Health Care Fraud: Thomas Edward Spell Was Sentenced For His involvement In a Million Compounding Pharmacy Fraud Scheme

Thomas Edward Spell Was Sentenced For His Involvement In A Million Compounding Pharmacy Fraud Scheme

Pharmacy Owner Sentenced to 10 Years in Prison for Role in Largest Health Care Fraud Case Ever in Mississippi

Nationwide Compound Pharmacy Fraud Scheme Involved Almost a Quarter of a Billion Dollars

Hattiesburg, Miss. – Thomas Edward Spell, Jr., 51, a pharmacy owner in Ridgeland, Mississippi, was sentenced today to 10 years in federal prison for his involvement in a $243 million compounding pharmacy fraud scheme, announced U.S. Attorney Mike Hurst, Michelle A. Sutphin, Special Agent in Charge of the FBI in Mississippi, Thomas J. Holloman III, Special Agent in Charge of Internal Revenue Service Criminal Investigation’s (IRS CI) Atlanta Field Office, and Cynthia Bruce, Special Agent in Charge of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office.

“This defendant ripped off every single military service member, veteran and American taxpayer when he defrauded TRICARE. The special agents, DOJ trial attorneys, our AUSAs and other law enforcement partners who investigated and prosecuted this case are to be commended for their diligence and fortitude in bringing this criminal to justice. We will continue to be vigilant in detecting, arresting and prosecuting those who defraud government services that benefit our military and our veterans,” said U.S. Attorney Hurst.

“Fraud against government funded health care systems like TRICARE not only costs taxpayers billions each year, but deprives funding for critical medical care and benefits for our current and former military members who bravely serve our country,” said FBI Special Agent in Charge Sutphin. “Schemes like these are a plague on the nation’s health care systems. Individuals and organizations that participate in this type of fraud will continue to be high priority investigations for the FBI.”

“Thomas Spell systematically defrauded the government and the taxpaying public,” said IRS CI Special Agent in Charge Thomas J. Holloman III. “His desire for money, along with the power and material items it buys, drove him to perpetrate crimes against our healthcare system and prey upon many of the vulnerable in our society. Thanks to the financial expertise and diligence of IRS-CI special agents, who worked side-by-side with other federal and state law enforcement officers to uncover these schemes, Spell will now face the consequences of his actions.”

“It saddens me that the desire for personal enrichment can lead individuals to commit egregious acts against DoD which jeopardize our ability to care for our military service members and their families,” stated DCIS Special Agent in Charge Cynthia A. Bruce. “Today’s sentencing represents the relentless commitment by DCIS, our investigative partners and the U.S. Attorney’s Office to fully investigate and bring to justice individuals who put our warfighters and healthcare system at risk.”

Spell’s case is part of the largest health care fraud scheme ever investigated and prosecuted in the State of Mississippi. The investigation is ongoing and prosecutions are continuing nationwide, including in states such as California, Tennessee, Arkansas, and Connecticut. Spell was sentenced today by Senior U.S. District Judge Keith Starrett, who also ordered Spell to pay $243,550,503.00 in restitution. Spell previously pled guilty to a Criminal Information outlining his role in the scheme to defraud TRICARE, the health care benefit program serving our nation’s military, veterans, and their respective family members.

From approximately December 2014 and January 2016, Spell owned and operated a pharmacy in Madison County, Mississippi, and several other pharmacies across the United States. During this time, Spell and other co-conspirators marketed compounded medications at his pharmacies. Rather than formulating compounded medications based on the individualized needs of patients, formulas were selected to maximize profit based upon reimbursements from TRICARE and other health care benefit programs. The result was that TRICARE reimbursed Spell’s pharmacies on these fraudulent claims totaling over $243 million.

In order to further their scheme, Spell and his co-conspirators waived TRICARE’s requirement that a beneficiary make a copayment to receive medicine. Instead, Spell and his co-conspirators had their employees purchase prepaid debit cards and money orders to use towards a copayment for a beneficiary, with Spell and his co-conspirators reimbursing their employees. Additionally, Spell and his co-conspirators paid kickbacks and bribes to marketers in order to obtain prescriptions for compounded medications from prescribers for beneficiaries who were covered by the most lucrative health care benefit programs, including TRICARE, irrespective of whether the compounded medications were medically necessary for the treatment of beneficiaries.

As a result of this fraudulent activity, Spell personally obtained over $29 million in proceeds from the illegal scheme. Spell used these proceeds to fund bank accounts and investment accounts in his name, in the name of family members, and in the name of various business entities. Spell also used these proceeds to lend money and to purchase vehicles, boats, and property.

Prior to Spell being charged by a Criminal Information, the United States seized approximately $26 million from Spell and the court ordered all assets and proceeds traceable to the fraud scheme forfeited by Spell.

This case has been designated as a related prosecution to cases charged in the Southern District of Mississippi. To date, a total of 20 people have been charged and 14 convicted in the compounding pharmacy scheme in the Southern District of Mississippi. The investigation is ongoing.

The case is being prosecuted by AUSA Mary Helen Wall and U.S. Department of Justice trial attorneys Sara Porter and Jared Hasten.

Financial Fraud: Michael Watts Convicted For Illegal Stock Promotion And Manipulation Scheme

Michael Watts Convicted For Illegal Stock Promotion And Manipulation Scheme

Corporate Insider Convicted of Conspiring with Others at Long Island Boiler Room to Pump and Dump Stock on Unsuspecting Elderly Investors

Illegal Stock Promotion and Manipulation Scheme Cost Victims Million of Dollars

A federal jury in Central Islip returned a guilty verdict on all counts this afternoon against Michael Watts, a former registered broker, for his role in a conspiracy to promote and manipulate the price of shares in Hydrocarb Energy Corp. (Hydrocarb) and other companies. Specifically, Watts was convicted of conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, money laundering conspiracy and money laundering. The verdict followed a three-week trial before United States District Judge Joanna Seybert. When sentenced, Watts faces a maximum sentence of more than 20 years’ imprisonment.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, announced the verdict.

“With today’s verdict, the jury has delivered a measure of closure to the victims, many of them elderly and vulnerable, who were preyed upon by Watts and his co-conspirators,” stated United States Attorney Donoghue. “The defendant will face another reckoning when he is sentenced for his crimes.”

As proven at trial, from 2014 to 2016, Watts and his co-conspirators at a Melville-based boiler room artificially inflated the price and trading volume of Hydrocarb stock. They did so through an illegal cold-calling campaign that used lies and high-pressure sales tactics to lure victim investors, including many elderly victims, into purchasing stock. Watts, who was one of the largest shareholders in Hydrocarb and knew that the business was failing, also used the boiler room to dump more than $2 million worth of Hydrocarb shares that he owned or controlled on unsuspecting investors in the months leading to the company’s April 2016 bankruptcy. The government has alleged that the conspiracy’s market manipulation fraudulently inflated the stock price of Hydrocarb and four other companies by more than $147 million.

Watts is the 13th defendant convicted in this case. Three others are scheduled for trial in January 2020. Four defendants have been sentenced for their roles in the scheme: Ronald Hardy was sentenced to 10 years’ imprisonment; Dennis Verderosa was sentenced to six years’ imprisonment; McArthur Jean was sentenced to four years’ imprisonment; and Emin Cohen was sentenced to two years’ imprisonment.

United States Attorney Donoghue thanked the Federal Bureau of Investigation, New York Field Office, for its hard work and dedication in leading the investigation, and expressed his appreciation to the Securities and Exchange Commission and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group for their cooperation and assistance.

The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys Whitman G.S. Knapp and Kaitlin T. Farrell are in charge of the prosecution.

The Defendant:

MICHAEL WATTS
Age: 63
Sugarland, Texas

Andrew Cuomo Signed a Measure That Charges Against People Who Have Received a Presidential Pardon

Cuomo Signed a Measure That Charges Against People Who Have Received a Presidential Pardon

Cuomo Signs Law Aimed At Weakening Trump’s Pardon Power, Closes ‘Double Jeopardy’ Loophole

New York Gov. Andrew Cuomo signed a measure Wednesday that would allow the state to pursue charges against people who have received a presidential pardon — a law seen as a direct shot at President Donald Trump.

Multiple ex-Trump aides or associates are imprisoned or facing legal scrutiny in New York.

The president, whose business and campaign are both headquartered in New York, also is facing numerous federal, state and congressional investigations related to his administration, campaign and business dealings.

The newly signed law creates a narrow exception in the state’s double jeopardy law, which prohibits the prosecution of a person who’s been tried for the same crime by the federal government. The change takes effect immediately.

“No one is above the law and New York will not turn a blind eye to criminality, no matter who seeks to protect them,” Cuomo said in a statement. “The closure of this egregious loophole gives prosecutors the ability to stand up against any abuse of power, and helps ensure that no politically motivated, self-serving action is sanctioned under law.”

The New York measure was introduced by state Attorney General Letitia James, who began investigating the finances of the president and the Trump Organization earlier this year. That probe came after Cohen told Congress that Trump had inflated the worth of his assets in financial statements to secure bank loans.

James has said the law was necessary because double jeopardy “exists to prevent someone from being charged twice for the same crime, not to allow them to evade justice altogether.”

“We have a responsibility to ensure that individuals who commit crimes under New York state law are held accountable for those crimes,” James said in a statement Tuesday.

“This critical new law closes a gaping loophole that could have allowed any president to abuse the presidential pardon power by unfairly granting a pardon to a family member or close associate and possibly allow that individual to evade justice altogether. No one is above the law, and this commonsense measure will provide a reasonable and necessary check on presidential power today and for all presidents to come.”

Trump has dismissed her efforts as “presidential harassment.” The White House did not immediately respond to a request for comment from NBC News.

“With the President all but pledging to corruptly abuse his pardon power to allow friends and associates off the hook, it is crucial that we have closed the Double Jeopardy loophole and preserved the rule of law in New York,” Democratic state Sen. Todd Kaminsky, who sponsored the legislation, said in a statement.

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The New York Assembly and Senate passed the bill to end the so-called “double jeopardy loophole” in May.

Democratic state Assemblyman Joseph Lentol, another sponsor, said the legislation “takes the incentive out of any scheme to thwart prosecution.”

Trump lawyers argue Trump can’t be investigated or prosecuted

The new exception allows state prosecutors to pursue investigations into any pardoned individual who served in a president’s administration, worked directly or indirectly to advance a presidential campaign or transition, or worked at a nonprofit or business controlled by a president, and whose alleged criminal activity took place in New York. The law also allows for investigations to be opened or continued into anyone who was pardoned for the president’s benefit.

The measure was proposed after reports that Trump was weighing a pardon for his former campaign manager, Paul Manafort, who’s serving a 7½-year prison term on federal bank fraud, tax evasion and conspiracy charges stemming from former special counsel Robert Mueller’s investigation into Russian interference in the 2016 presidential election.

In addition to the federal conviction, Manafort was indicted on state mortgage fraud charges in March by the Manhattan district attorney’s office. That office has also launched a criminal investigation into the Trump Organization over two hush money payments during the 2016 campaign to women who claim they had affairs with Trump.

Mueller’s 400-plus page report scrutinized Trump’s comments on possibly pardoning Manafort, as well as ex-longtime attorney Michael Cohen, who was involved in the hush payments, and former national security adviser Michael Flynn.

While presidents can pardon federal crimes, they cannot pardon state offenses.

Read More

Investment Fraud: Hector Absi Pleads Guilty To Conspiracy To Commit Mail, Wire, And Securities Fraud

Hector Absi Pleads Guilty To Conspiracy To Commit Mail, Wire, And Securities Fraud

Former Chief Operating Officer of Davis Bio-Pesticide Company Pleads Guilty to Conspiracy to Commit Mail, Wire, and Securities Fraud

SACRAMENTO, Calif. — Hector Absi, 51, of Las Vegas, Nevada, pleaded guilty today to one count of conspiracy to commit mail fraud, wire fraud, and securities fraud, U.S. Attorney McGregor W. Scott announced.

According to court documents, Absi is the former head of the sales department of Marrone Bio Innovations Inc. (MBI), a company headquartered in Davis, California that produces “bio-based” pesticides. Absi also served as MBI’s Chief Operating Officer from January 2014 until his resignation in August 2014. MBI is a publicly traded company; its stock trades on the NASDAQ exchange under the ticker symbol “MBII.” As a publicly traded company, it is required to file quarterly and annual reports with the Securities and Exchange Commission (SEC). In its reports, MBI stated that it recorded revenue in accordance with generally accepted accounting principles (GAAP).

According to Absi’s plea agreement, in order to increase sales, Absi sold MBI products to customers with side agreements that offered “inventory protection” under which MBI agreed to either repurchase the product from the customer or continue the date by which the customer would need to make full payment for the product. Under GAAP, revenue from sales that include such agreements cannot be recognized on the company’s books at the time of the sales. Between March 2013 and July 2014, Absi conspired with at least one other MBI employee to misrepresent to MBI’s accounting department, its external auditors, and the investing public that MBI had made sales under such terms. By concealing the practice, Absi caused MBI to report a doubling of its revenue in 2013 in comparison to 2012. Absi also conspired to backdate the delivery of certain shipments of MBI’s products to enhance MBI’s reported revenues for the quarter. Absi received a performance-based bonus and exercised stock options during a time when MBI’s inflated revenue figures were being reported.

The Securities and Exchange Commission has also filed a civil complaint against Absi in the U.S. District Court for the Eastern District of California, alleging that Absi violated the Securities Act of 1933, and the Securities Exchange Act of 1934, and federal rules issued under the Exchange Act, and seeking an injunction against Absi, disgorgement of wrongfully obtained benefits, and civil penalties.

This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorney Lee S. Bickley is prosecuting the case.

U.S. District Judge Morrison C. England Jr. is scheduled to sentence Absi on Feb. 20, 2020. Absi faces a maximum statutory penalty of 25 years in prison and a $250,000 fine or twice the gross loss or gain. 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.

Financial Fraud: Michael Cary Lawing Sentenced For One-Count Felony Information Charging Him With Conspiracy To Commit Wire Fraud

Michael Cary Lawing Sentenced For One Count Felony Information Charging Him With Conspiracy To Commit Wire Fraud

Another Tech Support Fraudster Sentenced To Prison

An American citizen who spent over a year running the day-to-day operations of a fraudulent tech support call center in Costa Rica is heading to prison. Michael Cary Lawing, 34, of Lincolnton, North Carolina, has been sentenced to serve 18 months behind bars for his role as the CEO of ABC Repair Tech (ABC) from 2015 to 2016. Lawing pleaded guilty in October 2018 to a one-count felony information charging him with conspiracy to commit wire fraud.

According to court documents, Lawing’s company was affiliated with another fraudulent tech support business in South Florida known as First Choice Tech Support, which later changed its name to Client Care Experts (CCE). Both ABC and CCE purchased pop-up advertisements that would appear suddenly on a person’s computer screen. The pop-ups were made to look like system warnings and falsely informed the victims that serious problems, such as viruses or malware, had been detected on their computers. Often, the pop-ups caused the person’s internet browser to freeze up and stop responding. The pop-ups also typically warned the victims not to shut down their computers or else they would lose all their data. Instead, the ads directed them to call a toll-free number, where they were connected to sales representatives who continued the fraud.

The sales representatives at ABC and CCE would convince the victims to grant them remote access to their computers, where normal computer functions and routine processes were highlighted as evidence of serious computer problems. Victims were never told that the pop-ups that had hijacked their computers were just advertisements purchased by the tech support company, or that in most instances they could make the pop-ups go away simply by rebooting their computers. Instead, they were sold remote “tune-ups” for $250 and anti-virus protection software for another $400. If victims balked at the steep prices, the sales representatives would offer them a discount for being a senior citizen or a military veteran or something else.

From 2013-2016, the two companies – CCE and ABC – combined to defraud more than 40,000 people.

Victims were located in all 50 States, the District of Columbia, Puerto Rico, several U.S. territories, all 10 Canadian provinces, the United Kingdom, and several other foreign countries. At least 57 victims of the scams were residents of the Southern District of Illinois, representing 22 of the district’s 38 counties, including St. Clair and Madison. All told, the two companies took in over $25 million.

In handing down the 18-month sentence, Chief United States District Judge Nancy J. Rosenstengel explained that the need to deter other would-be scammers was a “big factor” in her decision. “The general public needs to see that this kind of crime is taken seriously,” she said.

As part of his sentence, Lawing was ordered to pay back over $266,000 in restitution to ABC victims – a figure that represents ten percent of the roughly $2.6 million in actual losses incurred by
over 10,000 victims during Lawing’s tenure as the company’s top executive. Evidence presented in court showed that Lawing himself made only about $90,000 from the scam. The bulk of ABC’s fraudulent earnings were reportedly reinvested in the company.

Lawing’s sentence comes just one week after CCE’s Vice President, Grand Clark Wasik, 36, of Oakland Park, Florida, was sentenced to 125 months in prison and ordered to pay over $10 million in restitution. Wasik pled guilty to count one of a 14-count superseding indictment earlier this year.

Two former owners of CCE, Michael Austin Seward, 32, of Deerfield Beach, Florida, and Kevin James McCormick, 46, of Delray Beach, Florida, also pled guilty to their role in the conspiracy and are
due to be sentenced on November 18. The Honorable Joe Billy McDade from the Central District of Illinois, who presided over Wasik’s case, will also conduct the sentencings of Seward and McCormick.

Since April 2017, 14 other employees of CCE and ABC have also pleaded guilty to federal fraud violations in the Southern District of Illinois:

•      Joseph Ralph Aievoli, IV, 26, of Boynton Beach, FL – Salesperson at CCE
•      Cory Steven Bachman, 26, of Boynton Beach, FL – Salesperson at CCE
•      Andrew Douglas Broad, 27, of Boynton Beach, FL – Director of Training at CCE
•      Ryan Stocker Carr, 24, of Mount Laurel, NJ – Team Leader at CCE
•      Joshua Dennis Cortez, 38, of Lake Worth, FL – Director of Training at CCE
•      Erica Marie Crowell, 30, of Maple Shade, NJ – Salesperson at CCE
•      Nicholas James Davidson, 27, of Boynton Beach, FL – Salesperson at CCE
•      Patrick M. Dougherty, 36, of Boynton Beach, FL – Salesperson at CCE
•      Tatum Elyse Espenshade, 27, of West Palm Beach, FL – Salesperson at CCE
•      Eric M. Iannaccone, 33, of Monroe Township, NJ – Sales Manager at CCE
•      Anthony Vincent Ludena, 30, of Boca Raton, FL – Salesperson at CCE
•      Robert Thomas McCart, 33, of Boynton Beach, FL – Team Leader at CCE
•      Timothy James Miller, II, 28, of Schwenksville, PA – Salesperson at CCE
•      Jonathan Matthew Richardson, 28, of Lake Worth, FL – Salesperson at CCE
•      Kyle Evan Swinson, 27, of Boynton Beach, FL – Team Leader at ABC/CCE


Eleven of these additional defendants have been sentenced already:

DateDefendantPrison SentenceRestitution
Mar. 8, 2018Ryan Carr12 months + 1 day$20,384.36
May 7, 2018Joshua Cortez18 months$3,034.00
June 8, 2018Patrick Dougherty12 months + 1 day$240,966.94
June 14, 2018Anthony Ludena12 months + 1 day$176,692.26
June 29, 2018Nicholas Davidson5 years probation$181,808.40
July 26, 2018Timothy Miller5 years probation + 200 hours
community service
$127,042.06
Aug. 3, 2018Tatum Espenshade1 day + 18 months home detention$132,683.68
Sept. 11, 2018Andrew Broad12 months + 1 day$55,238.28
Sept. 20, 2018Jonathan Richardson12 months + 1 day$78,638.99
Oct. 4, 2018Cory Bachman1 day$156,806.25
Oct. 10, 2019Joseph Aievoli1 day$106,355.82


Because the crimes allegedly took place in connection with telemarketing and victimized 10 or more persons over the age of 55, the maximum punishment in each case is 30 years imprisonment. The defendants could also be ordered to serve up to five years of supervised release and pay a fine of up to $250,000. Under federal law, restitution to identified victims is mandatory.

These cases are part of an ongoing investigation by the St. Louis Field Office of the Chicago Division of the United States Postal Inspection Service and are being prosecuted by Assistant United States Attorneys Nathan D. Stump, Scott A. Verseman, and Ranley R. Killian.

The Florida Attorney General’s Office raided CCE in June 2016 and has been cooperating with the federal investigation, in addition to bringing its own civil enforcement action against CCE under Florida state law.

The Federal Trade Commission has been working for some time to shut down illegal tech support scams. For more information about the FTC’s “2019 Tech Support Takedown,” please visit https://www.consumer.ftc.gov/…2019.

Some consumers who were victimized by ABC or CCE / First Choice Tech Support have received additional fraudulent calls. These calls typically come from companies claiming   either (a) that the technical support the victims purchased has been transferred to them and additional funds are now needed; or (b) that they can help the victims obtain a refund. Victims should be advised that no companies have been authorized to provide them with any tech support services on behalf of ABC or CCE / First Choice Tech Support, or to provide them with a refund for any previous purchases.

Financial Fraud:Walter Konigseder Arrested On Investment Fraud Charges

Walter Konigseder Arrested On Investment Fraud Charges

Former Informix Executive Hauled Into Court On 19-Year-Old Indictment Regarding Alleged Investment Fraud Scheme

Walter Konigseder arrested on investment fraud charges

SAN FRANCISCO – This morning, former Informix executive Walter Konigseder appeared in federal court to face investment fraud charges laid out in an 11-count indictment filed in October of 2000, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.

A federal grand jury indicted Konigseder, 67, a German national, on October 5, 2000. According to the indictment, in the early 1990s, Konigseder was the Sales Director and Country Manager for Germany of Menlo Park-based Informix, a multinational, publicly held computer software developer, support, training, and consulting company. From 1992 through 1996, Konigseder had authority over Informix’s sales force, finance, and legal staff within all of Central and Eastern Europe. The indictment alleges that Konigseder caused Informix to record false and illusory sales, to make false statement to Informix’s auditors and management, and to book license revenue in advance, rather than over the period of maintenance contracts.

The indictment describes how Konigseder engaged in numerous acts of alleged wrongdoing in connection with Informix’s restatement in 1997 of its 1996 earnings. The indictment alleges that Konigseder’s fraud contributed to the need for Informix to restate its 1996 earnings. Between April and September of 1997, Informix therefore restated its previous year’s growth. The result was a 60% drop in its stock value—a change to the company’s value from approximately $2.5 billion to as low as $975 million. For example, the indictment describes six illusionary sales between June of 1996 and January of 1997 in which Konigseder, contrary to Generally Accepted Accounting Principles, directed Informix to recognize more than $25 million in revenue on contracts that contained contingencies. Further, the indictment describes how Konigseder allegedly concealed material facts from Informix’s auditors. In July of 1997, for example, Konigseder allegedly reported to Informix’s auditors that a client did not make a multi-million dollar payment because the client was hoping to expand on the existing contract with Informix. In truth, Konigseder was aware that the client had exercised a side agreement canceling the contract with Informix altogether. The indictment also alleges Konigseder caused Informix to make false statements to the Securities and Exchange Commission overstating the company’s earnings in the second, third, and fourth quarters of 1996.

In sum, Konigseder was charged with three counts of wire fraud, in violation of 18 U.S.C. §§ 1343 and 2; four counts of accounting fraud, in violation of 15 U.S.C. §§ 78m(b) and 78ff(a), 17 C.F.R. 240.13b2-1, and 18 U.S.C. § 2; and three counts of false statements to accountants, in violation of 15 U.S.C. §§ 78m(b)(2) and 78ff(a), 17 C.F.R. 240.13b2-2, and 18 U.S.C. § 2.

A bench warrant was issued for Konigseder’s arrest on October 5, 2000. At that time he was residing in Germany and remained there for almost 19 years after being indicted. Konigseder was arrested by Mauritius authorities in August while on a trip to that country. He was handed over to United States authorities on October 9 and arrived in the United States on Friday, October 11. He made his initial federal court appearance at 10:30 this morning before U.S. Magistrate Judge Jacqueline Scott Corley.

An indictment merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 5 years’ imprisonment and a $250,000 fine for each count of wire fraud, 10 years’ imprisonment and up to $1 million for each count of falsification of accounting records and false statements to accountants. In addition, the court may order additional periods of supervised release, fines, and restitution, if appropriate. However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney William Frentzen is prosecuting the case. The prosecution is the result of an investigation by the Federal Bureau of Investigation with assistance from the Department of Justice Office of International Affairs, Mauritius, and the United States Marshal Service.

Financial Fraud: Hardev Panesar Sentenced For His Leadership Role In An Immigration Fraud Scheme

Hardev Panesar Sentenced For His Leadership Role In An Immigration Fraud Scheme

San Diego Man Who Posed as a Federal Agent to Defraud Immigrants out of $2.5 Million Sentenced to 91 Months

Assistant U.S. Attorney Andrew Young (619) 546-7981 and Assistant U.S. Attorney Meghan Heesch (619) 546-9442

SAN DIEGO – Hardev Panesar of San Diego was sentenced today in federal court by U.S. District Judge Gonzalo P. Curiel to 91 months in custody for his leadership role in an immigration fraud scheme.

According to his plea agreement, Panesar conspired with others, including Rafael Hastie and Gurdev Singh, to induce unauthorized immigrants to pay money based on false and fraudulent claims that the defendants could secure immigration status for the victims and their families. Panesar misled the victims into believing that he could obtain immigration documents or legal immigration status by pretending to be an agent with the Department of Homeland Security. Panesar wore a DHS jacket and showed purported official credentials to his victims.

The plea agreement outlined several dates in 2016 where Panesar successfully obtained thousands of dollars by pretending to be a DHS official. The money paid by the victims totaled over $2.5 million, which was converted to the personal use and benefit of Panesar and his co-defendants. According to statements made at sentencing, Panesar also lost a significant portion of the money he stole from victims as a victim himself in a Nigerian “advanced fee scheme.” At a prior sentencing hearing, one of the victims testified in court that his family gave Panesar and Gurdev Singh approximately $250,000 with the hopes of receiving green cards—a devastating financial loss that contributed to the depression and eventual suicide of a family member.

Panesar’s sentence includes a six-month custodial sentence for an additional charge of Failure to Appear. On June 21, 2018, while released on bond, Panesar fled to Mexico and failed to appear at a Motion Hearing before Judge Curiel set for June 22, 2018. He was captured in Mexico and deported to the United States approximately six weeks later.

Earlier this year, Panesar’s co-defendants were sentenced by Judge Curiel. Rafael Hastie was sentenced to 46 months in custody and ordered to pay $942,000 in restitution to the victims. Gurdev Singh was sentenced to 27 months in custody and ordered to pay $392,850 in restitution to the victims. The Court ordered Panesar to pay approximately $2.5 million in restitution to his victims.

Additionally, last week, former HSI supervisor Johnny Martin was found guilty by a federal jury in a related case for the false statements he made to the FBI in connection with their investigation into this immigration fraud scheme. Martin will be sentenced on January 17, 2020.

In imposing the sentence, Judge Curiel described Panesar’s scheme as “one of the more serious cases this Court has handled” in recent years. “Mr. Panesar preyed on the most vulnerable…these are people who wanted to live and experience the American dream. . . . Mr. Panesar pretended he could be the one who provided the American dream.” Judge Curiel added, “This offense is serious because of the heartlessness and callousness required to perpetuate this fraud on so many for so long.”

“Pretending to be a legitimate government agent to scam hundreds of individuals of their life savings undermines the crucial trust we bestow upon our law enforcement partners,” said U.S. Attorney Robert S. Brewer, Jr. “When that trust is betrayed for personal enrichment, our office will aggressively prosecute the fraudsters and seek restitution for the victims.”

“Panesar’s fraud scheme was particularly egregious as he attempted to use the veil of a U.S. government official to obtain millions of dollars from those trying to obtain legal status in the United States,” said Scott Brunner, FBI Special Agent in Charge. “Falsely claiming to be a federal official degrades the integrity of the system and therefore has serious consequences. Today, Panesar’s destructive scheme has been shut down, he has a federal conviction, and must serve a prison sentence as a result of his actions.”

DEFENDANTS Case Numbers: 17CR1371-GPC, 18CR3229-GPC

Hardev PANESAR Age: 71 El Cajon, California

Rafael HASTIE Age: 49 Tijuana, Mexico

Gurdev SINGH Age: 58 Bakersfield, California

SUMMARY OF CHARGES

17CR1371-GPC

Count 1: 18 U.S.C. § 1349, Conspiracy to Commit Wire Fraud

Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution.

Counts 2-4: 18 U.S.C. § 1343, Wire Fraud;

Maximum Penalty: Twenty years in prison, $250,000 fine, forfeiture and restitution

Counts 5-10: 18 U.S.C. § 912, False Personation of an Officer or Employee of the United States;

Maximum Penalty: Three years in prison, $250,000 fine

Count 11: 31 U.S.C. § 5324(a)(3), Structuring Domestic Financial Institutions;

Maximum Penalty: Ten years in prison, $250,000 fine, forfeiture

18CR3229-GPC

Count 1: 18 U.S.C. § 3146(a)(1), Failure to Appear After Pre-Trial Release;

Maximum Penalty: Ten years in prison, $250,000 fine.

AGENCY

Federal Bureau of Investigation

U.S. Customs and Border Protection – Office of Field Operations

U.S. Customs and Border Protection – Office of Professional Responsibility

Cyber Crime: Elvin Lewis Convicted Of Conspiracy To Commit Money Laundering And Money Laundering Charges

Elvin Lewis Convicted Of Conspiracy To Commit Money Laundering And Money Laundering Charges

Man Convicted by South Florida Jury of Laundering More than $3 Million in Proceeds from International Cyber Scams

FORT LAUDERDALE – Elvin I. Lewis, Jr., of Hollywood, Florida, was convicted today of conspiracy to commit money laundering and money laundering charges, following a five-day jury trial. The charges stemmed from his decision to launder more than $3 million dollars in fraud proceeds from business email compromise (“BEC”) cyber scams, announced U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Special Agent in Charge Brian Swain of the U.S. Secret Service (USSS) Miami Field Office, and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office.

According to evidence at trial, from approximately November 2017 through August 2018, in Broward County, Florida, and elsewhere, Lewis knowingly and willfully agreed to participate in, and did participate in, a conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h) (Case No. 19cr60034). The purpose of the scheme was for Lewis and his co-conspirators to unlawfully enrich themselves, to hide illegal proceeds, and to further wire fraud schemes by, among other things, withdrawing, depositing, and transferring fraudulently obtained funds between banks, and individuals. As trial testimony established, Lewis also recruited others into the money laundering network, including a co-conspirator based in Detroit, whom he originally solicited on Craigslist.

Lewis’s co-conspirators – believed to be located abroad – contacted businesses (the “business victims”) located throughout the United States, using email, social media, and other Internet-based methods of communication, and falsely and fraudulently posed as vendors seeking payment for services rendered, in order to facilitate the BEC scams. The co-conspirators, posing as vendors, used spoofed emails and email account takeover techniques to send emails falsely and fraudulently directing the business victims to make payments to various bank accounts, through wire transfers, in purported satisfaction of invoices due to the actual vendors.

Lewis’s role in the laundering conspiracy was to wire fraud proceeds from the BEC scams into other corporate accounts under his and his co-conspirators’ control, in return for a five to ten percent cut of the funds. In particular, as trial evidence established, Lewis created more than eight accounts at different banks for his purported real estate investment business, “A NuFinancial Consortium LLC.” Through these accounts, Lewis laundered more than $3 million in BEC proceeds in less than a year, approximately $2.3 million of which was laundered in less than two weeks. Lewis variously converted the funds to cashier’s checks and cash, and wired money between accounts.

The business victims of the cyber scams included: a major Canadian city; a trucking company in Tennessee; a power company in Ohio; an axle company in Indiana and Detroit; an importing business in Chicago; and others.

In total, Lewis made more than $160,000 in cash during the course of the fraud and money laundering schemes. He used the funds to acquire a Porsche, which law enforcement seized as part of this criminal case.

Lewis is scheduled to be sentenced on Jan. 10, 2020 at 3:30 p.m. before U.S. District Judge Roy K. Altman. He faces a statutory maximum sentence of twenty years in prison as to each of the eleven counts of conviction. He also faces up to three years of supervised release, restitution and monetary penalties.

U.S. Attorney Fajardo Orshan commended the investigatory efforts of the USSS and FBI in this matter. She also thanked IRS-CI’s Orlando Field Office for the trial assistance provided by a money laundering expert. This case is being prosecuted by Assistant U.S. Attorneys Lisa H. Miller and Michele S. Vigilance. The asset forfeiture component of the case is being handled by Assistant U.S. Attorneys Alison W. Lehr and Daren Grove.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Tax Fraud: Cubby Wayne Williams Was Found Guilty Of 22 Counts Of Assisting In The Preparation Of False Tax Returns

Cubby Wayne Williams Was Found Guilty Of 22 Counts Of Assisting In The Preparation Of False Tax Returns

Inglewood-based Tax Preparer Convicted in Scheme that Sought More than $5 Million in Fraudulent Refunds

LOS ANGELES – A tax preparer and ex-California Franchise Tax Board employee was found guilty by a jury today of federal criminal charges accusing him of defrauding the IRS out of millions of dollars by declaring bogus withholdings used to fraudulently claim substantial tax refunds.

Cubby Wayne Williams, 64, of Alhambra, was found guilty of 22 counts of assisting in the preparation of false tax returns for his clients and four counts of subscribing to false tax returns for himself.

United States District Judge Percy Anderson has scheduled a December 16 sentencing hearing, at which time Williams will face a statutory maximum sentence of 78 years in federal prison.

Williams, who owns and operates the Inglewood-based tax services company Williams Financial Network, filed tax returns claiming that his clients had accrued Original Issue Discount (OID) interest income, according to the evidence presented at his four-day trial. OID is a form of interest that accrues over the life of a bond or other debt instrument, but is not payable as it accrues. Financial institutions use IRS Forms 1099-OID to report this accrued, but unpaid, income, and any tax withholdings on it.

Williams fraudulently claimed OID withholdings on 22 tax returns for his clients for the tax years 2013 through 2016, and sought hundreds of thousands in bogus tax refunds. Williams took a cut of many of these refunds often by directing the IRS to deposit a portion into a bank account under Williams’s control.

When his clients complained that their returns had fallen under IRS scrutiny, had been corrected and that they now owed money to the IRS, Williams told them the IRS had made a mistake and they were still entitled to their tax refunds. When the same clients informed Williams they were being audited, he assured them he would represent them before the IRS and resolve any issues, but he ultimately did little other than to submit further fraudulent documentation to the IRS.

According to prosecutors, Williams’ scheme included many false returns in addition to the returns charged in the indictment, through which Williams attempted to fraudulently obtain more than $5 million in tax refunds and, in fact, obtained nearly $3 million for himself and his clients.

This case was investigated by IRS Criminal Investigation.

This matter is being prosecuted by Assistant United States Attorneys James C. Hughes and Ranee A. Katzenstein of the Major Frauds Section.

Financial Fraud: Dwane Nevins Plead Guilty To An Indictment Charging Him With Corruption Related Crimes

Businessmen Shaking Hands And Receiving Money

Veterans Affairs Official Pleads Guilty to Six Corruption-Related Counts Arising from Scheme to Take Bribes To Rig Federal Contracts

Business Associates, Charged with Offering and Arranging for the Payments, Have Also Pleaded Guilty

DENVER – U.S. Attorney Jason R. Dunn announces that former U.S. Department of Veterans Affairs official Dwane Nevins, age 55, pleaded guilty last week to an indictment charging him with corruption related crimes, arising from a scheme to take payments from an undercover FBI agent. Earlier this week, on September 17, 2019, his co-conspirator Anthony Bueno pleaded guilty to one count of conspiring with Nevins to make those payments. Another businessman involved with the scheme, Robert Revis, pleaded guilty in April 2019.

As described in the indictment, Dwane Nevins — a small business specialist at the VA’s Network Contracting Office in Colorado — agreed to take bribes offered by Revis, Bueno, and an undercover FBI agent to help them manipulate the process for bidding on federal contracts with the VA. Revis and Bueno, working with Nevins, agreed to submit fraudulent bids from service-disabled-veteran-owned small businesses under contract with their consulting company so that federal contracts would be set aside for only those companies. As Bueno allegedly explained, they would then “own all the dogs on the track.” Nevins, Bueno and Revis worked to conceal the nature of the bribe payments by either kicking back to Nevins a portion of the payments made to their consulting company, or by asking their consulting company’s clients to pay Nevins for sham training classes related to federal contracting.

The indictment also alleges that, after complaining about not being paid by Revis and Bueno for his participation in the scheme, Nevins used his official position at the VA to extort approximately $10,000 from an undercover FBI agent, telling the agent that “the train don’t go without me. You know what I mean? I’m the engine. I’m the caboose. I’m the engine room.” Nevins also allegedly told the undercover FBI agent “this is a business and businessmen need to get paid . . . . so I can have my Christmas, you know what I’m saying?”

The indictment alleges that the conspirators attempted to rig the process related to two contracts, both of which related to medical equipment and not to the construction of any VA facilities. The first contract related to the procurement of LC bead particle embolization products by a VA hospital in Salt Lake City and the second related to the procurement of durable medical equipment for VA facilities located throughout the region.

“Corruption in the government procurement process has consequences,” said U.S. Attorney Jason Dunn. “Here the defendant participated in manipulating the bid process so that a specific company could prevail. That is wrong, it is criminal, and there will be swift consequences for anyone that engages in such behavior.”

“Dwane Nevins’ scheme attempted to take advantage of the system serving our veterans and hurt small businesses,” said FBI Denver Division Special Agent in Charge Dean Phillips. “The FBI thanks the multi-agency investigative team and the USAO for holding Nevins and his cohorts accountable for their criminal activities.”

Gregg Hirstein, Special Agent in Charge, VA Office of Inspector General, said, “This case should serve as a deterrent to any government employees tempted to unlawfully profit from their position of public trust. The VA Office of Inspector General will always vigorously pursue allegations of corruption by VA officials because our nations veterans deserve to be served by a workforce of the highest integrity.”

“Taking bribes is an egregious form of corruption that violates the public’s trust and deprives eligible businesses opportunities to compete fairly for Federal contracting opportunities,” said SBA OIG’s Western Region Special Agent-in-Charge Weston King. “SBA OIG and its law enforcement partners will aggressively pursue individuals that seek personal gain in their service as public officials. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their leadership and dedication throughout this investigation.”

Dwane Nevins is scheduled to be sentenced on December 20, 2019. He faces a maximum of 65 years’ imprisonment. Anthony Bueno is scheduled to be sentenced on January 7, 2020. Robert Revis is scheduled to be sentenced on January 24, 2020.

The case was jointly investigated by the Federal Bureau of Investigation, the U.S. Department of Veterans Affairs Office of Inspector General, and the U.S. Small Business Administration Office of Inspector General.

The defendant is being prosecuted by Assistant United States Attorneys Bryan D. Fields and Hetal J. Doshi.

Financial Fraud: Dana Q. Roush Guilty Of a Conspiracy To Commit Mail Fraud And Equity Skimming

Dana Q. Roush Guilty Of A Conspiracy To Commit Mail Fraud And Equity Skimming

Greenville Business Owner Convicted in Federal Court of Conspiracy to Defraud

Greenville, South Carolina —- United States Attorney Sherri A. Lydon announced today that Dana Q. Roush, age 38, of Greenville, was found guilty of a conspiracy to commit mail fraud and equity skimming. A federal jury returned guilty verdicts late Wednesday evening after an hour and a half of deliberation. United States District Judge Timothy M. Cain of Anderson received the verdicts and will sentence Dana Roush and her husband Michael “Bubba” Roush,” who pleaded guilty to the mail fraud conspiracy prior to trial, after reviewing a Presentence Investigation Report which will be prepared by the United States Probation Office.

Evidence presented at trial showed that Dana and Bubba Roush owned and operated Kingdom Connected Investments, LLC (“KCI”). They marketed their company as a Christian organization and promised to create “win-win” situations for home sellers and buyers. They sought homeowners who often owed more on their home than the property was worth, and buyers who lacked good credit and thus could not obtain a conventional mortgage.

KCI promised to relieve the homeowner from the burdens of mortgage payments by “buying” the home and placing a buyer in the home who would rent-to-own. KCI promised to make all the sellers’ mortgage payments. KCI misled sellers to believe that they would be immediately removed from the property’s title and that they were no longer responsible for the original loan.

KCI promised buyers an easy road to homeownership. In exchange for the down payment (typically 10 percent of the purchase price), the buyers were told that they were renting-to-own and building up equity. KCI further concealed from the buyers that a third party—the seller—had an existing mortgage on the property that KCI was responsible for paying.

Rather than using the down payments and rents received from the buyers to pay the sellers’ mortgage payments, Bubba and Dana Roush used the money for personal expenses and to expand their real estate business.

The sellers, many of whom believed they were off the title and note, received foreclosure notices. They learned that KCI, despite having a renter in the home, had stopped paying on the mortgage. Buyers often learned they had no real ownership interest when the home was purchased by a third-party at a foreclosure sale and the new owner started eviction proceedings.

Victims of the scheme suffered myriad injuries including loss of money, dreams, and ruined credit. Special Agent Matt Jacobson of the Federal Bureau of Investigation testified that KCI received $2.6 million from buyers and only paid $1.4 million in mortgage payments. Approximately 130 properties were involved in the scam, and Agent Jacobson testified that in only two instances did a buyer actually become a homeowner and a seller not face foreclosure and ruined credit.

“Protecting South Carolinians from financial fraud is one of our top priorities,” said U.S. Attorney Lydon. “Dana and Bubba Roush lined their own pockets by preying on distressed homeowners and families hoping to achieve the American dream of home ownership. The U.S. Attorney’s Office will vigorously investigate and prosecute individuals like the Roushes who make false representations to enrich themselves at the expense of others.”

“This verdict is the result of excellent work by FBI Special Agents, prosecutors from the United States Attorney’s Office and investigators from the Department of Housing and Urban Development. I commend them all. These schemes, based on absolute greed, prey on the vulnerable by perverting trust. The FBI will continue to work with our partners to track down such schemes and bring those responsible to justice,” said FBI Special Agent in Charge Jody Norris.

In addition to the FBI, Department of Housing and Urban Development, Office of Inspector General (HUD OIG) participated in the investigation. Nadine E. Gurley, Special Agent in Charge at HUD, stated “HUD OIG is dedicated to protecting HUD from individuals seeking to defraud the Federal Housing Administration (FHA) program. HUD OIG will continue to partner with other federal, state and local authorities to ensure that corrupt individuals do not use their positions to enrich themselves at the government’s expense. We remain steadfast in working with the U.S. Department of Justice to pursue any unscrupulous individuals who attempt to defraud our programs for their own personal enrichment.”

The maximum sentence the Roushes face is imprisonment for 20 years, a fine of $250,000, and supervised release for three years. Special Assistant United States Attorney Ian Conits and Assistant United States Attorney Bill Watkins of the Greenville office prosecuted the case on behalf of the Government.

Financial Fraud: Compounding Pharmacy Have Agreed To Resolve a Lawsuit Alleging That They Violated The False Claims Act

Compounding Pharmacy Have Agreed To Resolve A Lawsuit Alleging That They Violated The False Claims Act

Compounding Pharmacy, Two of Its Executives, and Private Equity Firm Agree to Pay $21.36 Million to Resolve False Claims Act Allegations

The Department of Justice announced today that compounding pharmacy Diabetic Care Rx LLC, or Patient Care America (PCA), PCA’s Chief Executive Officer Patrick Smith, PCA’s former Vice President of Operations Matthew Smith, and private equity firm Riordan, Lewis & Haden Inc. (RLH) have agreed to resolve a lawsuit alleging that they violated the False Claims Act through their involvement in a kickback scheme to generate referrals of prescriptions for expensive pain creams, scar creams, and vitamins, regardless of patient need, which were reimbursed by TRICARE, the federal health care program for military members and their families. PCA and RLH have agreed to pay $21,050,000, Patrick Smith has agreed to pay at least $300,000, and Matthew Smith has agreed to pay at least $12,788. These settlement amounts were based on defendants’ ability to pay.

“Kickback schemes taint decision-making and cause taxpayer-funded health care programs to pay for items or services that patients may not need,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “We will hold accountable health care providers involved in such schemes designed to induce referrals of prescriptions that are reimbursed by federal health care programs.”

“The prosecution and resolution of this case demonstrates the U.S. Attorney’s Office continuing commitment to hold all responsible parties to account for the submission of claims to federal health care programs that are tainted by unlawful kickback arrangements,” said United States Attorney Ariana Fajardo Orshan. “Kickback schemes lead to unnecessary medical services and drive up the cost of health care for all.”

“This settlement sends a clear message about the Defense Criminal Investigation Service (DCIS) and its law enforcement partners’ unwavering commitment to protect the integrity of TRICARE, the Department of Defense’s health care program which serves to protect our U.S. military, their family members, and military retirees,” said Special Agent in Charge Cyndy Bruce of the DCIS Southeast Field Office. “Health care providers who manipulate and abuse the TRICARE program in order to seek financial gain by submitting false claims and demonstrating a lack of regard for TRICARE patients and the health care plan which is charged to provide their medical care, will be diligently investigated and held accountable for their actions.”

This settlement resolves a lawsuit pursued by the United States against PCA for allegedly paying kickbacks to outside “marketers” to target military members and their families for prescriptions for compounded creams and vitamins, which were formulated to ensure the highest possible reimbursement from TRICARE. The United States alleged that the marketers paid telemedicine doctors who prescribed the creams and vitamins without seeing the patients, or in some cases, even speaking to them. The settlement also resolves the United States’ allegations that PCA and a marketer routinely jointly paid the copayments owed by patients referred by the marketer, without any verification of the patients’ financial needs, and then disguised the payments as coming from a sham charitable organization, which was affiliated with the marketer. Finally, the settlement resolves the United States’ allegations that PCA continued to claim reimbursement for prescriptions referred by the marketers despite regularly receiving complaints from patients that revealed the prescriptions were being generated without patient consent or a valid patient-prescriber relationship. RLH, the private equity firm that managed PCA on behalf of its investors, allegedly knew of and agreed to the plan to pay outside marketers to generate the prescriptions and financed the kickback payments to the marketers. Patrick Smith and Matthew Smith were executives of PCA who allegedly executed the scheme.

The lawsuit resolved by the settlement was originally filed under the whistleblower (or “qui tam”) provisions of the False Claims Act by Marisela Medrano and Ada Lopez, two former employees of PCA. The qui tam provisions permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The False Claims Act authorizes the United States to intervene and take over such lawsuits, which the United States did here, in part. The share to be awarded in this case has not been determined yet.

This civil settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch (Fraud Section), the United States Attorney’s Office for the Southern District of Florida, the Defense Criminal Investigative Service, and the U.S. Food & Drug Administration’s Office of Criminal Investigations.

The lawsuit is captioned United States ex rel. Medrano and Lopez v. Diabetic Care Rx LLC, d/b/a Patient Care America, et al., No. 15-CV-62617 (S.D. Fla.). The claims resolved by the settlement are allegations only and there has been no determination of liability.

Financial Fraud: Group Of 25 Individuals Charges In Healthcare Fraud Schemes

Group Of 25 Individuals Charges In Healthcare Fraud Schemes

25 Southern California Defendants Face Federal Charges Alleging Fraud Schemes that Cost Health Care Programs Millions of Dollars

LOS ANGELES – A local health care fraud enforcement action has resulted in federal charges against of 25 Southern California defendants for their alleged involvement in healthcare fraud schemes that fraudulently sought over $150 million from the Medicare and Medicaid programs, as well as private insurers and union health benefit plans. Fourteen of those charged in federal court in Los Angeles and Santa Ana are doctors or medical professionals.

The charges announced today target schemes billing Medicare, Medicaid and other health care plans for services, testing and prescriptions that were not medically necessary or not actually provided to beneficiaries.

The cases announced today are the result of investigations being conducted by the Federal Bureau of Investigation; the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG); the U.S. Department of Labor, Office of Inspector General; the U.S. Department of Labor, Employee Benefits Security Administration; the Defense Criminal Investigative Service; the Amtrak Office of Inspector General; the U.S. Office of Personnel Management, Office of Inspector General; the California Department of Insurance; and the California Department of Justice.

The criminal cases have been brought by the United States Attorney’s Office and prosecutors in the Health Care Fraud Unit of the Criminal Division’s Fraud Section at the Justice Department who work with law enforcement partners under the aegis of the Medicare Fraud Strike Force.

“Corruption drains dollars from private insurers and public programs such as Medicare and Medicaid,” said United States Attorney Nick Hanna. “This office will continue to hold accountable anyone – including medical professionals – who seeks to bilk our nation’s health care system.”

“Today’s action shows that our ability to detect and prosecute health care fraud grows more sophisticated with each passing day,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “The Department of Justice is using every tool at our disposal to target the medical professionals and others who place their personal greed above the public good.”

“Sticking taxpayers with a bill for unnecessary healthcare services will never be tolerated,” said Special Agent in Charge Timothy B. DeFrancesca of the U.S. Health and Human Services, Office of the Inspector General. “Working closely with our law enforcement partners, our agency will tirelessly pursue physicians and others who threaten the integrity of Federal healthcare programs.”

“Health care fraud schemes cheat American taxpayers and healthcare programs out of millions of dollars,” said Assistant Director in Charge Paul D. Delacourt of the FBI’s Los Angeles Division. “With the assistance of the public, the FBI and partner agencies will continue to combat this unscrupulous criminal activity that seeks to financially exploit our healthcare system.”

“Criminal activity that drives up medical costs for Californians at the expense of vulnerable communities will not be tolerated,” said California Attorney General Xavier Becerra. “The California Department of Justice will continue to seek opportunities to work with our federal partners to not only prevent wrongdoing, but also target fraudsters and hold them accountable.”

A total of 10 cases are being announced today. Those charged are:

Dr. Ronald Weaver, 70, of Pacific Palisades; Sara Soulati, 49, of Santa Monica; Dr. John Weaver, 75, of Alhambra; Dr. Ronald Carlish, 78, of Pacific Palisades; Dr. Howard Elkin, 68, of Whittier; Dr. Wolfgang Scheele, 79, of Los Angeles; and Dr. Nagesh Shetty, 74 of Huntington Beach, who were charged for their alleged participation in an approximately $135 million scheme to defraud Medicare through medically unnecessary cardiac treatments and testing through Global Cardio Care of Inglewood. This case is being prosecuted by DOJ Trial Attorneys Emily Z. Culbertson and Alexandra Michael.

Navid Vahedi, 40, of Los Angeles; Vahedi’s pharmacy, Fusion Rx Compounding Pharmacy; and Joseph S. Kieffer, 39, a marketer, of Los Angeles, who were charged in a fraud and kickback scheme. Vahedi and Kieffer, allegedly paid commissions to marketers and some patients to obtain medically unnecessary compounded drugs to allow Fusion Rx to bill health care providers for those compounded drugs, many of which were reimbursed at rates much higher than average medications. To encourage patients to continue seeking the compounded drugs, Fusion Rx allegedly failed to collect copayments from patients. However, to avoid the scheme being uncovered in an audit, they also allegedly directed Fusion Rx staff to use gift cards to pay the patients’ copayments for them so that it would appear they made the required copayments. This conduct allegedly resulted in approximately $17 million in losses to health care providers, while the defendants spent substantial sums of money on themselves, including Vahedi’s purchase of a 1963 Ford Mustang Cobra. Also charged in a related case was Joshua Pearson, 40, a marketer, of St. George, Utah, for his alleged receipt of illegal kickbacks from Fusion Rx, Vahedi and Kieffer for patient referrals for compounded drugs (Pearson is a 26th defendant in the cases being announced today). The cases are being prosecuted by Assistant United States Attorneys Ashwin Janakiram and Alexander Schwab of the Major Frauds Section and Assistant United States Attorney Jonathan Galatzan of the Asset Forfeiture Section.

Hilda Haroutunian, 59, of Sun Valley; Dr. Keyvan Amirikhorheh, 60, of Seal Beach; Lorraine Watson, 56, a physician’s assistant, of Valley Village; Noem Sarkisyan, 63, of North Hollywood; and Edmond Sarkisyan, 40, a medical assistant, of North Hollywood, who were charged for their alleged participation in an approximately $10 million scheme to defraud the Family Planning, Access, Care and Treatment (Family PACT) program administered by Medi-Cal, the California Medicaid program, through fraudulent claims for family planning services, testing and prescriptions for non-existent patients submitted through Los Angeles Community Clinic and associated diagnostic testing laboratories and pharmacies. The case is being prosecuted by DOJ Trial Attorney Alexis D. Gregorian.

Amir Friedman, 54, an anesthesiologist, of Calabasas, who is charged for his alleged participation in a conspiracy to commit honest services mail and wire fraud and Travel Act violations involving approximately $800,000 in kickbacks for compounded pharmaceutical drugs involving New Age Pharmaceuticals, Inc., in Beverly Hills. The case is being prosecuted by Assistant United States Attorney Ashwin Janakiram.

Susan H. Poon, 54, a chiropractor who resides in Dana Point, who was arrested today after a federal grand jury charged her in an approximately $2 million scheme to defraud Anthem, Aetna, and other Blue Cross Blue Shield Association affiliates, including the Teamsters Western Region and Local 177 health care plans. Through this scheme, Poon allegedly submitted false and fraudulent claims for chiropractic services never provided, medical diagnoses never given, and office visits that never occurred. Poon also allegedly submitted false and fraudulent prescriptions to a provider of durable medical equipment that relied on those false prescriptions in its reimbursement claims. Employees and employee-dependents of the United Parcel Service and Costco Wholesale Corporation, who allegedly never received the claimed services or sought the claimed medical equipment, were named as patients in Poon’s false claims and prescriptions. The case is being prosecuted by Assistant United States Attorney Daniel S. Lim of the Santa Ana Branch Office.

Antonio Olivera, 78, of Downey; Emelita Cephass, 57, of Downey; and Martin Canter, 70, of Rancho Palos Verdes, who were charged for their alleged participation in a hospice kickback scheme. Olivera was also charged for his alleged participation in a scheme to defraud Medicare. Both schemes involve Mhiramarc Management LLC, a hospice located in Downey. In a separate case, hospice owner John O’Brien was charged with health care fraud conspiracy for his alleged role in the fraud scheme. The cases are being handled by DOJ Trial Attorney Justin P. Givens.

Mahyar David Yadidi, 37, a chiropractor who resides in Los Angeles, who was charged with conspiracy to commit health care fraud for operating a scheme to defraud the International Longshore and Warehouse Union – Pacific Maritime Association health care benefit plan. Yadidi allegedly defrauded the ILWU-PMA Plan through his chiropractic clinic, San Pedro Philips Chiropractic, by offering kickbacks to patients for attending the clinic and by billing the benefit plan for services that were not rendered to its patients, services that were not medically necessary, and services that were provided by unlicensed employees not qualified to perform them. Yadidi allegedly continued to operate his scheme after he was terminated as an authorized provider by the ILWU-PMA plan. Ivan Semerdjiev, 40, of Irvine, a chiropractor working for Yadidi, and Julian Williams, 44, of San Pedro, a personal trainer working for Yadidi, were also charged in connection with this fraud conspiracy. In total, Yadidi, Semerdjiev and Williams submitted almost $5 million in claims to the ILWU-PMA plan. The case is being prosecuted by Assistant United States Attorney Alex Wyman.

Darren Hines, 49, a chiropractor who lives in the Harbor City neighborhood of Los Angeles, who was charged with health care fraud for operating a scheme to defraud the International Longshore and Warehouse Union – Pacific Maritime Association health care benefit plan. Hines allegedly defrauded the ILWU-PMA plan through his chiropractic clinic, Advanced Alternative Health, by billing for services not rendered and services being provided by unlicensed employees who were not qualified to perform them, all after Hines was terminated as an authorized provider by the ILWU-PMA plan. Hines allegedly submitted over $500,000 in fraudulent claims over a short period of time. The case is being prosecuted by Assistant United States Attorney Alex Wyman.

“Health plans are tempting targets for unscrupulous individuals,” said Crisanta Johnson, Los Angeles Regional Director for the U.S. Department of Labor’s Employee Benefits Security Administration. “When wrongdoers victimize health plans and their participants, EBSA and its fellow enforcement agencies will take prompt, aggressive, and coordinated action to hold them accountable.”

Thomas W. South, Deputy Assistant Inspector General for Investigations, the U.S. Office of Personnel Management, Office of Inspector General, said: “I am proud of the outstanding work of the OPM OIG investigative staff and our law enforcement partners. The OPM OIG has zero tolerance for unethical behavior and we will vigorously investigate cases of fraud and abuse by professionals in the health care industry.”

“An important mission of the Office of Inspector General is to investigate allegations of fraud relating to labor unions and their affiliated employee benefit plans. We will continue to work with our law enforcement partners to investigate these types of allegations,” said Quentin Heiden, Acting Special Agent-in-Charge, Los Angeles Region, U.S. Department of Labor, Office of Inspector General.

“Our office, in partnership with our fellow investigative agencies, will continue to comprehensively investigate and bring to justice the people who perpetrate health care fraud,” said Kevin Winters, Amtrak’s Inspector General. “We will remain vigilant in protecting Amtrak employees, retirees, and their dependents, by ensuring our health care dollars are not wasted on fraudulent providers.”

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

The Justice Department’s Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. There are 15 strike forces operating in 24 federal districts, and, since its inception in March 2007, strike force prosecutors have charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The U.S. Department of Labor, Office of Inspector General is responsible for identifying and reducing labor racketeering and corruption in employee benefit plans, labor-management relations, and internal union affairs. Through its criminal investigations and collaboration with the Employee Benefits Security Administration and other federal law enforcement partners, the DOL-OIG works diligently to ensure prosecution of individuals involved in wrongdoing related to union affairs.

The U.S. Department of Labor’s Employee Benefits Security Administration is responsible for protecting the retirement, health and other workplace-related benefits of America’s workers and their families. As part of its overall enforcement program, EBSA investigates criminal acts committed against employer- and union-sponsored health and welfare plans in coordination with other law enforcement partners.

Financial Fraud: 29 Individuals Indicted For Drug Conspiracy And Money Laundering

29 Individuals Indicted For Drug Conspiracy And Money Laundering

29 Defendants Indicted For Drug Conspiracy, International Money Laundering, Money Laundering Conspiracy, And/Or Related Charges

MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Enrique Pacheco, age 30, of McAlester; Liliana Alvarez Soto, age 22, of Oklahoma City; Leroy Carl Fox, age 40, of McAlester; Matthew Scott Scraper, age 37, of McAlester; Alyssa Mae Syvongsa, age 19, of Tulsa; Shiana Nicole Johnson, age 24, of Ada; Feather Cheyenne Pacheco, age 23, of Tahlequah; Marc Anthony Cox, age 43, of Fort Gibson; Krystal Sue-Ann Mayen, age 30, of Oklahoma City; Kendall Brent Smith, age 50, of Okmulgee; Michael Sean Gunn, age 30, of Alma, Arkansas; Magdalena B. Mallard, age 34, of Fort Smith, Arkansas; Wesley Michael Rollins, age 31, of Tulsa; Jamie Denise McDonald, age 30, of Tulsa; Kami Rai Gill, age 32, of Del City; Joel David Kazmierczak, age 46, of Broken Arrow; Alexandra Tristian Giemausaddle, age 31, of Anadarko; Trina Kay Rose, age 48, of Ada; Cheyenne Grace Alexus Tiger, age 22, of Oklahoma City; and Tina Marshall Stilwell, age 30, of Fort Gibson, were each indicted for Drug Conspiracy, in violation of Title 21, United States Code, Sections 846, 841(a)(1), and 841(b)(1)(A), punishable by not less than 10 years imprisonment and up to a $10,000,000 fine.

Muskogee residents Jose Miguel Pacheco, age 30; Maricsa Pacheco (Brown), age 29; Lannie Jo Carter, age 18; Daniel Pacheco, age 25; Teodoro Renteria Pacheco, age 55; Randy Eugene Langton, age 61; Tabitha Ann Bryant (Ford), age 37; Ervin Hernandez, age 31; and Christian Jonathan Hernandez, age 30, were also indicted for Drug Conspiracy. All 29 defendants are charged with conspiracy to distribute controlled substances, with some of those defendants additionally charged with other crimes, including International Money Laundering, Money Laundering Conspiracy and Distribution or Possession with Intent to Distribute Methamphetamine, Heroin, and/or Cocaine.

The Indictment alleges that beginning on November 4, 2016 and continuing until on or about September 11, 2019, in the Eastern District of Oklahoma and elsewhere, the defendants willfully and knowingly combined, conspired, confederated, and agreed together, and with others known and unknown to the Grand Jury, to commit offenses against the United States.

The Indictment also alleges that on certain dates from July 16, 2019 through August 8, 2019, in the Eastern District of Oklahoma, the defendants Enrique Pacheco, Lannie Jo Carter, Shaina Nicole Johnson, Trina Kay Rose, Daniel Pacheco, Maricsa Pacheco and Tabitha Ann Bryant, transmitted, transferred and attempted to transmit and transfer funds, that is United States Currency, by wire transfer from a place in the United States to a place outside the United States, with the intent to promote the carrying on of a specified unlawful activity, that is, the felonious importation, receiving, concealment, buying, selling, or otherwise dealing in a controlled substance, in violation of Title 21, United States Code, Section 1956(a)(2)(A) and Title 18, United States Code, Section 2, punishable by not more than 20 years imprisonment and a fine of the greater of $500,000.00 or two-times the amount of the transaction.

The charges arose from a joint investigation led by the Drug Enforcement Administration, along with the Federal Bureau of Investigation, the Internal Revenue Service, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Oklahoma Bureau of Narcotics and Dangerous Drugs, the Oklahoma Department of Corrections, the Oklahoma Highway Patrol, the Muskogee County Sheriff’s Office, the Muskogee Police Department, and the Tulsa County Sheriff’s Office. Additionally, many prominent agencies which are members of the DEA High Intensity Drug Trafficking Area Task Force (“HIDTA”), contributed to this investigation, including: the Tulsa Police Department, the Broken Arrow Police Department, the Chickasaw Nation Lighthorse Police Department, the Miami Police Department, the Moore Police Department, the El Reno Police Department, the Yukon Police Department, the Duncan Police Department, the Norman Police Department, the Choctaw Police Department, the Edmond Police Department, the Oklahoma County Sheriff’s Office, the Canadian County Sheriff’s Office, the Rogers County District Attorney’s Office, and the Oklahoma County District Attorney’s Office. The investigation was coordinated by the Organized Crime Drug Enforcement Task Force (“OCDETF”) of the Eastern District of Oklahoma. OCDETF is an initiative led and coordinated by the Office of the United States Attorney.

United States Attorney Brian J. Kuester said, “Each year hundreds of people in Oklahoma die as a result of drug overdoses. Among the drugs contributing to these tragic deaths are methamphetamine and heroin. This operation, known as operation “Pop Can,” targeted an organization dealing those deadly drugs in the Eastern District and throughout Oklahoma.” Kuester added, “This investigation has been a shining example of how the public benefits when law enforcement agencies collaborate. The scope, duration, and success of this takedown would not have been possible without the participation of the agencies involved.”

“Operation Pop Can has thus far resulted in 25 arrests, and the seizure of over 30 pounds of meth and approximately 5 pounds of heroin. This investigation is yet another, where a contraband phone is smuggled into a DOC facility, and then utilized by an inmate to orchestrate criminal activity spanning across all three Oklahoma Federal Judicial Districts,” said DEA Assistant Special Agent in Charge John Scott. “The success in this case was a direct result of the collaboration between federal, state, and local agencies. It was a combined effort of everyone involved bringing their respective resources together to go after this criminal organization. There is no doubt that the takedown of this group will have a positive effect on our community.”

“The FBI works closely with our federal, state, and local law enforcement partners to combat organized crime and illegal drug trafficking in Oklahoma. Today’s arrests are a reminder to those who prey on our communities – your criminal activity will not be tolerated and you will be brought to justice,” said Melissa Godbold, Special Agent in Charge of the FBI’s Oklahoma City Division.

“The selling of illicit drugs in our communities negatively impacts nearly all aspects of our lives,” said Tamera Cantu, IRS Special Agent In Charge of the Dallas Field Office. “This investigation involves drug traffickers laundering their profits through wire transfers to Mexico. The role of IRS-Criminal Investigation in narcotics cases is to track down these profits and dismantle the drug trafficking organizations. Today’s indictments emphasize our commitment to this role as we work alongside our law enforcement partners to protect people’s security, health and wellbeing by bringing these criminals to justice.”

John Scully, Commissioner of the Oklahoma Department of Public Safety said, “Partnering with the Eastern District of the United States Attorney’s Office and our other law enforcement partners on this case, has resulted in multiple arrests and indictments. Those arrests will certainly keep Oklahomans safer and will have a positive impact on the drug epidemic in our communities. These Drug Trafficking Organizations commit violent crimes in order to continue their criminal enterprise and the desire by those addicted, to obtain these illegal drugs drives them to commit related crimes as well. Oklahomans should be proud of the coordinated response by the U.S. Attorney’s Office and these law enforcement agencies, to keep them safe.”

Oklahoma Bureau of Narcotics and Dangerous Drugs Control Interim Director Bob Cook said, “It takes law enforcement in a cooperative effort with our federal, state and local partners to dismantle these groups that threaten the peace and safety of our communities. OBN is committed in our mission to eradicate criminal drug organizations and fight to protect law abiding citizens.”

Muskogee County Sheriff Rob Frazier said, “Today’s search warrants and arrests represent the continued efforts of the Muskogee County Sheriff’s Office to combat illegal drugs and make Muskogee County a safer place for all. This office will continue our strong alliances with local, state, and federal law enforcement agencies to maximize our efforts against drug distributors in Muskogee County.”

“The Tulsa County Sheriff’s Office is proud to be part of this collaboration”, said Tulsa County Sheriff Vic Regalado. “These arrests are a perfect example of how our communities and the citizens of the Eastern District are safer, when local, state and federal authorities work together to take drug dealers off the streets.”

A grand jury Indictment does not constitute evidence of guilt. A grand jury Indictment is a method of bringing formal charges against the defendant. All defendants are presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt.

Financial Fraud: Edvin Ovasapyan, Hakob Kojoyan, Lorik Papyan, and Stephen Silverman Indected For their Roles In An Alleged Scheme To Defraud Purchasers Of Prescription Drugs

Edvin Ovasapyan, Hakob Kojoyan, Lorik Papyan, And Stephen Silverman Indected For Their Roles In An Alleged Scheme To Defraud Purchasers Of Prescription Drugs

Four Defendants Charged In $70 Million Wire Fraud Conspiracy Involving Black Market HIV Medications

SAN FRANCISCO – A federal grand jury returned a superseding indictment charging Edvin Ovasapyan, Hakob Kojoyan, Lorik Papyan, and Stephen Silverman for their respective roles in an alleged scheme to defraud purchasers of prescription drugs, announced United States Attorney David L. Anderson and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.

The multi-count superseding indictment was returned on September 5, 2019, and unsealed September 10, 2019. It alleges Ovasapyan, 41, of Los Angeles; Kojoyan, 27, of Los Angeles; Papyan, 36, of Los Angeles; and Silverman, 77, of Los Angeles, each played a role in a conspiracy to operate a large-scale clearing house to divert drugs, primarily those used in the treatment of the Human Immunodeficiency Virus (“HIV”). The superseding indictment describes how Ovasapyan, Kojoyan, and Papyan conspired to acquire large quantities of diverted prescription HIV medications on the black market, and then created false documentation claiming that the medications had been acquired from licensed suppliers. All four defendants allegedly then conspired to sell these diverted prescription drugs to retail pharmacies and wholesalers across the United States. The drugs were sold through a company called Mainspring Distribution, LLC (“Mainspring”), and the defendants provided their customers with false documentation regarding the origin of those drugs. The indictment alleges Silverman, an attorney, was aware of the illicit nature of the operation and assisted his co-defendants by, among other things, agreeing to launder the proceeds of the fraud. Mainspring’s customers were never informed that they were purchasing prescription drugs acquired on the black market. Over the course of the conspiracy, Mainspring earned more than $70,000,000 through sales to its customers. According to the indictment, the defendants also disguised the destination of these funds, routing a portion of Mainspring’s earnings through misleadingly named bank accounts designed to create the appearance of a lawful supply chain.

All four defendants have been charged with one count each of conspiracy to commit wire fraud, in violation of § 18 U.S.C. § 1349; conspiracy to commit money laundering, in violation of § 18 U.S.C. § 1956(h); and conspiracy to engage in the unlawful wholesale distribution of drugs, in violation of 18 U.S. C. § 371.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted of conspiracy to commit wire fraud, the defendants face a maximum sentence of 20 years in prison, a fine of $250,000 (or twice the gross gain or loss), and restitution. If convicted of conspiracy to commit money laundering, the defendants face a maximum sentence of 20 years in prison, a fine of $500,000 (or twice the value of the property involved in the transaction), and restitution. If convicted of conspiracy to engage in the unlawful wholesale distribution of drugs, the defendants face a maximum sentence of 5 years in prison, a fine of $250,000 (or twice the gross gain or loss), and restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant United States Attorneys Andrew F. Dawson and Briggs Matheson are prosecuting the case with the assistance of Patricia Mahoney. The prosecution is the result of an investigation led by the Federal Bureau of Investigation, with the assistance of the Food and Drug Administration.

Ta Fraud: Joseph Kenny Batts Convicted On Charges Of Conspiracy To Defraud The IRS

Joseph Kenny Batts Convicted On Charges Of Conspiracy To Defraud The Irs

Tax Preparer Convicted of Conspiracy to Defraud IRS and Preparing False Tax Returns

TRENTON, N.J. – A Maryland man working as a tax preparer in New Jersey was convicted today on charges of conspiracy to defraud the IRS by preparing false income tax returns for clients in order to boost business at tax preparation companies that he and others ran, U.S. Attorney Craig Carpenito announced.

Joseph Kenny Batts, 50, of Elkridge, Maryland, was convicted following a one-week trial before U.S. District Judge Michael A. Shipp in Trenton federal court on one count of conspiracy to defraud the United States and five counts of aiding and assisting in the preparation of false federal income tax returns.

According to documents in this case and the evidence at trial:

Since at least 2009 to April 2015, Batts was co-owner, along with conspirator Damien Askew, of Tax Pro’s, a tax return preparation and payroll business in Essex County, New Jersey, where Batts and others prepared tax returns. In order to boost their business, Batts, Askew, codefendants Tony Russell, Angelo K. Thompson and Rudolph Sanders conspired to falsify their clients’ income tax returns for the purpose of generating refunds in amounts that their clients were not entitled to receive. The fraudulent practices used to inflate tax refunds included fabricating and inflating credits for education and child care; deductions, such as charitable contributions and unreimbursed employee expenses; and Schedule C business losses.

As part of their scheme, Batts, Thompson, Askew, Russell and Sanders also used fraudulent IRS Forms 1098-T to support false education credits that they had claimed on their clients’ false federal income tax returns prepared at Tax Pro’s and Tax Solutions and Associates.

Batts also used the Paid Taxpayer Identification Number (PTIN) – the identification number that paid tax preparers are required to place on tax returns that they have prepared – of his conspirator tax preparers when preparing tax returns to conceal his identity as the actual tax return preparer, due to, among other things, his prior tax fraud conviction.

By inflating the tax refunds through fraudulent means, Batts and his conspirators caused a total tax loss to the United States in excess of $900,000.

Thompson, Askew, Sanders and Russell have previously pleaded guilty to their roles in the scheme and await sentencing.

The conspiracy charge carries a maximum potential penalty of five years in prison. The maximum sentence for aiding or assisting in the filing of false returns is three years in prison. Both are also punishable by a statutory maximum fine equal to the greatest of $250,000 or twice the gross amount of any pecuniary gain that any persons derived from the offense or twice the gross amount of any pecuniary loss sustained by any victims. Sentencing for Batts is scheduled for Jan. 16, 2020.

U.S. Attorney Carpenito credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur, with the investigation leading to today’s conviction.

The government is represented by Assistant U.S. Attorneys Cari Fais and Jihee G. Suh and of the U.S. Attorney’s Office in Newark.

Financial Fraud: Kelley Rogers Defrauded Countless Citizens Across The Country Who Sought To Participate In The Political Process

Kelley Rogers Defrauded Countless Citizens Across The Country Who Sought To Participate In The Political Process

Political Consultant Pleads Guilty to Fraud Scheme Involving Scam PACs

ALEXANDRIA, Va. – A Maryland political consultant pleaded guilty today to wire fraud as a result of his fraudulent scheme to solicit millions of dollars in political contributions through several scam-PACs that he founded and advertised as supporting candidates for office and other political causes.

“Rogers preyed upon his victims political beliefs with the intent of enriching his companies, his business partners, and himself,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “Individuals like Rogers, who engage in sophisticated fraud schemes will be held accountable for their actions. We have a long history of investigating and prosecuting fraud cases here in the Eastern District, and we remain committed to working closely with our law enforcement partners to ensure that those who choose to engage in fraud activity are held accountable and brought to justice.”

According to court documents, from August 2012 through 2018, Kelley Rogers, 55, of Annapolis, operated multiple PACs, including Conservative StrikeForce (CSF), Conservative Majority Fund, and Tea Party Majority Fund. In that role, Rogers engaged vendors to send e-mail solicitations and make telemarketing phone calls to prospective donors seeking political contributions to his PACs. Rogers approved the text and other content of all solicitations, and determined how CSF spent the contributions individual donors gave in response to the solicitations.

“Rogers defrauded countless citizens across the country who sought to participate in the political process, and instead used the money to benefit himself and to perpetuate his fraudulent scheme,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “Today’s guilty plea shows that the Department of Justice is committed to investigating and prosecuting those who undermine the integrity of our democratic institutions, including those who commit fraud to line their own pockets along the way.”

During the course of his scheme, Rogers solicited contributions from the general public for his PACs based on materially false and fraudulent pretenses, representations, and promises. For example, in or around 2013, Rogers, working with an email vendor, represented through CSF that money contributed by donors would be used to support the campaigns of a candidate for Governor and a candidate for Attorney General of Virginia through, among other things, get-out-the-vote efforts and the hiring of attorneys to ensure the integrity of the elections. In or around 2014, Rogers represented that donations to the PAC would be spent on assistance and support for military veterans. In truth and in fact, Rogers never intended to spend, and never actually spent, any of the money raised by Rogers’ PACs on get-out-the-vote efforts or lawyers to protect the integrity of the 2013 Virginia and Attorney General elections, or on assistance and support for military veterans. Instead, Rogers spent nearly all of the money raised from donors to benefit himself, his associates, and his PACs, including by pouring the majority of donor money into the solicitation of more donations.

“Rogers swindled millions of dollars from individuals attempting to participate in our democratic process,” said Assistant Director in Charge Timothy R. Slater of the FBI’s Washington Field Office. “Instead of using donations to provide assistance and support to military veterans, as he advertised, Rogers used the money to benefit himself and his associates. I commend the dedication and hard work of our FBI agents and analysts who investigated this egregious fraud against innocent U.S. citizens.”

In addition to the misrepresentations that Rogers made to donors, Rogers and others fraudulently billed his PACs for services that were not performed, thereby misappropriating donor money that had been contributed to the PACs by individuals across the country. Rogers and his associates also made false statements to the Federal Election Commission about how they were spending PAC money.

Finally, Rogers admitted that he and several others also participated in a scheme to use conduits (“straw donors”) to make contributions to a candidate running to represent a district in the U.S. House of Representatives that exceeded the limits placed on individual campaign contributions under federal law.

As part of his guilty plea, Rogers agreed to pay $491,299 in restitution to victims of his fraud scheme, as well as a forfeiture money judgment in the amount of $208,954.

Rogers pleaded guilty to wire fraud and is scheduled to be sentenced on Jan. 17, 2020. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Brian A. Benczkowski, Assistant Attorney General of the Justice Department’s Criminal Division, and Timothy R. Slater, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after U.S. District Judge Liam O’Grady accepted the plea. Assistant U.S. Attorney Kimberly Pedersen and Trial Attorneys John Taddei and Bill Gullotta of the Criminal Division’s Public Integrity Section are prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:19-cr-270.

Financial Fraud: Shiraaz Sookralli Pled Guilty For Leading A Fraud Scheme

Shiraaz Sookralli Pled Guilty For Leading A Fraud Scheme

Former Salesman of Porsche Dealership Pleads Guilty to Over $3 Million Fraud Scheme Involving Non-Existent Rare Porsche Models

On September 13, 2019, a former salesman for Copans Motorsports d/b/a Champion Porsche, Shiraaz Sookralli, 45, of Plantation, pled guilty for leading a fraud scheme in which he entered into bogus sales orders for the sale of exotic Porsche models to over 30 customers throughout the United States.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, Michael J. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), and Gregory Tony, Sheriff, Broward Sheriff’s Office (BSO), made the announcement.

Sookralli pled guilty to conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 1349 (Case No. 19cr60188). He is scheduled for sentencing on November 14, 2019, at 10:00 am before U.S. District Judge Rodney Smith. He faces a maximum sentence of twenty years in prison.

According to his signed factual proffer and other court documents, in 2017, Sookralli opened a shell corporation with a name bearing a close resemblance to both Champion Porsche and another corporate affiliate of the dealership. After forming the shell corporation, Sookralli opened a bank account in the shell corporation’s name. Sookralli then entered into bogus sales orders with customers for the unauthorized sales of non-existent future exotic Porsche models. The majority of the vehicles were rare, highly sought-after, Carrera 911 models. The defendant required deposits from his victims in the form of, wire transfers, bank checks, and cash that he later deposited into his shell company’s bank account. The buyers relied on Sookralli’s longtime employment at Champion Porsche, title as “Vice President of Marketing,” representations that he or she would receive a yet-to-be-built Porsche vehicle, and the seemingly legitimate bank account for wiring deposits to Sookralli. Champion Porsche did not authorize Sookralli to conduct these transactions.

To further his scheme, Sookralli typically provided the customers with signed false and fraudulent purchase orders, sham vehicle build sheets showing the specifications of the customers’ vehicle, as well as other false and fraudulent documents. Sookralli often communicated with customers using email and other wire communications. Some customers sent Sookralli payments using the United States mails and interstate bank wire transfers. During this same fraud scheme, Sookralli defrauded another victim with whom he had agreed to sell, “on consignment,” a certain Porsche vehicle for the victim. Once the defendant sold the car, he kept the money for himself.

Throughout the conspiracy, customers wired or otherwise transferred approximately $3,000,000 to Sookralli which he used for his personal benefit. As set forth in the court documents, the defendant used the money for extravagant expenditures including luxury vehicles, jewelry, nightclubs, and restaurants. Sookralli also funneled amounts in excess of $10,000 at a time from his shell company account to bank accounts he controlled.

Prior to executing the fraud scheme involving the bogus sales orders for the Porsche vehicles, in or around 2014 through 2016, Sookralli opened a separate “shell” company named Color Pro Motorsport. Through that company, Sookralli embezzled additional money from Champion Porsche.

After Champion Porsche uncovered Sookralli’s fraud scheme, it contacted his victims and began its cooperation with the criminal investigation. All of Sookralli’s victims with valid claims were made whole by Champion.

U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI, IRS-CI, and BSO in this matter. The case is being prosecuted by Assistant U.S. Attorney Roger Cruz.

Financial Fraud: GEORGE PHILLIP TIGER Plead Guilty To Bribery Concerning Programs Receiving Federal Funds

George Phillip Tiger Plead Guilty To Bribery Concerning Programs Receiving Federal Funds

Tiger Enters Guilty Plea To Federal Bribery Charge

MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Bristow, Oklahoma, resident GEORGE PHILLIP TIGER, age 69, entered a guilty plea today to Bribery Concerning Programs Receiving Federal Funds, in violation of Title 18, United States Code, Section 666(a)(1)(B), punishable by not more than 10 years imprisonment, up to a $250,000.00 fine, or both.

Tiger, the former Principal Chief of the Muscogee (Creek) Nation, was an agent of the Alabama-Quassarte Tribal Town (AQTT) from September 26, 2017 through December 4, 2018. His duties included serving as the Chairman of the Economic Development Authority (EDA) Board. The AQTT formed the EDA to identify, plan, initiate and develop tribal economic and industrial activities on behalf of the AQTT. The AQTT is an Indian tribal government and organization that received federal assistance in excess of $10,000.00 during any one-year period from January 1, 2012 through the date of the indictment. The AQTT is headquartered in Wetumka, Oklahoma.

The Indictment to which Tiger entered his guilty plea alleged that from on or about September 26, 2017 through on or about February 15, 2019, in the Eastern District of Oklahoma and elsewhere, Defendant George Phillip Tiger did corruptly solicit, demand, accept and agree to accept a thing of value from persons known to the Grand Jury, intending to be influenced and rewarded in connection with a transaction or series of transactions of the Alabama-Quassarte Tribal Town (AQTT) involving $5,000.00 or more.

“Mr. Tiger took advantage of the position of trust he had been given by the people of the Alabama-Quassarte Tribal Town. Instead of acting in the best interests of those he was appointed to serve, Tiger sought out and received unlawful profit for himself,” said United States Attorney Brian J. Kuester. “This office and the agencies who have been involved in this investigation are committed to identifying, investigating, and prosecuting those who corrupt the positions of trust and authority they hold.”

“While serving as an appointed official for the Alabama-Quassarte Tribal Town, Tiger repeatedly exploited his position by soliciting and accepting bribes related to Tribal business. This plea reinforces the message that law enforcement will not tolerate tribal officials who engage in corrupt activity for personal financial gain at the expense of the people they serve,” said Melissa Godbold, Special Agent in Charge of the FBI’s Oklahoma City Division.

“This case demonstrates the commitment of the Defense Criminal Investigative Service (DCIS), along with our law enforcement partners, to aggressively pursue those who damage the economic health of Tribal organizations and their business entities that support critical national security programs funded by the Department of Defense (DoD),” said Michael Mentavlos, Special Agent-in-Charge of the DCIS Southwest Field Office. “DCIS will continue to investigate corruption and fraud that affects the DoD through the exploitation of Small Business Programs designed to help disadvantaged groups.”

“The IRS is committed to devoting all resources necessary to assist our local, state, and federal law enforcement partners in evaluating financial aspects of criminal investigations,” said Tamera Cantu, IRS Special Agent in Charge of the Dallas Field Office. “Today’s guilty plea underscores that commitment, not only to our law enforcement partners, but to the taxpayers and citizens who rely on us to uphold and enforce the law.”

The Defense Criminal Investigative Service (DCIS), Office of Inspector General, the Federal Bureau of Investigation (FBI), Internal Revenue Service, Small Business Administration – Office of Inspector General, General Services Administration – Office of Inspector General, Army Criminal Investigations Division, and Naval Criminal Investigative Service participated in the investigation that lead to the Indictment.

The Honorable Kimberly E. West, Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report. The defendant was allowed to remain free on a personal recognizance bond pending a sentencing hearing.

Assistant United States Attorney Douglas Horn, Assistant United States Attorney Ryan Heatherman, and Special Assistant United States Attorney Courtney Jordan represented the United States at the plea hearing.

Health Care Fraud: Philip Esformes Sentenced For Role In Largest Health Care Fraud Scheme

Philip Esformes Sentenced For Role In Largest Health Care Fraud Scheme

South Florida Health Care Facility Owner Sentenced to 20 Years in Prison for Role in Largest Health Care Fraud Scheme Ever Charged by The Department of Justice

A federal district judge sentenced a south Florida health care facility owner to 20 years in prison today after being found guilty in the largest health care fraud scheme charged by the U.S. Justice Department. The case involves a decades-long scheme of kickbacks and money laundering in connection with fraudulent claims to Medicare and Medicaid for services deemed medically unnecessary.

Philip Esformes, 50, of Miami Beach, Florida, was sentenced by U.S. District Judge Robert N. Scola of the Southern District of Florida, who also sentenced Esformes to three years supervised release. A hearing to determine restitution and forfeiture has been scheduled for Nov. 21.

After an eight-week jury trial, Esformes was found guilty in April 2019 of one count of conspiracy to defraud the United States, two counts of receipt of kickbacks in connection with a federal health care program, four counts of payment of kickbacks in connection with a federal health care program, one count of conspiracy to commit money laundering, nine counts of money laundering, two counts of conspiracy to commit federal program bribery and one count of obstruction of justice

“For nearly two decades, Philip Esformes bankrolled his lavish lifestyle with taxpayer dollars, paying bribes with impunity and robbing Medicare and Medicaid by billing for services that people did not need or get,” said Assistant Attorney General Brian A. Benczkowski. “It is a credit to the tenacity of our prosecutors and law enforcement partners that the man behind one of the biggest health care frauds in history will be spending 20 years in prison.”

“Philip Esformes will now spend years in prison for orchestrating a kick-back and money laundering scheme that defrauded America’s health care system out of millions of dollars,” said U.S. Attorney Fajardo Orshan of the Southern District of Florida. “The U.S. Attorney’s Office for the Southern District of Florida remains committed to working with our partners at the Department’s Criminal Division, the FBI and HHS-OIG to root out health care fraud and protect taxpayer dollars for patient care.”

“Philip Esformes is a man driven by almost unbounded greed,” said Deputy Special Agent in Charge Denise M. Stemen of the FBI’s Miami Field Office. “The illicit road Esformes took to satisfy his greediness led to millions in fraudulent health care claims, the largest amount ever charged by the Department of Justice. Along that road, Esformes cycled patients through his facilities in poor condition where they received inadequate or unnecessary treatment, then improperly billed Medicare and Medicaid. Taking his despicable conduct further, he bribed doctors and regulators to advance his criminal conduct and even bribed a college official in exchange for gaining admission for his son to that university. The FBI and its partners are constantly investigating health care fraudsters, big and small, who steal money from taxpayers at the expense of patients in need of quality medical care.”

“Healthcare fraud is a hidden tax costing billions of dollars every year and, as in this case, too often threatens the very health of vulnerable patients,” said Special Agent in Charge Omar Pérez Aybar for the Office of Inspector General of the U.S. Department of Health and Human Services (HHS-OIG). “Esformes – who provided shoddy medical care – stands convicted of fraud and is now paying the price. We continue working tirelessly with our law enforcement partners to protect people in government health programs.”

According to the evidence presented at trial, between January 1998 and July 2016, Esformes led an extensive health care fraud conspiracy involving a network of assisted living facilities and skilled nursing facilities he owned. Esformes bribed physicians to admit patients into his facilities. Then, he cycled the patients through his facilities where they often failed to receive appropriate medical services or received medically unnecessary services billed to Medicare and Medicaid. Several witnesses testified to the poor conditions in the facilities and the inadequate care patients receive.

Esformes concealed the poor conditions and scheme from authorities by bribing an employee of a Florida state regulator for advance notice of surprise inspections scheduled to take place at his facilities. The evidence further showed Esformes used his criminal proceeds to make a series of extravagant purchases, including luxury automobiles and a $360,000 watch. Esformes also used criminal proceeds to bribe the basketball coach at the University of Pennsylvania in exchange for his assistance in gaining admission for his son into the university.

Altogether, the evidence established that Esformes personally benefited from the fraud and received in excess of $37 million.

Esformes’s coconspirator, physician’s assistant Arnaldo Carmouze, previously pleaded guilty to conspiracy to commit health care fraud and was sentenced on April 10, 2019, to 80 months in prison and was ordered to pay $12,590,761 in restitution. Co-conspirator Odette Barcha also pleaded guilty to one count of conspiracy to violate the anti-kickback statute. Barcha was sentenced on April 3 to 15 months in prison and three years of supervised release and was ordered to pay $704,516.00 in restitution.

This case was investigated by the FBI and HHS-OIG and 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 for the Southern District of Florida, with assistance from Florida Attorney General’s Office Medicaid Fraud Control Unit. The case was prosecuted by Fraud Section Acting Health Care Fraud Chief Allan Medina and Assistant Chief Drew Bradylyons, and Trial Attorneys Elizabeth Young, James Hayes and Jeremy Sanders, as well as Assistant U.S. Attorneys John Shipley and Dan Bernstein of the Southern District of Florida. Assistant U.S. Attorneys Alison Lehr, Nalina Sombuntham and Daren Grove of the Southern District of Florida handled the forfeiture aspects of the case.

The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.