevant time period, Ford was employed by the U.S. Embassy in London. The majority of Ford’s phishing, hacking and cyberstalking activities were conducted from his computer at the U.S. Embassy.
“With nothing more than a computer and a few keystrokes, modern predators like Michael Ford can victimize hundreds of people around the world,” said Assistant Attorney General Caldwell. “While this criminal prosecution may never return the victims’ sense of security, I hope that today’s guilty plea brings them some peace of mind.”
“Ford engaged in an international sextortion campaign,” said U.S. Attorney Horn. “He tormented numerous women by threatening to humiliate them unless they provided him with sexually explicit photos and videos, and in some cases, he followed through on his threats. This case demonstrates the need to be careful in safeguarding personal information and passwords, especially in response to suspicious e-mails.”
“When a public servant in a position of trust commits any form of misconduct, to include federal crimes such as cyberstalking and computer hacking, we vigorously investigate such claims,” said Director Miller. “The Diplomatic Security Service is firmly committed to investigating and working with the Department of Justice, U.S. Attorney’s Office and our other law enforcement partners to investigate criminal allegations and bring those who commit these crimes to justice.”
“The allegations contained in this federal indictment portray an individual consumed with sexually themed cyber-stalking and exploitation as well as an individual who felt he was beyond detection and grasp of authorities,” said Special Agent in Charge Johnson. “The FBI is proud of the role it played in working with our law enforcement partners to bring Mr. Ford in for prosecution.”
U.S. District Judge Eleanor L. Ross of the Northern District of Georgia scheduled Ford’s sentencing hearing for Feb. 16, 2016.
The Diplomatic Security Service and the FBI are investigating the case. Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section, Trial Attorney Jamie Perry of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Kamal Ghali of the Northern District of Georgia are prosecuting the case. The Criminal Division’s Office of International Affairs and the U.S. Embassy in London provided assistance in this case.
Saturday, December 12, 2015
A TENTH MINNESOTAN CHARGED WITH PROVIDING MATERIAL SUPPORT TO ISIL
FROM: U.S. JUSTICE DEPARTMENT
Thursday, December 10, 2015
Tenth Minnesota Man Charged With Conspiracy to Provide Material Support to ISIL
Three Co-Conspirators Have Already Pleaded Guilty; Five Expected to Go to Trial in May 2016
Abdirizak Mohamed Warsame, 20, of Eagan, Minnesota, was charged by criminal complaint with conspiring to provide material support to the Islamic State of Iraq and the Levant (ISIL), announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Andrew M. Luger of the District of Minnesota and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division.
“Abdirizak Warsame conspired with others to travel to Syria to fight with ISIL,” said Assistant Attorney General Carlin. “Counterterrorism is the National Security Division’s highest priority, and we will continue to work to stem the flow of foreign fighters abroad and to bring to justice those who seek to provide material support to designated foreign terrorist organizations.”
“This defendant is the 10th Twin Cities’ man charged as part of a broad conspiracy to provide material support to ISIL,” said U.S. Attorney Luger. “The FBI and prosecutors in my office continue to work without pause to keep Minnesotans safe and bring these defendants to justice.”
“This arrest demonstrates the commitment to U.S. national security by the members of the FBI's Joint Terrorism Task Force,” said Special Agent in Charge Thornton. “The members of this task force work in concert to ensure the protection of the United States and its citizens every day. These efforts will continue as long as threats persist.”
According to the complaint and documents filed in court, in spring 2014, Warsame and his co-conspirators began meeting to watch propaganda videos that glorified religious violence and to discuss their aspirations to travel to Syria to join ISIL. Members of the group, including Warsame, discussed ways to leave the United States and travel to Syria, despite the fact that law enforcement was intensely scrutinizing the group. At one such meeting, Guled Omar was elected “emir,” or leader, of the group. Later in 2014, when Omar was planning to depart for Syria, Omar appointed Warsame to replace him as emir for the remaining co-conspirators.
According to the complaint and documents filed in court, during the same period, Warsame provided $200 to a co-conspirator, Adnan Farah, so that Farah could obtain an expedited U.S. passport to travel overseas to join ISIL. Warsame also applied for an expedited passport during this time, but his application was initially denied.
According to the complaint and documents filed in court, Warsame repeatedly attempted to obtain a telephone number or other contact information of ISIL members, including ISIL member H.K. In June 2014, Warsame specifically attempted to obtain this contact information so that he could pass it along to Y.J., who was attempting to travel from Turkey to Syria to join ISIL.
According to the complaint and documents filed in court, in April 2015, Warsame actively encouraged Omar and other co-conspirators to travel to Syria through Mexico, but did not plan to join their group because he was planning to travel with his family to East Africa. From East Africa, Warsame planned to either break free from his family and travel to Syria, or wait in Somalia for a time when, he believed, al-Shabaab would pledge allegiance to ISIL, thus expanding ISIL to Somalia.
According to the criminal complaint and documents filed in court, on April 2, 2015, Warsame recounted a conversation he had with Abdi Nur, before Nur left the United States for Syria. In that exchange, Warsame told Omar that he proposed to Nur that they rob people in order to finance their travel to Syria, which Nur rejected and suggested instead that they rob the government.
The charges contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
This case is the result of an investigation conducted by members of the FBI-led Joint Terrorism Task Force in Minneapolis.
This case is being prosecuted by Assistant U.S. Attorneys Andrew R. Winter and John F. Docherty of the District of Minnesota and the National Security Division’s Counterterrorism Section.
Friday, December 11, 2015
TWO EXECS CONVICTED FOR ROLES IN INTERNATIONAL INVESTMENT FRAUD SCHEME
FROM: U.S. JUSTICE DEPARTMENT
FOR IMMEDIATE RELEASE
Tuesday, December 8, 2015
Executives of Swiss and Las Vegas Companies Convicted in International Investment Fraud Scheme
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Special Agent in Charge Laura A. Bucheit of the FBI’s Las Vegas Field Office made the announcement.
Anthony Brandel, 48, of Las Vegas, and James Warras, 69, of Waterford, Wisconsin, were each convicted of one count of conspiracy, nine counts of wire fraud and eight counts of securities fraud following a five-day trial before Senior U.S. District Judge Kent J. Dawson of the District of Nevada. The defendants are scheduled to be sentenced on March 2, 2016, by Judge Dawson.
According to evidence presented at trial, Brandel and Warras conspired with others in the United States and Switzerland to promote investments and loan instruments that they knew to be fraudulent. The conspirators told victims that, for an up-front payment, a Swiss company known as the Malom (Make A Lot of Money) Group AG would provide access to lucrative investment opportunities and substantial cash loans. To effectuate this scheme, the defendants fabricated bank documents purporting to show that the Malom Group had large amounts of money in several European financial institutions. And as part of an effort to defraud an investor who held an equity stake in a corporation that had filed for bankruptcy, Warras submitted a sworn affidavit to the U.S. Bankruptcy Court in the District of New Hampshire in which he made false statements about the value of certain bonds that the defendants promoted to the investor.
Brandel and Warras were charged together with four other defendants, including Joseph Micelli, 62, a former California attorney who pleaded guilty to conspiracy to commit wire fraud and securities fraud and is set to be sentenced on Feb. 23, 2016. The remaining defendants are either at large or awaiting extradition from other countries.
The FBI’s Las Vegas Field Office investigated the case. Assistant Chief Brian R. Young and Trial Attorneys Melissa Aoyagi and Anna G. Kaminska of the Criminal Division’s Fraud Section are prosecuting the case with assistance from the Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office for the District of Nevada. The Securities and Exchange Commission’s Enforcement Division, which referred the matter to the department and is conducting a parallel civil enforcement investigation, also provided valuable assistance.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.
Thursday, December 10, 2015
SUMMARY OUTCOMES U.S.-CHINA DIALOGUE ON CYBERCRIME
FROM: U.S. JUSTICE DEPARTMENT
Wednesday, December 2, 2015
First U.S.-China High-Level Joint Dialogue on Cybercrime and Related Issues Summary of Outcomes
During the dialogue, both countries discussed ways to enhance cooperation within the bounds of each nation’s legal framework and assessed progress made on cases identified during their discussions in September 2015. They reached the following specific outcomes:
1. Guidelines for Combatting Cybercrime and Related Issues. Attorney General Lynch, Secretary Johnson and State Councilor Guo reached agreement on a document establishing guidelines for requesting assistance on cybercrime or other malicious cyber activities and for responding to such requests. These guidelines will establish common understanding and expectations regarding the information to be included in such requests and the timeliness of responses.
2.Tabletop Exercise. Both sides decided to conduct a tabletop exercise in the spring of 2016 on agreed-upon cybercrime, malicious cyber activity and network protection scenarios to increase mutual understanding regarding their respective authorities, processes and procedures. During the tabletop exercise, both sides will assess China’s proposal for a seminar on combatting terrorist misuse of technology and communications, and will consider the U.S.’s proposal on inviting experts to conduct network protection exchanges.
3. Hotline Mechanism. Pursuant to the commitment between the two presidents to establish a hotline for escalation of issues that may arise in the course of responding to cybercrime and other malicious cyber activities, both sides decided to develop the scope, goals and procedures for use of the hotline before the next High-Level Dialogue.
4. Enhance Cooperation on Combatting Cyber-Enabled Crime and Related Issues. Both sides decided to further develop case cooperation on combatting cyber-enabled crimes, including child exploitation, theft of trade secrets, fraud and misuse of technology and communications for terrorist activities, and to enhance exchanges on network protection. Both sides decided to improve cooperation among the relevant agencies, within the framework of the high-level dialogue, on network protection issues. U.S. and Chinese cyber incident and network protection experts will meet on Dec. 3, 2015, and will continue to meet regularly during future dialogues.
5. Second U.S.-China High-Level Joint Dialogue on Cybercrime and Related Issues. Attorney General Lynch, Secretary Johnson and State Councilor Guo decided to schedule the second U.S.-China High-Level Dialogue on Combatting Cybercrime and Related Issues in June 2016. The dialogue will take place in Beijing, China.
Wednesday, December 9, 2015
MAN WHO TRIED TO TRAVEL TO SYRIA TO JOIN ISIL, PLEADS GUILTY
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, December 1, 2015
California Man Pleads Guilty to Attempting to Provide Material Support to ISIL
According to court documents, on March 17, 2014, Teausant was arrested en route to Canada, near the border, with the intent of continuing to travel to Syria to join the Islamic State of Iraq and the Levant (ISIL), a foreign terrorist organization. On March 26, 2014, Teausant was indicted on one count of attempting to provide material support or resources to a terrorist organization. He pleaded guilty to the single count in the indictment without a plea agreement.
“Nicholas Michael Teausant attempted to travel overseas to join ISIL and to provide material support to the terrorist organization,” said Assistant Attorney General Carlin. “The National Security Division’s highest priority is counterterrorism, and we are committed to stemming the flow of foreign fighters abroad and holding accountable those who attempt to provide material support to designated foreign terrorist organizations.”
“This case, like others in communities across the United States and around the world, is an example of how a young person from any place and any background might make the terrible decision to try and become part of a terrorist organization,” said U.S. Attorney Wagner. “Fortunately, the FBI intervened in this case before any harm could be inflicted upon innocent persons. We hope that this case will be a reminder to us all to stay vigilant and involved in the lives of our youth, and in particular with respect to the dangerous influences they may be subject to on the Internet where these organizations are very active.”
Teausant is scheduled to be sentenced by U.S. District Judge John A. Mendez of the Eastern District of California on March 8, 2016. Teausant faces a maximum statutory penalty of 15 years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the federal sentencing guidelines, which take into account a number of variables.
This case was the product of an investigation by the FBI, the Modesto, California, Police Department and the San Joaquin, California, Sheriff’s Office, who are members of the Modesto/Stockton Joint Terrorism Task Force, with significant assistance from U.S. Customs and Border Protection. The case is being prosecuted by Assistant U.S. Attorneys Jean M. Hobler and Jason Hitt of the Eastern District of California and Trial Attorney Andrew Sigler of the National Security Division’s Counterterrorism Section.
Tuesday, December 8, 2015
COMPANY PLEADS GUILTY TO CRIMINAL CONTEMPT OF COURT FOR SELLING DIETARY SUPPLEMENTS IN VILATION OF COURT ORDERS
FROM: U.S. JUSTICE DEPARTMENT
Tuesday, December 1, 2015
Dietary Supplement Manufacturer Pleads Guilty to Criminal Contempt of Court
The Department of Justice announced today that a Livingston, Montana resident pleaded guilty to selling dietary supplements in violation of two court orders.
Toby McAdam, 57, pleaded guilty before U.S. District Judge Susan P. Watters in the District of Montana to one count of criminal contempt of court. McAdam was immediately sentenced to four months in prison. He was ordered to pay $80,000 in liquidated damages and $4,936.48 in attorney's fees.
“The Department of Justice will use all available tools to ensure that dietary supplement and drug manufacturers obey court orders,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “As demonstrated by our recently announced dietary supplements sweep, the Consumer Protection Branch will aggressively pursue those who distribute these products in violation of the law.”
The criminal contempt action arose out of a prior civil action the Department filed in 2010 against McAdam, who was the owner and operator of Risingsun Health, based in Livingston. According to court documents, McAdam sold misbranded and adulterated dietary supplements and drugs that made unsupported claims to cure cancer, ADD/ADHD, epilepsy and intestinal parasites, among other things. McAdam agreed to close his business until the U.S. Food and Drug Administration (FDA) authorized him to return to business. No such authorization was given and McAdam was later held in civil contempt for violation of the consent decree. The Ninth Circuit Court of Appeals later upheld the order of civil contempt against McAdam.
The criminal contempt charges against McAdam alleged that he violated a 2010 court order and an order of civil contempt issued in 2013, which prohibit him from selling dietary supplements. McAdam admitted to continuing to sell both supplements and drugs and failed to close down his business and online sites.
Principal Deputy Assistant Attorney General Mizer commended the efforts of the U.S. Postal Inspection Service and FDA for the investigation. The matter was handled by Trial Attorney David Sullivan of the Department’s Consumer Protection Branch.
Monday, December 7, 2015
U.S. MARSHALS SERVICE ARREST ALLEGED BABY SHOOTER
FROM: U.S. MARSHALS SERVICE MURDER
November 27, 2015
U.S. Marshals Arrest Alleged Shooter of Baby Aavielle
NOVFTF LogoCleveland, OH – Today, at approximately 10:00am, the U.S. Marshal’s Northern Ohio Violent Fugitive Task Force arrested 19 year old Davon Holmes. Holmes was wanted by the U.S. Marshals Service and the Cleveland Police Department for a homicide that occurred at East 145th St. and Spear Ave. on October 1st.
Holmes’ warrant was issued at approximately 9:00am this morning for the shooting death of 5 month old Aavielle Wakefield. On October 1, 2015, at approximately 5:00pm, baby Aavielle was shot in the chest while she sat in her car seat, next to her sister. Her mother and another family member were in the vehicle with her as well.
Within an hour of the warrant being issued for Holmes, he was taken into custody by the task force in the 3300 block of East 140th St. Lawrence Hilliard was also arrested in connection with this case. Hilliard was wanted by the Cleveland Police Department for tampering with evidence. He was taken into custody in the same location as the shooting took place, East 145th St. and Spear Ave.
U.S. Marshal Pete Elliott added, “The death of a child is something no family should have to endure, and nothing we do can bring baby Aavielle back to her family. We do hope that the arrest of Davon Holmes brings some peace to the Wakefield family.”
The Northern Ohio Violent Fugitive Task Force – Cleveland Division is composed of the following federal, state and local agencies: U.S. Marshals Service, Cleveland Police Department, Cuyahoga County Sheriff’s Office, Cuyahoga Metropolitan Housing Authority Police Department, Euclid Police Department, Lakewood Police Department, Ohio Adult Parole Authority, Ohio State Highway Patrol, and the Social Security Administration - Office of Inspector General.
Sunday, December 6, 2015
DOJ ANNOUNCES ADDITIONAL INDICTMENTS IN FIFA RACKETEERING CONSPIRACY AND CORRUPTION CASE
FROM: U.S. JUSTICE DEPARTMENT
Thursday, December 3, 2015
Sixteen Additional FIFA Officials Indicted for Racketeering Conspiracy and Corruption
The New Defendants Include Five Current or Former FIFA Executive Committee Members and the Current Presidents of CONCACAF and CONMEBOL; Guilty Pleas for Eight Others, Including Jeffrey Webb and the Former Presidents of the Colombian and Chilean Soccer Federations, also Announced
A 92-count superseding indictment was unsealed earlier today in federal court in Brooklyn, New York, charging an additional 16 defendants with racketeering, wire fraud and money laundering conspiracies, among other offenses, in connection with their participation in a 24-year scheme to enrich themselves through the corruption of international soccer. The superseding indictment also includes additional charges for seven of the defendants still pending extradition following the return of the original indictment last May. The guilty pleas of eight defendants – including Jeffrey Webb, Alejandro Burzaco and José Margulies, three of the defendants indicted last May – were also announced today.
The new defendants charged in the superseding indictment include high-ranking officials of FIFA, the organization responsible for the regulation and promotion of soccer worldwide, as well as high-ranking officials of other soccer governing bodies that operate under the FIFA umbrella. The defendants Alfredo Hawit and Juan Ángel Napout – the current presidents of CONCACAF and CONMEBOL, respectively, as well as current FIFA vice presidents and Executive Committee members – are among the 16 additional soccer officials charged with racketeering and bribery offenses. CONCACAF and CONMEBOL are two of FIFA’s six continental confederations. The new defendants also include Marco Polo del Nero and Ricardo Teixeira, the current and former presidents of the Brazilian soccer federation, both of whom are also former members of the FIFA Executive Committee, as well as José Luís Meiszner and Eduardo Deluca, the current and former general secretaries of CONMEBOL. Within UNCAF, the Central American regional soccer union operating within CONCACAF, the charges in the superseding indictment name the current and/or former presidents of nearly every country in the region: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. Taken together, the 27 defendants in the superseding indictment are alleged to have engaged in a number of schemes all designed to solicit and receive well over $200 million in bribes and kickbacks to sell lucrative media and marketing rights to international soccer tournaments and matches, among other valuable rights and properties.
The charges were announced by Attorney General Loretta E. Lynch, FBI Director James B. Comey, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office, Chief Richard Weber of Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Erick Martinez of the IRS-CI Los Angeles Field Office.
Early this morning, Swiss authorities in Zurich arrested two of the defendants charged in the superseding indictment – Hawit and Napout – at the request of the United States. Also this morning, a search warrant was executed at Media World, a sports marketing company based in Miami.
The new charges unsealed today bring the total number of individuals and entities charged to date to 41. Of those, 12 individuals and two sports marketing companies have already been convicted as a result of the ongoing investigation. The convicted defendants have agreed to pay more than $190 million in forfeiture. In addition, more than $100 million has been restrained in the United States and abroad in connection with the alleged criminal activity. The United States has issued mutual legal assistance requests seeking the restraint of assets located in 13 countries around the world.
“The Department of Justice is committed to ending the rampant corruption we have alleged amidst the leadership of international soccer – not only because of the scale of the schemes, or the brazenness and breadth of the operation required to sustain such corruption, but also because of the affront to international principles that this behavior represents,” said Attorney General Lynch. “The message from this announcement should be clear to every culpable individual who remains in the shadows, hoping to evade our investigation: You will not wait us out. You will not escape our focus.” Attorney General Lynch extended her grateful appreciation to the authorities of the government of Switzerland for their continuing outstanding assistance and collaboration in this investigation, and to the authorities in a number of other countries, including Brazil and Colombia, for their assistance as well.
“For decades, these defendants used their power as the leaders of soccer federations throughout the world to create a web of corruption and greed that compromises the integrity of the beautiful game,” said Director Comey. “I want to thank all the agencies for their hard work and for showing the world that we do not tolerate this criminal activity.”
“The charges unsealed today send a clear message to those who corrupted a sport beloved by millions to satisfy their own greed: We are determined to put a stop to bribery and corruption in international soccer and to make room for a new era of integrity and reform,” said U.S. Attorney Capers. “This indictment is the latest step in that effort, but our work is not done. While our investigation continues at home, we also look forward to continuing our collaboration with our international partners, including in particular the Swiss authorities, because there is so much yet to be done.” Mr. Capers extended his thanks to the agents, analysts and other investigative personnel with the FBI New York Eurasian Joint Organized Crime Squad and the IRS-CI Los Angeles Field Office, as well as their colleagues in the United States and abroad, for their continuing tremendous effort in this case. Mr. Capers also thanked the U.S. Marshals Service for its continuing assistance.
“The brazenness with which the individuals indicted today breached the integrity of the U.S. financial system to promote and conceal their criminal schemes is quite alarming,” said Chief Weber. “While it is one of the most complex worldwide financial investigations ever conducted, it is also an eye opener to everyone that such greed and corruption could be hiding in plain sight within the world’s most popular sport. By conspiring to enrich themselves through bribery and kickback schemes relating to media and marketing rights, the defendants undermined the process of fair and open competition, corrupting the beautiful game for their own personal gain.”
The charges in the superseding indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Overview of the Superseding Indictment
As alleged in the superseding indictment, FIFA and its six continental confederations – including CONCACAF, headquartered in the United States, and CONMEBOL, the confederation headquartered in South America – together with affiliated regional federations, national member associations and sports marketing companies, constitute an enterprise of legal entities associated in fact for purposes of violating the federal racketeering laws. The principal – and entirely legitimate – purpose of the enterprise is to regulate and promote the sport of soccer worldwide.
Like the original indictment, the superseding indictment alleges that between 1991 and the present, the defendants and their co-conspirators corrupted the enterprise by engaging in various criminal activities, including fraud, bribery and money laundering. Two generations of soccer officials abused their positions of trust for personal gain, frequently through an alliance with unscrupulous sports marketing executives who shut out competitors and kept highly lucrative contracts for themselves through the systematic payment of bribes and kickbacks. All told, the soccer officials are charged with conspiring to solicit and receive more than $200 million in bribes and kickbacks in exchange for their official support of the sports marketing executives who agreed to make the unlawful payments.
The schemes alleged in the original indictment related to the solicitation and receipt of bribes and kickbacks by soccer officials from sports marketing executives in connection with the commercialization of the media and marketing rights associated with various soccer matches and tournaments, as well as schemes related to the payment and receipt of bribes and kickbacks in connection with the sponsorship of the Brazilian soccer federation by a major U.S. sportswear company, the selection of the host country for the 2010 World Cup and the 2011 FIFA presidential election.
The new allegations in the superseding indictment relate to a series of bribery schemes in connection with multiple cycles of FIFA World Cup qualifiers and international friendly matches involving six Central American member associations within UNCAF; a bribery scheme implicating many top CONMEBOL officials relating to the sale of broadcasting rights to the CONMEBOL Copa Libertadores over an extended period; and a scheme by an Argentinian sports marketing company to obtain various rights properties from CONCACAF by paying bribes to three Central American soccer officials to cause them to exert their influence in favor of the company.
The 16 New Defendants
As set forth in the superseding indictment, the 16 newly-indicted defendants are all current or former soccer officials who acted at various times in a fiduciary capacity within FIFA and one or more of its constituent organizations:
CONCACAF Region Officials
Alfredo Hawit: Current FIFA vice president and Executive Committee member and CONCACAF president. Former CONCACAF vice president and Honduran soccer federation president.
Ariel Alvarado: Current member of the FIFA Disciplinary Committee. Former CONCACAF Executive Committee member and Panamanian soccer federation president.
Rafael Callejas: Current member of the FIFA Television and Marketing Committee. Former Honduran soccer federation president and former president of the Republic of Honduras.
Brayan Jiménez: Current Guatemalan soccer federation president and member of the FIFA Committee for Fair Play and Social Responsibility.
Rafael Salguero: Former FIFA Executive Committee member and Guatemalan soccer federation president.
Héctor Trujillo: Current Guatemalan soccer federation general secretary and judge on the Constitutional Court of Guatemala.
Reynaldo Vasquez: Former Salvadoran soccer federation president.
CONMEBOL Region Officials
Juan Ángel Napout: Current FIFA vice president and Executive Committee member and CONMEBOL president. Former Paraguayan soccer federation president.
Manuel Burga: Current member of the FIFA Development Committee. Former Peruvian soccer federation president.
Carlos Chávez: Current CONMEBOL treasurer. Former Bolivian soccer federation president.
Luís Chiriboga: Current Ecuadorian soccer federation president and member of the CONMEBOL Executive Committee.
Marco Polo del Nero: Current president of the Brazilian soccer federation. Announced resignation from FIFA Executive Committee on Nov. 26, 2015.
Eduardo Deluca: Former CONMEBOL general secretary.
José Luis Meiszner: Current CONMEBOL general secretary.
Romer Osuna: Current member of the FIFA Audit and Compliance Committee. Former CONMEBOL treasurer.
Ricardo Teixeira: Former Brazilian soccer federation president and FIFA Executive Committee member.
The Convicted Defendants
The following defendants previously pleaded guilty under seal and agreed to forfeit more than $40 million:
On May 26, 2015, Zorana Danis, the co-founder and owner of International Soccer Marketing Inc., a New Jersey-based sports marketing company, waived indictment and pleaded guilty to a two-count information charging her with wire fraud conspiracy and filing false tax returns. As part of her plea, Danis agreed to forfeit $2 million.
On Nov. 9, 2015, Fabio Tordin, the former CEO of Traffic Sports USA Inc. and currently an executive with Media World LLC, a Miami-based sports marketing company, waived indictment and pleaded guilty to a four-count information charging him with three counts of wire fraud conspiracy and one count of tax evasion. As part of his plea, Tordin agreed to forfeit more than $600,000.
On Nov. 12, 2015, Luis Bedoya, a member of the FIFA Executive Committee, a CONMEBOL vice president and, until last month, the president of the Federación Colombiana de Fútbol, the Colombian soccer federation, waived indictment and pleaded guilty to a two-count information charging him with racketeering conspiracy and wire fraud conspiracy. As part of his plea, Bedoya agreed to forfeit all funds on deposit in his Swiss bank account, among other funds.
On Nov. 16, 2015, Alejandro Burzaco, the former general manager and chairman of the board of Torneos y Competencias S.A., an Argentinian sports marketing company, pleaded guilty to racketeering conspiracy, wire fraud conspiracy and money laundering conspiracy. As part of his plea, Burzaco agreed to forfeit more than $21.6 million.
On Nov. 17, 2015, Roger Huguet, the CEO of Media World and its parent company, waived indictment and pleaded guilty to a three-count information charging him with two counts of wire fraud conspiracy and one count of money laundering conspiracy. As part of his plea, Huguet agreed to forfeit more than $600,000.
On Nov. 23, 2015, Jeffrey Webb, a former FIFA vice president and Executive Committee member, CONCACAF president, Caribbean Football Union Executive Committee member and Cayman Islands Football Association president, pleaded guilty to racketeering conspiracy, three counts of wire fraud conspiracy and three counts of money laundering conspiracy. As part of his plea, Webb agreed to forfeit more than $6.7 million.
On Nov. 23, 2015, Sergio Jadue, a vice president of CONMEBOL and, until last month, the president of the Asociación Nacional de Fútbol Profesional de Chile, the Chilean soccer federation, waived indictment and pleaded guilty to a two-count information charging him with racketeering conspiracy and wire fraud conspiracy. As part of his plea, Jadue agreed to forfeit all funds on deposit in his U.S. bank account, among other funds.
On Nov. 25, 2015, José Margulies, the controlling principal of Valente Corp. and Somerton Ltd, who served as an intermediary who facilitated illicit payments between sports marketing executives and soccer officials, pleaded guilty to racketeering conspiracy, wire fraud conspiracy, and two counts of money laundering conspiracy. As part of his plea, Margulies agreed to forfeit more than $9.2 million.
As previously announced last May, all money forfeited by the defendants is being held in reserve to ensure its availability to satisfy any order of restitution entered at sentencing for the benefit of any individuals or entities that qualify as victims of the defendants’ crimes under federal law.
* * * *
The indicted and convicted defendants face maximum terms of incarceration of 20 years for the Racketeer Influenced and Corrupt Organizations Act (RICO) conspiracy, wire fraud conspiracy, wire fraud, money laundering conspiracy, money laundering and obstruction of justice charges. In addition, Tordin and Danis face maximum terms of five and three years in prison, respectively, for the tax charges. Each defendant also faces mandatory restitution, forfeiture and a fine.
The superseding indictment and guilty pleas unsealed today are assigned to the U.S. District Judge Raymond J. Dearie of the Eastern District of New York.
The government’s investigation is ongoing.
The charges and guilty pleas announced today are part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office of the Eastern District of New York, the FBI’s New York Field Office and the IRS-CI Los Angeles Field Office. The work in the U.S. Attorney’s Office involves prosecutors from the National Security and Cybercrime Section, the Organized Crime and Gang Section, the Business and Securities Fraud Section and the Public Integrity Section. The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section and the Fraud Section, as well as from INTERPOL Washington.
The charges and guilty pleas announced today are being prosecuted by Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Darren A. LaVerne, Samuel P. Nitze, M. Kristin Mace, Paul Tuchmann, Keith D. Edelman, Tanya Hajjar and Brian D. Morris of the Eastern District of New York.
Saturday, December 5, 2015
MS-13 MEMBER PLEADS GUILTY TO CONSPIRACY TO COMMIT MURDER TO FURTHER RACKETEERING
FROM: U.S. JUSTICE DEPARTMENT
Thursday, December 3, 2015
MS-13 Member Pleads Guilty in Violent Racketeering Conspiracy
Defendant Admitted his Participation in MS-13 and Witness Retaliation Murder Conspiracy
A North Plainfield, New Jersey, man pleaded guilty today to conspiracy to commit murder in furtherance of a racketeering enterprise known as La Mara Salvatrucha, or MS-13, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Acting Special Agent in Charge Richard M. Frankel of the FBI’s Newark, New Jersey, Division.
Jose Romero-Aguirre, aka Conejo, 29, pleaded guilty before U.S. District Judge Stanley R. Chesler of the District of New Jersey, who scheduled sentencing for March 16, 2016. Romero-Aguirre remains detained pending sentencing.
According to court documents, MS-13 is a national and international gang with branches or “cliques” operating throughout the United States, including in Plainfield, New Jersey. In connection with his plea, Romero-Aguirre admitted that he was a member of the Plainfield Locos Salvatrucha (PLS) Clique of MS-13 for a period of time continuing through at least August 2011. Romero-Aguirre admitted that in or around July 2011, MS-13 members began investigating the arrest of several members of the PLS Clique to identify those who had provided police with information on the arrestees, contrary to PLS rules. Romero-Aguirre admitted that he participated in phone calls with other incarcerated MS-13 members discussing the need to find and kill the witnesses and that he agreed to relay the murder instructions from the incarcerated members to the other MS-13 members.
Twelve other members and associates of the PLS Clique are scheduled for trial in front of Judge Chesler on Feb. 9, 2016. The charges include several counts of murder, attempted murder, robbery, extortion, witness retaliation and sexual assault.
FBI’s Newark Division, U.S. Immigration and Customs Enforcement-Homeland Security Investigations’ Newark Field Office, the Plainfield Police Department and the Union County, New Jersey, Prosecutor’s Office investigated the case. Assistant U.S. Attorneys James Donnelly and Jamari Buxton of the District of New Jersey and Trial Attorney Kevin L. Rosenberg of the Criminal Division’s Organized Crime and Gang Section are prosecuting this case.
Friday, December 4, 2015
10 INDICTED FOR CONSPIRACY TO COMMIT FEDERAL PROGRAMS BRIBERY, HONEST SERVICES WIRE FRAUD AND EXTORTION
FROM: U.S. JUSTICE DEPARTMENT
Thursday, December 3, 2015
Ten Individuals Indicted for Conspiracy to Commit Federal Programs Bribery, Honest Services Wire Fraud and Extortion
A federal grand jury in the District of Puerto Rico returned the indictment on Dec. 2, 2015, which includes 25 charges against the following individuals:
1.Anaudi Hernández Pérez, businessman and political fund raiser. Although not named in official corporate records, he exercised de facto control over numerous companies doing business with agencies and public corporations of the Commonwealth of Puerto Rico.
2.Sally López Martínez, administrator of the Commonwealth of Puerto Rico’s Administración de Desarrollo Laboral (Workforce Development Administration, hereinafter ADL).
3.Sonia M. Barreto Colón, purchasing director of the Commonwealth of Puerto Rico’s Autoridad de Acueductos y Alcantarillados (Puerto Rico Aqueduct and Sewer Authority, hereinafter AAA).
4.Ivonne M. Falcón Nieves, vice president of AAA. Prior to her position as vice president, Ivonne M. Falcón Nieves served as treasurer of AAA.
5.Javier A. Muñiz Álvarez, businessman. Utilized the Company JM Profesional (sic) & Training Group Inc. to secure contracts from the Commonwealth of Puerto Rico.
Carlos F. Luna Cruz, businessman. Worked for JM Profesional (sic) & Training Group Inc.
Xavier González Calderón, Administrator for the House of Representatives of the Commonwealth of Puerto Rico.
Victor R. Burgos Cotto, Director of Technology for the House of Representatives.
Marielis Falcón Nieves, sister of Ivonne M. Falcón Nieves.
10. Glenn O. Rivera Pizarro, special assistant for administration at the House of Representatives of Puerto Rico.
According to the indictment, Hernández Pérez utilized his political and personal connections with high ranking members of the current government in order to have “his people” appointed in critical government positions within the new administration which took over after the November 2012 elections. He also provided those individuals with things of value in exchange for government contracts, benefits and preferential treatment for several of his corporations. The indictment focuses on benefits Hernández Pérez, his co-conspirators and corporate entities, obtained from the Commonwealth of Puerto Rico’s ADL, the Commonwealth of Puerto Rico’s AAA and the Puerto Rico House of Representatives. The three schemes detailed in the indictment essentially followed the same modus operandi.
The indictment alleges that beginning in or about late 2012 and continuing in or about early 2013, Hernández Pérez and several unindicted co-conspirators formalized their plans to obtain government contracts with numerous governmental entities. Hernández Pérez utilized his personal friendship with Person B (brother of the governor of Puerto Rico, identified as Person A in the indictment), and the good will generated by his substantial fundraising activities during the 2012 election cycle, to position himself to successfully make recommendations on behalf of individuals seeking government appointments and employment after the election.
Hernández Pérez received numerous emails and resumes from individuals seeking his assistance in obtaining positions within the newly elected government. Hernández Pérez, in turn, forwarded many of those emails to government officials, and to the governor’s brother, Person B. Many of these individuals ultimately received government employment. Hernández Pérez and his co-conspirators then set out to form and make alliances with various corporations and limited liability companies that would be used to obtain government contracts, proposals and purchase orders. These companies included: 3 Comm Global Inc., Links Group LLC, EKO Technologies LLC, JM Profesional (sic) & Training Group Inc. and Waffler Avenue LLC. Some of these corporations were formed immediately prior to, or after, the general elections of November 2012.
Hernández Pérez and his co-conspirators were careful to ensure that his name did not appear on any official documentation regarding the formation of the corporations, or on any formal request for government contracts, proposals or purchase orders. Hernández Pérez, however, was present in numerous meetings where the proposals were discussed, was included in internal electronic and oral communications regarding these matters, and received payment from the contracts into corporate bank accounts and other suspicious transactions.
Many of the individuals recommended by Hernández Pérez whom obtained the jobs, ultimately had the authority to approve or authorize contracts, purchase orders, and other financial obligations on behalf of their respective agencies, departments or public corporations, and in return for the recommendations for employment, and/or other things of value, authorized contracts, purchase orders, proposals and payments on behalf of the co-conspirators and their corporations.
Hernández Pérez and his co-conspirators offered and gave, and the public officials solicited and accepted from Hernández Pérez and his co-conspirators, things of value, including expensive meals, personal gifts, expensive fountain pens, purses, bags, concert tickets and the payment of certain accrued debts. Hernández Pérez allegedly kept written electronic records regarding the purpose of his government related business meetings, and the things of value provided to each of these individuals.
Hernández Pérez and his co-conspirators utilized their government influence to receive an unfair competitive advantage over their competitors, in that they: a) received preferred opportunities on certain government “request for proposals” (RFPs); b) received guidance from agency employees on the proper format and content of proposals and bids for government contracts; c) had access to speak and meet with critical employees in decision making positions within the agencies, departments and government corporations; d) received guidance on how to structure bids and proposals in order to avoid the formal bidding process required by law; e) demanded and were provided with explanations from agency employees when their proposals or bids were not selected.
Once awarded the government contracts, Hernández Pérez and his co-conspirators would utilize, often without proper contractual authority, subcontractors who would perform the work defined in the contracts. On many occasions, Hernández Pérez and his co-conspirators provided substandard work on their contractual obligations in that they: failed to make the required payments to suppliers, subcontractors and creditors; failed to abide by the terms of the contract regarding performance results/follow up as required under the contract; failed to competently provide the services they were contracted to perform.
Hernández Pérez is also charged, along with defendants Ivonne Falcón and Marielis Falcón, with Hobbs Act extortion under fear of economic harm. Hernández Pérez and unindicted co-conspirators would utilize their contacts and influence within at least one government dependency (the AAA) to secure, for a fee, the release of legitimate payments due to other corporations, which lacked the current connections within the government. In particular, Hernández Pérez and his associates, obtained property not due to them, specifically, $100,000.00 from Contractor A, in exchange for utilizing his connections within AAA in order to secure a portion of the money owed (approximately $1 million) to Contractor A, with Contractor A’s consent, induced through the wrongful use of a fear of economic loss. Moreover, the Falcón sisters aided and abetted each other to commit extortion. Defendant Ivonne M. Falcón Nieves utilized her position at AAA in order to enable her sister, defendant Marielis Falcón Nieves, to obtain property not due to her, specifically, cash payments, check payments, payments to contractors, and the performance of residential tree trimming, from Contractor A, with Contractor A’s consent, induced through the wrongful use of a fear of economic loss.
The 25 counts detailed in the indictment are as follows:
Count 1: 18 U.S.C. § 371, Conspiracy to Commit Federal Programs Fraud and Honest Services Wire Fraud regarding contracts with ADL and AAA.
Count 2: 18 U.S.C. § 1349, Conspiracy to Commit Honest Services Wire Fraud for scheme with ADL.
Counts 3-5: 18 U.S.C. § 343, substantive Wire Fraud counts for emails related to the scheme with ADL.
Count 6: 18 U.S.C. § 1349, Conspiracy to Commit Honest Services Wire Fraud for the scheme with AAA.
Counts 7-9: 18 U.S.C. § 1343, substantive Wire Fraud counts for emails related to the scheme with AAA.
Count 10: 18 U.S.C. § 666(a)(2), paying a bribe to an agent of an organization receiving federal funds for the scheme with ADL (Sally López Martínez).
Count 11: 18 U.S.C. § 666(a)(1)(B), receipt of a bribe by an agent of an organization receiving federal funds for the scheme with ADL.
Count 12: 18 U.S.C. § 666(a)(2), paying a bribe to an agent of an organization receiving federal funds for the scheme with AAA (Ivonne Falcón).
Count 13: 18 U.S.C. § 666(a)(1)(B), receipt of a bribe by an agent of an organization receiving federal funds for the scheme with AAA (Ivonne Falcón).
Count 14: 18 U.S.C. § 666(a)(2), paying a bribe to an agent of an organization receiving federal funds for the scheme with AAA (Sonia Barreto).
Count 15: 18 U.S.C. § 666(a)(1)(B), receipt of a bribe by an agent of an organization receiving federal funds for the scheme with AAA (Sonia Barreto).
Count 16: 18 U.S.C.§ 1951(a), Extortion Through Fear of Economic Harm (Hernandez Perez).
Count 17: 18 U.S.C.§ 1951(a), Extortion Through Fear of Economic Harm (Ivonne & Marielis Falcón Nieves).
Count 18: 18 U.S.C. § 1956(h), Conspiracy to Commit Money Laundering (Hernandez Perez and Muñiz Alvarez).
Count 19: 18 U.S.C. § 1623(a), False Declarations Before Grand Jury (Carlos F. Luna Cruz).
Count 20: 18 U.S.C. § 1623(a), False Declarations Before Grand Jury (Carlos F. Luna Cruz).
Count 21: 18 U.S.C. § 1512(c)(2), Obstruction of Justice (Carlos F. Luna Cruz).
Count 22: 18 U.S.C. § 1512(c)(2), Obstruction of Justice (Carlos F. Luna Cruz).
Count 23: 18 U.S.C. § 1512(c)(2), Obstruction of Justice (Carlos F. Luna Cruz and Javier A. Muñiz Álvarez (computer)).
Count 24: 18 U.S.C. § 1346, Conspiracy to Commit Wire Fraud (money and property) for scheme with PR House of Representatives.
Count 25: 18 U.S.C. § 666(a)(1)(A), Intentional misapplication of funds by an agent of an organization receiving federal funds for the scheme with House of Representatives (González Calderón, Burgos Cotto and Rivera Pizarro).
“For decades now, political cronyism, favoritism and corruption have robbed the people of Puerto Rico of the right to decent services and unbiased representation, including legally awarded government contracts,” said U.S. Attorney Rodríguez Vélez. “The people of Puerto Rico foot the bill for the underhanded dealings detailed in the indictment. The time for government cronyism that allows some to line their pockets with ill-gotten contracts at the expense of the many, is over. The time for public servants who trade their duty to represent the people of Puerto Rico in exchange for political appointments and gifts, is also over. The people of Puerto Rico deserve the honest services of, not only those in their government, but those who choose to do business with the government. Their violations of the public trust will be prosecuted to the full extent of the law.”
“Unfortunately, this is one more case of graft, greed and corruption that over the last 20 years have contributed to the government of Puerto Rico’s fragile financial condition and on the brink of bankruptcy,” said Special Agent in Charge Carlos Cases of the FBI’s San Juan Division. “It is the responsibility of the leaders of the government of Puerto Rico to ensure this type of reprehensible and corrupt behavior does not occur. The FBI, along with the United States Attorney’s Office, District of Puerto Rico, will always remain vigilant and attack the corruption threat with undeniable and fervent passion. Let there be no doubt this is only the beginning and the investigation will continue. There will be no stone left unturned.”
The case is being investigated by the FBI’s San Juan Division. The case is being prosecuted by First Assistant U.S. Attorney Timothy Henwood and José Capó Iriarte of the District of Puerto Rico, Deputy Chief of the Financial Fraud and Corruption Unit. If found guilty, the defendants are facing possible sentences of up to five years for the conspiracy to commit federal programs fraud and wire fraud, up to 10 years for honest services fraud, up to 20 years for money laundering, Hobbs Act, obstruction of justice and conspiracy to commit honest services fraud.
The charges contained in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.
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