James Burkhart’s conspiracy reaped nearly $19.4 million in fraud and kickbacks, funding

private jets, vacation homes, diamond jewelry, and gold bars

PRESS RELEASE

INDIANAPOLIS B United States Attorney Josh J. Minkler today announced the sentencing of the former CEO of American Senior Communities (ASC) in a massive fraud, kickback, and money laundering conspiracy. James Burkhart, 53, of Carmel, was sentenced to 114 months imprisonment by U.S. District Court Judge Tanya Walton Pratt.

“In spite of receiving a salary of over $1 million, Burkhart abused his official position of trust to steal tax payer dollars intended to benefit this community’s sick, elderly and mentally challenged,” said Minkler. “Because this thief was motivated by nothing other than corruption and greed, we sought a justifiably harsh sentence. Hopefully, the sound of the prison door slamming shut on this 9.5 year sentence will deter other officials from the culture of corruption and greed we see in this district.”

Today’s sentencing caps a three-year federal investigation and prosecution of Burkhart, who was charged with ASC Chief Operating Officer Daniel Benson, Burkhart friend and associate Steven Ganote, and Burkhart’s younger brother, Joshua Burkhart. In September 2015, federal agents executed search warrants at Burkhart’s residence and ASC office, among other locations. By October 2016, a federal grand jury indicted Burkhart and his co-defendants. And by January 2018, all of the defendants had pleaded guilty to federal felony charges.

For his part, Burkhart pleaded guilty to three federal felony offenses: conspiracy to commit fraud, conspiracy to violate the health care anti-kickback statute, and money laundering. All told, he and his co-conspirators funneled nearly $19.4 million in fraud and kickbacks to themselves through a web of shell companies. The majority of the money they stole came from the Health & Hospital Corporation of Marion County, part of Indiana’s public health system and the operator of health care facilities like Eskenazi Hospital. 

Burkhart’s fraud and kickback schemes, which spanned nearly six years, exploited numerous aspects of ASC’s operations. ASC is Indiana’s largest nursing home chain. It manages approximately 70 senior care facilities throughout the state, and to run those nursing homes, ASC purchases a wide variety of goods and services provided by outside vendors. The bulk of the money to pay those vendors’ bills comes from Health & Hospital. 

Burkhart used his position as ASC’s CEO to cut secret side deals with over a dozen of ASC’s vendors. He dangled the golden carrot of the purchasing power of the State’s largest nursing home chain. All they had to do was pay something back. 

In some cases, Burkhart had vendors inflate their bills to ASC, which Burkhart would pay with Health & Hospital’s money, and the vendor would kick the overage back to Burkhart and his co-conspirators. In other cases, he formed shell companies that would inflate vendors’ bills and submit them to ASC as if the shell companies were the real vendor. In still other cases, he caused vendors or shell companies to submit completely false bills for fictitious services that were never provided. And finally, in some cases, he simply demanded vendors to pay him kickbacks in exchange for him allowing them to service ASC’s large number of facilities. 

This last category included home health and hospice care, where Burkhart received a kickback for each patient ASC referred to Burkhart’s chosen home health or hospice company.

Landscaping, electrical generators, employee uniforms, patient gifts, American flags, furniture, heating and air conditioning, wound care creams, medical supplies, air fresheners, speech therapy, pharmacy services, food services, home health care, and hospice care – Burkhart concocted secret side deals involving all of those aspects of ASC’s operations.   

His motive was pure greed. He was caught on tape telling an informant, in reference to one of his schemes that netted him over $600,000 per year, “I ain’t givin’ that up. . . . It doesn’t sound like much money, but it’s money.” Over the six years, Burkhart use the money he stole to buy lakefront real estate on Lake Wawasee, golf vacations, trips to Las Vegas, political contributions, diamond jewelry, gold coins and gold bars. In addition, Burkhart spent over $1.5 million of other peoples’ money on over 150 flights on private jets.  

As Burkhart told the informant, “I’ll get mine, I always told ya, I’ll get mine one way or another.” That was true until 2015, when a vendor Burkhart tried to ensnare went to the FBI.  Burkhart and his co-conspirators had asked the vendor to inflate his bills by 30% and pay the overage to a shell company. The vendor thought that did not sound right or ethical, so he reported it to law enforcement. What followed was an extensive investigation involving multiple undercover informants, search warrants, and a detailed analysis of numerous shell companies and nearly 100 bank accounts – all of which culminated in the indictments, guilty pleas, and ultimately, today’s sentencing of Burkhart to 114 months in federal prison.

This case was jointly investigated by the Federal Bureau of Investigation (FBI), the Internal Revenue Service-Criminal Investigation Division (IRS-CID), and the Department of Health and Human Services, Office of Inspector General (HHS-OIG).

 "This defendant was paid a large salary and viewed as an industry leader, but he chose to abuse his power and position out of pure greed,” said Grant Mendenhall, Special Agent in Charge of the FBI’s Indianapolis Division. “The FBI works diligently with partner agencies to uncover and investigate corporate executives who enrich themselves through kickbacks and theft. We applaud the concerned citizen who brought this fraud to our attention, and we encourage anyone else who wants to bring these types of fraudulent behavior to light to contact us.”

David Talcott, Acting Special Agent in Charge of IRS Criminal Investigation's Chicago Field Office said, "Burkhart’s theft from the most vulnerable citizens of our communities is sickening. Taxpayers deserve honesty and integrity from business leaders. IRS-CI's thoroughness of the financial investigation represents our commitment to protect the taxpayers of this community."

“Health Care Fraud is fueled by greed and is perpetrated by criminals with the intent of concealing their acts and securing financial riches at the expense of taxpayers”, said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General. “Mr. Burkhart spun a web of deceit through side deals, inflated invoices and shell companies in order to pilfer funds from Medicare and Medicaid which ultimately led him to the doorstep of law enforcement and prosecutorial authorities. The OIG will continue to work with our federal, state and local law enforcement partners to uncover these schemes and hold those who execute them accountable.”

“I am eager to collaborate with other public offices and agencies to stop fraudsters from stealing money from Medicaid,” said Attorney General Curtis Hill. “This is a program intended to help people who truly need it. We will stay vigilant in holding accountable all those who seek to bilk taxpayers by misappropriating funds.”

According to Assistant U.S. Attorneys Nick Linder and Cindy Cho, who prosecuted the case, the gold bars, gold coins, and other assets seized from Burkhart will be criminally forfeited.  In addition, Burkhart must pay full restitution and serve three years of supervised release following his sentence.

Burkhart’s co-defendants will be sentenced on the following dates and times:

• Daniel Benson on July 6 at 9:00 a.m.
• Steven Ganote on July 9 at 9:00 a.m.
• Joshua Burkhart on July 9 at 2:00 p.m.
• David Mazanowski on July 10 at 2:00 p.m.
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• In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the Office’s firm commitment to prosecuting complex, large-scale fraud schemes, particularly those that exploit positions of trust. See United States Attorney’s Office, Southern District of Indiana Strategic Plan 5.1

          DALLAS– An indictment returned by a federal grand jury yesterday in Dallas charges Patrick O. Howard, 36, of Dallas, Texas, with offenses related to his role in a scheme to defraud investors and to obtain money by materially false and fraudulent pretenses, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.

          Specifically, Howard is charged with five counts of securities fraud and nine counts of mail fraud. 

          The indictment alleges that from January 2015 through April 2017, Howard owned Howard Capital and OE Capital located in Dallas, Texas, and exercised authority over the companies and Funds.

          Howard represented himself to be a Registered Investment Advisor, and offered and sold membership units to investors for $50,000 apiece.  Investors were told the Funds would invest proceeds from unit sales into third-party companies and that the Funds stood to profit when the companies paid revenue interests. 

          Howard mislead investors by telling them that their investment would earn a 12% minimum annual return, that OE Capital had average earnings of 20%, that investors’ investments and minimum returns were protected by insurance, and that the Funds purchased real estate to mitigate investors’ risk.

          Howard mailed investors who elected to reinvest phony quarterly earnings account statements showing their accounts had been credited the minimum preferred return, when they had not.  At the same time, investors who chose to receive their quarterly earnings as distributions were actually given Ponzi payments, or monies paid by other investors, rather than actual earnings of the Funds.

          The indictment further alleges that Howard never used a single dollar of investor funds to purchase real estate, and used investors’ money on things the investors did not approve or even know of, including, a nearly $20,000 payment to buyout a former business partner and approximately a $225,000 payment to Howard’s personal bank account that was neither salary nor a bonus. 

           An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.  If Howard is convicted, the mail fraud counts carry a maximum statutory penalty of 20 years in federal prison and a $250,000 fine, as to each count. 

          The indictment also includes a forfeiture allegation that would require the defendants, upon conviction, to forfeit to the U.S. any property traceable to the offense.

          The case is being investigated by the Federal Bureau of Investigation and the United States Postal Service.  Assistant U.S. Attorney Andrew Wirmani is prosecuting the case.

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SPRINGFIELD, Ill. – Trial has been scheduled on Aug. 3, 2018, for three Pana, Ill., defendants and a Missouri man charged with trafficking methamphetamine. Claudette Borders, 46; Jesse Stoldorf, 43, Randy Hammond, 39, all of rural Pana; and Raymond Toth, 60, of  Cuba, Mo., were arraigned in federal court in Springfield on June 28.

The defendants were previously charged by complaint and arrested on May 24, 2018. Each of the four defendants has been ordered detained in the custody of the U.S. Marshals Service. A federal grand jury returned the indictment against the four on June 20.

The indictment charges Borders and Stoldorf with one count of conspiracy to distribute and possession with intent to distribute methamphetamine and one count of distribution of methamphetamine, which was obtained from Missouri, from their Pana home on May 3, 2018. Hammond is charged with one count of possession with intent to distribute methamphetamine on May 22, 2018. Toth is charged with possession with intent to distribute 500 grams or more of meth on May 22, and possession of a firearm in furtherance of a drug trafficking crime.

If convicted, the charges against Borders, Stoldorf, and Hammond carry statutory penalties of up to 30 years in prison. If convicted, the drug charge against Toth carries a statutory penalty of 10 years to life in prison. For possession of a firearm in furtherance of a drug crime, the penalty is a mandatory five years in prison to be served consecutive to any sentence ordered for the underlying drug crime.

The charges are the result of an investigation by DEA and the Central Illinois Enforcement Group (CIEG) with the assistance of the Pana Police Department and the Christian County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Crystal Correa. 

Members of the public are reminded that an indictment is merely an accusation; each defendant is presumed innocent unless proven guilty.

United States Attorney Ron Parsons announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Failure to Appear and Contempt.

Brady One Feather, age 30, was indicted on June 12, 2018.  He appeared before U.S. Magistrate Judge Veronica L. Duffy on June 28, 2018, and pled not guilty to the Indictment.

The maximum penalty upon conviction is up to 5 years in federal prison and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund.  Restitution may also be ordered.

The Indictment alleges that on or about May 17, 2018, One Feather knowingly failed to appear for a scheduled hearing in district court which he was summoned and required to appear.

The charges are merely accusations and One Feather is presumed innocent until and unless proven guilty. 

The investigation is being conducted by the U.S. Marshals Service.  Assistant U.S. Attorney Jay Miller is prosecuting the case.   

One Feather was remanded to the custody of the U.S. Marshals Service pending trial.  A trial date has not been set.

U.S. Attorney Duane A. Evans announced that KEYIRA GABLE, age 31, a resident of New Orleans, was charged today by a federal grand jury with attempted access device fraud and aggravated identity theft. 

U.S. Attorney Evans praised the work of the United States Secret Service New Orleans Field Office and the Slidell Police Department in investigating this matter.  U.S. Attorney Evans thanked the District Attorney’s Office for the 22^nd Judicial District for its assistance in this prosecution.  Assistant U.S. Attorney Matthew R. Payne is in charge of the prosecution.

ADRIAN F. DANIEL, 24, a resident of Tucson, Arizona, was indicted on the charge of possession with intent distribute one kilogram or more of heroin announced U.S. Attorney Duane A. Evans. 

According to court documents, a detective of the Amtrak Police Department reviewed the manifests for incoming passengers to the Amtrak Station in New Orleans and noticed DANIEL’S train travel patterns.    Specifically, the detective noticed that beginning in January 2018, DANIEL made multiple train trips from Tucson, Arizona to New Orleans.  The trips were paid for in cash and were usually booked the day before DANIEL’S departure from Tucson.  Also, DANIEL used a different telephone number each time he booked a reservation.

When the train arrived at the station, the detective approached DANIEL and asked to speak to him.  DANIEL agreed to speak and became noticeably nervous.  When questioned about his prior train trips, DANIEL lied about the frequency of the trips further arousing suspicions. 

The detective asked to search DANIEL’S bags and DANIEL consented.  Among DANIEL’S belongings were bags containing approximately 2.6 kilograms of heroin.

DANIEL faces a minimum of ten years’ imprisonment, a maximum term of life imprisonment, and a fine of $10,000,000.00. 

The case was investigated by the Drug Enforcement Administration, the Louisiana State Police, and the Amtrak Police Department.  The case is being prosecuted by Assistant United States Attorney André Jones.

Bangor, Maine:  United States Attorney Halsey B. Frank announced that Steven Butler, 25,of Rangeley, Maine, was sentenced today by U.S. District by Chief Judge Nancy Torresen to two years in prison and three years of supervised release for distribution of fentanyl.

According to court records, between March and June 2017, the defendant distributed fentanyl three times to a confidential informant in Rangeley.

The case was investigated by the U.S. Drug Enforcement Administration; the Franklin County Sheriff’s Office; the Bureau of Alcohol Tobacco Firearms and Explosives; the Maine State Police; and the Rangeley Maine Police Department, with assistance provided by the Maine Office of the Attorney General. This case was investigated and prosecuted as part of the Department of Justice’s Strategy to Combat the Opioid Epidemic.

Bangor, Maine:  United States Attorney Halsey B. Frank announced that Ryan Mumme, 46, of Eastport, Maine, pleaded guilty today in U.S. District Court to possession of child pornography.

According to court records, the defendant was interviewed by agents at his home and admitted that he had child pornography on his laptop computer.  A subsequent forensic examination of the laptop revealed multiple images and videos of children under the age of twelve engaged in sexually explicit conduct.

The defendant faces up to 20 years in prison and a $250,000 fine.  He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.

The case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the Maine State Police Computer Crimes Unit, and the Eastport Police Department.  This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Bangor, Maine:  United States Attorney Halsey B. Frank announced that Jordan Richard, 24,of New Vineyard, Maine, pleaded guilty today in U.S. District Court to conspiracy to distribute cocaine, heroin, fentanyl, and oxycodone and discharging a firearm during, in relation to, and in furtherance of, a drug trafficking crime.  

According to court records, between January 2016 and September 2017, the defendant and others conspired to distribute cocaine, heroin, fentanyl, and oxycodone from the defendant’s residences in Rangeley and New Sharon, Maine. On July 28, 2016, the defendant shot and killed one of two men who came to his Rangeley residence to rob him. The second man fled the scene and was subsequently captured. Officers investigating the shooting discovered cocaine, heroin, fentanyl, oxycodone, cash, drug paraphernalia and the semiautomatic handgun used in the shooting in the residence. 

The defendant faces up to 20 years in prison, three years supervised release, and a $1,000,000 fine on the drug charge. He faces a mandatory consecutive term of between 10 years and life in prison, five years of supervised release, and a $250,000 fine on the gun charge.

The case was investigated by the U.S. Drug Enforcement Administration; the Franklin County Sheriff’s Office; the Bureau of Alcohol Tobacco Firearms and Explosives; the Maine State Police; and the Rangeley Maine Police Department; with assistance provided by the Maine Office of the Attorney General. This case was investigated and prosecuted as part of the Department of Justice’s Strategy to Combat the Opioid Epidemic.

Bangor, Maine:  United States Attorney Halsey B. Frank announced that Syriane Baldwin,a/k/a “Del”, 31, of Bangor was sentenced in U.S. District Court by Chief Judge Nancy Torresen to eight years in prison and three years of supervised release for conspiracy to possess with the intent to distribute and to distribute heroin, cocaine base, commonly known as “crack,” and oxycodone. He pled guilty to the charge on October 25, 2017.

According to court records, between January 2013 and September 2015, Baldwin conspired with others to obtain heroin, crack and oxycodone in New York City and to distribute it in the Bangor area and elsewhere.  This case was related to the prosecution of Mario Lee, a/k/a “Moe,” who was sentenced on May 5, 2017 to 218 months in prison for his role in the conspiracy. 

The case was investigated by the Maine Drug Enforcement Agency and the U.S. Drug Enforcement Administration, and prosecuted as part of the Department of Justice’s Strategy to Combat the Opioid Epidemic.

FORT WAYNE – Byron Curry, 42 years old, of Fort Wayne, Indiana, was sentenced by U.S. District Court Judge Theresa L. Springmann after pleading guilty to bank robbery, announced United States Attorney Thomas L. Kirsch II.

Curry was sentenced to 71 months imprisonment, 1 year supervised release and ordered to pay restitution in the sum of $1,334.00.

According to documents in the case, on December 3, 2016, Byron Curry and his two female co- defendants robbed a First Source Bank located in Fort Wayne, Indiana.

This case was investigated by the Federal Bureau of Investigation, the Allen County Sheriff’s Department, and the Fort Wayne Police Department and prosecuted by Assistant United States Attorney Lesley J. Miller Lowery.

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ROCK ISLAND, Ill. -- Trial has been scheduled on Aug. 27, 2018, for a Central Wisconsin man charged with impersonating a U.S. Marshal. Jared Keith Fulk, 20, last known address Milladore, Wis., was arraigned on June 26, in federal court in Rock Island.

The indictment, returned on June 20, alleges that on May 16, 2018, Fulk impersonated a federal officer by representing himself as a U.S. Marshal to an individual.

Fulk has remained in law enforcement custody since he was arrested on May 16, by the Galesburg Police Department. Fulk waived a federal detention hearing and will remain in the custody of the U.S. Marshals Service pending trial.

If convicted of impersonating an officer of the U.S. government, Fulk faces up to three years in prison.

The charge is the result of investigation by the Galesburg Police Department and the U.S. Marshals Service. Assistant U.S. Attorney Kevin C. Knight is prosecuting the case.

Members of the public are reminded that an indictment is merely an accusation; the defendant is presumed innocent unless proven guilty.

SAN FRANCISCO – Adrian Gordon (aka “Tit”), Esau Ferdinand (aka “Sauce”), and Monzell Harding, Jr., were each sentenced today for their respective roles in a racketeering conspiracy, announced Acting United States Attorney Alex Tse and FBI Special Agent in Charge John F. Bennett.  Gordon was sentenced to 27 years in prison, Ferdinand was sentenced to 20 years, and Harding was sentenced to 12 years.  The sentences were handed down by the Honorable William Orrick, U.S. District Judge.  The defendants were tried for crimes committed on behalf of the San Francisco gang referred to as Central Divisadero Players, aka Central Divis Playas, aka CDP.

“Eradicating violent gang crime is one of the top priorities of the Justice Department,” said Acting US Attorney Tse.  “The substantial federal sentences ordered today against convicted gang members is a true warning that the criminal justice system will be used to the fullest extent to punish the menace of gang conduct.”  

“For years, the Central Divisadero Players terrorized San Francisco through acts of murder, assault, robbery, and pimping,” said FBI Special Agent in Charge Bennett.  “The FBI and our partners used the full force of the federal justice system to bring an end to these racketeering activities and bring these five defendants to justice.  We especially want to thank the SFPD and the San Pablo Police Department for their hard work in investigating these crimes.”

After a 14-week trial ending on March 5, 2018, a federal jury convicted Gordon, 29, Ferdinand, 35, and Harding, 26, as well as co-defendants Charles Heard (aka “Cheese”), 33, and Jaquain Young (aka “Loc”), 44, of various charges in connection with a racketeering conspiracy.  The defendants were the first five to stand trial for crimes alleged in an eleven-defendant, 22-count second superseding indictment filed on August 14, 2014.  The indictment described CDP as a racketeering organization that worked collectively with other gangs in the Western Addition of San Francisco to preserve and protect power, territory, reputation, and profits of the enterprise through the use of intimidation, violence, assaults, and murder.  During the trial, the jury heard evidence that the five defendants, all from San Francisco, each played a role in the racketeering conspiracy whose crimes ranged from pimping to murder. 

Each defendant was found guilty of participating in the conspiracy.  In addition, Gordon was convicted of attempted murder for shooting at a victim during a nighttime ambush in San Pablo, Calif., on May 20, 2011.  Further, the evidence at trial showed the defendants’ involvement in a number of violent crimes, including Ferdinand’s and Young’s roles in the murder of Jelvon Helton at the Gravity bar in the Marina District of San Francisco on November 1, 2010, and Gordon’s and Harding’s involvement in a series of nine armed robberies throughout San Francisco between September 23, 2011, and October 5, 2011.  In sum, the five defendants were convicted of the following specific charges:

In addition to the prison terms, Judge Orrick sentenced Gordon, Ferdinand, and Harding each to 5 years of supervised release to follow their prison terms.  

On June 8, 2018, Judge Orrick sentenced Heard to four life sentences for his role in the conspiracy, including the murders of Andre Helton and Isiah Turner in a double-homicide that took place by the University of San Francisco on August 14, 2008.  Judge Orrick also sentenced Young to four life sentences for his role in the conspiracy, including the murder of Jelvon Helton and the attempted pimping of a minor; to an additional ten-year sentence to run consecutively for a related firearms charge; and an additional 20 years in prison for attempting to persuade an individual to travel for prostitution.

The defendants currently are in custody and will begin serving their sentences immediately.   

The prosecution is the result of joint investigation by the Federal Bureau of Investigation; San Francisco Police Department, including the Gang Task Force, Homicide Detail, Robbery Detail, Special Victims Unit, Night Investigations Unit, and the Northern, Park, Bayview, Mission, Central, and Taraval Stations; San Francisco District Attorney’s Office; and the San Pablo Police Department.

Defendant is alleged to have had hundreds of videos and other images on his cell phone

PRESS RELEASE

Indianapolis-Josh J. Minkler, the United States Attorney for the Southern District of Indiana, announced today that an Attica Indiana High School assistant boys and girls track coach was arrested on child exploitation charges. Jeremy Kelley, 39, from the town of Attica, was arrested yesterday and faces charges of sexual exploitation of a child, receipt of child pornography and possession of child pornography.

“Protecting and advocating for our most vulnerable has always been a top priority of my office,” said Minkler. “Those who take advantage of this district’s children can expect the full hammer of federal prosecution.”

In January 2018, law enforcement officials from the Montgomery County Sheriff’s Office received a tip from the National Center for Missing and Exploited Children. The follow-up investigation lead officials to a social media account owned by Kelley. Montgomery County deputies obtained search warrants for Kelley’s accounts and found over 16,000 images, most of which contained child pornography and over 500 video files.

On June 29, 2018, federal and local law enforcement served a search warrant at Kelley’s residence and found 451 videos and 27,000 images, most of which contained child pornography on his telephone.

Kelley was arrested and remains in the custody of the U.S. Marshal’s Service. He will have an initial hearing in Indianapolis on Monday, July 2, 2018.

The public is encouraged to call law enforcement officials if they have any reason to believe Kelley may have had inappropriate contact with their children or other youth in the community. The toll-free number is 800-CALLFBI (225-5324) or www.fbi.gov/tips

This case was investigated by the FBI, Indianapolis Metropolitan Police Department and the Montgomery County Sheriff’s Office.  

According to Assistant United States Attorney Tiffany J. Preston, Kelley could face decades in prison if convicted.

A criminal complaint is only a charge and not evidence of guilt. All defendants are presumed innocent until proved otherwise in federal court.  

 In October 2017, United States Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the Office’s firm commitment to prosecuting those who exploit children through the use of social media and to work closely with Project Safe Childhood. See United States Attorney’s Office, Southern District of Indiana Strategic Plan 4.1 and 4.2

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Dr. Andres Mencia, 64, of Fort Lauderdale, Florida was convicted today by a federal jury in Fort Lauderdale, of participating in a conspiracy to distribute a controlled substance.

U.S. Attorney Benjamin G. Greenberg for the Southern District of Florida; Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; Special Agent in Charge Adolphus P. Wright of the U.S. Drug Enforcement Administration (DEA), Miami Field Division; Special Agent in Charge Shimon R. Richmond of U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); and Special Agent in Charge Mark Selby of  U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), Miami Field Office, made the announcement.

According evidence admitted at trial, Dr. Mencia ran Adult & Geriatric Institute of Florida lnc, d/b/a AG1 Medical & Dental (AG1), in Oakland Park, Florida. Beginning in or around January 2014 and continuing through October 2017, Dr. Mencia, and office personnel Oscar Luis Ventura-Rodriguez, 41, of Ft. Lauderdale, Nadira Sampath-Grant, 51, of Margate, and John Mensah, 50, of Miami, conspired to perform sham consultations with cash-paying patients.  The evidence showed that the true and intended purpose of the consultations was to improperly issue the patients’ prescriptions for opioids and narcotics, such as Oxycodone, OxyContin and Percocet, in exchange for cash payments.  Pursuant to Dr. Mencia’s instructions, co-conspirators kept track of the drug-seeking patients by identifying them as “CS” (controlled substance) “patients.”  On occasion, Dr. Mencia provided his co-conspirators pre-signed prescriptions to issue the “CS” patients prescriptions for controlled substances in his name.  During the course of the conspiracy, Dr. Mencia was not providing a medically meaningful consultation but was in fact acting outside the scope of his professional practice and without legitimate medical purpose.  

Dr. Mencia is scheduled to be sentenced by U.S. District Judge William P. Dimitrouleas on Sept. 7, at 1:30 p.m. in Fort Lauderdale.

Ventura-Rodriguez, Sampath-Grant and Mensah previously pleaded guilty to conspiracy to defraud the United States by unlawfully distributing controlled substances.  Judge Dimitrouleas sentenced Ventura-Rodriguez to serve 60 months in prison, to be followed by three years of supervised release.  A re-scheduled sentencing date has not yet been set for Sampath-Grant.  Sentencing is set for John Mensah on Aug. 24, at 2:15 p.m.

The investigation was conducted by DEA, HHS-OIG and ICE-HSI.  The Aventura Police Department, City of Miami Police Department, Miami-Dade Police Department, and Miami Gardens Police Department assisted in the investigation.  This case was prosecuted by Assistant U.S. Attorney Michael Gilfarb of the Southern District of Florida and Trial Attorney Adam G. Yoffie of the Criminal Division’s Fraud Section. 

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

Abingdon, VIRGINIA – A Raven, Virginia man, who was previously convicted of criminal sexual misconduct in Michigan and therefore subject to the requirements of the Sex Offender Registration and Notification Act [SORNA], was sentenced last week for failing to register as a previously convicted sex offender when he moved to Virginia. United States Attorney Thomas T. Cullen and Virginia Attorney General Mark Herring made the announcement.

Nelson Jose Gonzalez, 50, a.k.a. “Gerald Perez” was sentenced last week to 21 months of federal incarceration. Gonzalez previously pleaded guilty to one count of failing to register as a previously convicted sex offender and one count of fraudulently using a social security number belonging to another person.

“As this case indicates, our office will aggressively prosecute individuals who violate the Sex Offender Registration Act,” U.S. Attorney Cullen stated.  “We are grateful to our partners at the United States Marshals Service for their commitment to this critical public-safety initiative.”

According to information presented at previous hearings by Special Assistant United States Attorney and Virginia Assistant Attorney General Suzanne Kerney-Quillen, Gonzalez was convicted of third-degree criminal sexual conduct while living in Michigan in 1993 and served 15 years in prison. Gonzalez registered as a sex offender in Michigan every three months from the time of his release from prison until sometime in 2012 or 2013.

Gonzalez admitted to purchasing identification documents in 2013, including a social security number of another person for $50 in order to avoid detection by law enforcement and the registration requirements of SORNA. The defendant admitted he left Michigan to pursue work with a traveling carnival and worked in Pennsylvania, Virginia, Maryland, Vermont, Connecticut, New Jersey, Florida and North Carolina without ever registering as a convicted sex offender in those states as a required by SORNA, despite knowing of his responsibility to do so.

After receiving information that Gonzalez was living and working in Raven, Virginia and had failed to register as a sex offender, the United States Marshals Service began an investigation in January 2018. During the course of that investigation, U.S. Marshal’s Service investigators discovered that Gonzalez was working at a local McDonald’s and using the name “Gerald Perez” to avoid detection by law enforcement.

The investigation of the case was conducted by the United States Marshals Service.  Suzanne Kerney-Quillen, an Assistant Attorney General assigned to the Major Crimes Section of the Virginia Attorney General’s Office and cross designated as a Special Assistant United States Attorney, prosecuted the case for the United States.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and David J. Downing, Special Agent in Charge of the Los Angeles Division of the U.S. Drug Enforcement Administration (“DEA”), announced today that LUIS EDUARDO RODRIGUEZ has been charged for his role in laundering hundreds of thousands of dollars in narcotics proceeds through Las Vegas real estate, and through multiple Nevada shell corporations, in order to send those proceeds to narcotics traffickers and money launderers based in Mexico.  RODRIGUEZ was arrested this morning in Las Vegas, and will be presented in federal court today in the District of Nevada.

The criminal complaint, which was filed under seal on June 28, 2018, alleges that RODRIGUEZ worked at the direction of Jesus Rodriguez-Jimenez, the leader of an international money laundering and narcotics trafficking organization (the “Organization”).  In June 2017, Rodriguez-Jimenez pled guilty to laundering in excess of $250 million in drug proceeds on behalf of drug cartels in Mexico and Central America through a variety of methods, including through seemingly “legitimate” corporations, shell bank accounts, and money couriers based in the United States and Europe.  RODRIGUEZ served as one conduit through which the Organization laundered drug money.    

U.S. Attorney Geoffrey S. Berman said:  “As alleged, Luis Eduardo Rodriguez assisted a major international drug trafficking organization in laundering the proceeds of its illegal operations.  Rodriguez allegedly laundered drug proceeds through Las Vegas real estate transactions, and assisted in recruiting people to act as straw-man ‘managers’ of shell companies for the trafficking organization.  Now, thanks to the DEA, Rodriguez is in custody and facing prosecution.”

DEA SAC David J. Downing said:  “The actions of the accused illustrate the methods drug trafficking organizations utilize to infiltrate our communities and attempt to legitimize their criminal enterprise, but this arrest exemplifies the tremendous steps taken by law enforcement to uproot and remove them.”

According to the allegations in the criminal complaint ^[1], and statements made in Court:

The Investigation

Since July 2013, the DEA has been investigating the Organization and its cartel clients, which together have been involved in trafficking hundreds of kilograms of cocaine and heroin, among other narcotics, and laundering narcotics proceeds through a variety of methods.  The Organization has ties to Panama, Mexico, Italy, Spain, and the United States, among other locations, and its members are believed to include the defendant.  Eight members of the Organization have previously been charged in the Southern District of New York, including in the indictment captioned United States v. Rodriguez-Jimenez et al., 16 Cr. 644 (KBF) filed on September 22, 2016.

In furtherance of the money laundering activities of the Organization, RODRIGUEZ, through his real estate business, purchased, renovated, and sold residential properties in Las Vegas at the direction of Jesus Rodriguez-Jimenez.  Jesus Rodriguez-Jimenez funded these transactions with drug dollars, and held his interest through a shell corporation, Innova Properties LLC (“Innova”).  During the first half of 2016, RODRIGUEZ “flipped” at least three properties in this way for Jesus Rodriguez-Jimenez; the last of these was purchased by Innova for approximately $220,000 and then sold two months later for approximately $226,000.

In or about October 2015, RODRIGUEZ assisted Jesus Rodriguez-Jimenez in recruiting individuals to allow their identities to be used by the Organization:  these individuals were listed with the State of Nevada as “managers” of various Organization-controlled shell corporations, and appeared as signatories on domestic bank accounts affiliated with those shell corporations.  In exchange for the use of their identities, these individuals each received $1,000 per month in cash.  These accounts were then utilized by the Organization for the movement of hundreds of thousands of dollars in narcotics proceeds.

In July 2016, after the raid of an Organization stash house by law enforcement in Philadelphia, which resulted in the seizure of $500,000 in narcotics proceeds, Jesus Rodriguez-Jimenez traveled from Monterrey, Mexico, to Las Vegas to meet with a purported associate to discuss the seizure.  In fact, that associate was an undercover DEA agent, and Jesus Rodriguez-Jimenez was arrested when he arrived for the meeting.  RODRIGUEZ accompanied Jesus Rodriguez-Jimenez to the meeting to discuss the seizure.

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RODRIGUEZ faces up to 20 years in prison on the charges contained in the criminal complaint.  The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Mr. Berman praised the DEA for its work in the investigation. 

This case is being handled by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant United States Attorneys Noah Falk and Jonathan E. Rebold are in charge of the prosecution.

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

WHEELING, WEST VIRGINIA – The United States Attorney’s office had the opportunity to employ four interns this summer.  The law students assisted in the Wheeling, Clarksburg, and Martinsburg offices in the criminal and civil divisions.

“Our district greatly benefited from the work of our student interns this summer.  It is always great to have smart young law students work with us.  They provide valuable research, written products and fresh insights.  They also have the opportunity to see the judicial process and our lawyers in action.  We all benefit from such experiences,” said United States Attorney, Bill Powell.

Samantha Berry is from Moundsville, West Virginia. She graduated from West Virginia University in 2014 with a Bachelor of Arts in Criminology and a minor in Law & Legal Studies. Samantha is a rising second year law student at West Virginia University College of Law.  She assisted in the Wheeling office.

Lakyn Cecil is from New Martinsville, West Virginia. She graduated from WVU in the spring of 2017 as Cum Laude with her Bachelors of Arts in Criminology and a double minor in Forensic and Investigative Science and Biology. Cecil went on to attend WVU College of Law in the fall of 2017. She also assisted in the Wheeling office.

Tim Dudley is from Utah where he earned a Bachelor’s degree from Brigham Young University.  He is currently studying law at Pepperdine University. Tim is assisting in the Martinsburg office. 

Jeremy Bumgardner is from Bridgeport, West Virginia. He holds a Bachelor of Science degree in Recording Industry Management and Commercial Songwriting from Middle Tennessee State. He is currently a rising 3L at WVU College of Law. Jeremy is assisting in the Clarksburg office.

The internships included an inside look at the federal judicial system and the federal and state corrections system.

Orlando, FL – United States Attorney Maria Chapa Lopez announces today that FWC Urogynecology, LLC, a network of urogynecology practitioners throughout Florida, has agreed to pay the United States $1,700,000.00 to resolve allegations that it violated the False Claims Act by knowingly billing the government for services that were inflated or that it did not provide.

The settlement relates to FWC Urogynecology’s use of Medicare billing codes with modifier 25.  A provider’s use of a modifier on healthcare claims can allow additional payment from government programs.  Here, FWC Urogynecology knowingly billed modifier 25 for services that were not billable or that it did not provide. 

According to the settlement agreement, from February 1, 2012, through January 12, 2017, FWC Urogynecology knowingly billed modifier 25 to receive additional payment from the United States.  For example, FWC Urogynecology’s physicians performed and billed for lavage treatments and pelvic floor therapies and then billed modifier 25 as if they provided another service, although no additional medical care was provided. 

“A primary mission of the United States Attorney’s Office is protecting Medicare, TRICARE, and other federal health care programs from fraud,” said U.S. Attorney Maria Chapa Lopez. “Our Civil Division works tirelessly in the pursuit of providers who bill for services they do not provide to patients.”

“I applaud the Department of Justice and the U.S. Attorney for their untiring efforts to hold health care providers accountable to the American taxpayer,” said Vice Adm. Raquel Bono, director of the Defense Health Agency. “The Department of Justice’s efforts safeguard the health care benefit for American service members, veterans and their families. The Defense Health Agency continues to work closely with the Justice Department, and other state and federal agencies to investigate all those who participated in fraudulent practices.”

“Misrepresenting alleged services to inflate costs is just plain and simple greed,” said Special Agent in Charge Shimon R. Richmond of HHS OIG.  “We will continue to thoroughly investigate health care companies that engage in schemes to defraud the American taxpayer.”

The settlement concludes a lawsuit originally filed in the United States District Court for the Middle District of Florida by a former employee of an FWC Urogynecology provider, Holly Loebl. Mrs. Loebl sued under the qui tam, or whistleblower, provisions of the False Claims Act permitting a private citizen to sue on behalf of the United States for false claims and to share in the recovery. The Act also allows the United States to intervene and prosecute the action. Mrs. Loebl will receive $306,000 of the proceeds from the settlement with FWC Urogynecology.

This settlement resulted from an investigation coordinated by Assistant U.S. Attorney Jeremy R. Bloor, with assistance from the Defense Criminal Investigative Service, and the U.S. Department of Health and Human Services, Office of Inspector General.

The government’s action in this matter illustrates the emphasis on combating health care fraud, and one of the most powerful tools in this effort is the False Claims Act. Tips from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

The case is captioned United States ex rel. Holly Loebl v. Urogynecology Specialists of Florida, LLC and Florida Woman Care, LLC, Docket Number 6:16-cv-1722-Orl-37KRS. The settlement resolves the United States’ claims in that case. The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Jacksonville, Florida – U.S. District Judge Brian J. Davis has sentenced Donald McCloud Long (51, Jacksonville) to 18 months in federal prison for conspiracy to illegally distribute anabolic steroids. Judge Davis also sentenced Long’s steroid supply source, Gregory Allen Baker (30, Jacksonville), to 3 years in federal prison for the same offense and for money laundering. In addition, Long’s wife, Sarah Long (35, Jacksonville), was sentenced to a term of 42 months’ probation, which includes a 1-year term of home confinement.

The court also ordered Don and Sarah Long to forfeit $250,000, which are traceable as proceeds of the offense. Baker was ordered to forfeit a 2015 Land Rover Range Rover Sport, a 2008 Cadillac Escalade Luxury, a 2011 Yamaha Drive Electric Golf Cart, a 2013 Kia Soul Sport, a 2007 Yamaha Motorcycle, jewelry, and proceeds in the amount of $124,418. Baker also consented to the forfeiture $37,800 in additional proceeds.    

Don and Sarah Long both pleaded guilty on January 22, 2018. Baker pleaded guilty on February 14, 2017. Eight others have been convicted as part of the conspiracy.    

According to court documents, from January 2013 through September 27, 2016, Don and Sarah Long supplied many of their clients with anabolic steroids and human grown hormone (HGH) as part of their “Team Long” training regimen. The Longs provided instruction, dosage, and direction to Team Long athletes on how to consume steroids and HGH to prepare for bodybuilding competitions and other athletic endeavors.

Baker was the Longs’ primary source of supply for steroids and HGH and  imported raw anabolic steroids and HGH from China. Baker manufactured the steroids into consumable form, then branded the product “AxioLabs” and distributed it for the Longs and others. After the federal investigation became known, Baker rebranded his anabolic steroid and HGH as “Razors Edge.”

These cases were part of “Operation Total Package,” led by the Drug Enforcement Administration (DEA). It was a collaboration among the DEA, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Postal Inspection Service, U.S. Customs and Border Patrol, the Jacksonville Sheriff’s Office, the Jacksonville Beach Police Department, the Green Cove Springs Police Department, the Internal Revenue Service – Criminal Investigation, and the U.S. Anti-Doping Agency. It was prosecuted by Assistant United States Attorney Kelly S. Karase.