PHILADELPHIA, PA – United States Attorney William M. McSwain announced today that Jong Young Choi, 46, of Chalfont, PA, was ordered to pay $81,217.00 in restitution for willful failure to pay employment taxes. He was also sentenced to 5 years' probation for his conduct.  Choi, as the president and sole shareholder of JUNS, Inc., doing business as Daisy Dry Cleaners, located in Philadelphia, was responsible for collecting, accounting for, and paying employment taxes due to the Internal Revenue Service from January 1, 2012 through January 31, 2016.  He failed to collect and pay approximately $67,931 in employment taxes for his employees.

“By ignoring his employment tax obligations for years, Choi lived by his own set of self-imposed rules, but his criminal conduct eventually caught up with him,” said U.S. Attorney McSwain.  “Failure to pay employment taxes is a federal crime – one that my Office takes seriously.  We will continue to hold people accountable when they willfully fail to pay taxes owed to the Internal Revenue Service.”

“When Jong Choi made the decision not to collect and turn over all IRS withholding taxes, he also made the decision to cheat his employees and other honest taxpayers,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. "The investigation of employment tax fraud is a priority for the special agents of IRS-CI as our system of taxation depends on everybody paying their fair share. Let today’s sentence serve as a warning to those contemplating similar actions."

The case was investigated by the Internal Revenue Service, Criminal Investigation Division and is being prosecuted by Assistant United States Attorney Terri A. Marinari.

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Adam C. McFadden, and George H. Moses, both of Rochester, NY, were charged by criminal complaint with wire fraud; conspiracy to commit wire fraud; money laundering; and conspiracy to commit money laundering. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that according to the complaint, McFadden is a member of the Rochester City Council, and Moses is the former Chairman of the Board of Commissioners of the Rochester Housing Authority (RHA), which provides housing opportunities and services for the Rochester community and a board member of the Rochester Housing Charities (RHC). The RHA has an annual contract with the United States Department of Housing and Urban Development from which it receives millions of dollars.

As alleged in the criminal complaint, on March 25, 2015, Moses, as Chairperson of the Board of RHA, caused that Board: (a) to appoint him as one of the three new board members of the RHC, and (b) to approve a loan by the RHA to the RHC in the amount of $300,000.

On July 7, 2015, the RHC entered into an $87,500 one year contract with Capital Connection Partners LLC (CCP) in Washington, D.C. for various services including: (a) advocating at the local, state and federal level of government for policy and legislation, reviewing best practices, and issuing presentations to elected officials; and (b) finding self-sufficient resources to include creating entrepreneurial opportunities and workforce development, developing revenue streams for residents, and applying for federal home loan bank grants.

The following day, on July 8, 2105, McFadden, on behalf of his company, Caesar Development LLC, executed a contract with CCP entitled the Pass Through Funding and Services Agreement, which provided that CCP would pass through 75% of the funds it received from the RHC to Caesar Development LLC.
          
The defendants caused the RHC to enter into the RHC/CCP contract knowing that CCP and McFadden would not be providing the majority of the services required under the terms of the contract. The defendants also concealed that CCP would be diverting most of the funds received from the contract to McFadden.

On August 3, 2015, the RHA on behalf of the RHC paid CCP $43,750, which represented the first installment payment under the terms of the RHC and CCP Contract. Thereafter, on August 8, 2015, CCP paid $32,812.50 to Caesar Development LLC, which represented 75% of the funds CCP had just received from the RHA.

Subsequently, on December 23, 2015, the RHC paid $43,750 to CCP, which represented the second installment payment under the terms of the RHC and CCP Contract. On the following day, December 24, 2015, CCP paid $32,812.50 to Caesar Development LLC, which represented 75% of the funds CCP had just received from the RHC.

To deceive the RHA and the RHC into making the payments to CCP, the defendants caused fraudulent invoices from CCP to be submitted to the RHC that falsely stated that CCP had provided various services required under the terms of the RHC/CCP contract, when in fact, such services had not been performed.

In October 2018, Moses was also charged with making false statements to Special Agents of the FBI in connection with the investigation, those charges remain pending.

In announcing the charges, U.S. Attorney Kennedy noted that, “the charges contained in the criminal complaint filed today should serve as a reminder to all public officials and holders of public office—you are elected to serve, not to take. If you put your own financial interests above the public trust, then your payback may well be the filing of federal criminal charges.”

The complaint is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Gary Loeffert, the Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent-in-Charge Brad Geary, and the Internal Revenue Service, Criminal Investigations Division, under the direction of Jonathan D. Larsen, Acting Special Agent-in-Charge, New York Field Office.

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

# # # #

Assistant U.S. Attorneys Valerie Chu (619) 546-6750, Caroline Han (619) 546-6968 and Fred Sheppard (619) 546-8237

NEWS RELEASE SUMMARY– February 22, 2019

SAN DIEGO – This week in federal court a slew of conspirators involved in a massive Workers’ Compensation kickback scheme were ordered to serve prison sentences and pay millions in financial penalties for their roles in the corrupt payment of millions of dollars to induce doctors and other medical professionals to refer hundreds of injured workers for medical treatments and services. 

According to court records, dozens of marketers, doctors, lawyers and medical service providers conspired to bilk the Workers’ Compensation system in California by buying and selling patients -- and their individual “body parts” -- like commodities. Among the defendants sentenced this week was an attorney, a chiropractor, two business owners and several marketers who referred patients for tests (such as MRIs, functional capacity exams and sleep studies), treatments (such as “shockwave,” x-rays, and ultrasound), pain medications, and durable medical equipment (DME) based on the corrupt payments.  The conspirators often subjected patients to uncomfortable and sometimes painful procedures, so the conspirators could thereafter bill insurance companies for millions of dollars.  As the government argued in its sentencing papers, the conspirators’ corruption of the doctor-patient relationship caused physicians to see price tags on every patient’s body parts.  Each of the defendants played a critical role in the corrupt scheme.

The Corrupt Network

Defendant Fermin Iglesias and co-defendant Carlos Arguello operated a patient-capping enterprise, in which they found individuals who would file Workers’ Compensation claims against their employers.  Iglesias and Arguello then sold, bartered and exchanged these applicants with others in the Workers’ Compensation industry, including attorneys, primary care physicians, and providers of medical goods and services.  Each of these entities had to “pay to play,” and as the patient was referred throughout this corrupt system, money changed hands at each step.  Arguello operated several patient-recruitment entities, including one called Centro Legal.  Through billboards, flyers, advertisements and business cards, Centro Legal recruited persons to seek workers' compensation benefits from their employers or former employers.  When the injured worker called the 1-800 number on the billboard or card, he or she reached a call center, which might be located in another country.  From there, Iglesias’ company, Providence Scheduling, took over brokering the patient to maximize the profit that could be extracted from him or her.

Centro Legal referred the newly-acquired patient to complicit Workers' Compensation attorneys, including, in San Diego, attorney Sean O’Keefe, who had one of the largest Workers’ Comp caseloads in the region.  To get these new clients, the attorneys in the corrupt network were expected to comply with certain conditions: first, they had to use Arguello’s copying service to fulfil document requests for all of the new client’s medical records; second, they had to agree to designate as their client’s primary treating physician (“PTP”) one of the complicit physicians within the corrupt network.  In exchange, the attorneys received compensation.  For O'Keefe, the compensation took a variety of forms.  One hospital administrator paid the salaries of two employees of O’Keefe’s law firm, as a kickback to O’Keefe for referring spinal surgeries to that hospital. In another variation, the kickback payments were disguised as payments for nonexistent legal services, for which O’Keefe generated phony “legal invoices” to cover up those obviously illegal payments.

The corrupt physician could serve as the patients' primary care physician in the Workers' Comp system.  This was a key gatekeeper role, because the PTP was entrusted with the authority to determine what additional goods and services the patient needed.  Iglesias required that the chiropractors prescribe a certain minimum quota of goods and services, on average, for each patient.  If the chiropractor failed to live up to the quota, Iglesias would cut off the flow of new patients.

Dr. Steven Rigler was one of the chiropractors involved in the corrupt referral network.  He had clinics in Calexico, San Diego, and Escondido.  To get patients for his San Diego and Escondido clinics, Rigler agreed to meet the referral “quota” set by Iglesias and Arguello. Court records reflect that Iglesias set a “value” for each type of service the physicians could refer, for example, $30 for each MRI, and $150 for Durable Medical Equipment (DME), to meet the quota of $600. To get credit, physicians had to refer their DME orders to Iglesias’ company, Meridian Medical Resources. Many of the MRIs were referred to Advanced Radiology, a diagnostic imaging company owned by Dr. Ronald Grusd.  In Calexico, Ruben Martinez ran Rigler’s clinic and managed all of Rigler’s referrals for ancillary services.  Alexander K. Martinez performed the same service for Rigler’s other clinics.

If the physicians failed to meet the quota, Iglesias cut off the pipeline of new patients.  Iglesias employed Miguel Morales to ensure that physicians met the quota, and to demand lump-sum payoffs from them if they failed to do so.  And to avoid such problems, and ensure a smooth referral process, Arguello hired referral managers who worked in chiropractor offices.  For a time, Julian Garcia was paid by Arguello to manage Rigler's referrals. Garcia had Rigler's signature stamp, and if Rigler got behind, Garcia would simply increase the number of MRIs referred for each patient.  Eventually, Garcia himself got licensed as a DME provider, and he himself paid chiropractors $50 apiece to prescribe “hot/cold packs” for pain relief, which were then billed to insurance companies for nearly $6,000. 

Jennifer Louise White represented providers of other types of services, namely, Autonomic Nervous System (“ANS”) studies and sleep studies.  She worked with Alex Martinez and with providers of the ANS and sleep studies to pay nearly $200,000 in kickbacks to Rigler to refer patients for these services.

Sentencing Hearings

In sentencing hearings held on February 20 and 21, 2019, U.S. District Judge Cynthia A. Bashant sentenced each defendant to custodial time. For his crimes, Iglesias was sentenced to 60 months in custody, and required to forfeit $1,005,000 in ill-gotten gains.  Judge Bashant imposed five years’ probation on Igelsias’ corporations, MedEx and Meridian, and imposed a $500,000 joint and several fine.  Miguel Morales was sentenced to 12 months and 1 day in custody, and was required to forfeit $140,000.

Alexander and Ruben Martinez were each sentenced to 33 months in custody and three years of supervised release.  Their companies, Line of Sight and Desert Blue Moon, were sentenced to five years’ probation and fines of $45,000 and $20,000 respectively. Jennifer Louise White was sentenced to 24 months in custody, and ordered to pay fine of $25,000.

Onetime Workers’ Compensation applicant attorney Sean E. O’Keefe received a sentenced of 13 months in custody, and was required to forfeit $300,000 in ill-gotten gains. San Diego chiropractor Steven J. Rigler was sentenced to six months in custody, and was ordered to forfeit $150,000. The court substantially reduced both defendants’ sentences because they cooperated with authorities soon after being confronted by agents, and played critical roles in revealing the scope of the corrupt network.

Throughout the sentencing hearings, Judge Bashant expressed dismay that the defendants scammed a system “that’s set up to help people that really need the help.”  She further expressed concern that these crimes would undermine public support for social safety-nets, such as the Workers’ Compensation system for injured workers. She expressed particular disappointment that licensed professionals like attorney O’Keefe and Dr. Rigler would engage in the fraud: “You are the most educated. You should know better,” she reproached them. 

This week’s sentencing hearings, along with the conviction and sentence of Beverly Hills Radiologist Dr. Ronald Grusd, bring to a successful close the first wave of cases brought by the U.S. Attorney’s Office and its law enforcement partners to combat fraud in the California Workers’ Compensation System. 

“It is unfortunate that some individuals see only an opportunity to profit in a system designed to aid injured workers,” said U.S. Attorney Robert S. Brewer, Jr.  “What’s more, this crime corrupted the doctor-patient relationship.  A doctor’s medical decisions should be based on the best interest of the patient, not the highest bidder.”

“Health care fraud betrays vulnerable patients and steals funds meant to care for injured workers,” said FBI Special Agent in Charge John Brown.  “The cases in 'Operation Back Lash' have shown that these medical professionals, doctors, and attorneys who took bribes chose profit over their patients. This massive investigation, with over 30  convictions to date, demonstrates the FBI's commitment to finding those who commit fraud and bringing them to justice.”

Anyone with information about healthcare fraud may call the FBI at 1-800-CALL-FBI, or 1-800-225-5324 or the California Department of Insurance’s toll-free fraud hotline, 800-927-4357.

DEFENDANTS        

United States v. Grusd, et al., 15cr2821-BAS                    Sentence               

Ronald Grusd, Los Angeles, CA                                                        10 years, $1.3 million forfeiture, $250,000 fine

California Imaging Network Medical Group                         5 years’ Probation, $500,000 fine

Willows Consulting Company                                               5 years’ Probation, $500,000 fine

Alex Martinez, El Centro, CA                                                37 months’ custody

Ruben Martinez, Murietta, CA                                               33 months’ custody

Line of Sight, Inc.                                                                   5 years’ Probation, $45,000 fine

Desert Blue Moon, Inc.                                                          5 years’ Probation, $20,000 fine

United States v. Iglesias et al, 16CR0131-BAS

Fermin Iglesias                                                                       60 months’ custody, $1,005,000 forfeiture

MedEx Solutions                                                                    5 years’ Probation, $500,000 fine

Meridian Medical Resources                                                  5 years’ Probation, $500,000 fine

Miguel Morales                                                                      12 months 1 day custody, $140,000 forfeiture

United States v. Garcia, 15CR2820-BAS

Julian K. Garcia, National City, CA                                       33 months’ custody, $10,000 fine

United States v. White, 16CR2905-BAS

Jennifer Louise White, Glendale, CA                                    24 months, $25,000 fine

United States v. O’Keefe, 14CR2343-BAS

Sean Enrique O’Keefe                                                            13 months, $300,000 forfeiture

United States v. Rigler, 15CR2773-BAS

Steven J. Rigler                                                                       6 months, $150,000 forfeiture

INVESTIGATING AGENCIES

Federal Bureau of Investigation

San Diego County District Attorney’s Office

California Department of Insurance

LAS VEGAS, Nev.– A Las Vegas woman was sentenced yesterday to 34 months in federal prison and ordered to pay more than $13.9 million in restitution to victims in connection with a series of grant fraud schemes, announced U.S. Attorney District Nicholas A. Trutanich for the District of Nevada. The woman’s fraud schemes targeted small business owners, many of them elderly, and a separate Medicare and insurance fraud scheme.

Lorraine Riddiough, aka Lorraine Ann Mader, 70, of Las Vegas, was also sentenced to five years of supervised release by U.S. District Judge Andrew P. Gordon. The sentencing combined four separate cases. Riddiough pleaded guilty last year to four counts of conspiracy to commit mail and wire fraud, two counts of wire fraud, and one count each of health care fraud and theft of government property.

From October 2009 to Spring 2013, Riddiough and others conspired to defraud small business owners by falsely telling the business owners that they qualified for grants, which Riddiough and others promised to secure for the business owners for a fee, usually between $2,500 and $7,000. Riddiough and the others did not provide the promised services or obtain grants for the small business owners. After scamming the initial $2,500 to $7,000 from the victim, Riddiough and the others often told the victims that grants had been approved, but that additional steps and fees were needed to access that grant. More than 25 victims suffered significant financial hardship as a result of the losses from the advance-fee telemarketing scheme. Riddiough herself directly obtained approximately $444,224 from the victims.

Riddiough admitted that after the telemarketing schemes were shut down by law enforcement intervention in 2014, she faked medical conditions, ailments, and injuries related to a minor, low-speed car accident to steal Medicaid benefits and funds from the Government Employees’ Insurance Company (GEICO). She filed a series of false claims related to the traffic accident and made a series of fake medical complaints including her inability to work and drive her car due to her injuries. She received treatment and medication for the non-existent injuries she falsely claimed.

The cases were investigated by the FBI. Assistant U.S. Attorney Dan Cowhig prosecuted the cases.

###

CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051

BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Robin Williams, 56, of Canada, who was convicted of unlawfully importing marijuana in the form of hashish, was sentenced, in absentia, to serve 41 months in prison, by U.S. District Judge Richard J. Arcara.              

Assistant U.S. Attorney Timothy C. Lynch, who handled the case, stated that on November 21, 2006, the defendant attempted to enter the United States at the Peace Bridge Port of Entry with a quantity of marijuana. Some of the marijuana was found in Williams’ pants pocket. Also located in the defendant’s truck was an additional 108 pounds of marijuana.

Williams pleaded guilty on August 1, 2007, to the charge and sentencing was scheduled for November 14, 2007. However, the defendant failed to appear for sentencing. In light of Williams’ continued failure to appear for sentencing, Judge Arcara granted a motion filed by the Government to have the defendant sentenced in absentia.

The sentencing is the result of an investigation by the U.S. Department of Homeland Security Investigations, under the direction of Special Agent-in-Charger Kevin Kelly.

# # # #

Assistant U.S. Attorneys Daniel Zipp (619) 546-8463 and Seth Askins (619) 546-6692

NEWS RELEASE SUMMARY– February 22, 2019

SAN DIEGO – Robert Holcomb, 53, was sentenced in federal court today to 46 months’ custody and ordered to pay a fine of $600,000, for misappropriating the identities of charities and using them to open bank accounts as part of a long-running tax fraud scheme.

Holcomb, who appeared before U.S. District Court Judge William Q. Hayes, was convicted by a federal jury on July 20, 2018 of four counts of making false statements to a financial institution.

According to the evidence presented at trial, Holcomb held himself out as an “asset protection” specialist who had the ability to use charitable trust accounts to reduce the tax liability of clients. Holcomb convinced his clients to forward him the profits from their businesses, which he then cycled through a series of bank accounts—with names that sounded like charities—and then returned the funds, minus a commission, with the assurance that they no longer constituted taxable income. Holcomb’s clients then filed tax returns that substantially underreported their true income, resulting in millions of dollars in lost income to the IRS.  Over the course of a decade, Holcomb transferred more than $12 million in otherwise taxable income through his accounts, collecting “commissions” from his clients of more than $1 million dollars.

In 2011, after a number of Holcomb’s bank accounts were frozen, he was forced to open dozens of new accounts to keep the tax-evasion scheme operating. To do so, Holcomb began creating corporate entities whose names matched those of existing charities; misappropriating the taxpayer identification information from those charities; and then using their names and identification numbers to open new bank accounts. These charities included:

• Light of Life LLC, which operated a soup kitchen and rescue mission in Pittsburgh, PA;
• On Eagle’s Wings LLC, which provided missionary outreach in the Northwest Territories of Canada;
• Push the Rock, LLC, a Christian Sports Ministry, in Pennsylvania; and
• Sharing and Caring, LLC, a veteran’s organization that organized an annual boat trip for wounded veterans in Pittsburgh.

Representatives from each organization testified at trial that they did not know Holcomb, never gave him authorization to use their identities, and were unaware that he opened bank accounts in their name. When confronted about his affiliation with the charities, in a recorded call, Holcomb claimed that he had a “fiduciary relationship” and “run[s] everything.” When IRS agents then executed a search warrant on Holcomb’s residence, he admitted to using the charities’ numbers, but claimed that he could “use whatever number” he wanted, because he was “USA posterity.” Holcomb explained that he was “part of the upper caste” that was descended from the original founders of the “Massachusetts Bay Company.” As such, he explained, he was not required to pay taxes and was not subject to the Constitution.

“Holcomb used a series of sham trust arrangements to divert millions of taxpayer dollars into his own pocket,” said U.S. Attorney Robert Brewer.  “His offense was particularly egregious because he used the identities of real charities in order to avoid detection and continue collecting commissions on funds that should have gone to the U.S. Treasury. No one is above the law, and merely claiming to be a sovereign citizen will not exempt you from criminal liability.”

“As today’s sentencing shows, individuals who create elaborate schemes that have no purpose other than to defraud the IRS and financial institutions will be prosecuted and suffer a loss of freedom,” said Acting Special Agent in Charge Bryant Jackson of IRS Criminal Investigation.  “With filing season in full swing, it is a good time to remember that the IRS will actively pursue fraudsters who cleverly orchestrate these types of avoidance schemes.”

The case was prosecuted by Assistant U.S. Attorneys Daniel Zipp and Seth Askins.

DEFENDANT                                                      16-CR-1408-WQH

Robert Holcomb       Age: 53          San Marcos, CA                   

SUMMARY OF CHARGES

Making False Statements to a Financial Institution (18 U.S.C. 1014)

AGENCIES

Federal Bureau of Investigations

Internal Revenue Service

Bureau of Alcohol, Tobacco, Firearms and Explosives

Portland, Maine:  United States Attorney Halsey B. Frank announced that Sherry Awadjie, 45, of Lewiston, Maine, pleaded guilty yesterday in U.S. District Court to theft of funds from the Supplemental Nutrition Assistance Program (SNAP), MaineCare, and the Social Security Administration (SSA). 

Court documents show that from November 2015 until May 2017, Awadjie received public assistance benefits from SNAP, MaineCare, and the SSA because she claimed to be disabled and not earning any income.  In fact, from at least November 2015, Awadjie was gainfully employed and earning income, but failed to inform any of the benefit programs.  On periodic reports that she was required to submit to receive the benefits, she failed to disclose her employment or income.  She also concealed her employment by arranging with her employer to be paid “under the table” and later, under the name of another person.  If she had disclosed her employment and income, she would not have been eligible for the benefits she received, including $3,492 in SNAP benefits, $1,654 in MaineCare benefits, and $15,072 in Social Security benefits.

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

This case was investigated by the U.S. Department of Health and Human Services, Office of Inspector General; the Department of Homeland Security, U.S. Immigration and Customs Enforcement; the SSA, Office of the Inspector General, and the Maine Department of Health and Human Services, Fraud Investigation and Recovery Unit.

New York Times Opinion (Published February 22, 2019)

By Thomas T. Cullen, United States Attorney for the Western District of Virginia

Last week, federal agents in Maryland arrested a United States Coast Guard officer and said he was plotting to assassinate Democratic members of Congress, prominent television journalists and others. The officer, Lt. Christopher Hasson, apparently inspired by a right-wing Norwegian terrorist who slaughtered 77 people in 2011, stockpiled firearms and ammunition and researched locations around Washington to launch his attacks, according to investigators. Fortunately, the F.B.I. arrested him before he could act.

This frightening case is just one of several recent reminders that white supremacy and far-right extremism are among the greatest domestic-security threats facing the United States.

Regrettably, over the past 25 years, law enforcement, at both the federal and state levels, has been slow to respond. This is in part because of the limited number of enforcement tools available to prosecutors. But there are steps that can be taken to help the police and prosecutors address this growing threat — including, on the federal level, a domestic terrorism law.

In 2017, hate crimes, generally defined as criminal acts motivated by the victim’s race, ethnicity, religion, or gender, increased by about 17 percent nationally, to 7,175 from 6,121 (the number of police agencies reporting crimes also rose, by about 6 percent); in my state, Virginia, they were up by nearly 50 percent, to 202 from 137.

Killings committed by individuals and groups associated with far-right extremist groups have risen significantly. Seventy-one percent of the 387 “extremist related fatalities in the United States” from 2008 to 2017 were committed by members of far-right and white-supremacist groups, according the Anti-Defamation League’s Center on Extremism. Islamic extremists were responsible for 26 percent.

The rising scourge of domestic hate has been underscored by particularly heinous acts in the past few years. In 2015, an avowed white supremacist murdered nine black congregants at the Emanuel African Methodist Episcopal Church in Charleston, S.C. Last year in Kentucky, a white man with a history of making racist remarks was charged with shooting and killing two African-Americans in their 60s at a grocery store after trying to enter a nearby black church. Several months ago, an assailant shouting anti-Semitic slurs stormed the Tree of Life Synagogue in Pittsburgh with a semiautomatic rifle and murdered 11 people.

Virginia, too, has experienced extremist violence. In August 2017, several hundred people — mainly young white men heavily influenced by white-nationalist propaganda — converged on Charlottesville, ostensibly to protest the possible removal of Confederate monuments from public parks. Among other odious acts, these “Unite the Right” protesters marched with lighted torches on the campus of the University of Virginia. They chanted “Jews will not replace us!” before attacking a small group of students and counterprotesters at the base of a statue of Thomas Jefferson.

The following day, some of these Unite the Right enthusiasts attacked and injured counterprotesters in Charlottesville. Their violence culminated when a white supremacist from Ohio drove his car into a crowd of people, killing 32-year-old Heather Heyer and injuring about 30 others.

In 2009, Congress took an important step in arming federal investigators to deal with hate crimes by passing the Matthew Shepard and James Byrd, Jr., Hate Crimes Prevention Act. This law makes it possible to prosecute as hate crimes violent acts committed against victims because of their race, color, national origin, religion, gender, gender identity or disability. The law provides stringent maximum penalties, including life imprisonment, if someone is killed during a hate crime.

But the hate crime law has its limitations. First, it requires proof that an individual acted because of a specific proscribed animus enumerated in the statute. That means investigators must uncover concrete evidence that the defendant was primarily motivated by, for example, racist or anti-Semitic views. Although this evidence exists in many hate crimes, it proves elusive in others.

Second, because it is a federal statute, prosecutors must prove a “jurisdictional” element, such as travel by the defendant across state lines. For those hate crimes that do not involve interstate travel or communication, the law can’t be invoked.

Given these limitations, elected officials should consider providing law enforcement with additional tools. At the federal level, this could include a domestic-terrorism statute that would allow for the terrorism prosecution of people who commit acts of violence, threats and other criminal activities aimed at intimidating or coercing civilians.

State officials can update and strengthen existing hate-crime laws, many of which do not include protections for some of the categories of people listed in the federal hate crimes law. Although many states have expanded these protections, the Indiana State Senate this week moved to weaken a proposed hate crime bill. In addition, states can authorize localities to place reasonable time, place, and manner restrictions on demonstrations that will likely result in widespread violence and other criminal activity, like the rally in Charlottesville.

At both the federal and state levels, immediate steps are required to curtail the alarming rise of hate crimes and extremist violence in this country.

Jay Walter Sall, 54, of Miami Beach, was sentenced, on February 21, 2019, to a total of 240 months in prison by U.S. District Judge K. Michael Moore, for attempting to entice a minor to engage in sexual activity.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigations (FBI), Miami Field Office, made the announcement.

According to the court record, Sall communicated with an undercover FBI agent by text messages. In those text messages, Sall solicited and paid for the agent to record sexual intercourse between the agent and the agent’s purported 9-year-old daughter. During the course of the investigation, the FBI also learned that Sall had been secretly recording three other females, two of which were minors at the time of the recordings.

On November 29, 2018, Sall pleaded guilty to attempting to entice a minor to engage in sexual activity.  On February 21, 2019, the Honorable K. Michael Moore sentenced Sall to 240 months in prison, 15 years of supervised release, payment of a $50,000 fine, and registration as a sex offender for life.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), 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.

U.S. Attorney Fajardo Orshan commended the investigatory efforts of the FBI and FBI Miami Child Exploitation Task Force in this matter.  She thanked the Miami Beach Police Department for their assistance.  This case was prosecuted by Assistant U.S. Attorney Daniel Cervantes.

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

Roanoke, VIRGINIA – A former Virginia Tech professor studying artificial sweeteners was found guilty last week of conspiring to commit federal grant fraud, making false statements and obstruction by falsification, First Assistant United States Attorney Daniel P. Bubar announced today.

Chief Judge Michael F. Urbanski of the Western District of Virginia released his Findings of Fact and Conclusions of Law February 20, 2018 in which he found Yiheng Percival Zhang, 47, of Blacksburg, Va., guilty of one count of conspiracy to defraud the United States, three counts of making false statements, and one count of obstruction by falsification. The ruling comes following a September 2018 bench trial in U.S. District Court in Roanoke.

“This verdict shows our commitment to hold individuals accountable who seek to fraudulently obtain federal funds.  Mr. Zhang used his position of prominence to unlawfully seek money from federal grant programs and will now pay for it,” FAUSA Bubar said today. “I am proud of our team of investigators and prosecutors that worked tirelessly to ensure that tax payer dollars are not being misused.” 

“Small Business Innovation Research (SBIR)  and Small Business Technology Transfer (STTR) grants are intended to promote scientific innovation in the private sector by providing capital to entrepreneurial teams at a very early stage when the technological risk associated with their ideas generally precludes private sector funding,” said Allison Lerner, Inspector General for the National Science Foundation (NSF). “The NSF Office of Inspector General remains committed to ensuring the integrity of the SBIR/STTR programs by holding accountable those who attempt to hide behind sophisticated schemes aimed at diverting Federal research funds. I commend the U.S. Attorney’s Office and our investigative partners for their strong support in this effort.”

According to evidence presented at trial, Zhang, who at the time of the offenses was a biological systems engineering professor at Virginia Tech, founded Cell-Free Bioinnovations, Inc. (“CFB”), a research firm located in Blacksburg, Virginia. CFB relied exclusively on federal grants for funding its research activities. Zhang began working as a paid researcher for the Tianjin Institute of Industrial Biotechnology, Chinese Academy of Sciences by, at least, 2014.  In 2015, Zhang caused fraudulent grant proposals to be submitted to the NSF. Evidence presented at trial indicated grant funds obtained would be used for research Zhang knew had already been done in China. Zhang intended to use the grant funds for other CFB projects rather than for the projects for which the funds were requested. To obstruct the investigation, Zhang submitted falsified timesheets to government investigators.

The investigation of the case was conducted by the Department of Energy-Office of the Inspector General, the Federal Bureau of Investigation, and the National Science Foundation-Office of the Inspector General with the assistance of the Blacksburg Police Department and the Virginia Tech Police Department.  Assistant United States Attorneys Steve Pfleger and Randy Ramseyer prosecuted the case for the United States.

JOHNSTOWN, Pa. - A resident of Roaring Springs, Pa., pleaded guilty in federal court to a charge of theft of government funds, United States Attorney Scott W. Brady announced today.

Glenn P. Rhykerd, 68, pleaded guilty to one count before United States District Judge Kim R. Gibson.

In connection with the guilty plea, the court was advised that from Jan. 1, 2015, to May 31, 2016, Rhykerd did receive and convert falsely to his own use a total of $50,985.21 in United States Railroad Retirement Board disability payments made to him to which he was not entitled.

Judge Gibson scheduled sentencing for June 5, 2019, at 1 p.m. The law provides for a maximum total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Assistant U.S. Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.

The United States Railroad Retirement Board, Office of Inspector General, conducted the investigation that led to the prosecution of Rhykerd.

United States Attorney Ron Parsons announced that a Lower Brule, South Dakota, man has been indicted by a federal grand jury for Third Degree Burglary.

Marlowe LaRoche, age 20, was indicted on February 13, 2019.  He appeared before U.S. Magistrate Judge Mark A. Moreno on February 22, 2019, 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 December 18, 2018, LaRoche entered the Lower Brule Indian Health Service Clinic after normal business hours with the intent to commit larceny.

The charge is merely an accusation and LaRoche is presumed innocent until and unless proven guilty. 

The investigation is being conducted by the Bureau of Indian Affairs, Crow Creek Agency.  Assistant U.S. Attorney Troy R. Morley is prosecuting the case.   

LaRoche was released on conditions pending trial.  A trial date has not been set.

The Office of the United States Attorney for the District of Vermont stated that Douglas Bedell, age 56, of Williamstown, Vermont, has been indicted and detained on a federal firearms charge.  At his arraignment in U.S. District Court in Burlington on February 22, 2019, Bedell pleaded not guilty and was ordered detained in the custody of the U.S. Marshal’s Service pending disposition of the charge.  Bedell was also ordered to undergo a competency evaluation.

On December 12, 2018, Bedell was arrested by the Vermont State Police in Orange County and charged with Aggravated Domestic Assault after an altercation with a female.  Half-a-dozen firearms were found in his residence, along with over 1600 rounds of ammunition.  At the time, Bedell had two Vermont felony convictions, and was on State court release based on a 2017 Aggravated Assault with a Weapon charge in Washington County.  As a result, federal law barred his possession of firearms.  Bedell was detained in State custody after his December, 2018 arrest.  A Criminal Complaint filed by the Bureau of Alcohol, Tobacco and Firearms initiated the federal prosecution. 

The Criminal Complaint and Indictment are accusations only and Bedell is presumed innocent until and unless proven guilty.  The maximum possible sentence on the federal charge is 10 years imprisonment.  However, any sentence would be informed by the U.S. Sentencing Guidelines. 

U.S. Attorney Christina E. Nolan thanked the Vermont State Police and ATF for their investigative work and collaboration.  She stated: “this case exemplifies how federal guns laws may be brought to bear to address and prevent domestic violence in all Vermont communities.”  The United States is represented by Assistant U.S. Attorney William Darrow.  Bedell is represented by Assistant Federal Defender Elizabeth Quinn.   

ATLANTA - Zachary Adam Johnson has been sentenced for aggravated identity theft and mail theft.  The defendant was previously a part-time mail carrier for the postal service.

“This case shows the importance of concerned citizens reporting suspicious conduct to law enforcement,” said U.S. Attorney Byung J. “BJay” Pak.  “Without that call, the police never would have obtained a search warrant for Johnson’s car and found the large amount of stolen mail there.  We ask all citizens to remain vigilant and if you see something, say something.” 

“The Postal Inspection Service applauds the efforts of the bank employees who reported the suspicious activity of their customer’s account to law enforcement officials,” said David M. McGinnis, Inspector in Charge of the Charlotte Division. “Postal Inspectors will remain vigilant in pursuing criminals, like Johnson, to ensure the public's trust in a safe and secure mail system.”

According to U.S. Attorney Pak, the charges and other information presented in court: Johnson repeatedly broke into the U.S. Post Office in Snellville, Georgia, and stole mail.  After stealing the mail, Johnson would look through it for checks and money orders, then change the payees on those instruments to make them payable to himself, and cash them at local banks.  On one occasion, Johnson also forged the signature of the account owner on a check. 

On June 28, 2018, Johnson was arrested by the Snellville police department after an alert bank teller at Regions Bank observed that he was trying to cash a check with a forged signature from a longtime branch customer.  A search of Johnson’s car revealed five bins of stolen mail in the trunk.  Johnson was released on bond by a Gwinnett County judge, but continued his conduct.  On July 7 and 9, 2018, while on bond in his Gwinnett county case, Johnson was captured on surveillance video breaking into the post office and stealing mail. 

Zachary Adam Johnson, 41, of Loganville, Georgia, has been sentenced to two years, one day in prison to be followed by three years of supervised release.  On November 13, 2018, Johnson pled guilty to one count of aggravated identity theft and one count of mail theft.

This case was investigated by the U.S. Postal Inspection Service, which has already notified the victims it was able to identify from the seized stolen mail.  The Snellville police department also assisted with this case.

Assistant U.S. Attorney Alana R. Black prosecuted the case.

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

The Office of the United States Attorney for the District of Vermont stated that Carmen Melari Ferrufino Perdomo, 29, of Charlotte, North Carolina, was sentenced on February 22, 2019, to a four-month period of incarceration upon her conviction for transporting aliens who had entered the United States illegally from Canada.  The prison term will be followed by a one-year period of supervised release.  Ferrufino was also ordered to pay $5,100 as a special assessment in light of the nature of her crime.  United States District Judge Christina Reiss ordered Ferrufino to surrender to the Bureau of Prisons on April 5, 2019.

Court records show that on March 17, 2018, Ferrufino flew from her home in North Carolina to Burlington, Vermont, where she rented a car.  She then drove in the early morning of March 18, 2018, to a pre-arranged location on the United States/Canada border to pick up six persons, all aliens who had just entered the United States illegally by walking through the woods.  The United States Border Patrol stopped Ferrufino a short while after she had picked up her passengers.  Records show that Ferrufino intended to drive all six aliens to New York City, and to receive payment in return. 

Counsel for Ferrufino argued for a sentence of six months of house arrest. Judge Reiss disagreed, noting the premeditated nature of Ferrufino's conduct, as well as the societal risks associated with Ferrufino bringing persons she did not know, who had just entered the country unlawfully, further into the United States.

The case was investigated by the United States Border Patrol. 

Ferrufino was represented by Assistant Federal Defender David McColgin.  Assistant United States Attorney Michael Drescher was the prosecutor.

JOHNSTOWN, Pa. – A resident of Johnstown, Pa. pleaded guilty in federal court in Johnstown to charges of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.

Bobby Washington, Jr., 35, pleaded guilty to the indictment before United States District Judge Kim R. Gibson.

In connection with the guilty plea, on March 17, 2018, Washington distributed a quantity of cocaine base, and on April 24, 2018, he possessed with intent to distribute 28 grams or more of cocaine base, commonly known as "crack."

Judge Gibson scheduled sentencing for June 5, 2019, at 10 a.m. The law provides for a maximum sentence of 60 years in prison and a fine of $6,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history of the defendant.

Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.

The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force conducted the investigation that led to the prosecution of Washington.

JOHNSTOWN, Pa. – A resident of Johnstown, Pa., pleaded guilty in federal court to a charge of violating federal narcotics laws, United States Attorney Scott W. Brady announced today.

Shawn R. Kmecak, 37, pleaded guilty to the indictment before United States District Judge Kim R. Gibson.

In connection with the guilty plea, on March 15, 2018, Kmecak possessed with the intent to distribute a quantity of heroin.

Judge Gibson scheduled sentencing for June 13, 2019, at 2 p.m. The law provides for a maximum sentence of 20 years in prison and a fine of $1,000,000 or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offense and the prior criminal history of the defendant.

Assistant United States Attorney Stephanie L. Haines is prosecuting this case on behalf of the government.

The Laurel Highlands Resident Agency of the Federal Bureau of Investigation and the Cambria County Drug Task Force conducted the investigation that led to the prosecution of Kmecak.

The Office of the United States Attorney for the District of Vermont stated that Marvin A. Jones, 24, a resident of New Jersey who recently lived in Vermont, was sentenced to 36 months imprisonment on February 20, 2019, in United States District Court in Rutland.

Jones pleaded guilty in November, 2018, to purchasing a semi-automatic pistol in Vermont and selling it in New Jersey without a license to do so.  As part of a plea deal, Jones also resolved several pending, unrelated Vermont charges.  Court filings indicated that Jones acquired other firearms in Vermont during the same time period.

The Bureau of Alcohol, Tobacco and Firearms initiated the investigation when the pistol sold by Jones was recovered in the State of New Jersey and found to have been originally purchased in the State of Vermont.  The firearm was recovered from a New Jersey man in a stolen car, and was matched by ballistics tests to an earlier shooting in that area of New Jersey.  ATF investigators conducted numerous interviews and found the pistol had been purchased by Jones as a used gun via Armslist.com from the original owner.  Jones transported it from Vermont to New Jersey where he sold the firearm to an associate.  He had pending Vermont felony charges at the time.

Jones was represented by Assistant Federal Public Defender David McColgin.  The United States was represented by Assistant U.S. Attorney William Darrow. 

According to the indictment, PINEDA was previously removed from the United States on May 11, 2011. He was later found in the Eastern District of Louisiana on January 31, 2019 and had not received permission from the Attorney General of the United States or the Secretary of the Department of Homeland Security to reenter.

If convicted, PINEDA faces a maximum term of imprisonment of 2 years, a fine of $250,000, one year of supervised release, and a $100 special assessment fee.

U.S. Attorney Strasser reiterated that an indictment is merely a charge and that the guilt of the defendant must be proven beyond a reasonable doubt.

U.S. Attorney Strasser praised the work of the United States Immigration and Customs Enforcement agency in investigating this matter. Assistant United States Attorney Carter K.D. Guice, Jr. is in charge of the prosecution.

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NEW ORLEANS– United States Attorney Peter G. Strasser announced that COURTNEY C. DUPLESSIS (“DUPLESSIS”), age 30, of New Orleans, Louisiana, entered a plea of guilty on Thursday, February 21, 2019 to Theft of Mail, in violation of Title 18, United States Code, Section 1709.

According to court records, DUPLESSIS was employed by the United States Postal Service as a Letter Carrier originally assigned to the Carrolton Station Post Office and then to the Elmwood Station Post Office.  After an investigation by the Office of Inspector General for the U.S. Postal Service, it was determined that on various dates from October 2017 to June 2018, DUPLESSIS stole several pieces of mail containing gift cards and cash. On June 19, 2018, special agents with U.S. Postal Service Office of Inspector General (“USPS-OIG”) determined DUPLESSIS opened an envelope and removed cash from the envelope. The USPS-OIG agents confronted DUPLESSIS and advised her of her Miranda rights. During an interview, DUPLESSIS admitted to opening several articles of mail and removing cash and gift cards. Agents discovered an additional 54 articles of mail during a subsequent search of DUPLESSIS’s personal vehicle.

DUPLESSIS faces a maximum penalty of five (5) years imprisonment, a $100.00 special assessment fee and/or a fine of $250,000 or the greater of twice the gross gain to the defendant or twice the gross loss to any person under Title 18, United States Code, Section 3571.  Sentencing is scheduled for May 2, 2019 at 2:00pm.

U.S. Attorney Peter G. Strasser praised the work of the USPS-OIG.  The prosecution of this case is being handled by Assistant U. S. Attorney Brian M. Klebba, Supervisor of the Financial Crimes Unit.

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