ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, announced that a federal jury returned a guilty verdict on Milton Boutte, 77, of Moriarty, New Mexico, on June 27. The jury convicted Boutte of conspiracy to defraud the United States and conspiracy to commit wire fraud. Boutte will remain on conditions of release pending sentencing, which has not been scheduled.

Boutte and three other men were charged by indictment with exploiting the now defunct Big Crow Program Office at Kirtland Air Force Base to perpetuate a scheme to defraud the United States. Boutte, along with George Lowe, 60, of Fort Washington, Maryland, Jose Diaz, 63, of El Paso, Texas, and Arturo Vargas, 59, also of El Paso, conspired to submit fraudulent invoices to federal agencies.  Beginning in 2004, Boutte, who was then the Director of the Big Crow Program Office, and Lowe, a lobbyist, schemed with Diaz and Vargas, owners of minority-owned small businesses that had sole-source contracts with the Big Crow Program Office, to pay lobbyists, consultants and contractors with funds fraudulently obtained from the United States.  The conspirators disguised the nature of the claims for lobbying services provided by Lowe as well as other unauthorized subcontracts and expenditures. The Big Crow Program Office was not authorized to lobby or to expend appropriated funds for lobbying activities under the contracts.

On April 4, 2018, Diaz pleaded guilty to one count of conspiracy to defraud the United States and two counts of fraud against the United States. In his plea agreement, Diaz admitted that over the course of the conspiracy Miratek and Vartek received approximately $8.4 million from the government, of which Boutte required those small businesses to pay nearly $4.1 million to lobbyists, consultants and contractors that Boutte had retained. Of that sum, Miratek and Vartek diverted more than $900,000 to Lowe, and another government contractor paid Lowe an additional $300,000.  Diaz faces up to ten years in prison for each count.

On Sept. 12, 2018, Vargas pleaded guilty to conspiracy to defraud the United States and faces up to 21 months in prison. On March 5, 2020, Lowe pleaded guilty to conspiracy to defraud the United States and faces up to 10 years in prison.

Boutte faces up to 10 years in prison for conspiracy to defraud the United States and up to 20 years in prison for conspiracy to commit wire fraud.

All four men are awaiting sentencing.

The case was investigated by the Major Procurement Fraud Unit of the U.S. Army Criminal Investigations Command, Defense Criminal Investigations Services, Defense Contract Audit Agency – Investigative Support, U.S. Small Business Administration Office – Office of Inspector General, and General Services Administration – Office of Inspector General. Assistant U.S. Attorneys Timothy S. Vasquez and Jeremy Peña are prosecuting the case.

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Damian Williams, the United States Attorney for the Southern District of New York, Michael J. Driscoll, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Ricky J. Patel, Acting Special Agent-in-Charge of the New York Office of Homeland Security Investigations (“HSI”), Keechant L. Sewell, the Commissioner of the New York City Police Department (“NYPD”), and Jocelyn Strauber, Commissioner of the New York City Department of Investigation (“DOI”), announced the unsealing of a two-count Indictment charging nine defendants with racketeering conspiracy and extortion conspiracy.  Eight of the defendants were arrested yesterday and presented before U.S. Magistrate Judge Stewart D. Aaron in federal court in Manhattan.  Defendant JATIEK SMITH was arrested and presented in the District of Puerto Rico.  The case has been assigned to U.S. District Judge Jed S. Rakoff.

The defendants, who include members of the violent Bloods street gang, took control of First Response Cleaning Corp. (“First Response”), a Brooklyn-based company which provides clean-up services to properties damaged by fire.  The defendants used First Response as a vehicle to extort other participants in the fire mitigation industry and to assert control over the industry using violence and threats of violence. 

U.S. Attorney Damian Williams said:  “We are smoking out corruption and violence in the fire mitigation industry with today’s charges.  As alleged, the defendants used threats and violence to take over a company and then an industry.  Thanks to our law enforcement partners’ work, today’s arrests bring an end to the defendants’ violent scheme.    

FBI Assistant Director Michael J. Driscoll said:  “We allege gang members deployed mob-like tactics, using extortion and violence in their attempts to take over an entire industry designed to help victims after a fire. They employed violence to force other companies and vendors to do their bidding. Thanks to the incredible work by the FBI and our law enforcement partners, this crew can no longer threaten to kill people's families, retaliate against potential witnesses, and profit off of someone else's loss.”

HSI Acting Special Agent-in-Charge Ricky J. Patel said:  “Members of the Bloods allegedly infiltrated the First Response Cleaning Corporation and utilized violence to command dominance and compliance over their competitors within the insurance industry.  This criminal organization took advantage of people in time of personal and professional turmoil to enrich themselves at others expense.  HSI will continue to work alongside our partners to disrupt and dismantle complex criminal organizations who seek to exploit legitimate businesses to further their violent agendas.”

NYPD Police Commissioner Keechant L. Sewell said:  “This indictment is a clear demonstration that those who use violence, force and threats of force to inflict harm on New Yorkers – will be prosecuted to the fullest extent of the law.  Due to the relentless efforts of the NYPD, the U.S. Attorney for the Southern District, and all of our law enforcement partners, these defendants are now forced to answer for their alleged gang-motivated crimes.  I thank everyone who worked on this important case.”

DOI Commissioner Jocelyn Strauber said:  “As alleged, the defendants used violence and threats of violence to seize control of the fire restoration industry in New York City, and submitted false claims to insurance companies in a scheme to ensure insurance coverage for defective restoration work.  DOI is proud to work alongside our law enforcement partners in the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation, Homeland Security Investigations and the NYPD to dismantle this charged criminal enterprise and to hold its members accountable for their illegal and violent charged conduct.”

As alleged in the Indictment unsealed yesterday in Manhattan federal court and statements made in court filings[1]:

First Response is an emergency mitigation services (or “EMS”) company which provides clean-up services to properties damaged by fire.  When properties suffer fire damage, property owners often hire an EMS company to clean up the damaged property.  Property owners also often rely upon adjusters—either a “public adjuster” or an “independent adjuster”—to investigate, process, and submit the insurance claims to their insurer.  A public adjuster is paid by the property owner with a percentage of the settlement paid out by the insurer on the insurance claim, while an independent adjuster works for and is paid by the insurer.  

Beginning in 2019, defendants JATIEK SMITH, a/k/a “Tiek,” SEQUAN JACKSON, a/k/a “Supa,” ANTHONY MCGEE, a/k/a “Touch,” KAHEEN SMALL, a/k/a “Biz,” DAMON DORE, a/k/a “Demo,” HASIM SMITH, a/k/a “Hoodie,” RAHMIEK LACEWELL, a/k/a “Ready,” and MANUEL PEREIRA, a/k/a “Manny,” many of whom are members of the Bloods street gang,worked together to take control of First Response.  JATIEK SMITH was the leader of the crew.  After taking control of First Response, SMITH and the others then used force and threats of force against other EMS companies and public adjusters to exert control over the entire fire mitigation industry.  Defendant OCTAVIO PERALTA was a public adjuster who participated in the enterprise’s efforts to defraud and who helped the conspirators solidify their control over the industry.  The enterprise’s threats included threats to kill or shoot their victims and members of the victims’ families.  With the backing of these threats of force, they imposed a system of rules upon other EMS companies and on public adjusters, including a strict rotation system in which the defendants dictated which companies got which losses.  The enterprise also extorted money from EMS companies and public adjusters and required these other companies to pay if they wanted to continue to work without being attacked.  On multiple occasions, the enterprise used force against other EMS companies and public adjusters to ensure that they submitted to the rules, including physically assaulting victims.  They sometimes created video recordings of this violence and distributed the recordings within the industry to threaten other victims.  The enterprise also helped submit false insurance claims for damaged properties and threatened violence or retaliation against potential witnesses who were believed to be cooperating with the federal investigation into the enterprise’s crimes.

*                *                *

JATIEK SMITH, 37, of Staten Island, New York; JACKSON, 33, of Staten Island, New York; MCGEE, 32, of Staten Island, New York; SMALL, 35, of Brooklyn, New York; DORE, 36, of Staten Island, New York; HASIM SMITH, 29, of Staten Island, New York; LACEWELL, 37, of Staten Island, New York; PEREIRA 38, of Brooklyn, New York; and OCTAVIO PERALTA, 42, of Staten Island, New York, are each charged with one count of conspiracy to commit racketeering and one count of conspiracy to commit extortion.  Each count carries a statutory maximum of 20 years in prison, for a combined statutory maximum of 40 years in prison. 

The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the FBI, HSI, NYPD, and DOI.  Mr. Williams also thanked the HSI Puerto Rico Gang Unit and the National Insurance Crime Bureau for their assistance with this investigation. 

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Mollie Bracewell, Rushmi Bhaskaran, and Adam S. Hobson, are in charge of the prosecution.

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

As a temporary measure due to COVID-19 concerns, service on the United States Attorney in civil cases shall be via email and US mail as follows: A copy of any summons, complaint or emergency motion shall be emailed to USATXS.CivilNotice@usdoj.gov.

A paper copy shall be mailed to the Civil Process Clerk, United States Attorney’s Office, 1000 Louisiana St., Suite 2300, Houston, Texas 77002. Hand delivery may not be accepted.

Please do not use this e-mail box for general pleadings or correspondence. Service will not be deemed effected until you receive an e-mail acknowledgement from our office.

This emergency accommodation will expire on Dec. 31, 2022. In addition to serving the United States Attorney, the Social Security Administration should be served in 405(g) disability cases at ogc.dallas.sdtx@ssa.gov.

Jennifer B. Lowery
United States Attorney

CHICAGO — A man who illegally possessed a loaded handgun on a Chicago sidewalk and tried to flee from police has been sentenced to nearly seven years in federal prison.

LAMONT HAGGARD illegally possessed the firearm on the evening of Jan. 4, 2019.  Chicago Police tactical officers observed Haggard reach for an object in his waistband while walking on a sidewalk in the West Garfield Park neighborhood on the city’s West Side.  Haggard ran from the officers and discarded the gun in a vacant lot before he was arrested in an outdoor stairwell in the rear of a nearby apartment building.

Haggard, 32, of Chicago, pleaded guilty earlier this year to a federal charge of illegal possession of a firearm.  Haggard had previously been convicted of multiple state felonies and was prohibited by federal law from possessing a firearm.

U.S. District Judge Charles R. Norgle on June 24, 2022, imposed an 80-month prison sentence.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Kristen de Tineo, Special Agent-in-Charge of the Chicago Field Division of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives; and David Brown, Superintendent of the Chicago Police Department.  Valuable assistance was provided by the Cook County State’s Attorney’s Office.

“The possession of a firearm by a convicted felon is serious in nature,” Assistant U.S. Attorney Aaron R. Bond argued in the government’s sentencing memorandum.  “The presence of this loaded firearm in the hands of defendant, and his actions when he possessed it, were a recipe for potential disaster.”

NEWARK, N.J.– A New York man today admitted his role in a scheme to alter and deposit hundreds of checks stolen from mailboxes across New Jersey, U.S. Attorney Philip R. Sellinger announced.

Nigel Lynch, 21, of Yonkers, New York, pleaded guilty by videoconference before U.S. District Judge Katharine S. Hayden to an information charging him with one count of bank fraud conspiracy and one count of conspiracy to receive and possess stolen mail.

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

From February to November 2020, Lynch and two conspirators stole over 290 checks from New Jersey mailboxes in Morris, Essex, Somerset, and Passaic counties. They then altered the stolen checks and deposited them into bank accounts controlled by Lynch and his conspirators. After the stolen checks were deposited, Lynch and his conspirators withdrew cash from the accounts totaling over $550,000.

The bank fraud charge conspiracy charge carries a maximum penalty of 30 years in prison and a $1 million fine; and the conspiracy to receive and possess stole mail carries a maximum sentence of five years in prison and a $250,000 fine. Sentencing is scheduled for Nov. 8, 2022.

U.S. Attorney Sellinger credited postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Damon Wood, Philadelphia Division, with the investigation leading to today’s guilty plea. 

The government is represented by Assistant U.S. Attorney Blake Coppotelli of the U.S. Attorney’s Office Economic Crimes Unit.

CHARLOTTE, N.C. – Yesenia Rodriguez, 25, of Charlotte, appeared before U.S. Magistrate Judge David S. Cayer today and pleaded guilty to conspiring to commit wire fraud for fraudulently obtaining over $100,000 in COVID-19 relief funds, announced Dena J. King, U.S. Attorney for the Western District of North Carolina.

Robert R. Wells, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, joins U.S. Attorney King in making today’s announcement.

According to filed court documents and today’s plea hearing, Rodriguez engaged in a conspiracy to defraud the U.S. Small Business Administration (SBA) by, among other things, obtaining an Economic Injury Disaster Loan (EIDL) based on false information. As Rodriguez admitted in court today, from April 2020 through May 2021, the defendant conspired with another individual, identified in court documents as G.R., to obtain COVID-19 relief funds, including two loans under the EIDL program and federally subsidized unemployment benefits totaling over $100,000.

Plea documents show that in July 2020, Rodriguez electronically submitted a fraudulent EIDL application for a purported hair and nail salon named Yesenia Rodriguez. Rodriguez, who had recently left her job at a national bank, submitted the application for the purported salon, when in fact Rodriguez did not own a salon and, instead, was collecting unemployment. As a result of the fraudulent EIDL application, Rodriguez received $37,500 in relief funding via electronic financial transactions. Rodriguez’s co-conspirator, G.R., also fraudulently obtained EIDL funding totaling $47,500 for a business identified as Company 1. Although Company 1 was a real operating business, G.R. electronically submitted a fraudulent application that contained false representations about its eligibility for EIDL funding, including the date Company 1 was founded. At the time the EIDL application was submitted for Company 1, G.R. was also fraudulently collecting federally subsidized unemployment benefits from the State of North Carolina. Rodriguez and G.R. fraudulently obtained at least $112,000 in disaster relief funds that were intended for existing businesses and individuals harmed by the COVID-19 pandemic.

Rodriguez was released on bond following today’s guilty plea. The conspiracy charge carries a maximum prison term of 5 years and a $250,000 fine. A sentencing date has not been set.

The CARES Act is a federal law enacted March 29, 2020, and it is designed to provide emergency financial assistance to millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The CARES Act established several new temporary programs and provided for the expansion of others, including the EIDL program, which is an SBA program that provides low-interest financing to small businesses, renters, and homeowners in regions affected by declared disasters.

In making today’s announcement U.S. Attorney King commended the FBI for their investigation and thanked the North Carolina Department of Public Safety Special Operations and Intelligence Unit for their invaluable assistance.

Assistant U.S. Attorney Daniel Ryan of the U.S. Attorney’s Office in Charlotte is prosecuting the case.

The Department of Justice and the U.S. Attorney’s Office for the Western District of North Carolina remain vigilant in detecting, investigating, and prosecuting wrongdoing related to the COVID-19 pandemic. If you think you are a victim of coronavirus fraud or have information pertaining to fraud involving COVID-19, contact the National Center for Disaster Fraud Hotline at 866-720-5721 or submit a complaint online using the NCDF Web Complaint Form. Members of the public in the Western District of North Carolina are also encouraged to call 704-344-6222 to reach their local Coronavirus Fraud Coordinator.

PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that Marques Russell, 37, of Philadelphia, PA, was sentenced to seven years in prison, three years of supervised release, and was ordered to pay a $3,100 special assessment and forfeiture of $129,600 by United States District Judge C. Darnell Jones, II, for his role in an inter-state prescription forgery ring.

In October 2021, the defendant pleaded guilty to 31 counts of possession with intent to distribute oxycodone. The charges stem from Russell’s participation in a forged prescription ring, in which he and others presented fake prescriptions, forging doctors’ signatures, to pharmacies in order to obtain large amounts of oxycodone for illegal resale. The defendant admitted to presenting such prescriptions on 31 occasions to pharmacies in Drexel Hill and Kennett Square, PA. Over a roughly two-year period from about February 2017 through May 2019, Russell obtained 4,320 oxycodone tablets totaling 129,600 milligrams. The defendant was charged by Indictment in 2019, along with eleven others who presented forged prescriptions, and one complicit pharmacist in New Jersey.

“Pharmacies and pharmacists have a responsibility to serve as gatekeepers of a closed system of prescription drug distribution. This defendant and his co-conspirators took advantage of that system to flood the streets of our region with dangerous opioid drugs, no doubt exacerbating the epidemic,” said U.S. Attorney Romero. “Our Office will continue to investigate and prosecute healthcare fraud crimes like this in an effort to deter such conduct and keep our communities safe.”

The case was investigated by the U.S. Drug Enforcement Administration and the Easttown Township Police Department, and is being prosecuted by Assistant United States Attorney David E. Troyer.

Damian Williams, the United States Attorney for the Southern District of New York, announced that LEV PARNAS was sentenced today in Manhattan federal court by United States District Judge J. Paul Oetken to 20 months in prison for conspiring to make political contributions by a foreign national along with solicitation and aiding and abetting the making of the same, conspiring to make straw donations, participating in a wire fraud conspiracy, and making false statements and falsifying records.  PARNAS was previously found guilty on October 22, 2021 following a two-week jury trial on campaign finance and false statements offenses, and pled guilty to participating in a wire fraud conspiracy on March 25, 2022. 

U.S. Attorney Damian Williams said:  “Parnas will now serve time in prison for his many crimes.  Not content to defraud investors in his business, Fraud Guarantee, out of more than $2 million dollars, Parnas also defrauded the American public by pumping Russian money into U.S. elections and lying about the source of funds for political contributions.  My office will continue to aggressively prosecute those who put their personal and financial gain above their country and their investors.”

According to the allegations in the Indictment, court documents, and evidence presented at trial:

The Foreign Donor Scheme

In the spring of 2018, PARNAS, Igor Fruman, Andrey Kukushkin and Andrey Muraviev, a Russian oligarch, decided to launch a business aimed at acquiring retail cannabis licenses in the United States. As part of that plan, Muraviev agreed to wire $1 million, through a series of bank accounts, to Fruman and PARNAS to fund hundreds of thousands of dollars in political contributions they had made or promised to make before the election in November 2018.  The purpose of the donations was to curry favor with candidates that might be able to help PARNAS and his co-conspirators obtain cannabis and marijuana licenses.  To obscure the fact that Muraviev was the true donor of the money, the funds were sent to a business bank account controlled by Fruman’s brother, and then the donations were made in PARNAS’s and Fruman’s names.

The Straw Donor and False Statements Scheme

In March 2018, PARNAS and Fruman began attending political fundraising events in connection with federal elections and making substantial contributions to candidates, joint fundraising committees, and independent expenditure committees with the purpose of enhancing their influence in political circles and gaining access to politicians. 

In May 2018, to obtain access to exclusive political events and gain influence with politicians, PARNAS and Fruman made a $325,000 contribution to an independent expenditure committee.  PARNAS and Fruman also made thousands of dollars in contributions to a federal candidate and a joint fundraising committee.  Despite the fact that the Federal Election Commission (“FEC”) forms for these contributions required PARNAS and Fruman to disclose the true donor of the funds, they falsely reported that the $325,000 contribution came from Global Energy Producers, a purported liquefied natural gas import-export business that was incorporated by PARNAS and Fruman around the time the contributions were made.  PARNAS also falsely stated on contribution forms that contributions to the federal candidate and joint fundraising committee were paid for by him.  In truth and in fact, the donations did not come from Parnas or GEP funds.  Rather, the contributions were all straw donations paid for by Fruman. 

In response to a complaint filed with the FEC regarding the $325,000 contribution to the independent expenditure committee, and to further conceal the true source of the funds used to make certain of their donations, in or about October 2018, PARNAS and Fruman submitted sworn affidavits to the FEC that contained false statements, including that the $325,000 contribution “was made with GEP funds for GEP purposes” and that  “GEP is a real business enterprise funded with substantial bona fide capital investment; its major purpose is energy trading, not political activity.”

The Fraud Guarantee Scheme

Between in or about late 2012 and in or about mid-2019, PARNAS and David Corriea conspired to defraud multiple victims by inducing them to invest in their company, known as “Fraud Guarantee,” based on materially false and misleading representations.  Among other things, PARNAS and Correia falsely claimed that the investors’ funds would be used solely for legitimate business expenses of Fraud Guarantee, when in fact the funds were largely withdrawn as cash, transferred to personal accounts, and used for various apparently personal expenditures.  PARNAS and Correia also made materially false representations concerning, among other things, how much money PARNAS had contributed to the company and how much money the company had raised overall.  At least seven victims invested in Fraud Guarantee based at least in part on PARNAS’s and Correia’s false and misleading representations, with each victim being fraudulently induced to pay hundreds of thousands of dollars, for a total of more than $2 million.

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PARNAS, 50, of Boca Raton, Florida, was sentenced to 20 months in prison, three years of supervised release, as well as $2,322,500 restitution.  Igor Fruman was sentenced to 366 days in prison on January 21, 2022 for solicitation of a contribution by a foreign national.  Andrey Kukushkin was sentenced to 366 days in prison on March 15, 2022 for conspiring to make and aiding and abetting the making of a contribution by a foreign national.  David Correia was sentenced to 366 days in prison on February 8, 2021 for making false statements and conspiracy to commit wire fraud.  Andrey Muraviev is believed to be in Russia and remains at large. 

Mr. Williams praised the outstanding investigative work of the FBI and its New York Field Office.

This case is being handled by the Office’s Public Corruption Unit.  Assistant U.S. Attorneys Rebekah Donaleski, Aline R. Flodr, Hagan Scotten, and Nicolas Roos are in charge of the prosecution.                                           

INDIANAPOLIS – Eleven defendants have been sentenced to federal prison after pleading guilty to federal crimes for their involvement in drug trafficking activities in the Indianapolis area.

Beginning in the fall of 2019, federal agents began investigating several individuals for their suspected drug trafficking activities in the Indianapolis area. As the investigation progressed, investigators discovered that methamphetamine was being transported from Muncie, Indiana to Vans Auto Repair in Indianapolis to be distributed. At the conclusion of the investigation, eleven defendants were charged in three different indictments for various drug trafficking charges.

On August 3, 2020, sixteen search warrants and federal arrest warrants were executed by federal agents and officers with the Indianapolis Metropolitan Police Department in the Indianapolis area. As a result of those search warrants, 31 illegally possessed firearms, 4½ pounds of methamphetamine; ½ kilogram of cocaine; 1 kilogram of fentanyl, and approximately $272,000 in cash drug trafficking proceeds were seized and taken off city streets. Each of the defendants pleaded guilty, and were sentenced, as follows:

“Traffickers of methamphetamine and fentanyl further the devastating cycle of substance abuse disorder to satisfy their own greed,” said U.S. Attorney Zachary A. Myers. “These prosecutions and sentences demonstrate that we will work tirelessly with our federal and local law enforcement partners to hold the traffickers of these dangerous and deadly drugs accountable for the pain they inflict on our communities.”

“The laundering of illegal drug profits is as important and essential to drug traffickers as the very distribution of their illegal drugs. Without these ill-gotten gains, the traffickers could not finance their organizations,” said Justin Campbell, Special Agent in Charge, Chicago Field Office, IRS Criminal Investigation. “Today’s sentencing shows that we are committed, now more than ever, to take the profit away from drug traffickers, to stop the flow of drugs into communities, and to put traffickers and money launderers in prison.”

The Federal Bureau of Investigation, the IRS Criminal Investigations, and the Indianapolis Metropolitan Police Department investigated the case. The DEA, and the U.S. Postal Inspection Service provided invaluable assistance.

U.S. Attorney Myers thanked Assistant U.S. Attorney Michelle P. Brady who prosecuted the case.

These prosecutions are the result of an Organized Crime Drug Enforcement Task Force (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks.

NEWARK, N.J. – A New York doctor today admitted participating in a health care fraud scheme to defraud Amtrak, distribution of a controlled substance in furtherance of that scheme, and the unlawful possession of a firearm, U.S. Attorney Philip R. Sellinger announced.

Michael DeNicola, 59, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to an information charging him with conspiracy to commit health care fraud, distribution of a controlled substance, and unlawful possession of a firearm.

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

From 2019 to August 2021, DeNicola and his conspirators agreed to engage in a scheme to bill the Amtrak health care plan for fraudulent claims for services that either were never provided or were medically unnecessary. They would recruit Amtrak employees to participate in the scheme by paying them to allow the conspirators to use their patient and insurance information to submit false and fraudulent claims. DeNicola and his conspirators submitted false and fraudulent claims that caused Amtrak losses of more than $1.6 million.

DeNicola also provided oxycodone prescriptions to an individual in return for the individual’s agreement to allow his patient and insurance information to be used for the submission of fraudulent insurance claims. DeNicola provided oxycodone prescription to others at the direction of this individual and did so outside of the usual course of professional treatment and without legitimate medical purpose. From April 2017 through February 2018, DeNicola issued 64 oxycodone prescriptions in this manner.

DeNicola also unlawfully possessed a firearm on Sept. 1, 2019, after previously having been convicted in a court of a crime punishable by a term of imprisonment exceeding one year.

The conspiracy to commit health care fraud and unlawful possession of a firearm charges each carry a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The distribution of a controlled substance charge carries a maximum potential penalty of 20 years in prison and a $1million fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Nov. 22, 2022.

U.S. Attorney Sellinger credited special agents of the Amtrak Office of Inspector General, under the direction of Special Agent in Charge Michael J. Waters; special agents of the  Drug Enforcement Administration, under the direction of Special Agent in Charge Frank A. Tarentino III in New York; special agents of the FBI, under the direction of Assistant Director in Charge Michael J. Driscoll in New York; the U.S. Food and Drug Administration Office of Criminal Investigations, under the direction of Acting Special Agent in Charge Bradley Greenberg; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Postal Inspector in Charge Damon Wood, Philadelphia Division; and the Amtrak Police Department, under the direction of Chief of Police Samuel Dotson, with the investigation, leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Katherine Romano of the Health Care Fraud Unit in Newark and Daniel V. Shapiro, Deputy Chief of the Criminal Division.

Miami, Florida – Habana Hospital Pharmacy, Inc., Longevity Drugs, LLC, and Forest Hill Pharmacy, LLC, all Florida-based pharmacies, have agreed to pay $830,707.19 to resolve allegations they fraudulently used collaborative pharmacy practice agreements to bill federal health care programs for unlawfully prescribed medications.

The United States previously alleged that five Florida-based pharmacies, including Habana Hospital Pharmacy, Inc., Longevity Drugs, LLC, Forest Hills Pharmacy, LLC, APB&J Holdings Corporation, and Tropic Pharmacy Holdings, Inc., violated the False Claims Act through the fraudulent use of collaborative pharmacy practice agreements.  Representatives of the five pharmacies signed the settlement agreement.

A collaborative pharmacy practice agreement is a written agreement between a physician and pharmacist that allows the pharmacist to provide specific patient care services for chronic health conditions to the physician’s patients.  Services provided by the pharmacist are outlined in the written agreement and must be in accordance with Florida law. 

The United States previously alleged that the settling pharmacies used unlawful collaborative practice agreements to delegate prescribing authority from physicians to pharmacists, resulting in unlawful prescriptions, and used the same collaborative practice agreements to write and fill prescriptions without any physician involvement.  It was alleged that the fraudulent scheme resulted in the submission of false claims to federal health care programs, including Medicare and Medicaid.

Juan Antonio Gonzalez, United States Attorney for the Southern District of Florida, and Omar Pérez Aybar, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), announced the settlement.

The settlement resolved allegations in a lawsuit filed by Beatriz Morales in federal court in Miami, Florida.  The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.  The Act allows the government to intervene and take over the action, as it did in this case.  The whistleblower share to be awarded in connection with the settlement is $166,141.44. 

HHS-OIG investigated the matter.  Assistant United States Attorney Matthew J. Feeley handled the litigation.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov, under case number 17-cv-80871. 

A copy of the settlement agreement is available here.

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This morning the United States Supreme Court issued its decision in Oklahoma v. Castro-Huerta. This decision holds that the State of Oklahoma has concurrent jurisdiction with the federal government to prosecute non-Indians who commit crimes against Indian victims within Indian Country.

“Today’s decision does not diminish the United States’ trust responsibility to our tribal partners,” said United States Attorneys Christopher J. Wilson, Clinton J. Johnson, and Robert J. Troester. “The United States Attorney’s Offices in the Eastern, Northern, and Western Districts of Oklahoma will continue to enforce federal law in Indian Country. We will also continue to coordinate and cooperate with our state, local, and tribal law enforcement partners as well as state and tribal prosecutors to promote public safety and provide justice to all Oklahomans in Indian Country.”

COLUMBUS, Ohio – Federal agents arrested a former member of the Ohio National Guard this morning on charges related to making and selling “ghost guns,” untraceable homemade weapons made in whole or in part with a 3D printer.

Thomas Develin, 24, of Columbus, also allegedly made antisemitic and violent statements while employed to provide security services at local synagogues and Jewish schools.

It is alleged that Develin created ghost guns to sell for profit. It also alleged that Develin possessed homemade conversion devices to convert semi-automatic AR-15 rifles and Glock-type pistols into fully automatic machine guns.

Agents discovered more than 25 firearms in Develin’s residence and vehicle while executing a search warrant in March 2022.

According to an affidavit filed in support of the criminal complaint, Develin’s Discord and Snapchat activity online revealed a large quantity of antisemitic, white nationalist, racist and misogynistic content. Develin used the fictional name “Patrick Bateman” online.

For example:

• In September 2021, it is alleged Develin posted a picture of the synagogue where he was working at the time and stated, in part, “Having an inner debate that if an active shooter comes in I might just join him.”

• In November 2021, Develin allegedly posted a video of himself sniffing a rifle. In the video, Develin says, “This one smells like dead Jews.”

• In a December 2021 Discord post, Develin allegedly wrote, “Ight, time to turn wright pat airbase into Fort hood in 2009.”

• In January 2022, Develin allegedly posted a picture of a New Albany synagogue with the text, “The holocaust didn’t happen” and “If anything I’ll scream 6 million wasn’t enough.”

• A Snapchat video in March 2022 shows Develin displaying a firearm at a Jewish school in Columbus.

• Develin also allegedly posted multiple times advocating the rape of women.

• Additional messages Develin posted online discussed committing terrorist attacks at John Glenn International Airport and at the Budweiser manufacturing facility in Columbus, and killing a Morgan County Sheriff’s deputy and the deputy’s entire family.

The defendant has been charged in the Franklin County Court of Common Pleas with various crimes, including making terroristic threats. Those charges remain pending.

Develin will appear in U.S. District Court this afternoon regarding his federal charges.

Kenneth L. Parker, United States Attorney for the Southern District of Ohio; Daryl S. McCormick, Special Agent in Charge, U.S. Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF); and Columbus Police Chief Elaine Bryant announced the charges. The agencies were assisted by the Federal Bureau of Investigation (FBI). Assistant United States Attorneys Peter K. Glenn-Applegate and Jessica W. Knight are representing the United States in this case.

A criminal complaint merely contains allegations, and defendants are presumed innocent unless proven guilty in a court of law.

# # #

This morning the United States Supreme Court issued its decision in Oklahoma v. Castro-Huerta. This decision holds that the State of Oklahoma has concurrent jurisdiction with the federal government to prosecute non-Indians who commit crimes against Indian victims within Indian Country.

“Today’s decision does not diminish the United States’ trust responsibility to our tribal partners,” said United States Attorneys Christopher J. Wilson, Clinton J. Johnson, and Robert J. Troester. “The United States Attorney’s Offices in the Eastern, Northern, and Western Districts of Oklahoma will continue to enforce federal law in Indian Country. We will also continue to coordinate and cooperate with our state, local, and tribal law enforcement partners as well as state and tribal prosecutors to promote public safety and provide justice to all Oklahomans in Indian Country.”

On June 28, 2022, a federal grand jury in Central Islip, New York returned an 18-count superseding indictment charging Carlos Acevedo, Ramon Collado, Naresh Deonarrain, Jason Liriano, Charlie Maisonet, Cavier Nedrick, Eric Nunez, Jose Rosado, Alberto Santiago and Jeffrey Vargas with conspiracy to commit burglary involving controlled substances. The superseding indictment, which was unsealed this morning, also charged the defendants, along with Jonathan Santiago, with conspiracy to distribute controlled substances, including ecstasy and fentanyl. Furthermore, the superseding indictment charged Luis Cerda, along with Collado, Liriano, Rosado and Alberto Santiago, with conspiracy to commit bank larceny. The defendants were also charged with several related firearms counts, including possessing a ghost gun.

According to court filings, the defendants are members and associates of a burglary and drug trafficking organization known as the “Route Boys.” Over the past two years, the defendants, along with other associates of the Route Boys, committed dozens of burglaries of pharmacies and convenience stores in Nassau, Suffolk, Brooklyn, Queens, Westchester and Rockland Counties, as well as in New Jersey and Connecticut. They then used social media to sell the controlled substances and frequently displayed images of themselves possessing firearms.

Earlier this morning, when agents arrested the defendants, they recovered several loaded guns and observed controlled substances in various defendants’ residences and cars. Acevedo, Cerda, Collado, Deonarrain, Maisonet, Nunez, Jonathan Santiago and Vargas were arrested this morning and will be arraigned on the superseding indictment later today in Central Islip, New York before United States Magistrate Judge Arlene R. Lindsay. Liriano, Nedrick, Rosado and Alberto Santiago are presently incarcerated on other charges and will be arraigned on a later date.

Breon Peace, United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), Keechant L. Sewell, Commissioner, New York City Police Department (NYPD), and Patrick J. Ryder, Commissioner, Nassau County Police Department (NCPD) announced the arrests and charges.

“For two years the defendants went on a crime spree targeting local businesses throughout the Tri-State, stealing money and pharmaceuticals to fuel their illegal drug business, and frequently using firearms to commit their crimes,” stated United States Attorney Breon Peace. “This office is working tirelessly with our law enforcement partners to protect local businesses and put a stop to those who seek to endanger our communities from drugs or guns.”

Mr. Peace thanked the Suffolk County Police Department, Westchester Safe Streets Task Force, Drug Enforcement Administration, Kings County District Attorney’s Office, Queens County District Attorney’s Office, Nassau County District Attorney’s Office, and Suffolk County District Attorney’s Office for their assistance with the investigation.

“This criminal wrecking crew allegedly broke into businesses and pharmacies, stole prescription medications, and created havoc in their Hollywood style getaways,” said FBI Assistant Director-in-Charge Driscoll. “These drugs are protected because of how addictive and potentially deadly they can be. The members of this gang showed no regard for the damage they caused the businesses or the danger they put people's lives in illegally pushing drugs, all to fuel their own greed.”

“The NYPD, in close cooperation with our state and federal partners, continues to focus its resources on the relatively small percentage of people responsible for much of our region’s crime and disorder,” stated NYPD Commissioner Sewell. “Neither the law-enforcement community nor the New Yorkers we serve will stand for our neighborhoods to be overrun by individuals or groups operating in illegal guns and drugs, and the havoc so often associated with them. I thank the U.S. Attorney’s Office for the Eastern District, the FBI’s New York Field Office, the Nassau County Police Department, and all of our investigators for their hard work in this important case.”

“The indictments of 12 members of the “Route Boys” is a clear example of the commitment by numerous law enforcement agencies as they continue to work cohesively to bring this group of dangerous felons to justice,” stated Nassau Police Commissioner Ryder. “The results of this extensive investigation will ensure the safety of the public and quality of life in Nassau County as we continue to exhibit a zero tolerance approach for all illegal criminal activity. I would like to acknowledge the dedication and hard work of all of the investigators and their agency’s for a job well done.”

As alleged in the indictment and other court filings, the Route Boys began committing burglaries in late 2020, breaking into convenience stores, check-cashing businesses, laundromats and restaurants, stealing primarily cash and tobacco products. In addition, they often stole free-standing ATMs, forcing them open and stealing the cash from inside the machine. The Route Boys then began targeting small “mom-and-pop” pharmacies throughout the Tri-State area.

Their pattern remained consistent throughout their crime wave: three to four participants would travel to multiple locations in quick succession on a given night, often in a stolen car, with stolen plates that were routinely switched to avoid detection, and then break into the business, either by smashing glass with crowbars, rocks or grinders. Once inside, the defendants or their associates quickly stole controlled substances – including oxycodone, alprazolam and promethazine-codeine cough syrup – and moved on to the next crime, often burglarizing several locations on a single night. After the Route Boys committed a crime, they routinely fled in stolen luxury vehicles at extremely high rates of speed, often crashing into other vehicles and endangering the lives of law enforcement officers and innocent citizens. Route Boys’ members, including Carlos Acevedo, Ramon Collado, Naresh Deonarrain, Jason Liriano, Charlie Maisonet, Cavier Nedrick, Eric Nunez, Jose Rosado, Alberto Santiago and Jeffrey Vargas used social media to sell the controlled substances and frequently displayed images of themselves possessing firearms, including high capacity magazines, scopes and multiple guns at once.

If convicted, Carlos Acevedo, Ramon Collado, Naresh Deonarrain, Jason Liriano, Charlie Maisonet, Cavier Nedrick, Eric Nunez, Jose Rosado, Alberto Santiago, and Jeffrey Vargas all face up to life imprisonment. Jonathan Santiago faces a sentence of up to 40 years’ imprisonment, and Luis Cerda faces a sentence of up to 15 years’ imprisonment. The charges in the superseding indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being handled by the Office’s Long Island Criminal Division. Assistant United States Attorneys Samantha Alessi and Andrew Wenzel are in charge of the prosecution, with the assistance of paralegal specialist Dejah Turla.

The Defendants:

CARLOS ACEVEDO (also known as “AM” and “Cartier_a.m”)
Age: 25
Brooklyn, New York

LUIS CERDA
Age: 32
Queens, New York

RAMON COLLADO (also known as “Greedy”, “greedy.billzz” and “greedyyt2gg”)
Age: 25
Brooklyn, New York

NARESH DEONARRAIN (also known as “Kans” and “nocheck_kans”)
Age: 26
Brooklyn, New York

JASON LIRIANO (also known as “S.L. and jay_bigfella”)
Age: 24
Brooklyn, New York

CHARLIE MAISONET (also known as “Charlie_._rb”)
Age: 20
Brooklyn, New York

CAVIER NEDRICK (also known as “Chief”, “big.chiefs” and “_bigchiefsrb”)
Age: 25
Hauppauge, New York

ERIC NUNEZ (also known as “Tok” and “therealtok”)
Age: 25
Brooklyn, New York

JOSE ROSADO (also known as “Cream” and “elite_cream”)
Age: 29
Queens, New York

ALBERTO SANTIAGO (also known as “Kom” and “dot._kom._”)
Age: 26
Queens, New York

JONATHAN SANTIAGO (also known as “Chop”)
Age: 23
Franklin Square, New York

JEFFREY VARGAS (also known as “Chito” and “chito_1838”)
Age: 22
Brooklyn, New York

E.D.N.Y. Docket No. 21-451 (S-2) (GRB)

ALBUQUERQUE, N.M. – Alexander M.M. Uballez, United States Attorney for the District of New Mexico, announced today that Genaro Ramos, 36, of Albuquerque, was sentenced to five years in prison for possession of a machinegun. Ramos pleaded guilty on March 30.

According to the plea agreement and other court records, in July 2021, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) received information from a business owner who had been approached by Ramos about purchasing 200 Glock firearms that would be taken to Mexico. An ATF undercover agent then made contact with Ramos, who informed the agent that he was purchasing AK-type firearms and 9mm firearms.

In August 2021, the agent sent Ramos photos of two Glock firearms and two AK-type firearms, one of which was fully automatic. In his plea agreement, Ramos admitted that he intended to traffic the firearms to Mexico and knew that one of the firearms was a machinegun. They agreed on a price of $2,600 and arranged to meet. On Aug. 24, 2021, Ramos met with undercover agents. Ramos inspected the firearms, paid the agents $2,600, and took possession of the firearms, including the machinegun. ATF agents arrested Ramos after he had taken possession of the firearms.

Assistant United States Attorney Jaymie L. Roybal prosecuted the case.

# # #

ALEXANDRIA, La. – A federal prisoner housed at the Federal Correctional Institution in Pollock, Louisiana (FCI-Pollock) has been sentenced for voluntary manslaughter, announced United StatesAttorney Brandon B. Brown. Jose G. Mercado-Gonzalez, 27, has been sentenced by United States District Judge David C. Joseph to spend an additional 135 months in prison, followed by 3 years of supervised release, for this offense.

On October 16, 2021, Mercado-Gonzalez was an inmate at the Bureau of Prisons, FCI-Pollock. On that date, Mercado-Gonzalez was moved to a cell in the Special Housing Unit at FCI-Pollock where he had an altercation which ended in him killing his cellmate. When the victim was found by officers at the prison, he had sustained injuries which caused him to lose his life.

A federal grand jury charged Mercado-Gonzalez on March 24, 2021 and he pleaded guilty to the charge of voluntary manslaughter on March 17, 2022.  At the time of this offense, Mercado-Gonzalez was serving a federal sentence for re-entry of a removed alien.

The case was investigated by the Federal Bureau of Investigation and the Bureau of Prisons and prosecuted by Assistant U.S. Attorney Seth D. Reeg.

# # #

PITTSBURGH, Pa. – Two residents of Pittsburgh and a resident of Georgia were sentenced in federal court for conspiracy to defraud the Pennsylvania Medicaid program and related offenses, United States Attorney Cindy K. Chung announced today.

During sentencing hearings on June 28 and June 29, 2022, United States District Judge Cathy Bissoon sentenced Tiffhany Covington, 45, of Pittsburgh, to fifteen months’ imprisonment; Luis Columbie-Abrew, 36, of East Point, Georgia, to three years’ probation, including twelve months of home confinement; and Julie Wilson, 51, of Pittsburgh, to three years’ probation, including six months of home confinement. Covington, Columbie-Abrew, and Wilson were also ordered to pay restitution to the Pennsylvania Medicaid program totaling $245,376.26, $164,799.48, and $2,083.36, respectively. All three defendants previously pleaded guilty to conspiracy to commit health care fraud. Columbie-Abrew and Wilson also pleaded guilty to health care fraud, with Columbie-Abrew pleading guilty to an additional charge of aggravated identity theft.

During their plea hearings, each defendant admitted that they were employees of one or more of four related entities operating in the home health care industry—Moriarty Consultants, Inc. (MCI), Activity Daily Living Services, Inc. (ADL), Coordination Care, Inc. (CCI), and Everyday People Staffing, Inc. (EPS). MCI, ADL, and CCI were approved under the Pennsylvania Medicaid program to offer certain services to qualifying Medicaid recipients (“consumers”), including personal assistance services (PAS), service coordination, and non-medical transportation, among other services. Between 2011 and 2017, the defendants admitted that they participated in a wide-ranging conspiracy to defraud the Pennsylvania Medicaid program for the purpose of obtaining millions of dollars in illegal Medicaid payments through the submission of fraudulent claims for services that were never provided to the consumers identified on the claims or for which there was insufficient or fabricated documentation to support the claims. The Court was further advised that the defendants conspired with, among others, Arlinda Moriarty, the owner of MCI, ADL, and EPS; Daynelle Dickens, the owner of CCI and Arlinda Moriarty’s sister; various office workers at the companies, including Tamika Adams, Tony Brown, Terra Dean, Larita Walls, Keith Scoggins, and Tia Collins; and caregivers (“attendants”) at MCI, including Tionne Street and Autumn Brown. To date, each of these co-conspirators have also pleaded guilty for their roles in the conspiracy.

As part of the conspiracy, the defendants each admitted that co-conspirators fabricated timesheets to reflect the provision of in-home PAS care they provided to consumers but that, in fact, never occurred. In addition, certain co-conspirators, including Covington and Columbie-Abrew, stopped using their own names as the attendant on timesheets and instead used the names of “ghost” attendants, some of whom permitted their names to be used in exchange for a kickback of resulting fraudulent salary payments. The defendants also admitted that certain co-conspirators submitted false timesheets for PAS care they never provided during times when they were actually working at other jobs or living out of the area. In some cases, as the defendants acknowledged, Medicaid claims were submitted for PAS care that purportedly occurred while consumers were hospitalized, incarcerated, or deceased, and in other instances, co-conspirators paid kickbacks to consumers in exchange for the consumers’ agreement to participate in the submission of fraudulent timesheets in support of Medicaid claims. Indeed, Columbie-Abrew specifically admitted causing the submission of hundreds of thousands of dollars of Medicaid claims for purported care of consumers who lived in the Pittsburgh area, despite the fact that he—as the purported attendant—lived several states away in Georgia.

The defendants also admitted that Arlinda Moriarty directed co-conspirators, including Covington, to bill the maximum allowable PAS and service coordination hours for consumers to maximize profits and to ensure that the state did not require MCI, ADL, and CCI to forfeit underutilized consumer hours. To that end, Wilson acknowledged that, at Moriarty’s behest, she collected information about consumers who had “unused” PAS care hours—that is, hours of authorized PAS care that had not been performed and, as a result, had not been billed to Pennsylvania Medicaid. In response, Wilson would provide lists of such consumers and their “unused” hours to Moriarty and Dickens. Moriarty, in turn, would direct Wilson to submit false claims, in bulk, for some or all of the “unused” hours—without the relevant consumers’ knowledge or consent. Wilson further admitted that she would then send Moriarty a list of the “unused” hours Wilson had billed and that required the creation of back-dated timesheets to document the purported care. Rampant document fabrication also occurred during the course of state audits of the Moriarty-related entities.

Assistant United States Attorney Eric G. Olshan and Special Assistant United States Attorney Edward Song are prosecuting this case on behalf of the government. The Federal Bureau of
Investigation, Pennsylvania Office of the Attorney General – Medicaid Fraud Control Unit, Internal Revenue Service – Criminal Investigation, U.S. Department of Health and Human Services – Office of Inspector General, and United States Postal Inspection Service conducted the investigation of the defendants.