United States Attorney Matthew D. Krueger announced today that a federal grand jury in the Eastern District of Wisconsin indicted Lisa Hofschulz, 58, who is an Advanced Practice Nurse Practitioner, and her ex-husband Robert Hofschulz, 70, for conspiring to distribute oxycodone and methadone outside of a professional medical practice and not for a legitimate medical purpose through their cash-only pain clinic, Clinical Pain Consultants, s.c. (“CPC”) in violation of 21 U.S.C. §§ 841(a)(1), 841(b)(1)(C) and 846.  In a separate case, the grand jury also charged Kameka Simpson, 43, Eric Jasper, 33, and Brittany Washington, 27, with multiple counts of obtaining controlled substances (oxycodone) by fraud, in violation of Title 21, United States Code, Section 843(a)(3), and aggravated identity theft, in violation of Title 18, United States Code, Section 1028A(a)(1).  Both of these indictments were part of a larger National Healthcare Fraud and Opioid Takedown coordinated by the Department of Justice and the Department of Health and Human Services.    

The indictment against Lisa and Robert Hofschulz charges fourteen counts, alleging that CPC collected over $800,000 in cash from patients in 2015 and over $1,000,000 in cash in 2016 because its prescribers, primarily Lisa Hofschulz, prescribed excessive dosages of controlled substances outside of a professional medical practice and not for a legitimate medical purpose.  CPC is located in Wauwatosa, Wisconsin.    

As part of the alleged conspiracy, Lisa and Robert Hofschulz hired newly graduated nurse practitioners with minimal pain management experience, provided them inadequate training, provided no written policies, and pressured them to prescribe dosages similar to Lisa Hofschulz to patients.  Lisa and Robert Hofschulz also failed to provide the new nurse practitioners a (legally required) collaborative physician for much of the time period covered by the conspiracy.  The indictment also alleges Lisa and Robert Hofschulz directed an individual not authorized to issue prescriptions (Registered Nurse) to distribute controlled substance prescriptions to customers when authorized prescribers refused.  Additionally, Lisa Hofschulz mailed controlled substance prescriptions or allowed them to be picked up from the front desk of CPC without being seen by Lisa Hofschulz or any other prescribers.  The indictment alleges that Lisa and Robert Hofschulz “caused an enormous amount of opioids to be distribute throughout Wisconsin, fueling opioid addictions in numerous individuals, while collecting huge sums of cash for themselves.”  Finally, the indictment charges that 13 specific prescriptions were issued outside a professional medical practice and not for a legitimate medical purpose. 

The indictment against Kameka Simpson, Eric Jasper, and Brittany Washington, each of Milwaukee, Wisconsin, charges eight counts stemming from this group’s passing of fraudulent oxycodone prescriptions purportedly written by an authorized healthcare provider.  Some of the defendants were employed by the healthcare provider, who practiced at a pain clinic in West Allis, Wisconsin. 

Each count of distribution of controlled substances against Lisa and Robert Hofschulz carries a maximum penalty of 20 years in prison and a $1,000,000 fine.  If Kameka Simpson, Eric Jasper, and Brittany Washington are convicted of aggravated identity theft, these defendants each face a mandatory minimum prison sentence of two years, a fine of up to $250,000, as much as one year of supervised release, and a special assessment of $100.  Each prescription fraud count carries a maximum penalty of four years’ imprisonment, a fine of up to $250,000, as much as one year of supervised release, and a special assessment of $100.

Both of these indictments were part of a larger National Healthcare Fraud and Opioid Takedown coordinated by the Department of Justice and the Department of Health and Human Services.  This year’s takedown was the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings.  Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.  Thirty state Medicaid Fraud Control Units also participated in today’s arrests.  In addition, HHS announced today that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse. 

United States Attorney Krueger stated, “Addiction to opioids has created has a crisis in Wisconsin, with the number of overdose deaths continuing to increase.  We must act with urgency to reduce overdose deaths, using all available tools, including prevention and treatment programs as well as law enforcement efforts.  For many, the road to addiction begins with prescription drugs.  That’s why we are committed to prosecuting individuals who distribute prescription drugs outside of a professional medical practice.  We commend the excellent joint investigative efforts that led to these indictments.”  

“Prescription painkiller abuse is a root cause of the state’s drug epidemic and can lead to heroin use,” said Wisconsin Attorney General Brad Schimel. “Enforcement, along with prevention and treatment, is crucial to stopping opioid abuse in our state. The indictments announced today demonstrate the value of collaboration between a multi-jurisdictional group of local, state, and federal investigators and prosecutors, and that all partners are united in their desire to end the drug epidemic.”

Paul E. Maxwell, Jr., Assistant Special Agent in Charge of the DEA’s Milwaukee Office stated, “The DEA fully supports the good and necessary work of medical providers in the State of Wisconsin and throughout the nation.  However, the DEA takes seriously the unethical and criminal diversion or misuse of controlled prescription pain killers, which has driven the national opioid addiction problem this nation currently faces.  The DEA continues to work with the medical community to insure the safe prescription of medication to patients.” 

“Health care fraud is a threat to this country, both in terms of the well-being of patients and the integrity of government health care programs,” said Lamont Pugh, Special Agent in Charge for the U.S. Department of Health & Human Services Office of Inspector General. “Our agents will continue to work with our law enforcement partners to ensure these criminals are held accountable for their actions.”

The charges contained in the indictments announced today are merely allegations.  The defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The Lisa and Robert Hofschulz case was investigated by the Drug Enforcement Administration (“DEA”), the Medicaid Fraud Control and Elder Abuse Unit of the Wisconsin Department of Justice, and Internal Revenue Service—Criminal Investigation.  It is being prosecuted by United States Attorney Matthew D. Krueger and Assistant United States Attorneys Zachary Corey and Michael Carter.    

The Kameka Simpson, Eric Jasper, and Brittany Washington case was investigated by the DEA, the Department of Health and Human Services, Office of the Inspector General, and the Medicaid Fraud Control and Elder Abuse Unit of the Wisconsin Department of Justice.  It is being prosecuted by Assistant United States Attorney Jonathan Koenig. 

Information and resources concerning the opioid crisis and the DEA’s “360 Strategy” for addressing the crisis may be found at the DEA’s website, www.dea.gov

Information about “Dose of Reality,” the State of Wisconsin’s effort to prevent prescription painkiller abuse in Wisconsin is available here: https://doseofrealitywi.gov/

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For Additional Information Contact:

Public Information Officer Dean Puschnig 414-297-1700

HELENA – The United States Court of Appeals for the Ninth Circuit yesterday issued an order affirming a ruling from U.S. District Court Judge Sam E. Haddon that the United States Forest Service possesses an easement by prescription on behalf of itself and the public for use of Forest Service Trail No. 328, commonly known as the Indian Creek Trail, in the Madison Ranger District of the Beaverhead-Deerlodge National Forest. This popular trail provides public access into the Lee Metcalf Wilderness. 

The case arose in 2014, when Plaintiff Wonder Ranch, LLC, sued the United States under the Quiet Title Act following the United States’ filing of a “statement of interest” in the trail. Wonder Ranch claimed that the trail, which traverses its 80-acre parcel east of Cameron, Montana, was used by the public by permission of the landowner, and that no public right of access existed.  The United States counter-sued, claiming that a prescriptive easement across Wonder Ranch for the public and the Forest Service to use the trail had been clearly established through many decades of stock, recreational, and commercial use. 

Following an eight-day trial in 2016, the District Court found that based on the historical evidence and testimony of multiple witnesses, a public easement had been established and maintained through generations of use of the Trail.  The Court of Appeals affirmed that ruling, holding that the District Court’s determination that a public right of way existed was not in error and that the easement is held by the Forest Service for the benefit of the public.

“We are very pleased with the Court’s decision,” said Leanne Martin, Forest Service Northern Regional Forester.  “Maintaining public access to USDA Forest Service lands is an important part of our mission.  At the same time, we ask everyone who accesses Forest Service land through private property, whether an easement exists or access is granted by permission, to be respectful of the landowner’s property rights.”

This case was argued before the Court of Appeals by Assistant U.S. Attorney Mark Smith.

LEXINGTON, Ky.– Preferred Care Inc. (Preferred Care); its Stanton, Kentucky skilled nursing facility, Stanton Nursing and Rehabilitation Center (Stanton Nursing); owner, Thomas D. Scott; Preferred Care Partners Management Group (PCPMG); and certain other affiliated entities have agreed to pay $540,000 to the United States and the Commonwealth of Kentucky, to resolve allegations that Stanton Nursing billed Medicare and the Kentucky Medicaid program for fraudulently inflated skilled nursing services and providing materially substandard care, in violation of the False Claims Act. 

Preferred Care and its related entities own or operate approximately one-hundred skilled nursing facilities throughout the United States, including Stanton Nursing and twenty other facilities in Kentucky.  Preferred Care’s facilities, including Stanton Nursing, are managed by PCPMG and related entities.  Preferred Care, Stanton Nursing, and PCPMG, along with related entities in Kentucky and New Mexico, declared Chapter 11 bankruptcy, in November 2017, in the Bankruptcy Court for the Northern District of Texas.  The respective bankruptcy courts approved the settlement on June 26, 2018. 

The United States alleged that Preferred Care, PCPMG, Stanton Nursing, and certain related entities violated the False Claims Act by submitting, or causing the submission of, false claims to Medicare and Medicaid.  Medicare reimburses skilled nursing facilities based on a patient’s resource utilization group, or RUG level, which is determined based on the anticipated amount of skilled therapy and skilled nursing services required by the patient.  The United States alleged that, from July 1, 2012 through October 31, 2017, Preferred Care, PCPMG, and Stanton Nursing improperly coded patients for higher amounts of skilled nursing services than they needed or received, resulting in higher payments from Medicare.

The Settlement also resolves the government’s allegations that, from July 1, 2012 through April 30, 2015, certain patients at Stanton Nursing received materially substandard or worthless services. 

“The United States is committed to protecting our senior community by ensuring that taxpayer dollars are not misspent and nursing facility residents are receiving appropriate, high quality care,” said Robert M. Duncan, Jr., U.S. Attorney for the Eastern District of Kentucky.  “This settlement, reached in cooperation with our partners at the Kentucky Attorney General’s Office of Medicaid Fraud and Abuse, highlights our efforts to combat healthcare fraud, waste, and abuse, and hold accountable those who fraudulently deprive government health care programs of vital resources.” 

“Protecting the health and safety of Medicare and Medicaid patients is our top priority,” said Derrick L. Jackson, the Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. “Settlements like this one hold skilled nursing facilities responsible for providing the best possible care to our beneficiaries.”

“My office works every day to protect Kentucky’s most vulnerable citizens and to seek justice for our seniors who have been physically abused,” Kentucky Attorney General Andy Beshear said.  “Our work on this case is an example of our ongoing commitment and the commitment of our federal partners to stop those who harm our seniors by not giving them the very best care and service.”

The allegations were originally brought in lawsuits filed by defendants’ former employees Susan Helton and Joseph Donchatz, under the qui tam provisions of the False Claims Act.  Under the Act, private parties may bring suit on behalf of the government and may receive a portion of any federal recovery. 

The claims resolved by the settlement are allegations only and there has been no determination of liability.

This matter was handled as part of the Elder Justice Initiative of the Department of Justice (https://www.justice.gov/elderjustice/).  In June 2016, the United States Attorney’s Offices for the Eastern District and Western District of Kentucky formed an Elder Justice Task Force (https://www.justice.gov/usao-edky/elder-justice-task-force).  The Task Force was assembled to foster a collaborative working relationship among federal, state, and local agencies charged with protecting the elderly.  The goals include ensuring the integrity of all government expenditures by eliminating fraud, waste, and abuse in health programs, and protecting some of the state’s most vulnerable citizens from harm, whether it occurs in nursing homes or other institutions, or involves financial fraud schemes.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services at 900-HHS-TIPS (800-447-8477).

This settlement is the result of an investigation by the U.S. Attorney’s Office for the Eastern District of Kentucky, U.S. Department of Justice Civil Division’s Commercial Litigation Branch, Office of Inspector General of the U.S. Department of Health and Human Services, and Kentucky Attorney General’s Office of Medicaid Fraud and Abuse.  The cases are captioned U.S. ex rel. Doe v. Preferred Care Inc., et al. (E.D. Ky.) and U.S. ex rel. Donchatz v. Stanton Health Facilities, L.P., et al. (E.D. Ky.). 

On June 29, 2018, Michael B. Stephens, Jr., 43, of Red Bud, Illinois, was sentenced to 25

years in federal prison for producing child pornography, United States Attorney for the Southern

District of Illinois, Donald S. Boyce, announced today. Stephens previously pled guilty on March

22 to a two-count indictment charging him with sexually exploiting a minor on two occasions in

November 2016.

The charges arose from an investigation conducted by the Federal Bureau of Investigation

and the Waterloo, Illinois, Police Department. Evidence at the plea and sentencing hearings

established that on numerous occasions in 2016, Stephens videotaped himself engaging in sexual

intercourse with a minor female at his residence in Waterloo, Illinois. The evidence also

established that Stephens was both physically and verbally abusive to the minor female during this

time.

In addition to the 25 year sentence, United States District Judge Michael J. Reagan imposed

a ten-year term of supervised release and ordered Stephens to pay a $500 fine. As a result of his

conviction, Stephens will also have to register as a sex offender after he is released from prison.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched

in 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation

and abuse. Led by the United States Attorneys’ Offices and the Criminal Division's Child

Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local

resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to

identify and rescue victims. For more information about Project Safe Childhood, please visit

www.usdoj.gov/psc. For more information about internet safety education, please visit

www.usdoj.gov/psc and click on the tab “resources.”

The case was investigated by the Federal Bureau of Investigation’s Springfield Child

Exploitation Task Force and the Waterloo, Illinois, Police Department. The case was prosecuted

by Assistant United States Attorney Daniel T. Kapsak with assistance fromMonroe County State’s

Attorney Christopher Hitzemann.

GREAT FALLS - The United States Attorney’s Office announced that former Fort Peck Tribal Officer Mikkel Derrik Shields was sentenced to one year in prison, one year of supervised release, and ordered to pay $1,149.06 in restitution.  The sentencing occurred on June 28, 2018, before U.S. District Judge Brian Morris, in Great Falls, Montana. 

In an offer of proof filed by Assistant U.S. Attorney Ryan G. Weldon, the government explained that Officer Shields, while on duty, broke into the evidence room at the Fort Peck Tribal Law and Justice Building.  While there, Officer Shields stole drug evidence, including methamphetamine, prescription drugs, marijuana, and money.  When interviewed, Officer Shields admitted he indeed took the drugs because he “just needed them” and he was a “weak person.”  As a result of Shields’ actions, the Fort Peck Tribe was forced to dismiss 27 criminal cases, including other drug cases, assaults, and property crimes. 

This case was investigated by the Federal Bureau of Investigation.  Because there is no parole in the federal system, the truth in sentencing guidelines mandate that Shields will likely serve all of the time imposed by the court.  In the federal system, Shie.ds does have the opportunity to shorten the term of custody by earning credit for good behavior.  However, this reduction will not exceed 15% of the overall sentence.     

HARRISBURG – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that U.S. District Court Judge Yvette Kane sentenced Anthony Sistrunk, a/k/a “Kanye,” age 30, a member of a gang that has operated for a decade or more in the City of York, to 30 years’ imprisonment for racketeering and drug distribution conspiracies.

According to United States Attorney David J. Freed, Sistrunk was identified as a member of the “Southside” street gang and the “Bloods.” The United States presented evidence at the sentencing hearing on Sistrunk’s involvement in the violent gang activity that was the subject of the two-month long trial. Judge Kane was reminded that in November 2012, Sistrunk and his fellow gang members were involved in the assault and killing of a patron at a local restaurant.   

In addition, Sistrunk was involved in the July 8, 2007, murder of Michael Concepcion in the City of York.  While evidence of this murder was not presented at Sistrunk’s federal racketeering trial, the United States introduced evidence of this event at his sentencing.   The evidence presented showed that on that Sunday morning Sistrunk and a fellow gang member drove through back alleys of a rival’s neighborhood.  Sistrunk’s companion shot an assault rifle at rivals, killing one and injuring a four-year old girl who was sitting in her home.  Juan Henriquez, who was the shooter, is currently serving a 20-40 year sentence in state prison for third degree murder. 

Judge Kane noted that the violence associated with the gang was some of the worst the city had ever scene. Even with the prospect of a life sentence pending before him in this federal case, Sistrunk continued with his associations and activities. While facing sentencing, prison guards searched Sistrunk’s cell and found him in possession of a cellular telephone that had been smuggled into the prison.  They also found marijuana under his bed.  Judge Kane noted that while Sistrunk fully deserved a life sentence, she was concerned about sentencing disparity with other defendants.  The judge found that 30 years in prison was enough time in prison to reform Sistrunk and protect the public.

In November 2015, a jury convicted Sistrunk of racketeering conspiracy, drug trafficking conspiracy, and drug trafficking after a seven-week trial.  It included over 100 witnesses called by the government, including York City Police officers and detectives, federal agents from the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and the FBI and gang members who had previously pleaded guilty and featured the presentation of over 500 exhibits.  Among the exhibits were videos of violent incidents involving the Southside Gang, drugs, cash and property seized by police and ATF agents as part of the investigation. 

The jury also convicted the other 11 men who went to trial with Atkinson.

Overall, the jury found seven of the 12 men on trial guilty of racketeering conspiracy and conspiracy to distribute drugs, mainly cocaine base (crack) and cocaine, but including heroin in some instances.  Two others were found not guilty of the racketeering charge but were found guilty of the drug distribution conspiracy count of the indictment.  Three of the defendants were found not guilty of either of the conspiracy counts.  The jury found all 12 defendants guilty of possession of illegal drugs with the intent to distribute.  Two defendants were also charged and found guilty of, possession of firearms in furtherance of drug trafficking.

The principal defendants, specifically the most violent and those in leading roles, were found guilty of the racketeering conspiracy charges. The individual defendants and the charges on which they were sentenced:

Rolando Cruz, Jr., “Mico,” age 32; racketeering conspiracy, drug trafficking conspiracy, drug possession with intent to deliver and possession of firearms in furtherance of drug trafficking (2 counts) was sentenced on October 3, 2017, to life in prison.

Marc Hernandez, a/k/a “Marky D,” age 32; racketeering conspiracy, drug trafficking conspiracy, drug possession with intent to deliver and possession of firearms in furtherance of drug trafficking (2 counts) was sentenced on October 25, 2017, to life in prison.

Douglas Kelly, a/k/a “Killer,” age 39, racketeering conspiracy, drug trafficking conspiracy, and drug possession with intent to deliver was sentenced on December 12, 2017, to life in prison.

Maurice Atkinson, a/k/a “Mo,” age 30; racketeering conspiracy, drug trafficking conspiracy, and drug possession with intent to deliver was sentenced on February 12, 2018, to life in prison.

Roscoe Villega, a/k/a “P Shawn,” age 44; racketeering conspiracy, drug trafficking conspiracy, and drug possession with intent to deliver was sentenced to 25 years in prison.

Eugene Rice, a/k/a “B Mor,” age 29; drug trafficking conspiracy, and drug possession with intent to deliver was sentenced to 200 months in jail on December 7, 2017,

Angel Schueg, a/k/a “Pocko,” age 28; drug trafficking conspiracy, and drug possession with intent to deliver was sentenced to 165 months in jail on December 21, 2017,  

Richard Nolden, age 28; racketeering conspiracy was sentenced to 25 years in prison on December 21, 2017,

Jalik Frederick, a/k/a “Murder Cat,” age 22; drug possession with intent to deliver was sentenced to 33 months in prison on June 5, 2017,

Brandon Orr, a/k/a “B Or,” age 23; drug possession with intent to deliver was sentenced to 34 months in prison on November 10, 2016,

Jabree Williams, a/k/a “Minute,” age 24; drug possession with intent to deliver was sentenced to 60 months in prison on May 15, 2017. 

The individual defendants and the charges on which they are awaiting sentencing:

Tyree Eatmon, a/k/a “Ree,” age 29; racketeering conspiracy, drug trafficking conspiracy, and drug possession with intent to deliver is awaiting sentencing,

Anthony Sistrunk, a/k/a “Kanye,” age 29; racketeering conspiracy, drug trafficking conspiracy, and drug possession with intent to deliver is awaiting sentencing,

Southside gang members who pleaded guilty to racketeering conspiracy prior to the trial are and who are awaiting sentencing are:

James Abney, a/k/a “Doocs,” age 31.

Malik Sturdivant, a/k/a “Base,” age 25.

Jahkeem Abney, a/k/a “Foo,” age 27.

Ronald Payton, a/k/a “Ron Ron,” age 25.

Cordaress Rogers, a/k/a “Tank,” age 31.

Marquis Williams, a/k/a “Quis,” age 29.

Jerrod Brown, a/k/a “Boogie,” age 28.

Quintez Hall, a/k/a “Q,” age 25.

The case included the participation and assistance of the Pennsylvania State Police, West York Borough Police Department, Spring Garden Township Police Department, the York County Drug Task Force, the Federal Bureau of Investigation, and the U.S. Marshals Service. Assistant U.S. Attorneys Michael A. Consiglio, William Houser, and Joseph Terz prosecuted the case. 

This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, local, and tribal law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.

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            WASHINGTON – Justin Wray, 30, of Washington, D.C., was sentenced today to 51 months in prison on a charge of assault with a dangerous weapon for stabbing the father of his then-girlfriend in the chest, U.S. Attorney Jessie K. Liu announced.

            Under what is known as the Alford doctrine, Wray pled guilty in March 2018 in the Superior Court of the District of Columbia. Under an Alford plea, the defendant does not admit the allegations but agrees that the government has enough evidence to secure a conviction.  Wray was sentenced by the Honorable Danya A. Dayson. Following his prison term, he will be placed on three years of supervised release.

            According to the government’s evidence, Wray and his girlfriend argued in the early morning of May 4, 2016 at the girlfriend’s apartment in the unit block of Galveston Street SW. Wray then left the residence, but returned a short while later, at approximately 6:40 a.m., to obtain his possessions. The girlfriend’s father let Wray back into the apartment and led Wray to his girlfriend’s bedroom. Soon thereafter, the girlfriend’s father attempted to lead Wray out of the apartment. Wray became extremely agitated. From behind, he reached over the top of his girlfriend’s father’s back and stabbed the father in the chest with a knife. He fled the scene.

            The girlfriend’s father suffered a punctured lung. Wray was arrested on Sept. 10, 2016 and has been in custody ever since. In his plea, Wray said that he had no memory of events but acknowledged that the government had sufficient evidence to find him guilty beyond a reasonable doubt at trial.

            In announcing the sentence, U.S. Attorney Liu commended the work of those who investigated the case from the Metropolitan Police Department. She also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists T.J. McPhail and Victim/Witness Advocate Elsa Maltese.

            Finally, she commended the work of Assistant U.S. Attorney Louis Manzo, who investigated, indicted and prosecuted the case.

ALBANY: Charles E. Peeler, United States Attorney for the Middle District of Georgia, announces that Lakevis Woodard, age 31, of Fitzgerald, Georgia pled guilty on June 28, 2018, to Possession with Intent to Distribute Cocaine Base before U.S. District Court Judge Leslie J. Abrams in Albany, Georgia. The plea subjects Mr. Woodard to a term of imprisonment of up to twenty (20) years, a fine of up to $1 million, or both.

Mr. Woodard admitted the following facts in his guilty plea:

On October 19, 2017, local law enforcement was conducting an authorized roadblock in Ben Hill County, Georgia. Mr. Woodard approached the roadblock and drug agents, who had been receiving information that he was selling drugs in the area, were present. They were also aware that he was on active probation as a result of a Georgia First Offender sentence. A trained drug detection dog alerted on the vehicle for the presence of narcotics. Agents conducted a search of Mr. Woodard’s vehicle and located a Ruger Model 1911 .45 caliber semi-automatic pistol under the driver's seat.

During a subsequent search of Mr. Woodard’s residence, officers located a gallon sized ziplock bag of marijuana and a box containing powder cocaine, crack cocaine, and a set of digital scales. Lab test results from the Georgia Bureau of Investigation determined the presence of 22.625 grams of cocaine base, commonly known as crack” cocaine.

“Our office will continue to work with our state and local law enforcement partners to identify, arrest and prosecute drug dealers throughout the Middle District of Georgia.  I want to thank the Ben Hill County Sherriff’s Office and the Georgia Department of Community Supervision for their excellent work in this matter” said United States Attorney Charles Peeler. 

This case was investigated by the Ben Hill County Sheriff’s Office and the Georgia Department of Community Supervision. Assistant United States Attorney Leah E. McEwen is prosecuting the case for the United States.

Questions concerning this case should be directed to Pamela Lightsey, Public Information Officer, United States Attorney’s Office, at (478) 621-2603.

LONDON, Ky. – A Middlesboro, Ky. resident was indicted yesterday on federal charges of attempted production of child pornography and receiving, distributing, and possessing child pornography.

A federal grand jury in London returned the four-count indictment against 30-year-old Jordan Ryan Turner, a teacher and assistant basketball coach at Bell County High School.  Turner was originally arrested on a state charge of using electronic means to induce a minor to engage in sexual activities.  A federal criminal complaint was filed against Turner and those charges were presented to the grand jury, which returned the indictment. 

Robert M. Duncan, Jr., U.S. Attorney for the Eastern District of Kentucky; Amy Hess, Special Agent in Charge, Federal Bureau of Investigation; and Richard Sanders, Commissioner of Kentucky State Police, jointly announced the charges.

The KSP and FBI have jointly conducted the investigation. Assistant U.S. Attorney Greg Rosenberg represents the United States in the case.

Trial is currently scheduled for September 4, 2018.  If convicted on all counts, Turner faces a mandatory minimum of 15 years and maximum of 90 years in prison.  However, any sentence following a conviction would come after the Court considers the U.S. Sentencing Guidelines and relevant federal statutes.

            Any indictment is an accusation only. A defendant is presumed innocent and is entitled to a fair trial at which government must prove guilt beyond a reasonable doubt.

ALBANY: Charles E. Peeler, United States Attorney for the Middle District of Georgia, announces that on June 28, 2018, Senior United States District Court Judge W. Louis Sands sentenced Terrance Williams, a/k/a Tank, age 42, of Cairo, Georgia, to 57 months’ imprisonment for Distribution of Cocaine.

In the fall of 2016, agents utilized a confidential informant who was able to make controlled purchases of crack cocaine from Mr. Williams. Three buys were made. On each occasion, the CI was directed by Mr. Williams to travel to Mr. Williams’ residence in Cairo, Georgia, for purposes of acquiring the crack cocaine from him. The suspected crack cocaine was submitted for laboratory analysis where it tested positive as cocaine base with weights of 3.95, 8.8 and 20.89 grams.

This case was investigated by the Bainbridge Department of Public Safety and the Cairo Police Department. Assistant United States Attorney Leah E. McEwen prosecuted the case for the United States.

BOSTON – A Pennsylvania woman was sentenced yesterday in federal court in Boston for smuggling drugs into the United States on a commercial flight from the Dominican Republic.

Natalia Alexander Duran, 23, was sentenced by U.S. District Court Judge Rya W. Zobel to one year and one day in prison and three years of supervised release. In March 2018, Duran pleaded guilty to two counts of importation of a controlled substance - heroin and cocaine, and two counts of possession of a controlled substance with the intent to distribute - heroin and cocaine. The U.S. Attorney’s Office sought a sentence of 30 months in prison, followed by three years of supervised release.

“Trafficking drugs is risky enough, but swallowing dozens of pellets full of heroin and cocaine is just reckless,” said United States Attorney Andrew E. Lelling. “Moreover, it didn’t work, because of the diligence and professionalism of the U.S. Customs and Border Protection officers who encountered Ms. Duran when she arrived at Logan. These officers stopped nearly a kilogram of cocaine and over 100 grams of heroin from hitting our streets.”

“This arrest exemplifies the drastic and dangerous means criminals will take to smuggle illicit drugs into our country,” said William A. Ferrara, Director of Field Operations, U.S. Customs and Border Protection. “The experience, training and constant vigilance of the CBP Officers here in Boston prevented these dangerous drugs from reaching our communities and I commend their great work.”

On May 30, 2017, Duran arrived at Logan International Airport on a flight from the Dominican Republic. Upon arrival, Duran, a U.S. citizen, was referred for a secondary baggage examination. Duran stated that she needed to use the restroom and was told that she would have to be “pat frisked” before she could do so. Duran was then pat frisked by a female U.S. Customs and Border Protection officer, who felt an abnormality in Duran’s groin area. Duran subsequently admitted that she had drugs concealed in her clothing. 41 pellets of suspected cocaine were removed from a bodysuit worn by Duran. Concerned that Duran may have ingested additional pellets of drugs, she was transported to a local hospital and given an x-ray, which revealed numerous pellets inside her abdominal area. While at the hospital, Duran excreted an additional 68 pellets. A combined total of 109 pellets were recovered, tested and determined to be approximately 971 grams of cocaine and approximately 109 grams of heroin.

During a subsequent interview, Duran admitted that in April 2017 she smuggled 75 pellets of drugs from the Dominican Republic into the United States in the same way. On the first trip, Duran flew into New York City and spent two days in a hotel passing the pellets through her digestive tract. In total, Duran smuggled approximately 1,720 grams of cocaine and 109.3 grams of heroin into the United States. 

 U.S. Attorney Lelling and CBP Director of Field Operations Ferrara made the announcement. Assistant U.S. Attorney David G. Tobin of Lelling’s Major Crimes Unit prosecuted the case.

PHILADELPHIA – At a formal investiture ceremony held today at the James A. Byrne United States Courthouse, U.S. Attorney William M. McSwain took the Oath of Office as the 39th United States Attorney for the Eastern District of Pennsylvania. Mr. McSwain was nominated by President Donald Trump on December 20, 2017, and unanimously confirmed by the United States Senate on March 20, 2018; he assumed office on April 6, 2018.

The Ceremonial Courtroom was filled to capacity with Mr. McSwain’s family, friends, and colleagues, as well as dignitaries from federal, state, and local government. Chief U.S. District Judge Lawrence F. Stengel presided over the proceedings. Guest speakers included Senator Patrick J. Toomey and Senator Robert P. Casey, Jr., both having recommended Mr. McSwain for the post; John J. Soroko, Esq., Chairman Emeritus, Duane Morris, LLP; Samuel G. Williamson, Esq., of Quinn Emanuel Urquhart & Sullivan, LLP; and the Honorable Marjorie O. Rendell, Senior United States Circuit Judge, U.S. Court of Appeals for the Third Circuit. Reverend William Golderer, President and CEO of the United Way of Greater Philadelphia, provided the invocation. After the guests provided remarks, Judge Rendell administered the Oath of Office to her former law clerk Mr. McSwain, who gave concluding remarks.  

The speakers highlighted the solemnity of the Office Mr. McSwain has undertaken and the wealth of experience he brings to bear as he assumes the role of the region’s top prosecutor for one of the nation’s largest districts. As Senator Toomey observed, “Bill McSwain will make an outstanding U.S. Attorney for the Eastern District of Pennsylvania. In addition to his vast experience in both the private and public sectors, he is committed to the rule of law and dedicated to ensuring everyone is treated fairly under it.”

“I congratulate Mr. McSwain and his family on his investiture, and I commend him for his willingness to serve,” remarked Senator Casey. “U.S. Attorneys play a vital role in the fair, independent administration of justice in this country, and Pennsylvania will benefit from Mr. McSwain’s extensive legal and prosecutorial experience.”

As Mr. Soroko remarked, “How fortunate for the cause of justice and the rule of law that the arc of Bill McSwain’s career has now brought him back to the Office.”

Over the last 18 years, Mr. McSwain has built a diverse trial practice. Most recently, Mr. McSwain was a partner at the law firm of Drinker Biddle & Reath in its Philadelphia office, specializing in white collar criminal matters and complex business litigation.  He previously served as an Assistant U.S. Attorney in the Criminal Division in the Office he now leads; while there, he was specially assigned to the Department of Defense in 2004 to be the lead staff investigator and Executive Editor of the “Church Report,” a worldwide examination of military interrogation techniques in the Global War on Terror, commissioned by Secretary of Defense Donald Rumsfeld and chaired by Vice Admiral Albert Church. Before his first tour of duty in the U.S. Attorney’s Office, Mr. McSwain began his legal career as a law clerk to Judge Rendell.

During his time in private practice, Mr. McSwain frequently volunteered his services in support of constitutional rights, often winning long-shot cases of national significance.  For example, in Intel Corporation v. Hamidi, the California Supreme Court established the legal rules for trespass liability on the Internet, ruling in favor of Mr. McSwain’s client, Mr. Kenneth Hamidi.  In Freethought Society v. County of Chester, PA, the U.S. Court of Appeals for the Third Circuit ruled that an historic plaque of the Ten Commandments could remain on the façade of the Chester County Courthouse, finding in favor of the County, Mr. McSwain’s client.  And in Cradle of Liberty, Boy Scouts of America v. City of Philadelphia, the jury returned a verdict in favor of Mr. McSwain’s client, the Boy Scouts, which allowed the Scouts to remain in their historic headquarters building in Philadelphia.

Having worked with Mr. McSwain at the outset of his legal career, Judge Rendell offered a unique perspective on his capabilities to lead the Office: “I know Bill McSwain will lead the U.S. Attorney’s Office with same brilliance, balance, and professionalism that he has shown in his legal career to date. Once a terrific law clerk for me, he will surely be a terrific United States attorney for the people of our region.”

Prior to becoming an attorney, Mr. McSwain served as an infantry officer and scout/sniper platoon commander in the United States Marine Corps.  In 1996, he deployed to the Persian Gulf region with the 13th Marine Expeditionary Unit (Special Operations Capable).  While on deployment, he received the Navy Achievement Medal for joint operations with snipers from the Royal Jordanian Army.  Mr. McSwain received the General William E. Potts award as the class honor graduate of the intelligence officer course at Fort Huachuca, AZ and was also an honor graduate of USMC Officer Candidates School and The Basic School in Quantico, VA.    

Mr. McSwain was the 1987 class valedictorian of Henderson High School in West Chester, PA.  He earned a B.A. in Economics, with honors, from Yale University in 1991.  He earned his J.D. from the Harvard Law School in 2000, where he served as an editor of the Harvard Law Review.  While at Harvard, he was a member of the winning team in the Ames Moot Court competition and received the George S. Leisure award as the Best Oralist in the Ames competition.

Mr. McSwain was raised in West Chester and resides there today with his wife, Stephanie, and their four children, Connor, Brady, Nancy, and Billy.  He is the first Chester County native to hold the position of U.S. Attorney for the Eastern District of Pennsylvania.

“The Oath I took today reaffirms my commitment to the cause of justice for the people in the Eastern District,” McSwain commented. “It is the same Oath every Assistant United States Attorney in my Office takes on the first day on the job. And in that sense, we fully commit ourselves together to keep our communities safe.”

Tampa, FL – U.S. District Judge Virginia M. Hernandez Covington has sentenced Tyrone Devlin (30, Tampa) to nine years and eight months in federal prison for conspiracy, theft of government property, access device fraud, and aggravated identity theft, related to his involvement in a stolen identity refund fraud scheme. The court ordered that this sentence be served consecutive to the 10-year prison term Devlin is currently serving in Florida state prison for unrelated crimes.  The court also ordered Devlin to repay the IRS $435,499, which are the proceeds from the conspiracy. Devlin had pleaded guilty on March 26, 2018.

According to court documents, between May 2012 and June 2013, Devlin, Marquis Thornton, and others conspired to commit tax fraud and identity theft offenses. As part of the conspiracy, they obtained stolen identities, including Department of Veterans Affairs medical records, and used them to file fraudulent federal income tax returns. The fraudulent tax returns claimed refunds to which the conspirators knew they were not entitled. Devlin, Thornton, and their coconspirators obtained debit cards issued and/or registered in their own and other people’s names and directed that the debit cards be loaded with the fraudulently obtained tax refunds. They then used the debit cards to make ATM withdrawals and for other purchases and shared in the proceeds of the fraud. The conspirators filed more than 400 fraudulent tax returns claiming refunds that totaled more than $2.5 million and received more than $435,000 in proceeds.

Thornton previously pleaded guilty for his role in the scheme and was sentenced to six years and six months in federal prison.

“Identity thieves represent one of the greatest evils of our time. The damage they inflict on individuals and our economy cannot be overstated,” stated Special Agent in Charge Mary Hammond of IRS Criminal Investigation. “Criminals should know we are paying attention. IRS Special Agents are uniquely qualified and distinctly engaged in spearheading the effort to bring those like Mr. Devlin to justice.  Devlin’s sentence buoys up the IRS mandate to protect the U.S. Treasury from would-be thieves, but, more importantly, this result we hope will provide some sense of relief to the victims.”

This case was investigated by the Internal Revenue Service Criminal Investigation, the Tampa Police Department, and the Department of Veterans Affairs Office of Inspector General. It was prosecuted by Assistant United States Attorneys Megan Kistler and Simon Gaugush.

          Former Washington State Auditor TROY X. KELLEY was sentenced today in U.S. District Court in Tacoma to one year in prison for possession of stolen property, making false declarations in a court proceeding, and tax fraud, announced U.S. Attorney Annette L. Hayes.  KELLEY was convicted of eight federal felonies in December 2017, following a five-week trial. 

          The charges stem from a business KELLEY operated while also serving in the Washington state legislature.  KELLEY used some of the stolen money to fund his 2012 campaign for State Auditor.  At the sentencing hearing, U.S. District Judge Ronald B. Leighton said, “There was overwhelming evidence of guilt… He wanted money, he found a vehicle to acquire wealth and what he did was known by him to be wrong…. Somebody who has done nothing wrong does not forge documents.  He is guilty of this crime.”

            “This case stands out because of Mr. Kelley’s calculated efforts to steal nearly $3 million dollars from thousands of homeowners when he thought no one was looking,” said U.S. Attorney Annette L. Hayes.  “What’s worse, he did this while serving as a state legislator and then used part of his ill-gotten gains to fund his campaign for state auditor.  We rightly expect our public servants to comply with the law and truly serve.  I commend the prosecutors and investigators who put this case together and thus ensured Mr. Kelley’s lies and deceit were exposed for all to see.”

            According to the evidence at trial, between 2003 and 2008, KELLEY operated a business that monitored real estate filings on county websites.  KELLEY agreed with escrow companies that his business would charge a flat fee of $15 or $20 for each real estate transaction it monitored for the escrow companies’ customers.  In addition to the flat fee, the escrow companies also gave Kelley $100-$150 of customer money for each transaction, which KELLEY agreed to use to pay expenses if necessary.  KELLEY agreed to refund the money to the homeowners if there were no expenses.  However, beginning in 2005, in virtually every case he handled, KELLEY kept the entire amount withheld on each transaction, thereby stealing nearly $3 million.  

          In 2008, class action lawsuits were filed against escrow companies, claiming that homeowners had been charged excessive fees in real estate transactions.  After the lawsuits were filed, KELLEY falsified a letter to the plaintiff in one lawsuit to make it appear that KELLEY had refunded the plaintiff’s money, when in fact he had not.  Concerned that the lawsuits would lead to his downfall, KELLEY transferred millions of dollars of stolen money through a series of bank accounts, ultimately placing the funds in an investment account for a company controlled by a Central American trust controlled by KELLEY.   One of the escrow companies sued KELLEY to retrieve the stolen money.  KELLEY testified falsely under oath in the lawsuit that he had only kept money he had earned for services provided.  One of KELLEY’s convictions for making false declarations in a court proceeding is based on that testimony.

          Beginning in 2011, KELLEY spent the stolen money on personal expenses and his campaign for State Auditor.  To hide the fact that this was money he had stolen years earlier, KELLEY claimed on his tax returns that he was continuing to perform real estate services, and to earn income through his business, when in fact he had not operated the business for years.  In the same tax returns, KELLEY claimed tens of thousands of dollars of business deductions for personal items like spa treatments, a family trip, and household purchases such as sheets and toys.  KELLEY’s tax fraud convictions are based on this conduct.

          In December 2017, a unanimous jury convicted KELLEY of possession of stolen property, two counts of making false declarations under oath, and six counts of tax fraud.  Following the trial, an unrelated U.S. Supreme Court ruling resulted in the dismissal of one of the tax fraud counts.

         “During the years he ran his business Mr. Kelley stole $2.9 million from thousands of his customers.  He attempted to further conceal his misdeeds by failing to report the monies to the IRS,” said Darrell Waldon, Special Agent in Charge, IRS Criminal Investigation.  “Today’s sentence demonstrates the government’s determination to protect consumers and ensure that everyone, including elected officials, are playing by the rules and paying the taxes they owe on income received from legal and illegal sources.”

          “The vast majority of public officials are honest in their work.  Unfortunately, a small percentage abuse the trust placed in them," said Special Agent in Charge Jay S. Tabb, of the FBI's Seattle Field Division.  “Identifying and investigating those corrupt public officials is the FBI’s top criminal investigative priority.  Citizens have the right to nothing less than fair and honest government.  Mr. Kelley violated the public's confidence through criminal actions he undertook while in office to conceal his previous illegal activity. The citizens of Washington rightfully demand high ethical standards from public servants.”

            The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and the FBI.

            The case was prosecuted by Assistant United States Attorneys Arlen Storm, Andrew Friedman, Seth Wilkinson, Katheryn Frierson, and Michelle Jenson.  Appellate attorney Michael Morgan provided significant assistance.

MADISON, WIS. -- Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Claudius Fincher, 21, Chicago, Illinois, was sentenced today by Chief U.S. District Judge James D. Peterson to 60 months in federal prison for conspiracy to distribute 100 grams or more of heroin.   Fincher pleaded guilty to this charge on February 20, 2018.

The charge against Fincher was the result of an investigation initiated after the heroin overdose death of Victor Spidell.  In May 2017, Spidell died from using heroin laced with fentanyl.  A Madison Police Department investigation revealed that on the day of his death Spidell contacted a number associated with co-defendant Darnell Brunt.  Shortly thereafter, the Dane County Narcotics Task Force made four heroin buys from Fincher and Brunt using an undercover officer.  On September 18, 2017, an undercover officer set up another heroin buy and Fincher, along with co-defendant Brunt, were arrested on their way to the buy.  Fincher was carrying 17 grams of heroin on his person. 

Law enforcement agents executed a search warrant at Fincher’s apartment in Sun Prairie, Wisconsin, and found 149 individual bags of heroin, laced with fentanyl, and a loaded firearm.  Fincher’s DNA was on the trigger of the firearm.

United States Attorney Blader expressed his office’s commitment to combatting the opioid crisis by prosecuting heroin dealers who are distributing significant quantities of heroin in the Western District of Wisconsin.

Co-defendant Darnell Brunt was sentenced to nine years in federal prison by Judge Peterson on April 18, 2018.

The charge against Fincher was the result of an investigation conducted by the Dane County Narcotics Task Force, Drug Enforcement Administration, Madison and Sun Prairie Police Departments, and the Dane County Sheriff’s Office.  The prosecution of the case has been handled by Assistant U.S. Attorney David J. Reinhard. 

The United States Attorney, Richard W. Moore, announces that, Jaquail Busby, a 26 year old resident of Mobile, Alabama was sentenced to 240 months of incarceration for a carjacking that occurred on January, 5 2017, a carjacking that occurred on April 13, 2017, and separate convictions for possession of a firearm in furtherance of each carjacking. He was also ordered to pay $21,000.00 in restitution to Easy Money Store located on Dauphin Island Parkway in Mobile, Alabama.

According to the factual statement Busby signed in connection with his guilty plea, on January 5, 2017, Busby took by force and threats of death the vehicle of R.W. using a firearm.  Busby and an accomplice followed R.W. around Mobile in a vehicle as she traveled home from work in her Mazda.  At the opportune time, Busby jumped out of the vehicle he was traveling in with a handgun after his vehicle cut in front of the Mazda.  Busby beat on the window with the handgun and told R.W. to unlock the door.  When she hesitated, he fired two shots into the air.  R.W. then opened the door and Busby got into the back seat of the Mazda and told R.W. to drive.  He continued to threaten R.W. as she drove to a local cemetery.  After several hours, Busby told R.W to drive back to her place of employment - Easy Money located on Dauphin Island Parkway – because he intended to steal money from the business.  R.W. complied.  When they arrived at Easy Money, Busby stole approximately $21,000 from R.W. Busby then ordered R.W. to drive him to another location in Mobile and he then exited her vehicle and threw her keys away.  R.W. retrieved the keys and called the police.   

On April 13, 2017, Jaquail Busby and Calvin Harris devised a plan to steal money from Easy Money, a local title loan business.  The plan included using an unknowing employee of the business.  Later that day, J. P. (Easy Money employee/ victim) left Easy Money, located at 7740 Airport Blvd, Mobile, AL at about 9:00pm, got into her vehicle for the drive home.  Unbeknownst to her, Harris and Busby were following her in Harris’ vehicle.  After she had been driving about 15 minutes, Harris drove his vehicle around in front of J. P’s. vehicle and positioned it to where she had to stop or hit Harris’ vehicle.  She chose to stop. 
Busby then exited the vehicle and beat on her window with a firearm, telling J. P. to open the door.  When she complied, Busby then told the victim to get out of the car, then ordered her back in the car, and Busby got in the rear driver side seat.  Harris then sped away.  As J. P. drove slowly on the city streets, Busby fired a shot out the window and told her to drive the speed limit.  Busby forced J. P. to drive into an old cemetery.  Busby told her to pull to the back and park facing out.

Busby then told J. P. to call her husband and tell him that she was staying with her mother. J. P. told Busby that if she called her husband, he would not believe her and Busby became angry and fired a second shot in the air.   Busby then told J. P. to call her husband and tell him that she had to stay with her mother.  Busby told J. P. that if she did not make the call that his associates would kill everyone there including her grandchild.  Busby communicated with Harris via cell phone and told Harris to shoot anyone who came to the house.  J. P. stated that throughout the night she kept praying that Busby would not kill her and tried to talk to him in an attempt to keep him calm. 

At approximately 6:30am the next day, J. P. and Busby left the cemetery and drove back to Easy Money.  During the drive, Busby and Harris communicated again and this time via text messages.  In the text messages, Busby sought confirmation that the coast was clear to return to the business and steal the approximately $12,000 that was in the safe.  Harris confirmed in return text messages that he would be positioned outside of Easy Money looking out to make sure no police were in sight.   When they arrived, Busby told J. P. that they were going to sit outside until 7:00am because he knew that's what time she had to be in the store and that was 30 minutes before the timer on the safe would unlock.       At 7:00am, Busby told J.P. to go inside and sit at the desk directly in front of where they parked so he could watch her.

At approximately 7:25am, J. P.’s co-worker, B. J. (the second victim) arrived at the location and was confronted by Busby who forced her inside at gunpoint and then made both of them go into the room where the safe was located.  Once inside the room, Busby realized that he did not have his cellphone to communicate with Harris so he told J. P. to go get it from her vehicle.  Busby told J. P. if she did anything funny he would blow B. J.’s brains out.  When J. P. walked outside, a police car simultaneously pulled in the parking lot so she ran over to the vehicle and began explaining to an officer what was happening.  Busby saw the police outside, and fled the scene in J. P.’s vehicle leaving the gun in his haste.  A K9 Officer was dispatched to the location to track Busby.  Busby was located a short time later hiding under a house.  He was arrested and confessed giving written permission to search his cell phone Texts on his cell phone between he and Harris discussing the robbery and kidnapping were located.  Busby pled guilty on January 25, 2018.    

Officers of the Mobile, AL Police Department along with special agents of the Federal Bureau of Investigation investigated the case and presented it to the United States Attorney’s Office for prosecution.  The prosecutor assigned to the case was Assistant United States Attorney, Gina S. Vann.
 

Madison, Wis. – Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Gary Auerswald, 61, Edgerton, Wisconsin, was sentenced today by Chief U.S. District Judge James D. Peterson to 24 months in federal prison for failing to pay taxes withheld from his employees' paychecks.  This term of imprisonment is to be followed by three years of supervised release.  Judge Peterson also ordered Auerswald to pay restitution in the amount of $593,300.46.  Auerswald pleaded guilty to this charge on March 30, 2018.

Auerswald was the owner of Full Spectrum Building Components, Inc., a business operating in Edgerton, and had corporate responsibility to collect and pay over the company’s payroll taxes.  Full Spectrum withheld payroll taxes from its employees’ payroll checks and was required to deposit these funds with the IRS on a quarterly basis; however, the company failed to make these payments.  Auerswald used the money for to pay for business and personal expenses. 

During sentencing, Judge Peterson highlighted Auerswald’s “pattern of nonpayment” and noted that Auerswald “resorted to dishonest behavior when faced with financial difficulty.” 

The charge against Auerswald was the result of an investigation conducted by IRS Criminal Investigation.  The prosecution of the case has been handled by Assistant U.S. Attorney Chadwick M. Elgersma. 

Largest Health Care Fraud Enforcement Action in Department of Justice History Resulted in 76 Doctors Charged and 84Opioid Cases Involving More Than 13 Million Illegal Dosages of Opioids

WASHINGTON - Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced yesterday the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings.  Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.  Thirty state Medicaid Fraud Control Units also participated in today’s arrests.  In addition, HHS announced today that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse. 

Attorney General Sessions and Secretary Azar were joined in the announcement by Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Deputy Director David L. Bowdich of the FBI, Assistant Administrator John Martin of the Drug Enforcement Administration (DEA), Inspector General Daniel R. Levinson of the HHS Office of Inspector General (OIG), Deputy Chief Eric Hylton of IRS Criminal Investigation (CI), Director Alec Alexander of the Centers for Medicare and Medicaid Services (CMS) Center for Program Integrity and Director Dermot F. O’Reilly of the Defense Criminal Investigative Service (DCIS).

Yesterday’s enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG.  In addition, the operation includes the participation of the DEA, DCIS, IRS-CI, Department of Labor, other various federal law enforcement agencies, and State Medicaid Fraud Control Units. 

The charges announced yesterday aggressively target schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and their families), and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.   

“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” said Attorney General Sessions.  “In many cases, doctors, nurses, and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history.  This is the most fraud, the most defendants, and the most doctors ever charged in a single operation—and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud. I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible. By every measure we are more effective at finding and prosecuting medical fraud than ever.”

“Every dollar recovered in this year’s operation represents not just a taxpayer’s hard-earned money—it’s a dollar that can go toward providing healthcare for Americans in need,” said HHS Secretary Azar.  “This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work.”

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of over $2 billion in fraudulent billings.  The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims.  Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.

Cases that have been indicted in the Eastern District of Kentucky are:

• United States v. Kimberly Jones (6:18-cr-00030 E.D. Ky.):  Kimberly Jones, a licensed pharmacist in Williamsburg, Kentucky, is charged with 26 counts of distributing oxycodone or oxymorphone, one count of maintaining a drug involved premises, and one count of health care fraud.  The Indictment alleges that Jones, the owner of Kim’s Hometown Pharmacy in Williamsburg, repeatedly filled prescriptions for oxycodone and oxymorphone outside the scope of professional practice, while also billing insurers for prescription drugs that were never dispensed to patients.  The Indictment was unsealed following Jones’s arrest on June 26, 2018.  The case is assigned to United States District Judge Gregory F. Van Tatenhove and is set for trial on August 21, 2018.  Jones faces a maximum sentence of 20 years imprisonment if convicted on the controlled substance offenses and 10 years if convicted of health care fraud.    
   
• United States v. Gary McPherson (6:18-cr-00031 E.D. Ky.):  Gary McPherson, a licensed pharmacist, is charged with theft of pre-retail medical products in violation of 18 U.S.C. § 670.  The charge stems from McPherson’s theft of pharmaceutical drugs from Kim’s Hometown Pharmacy in Williamsburg, Kentucky, in May 2018.   The Indictment was unsealed on June 26, 2018, and McPherson will appear in court on July 11, 2018, for arraignment.  The case is assigned to United States District Judge Gregory F. Van Tatenhove.  McPherson faces a maximum sentence of five years imprisonment if convicted.   
   
  The Medicare Fraud Strike Force operations are 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. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,700 defendants who collectively have falsely billed the Medicare program for over $14 billion.
   
  A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
   

LEXINGTON, Ky. – Fernando Rafael Lara Salas, age 40, who had previously used the aliases of Jesus Ruiz Vega, Francisco Garcia and Cristobal Palacios Garcia, was sentenced today, to 353 months in prison, by U.S. District Judge Danny C. Reeves.  In January, Lara Salas was tried and convicted of multiple offenses, including drug trafficking, firearms and immigration offenses.  His drug trafficking convictions included conspiracy to distribute more than five kilograms of cocaine, possession with intent to distribute more than five kilograms of cocaine, and possession with intent to distribute fentanyl, methamphetamine, and tramadol.  Lara Salas’ firearms convictions included possession of a firearm in furtherance of a drug-trafficking crime, possession of a firearm as a convicted felon, and possession of a firearm by an alien.  Lara Salas was also convicted of unlawfully re-entering the United States after previously being deported for a felony drug offense.

Two co-defendants in the case, Jorge De Jesus Macias Pedroza and Nestor Barron, were also convicted and previously sentenced by Judge Reeves, to terms respective terms of imprisonment of 188 and 120 months.  All three men will be required to serve 85% of their sentences.

The joint investigation by federal and state law enforcement into the drug trafficking activities of Lara Salas began in August 2016 and culminated with the execution of search warrants at Lara Salas’ residence in Lexington and a cargo trailer located in a remote location in Franklin County.  The search of Lara Salas’ home resulted in the seizure of 6 kilograms of cocaine, more than 50 grams of methamphetamine, a 9 mm firearm and $110,000 in U.S. currency.  Evidence found in the cargo trailer revealed that Lara Salas and others utilized the trailer for the preparation of fentanyl for distribution.  Agents located packaging material consistent with a kilogram quantity of a controlled substance.  The packaging contained a residual amount of fentanyl, an extremely potent opioid.  Also located in the trailer were five kilograms of tramadol, a Schedule IV controlled substance that is commonly used by drug traffickers as a cutting agent for fentanyl and heroin, and boxes of latex gloves.  The investigation was a cooperative effort led by investigators with the Drug Enforcement Administration (DEA); the Department of Homeland Security, Immigration and Customs Enforcement (ICE); and the Lexington Police Department.

“Without the outstanding work of our law enforcements partners, this prosecution would not have been possible.  Their efforts removed dangerous drugs from our streets, made our community safer, and saved lives.  Prosecuting those who sell drugs in our community will continue to be a core priority of our Office,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky.   

United States Attorney Duncan; Darrell Christopher Evans, Special Agent in Charge, DEA Louisville; Kristoffer Cortex, Acting Assistant Field Office Director, ICE; and Lawrence Weathers, Chief of Police, Lexington-Fayette County Division of Police, jointly announced the sentence.

St. Louis, MO – Jason Arnold was sentenced to 63 months imprisonment and five years supervised release for his bank fraud and money laundering convictions related to a scheme to defraud a financial institution and the company he worked for as a controller out of more than $7.6 million.  He was also ordered to pay restitution in excess of $6.4 million. 

According to court documents, Arnold created a company that had the same name as his employer.  He then opened a sham bank account for that company.  Between October 2009 and November 2017, Arnold fraudulently deposited into the sham bank account more than 50 checks totaling more than $7.6 million.  Arnold then used the proceeds from his scheme to defraud for his personal gain, including to purchase artwork and nearly one million dollars’ worth of rare wine.

Arnold appeared before U.S. District Judge Catherine D. Perry, who noted that “greed” appeared to be the sole motivator for Arnold’s malfeasance.

In addition to the criminal prosecution, extensive forfeiture activities have been undertaken to facilitate the payment of restitution.  More than $2.8 million dollars in property including financial accounts has been forfeited by the government.  The victim company recovered more than $1.2 million directly from Arnold in the form of wine, watches, coins and firearms. 

“This sentence combines incarceration, forfeiture and post-prison supervision.  It is a comprehensive response to this significant economic crime,” said U.S. Attorney Jeff Jensen.

This case was investigated by the United States Secret Service.  Assistant United States Attorney Kyle T. Bateman is handling the case for the U.S. Attorney’s Office.