BOSTON – Two California parents were sentenced today in federal court in Boston for their participation in the college admissions case in which they paid a total of $600,000 to facilitate their children’s admission to college.

Bruce Isackson, 65, and Davina Isackson, 58, of Hillsborough, Calif., were each sentenced by U.S. District Court Judge Patti B. Saris to time served (approximately one day in prison), one year of probation and 250 hours of community service. Additionally, Bruce Isackson was ordered to pay a fine of $7,500 and Davina Isackson was ordered to pay a fine of $1,000. In May 2019, the Isacksons pleaded guilty to one count of conspiracy to commit mail fraud and honest services mail fraud. Bruce Isackson also pleaded guilty to one count of money laundering conspiracy and one count of conspiracy to defraud the IRS. The Isacksons cooperated with the government’s investigation.

The Isacksons conspired with William “Rick” Singer and others – including university athletic coaches and administrators as well as standardized test administrators – to secure their daughters’ admission to elite colleges and universities through bribery and fraud. Specifically, the Isacksons agreed to pay Singer a total of $600,000 to facilitate cheating on their younger daughter’s college entrance exam to obtain an inflated test score, as well as to facilitate both daughters’ college admissions as purported athletic recruits. To conceal the scheme, Bruce Isackson conspired to make the bribes appear as charitable donations by laundering the payments through Singer’s fake charity, the Key Worldwide Foundation, and deducted the payments from their taxes as purported charitable contributions.

Case information, including the status of each defendant, is available here: https://www.justice.gov/usao-ma/investigations-college-admissions-and-testing-bribery-scheme.

United States Attorney Rachael S. Rollins; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; and Joleen D. Simpson, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston made the announcement today. Assistant U.S. Attorneys Stephen E. Frank, Leslie A. Wright, Kristen A. Kearney and Ian Stearns of Rollins’ Securities, Financial & Cyber Fraud Unit prosecuted the case.

BILLINGS — A Livingston man today admitted allegations that he trafficked methamphetamine in the community and carried loaded firearms in furtherance of his drug distribution, U.S. Attorney Jesse Laslovich said.

Ryan King Steady, 40, pleaded guilty to a superseding information charging him with possession with intent to distribute meth and possession of a firearm in furtherance of a drug trafficking crime. Steady faces a mandatory minimum five years to 40 years in prison, a $5 million fine and at least four years of supervised release on the drug crime and a mandatory minimum five years to life in prison, consecutive to any other sentence, a $250,000 fine and five years of supervised release on the firearm crime.

U.S. Magistrate Judge Timothy J. Cavan presided. A sentencing date will be set before U.S. District Judge Susan P. Watters. The court will determine a sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Steady was detained pending further proceedings.

The government alleged in court documents that on Jan. 3, 2021, law enforcement conducted a welfare check on a person identified as Jane Doe 1 at Steady’s residence. Steady was home and invited officers in to speak with Doe 1. While walking through the house, an officer saw a 9mm semi-automatic handgun in Steady’s bedroom. The gun contained a loaded magazine with 18 rounds and was next to a holster and an additional loaded magazine. Officers seized the firearm and ammunition.

Officers learned that a few days earlier, Steady had travelled with another individual to Arizona and obtained a pound of meth, which he then sold to several people. Steady also regularly provided Doe 1 with meth. In addition, officers learned that Steady twice went to Belgrade to buy meth, that he had several people moving the drug for him and got the firearm for protection. In an April 17, 2021, traffic stop of Steady in Gallatin County near Belgrade, officers found a 12-gauge shotgun with two shells in the feed tube near a backpack, which contained a digital scale and unused plastic baggies.  He described specific items in the backpack but denied knowledge of the scale and baggies. Officers searched the backpack and found gram quantities of meth.

Assistant U.S. Attorney Karla E. Painter is prosecuting the case, which was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, Park County Sheriff’s Office, Gallatin County Sheriff’s Office and Montana Probation and Parole.

This case is part of Project Safe Neighborhoods, a U.S. Department of Justice initiative to reduce violent crime. Through PSN, federal, tribal, state and local law enforcement partners in Montana focus on violent crime driven by methamphetamine trafficking, armed robbers, firearms offenses and violent offenders with outstanding warrants.

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SHERMAN, Texas – Fifteen additional Texas doctors have agreed to pay a total of $2,831,280 to resolve False Claims Act allegations involving illegal kickbacks in violation of the Anti-Kickback Statute and Stark Law, and to cooperate with the Department’s investigations of and litigation against other parties, announced Eastern District of Texas U.S. Attorney Brit Featherston today.

“These settlements should reinforce the message that the Eastern District of Texas will not tolerate health care providers who seek to enrich themselves through kickback schemes,” said U.S. Attorney Brit Featherston. “We will continue to work with our agency partners to identify those who defraud our taxpayers and we will hold those who have engaged in the schemes responsible.”    

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs. The Stark Law forbids a hospital or laboratory from billing Medicare for certain services referred by physicians that have a financial relationship with the hospital or laboratory. The Anti-Kickback Statute and the Stark Law are intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The settlements announced today resolve allegations that fifteen Texas doctors violated the Anti-Kickback Statute and the Stark Law by receiving thousands of dollars in remuneration from nine management service organizations (MSOs) in exchange for ordering laboratory tests from Rockdale Hospital d/b/a Little River Healthcare (Little River), True Health Diagnostics LLC (True Health), and/or Boston Heart Diagnostics Corporation (Boston Heart). Little River allegedly funded the remuneration to certain doctors, in the form of volume-based commissions paid to independent contractor recruiters, who used MSOs to pay numerous doctors for their referrals. The MSO payments to the doctors were allegedly disguised as investment returns but in fact were based on, and offered in exchange for, the doctors’ referrals. 

• Louis Coates, D.O., of Garland, Texas, agreed to pay $87,694 to settle allegations that from September 26, 2016 to March 14, 2018 he received kickbacks from an MSO, Herculis MG LLC, in return for ordering laboratory tests from Boston Heart.

• Jason DeMattia, M.D., and Candice DeMattia, M.D., both of Tomball, Texas, agreed to pay $316,142 and $207,009, respectively, to settle allegations that from August 1, 2014 to December 31, 2016 they received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from True Health and Little River.

• Emanuel Paul (“E.P.”) Descant, II, M.D., of Spring, Texas, agreed to pay $256,466 to settle allegations that from January 5, 2015 through February 3, 2018 he received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from Little River.

• Mitchell Finnie, M.D., of San Antonio, Texas, agreed to pay $582,522 to settle allegations that from June 4, 2015 to July 11, 2017 he received kickbacks from two MSOs, Alpha Rise Health, LLC and Tango Rise Health Solutions LLC, in return for ordering laboratory tests from Boston Heart, True Health, and Little River.

• Mark Le, M.D., of Tomball, Texas, agreed to pay $57,900 to settle allegations that from May 9, 2016 to September 22, 2017 he received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from True Health and Little River.

• Richard Le, M.D., of Houston, Texas, agreed to pay $41,000 to settle allegations that from September 29, 2016 to August 24, 2017 he received kickbacks from two MSOs, North Houston MSO Group, Inc. and Tomball Medical Management, Inc., in return for ordering laboratory tests from True Health and Little River.

• Robert Jeremy Laningham, M.D., and Rodney Jason Laningham, M.D., both of Conroe, Texas, agreed to pay $470,560 to settle allegations that from August 8, 2015 through July 6, 2016, they received kickbacks from two MSOs, SYNRG Partners LLC and Transparity Associates LP in return for ordering laboratory tests from Boston Heart, True Health, and Little River.

• Andres Mesa, M.D., of Houston, Texas, agreed to pay $45,484 to settle allegations that from May 1, 2016 to January 9, 2018, he received kickbacks from an MSO, Transparity Associates LP, in return for ordering laboratory tests from Boston Heart and Little River.

• Melissa Miskell, D.O., of New Braunfels, Texas, agreed to pay $100,392 to settle allegations that from July 13, 2015 to December 14, 2017, she received kickbacks from an MSO, Alpha Rise Health, LLC, in return for ordering laboratory tests from Boston Heart and Little River.

• Marco Munoz, M.D., of Fort Worth, Texas, agreed to pay $54,280 to settle allegations that from July 7, 2015 to April 6, 2016, he received kickbacks from an MSO, Alpha Rise Health, LLC, in return for ordering laboratory tests from Boston Heart and Little River.

• Kozhaya Sokhon, M.D., of the Woodlands, Texas, agreed to pay $160,456 to settle allegations that from January 16, 2015 to May 18, 2018, he received kickbacks from two MSOs, SYNRG Partners LLC and Transparity Associates LP, in return for ordering laboratory tests from Boston Heart and Little River.

• Annie Varughese, M.D., of the Woodlands, Texas, agreed to pay $213,888 to settle allegations that from September 1, 2015 to November 17, 2017, she received kickbacks from three MSOs, SYNRG Partners LLC, Transparity Associates, LP, and North Houston MSO Group, Inc., in return for ordering laboratory tests from True Health and Little River.

• Paul Worrell, D.O., of Dallas, Texas, agreed to pay $237,487 to settle allegations that from October 9, 2015 to December 31, 2017, he received kickbacks from three MSOs, Ascend MSO of TX LLC, Eridanus MG LLC, and BDS Healthcare, LLC, d/b/a Vybrem Labs, in return for ordering laboratory tests from Boston Heart, True Health, and Little River.

As part of their settlements, the fifteen physicians have agreed to cooperate with the Department of Justice’s investigations of and litigation against other parties involved in the alleged violations of law.

“The Anti-Kickback and Stark Statutes help protect the integrity of federal healthcare programs,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to pursue both individuals and corporations responsible for schemes that violate these important safeguards.”

“This outcome is the result of cooperation amongst law enforcement partners focused on upholding the integrity of federal healthcare programs,” said Miranda L. Bennett of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to pursue physicians engaging in improper financial relationships to ensure patients are receiving quality medical care.”

“Today’s announcement is another step forward by the Department of Defense, Office of Inspector General’s Defense Criminal Investigative Service (DCIS) and our law enforcement partners to protect the integrity of the military’s health care system, commonly known as TRICARE,” said Acting Special Agent in Charge Gregory P. Shilling of the DCIS Southwest Field Office. “We will continue to aggressively investigate and hold those accountable that take advantage of the U.S. Government and American taxpayers.”

“The VA Office of Inspector General actively investigates those in violation of the Stark Law and the Anti-Kickback Statute,” said Special Agent in Charge Jeffrey Breen of the South Central Field Office of the Department of Veterans Affairs Office of Inspector General (VA-OIG). “Today’s civil settlements demonstrate the VA OIG’s ongoing work to hold individuals accountable and protect the integrity of federal healthcare programs.”

Former True Health CEO Christopher Grottenthaler, former Boston Heart CEO Susan Hertzberg, former Little River CEO Jeffrey Madison, and others are defendants in a separate False Claims Act lawsuit in which the United States filed an amended complaint in May 2022. That pending case is captioned United States ex rel. STF, LLC v. True Health Diagnostics, LLC, et al., No. 4:16-cv-547 (E.D. Tex.). If a defendant is found liable for violating the act, the United States may recover three times the amount of its losses plus applicable penalties.

The civil settlements were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Texas and the Civil Division’s Commercial Litigation Branch, Fraud Section, with assistance from HHS-OIG, DCIS, and VA-OIG. As a result of its efforts, the United States has recovered over $32 million relating to conduct involving Boston Heart, True Health, and Little River, including False Claims Act settlements with thirty-three physicians, two healthcare executives, and one laboratory. This matter and the related matters were handled by Assistant U.S. Attorneys James Gillingham, Adrian Garcia, and Betty Young, Senior Trial Counsel Christopher Terranova, and Trial Attorney Gavin Thole.

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).

The claims resolved by the settlements are allegations only, and there has been no determination of liability.

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BOSTON – A Turners Falls man was sentenced yesterday in federal court in Springfield on child pornography charges.

Brian Cooper, 64, was sentenced by U.S. District Court Judge Mark G. Mastroianni to 15 years in prison and five years of supervised release. On Feb. 24, 2022, Cooper pleaded guilty to four counts of distribution of child pornography, six counts of receipt of child pornography and one count of possession of child pornography.

Between April 2018 and October 2019, Cooper distributed, received and possessed child pornography files depicting children engaged in sexually explicit conduct. He distributed and received the child pornography files from online associates via Instagram. A search of Cooper’s residence in October 2019 revealed thousands of child pornography files stored on a tablet and multiple thumb drives. At the time of the search, Cooper was arrested on state court charges and has been detained since.

United States Attorney Rachael S. Rollins; David E. Sullivan, Northwestern District Attorney; Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in Boston; and Colonel Christopher Mason, Superintendent of the Massachusetts State Police made the announcement. Assistant U.S. Attorney Catherine G. Curley of Rollins’ Springfield Branch Office is prosecuted the case.

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 the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to locate, apprehend and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

Baltimore, Maryland – A federal grand jury has returned a superseding indictment adding an additional charge against Roy C. McGrath, age 52, of Naples, Florida, for falsification of records to the previous federal charges of wire fraud and theft in programs receiving federal funds.

The superseding indictment was announced by First Assistant United States Attorney for the District of Maryland, Phil Selden and Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office.  The United States Attorney has recused himself from this case.

“Honesty and integrity are essential elements of a public servant and those who operate in public trust,” said First Assistant U.S. Attorney for the District of Maryland, Phil Selden. “Together with our federal and state partners, our office will continue to investigate and prosecute public officials who attempt to violate their trusted positions.”

McGrath was appointed by the Governor of Maryland to serve as Executive Director of Maryland Environmental Service (MES), a corporation owned by the State of Maryland to provide environmental services such as water and wastewater management, solid waste management, composting, recycling, dredged material management and other services to state and local government agencies, federal government entities, and private clients.  MES, which was headquartered in Millersville, Maryland, generated its operating funds from fees charged to governmental and private clients for its services, as well as from federal grants and funding from federal agencies, including the Environmental Protection Agency, the U.S. Department of the Interior, and the U.S. Department of Transportation.  MES functioned as an independent state corporation which did not pay its employees according to the state government pay scale but did require its employees to comply with state travel regulations, annual leave policies, and policies regarding compensatory leave, and time and attendance reporting.  McGrath resigned from MES as of May 31, 2020, to become the Governor’s Chief of Staff effective as of June 1, 2020.

Count Eight of the superseding indictment alleges that after press accounts of his “severance” payment from MES of a year’s salary or $233,647.23 occurred in August 2020, McGrath knowingly falsified a document which falsely purported to be a memorandum to the Governor of Maryland, referenced a salary of $233,647.23, and a severance package from MES.  The allegedly false memorandum contained a blue check mark, as characteristically used by the Governor of Maryland, in the “approved” box which created the illusion that the Governor had seen and approved the memorandum.  The allegedly false memorandum was backdated to May 18, 2020, which the indictment alleges was the date McGrath interviewed for the Chief of Staff position with the Governor.

The previously filed indictment alleges that to conceal the payments and circumstances surrounding the payments from the Governor of Maryland and the MES Board of Directors, McGrath falsely told the MES Board that the Governor was aware of and consented to the severance payment.  As detailed in the indictment, when the Governor learned about the severance package and questioned McGrath about it, McGrath falsely stated that the MES Board of Directors had offered him the severance payment in accordance with their usual practice.  McGrath also attempted to delete or caused to be deleted from the public minutes of the MES Board of Directors meeting, any mention of compensation of McGrath or the Executive Director of MES, or the amount $233,647.23, or the description of the compensation as a “year’s salary.”

The indictment re-alleges the federal charges previously filed against McGrath filed in 2021- specifically that from March 2019 through December 2020, McGrath personally enriched himself by using his positions of trust as the Executive Director of MES and the chief of staff for the Governor of Maryland to cause MES to make payments to McGrath, or on his behalf, to which he was not entitled.  One additional wire fraud charge has been added to the superseding indictment.

The previously filed federal indictment alleges that McGrath caused MES funds to be paid to a museum where he was a member of the Board of Directors instead of using his personal funds to pay his pledge to the museum; that McGrath caused the MES Board of Directors to approve paying McGrath a $233,647.23 severance payment—equal to one year’s salary—upon his departure from MES by falsely telling them that the Governor was aware of and approved the payment; that McGrath caused MES to pay tuition benefits for McGrath after he left MES by personally approving reimbursements for payments made by Subordinate Employee #1 on McGrath's behalf; and that McGrath falsified his time sheets, reporting that he was at work while on two separate vacations in 2019.

McGrath also faces pending state criminal charges relating to an alleged illegally recorded private conversations involving senior state officials without their permission during his employment at MES and as the Governor’s Chief of Staff.  In the state case, McGrath faces a maximum penalty of any sentence that is not cruel or unusual for Misconduct by a Public Official, and a maximum of five years in prison for felony theft, felony theft scheme, misappropriation, and for each violation of the Maryland Wiretap Statute.

If convicted of the federal charges, McGrath faces a maximum sentence of 20 years in federal prison for each of the five counts of wire fraud; a maximum of 10 years in federal prison for each of two counts of embezzling funds from an organization receiving more than $10,000 in federal benefits; and a maximum of 20 years in federal prison for the charge of falsifying a document.  Actual sentences for federal crimes are typically less than the maximum penalties.  A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. 

An indictment is not a finding of guilt.  An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings. 

First Assistant United States Attorney Phil Selden commended the FBI for their work in the investigation.  Mr. Selden thanked Assistant U.S. Attorneys Joyce K. McDonald, Aaron S.J. Zelinsky, and Special Assistant U.S. Attorney Sarah R. David, who are prosecuting the federal case. 

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.

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BOSTON – A Brockton man pleaded guilty today in federal court in Boston to his role in a highly sophisticated drug trafficking operation that manufactured and distributed a multitude of controlled substances using the Dark Web.

Steven McCall, 26, pleaded guilty to conspiracy to manufacture, distribute and possess with intent to distribute MDMA, commonly known as ecstasy, Ketamine and Alprazolam (Xanax). U.S. Senior District Court Judge Rya W. Zobel scheduled sentencing for Sept. 28, 2022.

McCall was indicted in June 2019 along with co-conspirators Binh Thanh Le and Allante Pires. Le, who was the ringleader of the drug-trafficking operation, created and operated a vendor site called “EastSideHigh” in marketplaces on the Dark Network, more commonly known as the Dark Web. The Dark Web is any portion of the internet that can only be accessed with specific software, configurations or authorization that anonymize internet traffic. Le used these Dark Web markets to advertise various drugs for sale, including cocaine, MDMA, Ketamine and Xanax. Le ordered and received wholesale quantities of the drugs he and the others were distributing in the mail, principally from foreign sources in Canada and Europe. McCall and Pires then processed and manufactured those controlled substances at an office space Le rented in Stoughton. After receiving the orders and payment via Bitcoin, the men mailed the drugs to customers throughout the United States.

At the time of his arrest, McCall had been manufacturing and packaging controlled substances at the co-conspirators’ stash location in Stoughton and was wearing latex gloves and a respirator.

Over 19 kilograms of MDMA, almost seven kilograms of Ketamine, nearly one kilogram of cocaine, more than 10,000 counterfeit Xanax pills and over $114,000 in cash were seized by authorities during the investigation. Investigators also recovered a computer with the “EastSideHigh” vendor page open, numerous packages containing MDMA and Ketamine, various shipping and packaging materials and a pill press from the office space in Stoughton.

On March 10, 2022, Le was sentenced to eight years in prison and three years of supervised release. Le was also ordered to forfeit more than 59 Bitcoin (currently worth more than $1.2 million), $114,680 in cash, $42,390 representing the proceeds from the sale of a 2018 BMW M3, along with other items including a pill press and currency counter. On June 3, 2022, Pires pleaded guilty to his role in the conspiracy and is scheduled to be sentenced on Sept. 8, 2022.

The charge of conspiracy to manufacture, distribute and possess with intent to distribute MDMA, commonly known as ecstasy, Ketamine and Alprazolam (Xanax) provides for a sentence of up to 20 years in prison, at least three years and up to a lifetime of supervised release and a fine of up to $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

United States Attorney Rachael S. Rollins; Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division; Matthew B. Millhollin, Special Agent in Charge for the Homeland Security Investigations in Boston; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; Norfolk County District Attorney Michael W. Morrissey; and Jennifer De La O, Director of Field Operations of U.S. Customs and Border Protection, Boston Field Office made the announcement. Special assistance with the investigation was provided by the Homeland Security Investigations in Colorado; Postal Inspectors from around the country; and the Stoughton, Norwood and Brockton Police Departments. Assistant U.S. Attorney James E. Arnold of Rollins’ Narcotics & Money Laundering Unit is prosecuting the case.

SAN ANTONIO – “San Antonio first responders and law enforcement discovered a tragic and disturbing scene yesterday evening on the southwest side of San Antonio. Dozens of immigrants were found dead or incapacitated in and around a tractor trailer with over a dozen others hospitalized in critical condition. All were the apparent victims of human smugglers indifferent to the well-being of human life. The South Texas heat is brutal this time of year, especially given the recent record-high temperatures. We will continue to work with the Homeland Security Investigations and the local responders to identify and bring those who were responsible for this tragedy to justice.”

Ashley C. Hoff, United States Attorney, Western District of Texas

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HUNTINGTON, W.Va. – Keegan Shane Stanley, 31, of Poca, was sentenced today to six years and six months in prison, to be followed by 20 years of supervised release, for transportation of child pornography.

According to court documents and statements made in court, on May 9, 2021, Stanley uploaded videos of child pornography to Dropbox, an online file sharing website. A search of his residence revealed over 1,600 images of child pornography.

United States Attorney Will Thompson made the announcement and commended the investigative work of the U.S. Department of Homeland Security-Homeland Security Investigations (HSI) and the Putnam County Sheriff’s Department.

United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Julie White prosecuted the case.

This case was prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

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. 3:21-cr-208.

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MINNEAPOLIS – Jose Angel Chapa-Aguilera has been charged in a federal indictment with drug trafficking and firearms violations in connection to the December 2021 kidnapping and torture of a man, announced U.S. Attorney Andrew M. Luger.

According to state and federal court documents, Chapa-Aguilera, 24, of Lino Lakes, was in possession of quantities of methamphetamine and unlawfully possessed 9mm semi-automatic handguns on two different occasions.

In April 2021 Chapa-Aguilera used a false name during a traffic stop in Nobles County which later resulted in the seizure of methamphetamine and a firearm from the vehicle he was driving near Worthington, Minnesota.

On December 20, 2021, at a Brooklyn Park residence, Chapa-Aguilera allegedly confronted a man about a drug debt. During the confrontation, Chapa-Aguilera pulled out a handgun and pointed it at a victim’s head. Chapa-Aguilera then ordered the victim to the ground and tied his hands behind his back and proceeded to beat and torture the victim for hours before barricading the victim in a crawlspace under the house. The victim was eventually able to escape once Chapa-Aguilera left the house. The victim suffered extensive injuries, including numerous burns, broken ribs, a large laceration above his eye, and required a blood transfusion. Law enforcement seized methamphetamine from Chapa-Aguilera’s residence during a search warrant executed shortly thereafter. Law enforcement eventually captured Chapa-Aguilera on January 7, 2022, and found him in possession of a firearm.

Chapa-Aguilera has also been charged in Hennepin County District Court with first-degree assault and kidnapping in connection with the December 2021 incident.

The federal indictment against Chapa-Aguilera charges him with two counts of possession with intent to distribute methamphetamine, one count of possessing a firearm in furtherance of a drug trafficking crime, one count of brandishing a firearm during a drug trafficking crime, and two counts of illegally possessing firearms as a felon. Because Chapa-Aguilera has a prior felony conviction in Anoka County for second degree assault he is prohibited under federal law from possessing firearms or ammunition at any time.

Chapa-Aguilera made his initial appearance today in U.S. District Court before Magistrate Judge Becky R. Thorson. He will remain in federal custody pending further court proceedings.

This case is the result of an investigation conducted by the Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms, and Explosives, and the Brooklyn Park Police Department.

Assistant U.S. Attorney Allen A. Slaughter is prosecuting the case.

An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

MINNEAPOLIS – A Coon Rapids man has pleaded guilty to a sextortion scheme that targeted minors through social media and an online gaming forum, announced U.S. Attorney Andrew M. Luger.

According to court documents, Glen Robert Anderson, 24, previously worked as a middle school paraprofessional in special education. Anderson used multiple internet applications and social media accounts for email, file sharing, and chatting with minors, including Snapchat and Grindr. Anderson also owned and administered an online gaming forum. To participate in the forum, users were required to submit an application, which included the age of the user. As Anderson knew, many of the users were minors. Between April 1, 2016, through August 20, 2021, Anderson used his position as the forum administrator to groom minors to produce child pornography and engage in sexual activity with him, including by providing minors with in-game perks, privileges, and other gifts. For example, Anderson coerced a 13-year-old victim to engage in sexually explicit acts for the purpose of producing images and videos. Anderson later threatened to release those sexually explicit images if the victim did not respond to Anderson’s demands.

Anderson pleaded guilty today before U.S. District Judge Patrick J. Schiltz to two counts of production of child pornography, one count of enticement of a minor, and one count of interstate communications with intent to extort. Anderson was ordered to remain in detention pending his sentencing hearing on October 25, 2022.

This case is brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, 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. Click on the “resources” tab for information about Internet safety education.

This case is the result of an investigation conducted by the FBI, the Anoka County Sheriff's Office, the Erie County (Ohio) Sheriff's Office, with assistance from the Minnesota Bureau of Criminal Apprehension and Waterloo Regional Police Service in Ontario, Canada.

Assistant U.S. Attorney Miranda E. Dugi is prosecuting the case.

CORPUS CHRISTI, Texas – A 33-year-old man has been ordered to federal prison following his conviction of conspiracy to possess with the intent to distribute 34 kilograms of meth, announced U.S. Attorney Jennifer B. Lowery.

Jeffrey Justice Dale Williams, Gray Court, South Carolina, pleaded guilty Jan. 5.

Today, US. District Judge Drew B. Tipton ordered Williams to serve 156 months in prison to be immediately followed by five years of supervised release. At the hearing, the court heard additional testimony that detailed how Williams recruited other individuals to transport a large quantity of meth from Texas to Georgia. In handing down the sentence, the court noted that this drug trafficking venture would not have happened if not for Williams’ involvement.

The investigation revealed Williams recruited Doug Allen Navy and Noah Michael Hiler in the narcotics scheme. They were to pick up meth in McAllen and transport it to Atlanta, Georgia, for distribution.

Authorities discovered the co-conspirators referred to bundles of meth as roosters because Williams participated in cock-fighting in South Carolina. At the time of his arrest, law enforcement discovered hundreds of brutalized animals and evidence of cock-fighting at his property.

On Jan. 25, 2020, law enforcement arrested Navy and Hiler at the Border Patrol (BP) checkpoint near Falfurrias. A search of the vehicle revealed 12 bundles of meth hidden in speaker boxes located inside of Navy’s vehicle.  

Navy and Hiler also pleaded guilty for their roles in the scheme. They later received 96 and 70 month sentences, respectfully.

Williams will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

The Drug Enforcement Administration conducted the investigation with the assistance of the Laurens County, South Carolina, Sherriff’s Office. Assistant U.S. Attorney Molly K. Smith prosecuted the case.

 BOSTON – A Bronx, N.Y., man has been sentenced in federal court in Springfield for his role in a large-scale drug conspiracy that trafficked dozens of kilos of heroin and fentanyl into Springfield from New York City and the Dominican Republic every month.

Marvin Ortega, 35, was sentenced on June 23, 2022 by U.S. District Court Judge Mark G. Mastroianni to 30 months in prison and two years of supervised release. In March 2019, Ortega pleaded guilty to one count of conspiring to distribute and possess with intent to distribute heroin.

“The impact of drug trafficking can be felt by everyone. Mr. Ortega was involved in an organization that funneled heroin and fentanyl into the Springfield area – profiting off of people’s pain,” said United States Attorney Rachael S. Rollins. “Drug trafficking activities, specifically those involving fentanyl, pose an immeasurable threat to public safety. The opioid crisis has taken the lives of over two thousand people last year in our Commonwealth. They were mothers, children, fathers, siblings, and loved ones and they are gone. Forever. We cannot allow ourselves to grow numb to this epidemic and become complacent. My office will not look the other way. Narcotics dealers will be identified, prosecuted and held accountable.”

“DEA is committed to investigating and dismantling Drug Trafficking Organizations and individuals like Mr. Ortega who are responsible for distributing lethal drugs like heroin and fentanyl to the citizens of Massachusetts” said Brian D. Boyle, Special Agent in Charge of the Drug Enforcement Administration’s New England Division. “Let this arrest be a warning to those traffickers who distribute this poison in order to profit and destroy people’s lives. DEA’s top priority is combatting the opioid epidemic by working with our local, county, state and federal partners to bring to justice anyone who distributes deadly drugs.”

“Opioid-related overdoses and deaths affect our community on a daily basis. The increase of fentanyl on our streets has only increased how deadly these drugs have become. This sentence will hopefully send a message to those individuals looking bring heroin and fentanyl into our city and region that we have a team of law enforcement partners working together to investigate and ultimately convict those responsible. I’d like to thank U.S. Attorney Rollins, her team and our local, regional and federal partners for their work on this investigation,” said Springfield Police Superintendent Cheryl C. Clapprood. 

Ortega transported heroin to Springfield and the proceeds from the sale to New York for a drug trafficking organization (DTO) based in Springfield, which was run by Alberto Marte. Marte had direct contact with heroin suppliers in the Dominican Republic and members of his DTO transported between eight and 20 kilograms of heroin, with a street value of approximately $1.6 million and $4 million, respectively, into the Springfield area every month. When law enforcement authorities executed federal search warrants in September 2016, they recovered approximately $140,000 in cash and over six kilograms of heroin.

U.S. Attorney Rollins; DEA SAC Boyle; Superintendent Clapprood; Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in Boston; Colonel Christopher Mason, Superintendent of the Massachusetts State Police; Hampden County District Attorney Anthony D. Gulluni; Chicopee Police Chief Patrick Major; Holyoke Police Chief David Pratt; and West Springfield Police Chief Paul Connor made the announcement. Assistant U.S. Attorneys Neil L. Desroches of Rollins’ Springfield Branch Office and Stephen W. Hassink of Rollins’ Narcotics & Money Laundering Unit prosecuted the case.

BOSTON – A Massachusetts man was sentenced today in connection with receiving child pornography, including images of an infant.

Paul Weddington, 51, was sentenced by U.S. District Court Judge Denise J. Casper to 12 years in prison and five years of supervised release. On March 9, 2022, Weddington pleaded guilty to one count of receipt of child pornography.

According to court records, in November 2020, Nichole Cyr was arrested for child exploitation offenses after child sexual abuse material (CSAM), including images and videos, were located on her cell phones. Further analysis of Cyr’s phones found conversations with Weddington in which Weddington received CSAM from Cyr that depicted two children who were two and seven years old and known to Cyr. Following the investigation, Weddington’s phone was seized during a search of his residence in February 2021. The phone contained screenshots of an apparent video chat with Cyr in which CSAM of the two-year-old child was displayed.

United States Attorney Rachael S. Rollins; Matthew B. Millhollin, Special Agent in Charge of Homeland Security Investigations in Boston; and Fall River Police Chief Paul Gauvin made the announcement today. Assistant U.S. Attorney Anne Paruti, Chief of Rollins’ Major Crimes Unit prosecuted the case.

The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.

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

CAMDEN, N.J. – A Camden County, New Jersey, resident today admitted conspiring to fraudulently obtain 30 Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL) totaling more than $3 million, and to laundering the proceeds, U.S. Attorney Philip R. Sellinger announced.

Rhonda Thomas, 38, of Sicklerville, New Jersey, pleaded guilty by videoconference before U.S. District Judge Karen M. Williams to an information charging her with one count of bank fraud conspiracy and one count of money laundering.

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

The Coronavirus Aid, Relief, and Economic Security (CARES) Act is a federal law enacted in March 2020 and was designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of hundreds of billions of dollars in forgivable loans to small businesses for job retention and certain other expenses, through the PPP. The CARES Act also authorized the Small Business Administration to provide EIDL of up to $2 million to eligible small businesses that were experiencing substantial financial disruption due to the COVID-19 pandemic.

To obtain a PPP or EIDL loan, a qualifying small business was required to apply and provide information on its operations, including the number of employees and expenses. In addition, businesses generally had to provide supporting documentation.

In 2020 and 2021, Thomas submitted at least 10 PPP application and three EIDL applications for companies she controlled. She represented to the lenders that her companies had employees and payroll expenses that they did not have. In fact, many of her companies were nominal businesses with no employees or payroll expenses.

Thomas also conspired with other purported business owners to submit at least 20 fraudulent PPP and EIDL loan applications. She prepared and submitted these loan applications, which falsely stated the number of employees, payroll, and expenses of the businesses.

Thomas forged tax forms and altered bank statements that she submitted to the lenders as part of the loan applications.

Based on Thomas’s misrepresentations, lenders approved approximately 30 PPP and EIDL loans and disbursed more than $3.1 million in federal COVID-19 emergency relief funds meant for distressed small businesses to Thomas and her conspirators. Thomas personally received more than $330,000 from lenders based on the fraudulent loan applications for her companies and received kickbacks of more than $700,000 from other business owners for her role in preparing and submitting fraudulent loan applications.

Thomas used the fraudulently obtained PPP and EIDL loan proceeds to pay for personal expenses. In March 2022, Thomas withdrew approximately $60,000 of the loan proceeds in cash at a credit union in Camden County.

The charge of bank fraud conspiracy carries a maximum penalty of 30 years in prison and a fine of $1 million. The count of money laundering is punishable by a maximum of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. As part of her guilty plea, Thomas agreed to make restitution in the full amounts of the PPP and EIDL loans. Sentencing is scheduled for Nov. 1, 2022.

U.S. Attorney Sellinger credited special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Patricia Tarasca, Special Agent-in-Charge, New York Regional Office; special agents of the Social Security Administration, Office of the Inspector General, New York Field Division, under the direction of Special Agent in Charge Sharon MacDermott; special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Jacqueline Maguire in Philadelphia; special agents of the U.S. Department of Labor, Office of the Inspector General, New York Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Daniel A. Friedman of the U.S. Attorney’s Office’s Criminal Division in Camden and Senior Litigation Counsel Jason M. Richardson of the U.S. Attorney’s Office Civil Rights Division in Camden.

BOSTON – A former member and Enforcer of the New Bedford Chapter of the Massachusetts Almighty Latin King and Queen Nation (Latin Kings) pleaded guilty today to racketeering charges.

Orlando Santiago-Torres, a/k/a “King Landy,” 27, pleaded guilty to conspiracy to conduct enterprise affairs through a pattern of racketeering activity, more commonly referred to as RICO conspiracy, and conspiracy to manufacture and distribute controlled substances. U.S. Senior District Court Judge Rya W. Zobel scheduled sentencing for Oct. 13, 2022.

According to court documents, the Latin Kings are a violent criminal enterprise comprised of thousands of members across the United States. The Latin Kings adhere to a national manifesto, employ an internal judiciary and use a sophisticated system of communication to maintain the hierarchy of the organization. As alleged in court documents, the gang uses drug distribution to generate revenue, and engages in violence against witnesses and rival gangs to further its influence and to protect its turf.

As Enforcer, Santiago-Torres was an officer in the New Bedford Chapter of the Latin Kings and was responsible for organizing violence against rival gang members and instilling discipline among Latin Kings members in the commission of violence. Santiago-Torres also organized security for the Latin Kings’ apartment buildings, or “trap houses,” from which the gang members distributed cocaine and cocaine base.

At today’s hearing, Santiago-Torres admitted to participating in a series of violent acts and shootings that were committed in New Bedford in furtherance of the Latin Kings enterprise.  In February 2019, Santiago-Torres assaulted a rival gang member and was captured on video chasing the rival gang member down, pushing him to the ground and kicking him. In May 2019, Santiago-Torres participated in the assault and shooting of a rival gang member and was captured on video surveillance with other Latin King members, one of whom engaged in a fight with the rival member and fired a handgun at him. In July 2019, Santiago-Torres fired multiple rounds of ammunition on a New Bedford street at rival gang members as they fled a fight with the Latin Kings. Later, in September 2019, Santiago-Torres participated in a shooting with other Latin Kings members in which a victim was struck with gunfire and casings from the scene were linked to a firearm recovered from Santiago-Torres’ apartment. Lastly, in November 2019, Santiago-Torres and other Latin Kings members assaulted a rival gang member, in which Santiago-Torres dragged the victim out of a vehicle to beat and kick him on the street.

In December 2019, a federal grand jury returned an indictment alleging racketeering conspiracy, drug conspiracy and firearms charges against 62 leaders, members and associates of the Latin Kings. Santiago-Torres is the 59^th defendant to plead guilty in the case. 

The RICO conspiracy charge provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charge of conspiracy to manufacture and distribute controlled substances provides for a sentence of up to 20 years in prison, at least three years of supervised release and a fine of up to $1 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

United States Attorney Rachael S. Rollins; Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Commissioner Carol Mici of the Massachusetts Department of Correction; and New Bedford Police Chief Joseph C. Cordeiro made the announcement. Valuable assistance was also provided by the FBI North Shore Gang Task Force and the Bristol County and Suffolk County District Attorney’s Offices. Assistant U.S. Attorney Philip A. Mallard of Rollins’ Organized Crime and Gang Unit is prosecuting the case.

This effort is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

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

“Along with her husband, Haoyang Yu, Yanzhi Chen was charged by indictment in September 2020 with participating in a scheme to defraud Mr. Yu’s former employer, a Massachusetts company called Analog Devices Incorporated (ADI). Last month, a jury convicted Mr. Yu of one count of possessing a stolen ADI trade secret. However, the jury found Mr. Yu not guilty of the remaining 18 counts charged in the indictment, including counts alleging that Mr. Yu defrauded ADI and violated immigration laws.

Today’s dismissal of the fraud charges against Mr. Yu’s wife, Ms. Chen, is in the interests of justice. As prosecutors, we have a constant obligation to assess the merits of every prosecution that we pursue. Today’s dismissal is the result of my office’s continuing assessment of the evidence against Ms. Chen in light of the jury’s verdict against Mr. Yu. We understand that our charging decisions deeply impact people’s lives. I will continue to require our prosecutors to rigorously assess cases at every stage of our proceedings to see if we should continue pursuing and prosecuting those suspected of engaging in criminal conduct.”

DENVER – The U.S. Attorney’s Office for the District of Colorado announces Ronald Philip Wallace, age 65, and Stace Yater Wallace, age 67, were indicted by a federal grand jury on June 22, 2022 on charges of wire fraud, money laundering, and bank fraud. Both defendants appeared in front of U.S. District Court Magistrate Judge Nina Wang on June 27, 2022 and were released on bond. 

According to information contained in the indictment, it is alleged Wallace made false and misleading statements to obtain nearly $1.5 million in investments from individuals for the purpose of funding, production, and marketing of CBD products. Additionally, it is alleged the couple worked together to obtain over $200,000 in COVID-19 Paycheck Protection Program funds through the inclusion of false information on the loan applications. 

Ronald Wallace faces nine counts of wire fraud, 31 counts of money laundering, three counts of bank fraud, and one count of conducting a monetary transaction in criminally derived property greater than $10,000. 

Stace Wallace faces 31 counts of money laundering, three counts of bank fraud, and one count of conducting a monetary transaction in criminally derived property greater than $10,000. 

Each count of wire fraud carries a penalty of not more than 20 years in prison and a fine of not more than $250,000.  Each count of money laundering carries a penalty of not more than 20 years in prison and a fine of not more than $500,000. Each count of bank fraud carries a penalty of not more than 30 years in prison and a fine of not more than $250,000. Conducting a transaction greater than $10,000 in criminally derived proceeds carries a penalty of not more than 10 years in prison and a fine of not more than $250,000.

This case is being investigated by Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation. This case is being prosecuted by Assistant United States Attorney Robert Brown.

The charges contained in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.

CASE NUMBER:  22-cr-00211

ALBANY, NEW YORK – Christopher L. Vandermark, age 57, formerly of Gansevoort, New York, pled guilty today to engaging in a money laundering conspiracy designed to conceal proceeds from a multi-state unemployment insurance fraud scheme.

The announcement was made by United States Attorney Carla B. Freedman and John Pias, Special Agent in Charge of the Detroit Field Office of the U.S. Department of Homeland Security, Office of Inspector General (DHS-OIG).

In pleading guilty, Vandermark admitted to corresponding via online text messages for over one year with a person who represented herself to be a woman living in North Carolina. The woman directed Vandermark to open accounts at multiple financial institutions, as well as provide her with routing details for his existing accounts. From June 2020 through early April 2021, Vandermark’s accounts received transfers of more than $88,000 in fraudulently obtained unemployment insurance benefits from six states. Vandermark purchased hundreds of gift cards from local retailers using the benefits, photographed the identifying numbers on the cards, and sent the photographs to the woman. The identifying numbers could be used to sell the gift cards online as part of an effort to conceal the original source of the funds.

Vandermark admitted that he received multiple warnings from financial institutions that his actions were furthering a fraudulent scheme. Additionally, on April 15, 2021, a federal law enforcement agent and a state investigator interviewed Vandermark at his residence regarding approximately $37,000 in fraudulently obtained unemployment insurance benefits transferred to his account at a local bank. Vandermark denied holding the account and receiving the funds. Both statements were false. Following the law enforcement interview, Vandermark opened yet another account with a financial institution and received an additional $13,734 in benefits from three states into two accounts, which he used to purchase more gift cards through July 2021. As before, he photographed the gift cards and sent the photos to the woman.

Vandermark admitted responsibility for $13,734 in benefits laundered through his accounts after the April 15, 2021 law enforcement interview. He agreed to pay restitution to the affected states.

Vandermark’s money laundering conspiracy conviction carries a maximum term of 20 years in prison, a fine of up to $500,000, and a term of supervised release of up to 3 years. Vandermark is scheduled to be sentenced on October 27, 2022 by Senior United States District Judge Gary L. Sharpe. A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.

The case was investigated by DHS-OIG, with assistance from the Social Security Administration Office of the Inspector General and the Office of the New York State Comptroller. The case is being prosecuted by Assistant U.S. Attorney John T. Chisholm.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

ATLANTA - Brett Sabado has been sentenced for his role in a scheme to defraud Tricare and Medicare by submitting fraudulent claims for compound medications and durable medical equipment (DME). Sabado also agreed to pay $950,000 as part of an “ability to pay” civil settlement in order to resolve violations of the False Claims Actfor causing false claims for DME to be submitted to the Medicare Program. This resolution is the result of a global investigation involving the criminal and civil divisions of the Northern District of Georgia and the Southern District of California.

“Instead of putting patient care first, the defendants decided their best interests were more important,” said U.S. Attorney Ryan K. Buchanan. “Healthcare providers and pharmacies who use their positions of trust to game the system, specifically designed to maximize their profits, put their patients at risk and divert scarce government resources.”

“Through federal healthcare programs like Medicare and TRICARE, the United States provides essential medical care for the elderly and disabled, and to service members and their families,” said U.S. Attorney Randy Grossman of the Southern District of California. “It is crucial that the American people know that taxpayer funds are being used for these important purposes and not diverted through the schemes of fraudsters. I am proud of the coordination and cooperation among districts and agencies reflected in this outcome,” he added, commending the work of the attorneys and agents in the SDCA and NDGA U.S. Attorneys’ Offices, and at DCIS, FBI, and HHS-OIG, in employing the range of criminal and civil remedies to reach this resolution.”

“This sentence will hold Sabado accountable for the damage he caused to Medicare and every taxpayer in this country,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “Government subsidized programs like Medicare help protect the healthcare needs of deserving Americans and the FBI is determined to work with our partners to prevent people from illegally profiting off of them.”

“HHS-OIG is committed to protecting beneficiaries of federal health care programs from fraud and safeguarding valuable taxpayer dollars,” said Tamala E. Miles, Special Agent in Charge with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to investigate and hold accountable any providers who egregiously take advantage of their patients for illegitimate financial gain.”

“Compounding pharmacy fraud bilked the Defense Health Agency of over a billion dollars and exploited not only the military, but all citizens,” said DoD Inspector General's Defense Criminal Investigative Service (DCIS) Southeast Field Office Special Agent in Charge Cynthia A. Bruce. “I thank the U.S. Attorney's Office and our investigative team for their tireless effort to untangle this web of crime, trace the assets, and hold these individuals accountable.”  

According to U.S. Attorney Buchanan, the charges, and other information presented in court: Sabado and his co-conspirators received illegal kickbacks for Tricare referrals and prescriptions of compound medication formulations including pain creams, scar creams, and multi-vitamins that they specifically devised to maximize profits.

Sabado operated NHS, a pharmaceutical company that caused compounding pharmacies to submit false claims for these prescriptions to Tricare. The compounding pharmacies paid NHS a portion of the Tricare reimbursement, and NHS paid a portion of its proceeds to healthcare marketing companies that pushed providers into prescribing these unnecessary compound medications.

Sabado further executed the scheme by creating an online portal database used by NHS to facilitate the referral of prescriptions through NHS to the compounding pharmacies. Sabado and others at NHS used claims data to track the referrals made to compounding pharmacies and to invoice those pharmacies for the illegal kickbacks owed to NHS for the referrals. Sabado ultimately caused a loss of $4.5 million to Tricare.

Sabado also conspired with the owners of DME supply companies to submit false and fraudulent claims for medically unnecessary DME such as arm, leg, back, wrist, and neck braces to Medicare. Specifically, Sabado warehoused, packaged, and shipped thousands of fraudulent DME orders to Medicare beneficiaries. Sabado knew that the DME orders were supported by sham prescriptions written by telemedicine physicians who, in many instances, never spoke with or examined the Medicare beneficiaries for whom the physicians ordered DME. Nonetheless, Sabado continued to package and ship DME that Medicare beneficiaries neither requested nor needed.

For his part in this scheme, Sabado received between $5 and $15 for each medically unnecessary brace he shipped. Sabado also received a percentage of all Medicare reimbursement for the braces. Sabado ultimately caused a loss of almost $70 million to Medicare.

Sabado further engaged in similar conduct involving the submission of false and fraudulent claims to Tricare, the New Jersey State Health Benefits Program, and private health care benefits programs for expensive and medically unnecessary compounded medication in other states.

Brett Sabado, 34, of Sandy Springs, Georgia, was sentenced by U.S. District Judge Thomas W. Thrash, Jr., to five years in prison to be followed by three years of supervised release.

This case was investigated by the U.S. Attorney’s Office for the Northern District of Georgia, the U.S. Department of Health and Human Services - Office of Inspector General, the Federal Bureau of Investigation, and the Defense Criminal Investigative Service.

The civil resolution was reached by Assistant U.S. Attorney Mellori Lumpkin-Dawson. The criminal case was prosecuted by Assistant U.S. Attorneys Angela Adams and Bernita Malloy in the Northern District of Georgia. A related case in the Southern District of California, United States v. Charles Ronald Green and Melinda Elizabeth Green, Case No. 3:20-cr-01566-DMS, SDCA (San Diego)), was prosecuted by Assistant U.S. Attorneys Valerie Chu and Kevin Larsen. 

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

HUNTINGTON, W.Va. – Keegan Shane Stanley, 31, of Poca, was sentenced today to six years and six months in prison, to be followed by 20 years of supervised release, for transportation of child pornography.

According to court documents and statements made in court, Stanley admitted to uploading videos of child pornography to Dropbox, an online file sharing website, with his computer on May 9, 2021. After receiving a cybertip from the National Center for Missing and Exploited Children (NCMEC) regarding the Dropbox activity, law enforcement officers executed a search warrant of Stanley's residence  on August 5, 2021. Officers seized the computer and other electronic devices during the search. A forensic analysis revealed over 1,600 images of child pornography on Stanley's computer. Stanley admitted to knowingly possessing the images, and further admitted than many depicted prepubescent minors while some depicted minors engaged in sadistic or masochistic conduct.

United States Attorney Will Thompson made the announcement and commended the investigative work of the U.S. Department of Homeland Security-Homeland Security Investigations (HSI) and the Putnam County Sheriff’s Department.

United States District Judge Robert C. Chambers imposed the sentence. Assistant United States Attorney Julie White prosecuted the case.

This case was prosecuted as part of Project Safe Childhood, a nationwide initiative of the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

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. 3:21-cr-208.

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