United States Attorney Randolph J. Seiler announced that a Philip, South Dakota, man convicted of Attempted Possession of Child Pornography was sentenced on October 2, 2017, by Chief Judge Jeffrey L. Viken, U.S. District Court.

Ryan Lloyd Kammerer, age 27, was sentenced to 2 years of probation and ordered to pay a $100 special assessment to the Federal Crime Victims Fund.

Kammerer was one of ten men who were arrested and federally indicted as a result of an undercover sex trafficking operation conducted during the 2016 Sturgis Motorcycle Rally, targeting persons willing to pay to have sex with underage girls or boys obtained through the Internet.  The conviction stemmed from Kammerer communicating with someone he believed to be a minor for the purpose of engaging in sexual acts.

The undercover operation and arrests were a joint effort between the South Dakota Division of Criminal Investigation, the Department of Homeland Security, the Federal Bureau of Investigation, the Rapid City Police Department, and the Pennington County Sheriff’s office. Assistant U.S. Attorney Sarah Collins prosecuted the case. 

United States Attorney Randolph J. Seiler announced that a Vale, South Dakota, man was charged in federal district court with False Claim.

Dale Knutson, age 57, was charged on September 19, 2017.  He appeared before U.S. Magistrate Judge Daneta Wollmann on September 29, 2017, and pleaded not guilty to the charge. 

The maximum penalty upon conviction is 5 years of imprisonment and/or a $250,000 fine, 3 years of supervised release, and $100 to the Federal Crime Victims Fund.  Restitution may also be ordered.

The charge relates to Knutson knowingly filing a false claim with the Farm Service Agency in May 2014. The charge is merely an accusation and Knutson is presumed innocent until and unless proven guilty. 

The investigation is being conducted by the United States Department of Agriculture, Office of Inspector General. Assistant U.S. Attorney Ben Patterson is prosecuting the case.

Knutson was released pending trial.  A trial date has not been set. 

BLUEFIELD, W.Va. – A former funeral director who defrauded an insurance company pleaded guilty today, announced United States Attorney Carol Casto. Joel L. McGuire, 61, of Alderson, entered his guilty plea to wire fraud.

McGuire was the funeral director at Broyles-McGuire Funeral Home in Union, West Virginia. While serving as funeral director, McGuire also sold insurance policies that would pay for clients’ funerals upon their death. On August 31, 2012, McGuire submitted a claim, stating that a client had passed away on August 29, 2012, and that he had provided funeral services at a cost of $3,313.71. McGuire knew that the client was still alive and that he had not provided any funeral services. The insurance company paid McGuire $3,312.71 for the claim. McGuire also admitted that, as a result of his submission of numerous other false claims for clients that had not died, he received more than $50,000.

McGuire faces up to 20 years in federal prison and a $250,000 fine when he is sentenced on January 9, 2018.

The West Virginia Offices of the Insurance Commissioner Fraud Unit conducted the investigation. Assistant United States Attorney Eric Bacaj is in charge of the prosecution. The plea hearing was held before Senior United States District Judge David A. Faber.

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United States Attorney Randolph J. Seiler announced that a Baraboo, Wisconsin, man convicted of Failure to Register as a Sex Offender was sentenced on October 2, 2017, by U.S. District Judge Roberto A. Lange.

James Nault-Hart, age 29, was sentenced to 26 months in custody, followed by 5 years of supervised release, and a special assessment to the Federal Crime Victims Fund in the amount of $100.

Nault-Hart was indicted by a federal grand jury on December 14, 2016.  He pled guilty on July 17, 2017.

The conviction stems from Nault-Hart failing to register as a sex offender as required by federal law between September 12, 2016, and October 5, 2016.  Nault-Hart had previously been convicted of a sex offense in Sault County, Wisconsin.  He absconded from parole supervision and came to South Dakota, where he failed to register as a sex offender.

This case was investigated by the U.S. Marshals Service.  Assistant U.S. Attorney Jay Miller prosecuted the case.

Nault-Hart was immediately turned over to the custody of the U.S. Marshals Service.

SAN JOSE – San Jose cleric Hien Minh Nguyen was sentenced today to 36 months in prison for bank fraud and tax evasion announced United States Attorney Brian J. Stretch and Internal Revenue Service, Criminal Investigation, Special Agent in Charge Michael T. Batdorf.  The sentence was handed down by the Honorable Beth Labson Freeman, U.S. District Judge, following Nguyen’s March 21, 2017, conviction on bank fraud charges, and August 9, 2016, guilty plea in which he admitted to committing tax evasion.

According to court filings and the evidence from trial, Nguyen, 57, is a priest for the Diocese of San Jose (the Diocese), and served as a pastor of St. Patrick’s Church (St. Patrick’s), and the director of the Vietnamese Catholic Center, also known as the Trung Tam Cong Giao (VCC).  As a priest in the Diocese, Nguyen received cash donations for St. Patrick’s and the VCC from parishioners, some of which he stole.  Nguyen also signed checks drawn on VCC’s bank accounts to pay his own personal expenses, and deposited checks made payable to the VCC into his own personal bank account.  Judge Freeman determined that Nguyen used this method to steal a total of at least $1,449,365 from the Diocese between 2005 and 2011.

On December 1, 2015, a federal grand jury issued a superseding indictment charging Nguyen with fourteen counts of bank fraud, in violation of both 18 U.S.C. §§ 1344(1) and 1344(2), and four counts of tax evasion, in violation of 26 U.S.C. § 7201.  He pleaded guilty to the tax evasion charges on August 9, 2016.  After a bench trial, the Court convicted Nguyen on all fourteen counts of bank fraud on March 21, 2017.

In addition to the prison term, Judge Freeman also ordered Nguyen to pay $1,883,883 in restitution, including $1,449,365 to the Diocese of San Jose, and $434,518 to the IRS.  In addition, Judge Freeman also ordered Nguyen to serve three years of supervised release.  Judge Freeman ordered the defendant to surrender on or before January 5, 2018, to begin serving his sentence.
   
Assistant U.S. Attorneys Michael G. Pitman and Thomas Moore are prosecuting the case.  The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.
 

OAKLAND – Antwon Graham was sentenced to 92 months’ imprisonment after pleading guilty to being a felon in possession of a firearm and for various violations of the conditions of his supervised release, announced United States Attorney Brian J. Stretch, Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett, and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Jill Snyder.  The sentence was handed down today by the Honorable Jeffrey S. White, United States District Judge.  

On May 30, 2017, Graham, 28, of Oakland, pleaded guilty to one count of being a felon in possession of a firearm.  Graham was arrested by Oakland Police Department Officers on December 7, 2016.  As part of his plea agreement, Graham admitted that on that date he had a loaded semi-automatic handgun in his waistband and a 31-round capacity magazine in his pocket.  In addition, Graham admitted that two months earlier, on October 12, 2016, he was approached by Burlingame Police Department officers when he was at a go cart company in Burlingame.  Graham acknowledged that on that occasion, he was in possession of two loaded pistols he was carrying in two backpacks.  Graham abandoned the backpacks and fled the scene, allowing the police officers to recover the backpacks and the firearms.  On January 31, 2017, a federal grand jury indicted Graham, charging him with two counts of being a felon in possession of a firearm, in violation of 18 U.S.C. § 922(g)(1).  Pursuant to his plea agreement, Graham pleaded guilty to one count.

In addition to the facts underlying the felon in possession charge, as part of his plea agreement, Graham admitted he committed several violations of the conditions of his supervised release resulting from a previous case.  Specifically, Graham admitted that he possessed firearms on December 7 and October 12, 2016; that he used a fraudulent credit card on September 3, 2016; that he associated with persons he knew were felons on October 12, 2016; and that he failed to report within 72 hours after October 12, 2016, that he had been questioned by law enforcement officers.   

Judge White sentenced Graham to 80 months of imprisonment for one count of being a felon in possession of a firearm and sentenced Graham to an additional 12 months of imprisonment for the supervised release violations.  In addition to the prison term, Judge White imposed a three-year period of supervised release that will commence after Graham completes his prison sentence.  The conditions of his supervised release include a condition that prohibits Graham from associating with members of the Ghost Town criminal street gang.  The defendant was remanded to federal custody and will begin serving his sentence immediately.

Assistant U.S. Attorney Scott Joiner is prosecuting the case with assistance from Lance Libatique.  The prosecution is the result of investigations by the FBI, ATF, Oakland Police Department, and Burlingame Police Department. 
 

OAKLAND – Bryan Escalante was sentenced to 72 months’ imprisonment today after pleading guilty to being a felon in possession of a firearm, announced United States Attorney Brian J. Stretch and Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Special Agent in Charge Jill Snyder.  The sentence was handed down by the Honorable Jeffrey S. White, United States District Judge.  

On July 25, 2017, Escalante, 23, of Pinole, pleaded guilty without a written plea agreement to one count of being a felon in possession of a firearm.  According to documents filed in the case, Escalante posted photographs and videos of himself on his Instagram account possessing and shooting firearms at a shooting range.  In addition, Escalante admitted he previously was convicted of a felony and was therefore not permitted to possess or own a firearm.  On February 9, 2017, a federal grand jury indicted Escalante, charging him with one count of being a felon in possession of a firearm.  Pursuant to his guilty plea, Escalante pleaded guilty to the charge.      

In sentencing Escalante, Judge White stated he was applying enhancements because the defendant was in possession of multiple firearms and because he possessed a firearm with an obliterated serial number.  Further, in addition to the prison term, Judge White sentenced Escalante to a three-year period of supervised release that will commence after he completes his prison sentence.  Judge White also ordered Escalante to refrain from having contact with members of the Sureño gang, or any other gang, as a condition of his supervised release.  The defendant was remanded to federal custody and will begin serving his sentence immediately.

The prosecution is the result of an investigation by the ATF. 
 

SYRACUSE, NEW YORK – New York Anesthesiology Medical Specialties, P.C. d/b/a New York Spine and Wellness Center (New York Spine & Wellness) agreed today to pay $1,941,850.29 to resolve claims that it improperly billed for moderate sedation services, announced Acting United States Attorney Grant C. Jaquith and New York State Attorney General Eric T. Schneiderman.

New York Spine & Wellness is a medical practice focusing on pain management, and spine and back procedures, with locations in the Syracuse, New York area.  During certain procedures, New York Spine & Wellness physicians placed patients under moderate sedation.  Moderate sedation produces a state where the patient retains the ability to respond to verbal direction and remains capable of maintaining their airway without assistance.  Generally, the administration of moderate sedation reduces pain and anxiety in patients who undergo therapeutic and diagnostic procedures by reducing their perception of pain and/or fear. 

The American Medical Association released guidance on the billing requirements for moderate sedation services in October 2011 to clarify that the service is billable only when the physician spends at least 16 minutes face-to-face with the patient.  The Medicare Administrative Contractor for New York that processes providers’ claims confirmed the 16-minute rule in February 2012 in an explanatory article released to its listserv and also maintained on its website for a period of approximately one year.  New York Spine & Wellness routinely billed for moderate sedation services when its physicians spent less than the required 16 minutes with the patient.  These moderate sedation claims were submitted in connection with claims for underlying therapeutic and/or diagnostic services for which New York Spine & Wellness also billed and was paid. Although New York Spine & Wellness utilized the services of an independent billing company, New York Spine & Wellness retained the contractual obligation to code its services accurately. 

In or about January 2015, a private insurance company rejected two of New York Spine & Wellness’s claims for moderate sedation services because, as described by New York Spine & Wellness’s billing company, the “Medicare 16 minute span rule to bill [the] code” was not satisfied.  In mid-June 2015, the same private insurance company performed an audit and rejected New York Spine & Wellness’s claims for moderate sedation services where the documentation did not support that the procedure lasted more than 16 minutes.  The billing company advised New York Spine & Wellness to review the audit findings concerning moderate sedation services.  New York Spine & Wellness continued to bill for moderate sedation services after mid-June 2015 without the required 16 minutes of face-to-face time.  The improper billing stopped after New York Spine & Wellness was contacted by the United States Attorney’s Office for the Northern District of New York in connection with this investigation.  

Acting United States Attorney Grant C. Jaquith said:  “We remain committed to holding healthcare providers to account when they submit false claims.  Providers should have policies and procedures in place to ensure that they are familiar with applicable billing requirements before submitting claims.  Although New York Spine & Wellness is being held responsible for its conduct, we appreciate that it resolved this matter outside litigation and worked cooperatively through the investigation.”  

“New York Spine and Wellness Center, like all health care providers, must be held to a high standard of ethical behavior,” said Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (“HHS-OIG”).  “HHS-OIG will continue to ensure that providers that bill federal health care programs do so in an honest manner.”

“Today’s agreement represents a win for New Yorkers, ensuring that over $660,000 will be returned to the New York Medicaid Program and that the provider does not improperly bill Medicaid for this service in the future,” said Attorney General Schneiderman.  “I’m proud of the federal and state collaboration involved in this investigation as we work to protect New York’s taxpayers, and appreciate the provider’s cooperation.”

The investigation and settlement were the result of a coordinated effort among the United States Attorney’s Office for the Northern District of New York, the Defense Criminal Investigative Service, the Department of Health and Human Services Office of Inspector General, and the New York State Attorney General’s Office.  The United States was represented by Assistant U.S. Attorney Michael D. Gadarian, and the State of New York was represented by Special Assistant Attorney General Paul R. Berry. 

KANSAS CITY, KAN. – A Kansas City, Kan., man who styled himself on the internet as rapper C-Los El Gran was sentenced Tuesday to 168 months in federal prison for his role in a $4 million drug trafficking conspiracy, U.S. Attorney Tom Beall said.

Carlos Sierra, 30, Kansas City, Kan., pleaded guilty to one count of conspiracy to distribute methamphetamine. In his plea, he admitted he was a member of a drug trafficking operation headed by his half-brother and co-defendant, Edwin Pacheco. They distributed methamphetamine in the Kansas City metro area.

Investigators used confidential informants and electronic surveillance to identify Sierra and to monitor his conversations with Pacheco, during which they talked about problems they faced processing drugs for distribution and their plans to increase their profit margins. Sierra was carrying a Ruger .380 handgun when he was arrested in Kansas City, Kan.

Co-defendant Pacheco is awaiting sentencing.

Beall commended the Drug Enforcement Administration and Assistant U.S. Attorney Trent Krug for their work on the case.

The U.S. Attorney’s Office is now able to receive calls via its usual telephone number on St. Thomas: (340) 774-5757. Until further notice, please use this number to call the St. Croix office as well.

BIRMINGHAM– U.S. Attorney Jay E. Town has named veteran federal prosecutor Robert O. Posey as executive assistant U.S. attorney for the Northern District of Alabama.

“Robert Posey is an institution of knowledge. His leadership is proven and battle-tested and the Northern District has been fortunate to have it for many years, and it is my hope we will have it for many years to come,” Town said. “Robert will remain a big part of the management team as our new executive assistant U.S. attorney.”

Posey most recently served as the acting U.S. attorney from January until Town’s U.S. Senate confirmation as U.S. attorney in August. Posey served as first assistant U.S. attorney to former U.S. Attorney Joyce White Vance from July 2013 until assuming the acting U.S. attorney role when Vance retired. Posey has more than 25 years’ experience as a federal prosecutor in the Northern District, including serving as deputy chief of the Criminal Division, where he supervised white-collar crime, public corruption and civil rights cases.

In his role as executive assistant U.S. attorney, Posey will be tasked with a number of leadership and managerial roles, to include direct supervision of the Administrative Division, supervising special projects and working groups, and continuing as the district office security manager.

As an assistant U.S. attorney, Posey received the Justice Department's highest award presented to an attorney for trial of litigation for his role in the successful prosecution of the 16th Street Baptist Church bombing cases. He received a similar Justice Department award for his role in the environmental crime prosecution of McWane Corporation.

Before joining the U.S. Attorney’s Office, Posey served 10 years as a state prosecutor in Jefferson and Shelby counties. He is an Alabama native and a graduate of Washington and Lee University in Lexington, Va., and the Cumberland School of Law of Samford University in Birmingham. He also is a retired U.S. Army Reserve officer.

          Concord, N.H.— Acting United States Attorney John J. Farley announced that Michael J. Soto-Hernandez, 26, a/k/a “Quajo,” previously of Manchester, New Hampshire, was sentenced on Tuesday to 40 months in federal prison for distributing fentanyl in Manchester in 2016. 

          According to the indictment, statements made in court, and other public records in the case, on several occasions throughout 2016, investigators used a cooperating individual to make purchases of heroin from Soto-Hernandez.  Subsequent lab results showed that the substance that Soto-Hernandez sold was actually fentanyl. 

          Soto-Hernandez pleaded previously pleaded guilty to two drug distribution charges in June of 2017. 

          This matter was the product of an investigation of the Organized Crime Drug Enforcement Task Force (OCDETF) and the Federal Bureau of Investigation’s Safe Streets Gang Task Force.  The OCDETF program is a federal multi-agency, multi-jurisdictional task force that supplies supplemental federal funding to federal and state agencies involved in the identification, investigation, and prosecution of major drug trafficking organizations.  Other state and local authorities involved in the investigation include the Manchester Police Department, the Hudson Police Department, the New Hampshire State Police, the Nashua Police Department, and the New Hampshire Department of Corrections Probation and Parole.   The case was prosecuted by Assistant U.S. Attorney Charles L. Rombeau.

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United States Attorney Richard W. Moore of the Southern District of Alabama announced that Chief United States District Judge Kristi K. DuBose sentenced Jabriel Bell and Fortune Hoppins to 46 months and 57 months of prison, respectively, in a gun burglary case.  The judge ordered that Bell, 25, and Hoppins, 35, face credit restrictions and pay restitution totaling $22,737.  The judge also ordered that each defendant pay a $100 special assessment and undergo three years of supervised release after completing their prison term. 

In the early morning hours of May 10, 2017, Bell, Hoppins, and Stanley Young stole approximately fifty firearms from Safford Tire and Hardware, a licensed firearms dealer in Safford, Alabama.  The store’s video surveillance system captured the burglary.  Law enforcement officials soon identified Bell, Hoppins, and Young as suspects and found several discarded clothing items near the store.  On May 11, 2017, law enforcement officials located Bell, who admitted post-Miranda to burglarizing the store with Hoppins and Young.  Bell helped officials find twenty-three firearms he left in a bag in the woods near Safford Tire.  That same day, law enforcement officials found Hoppins, a convicted felon, in Marion Junction, Alabama in possession of one of the stolen guns.  Officials later located Stanley Young, a convicted felon, in the state of New York.   

In late May 2017, a federal grand jury for the Southern District of Alabama returned a four-count indictment against Bell, Hoppins, and Young.  On July 19, 2017, Bell pleaded guilty to stealing firearms from a licensed firearms business, and Hoppins pleaded guilty to being a felon in possession of firearms.  On September 19, 2017, Young pleaded guilty to being a felon in possession of firearms.  His sentencing is scheduled for December 22, 2017.   

The Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Marshals Service, the Dallas County Sheriff’s Office, and the Fourth Judicial Drug Task Force in Selma, Alabama investigated the case.  Assistant United States Attorney Sinan Kalayoglu prosecuted the case.

BIRMINGHAM – U.S. Attorney Jay E. Town has named Lloyd Peeples as first assistant U.S. attorney for the Northern District of Alabama, the office’s number two post. Peeples began work in the leadership position this week.

“Lloyd Peeples brings tremendous energy, devotion and skill to the Northern District,” Town said. “His experience, coupled with his leadership capability, will serve the entire office well. I am very proud that Lloyd Peeples joins us as my first assistant U.S. attorney.”

As the first assistant U.S. Attorney, Peeples will supervise the Criminal, Civil, Appellate and Administrative Divisions. The first assistant U.S. attorney regularly receives case briefings, serves as a liaison with state and federal agencies, represents the U.S. Attorney’s Office to the public, and handles administrative matters as directed by the U.S. attorney.

Peeples worked as a prosecutor in the Northern District of Alabama from 2003 until 2012, handling a variety of civil and criminal matters, including civil and criminal health care fraud, False Claims Act, tax fraud, mortgage fraud, bank fraud, and public corruption cases. Peeples left the U.S. Attorney’s Office to assist in managing his father’s manufacturing business. Following his father’s death, Peeples took over as chairman of the board and chief executive officer until the family sold the company in January 2017.

Peeples was born in Dothan. He attended Washington and Lee University, where he received his bachelor’s degree in 1995. Peeples obtained his law degree from Samford University’s Cumberland School of Law in 1998. Peeples worked as a judicial clerk and in private practice in Birmingham before joining the U.S. Attorney’s Office for the Northern District of Alabama as an assistant U.S. attorney in 2003.

Peeples said he is grateful for the opportunity to re-join the U.S. Attorney’s Office and return to public service.

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ATLANTA – Treveyon Herring, one of five defendants charged with stealing credit cards from the baggage loading areas of Hartsfield-Jackson International Airport and a private mail sorting facility, has pleaded guilty to wire fraud conspiracy. 

“Americans depend on the United States mail system to carry some of their most vital and sensitive correspondence, like the new credit cards in this case,” said U. S. Attorney John Horn.  “By exploiting the airport’s baggage loading processes, these defendants were able to plunder mail bags and steal new credit cards on their way to customers across the country.”   

“Postal Inspectors have a long and proud history of protecting the U.S. mail from criminal activity,” said David M. McGinnis, Inspector in Charge, Charlotte Division.  “These defendants violated the trust bestowed upon them to handle mail and the law for their own personal gain.  The U.S. Postal Inspection Service takes allegations of mail theft seriously and investigates these matters to ensure the integrity of the U.S. Postal Service.”

“Herring and his conspirators were creative in their scheme to steal victims’ credit cards and defraud them,” said Kenneth Cronin, Special Agent in Charge of the United States Secret Service, Atlanta Field Office. “The United States Secret Service will continue to collaborate with our law enforcement partners to arrest criminals who use their trustworthy positions to violate unsuspecting victims.”

According to U.S. Attorney Horn, the charges and other information presented in court: From December of 2015 until April of 2017, the defendants stole credit cards from the baggage loading areas of Hartsfield-Jackson International Airport and a private mail sorting facility.  Cornelius Henderson, through his employment, had access to the airport’s baggage loading areas, where he stole mail that contained credit cards.  Treveyon Herring worked at a private mail sorting facility where he also stole mail containing credit cards.  LaSuhn Turner and Brandon Foster assisted in the scheme by obtaining cash from the stolen credit cards. 

Turner used stolen credit cards at ATMs to obtain cash advances, while Foster, through his employment as a bank teller, executed fraudulent transactions at the bank when presented with stolen credit cards by other co-conspirators.  Quentin Pickett was involved in almost every aspect of the scheme alleged in the indictment, interacting with co-conspirators who stole credit cards and those who were involved in extracting value from the stolen credit cards.

The stolen credit cards were shipped via the U.S. Postal Service to the rightful accountholders, who were located throughout the United States.  In total, the scheme caused over $1.7M in fraud-related losses.

All five defendants were charged in a criminal indictment on May 23, 2017.  Herring is the last of the five defendants to enter a guilty plea in the case.  The other defendants are as follows:

• Quentin Pickett, 25, of Jonesboro, Georgia, pleaded guilty to wire fraud conspiracy and aggravated identity theft on September 25, 2017, and agreed to the entry of a restitution order in the amount of $1,759,301.14.  Pickett is scheduled to be sentenced on January 10, 2018.

• Cornelius Henderson, 23, of Riverdale, Georgia, pleaded guilty to wire fraud conspiracy and aggravated identity theft on September 25, 2017, and agreed to the entry of a restitution order in the amount of $429,142.26.  Henderson is scheduled to be sentenced on January 9, 2018.

• LaSuhn Turner, 25, of Stockbridge, Georgia, pleaded guilty to wire fraud conspiracy on August 30, 2017, and agreed to the entry of a restitution order in the amount of $70,483.05.  Turner is scheduled to be sentenced on December 5, 2017.

• Brandon Foster, 24, of Stockbridge, Georgia, pleaded guilty to wire fraud conspiracy on August 24, 2017, and agreed to the entry of a restitution order in the amount of $14,831.00.  Foster is scheduled to be sentenced on November 17, 2017.

Treveyon Herring, 22, of Forest Park, Georgia, is scheduled to be sentenced on January 10, 2018.  As part of a plea agreement, Herring agreed to the entry of a restitution order in the amount of $1,341,778.96.  All five defendants in this case are scheduled to be sentenced by U.S. District Judge Eleanor L. Ross.

This case is being investigated by the U.S. Postal Inspection Service and the U.S. Secret Service. 

Assistant U.S. Attorney Samir Kaushal is prosecuting the case.

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.

ATLANTA - Lionel Lewis Alls, Jr., has been sentenced to 20 years for distributing child pornography.  In addition to sharing child pornography, Alls enticed minors as young as 8-years-old to send nude images and videos of themselves to him.

“Alls demonstrated in horrific ways how the Internet can be used by criminals to victimize our children,” said U. S. Attorney John Horn.  “His manipulation of young girls to send nude photos and videos of themselves is one more example of just how far these criminals will go to satisfy their disgusting desires.  Parents must be extremely vigilant with children when they venture online, especially when it involves their use of social media.”

“The internet is a very important and useful resource, but unfortunately can also be used for illegal activity in the darkest corners of our society, as criminals seek to prey on the most vulnerable of our population,” said David J. LeValley, Special Agent in Charge of the FBI’s Atlanta Field Office. “Alls actions are the worst of depravity and no sentence can lessen the harm he has caused to these young children. But at least he will no longer be able to pursue his egregious acts.”

According to U.S. Attorney Horn, the charges and other information presented in court: Alls used the Internet to access, download, and distribute child pornography. In one instance, he was aware another man was molesting a toddler in his care and encouraged that individual to share sexually explicit images of the child over the Internet.  That defendant subsequently pled guilty to production of child pornography and was sentenced to 35 years imprisonment in the Western District of Virginia.

Alls continued his exploitation by seeking out girls as young as eight years old on websites such as YouTube and engaged in sexually explicit chats with the children.  In multiple instances, he enticed young girls to send him sexually explicit images and videos of themselves over the Internet.  Alls also shared images of his own genitals with the children. 

Lionel Lewis Alls, Jr., 36, of College Park, Georgia, was sentenced to 20 years in prison to be followed by lifetime supervised release.  Alls was convicted on these charges on June 28, 2017, after he pleaded guilty.

This case was investigated by the Federal Bureau of Investigation.

Assistant U.S. Attorney Jolee Porter prosecuted the case.

This case is being brought as part of Project Safe Childhood. In February 2006, the Attorney General launched Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse.  Led by the United States Attorney’s Offices around the country, Project Safe Childhood marshals federal, state and local resources to apprehend and prosecute individuals who exploit children. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

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.

          LOS ANGELES– Un Hag Baeg, 58, of Marina del Rey, a Korean national currently living in the United States, pleaded guilty yesterday afternoon to conspiring to defraud the United States government by evading federal excise taxes due on 143 million cigarettes sold domestically but which the co-conspirators claimed were destined for cargo vessels sailing out of the ports of Los Angeles and Long Beach.

          In the United States, cigarettes are subject to a federal excise tax of $50.33 per one thousand cigarettes. This tax is generally paid by the manufacturer, but may be avoided if the cigarettes are properly transferred to a bonded warehouse in order to be exported or consumed outside of the United States. Untaxed cigarettes sold for this purpose are known as “export-only” cigarettes. When export-only cigarettes are diverted from their proper destination, and instead sold in the United States, federal and state taxing authorities suffer lost excise taxes.

          According to court documents, between 2012 and 2015, Baeg and others conspired to divert approximately 143 million export-only cigarettes from an export warehouse near the Port of Los Angeles. Baeg purchased the cigarettes under the pretext that the cigarettes would be provided to various ships sailing out of the United States from the ports. In fact, the cigarettes were sold in the United States resulting in millions of dollars in lost federal and state excise taxes. Baeg and his co-conspirators subsequently hid their fraud by preparing false paperwork indicating that the cigarettes had been delivered to the various ships. In order to give this paperwork the appearance of legitimacy, the conspirators would stamp the paperwork with false rubber stamps bearing the names of the subject cargo vessels.

          The conspiracy resulted in the evasion of federal excise taxes totaling $7,260,203.16 and California state excise taxes totaling $5,986,458.00.

          United States District Judge S. James Otero set Baeg’s sentencing for January 29, 2018.

          The case was investigated by the Alcohol and Tobacco Tax and Trade Bureau, Internal Revenue Service Criminal Investigation Division, Department of Homeland Security - Immigration and Customs Enforcement - Homeland Security Investigations, and the Bureau of Alcohol, Tobacco, Firearms, and Explosives. The case is being prosecuted by Assistant United States Attorney James Hughes and Department of Justice - Tax Division Trial Attorney Christopher Strauss.

          WASHINGTON– The United States filed a civil complaint against Michel Cordon Bleu Inc. of Los Angeles, California, and its owner and President Michel G. Blanchet to prevent the distribution of adulterated seafood products in violation of federal law, the Department of Justice announced today.

          Michel Cordon Bleu Inc. (Michel Cordon Bleu) prepares, processes, packs, holds, and distributes vacuum-packed, ready-to-eat cold and hot smoked fish and fishery products.  The complaint, filed in the U.S. District Court for the Central District of California, alleges that Michel Cordon Bleu and Michel G. Blanchet adulterated seafood products by preparing, packing, or holding them under insanitary conditions whereby the seafood may have become contaminated with filth or may have been rendered injurious to health. 

          The Department filed the complaint at the request of the U.S. Food and Drug Administration (FDA).

          “The Department of Justice is committed to ensuring that seafood processors comply with laws designed to protect consumers,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division.  “The Department of Justice will continue to work aggressively with the FDA to ensure that consumers are protected from potentially unsafe food.”

          According to the complaint, FDA inspected Michel Cordon Bleu’s facility on numerous occasions, including two times in 2016.  The complaint alleges that defendants failed to comply with the seafood Hazard Analysis and Critical Control Point (HACCP) regulations by, among other deficiencies, failing to adequately control the risk of Listeria monocytogenes (L. mono) and Clostridium botulinum (C bot.) toxin formation in their vacuum-packed fish or fishery products.

          The seafood HACCP regulations require every fish and fishery product processor to conduct, or have conducted for it, a hazard analysis to determine whether there are food safety hazards that are reasonably likely to occur during the processing of each kind of fish or fishery product that it processes.

          According to the complaint, FDA’s analysis of environmental samples collected during its January-February 2016 inspection revealed the presence of L. mono contamination in multiple locations throughout the Michel Cordon Bleu facility.  The complaint also alleges that FDA’s analysis of environmental samples collected during its subsequent inspection in July-August 2016 also revealed the presence of L. mono contamination in multiple locations throughout the company’s facility. 

          According to the complaint, FDA noted deficiencies at each of its two 2016 inspections at the Michel Cordon Bleu facility.  As alleged in the complaint, FDA noted that defendants failed to manufacture, package and store foods under conditions and controls necessary to minimize the potential for growth of microorganisms and contamination; failed to monitor sanitation conditions and practices with sufficient frequency to assure conformance with current good manufacturing practices; and failed to take corrective action that ensured affected product was not entered into commerce and the cause of the deviation was corrected.

          “When we find contaminants that can harm public health at a food manufacturing facility, we must take action to protect consumers,” said FDA Associate Commissioner for Regulatory Affairs, Melinda K. Plaisier.  “When necessary, we will seek legal action to ensure that manufacturers take steps to comply with food safety laws and regulations.”

          The government is represented by Trial Attorney Monica Groat of the Civil Division’s Consumer Protection Branch, with the assistance of the U.S. Attorney’s Office for the Central District of California and the Associate Chief Counsel for Enforcement Roselle Oberstein of the FDA, Office of General Counsel, Department of Health and Human Services.

          A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.

          Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Central District of California, visit its website at https://www.justice.gov/usao-cdca.

HOUSTON – Four Houston-area hospitals have agreed to pay $8.6 million to settle allegations they received kickbacks from various ambulance companies in exchange for rights to the hospitals’ more lucrative Medicare and Medicaid transport referrals. The hospitals are all affiliated with Hospital Corporation of America (HCA), which is based in Nashville, Tennessee, and include Bayshore Medical Center, Clear Lake Regional Medical Center, West Houston Medical Center and East Houston Regional Medical Center.

Acting U.S. Attorney Abe Martinez made the announcement along with Chief Counsel Gregory Demske of the Department of Health and Human Services – Office of Inspector General (DHHS-OIG) and Special Agent in Charge CJ Porter of HHS-OIG, Office of Investigations.

“This settlement demonstrates our office’s commitment to combatting health care fraud,” said Martinez. “Ensuring the integrity of our federal health care programs is one of our highest priorities. We will continue to work to protect the public and hold accountable those who attempt to defraud the system.”

This is the second such announcement this office has made holding accountable medical institutions (hospitals and skilled nursing facilities) for these ambulance “swapping” arrangements. The first such settlement - announced in late 2015 and believed at the time to be the first in the nation of its kind - involved another defendant in this same investigation. Prior to these, virtually all cases focused on the actions of the ambulance companies, rather than the medical institutions they serve.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare and Medicaid. The settlement announced today resolves allegations that patients at the four hospitals received free or heavily discounted ambulance transports from various ambulance companies in exchange for the hospitals’ referral of other lucrative Medicare and Medicaid business to those same companies. If not for this kickback arrangement, the four hospitals would have been financially responsible for the patient transports at significantly higher rates.

“This settlement emphasizes that both sides of any arrangement where remuneration is paid in exchange for healthcare referrals are responsible for their improper actions – even entities that do not actually bill Medicare or Medicaid for the services,” said Demske.  “Any company or individual receiving anything of value in exchange for referrals should understand that their actions may have serious legal and financial consequences.”

Medicaid is funded jointly by the states and the federal government. The State of Texas paid for some of the Medicaid claims at issue and will receive more than  $300,000 of the settlement amount.

Three whistleblowers, known as “relators,” filed two lawsuits under the qui tam provision of the False Claims Act which permits private parties to file suit on behalf of the government and obtain a portion of the recovery. The relators’ claims are also resolved by this settlement.

Today’s resolution also marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team initiative which the Attorney General and the Secretary of Health and Human Services announced in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.

“This settlement serves as an important reminder to the provider community that arrangements that violate the Anti-Kickback Statute will not be tolerated and provides an outstanding example of how law enforcement is able to use investigative tools,” said Porter.

Among the tools instrumental to the settlement were those provided by HHS-OIG’s Chief Data Office, Consolidated Data Analysis Center (CDAC). CDAC provides HHS-OIG and its law enforcement partners with best practices, consultancy and skills development in data mining, predictive analytics and data management and modeling in support of fraud prevention and recovery.

The settlement was the result of a coordinated effort among U.S. Attorney’s Office, DHHS-OIG and the Texas Attorney General’s Office. Assistant U.S. Attorney Kenneth Shaitelman handled the case.

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

Portland, Maine:  Acting United States Attorney Richard W. Murphy announced that $2,278,604 in Department of Justice grants were awarded yesterday to the Pleasant Point Passamaquoddy Tribe ($899,965) and the Indian Township Tribal Government ($1,378,639).

The awards were made through the Department’s Coordinated Tribal Assistance Solicitation (CTAS), a single application for tribal-specific grant programs. The Department developed CTAS through its Office of Community Oriented Policing Services, Office of Justice Programs and Office on Violence Against Women, and administered the first round of consolidated grants in September 2010.

CTAS grants are designed to enhance law enforcement practices, expand victim services and sustain crime prevention and intervention efforts. Awards cover nine purpose areas: public safety and community policing; justice systems planning; alcohol and substance abuse; corrections and correctional alternatives; children’s justice act partnerships; services for victims of crime; violence against women; juvenile justice; and tribal youth programs.

Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in American Indian and Alaska Native communities.

American Indians experience disproportionate rates of violence and victimization and often encounter significant obstacles to culturally relevant services. CTAS funding helps tribes develop and strengthen their justice systems’ response to crime, while expanding services to meet their communities’ public safety needs.

About the Office of Justice Programs:

The Office of Justice Programs, headed by Acting Assistant Attorney General Alan R. Hanson, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime; and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP and its components can be found at: www.ojp.gov.

About the Office of Community Oriented Policing Services:

The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1994, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of approximately 129,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about the COPS Office, please visit www.cops.usdoj.gov.

About the Office on Violence Against Women:

The Office on Violence Against Women provides leadership in developing the nation’s capacity to reduce violence through the implementation of the Violence Against Women Act (VAWA) and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing federal grant programs, OVW undertakes initiatives in response to special needs identified by communities facing acute challenges. Learn more at www.justice.gov/ovw.