Montgomery, Alabama– On Friday, August 14, 2020, Daniel Eric Cobble, age 45, was sentenced to a term of 20 years of federal imprisonment for mailing threatening letters to United States District Court Judges of the Middle District of Georgia announced Louis V. Franklin, Sr., United States Attorney for the Middle District of Alabama.

            A trial of the matter underlying the federal sentence was held February 19 and 20, 2020, in Columbus, Georgia, before United States District Judge Clay D. Land of the United States District Court for the Middle District of Georgia. The trial evidence showed that, in March and July 2013 and again in March 2014, Cobble mailed threatening letters to two United States District Court Judges of the Middle District of Georgia who were presiding over two different matters in which Cobble was a party.

            “We all know too well the stories of judges, law enforcement officers, and other public servants who are violently targeted simply for doing their jobs,” said U.S. Attorney Franklin. “This sentence sends a message to anyone who would threaten to harm public servants and their families-we will find you, we will prosecute you, and you will go to prison.”

            Cobble will not begin serving his federal sentence until he has completed service of the State of Georgia sentence he is currently serving. Additionally, there is no parole in the federal system.

            The Macon, Georgia office of the Federal Bureau of Investigation was responsible for the investigation of the case.

CHARLESTON, W.Va. – A federal grand jury has handed down two separate indictments charging a Charleston tax preparer and her mother in connection with a fraud scheme, according to United States Attorney Mike Stuart.

“Small businesses and entrepreneurs are the backbone of the American economy.  Business is tough especially for smaller businesses that may not have the resources of larger enterprises.  In this case, the victims did everything right- hired good employees, managed their company, and, as all good business should do, hired an accountant.  Unfortunately, they hired what we allege is a fraudster that, for nearly a decade, faked, constructed and defrauded her victims out of nearly $600,000,” said United States Attorney Mike Stuart.  “These two indictments- separate but certainly related- allege a very complex fraud scheme carried out by the defendants for the purpose of personal enrichment.  Greed for lack of a better term.  I applaud the efforts of our federal and state law enforcement partners for conducting the quick, but thorough investigation resulting in today’s indictments.”

“A great deal of trust was placed in these two individuals to not violate the fiduciary responsibility they had with their clients,” said FBI Pittsburgh Special Agent in Charge Michael Christman. “Instead, these women chose to pocket the hard earned money of local companies. The FBI does not take lightly any betrayal of trust and will fully investigate these crimes.”

Misty Brotherton-Tanner, 40, was charged in an 18-count indictment with wire fraud, aggravated identity theft, unlawful monetary transactions and making false statements. She faces up to 270 years in prison, with as much as four years running consecutively, a $4.5 million fine and three years of supervised release, if convicted.

The indictment alleges that from 2014 until March 13, 2020, Brotherton-Tanner provided tax preparation and bookkeeping services to several businesses, including three West Virginia corporations, all located in Kanawha County.  The indictment further alleges that she had provided the same services in the past to a now dissolved Kanawha County non-profit. According to the indictment, as part of Brotherton-Tanner’s work for the companies, she had access to each company’s accounting software that was connected to each of the company’s bank accounts.  Brotherton-Tanner used QuickBooks software to embezzle from the local businesses - she created "ghost" employee accounts and then funneled the money to the employee accounts before ultimately transferring the money to bank accounts over which she maintained control. Brotherton-Tanner used identities of herself, members of her family and others to create "ghost" employee accounts at the companies and connected those to her personal bank accounts. She was not employed by any of the companies, but would submit bills for her services to get paid. She created herself an employee profile in each company’s Quickbooks payroll system, knowing that she was not entitled or authorized to receive the funds she transferred to herself.  According to the indictment, Brotherton-Tanner also transferred a portion of the stolen funds to a non-profit’s bank account that she controlled and from the nonprofit’s bank account, she would then write checks to be distributed to herself and her family members, including Lois Brotherton, who is charged in a separate indictment.  In addition, the indictment alleges that Brotherton-Tanner fraudulently misrepresented to two companies that she had filed the federal and state tax returns for both of the companies, although she knew she had not filed the tax returns or paid the taxes due since 2013.  In furtherance of the scheme, Brotherton-Tanner made six electronic transfers from a third company’s bank account to the State of West Virginia Tax Department to pay off the state tax debt of one of the companies in an attempt to conceal her previous fraudulent transfers to herself and other “ghost employees.” According to the indictment, Brotherton-Tanner defrauded several businesses of at least $582,696.

In a separate five count indictment, Brotherton-Tanner’s mother, Lois Brotherton, 65, was indicted for conspiracy to commit wire fraud and wire fraud. She faces up to 100 years in prison, a $1 million fine and three years of supervised release, if convicted.  According to the indictment, Brotherton also provided bookkeeping, accounting and website design services to the same Kanawha County non-profit organization as Brotherton-Tanner.  The non-profit is now dissolved. According to the indictment, in 2017, Brotherton asked Brotherton-Tanner to write her checks from the non-profit’s bank account, although Brotherton knew she was not entitled to those funds. Brotherton-Tanner agreed to do so.  Brotherton would receive money at the non-profit that her daughter would transfer from three different companies, without their knowledge or consent. Brotherton would then deposit the money into her personal account.  As a result, the indictment alleges that Brotherton and Brotherton-Tanner defrauded the companies of at least $48,509.

The cases were investigated by the Federal Bureau of Investigation (FBI), the Internal Revenue Service-Criminal Investigations, the United States Postal Inspection Service and the West Virginia State Tax Department-Criminal Investigation Division. United States Attorney Mike Stuart and Assistant United States Attorneys Erik Goes and Kathleen Robeson are handling the prosecution.

Please note: An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:20-cr-00146 (Brotherton-Tanner) 2:20-cr-00147 (Brotherton).

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CHARLESTON, W.Va. - A federal grand jury has indicted Keith Lessard, 40, of Uxbridge, Massachusetts, for mailing threatening communications to a Kanawha County Circuit Judge, according to United States Attorney Mike Stuart.

According to the indictment, Lessard engaged in a series of communications with the Judge and others using email and the United States Postal Service. The indictment alleges that the communications were part of a scheme to extort money from the Judge by threatening injury to her reputation by claiming that she engaged in illegal prosecutorial misconduct in a 2010 case against Lessard when she was serving as an Assistant Prosecuting Attorney in Kanawha County.

“Threats of any kind are taken seriously and investigated, especially when those threats target a member of the judiciary,” said United States Attorney Mike Stuart. “Lessard now faces up to ten years if convicted of this scheme that targeted a judge.”

“These threats are taken very seriously and an example of the FBI’s dedication to keeping our community safe,” said FBI Pittsburgh Special Agent in Charge Michael Christman. “These charges should send the message that we will not tolerate sending threatening words to victims in our communities.”

Lessard faces up to two years in prison, if convicted.

The Federal Bureau of Investigation (FBI) and the United States Postal Inspection Service (USPIS) are conducting the investigation. Assistant United States Attorney Joshua C. Hanks is handling the prosecution.

Please note: An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:20-cr-00144.

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CHARLESTON, W.Va. – A federal grand jury has returned an indictment charging Julie Wheeler, 44, and her husband Rodney Wheeler, 48, both of Beaver, with conspiracy to obstruct justice, according to United States Attorney Mike Stuart. 

The indictment alleges that while awaiting sentencing for a federal health care fraud conviction, Julie Wheeler conspired with her husband Rodney Wheeler and others known to the Grand Jury to obstruct justice by falsely reporting her fall from Grandview Park overlook, part of the New River Gorge National River.  According to the indictment, on or about May 31, 2020, Rodney and a known person falsely reported her fall to the National Park Service, prompting an emergency 911 call. A massive search and rescue operation ensued. Rescue personnel found a shoe and cell phone that belonged to Julie Wheeler at the base of the overlook.  To further the conspiracy, the indictment alleges that Rodney Wheeler and a known person also gave false statements to federal, state and local law enforcement officials concerning Julie Wheeler’s disappearance. According to the indictment, Rodney Wheeler addressed the incident on his Facebook page on or about June 1, 2020, expressing “hope that she will be found,” to further mislead the public and law enforcement authorities into believing Julie Wheeler had fallen and remained missing. On June 2, 2020, members of the West Virginia State Police executed a state search warrant at the Wheelers’ home and found Julie Wheeler hiding in her closet. 

“Lies and deception. The indictment alleges that Julie Wheeler knowingly conspired with her husband, Rodney, to falsely report her fall from the New River Gorge National River,” said United States Attorney Mike Stuart. “Wheeler was already convicted of federal health care fraud for a most heinous crime of fraudulently obtaining nearly $300,000 from the VA’s spina bifida fund. Instead of accepting responsibility and being accountable for her horrendous conduct, she and her husband concocted a really bad scheme and, in the process, risked the lives of first responders and the critical resources of taxpayers. It is unconscionable conduct by any measure.  I want to commend Law Enforcement Specialist Stan Wilson with the National Park Service and Trooper First Class C. A. Dunn of the West Virginia State Police for their excellent work in this case.”

After being found, Julie Wheeler was sentenced on June 30, 2020, to 42 months in prison and three years of supervised release for health care fraud.  She was further ordered to pay restitution in the amount of $289,055.07. She pled guilty to the health care fraud charge on February 11, 2020, and admitted submitting fraudulent applications to the VA Spina Bifida Health Care Benefits Program where she overbilled for providing spina bifida care for a family member, K.L., in the amount of $289,055.07.

The Wheelers are charged for numerous felony and misdemeanor offenses in state court relating to the false reporting of an emergency. Raleigh County Prosecuting Attorney Kristen Keller has provided invaluable assistance throughout the federal investigation. 

The National Park Service and the West Virginia State Police conducted the investigation.  The Federal Bureau of Investigation (FBI) and the Veterans Affairs - Office of Inspector General (VA-OIG), the Office of Veterans Affairs (VA), and the United States Department of Health and Human Services - Office of Inspector General (HHS-OIG) conducted the investigation of the underlying fraud. Assistant United States Attorney Erik S. Goes is handling the prosecution.

Please note: An indictment is merely an allegation and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 5:20-cr-00145-1 (obstruction) and 2:19-cr-00135 (health care fraud).

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John H. Durham, United States Attorney for the District of Connecticut, announced that AMY MAKAROS, 41, of New Britain, waived her right to be indicted and pleaded guilty today before U.S. District Judge Stefan R. Underhill to theft of mail by a postal employee.

Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the court proceeding occurred via videoconference.

According to court documents and statements made in court, between November 2018 and February 2019, while she was employed as a mail carrier at the U.S. Post Office in Farmington, Makaros stole numerous pieces of mail, including greeting cards that contained gift cards or other items of value.  When confronted by investigators, Makaros admitted her theft and subsequently surrendered approximately 19 pieces of mail and four gift cards that she had stolen.

Theft of mail by a postal employee carries a maximum term of imprisonment of five years.

This investigation has been conducted by the U.S. Postal Service Office of the Inspector General and is being prosecuted by Assistant U.S. Attorney Elena L. Coronado.

U.S. Attorney Durham encouraged individuals who believe they are a victim of theft related to this case to file a complaint by calling 888-USPS-OIG, or by visiting www.uspsoig.gov/form/new-complaint-form.

Audrey Strauss, the Acting United States Attorney for the Southern District of New York, Philip Bartlett, Inspector-in-Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced charges against SAIBO SIDIBEH, MOUKHAMED FALL, MAMADY DANFAKHA, ALHANSA HYDARA, MAMADOU DIALLO, DEMBA DIAKITE, MOHAMMED SABALY, BANGALY DOUMBIA, and ABUBACKR DANSO for their involvement in a bank fraud scheme involving the deposit of more than $700,000 of fraudulent checks and the subsequent withdrawal of funds.  SIDIBEH, FALL, HYDARA, and DANSO were arrested on August 12, 2020, and presented before U.S. Magistrate Judge Ona T. Wang.  DANFAKHA, DIALLO, DIAKITE, and DOUMBIA were arrested this morning and are expected to be presented later today before U.S. Magistrate Judge Stewart D. Aaron in Manhattan federal court.  SABALY remains at large.

As alleged in the criminal Complaint^[1] unsealed today in Manhattan federal court:

Between at least July 2018 and at least August 2019, SAIBO SIDIBEH, MOUKHAMED FALL, MAMADY DANFAKHA, ALHANSA HYDARA, MAMADOU DIALLO, DEMBA DIAKITE, MOHAMMED SABALY, BANGALY DOUMBIA, and ABUBACKR DANSO engaged in a scheme to defraud banks by depositing fraudulent, forged, or altered checks into the bank accounts of third parties at ATMs in the Bronx, Manhattan, and elsewhere.  Before the bank realized that a check was invalid, the defendants withdrew the funds, typically by purchasing postal money orders.  In total, the defendants deposited more than $700,000 in fraudulent checks.

*                *                *

A chart containing the names, charges, and penalties for the defendants is set forth below.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Ms. Strauss praised the outstanding investigative work of the USPIS and the NYPD.

This case is being handled by the Office’s General Crimes Unit.  Assistant United States Attorney Andrew A. Rohrbach is in charge of the prosecution.

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

DETROIT – Federal and local law enforcement today announced the initial early results of Operation Legend, a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in cooperation with state and local law enforcement officials to fight violent crime.

On July 29, United States Attorney Matthew Schneider was joined at a press conference at the Detroit offices of the Bureau of Alcohol, Tobacco, Firearms and Explosives with the heads of Michigan’s federal law enforcement, including ATF Special Agent in Charge James Deir, FBI Special Agent in Charge Steve D’Antuono, and United States Marshal Owen Cypher to announce that Operation Legend was expanding to Detroit.

To date, Operation Legend has yielded the arrest of 22 defendants being charged with federal offenses outlined below.  Please note that some are charged with multiple offenses.

-           14 defendants have been charged with being a felon in possession of a firearm;

-           Two defendants have been charged with possession with the intent to distribute controlled substances;

-           Two defendants have been charged with possession of a firearm in furtherance of drug trafficking;

-           Three defendants have been charged with receipt of a firearm while under indictment;

-           Four defendants have been charged with making false statement to a licensed firearm dealer; and

-           Two defendants have been charged with carjacking.

United States Attorney Matthew Schneider stated, “Operation Legend is working.  The additional federal agents in Detroit have already taken high-powered assault rifles off our streets and have put armed drug dealers behind bars.  If these federal agents had not come to Detroit, these violent criminals would still be terrorizing our neighborhoods.  We cannot – and we will not – let up in our fight against violent crime.” 

Operation Legend is an extension of Operation Relentless Pursuit, an initiative announced in Detroit in December, 2019 by Attorney General William Barr, that surged federal resources to fight back against violent crime, gangs, and gun violence in seven of America’s most affected cities, including Detroit.

The Operation was first launched on July 8 in Kansas City, Missouri, as a result of President Trump’s promise to assist America’s cities that are plagued by recent violence and has since expanded to include Albuquerque, Chicago, Cleveland, Milwaukee, Detroit, Memphis and St. Louis.

Operation Legend is named after four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City.  Similar crimes are happening in Detroit.  Detroit is currently experiencing a significant increase in violent crime, with homicides currently up 31% and shootings up 53%. 

Operation Legend, combined with Operation Relentless Pursuit, brought a total of approximately 42 federal agents to Detroit, in addition to the many federal agents who have worked for decades with state and local partners on violent crime and other offenses.  An additional 10 Detroit ATF agents have been reassigned to work on violent gun crimes.

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PHILADELPHIA – United States Attorney William M. McSwain announced that Jason C. Weigand, 50, of Denver, PA has been charged by Indictment with mail fraud, wire fraud, and interstate transportation of stolen securities, while on bail for separate, similar offenses.

The Indictment announced today alleges that Weigand helped a former client of his, identified in court documents as “AH,” recover on life insurance policies when her husband died. Weigand later convinced AH to provide him with at least $240,000, which he told her that he would invest on her behalf. However, according to the Indictment, Weigand did not invest the client’s money in appropriate investments as he promised, but instead used the money for his own personal and business purposes, including payments to his personal line of credit, his Visa credit card, and his Lincoln MKZ and Chevy Suburban car loans.

In October 2017, Weigand was charged in a separate federal Indictment with allegedly misusing funds belonging to his clients. He was arrested on those charges and released subject to conditions including that he not commit any “Federal, State, or local crime during the period of release.” He allegedly violated those conditions by committing some of the offenses alleged in the current Indictment. Further, during the relevant time period, Weigand did not even possess a license to act as an investment advisor.

According to the Indictment, Weigand was a registered investment advisor in Pennsylvania between 2009 and 2014, and in New Jersey between 2011 and 2014. He voluntarily surrendered his licenses as an investment advisor in both states in 2014. In the case of his Pennsylvania license, Weigand terminated it on April 10, 2014—the same day that he was questioned by investigators from the Pennsylvania Department of Banking and Securities about his investment advisor activities.

“Weigand is alleged to be a serial fraudster with no respect for the law,” said U.S. Attorney McSwain. “Rather than serving his clients, he served himself. Prosecuting financial and securities fraud -- and thereby safeguarding innocent investors -- has been and will continue to be a top priority of my Office.”  

“Jason Weigand was first arrested in 2017 by Postal Inspectors from the Philadelphia Division for stealing money from his investment advisory clients,” said Postal Inspector in Charge, Damon Wood. “Since 2017, while preparing to defend himself on those charges, Mr. Weigand went back to his old ways, stealing money from his investment clients. I applaud the diligence of the investigators and prosecutors in this case to not only prepare for trial but to follow up on allegations of new crimes. The Postal Inspection Service has long prided itself as being a leader in investigating investments frauds. From snake oil salesmen in the 19^th century to modern day Wall Street frauds, if the United States Mail is used, Postal Inspectors will work tirelessly to bring the perpetrators to justice.”

If convicted, the defendant faces a maximum possible sentence of 120 years imprisonment, $1,500,000 fine, 3 years supervised release, $600 special assessment.

The case was investigated by the United States Postal Inspection Service, and is being prosecuted by Assistant United States Attorneys Katherine Driscoll and Paul Shapiro.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

During a press conference in Kansas City, MO., today, Attorney General William P. Barr, U.S. Attorney Justin Herdman and other U.S. Attorneys announced an update on the progress of Operation Legend in several cities across the country, including Cleveland. 

Since the launch of Operation Legend, there have been more than 1,000 arrests, including defendants who have been charged in state and local courts. Of those arrests, approximately 217 defendants have been charged with federal crimes. These numbers exclude Indianapolis, whose operation was just announced last Friday. In addition, nearly 400 firearms have been seized by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

“In just a few short weeks, federal investigators working side-by-side with state and local law enforcement have begun to make significant progress towards reducing violence related to illegal firearms, drug trafficking and other crime in our neighborhoods,” said U.S. Attorney Justin Herdman. “In Cleveland, Operation Legend’s law enforcement operations have already resulted in 32 defendants charged federally with various drug trafficking and firearms violations. These early results show the potential that Operation Legend has to make our cities and communities a safer place for everyone to live.”

The Attorney General launched the operation on July 8, 2020, as a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. The initiative is named in honor of four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City. 

Launched first in Kansas City, MO., on July 8, 2020, the operation was expanded to Chicago and Albuquerque on July 22, 2020, to Cleveland, Detroit, and Milwaukee on July 29, 2020, to St. Louis and Memphis on August 6, 2020, and to Indianapolis on August 14, 2020. A breakdown of the federal charges in Cleveland are listed below:

Cleveland, Ohio

32 defendants have been charged with federal crimes outlined below, with some defendants charged with multiple offenses. Two defendants remain fugitives.

• 22 defendants have been charged with federal drug trafficking charges;
• Nine defendants have been charged with federal firearms violations; and
• One defendant has been charged with carjacking.

To view Operation Legend results in other cities, click here.

NEWARK, N.J. – An Atlantic County, New Jersey, man today admitted his role in engaging in a pattern of fraudulent activity through his auto dealership, U.S. Attorney Craig Carpenito announced.

Afzal Khan, a/k/a “Bobby Khan,” 38, of Egg Harbor Township, New Jersey, pleaded guilty by videoconference before U.S. District Judge William J. Martini to Count One of an indictment charging him with wire fraud.

According to documents filed in the case and statements made in court:

From at least December 2013 through September 2014, Khan, through his car dealership, Emporio Motor Group (Emporio) of Ramsey, New Jersey, engaged in acts to defraud lenders and customers. Khan obtained loans from the auto finance division of a large bank for cars that he never delivered, but for which the purchaser was still responsible. Khan also obtained loans from the victim bank for cars that were delivered, but for which neither he nor Emporio had title. As a result, the purchasers of these cars were liable for the loans, but could not register the cars. In addition, Khan offered to sell cars for individuals on consignment, but did not return the cars or provide any money to the individuals from the sale of the cars. Khan admitted that as a result of his actions, he exposed the victim bank to a potential loss of at least $550,000.

Khan faces a maximum penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing is scheduled for Dec. 17, 2020.

U.S. Attorney Carpenito credited special agents of the FBI’s Newark Division, under the direction of Acting Special Agent in Charge Joe Denahan, with the investigation leading to today’s guilty plea. He also thanked the Bergen County Prosecutor’s Office and the Ramsey Police Department for their assistance.

The government is represented by Assistant U.S. Attorney Andrew Kogan of the U.S. Attorney’s Office Cybercrime Unit in Newark.

Saint Louis – At a press conference in Kansas City, MO, today, Attorney General William P. Barr and U.S. Attorney Jeff Jensen announced updates on Operation Legend.

Since the operation’s launch, there have been more than 1,000 arrests, including defendants who have been charged in state and local courts. Of those arrests, approximately 217 defendants have been charged with federal crimes. These numbers exclude Indianapolis, whose operation was just announced last Friday. In addition, nearly 400 firearms have been seized by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The Attorney General launched the operation on July 8, 2020, as a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. The initiative is named in honor of four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City. 

Launched first in Kansas City, MO., on July 8, 2020, the operation was expanded to Chicago and Albuquerque on July 22, 2020, to Cleveland, Detroit, and Milwaukee on July 29, 2020, to Saint Louis and Memphis on August 6, 2020, and to Indianapolis on August 14, 2020. A breakdown of the federal charges in each district, with the exception of Indianapolis, is below.

In Saint Louis, 25 defendants have been charged with federal crimes, with some defendants charged with multiple offenses.

• One defendant has been charged with drug trafficking and possession of a firearm in furtherance of a drug trafficking crime following the USMS’s execution of a state arrest warrant;
• One defendant has been charged with robbery of an item effecting interstate commerce and possession of a firearm in furtherance of a crime of violence following an joint ATF, SLMPDinitiated undercover operation targeting a known shooter;
• One defendant has been charged with being a felon in possession of a firearm following ATF’s execution of a federal search warrant directed towards the residence of a suspected murderer;
• 21 defendants have been charged with drug trafficking offenses; and
• One defendant has been charged with being a drug user in possession of a firearm.

“Operation LeGend – Saint Louis represents a unique federal partnership with local law enforcement to address the increase in homicides and violent crime in Saint. Louis in 2020,” said U.S. Attorney Jeff Jensen.  “Today’s announcement highlights the impactful work the brave men and women of the Saint Louis Metropolitan Police Department, Department of Homeland Security, FBI, DEA, ATF, the U.S. Marshals Service and Missouri State Highway Patrol have accomplished in Operation LeGend’s early stages.  Of course, there is more important work to be done.”

PHILADELPHIA and LAS VEGAS – United States Attorney for the Eastern District of Pennsylvania, William M. McSwain, and United States Attorney for the District of Nevada, Nicholas A. Trutanich, jointly announced that Catholic Charities of Southern Nevada (Catholic Charities) has agreed to pay $206,368.35 to resolve claims arising from its administration of community service grants funded through the Corporation for National and Community Service (CNCS).

From 2003 until 2018, Catholic Charities administered multiple grants in CNCS’s Senior Corps program. These grants included the Foster Grandparent Program, which places seniors in school and community settings to serve youth with exceptional needs, and the Senior Companion Program, which places seniors in community and residential settings to assist other seniors who have difficulty with tasks of daily living. These programs provide small hourly stipends to the volunteers performing these services.

The settlement resolves claims that in 2014 and 2015, Catholic Charities’ employees who oversaw the Foster Grandparent and Senior Companion programs falsified records for the stipend recipients. They also directed recipients to falsify records, leading to CNCS grant funds being used to pay stipends for hours that were never actually worked, were in violation of program requirements, or were inflated.

When Catholic Charities executive management discovered the fraudulent actions of its employees, it voluntarily disclosed them through the CNCS-OIG hotline. It terminated the employees who had perpetrated the fraud and cooperated fully in the United States’ investigation of its administration of these grants. In 2018, Catholic Charities relinquished the grants entirely.

“Every federal grantee, including community service organizations, is required to honestly and openly report the service that its volunteers perform. Every dollar spent on an hour that was not actually served is one that is not available to support other community service efforts,” said U.S. Attorney McSwain. “Strict compliance with grant requirements ensures that federal funds reach those who need it most.” 

“Each day, Catholic Charities of Southern Nevada feeds the hungry, provides shelter for the homeless, and supports families and seniors in need of assistance. The federal government relies on its non-profit partners to help ensure that federal grant funds are being used to assist their communities,” said U.S. Attorney Trutanich. “Today’s settlement is a reminder that everyone receiving federal grant funds must adhere to grant compliance requirements and self-report misuse of federal grant funds, as Catholic Charities of Southern Nevada did here. “

“Catholic Charities acted responsibly upon discovering fraud, promptly reported the misconduct, cooperated actively with the investigation and willingly made the taxpayers whole,” said CNCS’s Inspector General Deborah J. Jeffrey. “As a result, Catholic Charities was appropriately spared substantial penalties and fines. We thank our partners at the U.S. Attorney’s Offices in the Eastern District of Pennsylvania and Nevada for protecting the integrity of CNCS.”

United States Attorneys McSwain and Trutanich also praised Catholic Charities’ work in addressing the issues in these programs: “We commend Catholic Charities of Southern Nevada for promptly reporting these issues when they were discovered and for working with the Department of Justice and the Corporation for National and Community Service to make the government whole. We hope this settlement will serve as a message to other senior managers to be vigilant in overseeing government-funded programs and to ensure that their employees do not attempt to conceal any non-compliance. All organizations accepting federal funds should take their responsibility to the American taxpayers seriously to come forward promptly and cooperate fully if they discover that they have not lived up to their promises.”

This investigation was conducted jointly by the United States Attorney’s Offices for the Eastern District of Pennsylvania and District of Nevada with the Corporation for National and Community Service Office of Inspector General. Assistant United States Attorneys Paul W. Kaufman and Veronica Finkelstein of the Eastern District of Pennsylvania and Troy Flake of the District of Nevada handled the investigation and settlement. This case was initiated as a part of the U.S. Attorney’s Office for the Eastern District of Pennsylvania’s Affirmative Civil Enforcement Strike Force focus on grant fraud.

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

Memphis, TN - At a press conference in Kansas City, MO., today, Attorney General William P. Barr and U.S. Attorney D. Michael Dunavant announced updates on Operation LeGend.

Since the operation’s launch, there have been more than 1,000 arrests, including defendants who have been charged in state and local courts. Of those arrests, approximately 217 defendants have been charged with federal crimes. These numbers exclude Indianapolis, whose operation was just announced last Friday. In addition, nearly 400 firearms have been seized by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The Attorney General launched the operation on July 8, 2020, as a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. The initiative is named in honor of four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City.

U.S. Attorney D. Michael Dunavant said, "Operation LeGend is leveraging our collaboration between federal, state, and local law enforcement, and is already making a difference in our collective fight against violent crime in Memphis. With these much needed federal resources, we can interrupt the shooting cycle, hold dangerous offenders accountable, reduce violent crime rates, and ultimately save lives."

Launched first in Kansas City, MO., on July 8, 2020, the operation was expanded to Chicago and Albuquerque on July 22, 2020, to Cleveland, Detroit, and Milwaukee on July 29, 2020, to St. Louis and Memphis on August 6, 2020, and to Indianapolis on August 14, 2020. A breakdown of the federal charges in each district, with the exception of Indianapolis, is below.

Memphis, Tenn.

Seven defendants have been charged with federal offenses, with some defendants charged with multiple offenses.

- One defendant has been charged with being an alien in possession of a firearm while illegally or unlawfully in the United States;

- One defendant, who lives in Memphis, was charged in an out-of-district federal case with conspiracy to distribute methamphetamine;

- Two defendants have been charged with being unlawful users of a controlled substance in possession of a firearm and making a material false statement when acquiring a firearm from a Federal Firearms Licensee (FFL); and

- Two cases remain under seal, but the charges are as follows:

o One defendant has been charged with bank robbery

o Two defendants charged with theft from an FFL.

Kansas City, MO.

43 defendants have been charged with federal crimes outlined below, with some defendants charged with multiple offenses. In addition to the federal charges, the operation has led to the arrests of 17 state defendants on homicide charges.

- 20 defendants have been charged with being a felon in possession of a firearm;

- 17 defendants have been charged with drug trafficking;

- Four defendants have been charged with being a drug user in possession of a firearm;

- Six defendants have been charged with being in possession of a firearm in furtherance of drug trafficking;

- Four defendants have been charged with being in possession of a firearm in furtherance of violent crime;

- One defendant has been charged with being a felon in possession of ammunition;

- Three defendants have been charged with armed robbery;

- One defendant has been charged with carjacking; and

- One defendant has been charged with arson.

Chicago, Ill.

61 defendants have been charged with federal crimes outlined below, with some defendants charged with multiple offenses.

- 34 defendants have been charged with firearms-related offenses;

- 26 defendants have been charged with narcotics-related offenses;

- One defendant has been charged with possession of machine gun;

- One defendant has been charged with illegally dealing firearms without a license;

- One defendant has been charged with the illegal sale of firearm to prohibited person; and

- One defendant has been charged with bank fraud.

Albuquerque, NM.

16 defendants have been charged with federal crimes outlined below, with some defendants charged with multiple offenses.

- Six defendants have been charged with conspiracy to distribute controlled substances;

- Four defendants have been charged with distribution of controlled substances;

- Six defendants have been charged with possession with intent to distribute a controlled substance;

- Four defendants have been charged with being in possession of a firearm in furtherance of drug trafficking;

- Eight defendants have been charged with being a felon in possession of a firearm;

- One defendant has been charged with being in possession of a stolen firearm;

- Two defendants have been charged with Hobbs Act violations;

- One defendant has been charged with carjacking; and

- One defendant has been charged with re-entry of a removed alien.

Cleveland, OH.

32 defendants have been charged with federal crimes outlined below, with some defendants charged with multiple offenses. Two defendants remain fugitives.

- 22 defendants have been charged with federal drug trafficking charges;

- Nine defendants have been charged with federal firearms violations; and

- One defendant had been charged with carjacking.

Detroit,MI.

22 defendants have been charged with federal offenses outlined below, with some defendants charged with multiple offenses.

- 14 defendants have been charged with being a felon in possession of a firearm;

- Two defendants have been charged with possession with the intent to distribute controlled substances;

- Two defendants have been charged with possession of a firearm in furtherance of drug trafficking;

- Three defendants have been charged with receipt of a firearm while under indictment;

- Four defendants have been charged with making false statement to a licensed firearm dealer; and

- Two defendants have been charged with carjacking.

Milwaukee, WI.

11 defendants have been charged with federal crimes outlined below, with some defendants charged with multiple offenses. In addition, thus far, 28 firearms have been seized.

- Eight defendants have been charged with being a felon in possession of a firearm;

- Five defendants have been charged with possession with intent to distribute narcotics;

- Four defendants have been charged with possession of a firearm in furtherance of drug trafficking;

- Two defendants have been charged with making false statements to a licensed firearm dealer;

- One defendant has been charged with possession of a firearm while being an unlawful user of narcotics;

- One defendant has been charged with being a felon in possession of ammunition; and

- One defendant has been charged with distribution of narcotics.

St. Louis, MO.

15 defendants have been charged with federal crimes, with some defendants charged with multiple offenses.

- One defendant has been charged with drug trafficking and possession of a firearm in furtherance of a drug trafficking crime following the USMS’s execution of a state arrest warrant;

- One defendant has been charged with robbery of an item effecting interstate commerce and possession of a firearm in furtherance of a crime of violence following an joint ATF, SLMPD-initiated undercover operation targeting a known shooter;

- One defendant has been charged with being a felon in possession of a firearm following ATF’s execution of a federal search warrant directed towards the residence of a suspected murderer;

- 11 defendants have been charged with drug trafficking offenses; and

- One defendant has been charged with being a drug user in possession of a firearm.

***

Today, United States Attorney Matthew D. Krueger joins the Attorney General William P. Barr in announcing updates on Operation Legend.

Since the operation’s launch, there have been more than 1,000 arrests, including defendants who have been charged in state and local courts. Of those arrests, approximately 207 defendants have been charged with federal crimes. These numbers exclude Indianapolis, whose operation was just announced last Friday. In addition, nearly 400 firearms have been seized by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

The Attorney General launched the operation on July 8, 2020, as a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. The initiative is named in honor of four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City. 

“As Attorney General Barr has said, the most basic duty of government is to protect the safety of our citizens,” remarked U.S. Attorney Krueger.  “Operation Legend is already yielding results in Milwaukee and other cities.  Working together with our state and local partners, this effort will enhance the safety of Milwaukee’s neighborhoods.” 

The operation was expanded to Chicago and Albuquerque on July 22, 2020, to Cleveland, Detroit, and Milwaukee on July 29, 2020, to St. Louis and Memphis on August 6, 2020, and to Indianapolis on August 14, 2020. A breakdown of the federal charges in each district, with the exception of Indianapolis, is below. 

Kansas City, MO.

43 defendants have been charged with federal crimes outlined below, with some defendants charged with multiple offenses. In addition to the federal charges, the operation has led to the arrests of 17 state defendants on homicide charges.

• 20 defendants have been charged with being a felon in possession of a firearm;
• 17 defendants have been charged with drug trafficking;
• Four defendants have been charged with being a drug user in possession of a firearm;
• Six defendants have been charged with being in possession of a firearm in furtherance of drug trafficking;
• Four defendants have been charged with being in possession of a firearm in furtherance of violent crime;
• One defendant has been charged with being a felon in possession of ammunition;
• Three defendants have been charged with armed robbery;
• One defendant has been charged with carjacking; and
• One defendant has been charged with arson. 

Chicago, Ill.

61 defendants have been charged with federal crimes outlined below, with some defendants charged with multiple offenses.

-           34 defendants have been charged with firearms-related offenses;

-           26 defendants have been charged with narcotics-related offenses;

-           One defendant has been charged with possession of machine gun;

-           One defendant has been charged with illegally dealing firearms without a license;

-           One defendant has been charged with the illegal sale of firearm to prohibited person; and

-           One defendant has been charged with bank fraud.

Albuquerque, NM.

16 defendants have been charged with federal crimes outlined below, with some defendants charged with multiple offenses.

-           Six defendants have been charged with conspiracy to distribute controlled substances;

-           Four defendants have been charged with distribution of controlled substances;

-           Six defendants have been charged with possession with intent to distribute a controlled substance;

-           Four defendants have been charged with being in possession of a firearm in furtherance of drug trafficking;

-           Eight defendants have been charged with being a felon in possession of a firearm;

-           One defendant has been charged with being in possession of a stolen firearm;

-           Two defendants have been charged with Hobbs Act violations;

-           One defendant has been charged with carjacking; and

-           One defendant has been charged with re-entry of a removed alien. 

Cleveland, OH. 

• 22 defendants have been charged with federal drug trafficking charges;
• Nine defendants have been charged with federal firearms violations; and
• One defendant had been charged with carjacking.
   

Detroit, MI. 

22 defendants have been charged with federal offenses outlined below, with some defendants charged with multiple offenses.

• 14 defendants have been charged with being a felon in possession of a firearm;
• Two defendants have been charged with possession with the intent to distribute controlled substances;
• Two defendants have been charged with possession of a firearm in furtherance of drug trafficking;
• Three defendants have been charged with receipt of a firearm while under indictment;
• Four defendants have been charged with making false statement to a licensed firearm dealer; and
• Two defendants have been charged with carjacking.
•  

Milwaukee, WI. 

11 defendants have been charged with federal crimes outlined below, with some defendants charged with multiple offenses. In addition, thus far, 28 firearms have been seized.

• Eight defendants have been charged with being a felon in possession of a firearm;
• Five defendants have been charged with possession with intent to distribute narcotics;
• Four defendants have been charged with possession of a firearm in furtherance of drug trafficking;
• Two defendants have been charged with making false statements to a licensed firearm dealer;
• One defendant has been charged with possession of a firearm while being an unlawful user of narcotics;
• One defendant has been charged with being a felon in possession of ammunition; and
• One defendant has been charged with distribution of narcotics.
•  

St. Louis, MO.

15 defendants have been charged with federal crimes, with some defendants charged with multiple offenses.

• One defendant has been charged with drug trafficking and possession of a firearm in furtherance of a drug trafficking crime following the USMS’s execution of a state arrest warrant;
• One defendant has been charged with robbery of an item effecting interstate commerce and possession of a firearm in furtherance of a crime of violence following an joint ATF, SLMPD-initiated undercover operation targeting a known shooter;
• One defendant has been charged with being a felon in possession of a firearm following ATF’s execution of a federal search warrant directed towards the residence of a suspected murderer;
• 11 defendants have been charged with drug trafficking offenses; and
• One defendant has been charged with being a drug user in possession of a firearm.
   

Memphis, Tenn.

Seven defendants have been charged with federal offenses, with some defendants charged with multiple offenses.

• One defendant has been charged with being an alien in possession of a firearm while illegally or unlawfully in the United States;
• One defendant, who lives in Memphis, was charged in an out-of-district federal case with conspiracy to distribute methamphetamine;
• Two defendants have been charged with being unlawful users of a controlled substance in possession of a firearm and making a material false statement when acquiring a firearm from a Federal Firearms Licensee (FFL); and
• Two cases remain under seal, but the charges are as follows:
  • One defendant has been charged with bank robbery
  • Two defendants charged with theft from an FFL.

The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

#  #  #  #

            WASHINGTON – Amin Mahdavi, 53, an Iranian national living in the United Arab Emirates (UAE), and Parthia Cargo LLC, a freight forwarding company located in the UAE, were charged in the United States District Court for the District of Columbia with participating in a criminal conspiracy to violate U.S. export laws and sanctions against Iran.

            “We will not abide individuals or business organizations that seek to harm our national security by providing coveted U.S. goods to Iran, and we will pursue these wrongdoers no matter where they are located in the world,” said Acting U.S. Attorney Michael R. Sherwin.

            “Iran evades the U.S. embargo resulting from their malicious activities with the collaboration of those who pose as innocent buyers, but who are ready to send the products on to their forbidden destination,” said Assistant Attorney General for National Security John C. Demers.  “These charges against Parthia Cargo LLC and its managing director should put on notice all freight forwarders and others who facilitate illicit transshipments to Iran that their conduct will not be tolerated.”

            "Amin Mahdavi defiantly conspired and violated U.S. sanctions to benefit his company and Iran," said James A. Dawson, Acting Assistant Director in Charge of the FBI Washington Field Office. "Today’s charges are another example of the dedicated and unrelenting efforts of the FBI and the US Attorney's Office to pursue those who violate our nation's sanctions and put our national security at risk.  The FBI is charged with protecting our nation's security and intellectual property from being used to benefit our foreign adversaries."

           “The actions today are a result of the ongoing coordination and collaborative counter-proliferation efforts by the Office of Export Enforcement and the FBI,” said P. Lee Smith, of BIS. “We will continue to vigorously pursue violators with all law enforcement partners to interdict illicit trade that threatens U.S. national security and undermines U.S. foreign policy.”

           Mahdavi and Parthia Cargo LLC were charged in a criminal complaint with conspiring to defraud the United States and to violate the International Emergency Economic Powers Act (IEEPA) and the Iranian Transactions and Sanctions Regulations (ITSRs).

           The affidavit in support of the criminal complaint alleges that Mahdavi was the Managing Director of Parthia Cargo LLC, a business organization that facilitated the illegal shipment to Iran of goods manufactured in the United States.  Mahdavi acknowledged to U.S. government officials in 2017 that he understood a U.S. government license was necessary to lawfully ship U.S. commercial aircraft parts to Iran.  But Mahdavi nonetheless agreed to help ship a U.S.-origin commercial aircraft part to an Iranian air transport company, utilizing the freight forwarding services of Parthia Cargo LLC and without obtaining a license.  Mahdavi and Parthia Cargo LLC conspired with individuals and business organizations located outside the United States as part of the criminal scheme, which included falsely stating to a U.S.-based aircraft parts supplier that the goods would not be shipped to Iran unless authorized by the U.S. government.

            A concurrent action was taken by the Department of the Treasury, sanctioning Mahdavi and Parthia Cargo LLC, as well as a related UAE business organization, Delta Parts Supply FZC.

            If convicted, Mahdavi would face up to five years of imprisonment and a fine of up to $250,000, and Parthia Cargo LLC would face a fine of up to $500,000.  The criminal charge in the complaint is an allegation, and Mahdavi and Parthia Cargo LLC are presumed innocent until proven guilty beyond a reasonable doubt.

            The investigation was conducted by the FBI’s Washington Field Office and the BIS’s Boston Field Office.  Assistant U.S. Attorney Michael J. Friedman and National Security Division Trial Attorney Jennifer Kennedy Gellie are representing the United States.

LAS VEGAS and PHILADELPHIA– United States Attorney for the District of Nevada Nicholas A. Trutanich and United States Attorney for the Eastern District of Pennsylvania William M. McSwain jointly announced that Catholic Charities of Southern Nevada (Catholic Charities) has agreed to pay $206,368.35 to resolve claims arising from its administration of community service grants funded through the Corporation for National and Community Service (CNCS).

From 2003 until 2018, Catholic Charities administered multiple grants in CNCS’s Senior Corps program. These grants included the Foster Grandparent Program, which places seniors in school and community settings to serve youth with exceptional needs, and the Senior Companion Program, which places seniors in community and residential settings to assist other seniors who have difficulty with tasks of daily living. These programs provide small hourly stipends to the volunteers performing these services.

The settlement resolves claims that in 2014 and 2015, Catholic Charities’ employees who oversaw the Foster Grandparent and Senior Companion programs falsified records for the stipend recipients. They also directed recipients to falsify records, leading to CNCS grant funds being used to pay stipends for hours that were never actually worked, were in violation of program requirements, or were inflated.

When Catholic Charities executive management discovered the fraudulent actions of its employees, it voluntarily disclosed them through the CNCS-OIG hotline. It terminated the employees who had perpetrated the fraud and cooperated fully in the United States’ investigation of its administration of these grants. In 2018, Catholic Charities relinquished the grants entirely.

“Each day, Catholic Charities of Southern Nevada feeds the hungry, provides shelter for the homeless, and supports families and seniors in need of assistance. The federal government relies on its non-profit partners to help ensure that federal grant funds are being used to assist their communities,” said U.S. Attorney Trutanich. “Today’s settlement is a reminder that everyone receiving federal grant funds must adhere to grant compliance requirements and self-report misuse of federal grant funds, as Catholic Charities of Southern Nevada did here.”

“Every federal grantee, including community service organizations, is required to honestly and openly report the service that its volunteers perform. Every dollar spent on an hour that was not actually served is one that is not available to support other community service efforts,” said U.S. Attorney McSwain. “Strict compliance with grant requirements ensures that federal funds reach those who need it most.” 

“Catholic Charities acted responsibly upon discovering fraud, promptly reported the misconduct, cooperated actively with the investigation and willingly made the taxpayers whole,” said CNCS’s Inspector General Deborah J. Jeffrey. “As a result, Catholic Charities was appropriately spared substantial penalties and fines. We thank our partners at the U.S. Attorney’s Offices in the Eastern District of Pennsylvania and Nevada for protecting the integrity of CNCS.”

United States Attorneys Trutanich and McSwain also praised Catholic Charities’ work in addressing the issues in these programs: “We commend Catholic Charities of Southern Nevada for promptly reporting these issues when they were discovered and for working with the Department of Justice and the Corporation for National and Community Service to make the government whole. We hope this settlement will serve as a message to other senior managers to be vigilant in overseeing government-funded programs and to ensure that their employees do not attempt to conceal any non-compliance. All organizations accepting federal funds should take their responsibility to the American taxpayers seriously to come forward promptly and cooperate fully if they discover that they have not lived up to their promises.”

This investigation was conducted jointly by the United States Attorney’s Offices for the District of Nevada and Eastern District of Pennsylvania with the Corporation for National and Community Service Office of Inspector General. Assistant United States Attorneys Troy Flake of the District of Nevada and Paul W. Kaufman and Veronica Finkelstein of the Eastern District of Pennsylvania handled the investigation and settlement. This case was initiated as a part of the U.S. Attorney’s Office for the Eastern District of Pennsylvania’s Affirmative Civil Enforcement Strike Force focus on grant fraud.

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

###

BIRMINGHAM, Ala. – Adrian L. Stargell, 39, a former Bureau of Prisons (BOP) Corrections Officer who worked as an Education Specialist at the FCI-Aliceville facility in Aliceville, Alabama, was sentenced today in federal court in Tuscaloosa, Alabama to 42 months in prison and three years of supervised release.

Stargell previously pleaded guilty to two counts of violating the rights of two women whom he sexually assaulted on multiple occasions and one count of making false statements to federal agents from the U.S. Department of Justice Office of the Inspector General (OIG).

“The Department of Justice will not tolerate corrections officers who sexually assault individuals whom they are otherwise supposed to protect and keep safe,” said Assistant Attorney General Eric Dreiband. “The Civil Rights Division will continue to vigorously prosecute these cases and secure justice for victims of these egregious crimes.” 

“Today justice was served for the victims of these egregious crimes,” said U.S. Attorney Prim Escalona of the Northern District of Alabama. “We will continue to aggressively prosecute those who abuse authority and prey on vulnerable people in their care.”

“Stargell abused his power, sexually assaulted two inmates, and lied to try to cover up his actions. Today, justice is served. He will rightly serve time for his egregious actions,” said James F. Boyersmith, Special Agent in Charge of the OIG Miami Field Office.

According to court documents, during 2017 and 2018, while on-duty as an Education Specialist, Stargell sexually assaulted two women who were incarcerated at FCI-Aliceville.  Stargell admitted that he knew what he was doing was wrong and against the law, yet he did it anyway. When OIG agents interviewed Stargell about the allegations of sexual misconduct, Stargell lied by falsely denying having any sexual contact with the victims.

This case was investigated by the Department of Justice OIG Miami Field Office. Assistant U.S. Attorney Robert Posey of the Northern District of Alabama and Special Litigation Counsel Fara Gold and Trial Attorney Anna Gotfryd of the Criminal Section of the Civil Rights Division of the U.S. Department of Justice prosecuted the case.

Metropolitan Jewish Health System Hospice and Palliative Care (“MJHS Hospice”), a New York nonprofit hospice provider, has agreed to pay the United States $4,850,000 to resolve civil allegations that it billed Medicare and Medicaid for services rendered to hospice patients at heightened levels of care for which the patients did not qualify, in violation of the False Claims Act, and has agreed to pay the State of New York $375,000.  

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, announced the settlement.  Mr. DuCharme thanked the Office of the Inspector General of the U.S. Department of Health and Human Services and the New York State Attorney General for their assistance in the investigation.

The settlement resolves allegations that MJHS Hospice knowingly billed Medicare and Medicaid for unnecessary levels of hospice care to patients.  Medicare’s and Medicaid’s hospice benefits are available for patients who elect palliative treatment (medical care focused on the patient’s relief from pain and stress) for a terminal illness. 

Under the Medicare and Medicaid programs, a hospice provider may seek payment for several levels of care, including heightened levels known as “CHC” (continuous home care services) and “GIP” (general inpatient services).  To receive reimbursement for CHC, a hospice provider must show that a patient is experiencing acute medical symptoms.  For a hospice provider to obtain reimbursement for GIP, a patient must need pain control, or acute or chronic symptom management, which must be managed in a hospital.  After an extensive investigation, the United States determined that from 2011-2015, MJHS falsely claimed that some of its patients required CHC and, in 2012, falsely claimed that some patients required GIP.

“It is vital that the terminally ill have appropriate access to hospice care, including levels of care that are available under Medicare and Medicaid.  This Office recognizes the importance of preserving limited federal health care funds for this purpose, and to holding health care providers accountable when they seek reimbursement for care that is not reasonable and necessary,” stated Acting United States Attorney DuCharme.

The allegations were brought to the government’s attention through the filing of a complaint pursuant to the qui tam provisions of the False Claims Act.  Under the Act, private citizens can bring suit on behalf of the United States and share in any recovery.  The claims resolved by the settlement are allegations only and there has been no finding of liability by a court.

The United States’ case was handled by Assistant U.S. Attorney Lisa D. Kutlin of the Office’s Civil Division, with assistance from Affirmative Civil Enforcement Auditor Michael Gambrell.

E.D.N.Y. Docket No. 14-CV-4201 (FB)

COLUMBUS, Ohio – A former Mount Vernon couple pleaded guilty in U.S. District Court today to accepting federal mortgage assistance in Ohio while living in another state and renting the Ohio property to a tenant.

Christopher Lee Horn, 58, and Sondra Horn, 57, both of Richville, Minn., pleaded guilty to conspiring to defraud the United States Treasury Department’s Troubled Asset Relief Program.

Part of the relief programs funds targeted aid to families in states hit hard by the 2008 economic and housing market downturn. The program provided state housing finance agencies funding to develop locally tailored foreclosure prevention solutions. In Ohio, the housing finance agency created “Save the Dream Ohio,” a statewide program focused on unemployed and underemployed homeowners at risk of mortgage loan default or foreclosure.

According to court documents, the Horns admitted to receiving more than $14,000 in Save the Dream Ohio mortgage assistance funds to which they were not entitled.

In September 2014, the couple received more than $2,800 in rescue payment assistance and was approved to receive 18 monthly mortgage assistance payments of $692 each for their property at 18 Marion Street in Mount Vernon.

Also in September 2014, Christopher and Sondra Horn negotiated to rent their Marion Street residence to a tenant for $655 per month. In later months, the amount increased. The couple requested the tenant pay his monthly rent in cash or personal check to a third party, who then deposited the money into a joint credit union account controlled by the Horns.

Each pleaded guilty to conspiring to commit theft of government property, a crime punishable by up to 10 years in prison.

“Today the defendants join 388 defendants convicted of crimes the Special Inspector General for the Troubled Asset Relief (SIGTARP) investigated,” said Special Inspector General Christy Goldsmith Romero. “Christopher and Sondra Horn knowingly defrauded a TARP program that helps unemployed homeowners stay in their primary home. The Special Inspector General commends the Office of the U.S. Attorney for the Southern District of Ohio for standing with SIGTARP to combat rescue fraud.”

Congress sets the maximum statutory sentence. Sentencing of the defendants will be determined by the Court based on the advisory sentencing guidelines and other statutory factors.

David M. DeVillers, United States Attorney for the Southern District of Ohio; and Special Inspector General Christy Goldsmith Romero, Troubled Asset Relief Program; announced the plea offered today before U.S. Magistrate Judge Norah McCann King. Assistant United States Attorney Sheila G. Lafferty is representing the United States in this case.

# # #

NEWARK, N.J. – The Bank of Nova Scotia (Scotiabank), a Toronto, Canada-based global banking and financial services firm, has entered into a resolution with the Department of Justice to resolve criminal charges related to a price manipulation scheme involving thousands of episodes of unlawful trading activity by four traders in the precious metals futures contracts markets. 

Scotiabank entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the District of New Jersey charging the company with one count of wire fraud and one count of attempted price manipulation.  Under the terms of the DPA, Scotiabank has agreed to the imposition of an independent compliance monitor, and will pay over $60.4 million in a criminal monetary penalty, criminal disgorgement, and victim compensation, with part of the criminal monetary penalty credited against payments made to the Commodity Futures Trading Commission (CFTC) under a separate agreement with the CFTC being announced today.

“For over eight years, Scotiabank traders placed thousands of orders for precious metals futures contracts in an attempt to manipulate prices for their own and the bank’s benefit and to deceive other market participants,” said Chief Robert A. Zink of the Justice Department’s Criminal Division, Fraud Section.  “This deferred prosecution agreement—which includes a criminal monetary penalty at the top of the United States Sentencing Guidelines range, money to compensate victims, and an independent compliance monitor—reflects the seriousness of the offense and the state of Scotiabank’s compliance program, and further helps to promote the integrity of our public markets.”

“For the markets to work fairly, everyone needs to be able to make trading decisions with consistent, accurate information,” said U.S. Attorney Craig Carpenito for the District of New Jersey.  “In the conduct described here, four Scotiabank traders attempted to rig precious metals futures prices in their favor by placing thousands of orders they knew they would cancel before the trades were executed. In this way, they sought to illegally manipulate the market to their own advantage, and to the disadvantage of other traders. The resolution announced requires Scotiabank to pay a substantial penalty and places them under watch by an independent compliance monitor.”

“Today, Scotiabank has admitted to their role in a massive price manipulation scheme aimed at falsely manufacturing the prices of precious metals futures contracts to serve the bank’s best interests,” said Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office.  “The bank’s actions were designed to lead others to trade in ways they never would have without what was believed to be legitimate market activity.  Scotiabank’s agreement to surrender more than $60 million in criminal fines, disgorgement and victim compensation underscores the severe penalties that can be levied against those who wish to engage in similar, illegal business tactics.”

“The consequences of the actions of these traders are far reaching, affecting not only the economy of the United States, but also the world’s financial markets,” said Inspector in Charge Delany De Leon-Colon of the U.S. Postal Inspection Service’s Criminal Investigations Group. “Anyone who thinks that manipulating trading markets to benefit their own bank accounts should see today’s announcement as a significant warning. The U.S. Postal Inspection Service has an extensive history of investigating complex financial fraud schemes in order to protect investors as well as the integrity of the financial marketplace.” 

According to admissions and court documents,  between approximately January 2008 and July 2016, four precious metals traders located in New York, London and Hong Kong engaged in fraudulent and manipulative trading practices in the markets for gold, silver, platinum, and palladium futures contracts (collectively, precious metals futures contracts) that traded on the New York Mercantile Exchange Inc. (NYMEX) and Commodity Exchange Inc. (COMEX), which are commodities exchanges operated by the CME Group, Inc.  One of the traders, Corey Flaum, 42, of Delray Beach, Florida, pleaded guilty on July 25, 2019, to one count of attempted price manipulation in connection with his precious metals futures contracts trading at Scotiabank and another financial services firm, and his sentencing is scheduled for Jan. 27, 2021, before U.S. District Judge Brian M. Cogan of the Eastern District of New York.

As part of the DPA, Scotiabank has agreed to, among other things, continue to cooperate with the department in any ongoing investigations and prosecutions relating to the underlying misconduct, to modify its compliance program where necessary and appropriate, and to retain an independent compliance monitor for a period of three years.

A number of relevant considerations contributed to the department’s criminal resolution with Scotiabank, including the nature and seriousness of the offense, the state of Scotiabank’s compliance program, and Scotiabank’s failure to fully and voluntarily self-disclose the offense conduct to the department.

As Scotiabank admitted in the DPA, Flaum and the three other traders, collectively, placed thousands of orders to buy and sell precious metals futures contracts with the intent to cancel those orders before execution.  By placing these orders, the traders intended to artificially move the prices of precious metals futures contracts in a direction that was favorable to them, and to inject false and misleading information into the precious metals futures markets in order to deceive other market participants into believing something untrue, namely that the market reflected legitimate supply and demand.  This false and misleading information was intended to, and at times did, trick other market participants into reacting to the apparent change and imbalance in supply and demand by buying and selling futures contracts at quantities, prices, and times that they otherwise likely would not have traded.

As set forth in the DPA, Scotiabank’s compliance function failed to detect or prevent the four traders’ unlawful trading practices.  Moreover, between August 2013 and February 2016, three Scotiabank compliance officers possessed information regarding unlawful trading by one of the traders other than Flaum but failed to prevent further unlawful conduct by this same trader. These facts were significant considerations that counseled for the imposition of a criminal monetary penalty at the high end of the applicable United States Sentencing Guidelines range under the DPA.

Since the time of the underlying offense conduct, Scotiabank has made significant investments to improve its compliance technology and trade surveillance tools, has nearly doubled its annual compliance operating budget, has added more than 200 full-time equivalent compliance positions, and is in the process of winding down its precious metals business.  The department ultimately determined, however, that an independent compliance monitor was necessary because Scotiabank’s remedial improvements to its compliance and ethics program have yet not been fully implemented and tested to demonstrate that they would be effective in detecting and preventing similar misconduct in the future.

Scotiabank did not receive voluntary disclosure credit because it did not voluntarily and timely disclose the offense conduct to the department.  In 2016, after one of its futures commission merchants flagged trading by Flaum for possible spoofing, Scotiabank made a voluntary disclosure regarding Flaum to the CFTC.  As a result of recordkeeping failures, however, Scotiabank’s disclosure to the CFTC was materially incomplete.  As a result, the CFTC was impaired in its ability to fully investigate Flaum’s unlawful trading and discover the true extent of the misconduct. The CFTC, relying on Scotiabank’s incomplete and, ultimately, inaccurate disclosure, entered into a resolution with Scotiabank in 2018 that did not reflect the full extent of Flaum’s conduct (2018 CFTC Resolution).  In the 2018 CFTC resolution, Scotiabank received a substantially reduced penalty in recognition of, among other things, its purported self-reporting.

Today, the CFTC announced two separate settlements with Scotiabank in connection with related, parallel proceedings.  One of Scotiabank’s resolutions with the CFTC relates to unlawful trading by Flaum and the three other traders that Scotiabank did not fully disclose to the CFTC in connection with the CFTC’s prior investigation that resulted in the 2018 CFTC Resolution, discussed above.  Under the terms of the new agreement between Scotiabank and the CFTC, Scotiabank agreed to pay approximately $60.4 million, which includes a civil monetary penalty of $42 million, as well as restitution and disgorgement that will be credited to any such payments made to the department.  The second resolution between Scotiabank and the CFTC relates to certain false statements that Scotiabank made to the CFTC (including in connection with the investigation that resulted in the 2018 CFTC Resolution), the COMEX, and the National Futures Association.  Under the terms of this agreement, Scotiabank has agreed to pay a civil monetary penalty of approximately $17 million.

The FBI’s New York Field Office and the USPIS investigated this case.  Assistant Chief Avi Perry and Trial Attorneys Matthew F. Sullivan and Alexander Kramer of the Fraud Section and Assistant U.S. Attorney Catherine R. Murphy of the District of New Jersey prosecuted the case.  The CFTC’s Division of Enforcement provided assistance in this matter.

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website at https://www.justice.gov/criminal-vns/case/the-bank-of-nova-scotia-dpa or call (888) 549-3945.

The year 2020 marks the 150th anniversary of the Department of Justice.  Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.