Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and James D. Robnett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced the arrest of EARL SIMMONS, an internationally known recording artist, performer, and actor known professionally as “DMX” and “X,” for engaging in a multi-year scheme to conceal millions of dollars of income from the IRS and to avoid paying $1.7 million of tax liabilities.  SIMMONS surrendered to law enforcement agents today and will be presented tomorrow in Manhattan federal court before United States Magistrate Judge Andrew J. Peck

Acting U.S. Attorney Joon H. Kim said:  “For years, Earl Simmons, the recording artist and performer known as DMX, made millions from his chart-topping songs, concert performances and television shows.  But while raking in millions from his songs, including his 2003 hit ‘X Gon’ Give it to Ya,’ DMX didn’t give any of it to the IRS.  Far from it, DMX allegedly went out of his way to evade taxes, including by avoiding personal bank accounts, setting up accounts in other’s names and paying personal expenses largely in cash.  He even allegedly refused to tape the television show ‘Celebrity Couples Therapy’ until a properly issued check he was issued was reissued without withholding any taxes.  Celebrity rapper or not, all Americans must pay their taxes, and together with our partners at the IRS, we will pursue those who deliberately and criminally evade this basic obligation of citizenship.”

IRS-CI Special Agent in Charge James D. Robnett said:  “While most individuals file truthful tax returns and pay their taxes, the indictment against Mr. Simmons alleges various tax crimes, including that he failed to file personal tax returns for several years and did not pay his fair share of taxes.  IRS-Criminal Investigation will continue to focus our investigative efforts on those who try to conceal their income in order to evade their taxes.”

According to the allegations in the Indictment[1] unsealed today in Manhattan federal court:

SIMMONS, known professionally as “DMX” or “X,” worked as a recording artist, performer, and actor.  Beginning in 1997, SIMMONS released a series of hip-hop albums that sold millions of records.  Many of his albums went platinum and occupied the top positions on musical charts.  During his career, SIMMONS has performed at venues across the United States and around the world, and has acted in motion pictures.

As a result of the income SIMMONS earned from sources including musical recordings and performances, from 2002 through 2005 he incurred federal income tax liabilities of approximately $1.7 million.  Those liabilities went unpaid, and in 2005, the IRS began efforts to collect SIMMONS’s unpaid tax liabilities. 

During the period from 2010 through 2015, SIMMONS earned over $2.3 million, but SIMMONS did not file personal income tax returns during that time period.  Instead, he orchestrated a scheme to evade payment of his outstanding tax liabilities, largely by maintaining a cash lifestyle, avoiding the use of a personal bank account, and using the bank accounts of nominees, including his business managers, to pay personal expenses.  For example, SIMMONS received hundreds of thousands of dollars of royalty income from his music recordings.  SIMMONS caused that income to be deposited into the bank accounts of his managers, who then disbursed it to him in cash or used it to pay his personal expenses.  SIMMONS also participated in the “Celebrity Couples Therapy” television show in 2011 and 2012 and was paid $125,000 for his participation.  When taxes were withheld from the check for the first installment of that fee by the producer, SIMMONS refused to tape the remainder of the television show until the check was reissued without withholding taxes.

SIMMONS took other steps to conceal his income from the IRS and others, including by filing a false affidavit in U.S. Bankruptcy Court that listed his income as “unknown” for 2011 and 2012, and as $10,000 for 2013.  In fact, SIMMONS received hundreds of thousands of dollars of income in each of those years.

*                             *                            *

SIMMONS, 46, of Yonkers, New York, is charged in 14 counts:  one count of corruptly endeavoring to obstruct and impede the due administration of Internal Revenue Laws, one count of evasion of payment of income taxes, six counts of evasion of assessment of income tax liability, and six counts of failure to file a U.S. individual income tax return.  Count One carries a maximum sentence of three years.  Counts Two through Eight each carry a maximum sentence of five years.  Counts Nine through Fourteen each carry a maximum sentence of one year.  The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Mr. Kim praised the investigative work of the IRS-CI.  

This case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorney Richard Cooper is in charge of the prosecution.

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

LAS VEGAS, Nev.– A California man was convicted by a jury on Wednesday of conspiring with others to burn down a Henderson popcorn business and threatening to injure the business owners, announced Acting U.S. Attorney Steven W. Myhre for the District of Nevada.

Following a three-day jury trial, Joel Kenneth Ausbie, 53, of Fontana, Calif., was found guilty of one count of conspiracy to commit arson and one count of committing extortion by force or threat of injury. United States District Judge James C. Mahan presided over the trial and scheduled sentencing for Oct. 18, 2017. Ausbie faces the maximum statutory penalty of 20 years in prison and a $250,000 fine.

According to the indictment and court related documents, Ausbie and co-defendant Calvin Robinson paid co-defendant Joseph A. Strickland to set fire to Las Vegas Kettle Corn & Special Events, LLC, in Henderson. Robinson met Strickland in Victorville, Calif., and provided Strickland with directions as well as a note for Strickland to tape to the front window of the business. The note read: “I still don’t have my money. This is the last warning! Next time someone is going to be dead.” On Oct. 30, 2015, Strickland set fire to the business and as a result the business was closed. After the building fire, Robinson met Strickland and paid him for the act. Strickland also admitted to shooting at a private residence during the relevant conspiracy.

Robinson, 41, of Pomona, Calif., pleaded guilty and is scheduled to be sentenced on Aug. 10, 2017, and Strickland, 35, pleaded guilty and is scheduled to be sentenced on Aug. 28, 2017.

The case was investigated by the FBI and the Las Vegas Metropolitan Police Department. The case was prosecuted by Assistant U.S. Attorneys Lisa Cartier-Giroux and Cristina D. Silva.

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PEORIA, Ill. – A Bloomington, Ill., man, Braman Benjamin Broy, 22, has been sentenced to 68 months (5 years, 8 months) in prison for receiving child pornography. In addition to the prison term, U.S. District Judge Michael M. Mihm ordered that Broy remain on supervised release for eight years following his release from incarceration. Broy will be required to register as a sex offender.

Broy pleaded guilty on Jan. 9, 2017. According to court documents, Broy was a member of Playpen, a hidden website dedicated to sharing child pornography that operated on the Tor network, from August 2014 until March 2015. In February 2015, Broy logged into Playpen and downloaded content depicting the sexual exploitation of children. During a search of his residence, agents located a computer and hard drives that contained more than 2,600 images and 530 videos of child pornography.

Broy has been detained in the custody of the U.S. Marshals Service since his arrest on May 31, 2016.

The case was prosecuted by Assistant U.S. Attorney Ronald L. Hanna, and investigated by the FBI.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

SACRAMENTO, Calif. — Patricia Ramona Vasquez, 37, of Stockton, was sentenced today to three years in prison and ordered to pay $30,971 in restitution by U.S. District Judge Morrison C. England Jr. for bank fraud, aggravated identity theft, and mail fraud, U.S. Attorney Phillip A. Talbert announced.

San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors work closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those individuals responsible for mail fraud and identity theft crimes committed against the public.”

According to court documents, between February 3, 2016, and July 7, 2016, Vasquez targeted a woman with the same last name and obtained her mail to obtain documents and information to steal her identity. Vasquez created an email address for her new identity. On April 4, 2016, Vasquez entered a DMV branch in Sacramento and claimed her California driver’s license was lost or stolen. In doing so, Vasquez obtained a genuine driver’s license with her own picture and the identity theft victim’s personal identifying information. On April 15, 2016, Vasquez used the false identity to purchase a Nissan Altima from an auto dealership in Stockton. At the victim’s and creditors’ expense, Vasquez obtained a car loan from Well Fargo Bank for $16,703. On May 20, 2016, Vasquez opened accounts at Golden 1 Credit Union in Stockton using her phony California driver’s license number, the victim’s SSN, date of birth, true residence address, and signature. After opening the credit union accounts, Vasquez deposited stolen and altered checks to obtain cash.

This case was the product of an investigation by the United States Postal Inspection Service, with the assistance of the Stockton Police Department. Assistant United States Attorney Michelle Rodriguez prosecuted the case.

SAN FRANCISCO — Christopher Owens, a physician licensed to practice in California, was indicted on Tuesday with unlawfully prescribing oxycodone, announced U.S. Attorney Brian J. Stretch and Drug Enforcement Administration Special Agent in Charge John J. Martin.  The indictment alleges that between September of 2012 and June of 2015, Owens, 50, now of Indianapolis, IN, intended to act outside the course of usual professional practice and without a legitimate medical purpose when he prescribed oxycodone on numerous occasions.  In sum, Owens is charged with 36 counts of distributing oxycodone, in violation of 21 U.S.C. § 841(a)(1) and (b)(1)(C).  

Owens was arrested on Tuesday, July 11, 2017, in Indianapolis, Ind., and is currently scheduled to appear in Indiana before a U.S. Magistrate Judge for a detention hearing on Monday, July 17th.

An indictment merely alleges a crime has been committed.  Owens, as well as all defendants, must be presumed innocent unless and until proven guilty beyond a reasonable doubt.

Assistant U.S. Attorney Sheila Armbrust is prosecuting the case.  The prosecution is the result of an investigation by the Drug Enforcement Administration with assistance from the University of California San Francisco Police Department.  

Earlier today, federal officials joined in Washington to announce the scope of the recent enforcement actions. Attorney General Jeff Sessions, Department of Health and Human Services (HHS) Secretary Tom Price, M.D., Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting FBI Director Andrew McCabe, Acting Drug Enforcement Administration (DEA) Administrator Chuck Rosenberg, Inspector General Daniel Levinson of the HHS Office of Inspector General (OIG), IRS-Criminal Investigations Chief Jon Fort, CMS Administrator Seema Verma, and Deputy Director Kelly P. Mayo of the Defense Criminal Investigative Service (DCIS) described the program.  The enforcement actions were led and coordinated by the Criminal Division and staffed by the Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG.  In addition, the operation includes the participation of the DEA, DCIS, and State Medicaid Fraud Control Units.  Of the more than 412 people charged, over 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics.
 

PROVIDENCE – A North Carolina resident arrested by Rhode Island State Police on June 20, 2017, following a traffic stop which resulted in the seizure of a cache of loaded, high-powered firearms, camouflage equipment, night-vision goggles, and 443 grams of suspected methylenedioxymethamphetamine (MDMA, with street names of Molly and Ecstasy) was charged today by way of a federal criminal complaint in U.S. District Court in Providence with firearms and drug trafficking charges.

Acting United States Attorney Stephen G. Dambruch and Colonel Ann C. Assumpico, Superintendent of the Rhode Island State Police, announced today the filing of a federal criminal complaint charging Anthony Mondrez Thompson, 39, of Charlotte, NC, with being a felon in possession of firearms, possession with the intent to distribute 50 grams or more of MDMA, and possession of a firearm in furtherance of a drug trafficking crime.

According to an affidavit filed with the court in support of the criminal complaint, during the traffic stop it is alleged that Thompson, the only person in the vehicle, denied having firearms or illicit drugs in the vehicle, and denied having been previously convicted of a crime. During a check of the driver’s license and car registration provided by Thompson, and a criminal history check, the trooper learned that in fact Thompson has a lengthy criminal record, including convictions in federal and state courts in North Carolina on firearms and drug trafficking charges.

According to the affidavit, after agreeing to exit the vehicle and while being questioned by a trooper outside of the rear of the vehicle, it is alleged that Thompson shoved a trooper into a travel lane of the highway, and then he ran into the highway and began running in a travel lane opposite the direction of oncoming traffic. After ignoring verbal warnings to stop and repeated warnings of the possible use of a Taser, the trooper discharged his Taser causing Thompson to fall to the ground where he was placed under arrest.

According to the affidavit, it is alleged that searches of the vehicle at the scene of the traffic stop and later at the State Police barracks troopers discovered and seized eight high-powered pistols, a revolver, two AR-15-style assault rifles, numerous high-capacity rifle and pistol magazines, boxes of ammunition, military-issued smoke grenades, holsters, camouflage gear and masks, night vision goggles and a Taser. It is alleged that troopers also seized approximately 443 grams of MDMA.

Thompson, who is presently being held in state custody on firearms, drug, assault and resisting arrest charges, will make an initial appearance in U.S. District Court at a later date.

Acting United States Attorney Stephen G. Dambruch and Colonel Ann C. Assumpico thank the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Rhode Island Department of Attorney General for their assistance with this matter.

The case is being prosecuted by Assistant U.S. Attorney Milind M. Shah.

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Abingdon, VIRGINIA – Three Bristol, Virginia residents, who were previously convicted of healthcare fraud, were sentenced today in Federal Court, Acting United States Attorney Rick A. Mountcastle, Virginia Attorney General Mark R. Herring and Nick DiGiulio, Special Agent in Charge, Philadelphia Regional Office for U.S. Health and Human Services - Office of Inspector General announced.

Deborah Branch, 65, was sentenced today to 72 months in federal prison. In a pair of separate hearings today, Bryan Harr, 41, was sentenced to 48 months in federal prison and Melissa Harr, 49, was sentenced to 48 months in federal prison. The three previously pled guilty to federal healthcare conspiracy charges. Branch additionally pled guilty to wire fraud.

“This case shows that fraud committed against our federal and state health care benefit programs is more than just simple theft of government money, there is a sinister side to the greed that fuels the criminal acts of defendants like these,” Acting United States Attorney Mountcastle said today. “This type of greed brings physical and emotional devastation upon the innocent, vulnerable victims for whom essential services are denied, simply to satiate the greed of these defendants. In this case, children were forced to live in filth in a room without electricity. The United States Attorney’s Office, and our partners at the Virginia Attorney General’s Office, Health and Human Services and others, will continue to aggressively pursue fraudsters, like Branch and the Harrs, whose criminal actions bring harm to vulnerable victims.”

“Anyone who diverts public funds for their private benefit is stealing from all of us and undermining an important system that provides thousands of Virginians with needed medical services,” said Attorney General Mark Herring. “A situation where people steal that money at the expense of their own disabled child is even more horrifying and unacceptable, and I’m glad to see these criminals brought to justice today. My award-winning Medicaid Fraud Unit and I will be relentless in holding accountable those who try to take advantage of our health care system.”

“It is shocking to imagine parents who would for many years neglect their disabled child and allow him to suffer horribly while they worked to steal taxpayer money meant to pay for the child’s much needed care,” said Special Agent in Charge Nick DiGiulio of the United States Department of Health and Human Services, Office of Inspector General. “We are satisfied that justice was served today, and we will continue to work with our law enforcement partners to jail heartless criminals who prey on beneficiaries and our health care system.”

According to evidence presented at previous hearings, Bryan Harr Sr. and his wife, Melissa Harr, hired Branch to work with one of their children, who suffers from intellectual and physical disabilities and who qualifies for services paid for by Virginia Medicaid, including personal assistance, respite and residential support services. These services are available to qualified individuals pursuant to Virginia Medicaid’s Intellectual Disability (ID) waiver program. The ID waiver program is designed to provide critical services that enable a recipient to remain at home instead of being placed in an institution. Recipients or their guardians are permitted to hire workers of their own choosing to provide these services, which are paid for by Virginia Medicaid. Branch was paid through two different Virginia Medicaid contractors: Public Partnerships, LLC and ResCare (formerly known as Creative Family Solutions).

From January 2010 until September 2015, Branch, with the knowledge of Melissa Harr and Bryan Harr Sr., submitted time sheets claiming Branch was providing services for Harr’s disabled son when she was not. In exchange for assisting Branch in being paid for work she did not do, Branch paid the Harrs approximately $200 every two weeks. Virginia Medicaid’s Department of Medical Assistance Services (DMAS) paid out $350,641.02 to the contractors based on these time sheets, of which $207,854.43 was paid to Branch. More importantly, the Harr’s disabled son did not receive the services he legitimately needed pursuant to the ID waiver program.

The investigation of the case was conducted by the Medicaid Fraud Control Unit of the Virginia Attorney General’s Office, the U.S. Department of Health and Human Services Office of Inspector General, and the Bristol Virginia Police Department. Special Assistant United States Attorney Janine M. Myatt, a Virginia Assistant Attorney General, prosecuted the case for the United States.

WASHINGTON – Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Tom Price, M.D., announced today the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force, involving 412 charged defendants across 41 federal districts, including 115 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $1.3 billion in false billings. Of those charged, over 120 defendants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in today’s arrests. In addition, HHS has initiated suspension actions against 295 providers, including doctors, nurses and pharmacists.

Attorney General Sessions and Secretary Price were joined in the announcement by Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting Director Andrew McCabe of the FBI, Acting Administrator Chuck Rosenberg of the Drug Enforcement Administration (DEA), Inspector General Daniel Levinson of the HHS Office of Inspector General (OIG), Chief Don Fort of IRS Criminal Investigation, Administrator Seema Verma of the Centers for Medicare and Medicaid Services (CMS), and Deputy Director Kelly P. Mayo of the Defense Criminal Investigative Service (DCIS).

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

The charges announced today aggressively target schemes billing Medicare, Medicaid, and TRICARE (a health insurance program for members and veterans of the armed forces and their families) for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries. The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department. According to the CDC, approximately 91 Americans die every day of an opioid related overdose.

“Too many trusted medical professionals like doctors, nurses, and pharmacists have chosen to violate their oaths and put greed ahead of their patients,” said Attorney General Sessions. “Amazingly, some have made their practices into multimillion dollar criminal enterprises. They seem oblivious to the disastrous consequences of their greed. Their actions not only enrich themselves often at the expense of taxpayers but also feed addictions and cause addictions to start. The consequences are real: emergency rooms, jail cells, futures lost, and graveyards. While today is a historic day, the Department's work is not finished. In fact, it is just beginning. We will continue to find, arrest, prosecute, convict, and incarcerate fraudsters and drug dealers wherever they are.”

“Today’s announcement demonstrates the Department of Justice’s commitment to focus investigative resources on individuals who choose to pursue profit over public health. Ultimately, health care fraud deprives the elderly and disabled from benefits they are entitled to receive,” said US Attorney Rosa Emilia Rodríguez-Vélez. “We will continue to aggressively pursue and prosecute those who commit fraud against our nation’s federal healthcare programs.”

“Healthcare fraud is not only a criminal act that costs billions of taxpayer dollars - it is an affront to all Americans who rely on our national healthcare programs for access to critical healthcare services and a violation of trust,” said Secretary Price. “The United States is home to the world’s best medical professionals, but their ability to provide affordable, high-quality care to their patients is jeopardized every time a criminal commits healthcare fraud. That is why this Administration is committed to bringing these criminals to justice, as President Trump demonstrated in his 2017 budget request calling for a new $70 million investment in the Health Care Fraud and Abuse Control Program. The historic results of this year’s national takedown represent significant progress toward protecting the integrity and sustainability of Medicare and Medicaid, which we will continue to build upon in the years to come.”

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

As part of this national effort, the District of Puerto Rico charged 13 individuals in six separate indictments, including three physicians and two pharmacists, in four schemes involving drug diversion, Medicaid fraud, and the theft of funds from a health care program. Defendants Miguel Hernández-Marquez, owner of Farmacia Condado Moderno in Caguas; Guillermo Tirado-Menéndez, a physician specialized in internal medicine with offices located in Caguas and Cidra; Gilberto Figueroa-Trinidad, aka “Chino;” Rebecca Sierra-López, aka “Rebe,” a nurse; William Vélez-Montes, a pharmacist; and Myrna Nevares-Sobrino, a pharmacist, are charged for their participation in a conspiracy to manufacture, distribute and dispense - outside the scope of professional practice and not for a legitimate medical purpose - a controlled substance, that is, at least 70,000 units of Oxycodone (commonly known as Percocet), and at least 40,000 units of Alprazolam (commonly known as Xanax).

In a separate indictment, defendants Hernández-Marquez, Figueroa-Trinidad, Vélez-Montes and Nevares-Sobrino; along with Luis Vélez-Quiñones, a physician specialized in internal medicine with office located in Guánica; and Laura López-Rolón are charged with conspiracy to manufacture, distribute and dispense - outside the scope of professional practice and not for a legitimate medical purpose - a controlled substance, that is, at least 77,000 units of Oxycodone, at least 47,000 units of Alprazolam, and at least 40,000 units of Tramadol.

In a third indictment, Ivette Caraballo-Pérez, aka “Tita” and Steven Velázquez-Pérez are charged with conspiracy to possess with intent to distribute Oxycodone. The fourth indictment charges José Vega-Emmanuelli, a DEA registrant with the authorization to dispense controlled substances, with possession with intent to dispense, outside the scope of professional practice and not for a legitimate medical purpose, Oxycodone and Alprazolam.

Defendant Luz De Alba Quezada-De Jesús, a Postal Service employee, is charged with health care fraud and false statements relating to health care matters. Quezada-De Jesús certified that she was unemployed in order to receive Medicaid benefits, also known as Mi Salud, through First Medical Health Plan Inc. In a separate indictment, Yalixa Flores-Fuentes, employed by MMM Healthcare, LLC is charged with bank fraud, aggravated identity theft, and embezzlement in connection with health care. Flores-Fuentes submitted false invoices for catering services and, using her status as an employee of MMM, caused checks to be drawn which she later cashed for herself.

The cases are being handled by Assistant U.S. Attorneys Teresa Zapata-Valladares, and Susan Z. Jorgensen, and Special Assistant U.S. Attorney Amanda C. Soto-Ortega.

“The arrests conducted in Puerto Rico last Monday as part of the nationwide “Diversion and Health Care Takedown” shed some light to the communities in the island that DEA, other federal and state agencies will target any kind of illicit drug trafficking activity threatening our communities,” stated DEA Special Agent in Charge Matthew G. Donahue. “The opioid addiction issue in the United States has become a national crisis, for this reason we are working hard and proactively to keep our neighborhoods and communities safe and to protect the lives of our citizens. This enforcement operation sends a message to the medical professionals that once they dishonor their Hippocratic Oath, DEA will investigate them and bring any physician or pharmacist to justice that violates federal narcotics laws and regulations. Law enforcement agencies/departments in Puerto Rico are part of our communities support networks and our goals and mandates are to prevent the individuals responsible who are dealing and trafficking in these opioid substances from killing our families and friends selling one baggy, one deck, capsule, and one pill. DEA will stay here, and we will prevail.”

“This indictment is another reminder that the misappropriation of federal funds is illegal and unacceptable,” said Scott J. Lampert, Special Agent in Charge, Office of Inspector General, U.S. Department of Health and Human Services. “HHS-OIG, along with our law enforcement partners, will not tolerate this behavior and will remain vigilant in our efforts to protect the integrity of our federal health care programs.”

Eileen Neff, Special Agent-in-Charge, U.S. Postal Service Office of Inspector General stated: “The U.S. Postal Service Office of Inspector General investigates those who would defraud the Postal Service as well as Postal Service employees alleged to commit fraud against other government programs. We will continue to work closely with our law enforcement partners in investigations such as this and we thank the U.S. Attorney’s Office and HHS-OIG for their assistance with our investigations.”

The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.

This operation also highlights the great work being done by the Department of Justice’s Civil Division. In the past fiscal year, the Department of Justice, including the Civil Division, has collectively won or negotiated over $2.5 billion in judgements and settlements related to matters alleging health care fraud.

# # #

Abingdon, VIRGINIA – A Kingsport, Tennessee, coal company pled guilty this week in the United States District Court in Abingdon to violating the Federal Mine Safety and Health Act by providing advance notice of safety inspections, Acting United States Attorney Rick A. Mountcastle announced.

Mill Branch Coal, LLC, pled guilty and was sentenced earlier this week to one count of providing advance notice of safety inspections.

Pursuant to the plea agreement, Mill Branch Coal, LLC, paid $260,538 to the United States Department of Labor for criminal fines and obligations, and resolution of civil citations, orders, and assessments. In addition, the company was placed on probation for a period of two years.

From January to June 2015, Mill Branch employees at the Dorchester mine in Wise County, Virginia, used an underground texting system to give employees advance notice that United States Mine Safety and Health Administration inspectors were on premises. The employees also gave advance notice when Mill Branch’s internal auditors and inspectors from the Virginia Department of Mines, Minerals and Energy were on premises.

When evidence of the activity was uncovered in June 2015, both the company and MSHA conducted investigations of the illegal activity by Mill Branch’s employees. The company terminated employees and took remedial action to prevent the activity from occurring in the future.

“MSHA believes that mine inspections should be conducted when mines are operating under actual working conditions. The Agency appreciates Mill Branch’s swift, remedial action to address this problem,” notes Patricia W. Silvey, deputy assistant secretary for MSHA.

The investigation of the case was conducted by the Norton Office of the Mine Safety and Health Administration. Assistant United States Attorney Randy Ramseyer prosecuted the case for the United States.

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

BUFFALO, N.Y. - Acting U.S. Attorney James P. Kennedy, Jr. announced today that Phillip Keomongkoun, 30, of Buffalo, NY, who was convicted of conspiring to possess with intent to distribute, and to distribute, cocaine, was sentenced to two years’ probation by Senior U.S. District Judge William M. Skretny.

Assistant U.S. Attorney Joel L. Violanti, who handled the case, stated that between July 2012 and January 18, 2013, the defendant participated in a conspiracy, alleged to have been led by Steven Bennett, to distribute cocaine in the Buffalo area. The investigation into the conspiracy included the court ordered interception of telephone calls and text messages. Those included calls between Keomongkoun and Bennett during which the two discussed cocaine prices and deals. During the calls, the defendant arranged to purchase at least one ounce of cocaine from Bennett, which he then sold to others in the Buffalo area.

On January 18, 2013, Keomongkoun was arrested at 580 Niagara Street in Buffalo and approximately 1.5 ounces of cocaine were seized from his residence.

Charges are pending against Steven Bennett. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.  
The sentencing is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division. 

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

ROCHESTER, N.Y.—Acting U.S. Attorney James P. Kennedy, Jr. announced today that Calvin R. Patrick, 35, of Mount Morris, NY, who was convicted of receipt of child pornography, was sentenced to 295 months in prison by Chief U.S. District Judge Frank P. Geraci, Jr.

Assistant U.S. Attorney Tiffany H. Lee, who is handling the case, stated that in the fall of 2015, Patrick enticed two minor females under the age of 18 to send to him sexually explicit pictures of themselves. The defendant used the application known as “Kik” to communicate with a 14-year-old female in Florida and a female in Pennsylvania who was not quite 12 years-old.

The plea is the culmination of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Adam S. Cohen; the Mount Morris Police Department, under the direction of Chief Kenneth Mignemi; the Livingston County Probation Department, under the direction of Director Lynne C. Mignemi; and the Livingston County District Attorney’s Office, under the direction of Gregory J. McCaffrey.

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

BUFFALO, N.Y. - Acting U.S. Attorney James P. Kennedy, Jr. announced today that, following a week-long trial, a federal jury has convicted Jose Escalera, a/k/a Tank, 41, of Buffalo, NY, and Giovanni Cotto, a/k/a Monte, 36, of Springfield, Massachusetts, of retaliating against a witness. The charge carries a maximum sentence of life in prison and a $250,000 fine.

Assistant U.S. Attorneys Michael P. Felicetta and Meghan A. Tokash, who handled the prosecution of the case, stated that in 2014, the defendants ordered the assault of a witness testifying for the Government at a federal trial that involved a murder. One of the defendants in that case was a member of the Latin Kings Gang. Escalera and Cotto, also members of the Latin Kings Gang, ordered the assault against the witness for testifying against their Latin King brother.

Back in 2014, the witness, after completing three days of testimony, was returned to the Cattaraugus County Jail where he was being detained. The following day, while in the recreation yard at the jail, the witness was viciously assaulted. The assault included multiple contusions and a broken jaw. The injuries resulted in the witness undergoing surgery and having his jaw wired shut, preventing him from completing his testimony for several weeks.

Evidence presented by the Government included the testimony of the assailant who was also charged and convicted for his role in the assault. 

The verdict is the result of an investigation by the Drug Enforcement Administration, under the direction of Special Agent-in-Charge James J. Hunt, New York Field Division, and the Cattaraugus County Sheriff’s Department, under the direction of Sheriff Timothy Whitcomb. 

Escalera is scheduled to be sentenced on October 18, 2017, at 12:30 p.m. before U.S. District Judge Richard J. Arcara, who presided over the trial of the case. Cotto will be sentenced on October 20, 2017, at 12:30 p.m.  

WILLIAMSPORT - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Larry Eason a/k/a “Tree,” age 34, of Renovo, Pennsylvania, was sentenced on July 12, 2017, to 15 years’ imprisonment by United States District Court Judge Matthew W. Brann for conspiracy to distribute 1,000 grams or more of heroin.

According to United States Attorney Bruce D. Brandler, Eason pled guilty in December 2016, to conspiracy to distribute 1,000 grams or more of heroin. One thousand grams of heroin is the equivalent of approximately 40,000 individual doses of potentially fatal heroin. Judge Brann found that from January 2014 through March 2015, Eason managed and supervised more than five participants in a conspiracy to distribute heroin, crack cocaine, cocaine, MDMA, and prescription pills, including oxycodone, to drug users and sellers in Williamsport and Lycoming, and Clinton Counties. The conspirators used mobile phones, social media, four addresses in Williamsport, and multiple motor vehicles to carry out drug distribution activities. The conspirators also bought, sold, traded, and possessed firearms in exchange for cash and controlled substances and to facilitate the distribution of controlled substances.

In addition to the prison term, Judge Brann also ordered that a probation officer supervise Eason for five years following his release from prison, and pay a $1,500 fine.

Judge Brann also ordered a forfeiture money judgment in the amount of $1 million.

The case was investigated by the Federal Bureau of Investigation with substantial support and assistance from the Lycoming County District Attorney’s Office, the Old Lycoming Township Police Department, the Williamsport Bureau of Police, the Northumberland-Montour County Drug Task Force, the United States Marshals Service and the Pennsylvania State Police. Assistant United States Attorney George J. Rocktashel prosecuted the case.

This case was brought as part of a district wide initiative to combat the nationwide epidemic regarding the use and distribution of heroin. Led by the United States Attorney’s Office, the Heroin Initiative targets heroin traffickers operating in the Middle District of Pennsylvania and is part of a coordinated effort among federal, state and local law enforcement agencies to locate, apprehend, and prosecute individuals who commit heroin related offenses.

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BEAUMONT, Texas – A 20 year old Beaumont, Texas man was sentenced to federal prison for violating the terms of his probation in the Eastern District of Texas, announced Acting U.S. Attorney Brit Featherston today.

­­­­­ Trey Joseph Frederick was sentenced to five years of federal probation in October, 2016 after he pleaded guilty to a violation of the Endangered Species Act. In January, 2016, a Texas Game Warden received two calls reporting that two Whooping Cranes had been shot on Blair Road in Jefferson County. Further investigation revealed that Frederick had been seen in the area with a hunting rifle and claimed to be hunting geese. Federal agents contacted Frederick at his home where he admitted to killing the cranes.

Whooping Cranes are a species of migratory birds in danger of extinction throughout all or a significant portion of its range, and therefore an endangered species as defined by the Endangered Species Act, making it unlawful to capture, kill, trap, or collect Whooping Cranes, or attempt to engage in such conduct in the United States.

Today, Frederick was back in federal court facing charges that he violated the terms of his probation for, among other things, using an AR-15 assault rifle to hunt from a roadway in Jefferson County, Texas. The terms of Frederick’s probation specifically prohibited him from owning or possessing firearms, ammunition or any other dangerous weapon. Frederick is also prohibited from hunting or fishing anywhere in the United States. During his court appearance today, U. S. Magistrate Judge Zack Hawthorn sentenced Frederick to 11 months incarceration to be followed by a one year term of supervised release.

Acting U.S. Attorney Featherston made the following statement, “Trey Frederick was given the opportunity of probation when he was first convicted of killing two federally protected whooping cranes. Apparently, Mr. Frederick did not appreciate the leniency he was given, and today, he learned the consequences. Mr. Frederick will now have 11 months to contemplate his actions.”

This case was investigated by special agents with the U.S. Fish and Wildlife Services, Office of Law Enforcement and Game Wardens with the Texas Parks and Wildlife Department and prosecuted by Assistant U.S. Attorney Joseph R. Batte.

Jackson, TN – Preston Bryson, 40, was sentenced to 180 months in federal prison for being a felon in possession of a firearm. Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, announced the sentence today.

According to information presented in court, on September 1, 2016, members of the West Tennessee Violent Crimes and Drug Task Force, attempted to serve an outstanding parole violation warrant on Bryson in Humboldt, Tennessee, when Bryson fled on foot. Agents apprehended him a short distance away and found methamphetamine and cocaine near where Bryson fled.

Agents later located a North American Arms .22 caliber revolver in the same area after Bryson, in a recorded jail call, admitted that he had thrown a "strap" in the wood line while fleeing from agents.

On July 12, 2017, the Honorable J. Daniel Breen sentenced Bryson, who had three prior serious drug offense convictions, as an Armed Career Offender to 15 years’ confinement and a total of 5 years supervised release to begin after his incarceration.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the West Tennessee Violent Crimes and Drug Task Force; and the U.S. Attorney’s Office, who have all worked jointly to address gun-related crimes through aggressive investigation and prosecution.

Assistant U.S. Attorney Taylor Eskridge prosecuted this case on the government’s behalf.

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DALLAS—A tax preparer who operated a tax preparation business in Irving, Texas, was sentenced yesterday for preparing false tax returns, announced U.S. Attorney John Parker of the Northern District of Texas.

U.S. District Judge Jane J. Boyle sentenced Hector Gerardo Nunez yesterday afternoon to 35 months in federal prison and ordered him to pay $68,121.06 in restitution. On December 2, 2015 Nunez pleaded guilty to one count of aiding and assisting in the preparation of a false tax return.

According to the factual resume filed in his case, from at least 2007 through 2010, Nunez did business under the name of Speedy Tax Service, located on W. Airport Freeway in Irving. During this period, Nunez knowingly and willfully prepared, and caused to be filed with the Internal Revenue Service (IRS), income tax returns that were materially false. Nunez would include false or inflated deductions and credits that were intended to produce a fraudulently inflated refund to be paid by the IRS. He would then collect a fee that was deducted from the refund generated by each return he prepared.

IRS Criminal Investigation investigated the case. Assistant U.S. Attorney Christopher Stokes prosecuted.

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DALLAS — A Dallas man who admitted to his role in a cocaine conspiracy was sentenced yesterday to a lengthy federal prison sentence, announced U.S. Attorney John Parker of the Northern District of Texas.

Corey Nelson, 40, was sentenced by U.S. District Judge Jane J. Boyle to 230 months in federal prison following his guilty plea in September 2016 to one count of conspiracy to possess with intent to distribute a schedule II controlled substance. Nelson has been in custody since mid-July 2015 following a law enforcement operation, led by the Federal Bureau of Investigation, the Dallas Police Department and Internal Revenue Service Criminal Investigation, in which numerous defendants were arrested on drug distribution conspiracy and related charges outlined in a federal superseding indictment returned by a federal grand jury in Dallas in June 2015.

According to documents filed in the case, from January 1, 2012 through June 23, 2015, Nelson engaged in a conspiracy to possess with intent to distribute five kilograms or more of a mixture or substance containing a detectable amount of cocaine. Nelson purchased multiple kilograms of cocaine and would resell the cocaine he purchased to other individuals involved in the conspiracy.

At yesterday’s sentencing hearing, Judge Boyle held Nelson responsible for 120 kilograms of cocaine.

At the time of Nelson’s arrest a firearm and $12,963 in United States Currency were seized.

The FBI, Dallas Police Department and Internal Revenue Service Criminal Investigation led the investigation with assistance from the Texas Department of Public Safety; the DFW Department of Public Safety; the U.S. Department of State; the Drug Enforcement Administration; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Transportation Security Administration; the U.S. Secret Service; U.S. Immigration and Customs Enforcement’s Enforcement and Removal Operations; and the Fort Worth, McKinney, Mesquite, and Plano Police Departments.

Assistant U.S. Attorney George Leal prosecuted.

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Jackson, TN – Caricus Hendrix, 30, was sentenced to 180 months in federal prison for being a felon in possession of a firearm. Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, announced the sentence today.

According to information presented in court, on August 8, 2016, investigators with the Jackson Police Department (JPD) observed a vehicle parked in the parking lot of Pandora’s Box blocking the flow of traffic. When investigators approached the vehicle, Hendrix admitted that he had an open container of alcohol and that a firearm was in the center console of the vehicle.

A search of Hendrix revealed "Molly" or ethylone. The firearm, a Smith and Wesson 9mm pistol, was found to be stolen out of Murfreesboro, Tennessee.

On July 12, 2017, the Honorable J. Daniel Breen sentenced Hendrix, who had three prior serious drug offense convictions, as an Armed Career Offender to 15 years’ confinement and a total of 3 years supervised release to begin after his incarceration.

This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Jackson Police Department and the U.S. Attorney’s Office, who have all worked jointly to address gun-related crimes through aggressive investigation and prosecution. Assistant U.S. Attorney Taylor Eskridge prosecuted this case on the government’s behalf.

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Memphis, TN - A former Shelby County Sheriff’s Office deputy has been indicted for soliciting a person to murder a witness in a federal case. Lawrence J. Laurenzi, Acting U.S. Attorney for the Western District of Tennessee, announced the superseding indictment today.

Jeremy Drewery, 42, of Arlington, Tennessee, was indicted last September for attempting to extort thousands of dollars from an alleged drug dealer in August of 2016. In March, additional charges were added to the indictment, which alleged an incident of extortion of another alleged drug dealer in late 2013.

The Shelby County Sheriff’s Office has since received information that Drewery solicited a person to kill one of the witnesses in the earlier indictment and notified the FBI.

Drewery was assigned to the Shelby County’s Sheriff’s Office’s Narcotics Task Force, but has since been terminated from the department.

On Thursday, July 13, 2017, Drewery had his initial appearance in federal court before U.S. Magistrate Judge Charmiane G. Claxton.

Drewery is charged with two counts of Hobbs Act Extortion; two counts of Receipt of a Bribe by a Government Agent; and one count of Solicitation to Commit a Crime of Violence.

If convicted, he faces up to 20 years in federal prison and a fine of up to $250,000.

This case is being investigated by the Tarnished Badge Task Force, which is comprised of investigators from the FBI, Memphis Police Department and the Shelby County Sheriff’s Office.

Assistant U.S. Attorneys Reagan M. Taylor and Mark Erskine are prosecuting this case on the government’s behalf.

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

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PROVIDENCE – Lenin Gutierrez, 40, of Cranston, was sentenced today to 41 months in federal prison for robbing a bank branch office located inside a Johnston supermarket on December 30, 2016, announced Acting United States Attorney Stephen G. Dambruch, Johnston Police Chief Richard S. Tamburini and Harold H. Shaw, Special Agent in Charge of the Boston Division of the FBI.

At sentencing, U.S. District Court Chief Judge William E. Smith also ordered Gutierrez to serve 3 years supervised release upon completion of his prison sentence and to pay $2,500 restitution to Citizens Bank. Gutierrez pleaded guilty on April 27, 2017, to bank robbery, as charged in a federal indictment returned on January 26, 2017. No plea agreement was filed in this matter.

The U.S. Sentencing Guidelines range of imprisonment in this matter is 41-51months. The government recommended the court impose a sentence of 41 months in prison.

At the time of his guilty plea, Gutierrez admitted to the court that on December 30, 2016, he entered a Citizens Bank branch office inside a Johnston supermarket while dressed in a beige jacket, black facemask, and a Spiderman hat and scarf. Gutierrez admitted that he handed a bank teller a hand-written note demanding cash and threatening to shoot the teller if the money was not handed over. After the teller gave Gutierrez $100 and $50 dollar bills, Gutierrez demanded more money. The teller then handed over $20 bills.

Gutierrez left the bank without showing a weapon.

According to court documents, responding Johnston Police officers searched the immediate area and located the black facemask, Spiderman hat and scarf, and beige jacket worn by Gutierrez during the robbery. Inside the jacket, officers located a note that said, “Robbery $100 and $50 Stacks only No die pack No Allarm. have A gun will use.” An outer pocket contained a stack of $20 bills. Officers did not locate a firearm.

According to court documents, a fingerprint lifted from the note by Johnston Police detectives was matched to Lenin Gutierrez. Gutierrez has been detained since his arrest on January 5, 2017.

The case was prosecuted by Assistant U.S. Attorney Ly T. Chin.

The FBI assisted Johnston Police in the investigation of this matter.

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