Orlando, Florida – U.S. District Judge Roy B. Dalton, Jr. has sentenced James John Edwards (37, Brevard County) to 9 years in federal prison for possession of child pornography. The court also ordered Edwards to pay $50,000 in restitution to the victims of the offense, and to forfeit the electronic devices that he had used to commit the offense. A federal jury found Edwards guilty on August 1, 2019.

According to evidence presented at trial, on February 7, 2019, during the execution of a search warrant, agents found Edwards in possession of more than 1,000 videos and over 300 images depicting the sexual exploitation and abuse of young children. Those videos and images captured the rape and sexual torture of children under the age of 12. The evidence also showed that Edwards had an extensive computer background, and in this case, used a file-sharing program to obtain the illicit images via a computer and hard drive in his bedroom. The computer was connected to a television that was mounted on the wall above Edwards’s dresser. Edwards used the hard drive to store videos and images of child pornography. His collection dated back to 2015.

This case was investigated by the Federal Bureau of Investigation and the Palm Bay Police Department. It was prosecuted by Assistant United States Attorneys Ilianys Rivera Miranda and Karen L. Gable.

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. Led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

ROCKFORD — Two Freeport men were sentenced today in federal court in Rockford on drug trafficking charges. 

TERRANCE YOUNG, 46, was sentenced by U.S. District Chief Judge Rebecca R. Pallmeyer to seven and a half years in federal prison.  Young pleaded guilty on Sept. 13, 2019, to possessing cocaine with intent to distribute.  In a written plea agreement, Young admitted that on Aug. 30, 2018, law enforcement officers executed a search warrant at Young’s home.  During the search, officers located and seized approximately 5.5 grams of cocaine in a plastic bag inside a kitchen cupboard, as well as other drug paraphernalia.  Young acknowledged that the cocaine in the cupboard belonged to him and that he possessed it with the intent to distribute to others.  In a dining room adjacent to the kitchen, officers located $3,743 in cash.  Young also acknowledged that the cash belonged to him and that it came from the proceeds of drug sales.  Young further admitted that he sold cocaine on July 14, 2017, Aug. 15, 2017, Dec. 4, 2017, and Aug. 7, 2018.

In a separate but related case, KYRAN WILLIAMS, 25, was sentenced by U.S. District Judge Philip G. Reinhard to nine years and three months in federal prison.  Williams pleaded guilty on Sept. 17, 2019, to possessing crack cocaine with intent to distribute, possessing a firearm in furtherance of a drug trafficking crime, and illegally possessing a firearm as a felon.  In a written plea agreement, Williams admitted that on Aug. 30, 2018, law enforcement officers executed a search warrant at Williams’s home in Freeport.  Officers found and seized two guns, one with an extended magazine containing 31 rounds and the other with an obliterated serial number, as well as ammunition, a plastic baggie containing crack cocaine, and other drug paraphernalia.  Williams also admitted he illegally possessed the firearms as a convicted felon and that he possessed the guns and ammunition found during the search to protect his drug stash and himself during his drug trafficking activity.  Williams also admitted that he engaged in drug transactions and sold heroin on April 11, 2017, May 31, 2017, and April 11, 2018, and that he sold a substance containing both heroin and fentanyl on June 13, 2018.

The sentencings were announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI; Brendan F. Kelly, Director of the Illinois State Police; and Matt Summers, Freeport Police Chief.  The investigation was conducted by the Rockford Area Violent Gang Task Force, the Stateline Area Narcotics Team (“SLANT”), and the Freeport Police Department.  The Rockford Area Violent Gang Task Force is led by the FBI and includes members of the FBI and the Rockford, Loves Park, and Freeport police departments.  SLANT is a task force led by the Illinois State Police.  The government is represented by Assistant U.S. Attorney Margaret J. Schneider.

Ocala, Florida – Senior United States District Judge John Antoon II today sentenced Twon Deshay Kinsler (28, Ocala) to 5 years and 10 months in federal prison for possessing a firearm as a convicted felon. The court also ordered Kinsler to forfeit two handguns and ammunition used during the offense. Kinsler had pleaded on October 2, 2019.

According to court documents, on May 7, 2019, City of Ocala police officers responded to a call from a homeowner about an unknown man shooting firearms in a backyard of a residential area. They located Kinsler, who was sweating profusely and wearing a bulletproof vest, in the backyard of the residence. Kinsler had illegal drugs in his pockets and two loaded firearms at his feet. One of the firearms had previously been reported stolen. A gunshot residue test also confirmed the presence of gunpowder on Kinsler’s hands. 

At the time, Kinsler was a convicted felon and therefore prohibited from possessing firearms or ammunition under federal law. 

This case was investigated by the Ocala Police Department, the Federal Bureau of Investigation, and the Bureau of Alcohol, Tobacco, Firearms and Explosives. It was prosecuted by Assistant United States Attorney Robert E. Bodnar, Jr.

This is another case prosecuted as part of the Department of Justice’s “Project Safe Neighborhoods” Program (PSN), which is a nationwide, crime reduction strategy aimed at decreasing violent crime in communities. It involves a comprehensive approach to public safety — one that includes investigating and prosecuting crimes, along with prevention and reentry efforts. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.

In San Antonio, a federal grand jury indicted 46–year-old licensed Physician’s Assistant Christopher Felix Montoya and 40–year-old Nancy Almaguer for their roles in a Health Care Fraud, bribery and kickback scheme, announced U.S. Attorney John Bash, FBI Special Agent in Charge Christopher Combs, San Antonio Division, and Texas Attorney General Ken Paxton. 

The indictment, returned Wednesday and unsealed today, charges Montoya, the owner and operator of TPC Family Medicine and Urgent Care Clinics in San Antonio and Laredo (TPC), and TPC Chief Operating Officer Almaguer with one count of conspiracy to pay and receive health care kickbacks and three counts of soliciting and receiving illegal health care kickbacks.  Each count calls for up to five years in federal prison upon conviction.

The indictment alleges that from September 2018 to June 2019, the defendants schemed to enrich themselves by receiving kickbacks and bribes in exchange for sending patient nasal swabs to a specific laboratory (lab) for testing.  The lab would perform the testing, receive reimbursement from Medicare and other insurance programs.  The lab, through a 3^rd party, would pay kickbacks to Montoya and Almaguer.

FBI agents arrested both defendants yesterday afternoon without incident.  During an initial appearance today in San Antonio, U.S. Magistrate Judge Elizabeth S. Chestney set $50,000 bonds for both Montoya and Almaguer. 

The FBI, Texas Attorney General’s Office, U.S. Department of Health and Human Services—Office of Inspector General and the U.S. Office of Professional Management—Office of Inspector General investigated this case.  Assistant U.S. Attorney Justin Chung is prosecuting this case on behalf of the government.

An indictment is merely a charge and should not be considered as evidence of guilt.  The defendants are presumed innocent until proven guilty in a court of law.

OKLAHOMA CITY – The Western District of Oklahoma collected $14,463,175.11 in civil and criminal actions in the fiscal year that ended on September 30, 2019, announced U.S. Attorney Timothy J. Downing.  Of this amount, the office collected $9,794,703.57 in civil actions and $4,668,471.54 in criminal actions.

The U.S. Attorneys’ Offices, along with the Department of Justice’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the United States and criminal debts owed to federal crime victims.  The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss.  While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims Fund, which distributes the funds to federal and state victim compensation and victim assistance programs.

"Recovering money for the United States, penalizing wrong-doers, and collecting restitution for crime victims are integral parts of our law enforcement mission," said U.S. Attorney Downing.  "In FY2019, we collected nearly twice the amounts we collected in both FY2017 and FY2018.  That’s a tribute to the hard work of civil and criminal attorneys, and particularly the hard work of our Financial Litigation Unit."

Highlights of the Western District of Oklahoma’s FY2019 collection efforts include:

• a $4.2 million civil settlement in June 2019 with PAE Applied Technologies, LLC, in a dispute over alleged false claims to the United States Air Force concerning employee wages at Vance Air Force Base;
• a $2.8 million civil settlement in May 2019 with the Oklahoma Heart Hospital, LLC, and the Oklahoma Heart Hospital South, LLC, based on allegations of improper Medicaid billing for cardiovascular stent procedures;
• a $455,000 civil settlement in October 2018 with Olsen Orthopedics, PLLC, over allegations of false billings to Medicare and TRICARE for injectable drugs that were purchased outside the United States and did not have approval from the Food and Drug Administration;
• multiple settlements of claims against health care providers under federal laws concerning record-keeping and registrations involving drugs that qualify as controlled substances, including a June 2019 settlement for $155,000 with Comanche County Memorial Hospital and two doctors concerning testosterone records;
• $818,083 in restitution from former Bank of Union President John Arnold Shelley, whose December 2018 sentence for making a false statement to the FDIC included a restitution order of more than $137 million;
• $493,707.59 in restitution from Joel Matthew Eilerts, who was sentenced in June 2019 for fraud against SandRidge Energy, Inc., where he worked as a senior landman;
• $269,107.79 in restitution in a criminal health care fraud against Lawrence and Eunja Vasquez, who were sentenced in January 2019 for using their company, Mercy Diabetic Supply, Inc., to defraud the Oklahoma Health Care Authority;
• $230,333.37 in restitution from the Estate of Howard Michael Wampler in connection with his 2012 conviction for fraudulently inflating the cost of building projects involving federal low-income housing tax credits; and
• $151,799.02 in restitution from Samuel Okere, who was sentenced in November 2018 for defrauding the Oklahoma Health Care Authority in connection with behavioral counseling.

Additionally, the U.S. Attorney’s Office deposited$1,763,203 into the Department’s Asset Forfeiture Fund in FY 2019. Many forfeited assets are returned to victims of crime.  When that is not possible, forfeiture proceeds are deposited into a centralized fund and used to assist crime victims across the nation and for a variety of law enforcement purposes.

To download a photo of U.S. Attorney Downing, click here.

In Austin today, a federal judge sentenced a Nigerian National residing in Austin to 78 months in federal prison for laundering more than $1.7 Million in Business Email Compromise (BEC) scam proceeds stolen from multiple companies, announced U.S. Attorney John F. Bash; Special Agent in Charge Shane Folden, Homeland Security Investigations (HSI), San Antonio; and, Inspector in Charge Adrian Gonzalez, U.S. Postal Inspection Service (USPIS), Houston Division

In addition to the prison term, U.S. District Judge Robert Pitman ordered that 28-year-old Joseph Odibobhahemen pay $1,639,419.57 in restitution; pay a $1.5 million money judgment; and, be placed on supervised release for a period of three years after completing his prison term.

In a BEC scheme, scammers target businesses and individuals making wire transfer payments, often targeting employees with access to company finances. The scammers trick the employees into making wire transfer payments to bank accounts thought to belong to trusted partners—except the money ends up in accounts controlled by the fraudsters. Sometimes the scammers use computer intrusion techniques to alter legitimate payment request emails, changing the recipient bank accounts. Sometimes they send spoofed emails from email addresses similar to the real email accounts used by trusted partners.

On February 7, 2019, Odibobhahemen pleaded guilty to one count of conspiracy to commit money laundering.  Odibobhahemen’s co-defendant in this indictment, Nosa Onaghise, pleaded guilty to one count of passport fraud on December 28, 2018.  Onaghise, another Nigerian citizen residing in Austin, admitted to attempting to use a false, forged or counterfeit passport to open several bank accounts in the U.S. in April 2018.  Onaghise faces up to ten years in federal prison.  He remains in federal custody pending sentencing scheduled for 10:00am on February 19, 2020, before Judge Pitman.

Court records in this indictment (A18cr358), and the indictment also returned in Austin against four other coconspirators (A19cr78), show that between November 2016 and April 2019, over $10 million was allegedly sent by victims to accounts controlled by the conspirators, who were able to take in excess of $6 million before law enforcement or financial institutions stopped the fraudulent transfers. Odibobhahemen and the others acquired or controlled dozens of bank accounts opened in the U.S., including in Austin, utilizing fraudulent identification documents, including fraudulent foreign passports in fake names.  Once the funds were fraudulently procured and deposited into these bogus accounts, the defendants worked quickly to withdraw or transfer the funds.

The four additional co-conspirators—Bameyi Omale, Chinonso Agbaji, Igho Calaba and Chibuzor Uba—have all pleaded guilty and await sentencing on January 30, 2020.

“This sentencing serves as a real warning to those who use deception to victimize our citizens while defrauding the financial system for personal gain,” said Shane Folden, special agent in charge for HSI San Antonio. “HSI is committed to pursuing thieves such as Mr. Odibobhahemen who brazenly enrich themselves through fraud. HSI will continue to utilize its broad investigative authorities to dismantle transnational criminal organizations who blatantly ignore the laws of this nation.”

Special agents with HSI and USPIS investigated this case.  Assistant U.S. Attorneys Michael Galdo and Keith Henneke are prosecuting this case on behalf of the Government.

BOSTON – Two former verification pharmacists at New England Compounding Center (NECC) have been sentenced in federal court in Boston for violating the Food, Drug, and Cosmetic Act (FDCA).

Michelle L. Thomas, 35, of Cumberland, R.I., was sentenced today by U.S. District Court Judge Richard G. Stearns to one year of probation. Yesterday, Judge Stearns sentenced Kathy S. Chin, 47, of Canton, to two years of probation. In May 2019, Thomas and Chin were convicted by a federal jury of two and four felony counts, respectively, of dispensing drugs without valid prescriptions with the intent to defraud or mislead government regulators and customers. 

NECC, a licensed pharmacy, routinely dispensed drugs in bulk without valid prescriptions. Chin and Thomas served as verification pharmacists, signing off on drug orders prior to shipment to customers. Chin was convicted of approving shipments of drugs for patients with names such as Flash Gordon, Long John, Tony Tiger, Chester Cheeto, Dale Earnhardt, Tom Brokaw, Jon Stewart, Jay Leno, David Letterman, and Dick Van Dyke, among others. Thomas was convicted of approving shipments of drugs for patients with names such as L.L. Bean, Filet O’Fish, Rug Doctor, Squeaky Wheel, Dingo Boney, Coco Puff, and Harry Potter, among others. 

Chin and Thomas dispensed these and other bulk orders of prescription drugs with the intent to defraud and mislead state and federal government regulators. Specifically, NECC repeatedly took steps to shield its operations from regulatory oversight by the Food and Drug Administration (FDA) by claiming to be a pharmacy dispensing drugs pursuant to valid, patient-specific prescriptions. The jury heard evidence that the fake prescriptions, along with numerous other bulk drug orders, approved by Chin and Thomas allowed NECC to operate as an unregulated drug manufacturer. 

In June 2017, Barry Cadden, the former owner and head pharmacist for NECC, was sentenced to nine years in prison and three years of supervised release after being convicted of racketeering, racketeering conspiracy, mail fraud, and introduction of misbranded drugs into interstate commerce with the intent to defraud and mislead. In January 2018, Glenn Chin, NECC’s former supervisory pharmacist, was sentenced to eight years in prison and two years of supervised release after being convicted of 77 counts. In total, 13 NECC defendants have been convicted of 178 charges. 

United States Attorney Andrew E. Lelling; FDA Commissioner ADM Brett P. Giroir, M.D.; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Leigh-Alistair Barzey, Special Agent in Charge of the Defense Criminal Investigative Service, Northeast Field Office; Sean Smith, Special Agent in Charge of the Department of Veterans Affairs Office of Inspector General, Criminal Investigations Division; and Joseph W. Cronin, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division, made the announcement today.  Assistant U.S. Attorneys Amanda P.M. Strachan, Chief of Lelling’s Health Care Fraud Unit, and Christopher Looney prosecuted the case. 

OKLAHOMA CITY – Ernesto Fuentes, M.D.,has agreed to pay $50,000 to settle civil penalty claims stemming from allegations that he violated the Comprehensive Drug Abuse Prevention and Control Act of 1970 and its regulations, announced United States Attorney Timothy J. Downing.

Dr. Fuentes practiced medicine as a hospitalist in the Chickasaw Nation Medical Clinic in Ada, Oklahoma.  The United States alleges that from January 1, 2014, through June 11, 2019, he issued prescriptions for Schedule II-IV controlled substances without a valid certificate of registration from the Drug Enforcement Administration and without a controlled substance license from the Oklahoma Bureau of Narcotics and Dangerous Drugs.  Some of the prescriptions issued by Dr. Fuentes were filled at pharmacies in Oklahoma City.

To resolve these allegations, Dr. Fuentes has agreed to pay $50,000 to the United States.

In reaching this settlement, Dr. Fuentes did not admit liability, and the government did not make any concessions about the legitimacy of the claims.  The agreement allows the parties to avoid the delay, expense, inconvenience, and uncertainty involved in litigating the case.

This case was investigated by the Drug Enforcement Administration, Office of Diversion Control.  Assistant U.S. Attorneys Amanda R. Johnson and Ronald R. Gallegos prosecuted the case.

Rodolfo Pichardo, 71, of Hialeah, Florida was sentenced to more than 15 years in prison for masterminding a $38 million health care fraud and wire fraud scheme.  His wife Marta Pichardo, 66, was sentenced to 8 years in prison for her role in the scheme.

Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida,Omar Pérez Aybar, Special Agent in Charge, U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office, and George L. Piro, Special Agent in Charge, FBI’s Miami Field Office made the announcement.

Rodolfo Pichardo and Marta Pichardo previously pled guilty to conspiracy to commit health care fraud and wire fraud.  On December 4, 2019, Rodolfo Pichardo, was sentenced by U.S. District Judge Rodolfo A. Ruiz to 188 months in prison, to be followed by 3 years of supervised release.  He was ordered to pay $33,841,576 in restitution.  Today, Marta Pichardo was sentenced by Judge Ruiz to 96 months in prison, to be followed by 3 years of supervised release.  She was ordered to pay $10,482,178 in restitution. 

According to court documents, after arriving in the United States from Cuba on a raft seeking refuge and a better life, the Rodolfo Pichardo and his wife Marta Pichardo settled in Miami-Dade County, Florida where they proceeded to build a vast empire of fraud, consisting of at least six fraudulent home health agencies, three fraudulent therapy staffing companies, and two fraudulent pharmacies. Each of these entities purportedly provided home health services, therapy services, and prescription drugs, respectively, to qualified Medicare beneficiaries, though in fact and as both Rodolfo and Marta Pichardo knew, they did not.  

From May 2010 through September 2016, the Pichardos and their co-conspirators used this empire to submit more than $38 million in false and fraudulent claims to Medicare, for which the trust-based program then paid out more than $33 million.  The Pichardos then used this money to purchase multiple properties, high-end vehicles, expensive jewelry, plane tickets, vacations, cosmetic procedures, and more, both for themselves and their family members. 

As part of the scheme, Rodolfo Pichardo offered and paid kickbacks, both by cash and by check, to numerous patient recruiters, in exchange for the referral of Medicare beneficiaries to home health agencies that he owned. The conspirators also offered and paid cash kickbacks to owners and operators of multiple Miami-Dade medical clinics, in return for acquiring medically unnecessary home health prescriptions for the recruited Medicare beneficiaries.  These prescriptions were then used by the Pichardos’ various home health agencies and pharmacies to bill Medicare for purported services and pharmaceutical drugs that were provided to allegedly qualified Medicare beneficiaries 

During the long-running scheme, the Pichardos took several calculated steps to conceal the fraud and avoid detection, including using nominee owners, changing names and locations of their fraudulent entities, and creating shell companies to conceal the receipt of the fraud proceeds, hide assets and transactions, and divert proceeds for both personal use and to further the fraud. 

Additional co-conspirators previously pleaded guilty and were sentenced in connection with the scheme, including family member Jesus Fonseca, who was sentenced earlier this year by Judge Ruiz to 63 months in prison. 

U.S. Attorney Fajardo Orshan commended the investigative efforts of FBI and HHS-OIG.  This case was prosecuted by Assistant U.S. Attorney Anne P. McNamara.  Assistant U.S. Attorney Adrienne Rosen is handling the asset forfeiture aspects of the case.

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.

BOSTON – A Lawrence man has been indicted by a federal grand jury in Boston in connection with drug trafficking activities involving fentanyl.

Cecilio Guzman, 27, was indicted on Dec. 18, 2019, on one count of distribution and possession with intent to distribute 40 grams or more of fentanyl. Guzman was previously charged by complaint and arrested by state authorities on Nov.20, 2019. He is currently in federal custody.

According to court documents, it is alleged that Guzman arranged to sell 120 grams of fentanyl to a cooperating witness for the government. On Nov. 20, 2019, Guzman met with that witness in Lawrence, sold him the fentanyl, and was subsequently arrested.

The charge of distribution and possession with intent to distribute more than 40 grams of fentanyl carries a mandatory minimum sentence of five years and up to 40 years in prison, at least four years of supervised release, and a fine of up to $5 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Andrew E. Lelling and Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration, New England Division, made the announcement today. The investigation was conducted with the assistance of the Andover, Haverhill, Lawrence, Lowell, and Wilmington Police Departments. Special assistance was provided by the Essex District Attorney’s Office. Assistant U.S. Attorney Stephen Hassink of Lelling’s Narcotics and Money Laundering Unit is prosecuting the case

The details contained in the charging documents are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

BOSTON – A Guatemalan national wanted for arrest in his home country of Guatemala was sentenced today in federal court in Boston.  

Francisco Cuxum Alvarado, a/k/a Francisco Cuxun-Alvarado, 64, was sentenced by U.S. District Court Judge Indira Talwani to six months in prison. Following his sentence, Cuxum Alvarado will be subject to extradition to Guatemala. In September 2019, Cuxum Alvarado pleaded guilty to one count of illegal reentry into the United States, and has been detained since he was indicted in May 2019.  

“The United States will not serve as a safe haven for individuals sought for prosecution abroad,” said United States Attorney Andrew E. Lelling. “After service his sentence in the U.S., Mr. Cuxum Alvarado will be returned to Guatemala to face prosecution for his alleged crimes.”

“Cuxum Alvarado will now face removal to his own country,” said Jason Molina, Acting Special Agent in Charge of Homeland Security Investigation in Boston. “By holding Cuxum Alvarado accountable for his violations of U.S. immigration law, today’s sentencing allows for the next critical stage in this case. That’s a fitting next step in the search for justice sought by Guatemala.”

The prosecutor presented evidence that Cuxum Alvarado was implicated in crimes against humanity by participating in the mass sexual assault of indigenous women in Guatemala in the early 1980s. The Guatemalan government obtained an INTERPOL Red Notice in 2018 for Cuxum Alvarado’s arrest, which is a request to law enforcement agencies worldwide to locate and provisionally arrest suspects pending extradition to the jurisdiction in which they are charged.  

On April 30, 2019, Cuxum Alvarado was located in Waltham and arrested. At the time of his arrest, Cuxum Alvarado was unlawfully in the United States. He previously unlawfully entered the country in March 2004 in Arizona, and was ordered to be removed. 

U.S. Attorney Lelling and Acting HSI Boston SAC Molina, made the announcement today. The Waltham Police Department and the HSI Attaché in Guatemala City, Guatemala assisted in the investigation. Assistant U.S. Attorney Scott L. Garland, Deputy Chief of Lelling’s National Security Unit, prosecuted the case.

The U.S. Attorney’s Office announced that the following persons were arraigned or appeared this week before U.S. Magistrate judges on indictments handed down by the Grand Jury or on criminal complaints. The charging documents are merely accusations and defendants are presumed innocent until proven guilty:

Appearing in Billings before U.S. Magistrate Judge Timothy J. Cavan and pleading not guilty on Dec. 20 was:

Dale Lee Musgrave, 50, of Pompeys Pillar, on charges of conspiracy to possess with intent to distribute cocaine and possession with intent to distribute cocaine. If convicted of the most serious crime, Musgrave faces a maximum 20 years in prison, a $1 million fine and three years of supervised release. Musgrave was released pending further proceedings. The case was investigated by the Eastern Montana High Intensity Drug Trafficking Area Task Force.Pacer case reference. 19-159.

Appearing on Dec. 17 on a criminal complaint:

Tyler Fleming, 37, of Billings, on charges of possession with intent to distribute methamphetamine. If convicted of the most serious crime, Fleming faces a minimum mandatory 10 years to life in prison, a $10 million fine and at least five years of supervised release. Fleming was detained pending further proceedings. The case was investigated by the Eastern Montana High Intensity Drug Trafficking Area Task Force. Pacer case reference. 19-78.

Appearing on Dec. 16 was:

Ryan Edwin Hewitt, 35, of Wenatchee, WA, on charges of conspiracy to possess with intent to distribute controlled substances, possession with intent to distribute controlled substances and possession of a firearm in furtherance of a drug trafficking crime. If convicted of the most serious crime, Hewitt faces a minimum mandatory five years to 40 years in prison, a $5 million fine and at least five years of supervised release. Hewitt was detained pending further proceedings. The case was investigated by the Eastern Montana High Intensity Drug Trafficking Area Task Force.  Pacer case reference. 19-107.

Appearing in Great Falls before U.S. Magistrate Judge John T. Johnston and pleading not guilty on Dec. 18 was:

Austin Kade Goings, 22, of Browning, on charges of sexual abuse of a minor and aggravated sexual abuse. If convicted of the most serious crime, Goings faces a maximum life in prison, a $250,000 fine and five years of restitution. Goings was detained pending further proceedings. The case was investigated by the Bureau of Indian Affairs and Blackfeet Law Enforcement Services. Pacer case reference. 19-83.

Appearing on a criminal complaint was:

Eric Shawn Roasting Stick, 37, of Box Elder, on charges of assault with a dangerous weapon; domestic assault resulting in substantial bodily injury and domestic assault by habitual offender. If convicted of the most serious crime, Roasting Stick faces a maximum 10 years in prison, a $250,000 fine and three years of supervised release. Roasting Stick was detained pending further proceedings. The FBI investigated the case. Pacer case reference. 19-97.

If any of the above cases are of interest to your media organization and the community it serves, we encourage you to monitor the progress of the case regularly through the U.S. District Court calendar and the PACER system.

To establish a PACER account, which will allow you to review documents filed in the case, please go to, http://www.pacer.gov/register.html. To access the district court’s calendar, please go to https://ecf.mtd.uscourts.gov/cgi-bin/PublicCalendar.pl.

 XXX

NEWS RELEASE SUMMARY– December 20, 2019

SAN DIEGO – Liam Graham Szalay-Bristol, Jose Benjamin Cisneros-Quintero, and Cristian Rodriguez-Hernandez were charged in federal court yesterday with conspiring to import 505 pounds of methamphetamine, in violation of Title 21, U.S.C., Section 963.  Defendant Cisneros-Quintero was also charged with knowingly and intentionally importing the drug, in violation of Title 21, U.S.C., Sections 952 and 960.

On December 18, 2019, Cisneros-Quintero, the driver and sole occupant of a white bobtail box truck, arrived at the Otay Mesa Port of Entry Cargo Facility with what appeared to be a load of cement and/or clay blocks.  The U.S. Customs and Border Protection Officer inspected one of the cement blocks and observed a brown package inside, containing a white crystal substance that field-tested positive for methamphetamine.  The truck and Cisneros-Quintero were subsequently released from the inspection area and were kept under constant surveillance by special agents with Homeland Security Investigations. While agents watched closely, Cisneros-Quintero picked up defendant Rodriguez-Hernandez and met with Defendant Szalay-Bristol before proceeding to a storage facility, which defendant Szalay-Bristol unlocked. At that point, the three defendants unloaded a total of 60 packages weighing 505.87 pounds into the unit.  All three were arrested, charged, and appeared in federal court yesterday afternoon.

“Methamphetamine-related deaths are at record numbers here in San Diego, and this spike directly mirrors the increase in meth seizures at the border,” said U.S. Attorney Robert Brewer.  “Fortunately, diligent federal agents prevented this very large meth load from causing further misery in our community, and ensured that the smugglers responsible will be held accountable.”

“Methamphetamine continues to be a deadly epidemic impacting our communities, and San Diego is a key hub for Mexican cartel methamphetamine coming into the United States,” said Cardell T. Morant, acting special agent in charge of Homeland Security Investigations (HSI) San Diego.  “As this significant seizure makes clear, HSI, CBP, and our partners are resolute in our efforts to protect our communities and our country from the threats of drug trafficking.”

“Smuggling of narcotics is a serious threat to our communities.  As long as transnational criminal originations continue to profit from their illicit activities, they will continue to develop ways to move their product,” said Pete Flores, director of Field Operations for CBP in San Diego.  “Close collaboration between CBP and HSI is an essential piece to combatting trafficking of illegal narcotics.” 

DEFENDANTS                                              Case Number 19MJ5657

Liam Graham Szalay-Bristol                         Age: 21           San Diego      

Jose Benjamin Cisneros-Quintero                  Age: 25           Tijuana

Cristian Rodriguez-Hernandez                       Age: 31           Tijuana

SUMMARY OF CHARGES

Importation of Methamphetamine, in violation of 21 U.S.C. §§ 952, 960

Maximum penalty: Life in prison and $10 million fine

Conspiracy to import Schedule II Controlled Substance into the U.S., in violation of 21 U.S.C. § 963

Maximum penalty:  Life in prison and $10 million fine

AGENCIES

Homeland Security Investigations

Customs and Border Protection

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

DENVER – United States Attorney Jason R. Dunn announced that Ariel Nicole Walker, age 31 of Denver, Colorado was sentenced today by U.S. District Court Judge R. Brooke Jackson to serve 180 months (15 years) in federal prison for distribution of heroin resulting in death.  Following her prison sentence, Walker will serve five years of supervised release.  She appeared at the sentencing hearing in custody, and was remanded to the custody of the U.S. Marshals Service at the hearing’s conclusion.  The FBI joined in today’s announcement.

According to the facts contained in Walker’s plea agreement, on May 31, 2018, Walker, an individual with the initials E.N., and an individual with the initials C.T., drove to Westminster to buy heroin from Kayla Pagano, who was prosecuted separately in U.S. District Court.  E.N. paid Walker approximately $80 to purchase the heroin and approximately $40 for arranging the drug deal. Walker then met with Pagano at a Circle K in Westminster where Pagano sold Walker approximately .20 grams of heroin and approximately .20 grams of methamphetamine. E.N. injected some of the heroin and then passed out. Police later found E.N.’s dead body dumped in an alley in Denver. The heroin which caused E.N.’s death was the heroin Walker purchased from Pagano outside the Circle K and then distributed to E.N.  Pagano was subsequently charged with distribution of heroin and methamphetamine, and sentenced to 77 months in federal prison followed by four years of supervised release.

“Walker sold the drugs to an individual that died of an overdose and then dumped the body in an alley,” said U.S. Attorney Jason Dunn.  “As we have said before, this office will continue to treat harshly those who deal drugs that kill people.” 

"This was an entirely preventable tragedy," said Denver FBI Special Agent in Charge Dean Phillips.  “We will not hesitate to investigate and seek prosecution for those who bring dangerous drugs to our streets."

This case was investigated by the Denver Police Department with assistance from the FBI Denver OCDETF Strike Force.  The defendant was prosecuted by Assistant U.S. Attorney Peter McNeilly.

SAN FRANCISCO – Brandon Frere pleaded guilty today to wire fraud and money laundering charges in connection with a multi-million-dollar scheme to use deceptive sales tactics to convince people to enroll in his companies’ student loan repayment services programs, announced United States Attorney David L. Anderson and Federal Bureau of Investigation, Special Agent in Charge John F. Bennett.  The plea was accepted by the Hon. Susan Illston, United States District Judge.

Frere, 42, of Sonoma County, owned and operated three companies—American Financial Benefits Center (AFBC), the Financial Education Benefits Center (FEBC), and Ameritech Financial (Ameritech)—all based in Rohnert Park, Calif.  According to his plea agreement, between January of 2014 and November of 2018, Frere used the companies to market student loan document preparation services for borrowers who wished to apply for programs through the Department of Education.  Frere targeted potential customers who were seeking federal loan forgiveness, loan consolidation, and reduced-payment programs.  When Frere’s companies sold consumers “document preparation” services, they also sold them a purportedly optional membership in a “financial education benefits program.”  The so-called benefits program provided the opportunity to customers to sign up for services such as LifeLock identity theft protection and roadside assistance.  

Frere admitted he instructed his employees to follow misleading sales scripts and to employ deceptive sales tactics so that people would enroll for services without fully understanding what they were paying for.  For example, when initially enrolling consumers in the document preparation service and signing them up for the financial education benefits program, Frere hid the fees for the financial education benefits program and described the benefits program in a way that made it seem like the cost of the program was included in the document preparation services.  Further, Frere admitted he instructed enrollment associates not to present the benefits program as an optional or additional service to the document preparation service; this way, consumers would purchase the benefits packages without knowing they were doing so.

In sum, Frere instructed his employees (1) to make false statements concerning the companies’ ability to deliver fixed payments for the life of student loans and loan forgiveness under alternative repayment plans; (2) to engage in enrollment practices that improperly inflated a consumers’ family size to reduce their prospective payments under federal alternative repayment plans (and therefore make it appear to the consumer that their monthly payments would be lower than what they would have been if the family size were not inflated); and (3) to hide the monthly fees that consumers would pay for a purportedly optional financial education benefits program while leading victims to believe that the benefits program was already included in the document preparation service.  Frere admitted for the purposes of sentencing that the amount of losses attributable to his scheme was no less than $25,000,000 and up to $65,000,000.  

Moreover, Frere admitted that in order to conceal the proceeds of his wire fraud scheme, in 2015, he began transferring to overseas bank accounts that he controlled large sums of the funds that he had received through the scheme.  He continued this process in August 2017, after he became involved in litigation with the Federal Trade Commission (“FTC”) and became concerned the FTC or a court might be able to seize the proceeds of his fraud.  The FTC filed a civil complaint in February 2018 against Frere and his companies in federal court in Oakland. (Federal Trade Commission v. American Financial Benefits, et al., Case No. CV 18-00806-SBA).

Frere was arrested December 5, 2018, at SFO as he attempted to board a flight to Cancun, Mexico.  He is now free on bond pending sentencing.  Judge Illston scheduled Frere’s sentencing for March 27, 2020 at 11:00 AM.  

Frere was charged by information on October 1, 2019 with one count of wire fraud, in violation of 18 U.S.C. § 1343, and one count of money laundering, in violation of 18 U.S.C. § 1956(a)(2)(B).  Frere pleaded guilty to both counts.  Frere faces a maximum sentence of 20 years in prison, for each count.  In addition, with respect to the fraud count, Frere faces a fine of $250,000, or the greater of twice the gross gain or twice the gross loss from the fraud.  With respect to the money laundering count, Frere faces a fine of $500,000, or the greater of twice the gross gain or twice the value of the money instruments involved.  In addition, restitution, supervised release, and additional fines may be ordered.  However, any sentence following conviction will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant U.S. Attorney Scott Joiner is prosecuting the case with the assistance of Kimberly Richardson. The prosecution is the result of an investigation by the Federal Trade Commission, Federal Bureau of Investigation, and Internal Revenue Service Criminal Investigation, with assistance from the U.S. Department of Education Office of Inspector General. 
 

DENVER – United States Attorney Jason R. Dunn announced today that Matthew Marre, age 30, of Johnstown, Colorado was sentenced by U.S. District Court Judge R. Brooke Jackson to serve 15 months imprisonment followed by 3 years of supervised release for fraudulently obtaining confidential phone records.  The defendant appeared at the hearing in custody and was remanded at the hearing’s conclusion.  The FBI joined in today’s announcement.

According to the stipulated facts contained in the plea agreement, Marre worked as a fugitive recovery agent, or bounty hunter, throughout Colorado.  He contacted the four major cellular phone carriers – Sprint, Verizon, T-Mobile and AT&T – falsely claiming to be a law enforcement officer investigating exigent circumstances with suicidal subjects.  In doing so, Marre submitted false documents and used an email address he had created to look like an official law enforcement email.  Marre’s fraudulent requests involved cell phone GPS location information which he used in an effort to locate bounties rather than for a legitimate law enforcement purposes.

Phone providers became suspicious of Marre’s requests for emergency assistance and contacted the FBI when their attempts to verify Marre’s claim to be a law enforcement officer were unsuccessful. 

“Those who impersonate peace officers for their own private gain will be held accountable for their actions,” said U.S. Attorney Jason Dunn.  “In this case, the defendant will have some time in federal prison to reflect on his conduct.”

"Impersonating a law enforcement officer is a serious offense," stated FBI Special Agent in Charge Dean Phillips.  "Gaining access to private information without a legitimate law enforcement purpose, especially alleging a threat to life, undermines the lawful processes in place which allow us to investigate crime."

This case was investigated by the FBI Safe Streets Task Force.  The defendant was prosecuted by Assistant U.S. Attorney Greg Holloway.

SAN FRANCISCO –  Vadim Humenyuk pleaded guilty to operating a commercial cargo ship while intoxicated, announced United States Attorney David L. Anderson and U.S. Coast Guard Captain of the Port Marie Byrd.  The plea was accepted by U.S. Magistrate Judge Thomas S. Hixon.  

In pleading guilty, Humenyuk, 51, of Izmail, Ukraine, admitted that he was intoxicated while serving as the Master, or head officer, of the Rainbow Quest, a Gibraltar-flagged bulk carrier. The 590-foot long Rainbow Quest was in San Francisco Bay and preparing to sail to South Korea when Humenyuk was found to be intoxicated.

“I appreciate the outstanding collaboration from the San Francisco Bar Pilots, Customs and Border Protection, and the U.S. Attorney’s office for ensuring safety on our waters, and protecting the maritime public, property, and environment,” said Captain Byrd. “The Coast Guard and our partners will not tolerate operating a vessel under the influence from any mariner, much less a commercial ship captain preparing to get a large cargo ship underway in San Francisco Bay.”

The investigation began on Tuesday, December 10, 2019, when a San Francisco Bar Pilot contacted Coast Guard Sector San Francisco Vessel Traffic Service personnel reporting that the captain of the Rainbow Quest appeared to be intoxicated.  Investigators of the U.S. Coast Guard administered sobriety tests to Humenyuk late on the evening of December 10, 2019, and the early morning of December 11, 2019.  After Humenyuk failed the sobriety tests, he was charged with operating a non-recreational vessel under the influence of alcohol, in violation of 46 USC 2302(c), a Class A misdemeanor.  

Humenyuk faces a maximum statutory penalty of up to one year of incarceration, an additional year of supervised release, and a fine of up to $100,000.  Magistrate Judge Hixson scheduled Humenyuk’s sentencing hearing for January 3, 2019 at 10:00 a.m.

The case is being prosecuted by Special Assistant United States Attorney Alexandra Shepard.  This case is being investigated by the United States Coast Guard.  
 

SAN FRANCISCO – A federal grand jury indicted Joey Stanton Dodson, chairman and managing partner of an energy company, charging him with crimes related to an alleged $15 million Ponzi scheme involving approximately 50 victims.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, United States Attorney David L. Anderson of the Northern District of California, and Special Agent in Charge John F. Bennett of the FBI’s San Francisco Field Office made the announcement.

According to the indictment, between November 2012 and May 2015, Dodson, 55, of Indio, Calif., used several related companies and partnerships, collectively known as Citadel Energy, to fraudulently raise $15 million by soliciting investments in three limited partnerships that would purportedly provide water-related services to oil and gas companies in North Dakota.  The indictment further alleges that Dodson induced investors by making numerous materially false misrepresentations about these partnerships, including regarding how the investor funds would be used, the amount of his compensation, and the status of a potential acquisition of the partnerships by a private equity firm.  

According to the allegations in the indictment, Dodson routinely commingled the monies between the three partnerships, which resulted in investor funds being used to pay the expenses of unrelated projects.  Furthermore, the indictment alleges that Dodson misappropriated and diverted more than $1.3 million of investor funds for his own personal benefit, which included repaying former investors in unrelated Dodson-led investments, gambling activity, his wife’s BMW, and other expenses.  

The indictment charges Dodson with four counts of wire fraud, in violation of 18 U.S.C. § 1343, three counts of mail fraud, in violation of 18 U.S.C. § 1341, and three counts of money laundering, in violation of 18 U.S.C. §§ 1957 and 2.  

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.  If convicted of the wire fraud charges, Dodson faces a maximum statutory sentence of 20 years in prison and a fine in the amount of $250,000.  If convicted of the mail fraud charges, Dodson faces a maximum statutory sentence of 20 years in prison and a fine in the amount of $250,000.  If convicted of the money laundering charges, Dodson faces a maximum statutory sentence of 10 years in prison and a fine in the amount of $250,000.  The court also may order a term of supervised release, fines or other assessments, restitution, and forfeiture, if appropriate.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Dodson was arrested this morning and made an initial appearance before the Hon. Shashi H. Kewalramani, U.S. Magistrate Judge for the Central District of California.  Dodson’s next appearance is expected before the Hon. Nathanael M. Cousins, U.S. Magistrate Judge for the Northern District of California. 

Trial Attorney Jason M. Covert of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Sarah Griswold of the Northern District of California are prosecuting the case.  The prosecution is the result of an investigation by the FBI’s San Francisco Field Office, with the assistance of the Enforcement Division of the U.S. Securities and Exchange Commission.  

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
 

Related Charleston Pharmacy Previously Shut Down

Pharmacy Agrees to Pay A Total of $250,000 in Community Restitution and Forfeiture

CHARLESTON, W.Va. – A pharmacy located in Alum Creek in Lincoln County pled guilty to money laundering, announced United States Attorney Mike Stuart.  The money laundering charge arose out of a conspiracy between the pharmacy and a pain clinic operating as a pill mill to dispense compound opioids for no legitimate medical purpose and outside the bounds of professional medical practice.

“Meds2Go Express Pharmacy is being held accountable for its role in contributing to West Virginia’s opioid crisis,” said United States Attorney Mike Stuart.  “This pharmacy put profits before all else and caused great  harm to the communities it served.  Prosecuting poison peddlers, whether they be a street dealer, drug kingpin, a medical professional or a corporation, has been and will continue to be, a priority for my office.”

In a plea agreement reached with the United States, Meds2Go Express Pharmacy, Inc. will shut down and pay community restitution for the costs associated with drug abuse treatment in West Virginia to redress the harm caused by illicit opioid usage stemming from the sale of prescription opioids.

Meds2Go Express Pharmacy, Inc. admitted that in 2014 and 2015, it filled prescriptions written by physicians employed by a pill mill despite its knowledge that there was no legitimate medical purpose for the prescriptions and that they were prescribed outside the usual course of medical practice. In order to maximize corporate profits, the pharmacy ignored numerous red flags that should have prevented them from dispensing the prescription medications written by the pill mill, such as: (1) an abnormally high amount of prescriptions for widely-abused, highly-addictive controlled substances such as oxycodone; (2) prescribed controlled substances to patients for long periods of time; (3) permitted refills before prior prescriptions should have run out; (4) ignored obvious signs that patients were drug addicts; (5) patients travelled long distances and from out of state; (6) multiple pill mill physicians issued prescriptions to the same patient; (7) numerous family members who were all patients of the pill mill, came to the pharmacy at the same time; (8) insurance companies refused to pay for prescriptions from the pill mill; and (9) cash-only transactions.

Meds2Go Express Pharmacy, Inc. admitted that it engaged in illegal manufacturing of its own supply of oxycodone and methadone due to supply and demand by “compounding” pills in mass quantities at its locations Alum Creek and Charleston. Due to the excessive amount of prescriptions for controlled substances written by the pill mill, the pharmacy could not obtain enough of a supply of oxycodone and methadone from its distributors. In order to keep up with the demand, the pharmacy bypassed purchase restrictions from the distributor by setting up and purchasing compounding equipment, training its employees to compound pills on a mass scale, purchasing powders and other raw materials, and manufacturing pills containing oxycodone and methadone. The compounded pills were then sold to cash-paying customers who had prescriptions written by the pill mill. The pharmacy used the proceeds from the illegal manufacturing and dispensing to carry on the operations of business.

As part of the plea agreement with the United States, Meds2Go Express Pharmacy, Inc. agreed that it will shut down and pay $250,000 toward community restitution and a forfeiture money judgment. The community restitution will be paid for the costs associated with drug abuse treatment in West Virginia to redress the harm caused by illicit opioid usage stemming from the sale of prescription opioids.  The West Virginia Crime Victim's Compensation Fund will receive 65% of the community restitution amount, and 35% will be paid to West Virginia Department of Health and Human Resources, Bureau of Behavioral Health and Health Facilities.

United States District Judge Irene C. Berger presided over the hearing.  The investigation was conducted by the U.S. Food and Drug Administration – Office of Inspector General (OIG) and the U.S. Department of Health and Human Services – Office of Inspector General (OIG).  Assistant United States Attorneys Andrew Tessman and Steven I. Loew are handling the prosecution.

The plea agreement in this case can be found here.

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