PITTSBURGH - An Allegheny County resident pleaded guilty in federal court to charges of malicious destruction of property by fire and wire fraud, United States Attorney David J. Hickton announced today.

Andrea Forsythe, 27, of Oakdale, Pa. pleaded guilty to two counts before Senior United States District Judge Terrence F. McVerry.

In connection with the guilty plea, the Court was advised that Forsythe set fire to a residential structure located in Sturgeon, Pa., which structure was a rental home where she had been residing, so that she could obtain money from the insurance company which provided coverage on that structure. The wire fraud charge states Forsythe engaged in a scheme to defraud Nationwide Insurance company in connection with the claim she made for the fire loss on or about June 20, 2014.

Judge McVerry scheduled sentencing for Oct. 21, 2016. The law provides for a maximum total sentence of 40 years in prison, a fine of $500,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Forsythe will remain in custody pending sentencing.

Assistant United States Attorney Shaun E. Sweeney is prosecuting this case on behalf of the government.

The Bureau of Alcohol, Tobacco, Firearms, and Explosives conducted the investigation that led to the prosecution of Forsythe.

DAVENPORT, IA – On July 22, 2016, Robert W. Webster, 66, of Davenport, Iowa, after three days of trial, pleaded guilty before Chief United States District Court Judge John A. Jarvey to three counts of an Indictment charging one count of conspiracy to commit bribery involving governments receiving federal funds in violation of 18 U.S.C. §§ 666(a)(2) & (b) and 371 and two counts of bribery concerning governments receiving federal funds in violation of 18 U.S.C. § 666(a)(1)(B), announced United States Attorney Kevin E. VanderSchel. Webster, the former City Electrician for the City of Bettendorf, Iowa, admitted that from 2004 or earlier, until around July of 2010, he conspired with persons at Brown Traffic Products, Inc. (BTP) of Davenport to accept all-expenses-paid trips including airfare, lodging, meals, drinks, and entertainment intending to be rewarded or influenced in connection with business transactions with the City of Bettendorf.

Webster admitted in March of 2009, he accepted $2,700 from an employee of BTP in the form of a check issued to Webster’s wife and deposited into her credit union account. The March 2009 payment was accepted by Webster with the intent that he rewarded and influenced in connection with business transactions, past and future, between BTP and the City of Bettendorf. He further admitted that in September of 2009, he accepted payment for golf at the Kokopelli golf course in Gilbert, Arizona, from an employee of BTP as a reward or as influence for transactions with the City of Bettendorf.

For the bribery charges, on each of the two counts, Webster faces a potential statutory sentence of up to ten years (10) years in prison, a fine of up to $250,000, and a term of up to two (2) years of supervised release to follow any term of imprisonment. For the conspiracy charge, Webster faces a potential statutory sentence of up to five years (5) years in prison, a fine of up to $250,000, and a term of up to one (1) year of supervised release to follow any term of imprisonment. Sentencing is scheduled before Chief United States District Court Judge John A. Jarvey on December 14, 2016, at 10:00 a.m. at the United States Courthouse in Davenport, Iowa.

Other persons who have pled guilty in this investigation are Robert L. Budd, Jr., Daniel O. Fuchs, and David Schiltz, all former employees of Brown Traffic Products, Inc.

This matter was investigated by the Federal Bureau of Investigation. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.

CHICAGO — A federal judge today sentenced the head of a Schaumburg home health company to six years in prison for scheming to bill Medicare for millions of dollars in unnecessary services. 

As the manager of Suburban Home Physicians, which did business as Doctor at Home, DIANA JOCELYN GUMILA directed employees to perform in-home visits with patients who were physically capable of leaving their residences and not in need of in-home treatment.  Gumila also inflated the costs incurred by Medicare by directing employees to bill the treatment at the most complicated levels, even though the visits were typically routine and did not qualify for the elevated billing. 

A jury in April convicted Gumila, 47, of Streamwood, on 21 counts of health care fraud and three counts of making false statements in a health care matter.  In addition to the 72-month sentence, U.S. District Judge Charles P. Kocoras ordered the defendant to pay $15.6 million in restitution.

“Home-health fraud has become a significant problem nationally and particularly in the Chicago area,” Assistant U.S. Attorney Stephen Chahn Lee argued in the government’s sentencing memorandum.  “Such fraud cannot happen without people like defendant, who abuse Medicare’s rules and abuse the trust placed in them by Medicare and their patients.”

Gumila is one of several defendants convicted in the federal investigation of Doctor at Home.  The prior convictions include ALAN NEWMAN, a physician from Chicago, and JAMES ADEMIJU, a nurse from Matteson who operated two nursing agencies.  In a plea agreement, Newman admitted falsely certifying patients for nursing services even when he knew the patients did not need such care.  Newman admitted causing approximately $2.6 million in losses to Medicare, according to his plea agreement.  Ademiju pleaded guilty to billing for unnecessary services that were improperly authorized by physicians from Doctor at Home, and he acknowledged making illegal payments for patient referrals.

Evidence presented at Gumila’s two-week trial included a surreptitious audio recording in which Gumila can be heard telling a new doctor to “paint the picture” of patients so as to make them appear confined to their homes.  Emails from Gumila were also shown to the jury, including one in which she referred to a physician who did not read orders before signing them as “the type of doctor we need [b]ecause he will just do what we tell him to do.”

Gumila’s conviction was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Lamont Pugh III, Special Agent-in-Charge of the Chicago Region of the U.S. Department of Health and Human Services Office of Inspector General; Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Kristie Osswald, Special Agent-in-Charge of the Chicago Office of the Railroad Retirement Board Office of the Inspector General.

The investigation was carried out by the Medicare Fraud Strike Force, which is part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Justice Department and the U.S. Department of Health and Human Services to prevent fraud and to enforce anti-fraud laws around the country.  Dozens of defendants have been charged in numerous fraud cases since the strike force began operating in Chicago in 2011.

The government is represented by Mr. Lee and Assistant U.S. Attorney Vikas Didwania.

ALBUQUERQUE – Rob Begay, 24, an enrolled member of the Navajo Nation who resides in Twin Lakes, N.M., pled guilty this morning in federal court in Albuquerque, N.M., to an indictment charging him with involuntary manslaughter. 

Begay was arrested on Dec. 2, 2015, on a criminal complaint charging him with involuntary manslaughter.   Begay was indicted on Dec. 17, 2015, and was charged with killing a Navajo woman on Nov. 28, 2015, while driving under the influence of alcohol.  According tot the indictment, Begay committed the crime on the Navajo Indian Reservation in McKinley County, N.M.

During today’s change of plea hearing, Begay pled guilty to the indictment and admitted killing the victim by driving recklessly while under the influence of alcohol.  Begay admitted that because of his intoxication he was incapable of exercising clear judgment and a steady hand in operating a vehicle.

At sentencing, Begay faces a statutory maximum penalty of eight years in federal prison.  A sentencing hearing has yet to be scheduled.

This case was investigated by the Crownpoint office of the Navajo Nation Division of Public Safety, and is being prosecuted by Assistant U.S. Attorney Jack Burkhead. 

BOISE –  Agustin de Jesus Aguirre, 28, of Boise, Idaho, was sentenced today to ten years in prison and five years of supervised release for distribution of methamphetamine and unlawful possession of a firearm, U.S. Attorney Wendy J. Olson announced.  Senior U.S. District Judge Edward J. Lodge also ordered Aguirre to forfeit $4,250 in drug proceeds and a Smith and Wesson, 9mm pistol.  Aguirre pleaded guilty on April 19, 2016.

According to evidence presented in court, Aguirre distributed methamphetamine to an undercover officer on three occasions, selling over five ounces of methamphetamine.  Aguirre was arrested on August 11, 2015, on an unrelated state probation violation and was found to be in possession of a 9mm pistol. Aguirre was prohibited from possessing any firearms under federal law as a result of his 2013 conviction for misdemeanor domestic battery.   

The case was investigated by Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Administration, and the Boise Police Department.

ALBUQUERQUE – Ruben Cantu, 43, of Hobbs, N.M., was sentenced today in federal court in Las Cruces, N.M., to 100 months in prison for being a felon in possession of a firearm and ammunition.  He will be on supervised release for two years after completing his prison sentence.

U.S. Attorney Damon P. Martinez said that Cantu, who has six felony convictions over the past 23 years, was prosecuted as part 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 work with New Mexico’s District Attorneys and state, local and tribal law enforcement agencies to target violent or repeat offenders for federal prosecution with the goal of removing repeat offenders from communities in New Mexico for as long as possible.  Because New Mexico’s violent crime rates, on a per capita basis, are amongst the highest in the nation, New Mexico’s law enforcement community is collaborating to target repeat offenders from counties with the highest violent crime rates, including Lea County, under this initiative.

 “Today’s sentencing serves as an example to those criminals who continue to plague or community and utilize crime guns,” said Special Agent in Charge Thomas G. Atteberry of the Phoenix Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).  “We will find you, and we will lock you up in a federal prison where you will no longer experience an iota of freedom.”

“The FBI and its federal partners are glad to work with local law enforcement to get the worst offenders off the streets and put them behind bars for a long time,” said Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division.  “These convictions demonstrate how federal, state and local agencies working together can make their communities safer.  I am grateful to the FBI Special Agents and staff who worked on this case, along with the U.S. Attorney’s Office, Bureau of Alcohol, Tobacco, Firearms and Explosives, Lea County Drug Task Force, and Hobbs Police Department.”

Cantu was arrested on July 7, 2014, on an indictment charging him with two counts of being a felon in possession of a firearm and ammunition.  The indictment alleged that Cantu committed the crimes on March 5, 2014, in Lea County, N.M.  At the time, Cantu was prohibited from possessing firearms and ammunition because of his prior felony convictions.

 On Dec. 8, 2015, Cantu pled guilty to the indictment and admitted that on March 5, 2014, he was in possession of a firearm and multiple rounds of ammunition.  He further acknowledged that he was prohibited from possessing firearms or ammunition based on his status as a convicted felon. 

This case was investigated by the ATF’s office in Las Cruces, the Roswell office of the FBI, the Lea County Drug Task Force and the Hobbs Police Department.  Assistant U.S. Attorney Terri J. Abernathy of the U.S. Attorney’s Las Cruces Branch Office prosecuted the case.

The Lea County Drug Task Force is comprised of officers from the Lea County Sheriff’s Office, Hobbs Police Department, Lovington Police Department, Eunice Police Department the Tatum Police Department and the Jal Police Department, and is part of the NM HIDTA Region VI Drug Task Force.  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.

BOSTON – Carmen M. Ortiz, the United States Attorney for the District of Massachusetts, Andrew J. Ceresney, Director of the Division of Enforcement for the Securities and Exchange Commission (SEC), and Thomas E. Perez, the United States Secretary of Labor (DOL), announced today that State Street Bank and Trust Company, a Massachusetts-based financial institution, agreed to pay a total of at least $382.4 million, including $155 million to the Department of Justice (DOJ), $167.4 million in disgorgement and penalties to the SEC, and at least $60 million to ERISA plan clients in an agreement with the DOL, to settle allegations that it deceived some of its custody clients when providing them with indirect foreign currency exchange (FX) services.

As part of the settlement with the Department of Justice, State Street, a Massachusetts-based financial company, admitted that contrary to its representations to certain custody clients, its State Street Global Markets division (SSGM) generally did not price FX transactions at prevailing interbank market rates.  Instead, State Street admitted that SSGM executed FX transactions by applying a predetermined, uniform mark-up (if the custody client was a FX purchaser) or mark-down (if the custody client was an FX seller) to the prevailing interbank rate for FX.  State Street is also alleged to have falsely informed custody clients that it provided “best execution” on FX transactions, that it guaranteed the most competitive rates available on FX transactions, and that it priced FX transactions based on a variety of factors when, in fact, prices were largely driven by hidden mark-ups designed to maximize State Street’s profits. 

“State Street’s custody clients, many of whom were public pension funds, financial institutions, and non-profit organizations, had a right to expect that State Street would execute transactions in an honest and forthright manner,” said United States Attorney Carmen M. Ortiz.  “Instead, State Street executed FX transactions in a manner that enabled it to reap substantial profits at the expense of its custody clients.  Today’s settlement reflects a significant and appropriate penalty for State Street’s deceptive conduct.”

“State Street misled custody clients about how it priced their trades and tucked its hidden markups into a corner where they were unlikely to notice,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement.  “Financial institutions cannot mislead their customers about their trading costs.”

 “When financial institutions charged with safeguarding retirement plan assets put the firm’s interests ahead of the best interest of their plan clients, or fail to candidly disclose fees, we will hold them accountable.  Retirement security is a pillar of middle class life, and the Labor Department and our federal partners are committed to using our authority to protect it,” said Secretary of Labor Thomas E. Perez.

 Pursuant to the proposed settlements and other agreements, State Street will pay a total of $382.4 million, of which $155 million will be paid as a civil penalty to the United States to resolve the allegations made by the Department of Justice that State Street violated the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), by committing fraud affecting financial institutions.  The United States’ investigation arose from whistleblowers who filed a declaration pursuant to FIRREA. 
The SEC has approved a separate agreement to settle the SEC’s investigation concerning State Street’s indirect FX services.  Under the terms of the agreement, the Commission will enter an administrative order against State Street, only after the U.S. District Court gives final approval to State Street’s proposed settlement with private plaintiffs in pending securities class action lawsuits concerning its indirect FX pricing service.  The administrative order will find that State Street violated Section 34(b) of the Investment Company Act of 1940 (Investment Company Act) and caused violations of Section 31(a) of the Investment Company Act and Rule 31a-1(b) thereunder, by providing its registered investment company (RIC) clients with trade confirmations and monthly transaction reports that were materially misleading in light of State Street’s representations about how it priced FX transactions.  Under the terms of the order, State Street will be required to disgorge $75 million in ill-gotten gains and $17.4 million in prejudgment interest, to be paid to RIC clients, and also pay the SEC a civil penalty of $75 million.

State Street is simultaneously resolving DOL’s claims under the Employee Retirement Income Security Act (ERISA) by agreeing to pay at least $60 million to State Street’s ERISA plan customers who, DOL found, sustained losses in connection with the conduct alleged above.  This amount will be distributed to ERISA plan customers in conjunction with the settlement of certain private class action lawsuits.  DOL alleges in the settlement that State Street made false or misleading representations concerning certain FX trades, and concealed from its plan customers how it priced those trades.  In the settlement State Street represents that it now makes and will continue to make detailed disclosures to its customers with respect to its FX pricing, and that it now refrains and will continue to refrain from making representations regarding its FX pricing that are not accurate. 

State Street will pay an additional $147.6 to resolve private class action lawsuits filed by the Bank’s customers alleging similar misconduct.

The case was handled by Assistant U.S. Attorneys Justin O’Connell and Abraham George of Ortiz’s Civil Division.  The SEC’s investigation was conducted by Senior Enforcement Counsels Sue Curtin, Cynthia Storer Baran and Andrew Palid, Senior Trial Counsel Deena Bernstein, and Assistant Regional Director Celia Moore, all of the Boston Regional SEC Office, and Stuart Jackson of the Division of Economic and Risk Analysis.  The DOL’s case was investigated by the Employee Benefits Security Administration’s Boston Regional Office with assistance from Senior Trial Attorneys Suzanne Reilly, Nathan Goldstein, and Nathan Henderson, and ERISA Counsel Marjorie Butler.

            A 24-year-old member of the Quinault Tribe was sentenced today in U.S. District Court in Tacoma to three years in prison and three years of supervised release for Assault Resulting in Serious Bodily Injury, announced U.S. Attorney Annette L. Hayes.   RICKY LEE LOGAN, pleaded guilty in March 2016, to repeatedly assaulting his girlfriend during the period May 25-29 while both were on Tribal Trust land on the Quinault Reservation.  At sentencing U.S. District Judge Benjamin H. Settle noted that LOGAN was under the influence of methamphetamine at the time of the assaults saying “Your use of drugs has led to violent behavior….(The victim) was seriously injured as the result of this conduct.”

            According to records in the case, on May 29, 2015, Quinault Tribal Police found the victim with bruising all over her back, side, face, jaw, and neck, and black eyes. She had puncture wounds on her hands. Her lungs had collapsed from the repeated beatings, and she had broken ribs.  The woman was rushed to the hospital and has since recovered.  LOGAN was indicted federally for the assault in October 2015.

            Because LOGAN is a tribal member and the assault occurred on Tribal land the case is under the jurisdiction of federal courts.  

            The case was investigated by the Quinault Tribal Police and the FBI.

            The case was prosecuted by Assistant United States Attorneys J. Tate London and Ye-Ting Woo.

This morning, federal, state and local authorities arrested nine individuals in the Austin area, including ring-leaders Xavier Martinez (aka “Javi”) and Eulalio Samarripa (aka “Chico”), for conspiring to distribute heroin announced United States Attorney Richard L. Durbin, Jr. and Drug Enforcement Administration Special Agent in Charge Joseph M. Arabit, Houston Division. 

A one-count federal grand jury indictment unsealed in Austin this afternoon alleges that since April 2014, the defendants have conspired to distribute more than 500 grams of heroin. 

Those arrested this morning include:

Xavier Martinez (aka “Javi)
Age: 47
Residence:  Bastrop

Lisa Martinez                                                
Age: 46
Residence: Bastrop

Xhavier Martinez          
Age: 25
Residence: Bastrop           

Bobby Martinez
Age: 51
Residence: Austin

Darrell Cano
Age: 49
Residence: Bastrop

Eulalio Samarripa (aka “Chico”)
Age: 48
Residence: Austin

Sandra Davila
Age: 41
Residence: Austin

Ray Armonta
Age: 30
Residence: Austin

Zaragosa Marez (aka “Gus“)
Age: 51
Residence: Austin

Upon conviction, the defendants face sentences of between ten years and life in federal prison.  All of the defendants remain in federal custody pending detention hearings later this week.

This eleven-month investigation was conducted by the Drug Enforcement Administration together with the Austin Police Department, Bastrop County Sheriff’s Office, Travis County Sheriff’s Office and the Texas Department of Public Safety. 

Assistant United States Attorney Mark Marshall is prosecuting this case on behalf of the government.

An indictment is merely a charge and should not be considered as evidence of guilt.  The defendants are presumed innocent until proven guilty in a court of law.

Earlier today, 34-year-old Luis Armando Ontiveros of San Antonio was sentenced to 145 months in federal prison followed by a 30 years of supervised release for receiving of child pornography announced United States Attorney Richard L. Durbin, Jr., and FBI Special Agent in Charge Christopher Combs, San Antonio Division.

On April 25, 2016, Ontiveros pleaded guilty to the charge.  By pleading guilty, Ontiveros admitted that from July 2013 until November 2015, he downloaded images and videos involving child pornography from the Internet.  

In November 2015, federal authorities arrested Ontiveros following the execution of a search warrant at his residence.  A subsequent forensics examination of seized materials, including the defendant’s computer and related media, revealed the presence of approximately 700 images and 270 videos depicting prepubescent children, many of which were engaged in sadistic or masochistic conduct.  Ontiveros has remained in federal custody since his arrest.

This investigation was conducted by the FBI’s San Antonio Child Exploitation Task Force.  Assistant United States Attorney Tracy Thompson prosecuted this case on behalf of the Government.

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

In San Antonio this afternoon, 45-year-old Mexican National Mauricio Sanchez-Garza made his initial appearance in federal court following his extradition from Mexico yesterday.  Sanchez is charged by two federal grand jury indictments in the Western District of Texas with laundering drug distribution proceeds and committing extortion in a scheme involving a Hollywood screenplay.  That announcement was made today by United States Attorney Richard L. Durbin, Jr.; Drug Enforcement Administration (DEA) Special Agent in Charge Joseph M. Arabit, Houston Division; Homeland Security Investigations (HSI) Special Agent in Charge Shane Folden; Internal Revenue Service-Criminal Investigation Special Agent in Charge William Cotter; and, Texas Attorney General Ken Paxton.

Sanchez had remained a fugitive since fleeing the United States to avoid prosecution in 2010.  Sanchez faces two separate federal grand jury indictments.  On December 15, 2010, a federal grand jury charged Sanchez with one count of conspiracy to commit extortion and one count of money laundering.   On July 20, 2011, a separate federal grand jury charged Sanchez with one count of conspiracy to commit money laundering.

According to court records (SA10CR1088), in 2008, Sanchez and 38-year-old Mexican National Jorge Vasquez Sanchez conspired to steal by force a movie manuscript from its rightful owner.  The movie, a project between the owner and Proud Mary Productions, was billed as a prequel to “The Passion of Christ.”

On June 12, 2013, Jorge Vasquez Sanchez was sentenced to four years in federal prison followed by three years of supervised release after pleading guilty to one count of extortion.  The Court also ordered that Jorge Sanchez forfeit to the Government his rights and interests in the movie project—15% of the net profits of the motion picture.

According to court records (SA11CR616), from 2005 until July 2011, Mauricio Sanchez, Jorge Sanchez and Mauricio’s brother, 47-year-old Mexican National Alejandro Sanchez-Garza, conspired to transport into the United States and conduct financial transactions with proceeds derived from illegal drug trafficking in order to conceal the nature of the funds.  Specifically, the defendants entered into joint ventures with drug traffickers by funneling proceeds generated from drug trafficking through their businesses and corporate entities to make the proceeds appear to be legitimate and lawful; insulate the drug traffickers from evidence of criminal involvement in the proceeds; and, to attempt to make a profit for both the defendants and the drug traffickers.

This indictment also contains a notice of criminal forfeiture which seeks the forfeiture of two San Antonio commercial properties as well as a 1991 Bombardier Learjet 31.  The indictment also seeks a monetary judgment in the amount of $5 million representing proceeds derived from the above-mentioned scheme.

Alejandro Sanchez-Garza was arrested in September 2012.  On August 19, 2014, Alejandro Sanchez-Garza was sentenced to 30 months in federal prison followed by three years of supervised release after pleading guilty to one count of conspiracy to commit money laundering. The Court also ordered that Alejandro Sanchez forfeit to the Government his rights and interests in the properties as well as the Learjet.

This case was investigated by the Drug Enforcement Administration (DEA), Homeland Security Investigations (HSI), Internal Revenue Service-Criminal Investigation, and the Texas Attorney General’s Office.  The Justice Department's Office of International Affairs provided assistance with the extradition.  The department appreciates the support of the government of Mexico in extraditing the defendant to the United States.

ALBUQUERQUE – Matthew Martinez, 38, of Espanola, N.M., was sentenced today in federal court in Albuquerque, N.M., to 70 months in prison followed by three years of supervised release for his conviction on a heroin trafficking charge.  Martinez also was ordered to pay $500 in community restitution and to pay a $2,000 money judgment to the United States.

 Martinez was arrested on Dec. 3, 2015, on a three-count indictment charging him with heroin trafficking offenses.  The indictment charged Martinez with distributing heroin in Bernalillo County, N.M., on April 30, 2015.  It also charged Martinez with distributing heroin on two occasions in Santa Fe, N.M.; the first time on May 1, 2015 and the second on Sept. 16, 2015.

On March 21, 2016, Martinez pled guilty to distributing heroin on Sept. 16, 2015.  In his plea agreement, Martinez admitted selling approximately two ounces of heroin to an undercover FBI agent outside of a Santa Fe-area Walmart store.  By his own admission, Martinez is associated with the Syndicato de Nuevo Mexico (SNM) prison gang and became involved in the heroin trade as a result of his gang affiliation.

“New Mexico’s Espanola Valley has had one of the country’s highest heroin overdose death rates for decades.  Every time a heroin trafficker is removed from the Valley, the community continues its efforts to turn the tide against the heroin epidemic that has devastated its residents for generations,” said U.S. Attorney Damon P. Martinez.  “This prosecution is part of a bigger effort that we call HOPE.  The HOPE Initiative recognizes that law enforcement is only part of the answer, and that the community’s treatment, prevention and education needs must also be addressed.”

“New Mexico for too long has had the unenviable distinction of having one of the highest heroin-related death rates in the country,” said Special Agent in Charge Terry Wade of the FBI’s Albuquerque Division.  “Today's sentence should send a clear signal the FBI is committed to bringing to justice those drug-traffickers who endanger our communities and destroy so many lives.  I would like to thank the FBI Special Agents and support staff, Santa Fe County Sheriff’s Office and New Mexico Corrections Department for their work on this case, and I congratulate the U.S. Attorney's Office on a successful prosecution.”

The Santa Fe office of the FBI investigated this case with assistance from the Santa Fe County Sheriff’s Office and the New Mexico Corrections Department.  The Organized Crimes Section of the U.S. Attorney’s Office prosecuted the case as part of the New Mexico Heroin and Opioid Prevention and Education (HOPE) Initiative. 

The HOPE Initiative was launched in January 2015 by the UNM Health Sciences Center and the U.S. Attorney’s Office in response to the national opioid epidemic, which has had a disproportionately devastating impact on New Mexico.  Opioid addiction has taken a toll on public safety, public health and the economic viability of our communities.  Working in partnership with the DEA, the Bernalillo County Opioid Accountability Initiative, Healing Addiction in our Community (HAC), the Albuquerque Public Schools and other community stakeholders, HOPE’s principal goals are to protect our communities from the dangers associated with heroin and opioid painkillers and reducing the number of opioid-related deaths in New Mexico. 

The HOPE Initiative is comprised of five components:  (1) prevention and education; (2) treatment; (3) law enforcement; (4) reentry; and (5) strategic planning.  HOPE’s law enforcement component is led by the Organized Crime Section of the U.S. Attorney’s Office and the DEA in conjunction with their federal, state, local and tribal law enforcement partners.  Targeting members of major heroin and opioid trafficking organizations for investigation and prosecution is a priority of the HOPE Initiative.  Learn more about the New Mexico HOPE Initiative at http://www.HopeInitiativeNM.org.

RICHMOND, Va. – Leonard Paul Baumgardner, 39, of King George, was sentenced today to 54 months in prison for possession with intent to distribute heroin with three years of supervised release.

Baumgardner pleaded guilty on April 26. According to court documents, on December 9, 2015, December 10, 2015, December 11, 2015, and December 17, 2015, the King George County Sheriff’s Department, utilizing a confidential informant (CI), made controlled purchases of a controlled substance from Baumgardner at his King George residence. On December 18, 2015, DEA agents along with the King George Sheriff’s Office and the Virginia State Police Tri-County Task Force executed a search warrant at the residence. During the search, 24.3 grams of heroin and a firearm, a Cobra .380 Denali Pistol, were recovered.  Baumgardner was arrested at that time and has been held without bond during the pendency of the case.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Karl C. Colder, Special Agent in Charge for the Drug Enforcement Administration’s (DEA) Washington Field Division; and Steve F. Dempsey, Sherriff for King George County, made the announcement after sentencing by U.S. District Judge M. Hannah Lauck. Assistant U.S. Attorney S. David Schiller prosecuted the case.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.  Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16cr24.

SHREVEPORT, La. – United States Attorney Stephanie A. Finley announced today that a man and woman from Shreveport were found guilty after a trial of having a minor female from Texas engage in prostitution in Shreveport.

Tyrone Larry Smith, 37, and Lacoya Washington, 33, both of Shreveport, were found guilty of one count of sex trafficking of a minor, and Smith was also found guilty of one count of coercing or enticing a minor to travel to engage in prostitution. United States District Judge S. Maurice Hicks Jr. presided over the bench trial, which started Monday and ended today. According to evidence presented at trial, Smith began conversing with a 14-year-old female from Texas over an internet dating service in June of 2015. He convinced her to travel to Shreveport saying he had feelings for her. Upon arriving in Shreveport, the female met Smith and Washington and stayed at their home. That same month, they brought her to local hotels where she engaged in prostitution. If she resisted, Smith struck her and abused her in order for her to continue the illegal activity. Smith also took the money from the prostitution. The minor was contacted by authorities who later arrested Smith and Washington.

The defendants face a minimum of 15 years in prison, at least five years of supervised release and a $250,000 fine. They are also required to register as sex offenders. A sentencing date of November 1, 2016 was set.

The FBI investigated the case.  Assistant U.S. Attorneys James G. Cowles Jr. and Earl M. Campbell are prosecuting the case.

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

Those concerned may also leave tips with the FBI at tips.fbi.gov. Tips may be submitted anonymously.  The Shreveport FBI office number is (318) 861-1890.

CHARLESTON, W.Va. – Three defendants appeared in Charleston today and pleaded guilty to federal charges, announced Acting United States Attorney Carol Casto.

Ronald Sayles, 39, of Charleston, pleaded guilty to being a felon in possession of a firearm. Sayles admitted that in December 2014, he possessed two handguns, a Taurus .32 caliber pistol and a Ruger 9 mm pistol, at his Charleston residence. Charleston Police Department officers discovered the guns while executing a search warrant on December 7, 2014. Sayles was prohibited from possessing any firearm under federal law because of a 2002 felony drug conviction in Kanawha County Circuit Court. Sayles faces up to 10 years in federal prison when he is sentenced on October 20, 2016.

Howard Williamson, 55, of Madison, entered his guilty plea to distribution of oxycodone. Williamson admitted that on July 23, 2015, and again on October 25, 2015, he sold oxycodone pills to a confidential informant working with law enforcement. Williamson further admitted that the drug deals took place at his Madison residence. Williamson faces up to 20 years in federal prison when he is sentenced on November 2, 2016.

Tyruss Jackson, 34, pleaded guilty to possession of a weapon while an inmate of a federal prison. Jackson admitted that on September 18, 2015, he possessed a handcrafted knife while he was serving time in the Federal Correctional Institution at McDowell. The handcrafted wooden weapon, commonly referred to as a “shank,” was sharpened to a point, measured slightly over six inches in length, had tape wrapped around one end to serve as a handle, and a had a string tied to the handle to serve as a lanyard. A Bureau of Prisons staff member discovered the item concealed in Jackson’s pants. Jackson is scheduled to be sentenced on August 30, 2016. He faces a year and two months in federal prison to be served after he completes his current undischarged sentence.

The Charleston Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation of Sayles. Assistant United States Attorney John J. Frail is handling the prosecution of Sayles. The plea hearing for Sayles was held before United States District Judge Joseph R. Goodwin.

The Route 119 Drug Task Force conducted the investigation of Williamson. Assistant United States Attorney John J. Frail is responsible for the prosecution of Williamson. The Williamson plea hearing was held before United States District Judge Thomas E. Johnston.

The case against Jackson was investigated by the Federal Bureau of Prisons. Assistant United States Attorney John L. File is in charge of the prosecution of Jackson. The Jackson plea hearing was held before Senior United States District Judge David A. Faber.

The case against Sayles was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.

The Williamson case was prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of prescription drugs and heroin. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down illegal pill trafficking, eliminating open air drug markets, and curtailing the spread of opiate painkillers and heroin in communities across the Southern District.

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BECKLEY, W.Va. – A convicted felon from Sophia pleaded guilty today to a federal gun charge, announced Acting United States Attorney Carol Casto. Gene A. James, 46, entered his guilty plea to being a felon in possession of a firearm.

James admitted that on February 23, 2016, while in Sophia, he possessed a Leinad model DD derringer pistol. James was prohibited from possessing any firearm under federal law because of a 2014 conviction in United States District Court for the Southern District of West Virginia for distribution of oxycodone.

James faces up to 10 years in federal prison when he is sentenced on November 2, 2016.

The United States Marshals Service and the Bureau of Alcohol, Tobacco, Firearms and Explosives conducted the investigation. The plea hearing was held before United States District Judge Irene C. Berger.

This case was brought as part of Project Safe Neighborhoods. Project Safe Neighborhoods is a nationwide commitment to reduce gun crime in the United States by networking existing local programs targeting gun crime.

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FORT WORTH, Texas — Following an early morning operation on Thursday, July 21, 2106, conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), U.S. Immigration and Customs Enforcement’s Homeland Security Investigation (ICE HSI), the Fort Worth Police Department and the U.S. Marshal Service, six individuals, most with ties to the Polywood Crips street gang in Fort Worth, Texas, are in federal custody on charges outlined in a criminal complaint filed earlier this month, and unsealed today, announced U.S. Attorney John Parker of the Northern District of Texas.  Two additional defendants remain fugitives.

The six defendants were arrested at three locations in Fort Worth.  During the course of the arrests, among other items, law enforcement seized numerous cell phones, a computer, a tablet and a stolen firearm.

The following individuals made initial appearances before U.S. Magistrate Judge Jeffrey L. Cureton on Friday, July 22, 2016.  Judge Cureton ordered each detained pending detention hearings this week. 

Those charged and in custody include:

            Diwone Nobles, a/k/a “Pooh,” 31
            Stanley Johnson, a/k/a “Pee Wee,” 24
            Audrey Lane, a/k/a “Spud,” 29
            Alvin Lane, a/k/a “Spank,” 32
            Jessica Arnold, 23
            Serrah Arnold, a/k/a “Kristen,” 27

Chad Johnson, a/k/a “Chad Ocho Hood Fame,” 24, and Deon Bonner, a/k/a “Spanish Fly,” 25, were also charged, and they are currently fugitives.

The complaint alleges that from approximately October 2013 to April 21, 2016, these eight defendants committed the offenses of sex trafficking of children; sex trafficking of adults through force, fraud, or coercion; and/or conspiracy to engage in child sex trafficking.  The men listed are pimps, and the females listed are “bottom girls.”

According to the affidavit filed with the complaint, minor victim girls under age 18 and adult victim girls engaged in commercial sex acts at the direction of Nobles, Bonner, and Chad Johnson and they were “sold” back and forth between all six pimps.  Nobles, Chad Johnson, Stanley Johnson and Bonner would pay Alvin Lane, Jessica Arnold and Serrah Arnold to post commercial sex advertisements for various victims on Backpage.com, including the minors.

A 16-year-old victim was told by Nobles, Bonner and Chad Johnson to charge $120 for a half hour and $180 for a full hour of commercial sex acts, and the three kept all of the money she received.  The victim feared Nobles and Chad Johnson because she had observed both become violent when angry and had observed Chad Johnson assault another female on several occasions when the female did not follow his instructions.  Nobles and Chad Johnson assaulted this victim, and Chad Johnson sexually assaulted her as well.

Another 17-year-old victim engaged in commercial sex acts at the direction of Stanley Johnson, who would post advertisements with her photo on Backpage.com.  All of the money she earned by engaging in commercial sex acts was given to Stanley Johnson.

An adult female victim engaged in commercial sex acts at the direction of Nobles, Chad Johnson, Audrey Lane, Alvin Lane and Serrah Arnold.  These individuals bought and sold her amongst themselves.  Nobles frequently assaulted her when she made him angry or did not follow his instructions; he also raped her.  Nobles kept the money she earned and the contact phone number used in the Backpage.com ad for her services was used by Nobles.  In one trip to Austin, Texas, the adult female victim made enough money for Nobles to buy a Chevy sedan that he painted bright orange – “Poly Orange” in reference to their neighborhood Polytechnic Heights – that he still owns.

When that same adult female victim engaged in commercial sex acts at Chad Johnson’s direction, he physically assaulted her if she did not follow his instructions.  On one occasion, Chad Johnson punched her in the ear hard enough to cause her eardrum to burst and bleed.  Chad Johnson also raped her, and when he believed she had attempted to “renegade,” he had several friends gang rape her as punishment.  “Renegade” is a term used to describe attempting to engage in commercial sex acts for money outside the knowledge or control of a pimp. 

When this adult female victim engaged in commercial sex acts at Audrey Lane’s direction, he would have Serrah Arnold, his bottom girl, supervise the victim and take the money she received.  Sometimes Serrah Arnold was violent toward this adult female victim and would physically assault her if she did not do as she was instructed. 

An additional 17-year-old female victim engaged in commercial sex acts at the direction of Audrey Lane, Alvin Lane, Serrah Arnold and Jessica Arnold.  Alvin Lane would have his girlfriend/bottom girl, Jessica Arnold, post photos of her in ads that she placed on Backpage.com.  The minor female victim would give all the money she earned to Jessica or Serrah Arnold, who would then give the money to Audrey Lane or Alvin Lane.

Some of the six pimp’s Facebook pages contained online posts, visible to the public, that reference making a lot of money through criminal activity, namely “pimping.”  Chad Johnson’s Facebook page contains photos of him posing with large sums of cash while referencing commercial sex.  Several of Chad Johnson’s Facebook friends are females observed in Backpage.com ads for commercial sex. 

Nobles, Bonner, Chad Johnson, Stanley Johnson and Audrey Lane have several photos on their Facebook pages in which they can be observed flashing gang signs referencing the “Polywood Crips” street gang.

A federal complaint is a written statement of the essential facts of the offenses charged and must be made under oath before a magistrate judge.  The government has 30 days to present the matter to a federal grand jury for indictment.  A defendant is entitled to the presumption of innocence until proven guilty.  However, if convicted, the maximum statutory penalty for each of the offenses charged is life in federal prison and a $250,000 fine. 

ATF, ICE HSI, the Fort Worth Police Department and the U.S. Marshals Service are investigating.  Assistant U.S. Attorney Cara Foos Pierce is in charge of the prosecution.              

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Springfield, Ill. – U.S. District Judge Sue E. Myerscough has rendered verdicts of guilty on all counts against a Chicago man for fraudulent overbilling of an estimated $4.7 million to Illinois’ Medicaid program for non-emergency medical transport. Sentencing for Gregory D. Toran, 67, of Hazel Crest, Ill., is scheduled on Nov. 14, 2016.

Toran owned IBT Transportation, LLC., with Tina Kimbrough, 44, of Berwyn, Ill. In June 2015, Kimbrough pled guilty to participating in the conspiracy with Toran, one count of mail fraud and one count of making false statements.  Kimbrough’s sentencing is scheduled on Aug. 15, 2016.

Over 12 days, beginning May 17 and concluding on June 14, the government presented evidence in a bench trial before Judge Myerscough. In the verdict, filed this week, the court found Toran responsible for the company’s fraudulent overbilling to the state of Illinois and Medicaid for services not rendered, not rendered to the extent claimed, and for mileage well in excess of miles actually driven. During the period of the conspiracy, from December 2005 to June 2011, IBT billed and was paid claims totaling approximately $7.3 million. Evidence was presented that IBT overbilled the state’s Medicaid program by an estimated $4.7 million.

Despite rules clearly set forth in the state handbook, the court found that IBT billed for deceased individuals and individuals who were not transported because they were in the hospital. Further, IBT billed based on the dates the individuals were approved for transportation, whether they rode or not, even though route sheets showed who was transported daily. At times, IBT billed for more riders than it could physically transport. Further, the court found that although the handbook mileage rules were straightforward, that transportation providers could only bill mileage for the first rider, Toran directed billers to incorrectly bill for mileage - from not billing mileage at all, to billing mileage for all riders, and later, every fourth rider.

The court also found that various bank accounts and real estate constitute proceeds or property derived from proceeds, obtained by Toran, directly or indirectly, as a result of the offenses of conviction, including:  $69,382 representing proceeds from the sale of property at 9544 S. Vanderpoel Ave., Chicago; 1450 W. 112^th Place, Chicago; 28 Carrington Court, Hazel Crest, Ill.; $205,439, representing proceeds from the sale of property at 5741 and 5751 to 5759 South Halstead, Chicago; and, at 6978 West North Ave., Chicago.

Both Toran and Kimbrough remain on bond pending sentencing. At sentencing, the maximum statutory penalty for conspiracy to defraud (one count as to each defendant) is up to five years in prison; for each count of mail fraud (Toran seven counts; Kimbrough one count) is up to 20 years in prison. The penalty for making a false statement is up to five years in prison.

The charges were investigated by the Illinois State Police, Medicaid Fraud Unit; the U.S. Department of Health and Human Services, Office of Inspector General, Office of Investigations; the Federal Bureau of Investigation; and the U.S. Postal Inspection Service. In addition, the Illinois Department of Health and Family Services, which administers the Medicaid program for the state of Illinois, assisted in the investigation. Assistant U.S. Attorneys Gregory K. Harris and Timothy A. Bass are prosecuting the case.

PORTLAND, Ore. – The former practice manager for Eye Care Services, Inc. appeared in federal court yesterday and admitted to his role in defrauding Medicare and other public and private health care plans and conspiring to defraud the Internal Revenue Service (IRS).  Anthony Curtis Neal, 40, pled guilty to health care fraud and conspiracy to defraud the IRS before U.S. District Judge Robert E. Jones and admitted that he, along with his deceased father, Dr. Dean Neal, committed health care fraud and tax related crimes between 2007 and 2014.  According to the plea agreement, the government will be seeking a sentence of imprisonment and restitution to Medicare, private insurers and the IRS.  The actual sentence will be determined by Judge Jones at Anthony Neal’s sentencing hearing which is scheduled for January 4, 2017.

Court records indicate that Anthony Neal worked as the practice manager for Eye Care Services Inc., dba 20/20 Eye Care, an ophthalmology clinic located at 500 NW 20^th Suite 100, Gresham, Oregon.  Neal worked in conjunction with his father, Dr. Dean Neal, the long-time primary doctor at Eye Care Services (ECS).   In addition to serving as the practice manager, Neal was primarily responsible for the insurance billing services.  He, along with his father, managed the practice, established testing protocols for patients, and set all business related polices.

Anthony Neal admitted the health care fraud scheme involved three false and fraudulent components:  billings for medically unnecessary tests, up-coded billings, and double billings.  To increase income, ECS required that many patients receive a battery of diagnostic tests, many of which were not medical necessity.  Claims for these medically unnecessary tests were submitted to Medicare and private insurers for reimbursement.  Neal also engaged in a practice of up-coding certain tests by claiming ECS was entitled to a higher than warranted reimbursement rate.  Finally, ECS was supposed to be paid one amount for tests performed on both eyes, but it fraudulently submitted bills to health insurance plans that resulted in ECS being paid twice, once for each eye.  The government alleges the loss attributable to the health care fraud scheme is $1,702,567.89.

As to the conspiracy to defraud the IRS, Anthony Neal admitted to conspiring to conceal ECS income from the IRS and he failed to report business or personal income to the IRS for tax years 2006 – 2013.  The government alleges the loss attributable to the tax conspiracy scheme is $817,378.77.

The case was investigated by the U.S. Department of Health and Human Services - Office of Inspector General, the FBI, and the Internal Revenue Service – Criminal Investigation.  The case is being prosecuted by Assistant U.S. Attorneys Donna Brecker Maddux and Seth Uram.

Anchorage, Alaska – U.S. Attorney Karen L. Loeffler announced that Shanice Mano, 23, of Anchorage, Alaska, was arrested on July 25, 2016, and was arraigned yesterday in federal court on a criminal complaint charging her with bank embezzlement.  The complaint alleges that she had embezzled over $100,000 from her former employer, Credit Union 1.

According to the complaint, Mano was a teller at Credit Union 1 when she accessed customer accounts without authority and transferred money to accounts that she had control over and from which she was able to make withdrawals. 

The law provides for a maximum sentence of 30 years in prison and a fine of $1 million or both. Under federal sentencing statutes, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

The FBI conducted the investigation leading to the arrest. 

A complaint is only a charge and is not evidence of guilt.  A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilty beyond a reasonable doubt.