NEWARK, N.J. – A Pennsylvania man was charged today in connection with his role in two conspiracies in connection with construction projects at Picattiny Arsenal (PICA) and at the Joint Base McGuire-Dix Lakehurst (Ft. Dix) and for endeavoring to obstruct justice, Acting U.S. Attorney William E. Fitzpatrick announced.

Kevin Joseph Leondi, 57, was indicted by a federal grand jury in Newark on a charge of conspiring to defraud the United States in connection with his acceptance of repeated bribes given by other conspirators to influence Leondi to take official action for the benefit of his conspirators and their companies and to violate his duties as an employee of the U.S. Army. He is also charged with causing another to travel across state lines to facilitate a portion of this bribery scheme and with conspiring to steer kickbacks from one conspirator to another in connection with the award and administration of a prime contractor’s subcontracts.

Leondi had been charged in March 2017 with conspiring to defraud the United States through bribes and contactor kickbacks in connection with the conduct that now is charged in the indictment. He currently remains free on bail.      

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

Leondi was employed by the U.S. Army’s Contracting Command in New Jersey and represented the Army with respect to renovation projects at PICA and Ft. Dix. There was a construction company referred to as Construction Company No. 1 in the indictment, which served as a Job Order Contractor, also known as a “prime contractor,” for construction projects at PICA and Ft. Dix. James Conway was employed by Construction Company No. 1 as a regional project manager of large-scale construction projects at PICA and Ft. Dix. George Grassie ran a construction, excavation and landscaping business in Pennsylvania that did subcontracting work at the bases.

From December 2010 through August 2015, Leondi allegedly conspired with Conway and Grassie to accept more than $125,000 in bribes from them in return for task orders and other favorable assistance at the bases and in not denying them future work. The bribes included direct cash payments to Leondi (in one instance Conway traveled from New Jersey to Pennsylvania to pay Leondi $5,000 in cash). In some instances, Leondi and the conspirators would disguise the bribes in the form of facially legitimate transactions, with Leondi buying vehicles and equipment from the conspirators at cut-rate prices or selling them equipment at inflated prices. In another instance, Leondi had Grassie absorb the costs that another contractor incurred in renovating Leondi’s property in East Stroudsburg, Pennsylvania. 

Leondi also allegedly conspired to steer at least $46,000 in corporate kickbacks from Grassie to Conway to improperly obtain and reward Conway for his giving subcontracts and other favorable assistance to Grassie relating to Conway’s employer’s contracts with the federal government at PICA and Fort Dix.

As alleged in the indictment, Leondi also endeavored to obstruct the federal grand jury investigation by submitting a false document to federal authorities in response to a federal grand jury subpoena in order to conceal part of his bribe-taking involving Grassie.

Grassie pleaded guilty to one count of conspiracy and one count of providing unlawful kickbacks in February 2017 for his role in the bribery and kickback conspiracies. Conway pleaded guilty to accepting unlawful kickbacks and a wire fraud charge involving other fraudulent conduct in August 2016. Both cases are pending before U.S. District Judge Susan D. Wigenton.    

The conspiracy charges and the travel in aid of bribery charge each carry a maximum penalty of five years in prison; the obstruction of justice charge carries a maximum penalty of 10 years in prison. Each charge carries a maximum $250,000 fine.

Acting U.S. Attorney Fitzpatrick credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction Special Agent in Charge Craig Rupert, Northeast Field Office; and the U.S. Army, Major Procurement Fraud Unit, Criminal Investigation Command, under the direction of Special Agent in Charge Larry Scott Moreland.    

 The government is represented by Senior Litigation Counsel Leslie Faye Schwartz, of the U.S. Attorney’s Office’s Special Prosecutions Division and Assistant U.S. Attorney Barbara Llanes, Chief of the General Crimes Unit, in Newark.     

MADISON, WIS. – Scott C. Blader, United States Attorney for the Western District of Wisconsin, announced that Linda C. Germann, 57, Onalaska, Wis., was sentenced today by U.S. District Judge William Conley to three years’ probation.  On September 21, 2017, Germann pleaded guilty to stealing money from a federally insured credit union.

Beginning in October 2013, Germann stole $14,813.19 from Altra Federal Credit Union.  Germann used various methods including: misappropriation of stale dated cashier’s checks; the creation and reimbursement of false debit card losses; the issuance of ‘instant issue’ automated teller machine cards (debit cards) to obtain account access; the re-issuance of stale dated gift cards; and the utilization of dormant accounts and ‘bad address’ accounts.  In sentencing Germann, Judge Conley noted that the defendant stole the money because of debts incurred due to a gambling problem. 

The charges against Germann were the result of an investigation conducted by the Federal Bureau of Investigation.  The prosecution of the case has been handled by Special Assistant U.S. Attorney Chadwick Elgersma.

ALBUQUERQUE – Saul Cerros, 36, of Northglenn, Colo., was sentenced today in federal court in Las Cruces, N.M., to 121 months in prison for his conviction on methamphetamine trafficking charges.  Cerros will be on supervised release for five years after completing his prison sentence.

Cerros was arrested on Sept. 28, 2016, on a four-count indictment charging him with methamphetamine trafficking offenses.  Cerros was charged with conspiring to distribute methamphetamine from March 27, 2015 through March 31, 2015, and with distributing methamphetamine twice on March 27, 2015, and again on March 31, 2015.  According to the indictment, Cerros committed the offenses in Dona Ana County, N.M.

On April 10, 2017, Cerros pled guilty to the indictment.  In entering the guilty plea, Cerros admitted selling an aggregate of 891.56 grams of pure methamphetamine to undercover law enforcement agents on three separate occasions; twice on March 27, 2015, and a third time on March 31, 2015.  Cerros further admitted that he personally smuggled the methamphetamine involved in one of the drug deals into the United States from Mexico.  

This case was investigated by the Las Cruces office of the FBI and the HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force and was prosecuted by Assistant U.S. Attorney Dustin Segovia of the U.S. Attorney’s Las Cruces Branch Office.

The HIDTA Regional Interagency Drug Task Force/Metro Narcotics Task Force is comprised of officers from the Las Cruces Police Department, the Doña Ana County Sheriff’s Office, the FBI, HSI and the New Mexico State Police.  The High Intensity Drug Trafficking Areas (HIDTA) program was created by Congress with the Anti-Drug Abuse Act of 1988.  HIDTA is a program of the White House Office of National Drug Control Policy (ONDCP) which provides assistance to federal, state, local and tribal law enforcement agencies operating in areas determined to be critical drug-trafficking regions of the United States and seeks to reduce drug trafficking and production by facilitating coordinated law enforcement activities and information sharing.

ALBUQUERQUE – A federal jury sitting in Albuquerque, N.M., returned a verdict yesterday afternoon finding Gaspar Leal, 47, guilty of participating in a methamphetamine trafficking conspiracy after a three-day trial, announced Acting U.S. Attorney James D. Tierney and Special Agent in Charge John J. Durastanti of the Phoenix Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).

In Aug. 2016, a multi-agency investigation led by the ATF concluded with the filing of 59 federal indictments and a federal criminal complaint charging 103 Bernalillo County residents, including Leal, with federal firearms and narcotics trafficking offenses.  To date, 81 of the 103 defendants charged as the result of this investigation have been convicted, including 80 who have pleaded guilty, and 52 have been sentenced.

The investigation was undertaken in support of a federal anti-violence initiative that targets “the worst of the worst” offenders for federal prosecution.  Under this initiative, the U.S. Attorney’s Office and federal law enforcement agencies collaborate with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution primarily based on their prior criminal convictions with the goal of removing repeat offenders from communities in New Mexico for as long as possible.

This week, in addition to the guilty verdict against Leal, two other Albuquerque residents were sentenced for their convictions on federal firearms and drug trafficking offenses. 

Guilty Verdict in Trial against Gaspar Leal

Leal and co-defendants Candace Tapia, 23, Bernadette Aurora Tapia, 49, and Brandon Candelaria, 22, were charged by indictment on July 12, 2016, with conspiracy and distribution of methamphetamine on June 8, 2016, in Bernalillo County.  Bernadette Aurora Tapia pled guilty on Dec. 13, 2016, and was sentenced to 21 months in prison followed by three years of supervised release on April 7, 2017.  Candace Tapia pled guilty on June 1, 2017, and was sentenced to 18 months in prison followed by three years of supervised release on Oct. 3, 2017.  The charges against Candelaria were dismissed on July 18, 2017.

Trial against Leal on the two-count indictment commenced on Dec. 4, 2017, and concluded the afternoon of Dec. 6, 2017, when the jury convicted Leal on Count 1, charging Leal with conspiracy to distribute methamphetamine, and acquitting him on Count 2, charging him with possession of methamphetamine with intent to distribute.  The evidence at trial established that in May and June 2016, Leal facilitated the sale of approximately 59.2 grams of methamphetamine to an individual working with the ATF.  The jury deliberated approximately three-and-a-half hours before returning its verdict.

At sentencing, Leal faces a mandatory minimum penalty of five years and a maximum of 40 years in federal prison.  Leal has been in federal custody since his arrest and remains detained pending his sentencing hearing, which has yet to be scheduled. 

United States v. Noe Urias, et al.

Noe Urias and co-defendant Angelica Marie Santiesteban, 40, were charged in a four-count indictment filed on June 30, 2016, with methamphetamine trafficking offenses.  The indictment was superseded on July 28, 2016, to include Patrick Zamora, 22, and an additional methamphetamine trafficking charge.  The superseding indictment charged all three defendants with conspiracy to distribute methamphetamine from May 2, 2016 through June 20, 2016, and distribution of methamphetamine on June 20, 2016; Urias and Santiesteban with distribution of methamphetamine on May 2, 2016 and May 19, 2016; and Urias with distribution of methamphetamine on May 18, 2016. 

On March 9, 2017, Urias pled guilty to Count 3 of the superseding indictment charging him with distribution of methamphetamine and admitted that on May 18, 2016, he sold methamphetamine in exchange for money.  Santiesteban pled guilty on Dec. 8, 2016, and was sentenced to 63 months in prison followed by five years of supervised release on June 27, 2017. 

Noe Urias, 35, was sentenced on Dec. 6, 2017, to 41 months in prison followed by three years of supervised release for his methamphetamine trafficking conviction. 

Zamora has entered a plea of not guilty and is pending trial.

United States v. Jorge Chacon

Jorge Chacon was charged in a seven-count indictment filed on June 30, 2016, with drug trafficking and firearms offenses.  Chacon was charged with distributing methamphetamine and using and carrying a firearm in relation to a drug trafficking crime on May 16, 2016; being a felon in possession of a firearm on May 16, 2016, May 19, 2016, and twice on May 26, 2016; and possession a firearm with an obliterated serial number on May 26, 2016.  According to the indictment, Chacon was prohibited from possessing firearms or ammunition because he previously been convicted of burglary, aggravated battery and aggravated assault with a deadly weapon. 

On Feb. 13, 2017, Chacon pled guilty to Count 2 of the indictment charging him with carrying a firearm during and in relation to a drug trafficking crime, and admitted that on May 16, 2016, he possessed a firearm during the sale of methamphetamine.  Chacon, 34, was sentenced on Dec. 6, 2017, to 60 months in prison followed by three years of supervised release for using and carrying a firearm in furtherance of a drug trafficking crime.

Nineteen of the defendants charged as the result of the ATF investigation have entered not guilty pleas or have been found guilty to the charges against them.  Charges in indictments are merely accusations, and defendants are presumed innocent unless found guilty in a court of law.   Two defendants are fugitives and the charges against two defendants have been dismissed.

These cases were investigated by the Albuquerque office of ATF.  The case against Leal is being prosecuted by Assistant U.S. Attorneys Samuel A. Hurtado and Kimberly A. Brawley.  The case against Urias is being prosecuted by Assistant U.S. Attorney Edward Han.  The case against Chacon was prosecuted by Assistant U.S. Attorney Norman Cairns.

ALBUQUERQUE – Dennison Hale, 44, an enrolled member of the Navajo Nation who resides in Tohatchi, N.M., was sentenced today in federal court in Albuquerque, N.M., to 210 months in prison for his conviction on a second-degree murder charge.  Hale will be on supervised release for five years after completing his prison sentence.

Hale was arrested on Feb. 23, 2016, by the FBI on a criminal complaint alleging that he murdered a Navajo woman on the Navajo Indian Reservation in San Juan County, N.M.  According to the complaint, on Feb. 20, 2016, Hale struck the victim in the head and fled from the scene of the crime, the victim’s home in Hogsback, N.M.  The victim was transported by helicopter to the hospital, where she was pronounced dead.  Hale was later indicted on a murder charge on March 23, 2016.

On Feb. 28, 2017, Hale pled guilty to a felony information charging him with second degree murder.  In entering the guilty plea, Hale admitted that on Feb. 20, 2016, he killed the victim by striking her twice in the head with a crowbar. 

This case was investigated by the Farmington office of the FBI and the Navajo Nation Department of Public Safety.  Assistant U.S. Attorney Michael D. Murphy prosecuted the case.

This case was brought as part of the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna.  The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native American women is prosecuted in either federal court or tribal court, or both.  The Tribal SAUSA Pilot Project was largely driven by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.

          An enrolled member of the Quinault Indian Nation was sentenced last week to 12 years in prison and 20 years of supervised release for rape of a child, announced U.S. Attorney Annette L. Hayes.  DEVELIN L. HOWTOPAT, 33, pleaded guilty in December 2016, admitting that he sexually molested a young child in Taholah, Washington.  The abuse occurred in 2008 when the child was 7 or 8-years-old.  The molestation was reported to the Hoquiam Police Department in 2015 and was investigated by Hoquiam Police, the Quinault Nation Police Department and the FBI.  HOWTOPAT was arrested in April 2016, and has remained in custody since that time.  On December 1, 2017, U.S. District Judge Ronald B. Leighton sentenced HOWTOPAT to the 12-year prison term calling the crime “despicable.” 

            In a second, unrelated sex assault case, an enrolled member of the Spirit Lake Tribe of North Dakota, was sentenced to five years in prison and five years of supervised release, for the sexual assault of a 19-year-old woman.  AARON JOSEPH MITZEL, 37, has been in federal custody since his arrest on October 9, 2015.  The assault occurred on October 4, 2015, in an apartment on the Puyallup Indian Reservation where the victim was sleeping.  The victim awoke to MITZEL sexually assaulting her and he then bit her ear and smothered her with a pillow.  At today’s sentencing hearing, U.S. District Judge Ronald B. Leighton said, “this is a very horrendous, serious offense.” 

            The MITZEL assault was investigated by the Puyallup Tribal Police Department and the FBI.   

            Both cases were prosecuted by J. Tate London and Rebecca Cohen who serve as Tribal Liaisons for the U.S. Attorney’s Office, prosecuting criminal cases in Indian Country.

DENVER – Ryan Charles McCraw, age 37, of Aurora, Colorado, was arrested following a federal grand jury indictment on charges of coercion, enticement and production of child pornography, U.S. Attorney Bob Troyer and FBI Denver Division Special Agent in Charge Calvin Shivers announced.  McCraw, who is in federal custody, appeared today before U.S. Magistrate Judge Nina Y. Wang where he was arraigned and entered a not guilty plea.  He is being detained under an order from the District of Kansas. 

McCraw was indicted by a federal grand jury in Denver on October 26, 2017.  He first appeared in U.S. District Court in Denver on December 4, 2017 to be advised of his rights and the charges pending against him.  According to the indictment as well as information presented in open court, McCraw allegedly met underage boys living in the Denver metro area through online chat services. McCraw engaged in sexually explicit conversations with the boys over the course of months, asking them to send him sexually explicit images online.  He enticed the boys to meet with him, picking them up in his car if they were too young to drive.  He took them to his residence and engaged in sex acts with them.  McCraw filmed the sex acts and took still images of the boys, including images of bondage.  He continued this course of conduct for over a year with multiple victims.  McCraw boasted online that he had “trained” 12 other boys.  

Authorities believe that there could be other victims of the defendant.  To that end, attached please find a photo of the defendant released in hopes of determining whether there are other child victims.   If you are a victim or know of someone who could be a victim of the defendant, you are asked to contact the FBI at 970-663-1028.

McCraw faces two counts of coercion and enticement and attempted coercion and enticement.  Those two counts carry penalties of not less than 10 years and up to life in federal prison.  He also faces two counts of production of child pornography, both of which carry penalties of not less than 15 years, and up to 30 years imprisonment.  He also faces one count of transportation of child pornography, which carries for the first offense a penalty of not less than 5 years, and up to 20 years in prison. 

The FBI, Longmont Police Department and Aurora Police Department investigated this matter.  The 20^th Judicial District assisted with this matter.  The defendant is being prosecuted by Assistant U.S. Attorney Valeria Spencer.

The defendant is presumed innocent unless and until proven guilty in a court of law

ALBUQUERQUE – A federal grand jury sitting in Albuquerque, N.M., filed a superseding indictment on Dec. 5, 2017, in the criminal case against Susan Harris, 71, and Sharon Moore, 62, the co-founders of Ayudando Alpha, Inc., d/b/a “Ayudando Guardians, Inc.” (Ayudando Guardians or Ayudando), a now defunct non-profit Albuquerque-based corporation that provided guardianship, conservatorship and financial management services to hundreds of individuals with special needs.  The superseding indictment amends the original indictment by adding two new defendants, William S. Harris, 56, and Craig M. Young, 52, the husband and son, respectively, of defendant Susan Harris, and five new counts of money laundering.

The superseding indictment, which was filed under seal, was unsealed earlier today after the Special Agents of the FBI and IRS Criminal Investigation arrested William Harris and Young, both of whom made their initial appearances before U.S. Magistrate Judge Steven C. Yarbrough in federal court in Albuquerque this morning.  William Harris and Curtis are scheduled to return to court tomorrow morning for detention hearings, when they also will be arraigned on the superseding indictment.  Moore is scheduled to be arraigned on the superseding indictment on Dec. 11, 2017, and Susan Harris is scheduled for arraignment on Dec. 12, 2017.

The Original Indictment

The original indictment, which was filed on July 11, 2017, generally alleged that Susan Harris and Moore perpetuated a decade-long sophisticated scheme to embezzle funds from client trust accounts managed by Ayudando Guardians.  According to the indictment, Ayudando Guardians received government benefit payments from the U.S. Department of Veterans Affairs (VA) and U.S. Social Security Administration (SSA) on behalf of many of its clients, and acted as a fiduciary or representative payee for these clients by paying their expenses and maintaining the balances for the benefit of the clients.  The indictment alleged that Harris and Moore, the primary owners and operators of Ayudando, embezzled millions of dollars from their special needs clients to support lavish lifestyles for themselves and their families. 

The original indictment was comprised of 28-counts, including two conspiracy counts, ten counts of mail fraud, ten counts of aggravated identify theft and six counts of money laundering.  It alleged that from Nov. 2006, when Harris and Moore founded Ayudando, and continuing until July 2017, Ayudando, Harris and Moore embezzled millions of dollars from Ayudando client accounts to cover their personal expenses and support lavish lifestyles for themselves and their families.  According to the indictment, Harris and Moore perpetuated the embezzlement scheme by:

• Establishing Ayudando as a non-profit corporation in Nov. 2006, to position it as a guardian, conservator, fiduciary and representative payee for individuals needing assistance with their financial affairs;
• Setting up client trust and company bank accounts which only they controlled;
• Transferring funds from client accounts to Ayudando company accounts;
• Using client funds to pay off more than $4 million in charges on a company credit card account used by Harris, Moore and their families for personal purposes;
• Writing checks from Ayudando company accounts to themselves, cash and to cover personal expenses; replenishing depleted client accounts with funds taken from other clients; mailing fraudulent statements and certifications to the VA; and
• Forging and submitting forged bank statements to the VA.
   

The mail fraud charges in the original indictment described some of the fraudulent documents allegedly mailed by Ayudando, Harris and Moore to the VA to perpetuate and conceal their embezzlement scheme.  For example, between Jan. 2016 and Nov. 2016, Moore allegedly mailed fraudulent documents to the VA that falsely represented the balances in ten client accounts.  The documents falsely claimed that the ten client accounts had an aggregate balance of $1,906,908, when the actual value of the ten accounts was only $72,281.  The original indictment identified the ten client accounts as examples of the fraud allegedly perpetrated by the defendants as part of their embezzlement scheme.

According to the original indictment, Ayudando, Harris and Moore also engaged in aggravated identify theft by using their clients’ names, dates of birth, Social Security Numbers and VA file numbers to commit mail fraud offenses.  Harris and Moore also allegedly committed money-laundering offenses by using $392,623 from the Ayudando client reimbursement account to pay off balances on a company credit card used by the defendants and their families for personal purposes. 

The original indictment included forfeiture provisions seeking forfeiture to the United States of any proceeds and property involved in, or derived from, the defendants’ unlawful conduct. 

The Superseding Indictment

The superseding indictment is the result of an ongoing multi-agency investigation by the FBI, IRS Criminal Investigation, U.S. Marshals Service (USMS), VA Office of Inspector General and SSA Office of Inspector General.  It amends the original indictment by adding William Harris and Young as defendants to the two conspiracy counts, ten mail fraud counts, and eight of the ten substantive money laundering counts.  The superseding indictment also adds several new overt acts to Count 1, the conspiracy charge, including the following:

• From Oct. 2010 through July 2017, Susan Harris, Moore and Young allegedly paid Young’s personal mortgage through a series of 83 checks totaling $206,970 from Ayudando bank accounts.
• From March 2013 through July 2017, Susan Harris, William Harris, Moore and Young maintained a private box at the University of New Mexico basketball arena, also known as the “Pit,” and allegedly provided $304,863 in Ayudando client funds to the UNM Lobo Club, UNM Athletic Department, UNM Catering and UNM Ticketing Services. 
• In March 2014, Susan Harris and Moore allegedly invested $100,000 in Ayudando client funds to a fantasy football software company.
• Between July 2014 and July 2017, Susan Harris, William Harris, Moore and Young, allegedly paid $20,900 in Ayudando client funds to William Harris’s mother in exchange for a recreational vehicle.
• Between Nov. 2014 and Oct. 2015, Susan Harris, William Harris and Moore allegedly used $15,700 of Ayudando client funds to pay a New Mexico state tax liability incurred by William Harris while operating an unrelated business.
• In March 2017, Susan Harris, William Harris and Moore allegedly applied for a $250,000 business loan supposedly to expand Ayudando’s business but actually to “pay back” clients from whom they had taken money without authorization. 

The superseding indictment also includes the following two new counts of money laundering against Susan Harris and Moore.  Counts 22 and 23 allege that on Feb. 28 and 29, 2016, Susan Harris and Moore engaged in financial transactions intended to conceal that they involved the proceeds of mail fraud when they made payments to the UNM Lobo Club.  It also includes three new counts of money laundering against all four defendants.  Counts 26 and 27 charge the four defendants with engaging in financial transactions involving the alleged $100,000 investment in the fantasy football software company, and Count 30 charges the four defendants with a money laundering charge relating to the use of Ayudando client funds for “Pit” related expenses.

The forfeiture provisions in the superseding indictment are amended to seek forfeiture of the following parcels of real estate and the following vehicles: 

• The Albuquerque residence of Susan Harris and William Harris;
• The Albuquerque residence of Moore;
• The Albuquerque residence of Young;
• Two Albuquerque residences owned by Moore;
• A 2018 5^th Wheel Vehicle owned by Susan Harris and William Harris; and
• A 2014 Jeep Wrangler.

Ayudando Guardian, as a corporate entity, was charged as a defendant in the original indictment but to date has not had an attorney enter an appearance on its behalf.  On July 19, 2017, the USMS took over Ayudando’s business operations under a federal court order authorizing it to operate the business so that its assets were not improperly spent or removed, and so that the interests of Ayudando clients were protected as the prosecution of the criminal case moved forward.  On Aug. 31, 2017, the USMS announced that it was closing the offices of Ayudando Guardians while continuing to be responsible for managing Ayudando’s business affairs under a protective restraining order issued by the federal court.  Ayudando Guardians is not named as a defendant in the superseding indictment.

Statutory Penalties for Charges in Superseding Indictment

If the defendants are convicted on the crimes charged in the superseding indictment, they face the following maximum statutory penalties:

• Count 1, conspiracy – 30 years of imprisonment and a $250,000 fine;
• Counts 2-11, mail fraud – 30 years of imprisonment and a $250,000 fine;
• Counts 12-21, aggravated identity theft – a mandatory two-years of imprisonment that must be served consecutive to any other sentence imposed on other counts and a $250,000 fine;
• Counts 22-23, money laundering – 20 years of imprisonment and a $250,000 fine  or twice the amount of the property involved in the crime;
• Counts 23-32, money laundering – ten years of imprisonment and a $250,000 fine  or twice the amount of the property involved in the crime; and
• Count 33, conspiracy to commit money laundering – ten years of imprisonment and a $250,000 fine or twice the amount of the property involved in the crime.

Susan Harris and Moore have entered not guilty pleas to the original indictment.  Arraignment hearings on the superseding indictment for the four defendants have not yet been scheduled.

The Albuquerque offices of the FBI and IRS Criminal Investigation conducted the investigation, which resulted in the charges in the superseding indictment, and are leading the continuing investigation.  The Complex Assets Unit and the Albuquerque office of the USMS, the Criminal Investigations Division of the VA Office of Inspector General, and the Dallas Field Division of the SSA Office of Inspector General are assisting in the investigation.  Assistant U.S. Attorneys Jeremy Peña and Brandon L. Fyffe are prosecuting the case.

Information about the federal investigation into Ayudando Guardians is available at www.justice.gov/usao-nm/ayudando-guardians.

Charges in indictments are merely allegations and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Ayudando Superseding Indictment

In El Paso today, a federal judge sentenced 40-year-old Jose Juan Quinones Avila of Ciudad Juarez, Chihuahua, Mexico, to 57 months in federal prison for drug trafficking and money laundering announced United States Attorney Richard L. Durbin, Jr.; Federal Bureau of Investigation Special Agent in Charge Emmerson Buie, Jr., El Paso Division; and, Inspector in Charge Adrian Gonzalez, United States Postal Inspection Service, Houston Division.

On September 26, 2017, Quinones pleaded guilty to conspiracy to possess with the intent to distribute a Controlled Substance, over 500 grams of cocaine, and one count of conspiracy to launder monetary instruments.  Quinones was a target in an ongoing Bank Secrecy Act investigation.  By pleading guilty, Quinones admitted that from March 2006 to April 2017, he was responsible for transporting approximately five kilograms of cocaine in El Paso that was destined for Charlotte, NC, and disbursing approximately $142,156 in illicit proceeds to further ongoing drug trafficking activities in the United States.

The investigation involved agents from the Federal Bureau of Investigation, United States Postal Inspection Service, Homeland Security Investigations, United States Border Patrol, Drug Enforcement Administration, Texas Attorney General’s Office, and the Department of Treasury Financial Crimes Enforcement Network (FinCEN), who safeguards the United States financial system from illicit use, combats money laundering, and promotes national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.  Assistant United States Attorney John Johnston prosecuted this case on behalf of the Government.

DALLAS— On December 6, 2017, a husband and wife were indicted on charges that they submitted false and fraudulent claims for home health services and defrauded Medicare of more than $3.4 million, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Edwin Oparaochaekwe, 53, and Chiazom Oparaochaekwe, 47, both of Grand Prairie, Texas, are charged collectively with 10 counts of health care fraud.  Today, both defendants were arrested and made their initial appearance before a U.S. Magistrate Judge.

The indictment alleges that from December 2011 through May 2017, Prime World Home Health (Prime World) was an approved home health agency located originally in Irving, Texas and most recently in Mansfield, Texas.  Edwin Oparaochaekwe was part-owner of Prime World and worked as a recruiter. Chiazom Oparaochaekwe was a registered nurse and also part-owner of Prime World.

As part of the scheme, the defendants marketed Prime World’s services directly to Medicare beneficiaries, instead of obtaining referrals from physicians who had legitimate physician-patient relationships with patients. To obtain the required physician homebound certifications and plans of care (CMS-485s), the defendants sought and obtained signatures on CMS-485s from physicians who had no prior relationship with the patients, and who, in many cases, never saw or treated them. The defendants sought home health certifications for patients regardless of the patient’s eligibility for home health care.

Prime World employees were directed to submit claims for patients that did not have legitimately signed CMS-485s.  For some of the unsigned CMS-485s, Chiazom Oparaochaekweforged the signatures by photocopying physician signatures and affixing them on the unsigned document.  Chiazom Oparaochaekwethen placed a copy of the forged document in the patient’s medical record.

An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty.  If convicted, each of the 10 counts of health care fraud carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine.  Restitution could also be ordered.  In addition, the indictment includes a forfeiture notification that would require the defendants, upon conviction, to forfeit any property derived from proceeds of the offenses alleged.

The case was investigated by the Department of Health and Human Services-Office of Inspector General, the Federal Bureau of Investigation, and the Texas Medicaid Fraud Control Unit.  Assistant U.S. Attorney Kate Rumsey and Special Assistant U.S. Attorney Jason Meyer are handling the prosecution. 

# # #

LAS VEGAS, Nev. – A Las Vegas couple pleaded guilty to two violent armed carjackings, announced Acting U.S. Attorney Steven W. Myhre for the District of Nevada.

Former felon Uriah Zamir Crain, 28, of Las Vegas, pleaded guilty to carjacking, carjacking resulting in serious bodily injury, discharging a firearm during and in relation to a crime of violence, and felon in possession of a firearm. Nicole Elizabeth Nowak, 23, also of Las Vegas, pleaded guilty to carjacking, carjacking resulting in serious bodily injury, and brandishing a firearm during and in relation to a crime of violence. United States District Judge Richard F. Boulware II accepted their guilty pleas. Sentencing is scheduled for March 8, 2018.

According to the criminal complaint and their individual plea agreements, on June 22, 2017, after striking up a conversation with the victim at Hayat Liquor, Nowak asked the victim to drive her home and invited the victim into the house. Later that night at the house, Crain and another man hit the victim in the head with handguns, which resulted in injury, and stole the victim’s money, wallet, and Ford F-150 truck. Then, on June 25, Crain and Nowak committed a second carjacking. Crain shot the victim in the leg, which resulted in serious bodily injury, and Crain and Nowak then stole the victim’s Lincoln Navigator truck and other property belonging to the victim. At the time of his arrest, Crain had a Glock 9mm handgun and a 30-round Glock magazine in his possession.

At the time of sentencing, the statutory maximum penalty for carjacking is 15 years in prison and a $250,000 fine; the maximum penalty for carjacking resulting in serious bodily injury is 25 years in prison and a $250,000 fine; the minimum penalty for discharging a firearm during and in relation to a crime of violence is 10 years in prison with a maximum penalty of up to life in prison; the minimum penalty for brandishing a firearm during and in relation to a crime of violence is seven years in prison with a maximum penalty of up to life in prison; and the maximum penalty for felon in possession of a firearm is 10 years in prison and a $250,000 fine.

The case is being investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Las Vegas Metropolitan Police Department. Assistant U.S. Attorneys Phillip N. Smith Jr. and Alexandra Michael are prosecuting the case.

This case was brought as part of Project Safe Neighborhoods, a nationwide commitment by the Department of Justice to reduce gun and gang crime in America by networking local programs that target gun and gun crime and providing these programs with additional tools necessary to be successful. For more information about Project Safe Neighborhoods, visit www.justice.gov/usao-nv.

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SAN FRANCISCO – A former Bay Area resident was arrested yesterday in Barnstable, Massachusetts on charges related to a long-running investment fraud scheme.  John Bryan Murphy was charged on November 30, 2017, by a federal grand jury in San Francisco with wire fraud and money laundering announced United States Attorney Brian J. Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.  The indictment was unsealed late yesterday following Murphy’s arrest.

According to the indictment, between 2012 and 2017, Murphy, 44, who currently resides in Massachusetts, solicited investments from numerous individuals on the premise that their money would be professionally invested.  After receiving these solicitations, several victim investors provided funds to Murphy for the purpose of allowing him to invest those funds on their behalf.  In fact, Murphy primarily used these “investments” to support his personal lifestyle, to speculate on the stock market in an account in his name, and/or to repay other victims a portion of their investments.

The indictment alleges that Murphy made payments to various victims that were designed to lull them into a false sense of security, lead them to believe that the promises made to them would be fulfilled, postpone or prevent the victims’ complaints to law enforcement, conceal and prevent detection of the scheme and artifice, and induce victims to “invest” more money with Murphy.  The indictment alleges that Murphy obtained over $700,000 in fraudulently solicited funds from victims of the scheme.

The indictment charges Murphy with ten counts of wire fraud, in violation of 18 U.S.C. § 1343, and two counts of money laundering, in violation of 18 U.S.C. § 1957.  

After his arrest, Murphy made his initial appearance in United States District Court in Boston, Massachusetts, and was detained pending further proceedings.  A detention hearing is scheduled for Friday, December 8, 2017, before Magistrate Judge Donald L. Cabell in Boston.  

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of 20 years’ imprisonment on each wire fraud count and 10 years’ imprisonment on each money laundering count, fines of $250,000 on each count in the indictment, and restitution for the losses he is alleged to have caused.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

Assistant U.S. Attorneys Robert Rees and Kyle Waldinger are prosecuting the case.  The prosecution is the result of an investigation by the Federal Bureau of Investigation. 
 

ALBANY, NEW YORK – Shelley L. Bovee, age 63, of Gloversville, New York, was sentenced today to 3 years of probation for dealing firearms without a license.

The announcement was made by Acting United States Attorney Grant. C. Jaquith and Ashan M. Benedict, Special Agent In Charge of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), New York Field Division.

Senior United States District Judge Frederick J. Scullin, Jr. also sentenced Bovee to pay a $2,000 fine and perform 50 hours of community service.

As part of his August 23, 2017 guilty plea, Bovee admitted that on three occasions in 2016, he sold a total of five firearms, including two .22 caliber rifles, a .30-30 caliber long gun, a .410 caliber shotgun, and an AR-15 variant rifle.  Bovee admitted to selling these firearms for a profit without having the required federal firearms license.

This case was investigated by the ATF and prosecuted by Special Assistant United States Attorney Jason W. White.

ALBANY, NEW YORK – Maria Angelica Cruz Lancheros, a/k/a Coral Marisol Tovar Flores, age 41, and a citizen of Mexico, pled guilty today to illegally re-entering the United States.

The announcement was made by Acting United States Attorney Grant C. Jaquith and Chief Patrol Agent John C. Pfeifer, United States Border Patrol, Swanton Sector.

Cruz Lancheros admitted that she was removed from the United States to Mexico on July 7, 2009 and again on June 14, 2010.  In 2010, Cruz Lancheros was convicted of this same offense, re-entry of a removed alien, in the United States District Court for the Western District of Texas.  Cruz Lancheros admitted that she returned to the United States without permission after those removals and that on May 6, 2017, she was in Burke, New York.

As a result of her conviction, Cruz Lancheros faces up to 10 years in prison and a fine of up to $250,000 when she is sentenced by Chief United States District Judge Glenn T. Suddaby on April 6, 2018.  A defendant’s sentence is imposed by a judge based on the particular statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.    

This case was investigated by the United States Border Patrol and prosecuted by Assistant U.S. Attorney Edward P. Grogan.

ALBANY, NEW YORK –Nikolay Souslov, a/k/a “Nikolay Glukhov,” a/k/a “Nikolai Kuznetsov,” a/k/a “Nikolai Burov,” age 70, and a citizen of Russia, was sentenced today to 37 months in prison for alien smuggling.

The announcement was made by Acting United States Attorney Grant C. Jaquith and Chief Patrol Agent John C. Pfeifer, United States Border Patrol, Swanton Sector.

Souslov was convicted following a four-day jury trial in May 2017. Chief United States District Judge Glenn T. Suddaby also ordered him to serve a 3-year term of post-imprisonment supervised release.

The evidence at trial showed that between 2013 and October 19, 2016, Souslov smuggled people into the United States by walking them through the woods from Canada during the night.  Souslov, who is experienced in orienteering, used only a compass to guide people through the woods to a pickup spot, where they were transported to New Jersey. On October 19, 2016, Border Patrol arrested Souslov as he led an alien into the United States.

This case was investigated by the United States Border Patrol and prosecuted by Assistant U.S. Attorney Douglas G. Collyer.

          GRAND RAPIDS, MICHIGAN– Lawrence Gerard Nassar, 54, of Holt, Michigan, was sentenced to 60 years in federal prison for child-pornography and obstruction-of-justice offenses, U.S. Attorney Andrew Birge announced today. U.S. District Judge Janet T. Neff ordered the federal sentence to be served consecutive to the sentences he receives in state court. In addition to the prison term, Nassar must also register as a sex offender, and, if released from prison, he will be subject to a lifetime term of supervised release.

          In July of this year, Nassar pleaded guilty in federal court to receiving child pornography in 2004, possessing child pornography from 2003 to 2016, and destroying and concealing evidence in 2016 when he believed, correctly, that ongoing investigation by law enforcement would reveal his child-pornography activities. As part of a plea agreement, Nassar agreed not to oppose a sentencing enhancement for engaging in a pattern of activity involving the sexual abuse or exploitation of minors. That enhancement, based on his extensive history of personally sexually molesting minors, increased his advisory U.S. Sentencing Guideline range by over 70%. This is the same enhancement that would have applied had he been convicted of additional federal charges related to his hands-on misconduct, such as for traveling interstate with intent to engage in illicit sexual conduct. By the time of his sentencing, Nassar faced an advisory guideline range of 30 years to life in prison, capped by the combined statutory maximum for the three counts of 60 years.

          Dozens of victims participated in the federal sentencing proceeding by submitting written victim-impact statements to the Court. The victims wrote about the pain and trauma Nassar caused them, their shattered trust and innocence, the enduring impact this conduct has had on their lives, and their desire to see justice. The victims called on the Court to severely punish Nassar and protect others from further acts of sexual predation.

          In announcing the sentence, Judge Neff left no doubt that “maximum potential penalties are in order here.” She found the case “unique.” The images Nassar collected were numerous and “like none other that I’ve seen.” She expressed dismay that Nassar was a doctor and was troubled by the thought that he might have “felt omnipotent” for getting away with sexually assaulting his  victims when their mother was in the room. “I am a mom. I cannot imagine [the anguish those mothers must feel].” She chastised Nassar for violating the most basic tenant of medicine – “Do no harm.” Finally, the Judge expressed deep concern for the victims’ sense of self-worth that was destroyed. She concluded that Nassar “is, was, and will be a danger to children.” “It is through consecutive sentencing that I can protect young children.”

          Following the sentencing, U.S. Attorney Birge said: “Today was a day of reckoning for Larry Nassar. He more than deserves this punishment for what he did. He consumed child pornography on a massive scale. We found 37,000 images of child pornography on his computers. Insatiable hunger of that nature simply encourages those who produce such images to continue to sexually exploit children. Compounding his danger to the public, Nassar was an insidious hands-on child predator in his own right. He took advantage of family friendships. And he treated his license to practice medicine as a license to sexually molest children. Thanks to the brave victims who came forward, we learned the full scope of his depravity. The breadth and dark depth of his heinous acts are extraordinary.”

          U.S. Attorney Birge added: “My heart goes out to the victims-- those in the images and those he personally sexually molested. With today’s sentencing, I hope his victims find a sense of renewed self-worth in knowing their role in this outcome. And I hope they and the public find some measure of solace and reassurance in knowing that Nassar has been held accountable for his actions. Anyone who exploits children will be found out and held accountable regardless of their position or station in life.” U.S. Attorney Birge then expressed his thanks to the victims for making the outcome possible in this case and he thanked the FBI and Michigan State University Police for their efforts in support of the charges.

          “Today’s sentencing represents an important achievement as we take another step in this long process of holding Nassar accountable for his shocking predatory acts of child sexual abuse and exploitation,” said David P. Gelios, Special Agent in Charge, Detroit Division of the FBI. “I want to thank those involved at the FBI in Detroit and Los Angeles, Michigan State University Police Department, and the U.S. Attorney’s Office for their tireless work to bring Nassar to justice. This punishment of a man who once held a position of trust and enjoyed the trust and respect of many should serve as a warning to those who prey upon and sexually exploit children that there will be severe consequences for crimes of this nature. My thoughts are with all the victims whose lives have been forever impacted.”

          Michigan State University Police Chief Jim Dunlap commented that: “The Michigan State University Police Department appreciates the effective collaboration with the FBI and the U.S. Attorney’s Office to achieve a measure of justice for the survivors.”

          This case is part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. The U.S. Attorney's Office, county prosecutor's offices, the Internet Crimes Against Children task force (ICAC), federal, state, tribal, and local law enforcement are working closely together to locate, apprehend, and prosecute individuals who exploit children. The partners in Project Safe Childhood work to educate local communities about the dangers of online child exploitation, and to teach children how to protect themselves. For more information about Project Safe Childhood, please visit the following web site: www.projectsafechildhood.gov. Individuals with information or concerns about possible child exploitation should contact local law enforcement officials.

          The Detroit and Los Angeles Divisions of the Federal Bureau of Investigation (FBI) and the Michigan State University Police Department (MSUPD) investigated the case. Assistant U.S. Attorney Sean M. Lewis prosecuted the case.

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BOSTON – The owner of Esther’s Fashion Paradise in Worcester pleaded guilty yesterday in federal court to defrauding the SNAP benefits program and selling counterfeit merchandise.

Esther Acquaye, 31, of Worcester, pleaded guilty to one count of conspiracy to acquire, possess, and redeem SNAP benefits in an unauthorized manner, and to convert public money; one count of SNAP fraud; and one count of trafficking in counterfeit goods. U.S. District Court Judge Timothy S. Hillman scheduled sentencing for March 7, 2018.

On numerous occasions between November 2013 and April 2016, Acquaye, the owner of Esther’s Fashion Paradise in Worcester, accepted EBT cards from SNAP recipients wishing to exchange their SNAP benefits for cash. Specifically, Acquaye passed the EBT cards through a point-of-sale terminal causing the full value of the SNAP benefits to be electronically transferred to her business, and then provided less than the full value of the SNAP benefits in cash to the SNAP recipients. In total, Acquaye caused approximately $282,541 in fraudulent EBT transactions and SNAP benefits to be transacted at Esther’s.

In addition, on at least four occasions between November 2015 and March 2016, Acquaye accepted an EBT card from an undercover investigator as payment for counterfeit retail goods. Acquaye sold the investigator two counterfeit Michael Kors purses, one counterfeit Gucci purse, one counterfeit The North Face jacket, and one counterfeit Michael Kors wallet.

The charge of conspiracy provides for a sentence of no greater than five years in prison, three years of supervised release and a fine of $250,000. The charge of SNAP fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release, and a fine of $250,000, or twice the gross gain/loss, whichever is greater. The charge of trafficking in counterfeit goods provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $2 million. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting United States Attorney William Weinreb; Bethanne M. Dinkins, Special Agent in Charge of the U.S. Department of Agriculture, Office of Inspector General, Office of Investigations, Northeast Region; and Michael Shea, Acting Special Agent in Charge of Homeland Security Investigations in Boston made the announcement today. Assistant U.S. Attorney Michelle Dineen Jerrett of Weinreb’s Worcester Branch Office is prosecuting the case.

DALLAS— A federal grand jury in Dallas has indicted Joshua Pugh, 23, of Dallas, Texas, and Johnny Glenn Clifton, 50, of Frisco, Texas, on wire fraud charges stemming from an elaborate scheme to defraud an individual out of approximately $1 million between November 2015 and March 2017, announced U.S. Attorney Erin Nealy Cox of the Northern District of Texas.

Specifically, the indictment charges Pugh, aka “Joshua Wealthy,” “Joshua Money,” “Joshua Looney” and “Jmoney” and Clifton, aka “John Mason” and “John Glenn,” with one count of conspiracy to commit wire fraud and five counts of wire fraud.  The indictment was returned this week and unsealed yesterday. Detention hearings for both defendants are scheduled for December 12, 2017 before U.S. Magistrate Judge Renee Harris Toliver. 

According to the indictment, in March 2016, Clifton contacted an individual, Victim 1, and detailed an opportunity to invest in Sectors Global Management (Sectors), a fictitious elite real estate company. According to Clifton, Sectors was backed by elite individuals. Clifton alleged that he would serve as the chief executive officer of Sectors and an individual that Clifton referred to as “Joshua Wealthy” was a leading member. 

Clifton explained to Victim 1 that both he and “Wealthy” were also members of or connected to the Illuminati, which he described as a clandestine cabal of high net worth individuals who delegated control of the world to a select group of 43 families through the manipulation of banks, politics, and intelligence/law enforcement organizations. Clifton stated that Victim 1 was selected to invest in Sectors because of a secret reason that even Clifton was not allowed to know.

The indictment alleges in an effort to convince Victim 1 of the legitimacy of these claims, Pugh and Clifton used extravagant means to effectuate their scheme to defraud Victim 1, including the use of helicopters, caravans, bodyguards, chauffeurs, falsified documentation, and contrived video chats and teleconferences with purported world leaders. The defendants also created a library of falsified documents intended to corroborate their claims, including, emails and communications describing major business deals; letters to major corporations and sport franchises discussing Pugh’s roles in such entities; alleged communications with businesses detailing endorsements with major companies such as Under Armour and the National Basketball Association (NBA); daily itineraries for “Wealthy,” which referenced frequent travel in private jets; and falsified tax documents and W-2 forms.

During certain meetings with Victim 1, Pugh outlined the ramifications to Victim 1 if he did not comply with their demands, which included the seizure of Victim 1’s assets, Victim 1’s incarceration by law enforcement and claimed his life would be in danger. The defendants would also send emails often demanding additional money from Victim 1 and outlined the consequences of non-compliance, according to the indictment.

Based on the representations and interactions with the defendants, Victim 1 feared the ramifications of not meeting their demands. Victim 1 invested approximately $1 million between November 2015 and March 2017 with Sectors. The money invested was used by the defendants to purchase two Porsche Panameras, a Maserati Quatraporte, merchandise from Louis Vuitton, a black mink stroller coat, a ticket to Super Bowl LLI, a private jet, $400 per month payment to an individual who would put in and take out Pugh’s contact lenses on a daily basis, and chartered helicopter rides.

An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty.  However, if convicted, the maximum statutory penalty for each count of wire fraud is 20 years in federal prison and a $250,000 fine.  Restitution could also be ordered.  The indictment also includes a forfeiture allegation that would require the defendant, upon conviction, to forfeit the proceeds obtained as a result of the offense, including, a 2010 Porsche Panamera, 2012 Porsche Panamera and 2007 Maserati Quattroporte. . 

The Federal Bureau of Investigation is in charge of the investigation.  Assistant U.S. Attorney PJ Meitl is in charge of the prosecution.

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United States Attorney John H. Durham and Connecticut Attorney General George Jepsen today announced that APT FOUNDATION, INC. and its Chief Executive Officer, LYNN MADDEN, have entered into a civil settlement agreement with the federal and state governments in which they will pay $883,859 to resolve allegations that they caused overpayments to be paid by the Connecticut Medicaid Program.

APT Foundation, Inc. (“APT”) is a healthcare organization that provides behavioral health and substance use disorder services to patients at its clinics in New Haven, North Haven and Bridgeport.  The allegations against APT and MADDEN arise out of improper billing for urine drug testing services.

APT entered into contracts with the State of Connecticut Department of Social Services (“DSS”) to provide behavioral health and substance use disorder services to Medicaid beneficiaries.  Medicaid reimburses methadone clinics, such as APT, utilizing a weekly rate payment for each Medicaid patient provided methadone treatment.  Regulations issued by the State of Connecticut in 2013 made it clear that the weekly payment was a “bundled” rate that included intake evaluation, initial physical examination, on-site drug abuse testing and monitoring, and individual, group and family counseling services (emphasis added).

On September 3, 2014, Medicaid issued a Provider Bulletin to all methadone clinics reminding them that the weekly rate payment included reimbursement for on-site drug abuse testing and monitoring.

On February 1, 2015, DSS published on its website an Audit Protocol for methadone clinics.   The Audit Protocol stated that if a DSS audit found Medicaid paid another laboratory provider for drug testing within a week of the date a methadone clinic was paid for methadone treatment, Medicaid would reduce the methadone clinic’s payment for the methadone treatment service by the cost of the laboratory service.

In 2015, DSS conducted an audit of APT and found that both APT and an independent laboratory billed Medicaid for drug testing performed by the laboratory, contrary to DSS’ weekly rate payment regulation.  The Audit Report warned APT that continued non-compliance with the weekly rate payment rule would result in financial disallowances in future audits.

The government alleges that despite clear guidance from the Medicaid program and the audit finding indicating that on-site drug testing was part of the bundled rate, APT and MADDEN routinely referred urine drug tests for APT’s patients to an outside, independent lab in Massachusetts.  As a result, Medicaid paid for the claims twice, once to APT pursuant to the bundled rate, and a second time to the outside lab in Massachusetts.

To resolve their liability, APT and MADDEN will pay $883,859 to the federal and state governments for conduct occurring between January 1, 2016 and November 30, 2016. 

“Providers who bill government health insurance programs must follow the relevant rules and regulations, and the failure to do so will have serious consequences,” said U.S. Attorney Durham.

This matter was investigated by the U.S. Department of Health and Human Services, Office of Inspector General.  The case is being prosecuted by Assistant U.S. Attorney Richard M. Molot, and by Assistant Attorneys General Michael Cole and Greggory O’Connell of the Connecticut Office of the Attorney General.

People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS or the Health Care Fraud Task Force at (203) 777-6311.

United States Attorney Randolph J. Seiler announced that an Eagle Butte, South Dakota, man has been indicted by a federal grand jury for Assault by Strangulation, Assault with a Dangerous Weapon, and Brandishing a Firearm During and in Relation to a Crime of Violence.

Jared Bourland, age 36, was indicted on November 17, 2017.  He appeared before U.S. Magistrate Judge Mark A. Moreno on November 28, 2017, and pled not guilty to the Indictment.

The maximum penalty upon conviction is up to life in prison and/or a $250,000 fine, 5 years of supervised release, and $100.00 to the Federal Crime Victims Fund.  Restitution may also be ordered.

The Indictment alleges that on December 28, 2016, in Dewey County, South Dakota, Bourland did unlawfully assault his spouse by strangulation and suffocation. The Indictment further alleges that on December 29, 2016, Bourland assaulted his spouse with a dangerous weapon with the intent to do bodily harm and knowingly carried a long gun during and in relation to a crime of violence.

The charge is merely an accusation and Bourland is presumed innocent until and unless proven guilty. 

The investigation is being conducted by the Cheyenne River Sioux Tribe Law Enforcement Services.  Assistant U.S. Attorney Jay Miller is prosecuting the case.  

Bourland was released to reside in Rapid City, South Dakota.  A trial date has not been set.