Medical Device Maker ev3 to Plead Guilty and Pay $17.9 Million for Distributing Adulterated Device; Covidien Paid $13 Million to Resolve Civil Liability for Second Device

WASHINGTON – Minnesota-based medical device manufacturer ev3 Inc. has agreed to plead guilty to charges related to its neurovascular medical device, Onyx Liquid Embolic System, and pay $17.9 million, the Department of Justice announced today. Covidien LP, whose parent acquired ev3, separately paid $13 million to resolve False Claims Act allegations resulting from its alleged payment of kickbacks in connection with another medical device, the Solitaire mechanical thrombectomy device.

“The Department of Justice will hold corporations accountable when they violate laws designed to protect consumers and protect public funds,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “This resolution demonstrates the Department’s continued commitment to protect taxpayer dollars and deter companies from putting profits before patient safety.”

Pursuant to a criminal information filed today in U.S. District Court for the District of Massachusetts, ev3 will plead guilty to a misdemeanor charge in connection with the company’s distribution of adulterated Onyx, in violation of the Food, Drug and Cosmetic Act. As part of the criminal resolution, ev3 will pay a criminal fine of $11.9 million and will forfeit $6 million.

According to the plea agreement, Onyx was approved by the U.S. Food and Drug Administration (FDA) as a liquid embolization device that is surgically injected into blood vessels to block blood flow to arteriovenous malformations in the brain. The FDA has approved Onyx only for use inside the brain. Despite the FDA’s limited approval of Onyx, from 2005 to 2009, ev3 sales representatives encouraged surgeons to use Onyx in large quantities for unproven and potentially dangerous surgical uses outside the brain. The company’s sales force continued to tout unapproved and potentially dangerous uses of Onyx even after FDA officials told ev3 executives that they had specific safety concerns regarding uses of Onyx outside the brain at a 2008 meeting. FDA officials told ev3 executives that a study would be required to gain approval for uses of Onyx outside the brain and to ensure that the benefits of the device outweighed the risks.

Rather than conduct a study to ensure the safety and effectiveness of Onyx for uses outside the brain, ev3’s sales representatives sometimes attended surgical procedures and provided explicit instructions to surgeons regarding how to use Onyx for unapproved surgical procedures outside the brain, including in quantities far larger than what would be used in the brain. According to the criminal information, ev3’s management also set-up a system of sales quotas and bonuses that incentivized sales representatives to sell Onyx for unapproved uses and trained the sales force how to instruct physicians on unapproved uses of the device.

Covidien acquired ev3 in 2010, subsequent to the course of criminal conduct covered by the plea agreement. Covidien was acquired by Medtronic in 2015. Although Medtronic played no role in the criminal conduct, the company has agreed as part of the ev3 criminal resolution to implement new compensation structures to ensure the sales force responsible for marketing Onyx is not incentivized to sell the device for unapproved uses. Medtronic has also agreed to conduct compliance monitoring related to the Onyx sales and marketing components.

“ev3 disregarded laws designed to protect patient safety,” said United States Attorney Andrew E. Lelling for the District of Massachusetts. “The U.S. Attorney’s Office is committed to protecting patients and the integrity of federal health care programs, and we will continue to use our criminal authority to ensure that medical device manufacturers play by the rules that protect the public and ensure quality of care.”

“Unnecessarily putting patients at risk to increase profits, as the government alleged in this case, will not be tolerated,” said Christian J. Schrank, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “We will continue to work with our federal partners and hold accountable companies that use deceptive practices to increase their bottom line.”

“Consumers rely on the FDA to ensure that there’s a reasonable assurance of safety and effectiveness for the approved uses of medical devices. When manufacturers ignore the FDA’s regulatory authority, they undermine these crucial assurances and put lives at risk. Our Office of Criminal Investigations investigated a bad actor who marketed their device for unapproved uses, potentially harming patients,” said FDA Commissioner Scott Gottlieb, M.D. “The ev3 agreement to plead guilty announced by the U.S. Department of Justice today is an example of the FDA’s comprehensive commitment to ensuring the safety of medical devices and investigating companies that put patients at risk. A key part of our overall efforts to promote safe and effective innovation and protect patients is our enforcement work related to unsafe practices and bad actors. In addition to investigating such activities, we’re advancing other new policies to assure post-market device safety, as we recently outlined in our Medical Device Safety Action Plan. The FDA is also committed to fully implementing a new active surveillance system that will enable the agency to harness real-world evidence from medical records and patient registries to more swiftly identify device safety issues and enable more informed decision-making.”

Covidien separately has agreed to pay $13 million to resolve its civil liability for allegedly paying kickbacks to induce the use of its Solitaire mechanical thrombectomy device. The Solitaire device is intended to restore blood flow and retrieve a blood clot in certain stroke patients.

The United States alleged that Covidien caused false claims to be submitted to Medicare and Medicaid by paying kickbacks to hospitals and institutions to induce them to use Covidien’s Solitaire device. Specifically, the United States alleged that after receiving FDA clearance for the Solitaire device, Covidien launched a registry to pay hospitals and institutions to collect data about user experiences with the device. For about two years beginning in August 2014, Covidien paid a fee to hospitals and institutions that participated in a registry each time they used a new Solitaire device and reported certain clinical data about their practices for treating stroke patients to Covidien. Covidien solicited certain hospitals and institutions for the registry in order to convert their business from the competitor’s product and/or persuade them to continue using Covidien products, and knowingly and willfully used the registry as a means of increasing device sales.

The civil lawsuit was filed by Jeffrey Faatz, who worked for Covidien from 2012 to 2014, under the qui tam, or whistleblower, provisions of the False Claims Act. The Act allows private parties to sue on behalf of the government for false claims and to share in any recovery. As part of today’s resolution, Mr. Faatz will receive $2,015,000. The case is captioned United States ex rel. Doe v. Covidien PLC et al., Civil Action No. 8:15-cv-01796 AG (JCGx) (C.D. Cal.).

“Illegal kickbacks bring fraud and abuse into the Medicare system,” said U.S. Attorney Nicola T. Hanna for the Central District of California. “As part of an aggressive marketing campaign for its medical device, Covidien allegedly found a way to subsidize facilities that agreed to use its product – often convincing them not to use devices sold by another manufacturer. Patients deserve to know that their medical providers are offering the best possible treatments and are not making decisions based on increasing the bottom line for health care providers.”

The plea agreement was the result of a coordinated effort among the U.S. Attorney’s Office for the District of Massachusetts and the Civil Division’s Consumer Protection Branch, with assistance from the FDA’s Office of Chief Counsel. The criminal investigation was conducted by the FDA’s Office of Criminal Investigations, HHS’s Office of the Inspector General, the Department of Veteran’s Affairs, Office of the Inspector General, and the Federal Bureau of Investigations.

The civil settlement was the result of an investigation by the Justice Department’s Civil Division, Commercial Litigation Branch, the U.S. Attorney’s Office for the Central District of California, and the Office of Inspector General at the U.S. Department of Health and Human Services. The False Claims Act claims resolved by the settlement are allegations only and there has been no determination of liability.

For more information about the Consumer Protection Branch, the Commercial Litigation Branch, Fraud Section, and their enforcement efforts, visit their websites at http://www.justice.gov/civil/consumer-protection-branch and https://www.justice.gov/civil/fraud-section.

Original PressReleases…

Sixth Defendant Sentenced in Credit Card and ID Theft Fraud Conspiracy

ALEXANDRIA, Va. – A Las Vegas man was sentenced today to four and a half years in prison for his involvement in a scheme that resulted in 19,000 stolen credit and debit cards that were used to obtain over $490,000 in unauthorized ATM cash withdrawals and money order purchases.

According to court documents, Mushegh Melkonyan, 28, participated in a multistep conspiracy involving at least six other individuals. Specifically, conspirators attached electronic devices known as “skimmers” to gas pump payment systems, collected the information captured when payment cards were swiped at the compromised gas pumps by unwitting customers, and encoded the stolen card numbers onto physical payment cards. Thereafter, conspirators used the physical cards encoded with stolen card information throughout Northern Virginia and elsewhere, making fraudulent ATM withdrawals and U.S. Postal Service money order purchases. Court documents show that Melkonyan furthered the conspiracy by traveling to the Eastern District of Virginia in August 2017, reserving a Falls Church hotel room that was used to store the proceeds and tools of the conspiracy, and using physical cards encoded with stolen payment card numbers to withdraw funds on August 8 from area ATMs.

As reflected in court documents, in addition to Melkonyan, the five individuals listed in the table below have been charged with participating in the same conspiracy, have pleaded guilty to conspiracy to commit wire and bank fraud and/or aggravated identity theft, and have been sentenced.

Court documents indicate that some of the above-listed defendants may face immigration consequences as a result of their convictions. For instance, Karapetyan and Yengibaryan are citizens of Armenia and green card holders, and Saplekchian is an illegal alien.

G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office, Patrick J. Lechleitner, Special Agent in Charge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C., Peter R. Rendina, Inspector in Charge, U.S. Postal Inspection Service, Washington Division, and Colonel Edwin C. Roessler Jr., Fairfax County Chief of Police, made the announcement after sentencing by U.S. District Judge Liam O’Grady. Assistant U.S. Attorneys Alexander P. Berrang and Kellen S. Dwyer prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-cr-149.

Original PressReleases… 

Former Cheyenne Resident Sentenced for Bank Fraud, Possession of Stolen Mail, and Aggravated Identity Theft

United States Attorney Mark A. Klaassen announced that former Cheyenne resident Dawn Marie Wheeler, 51, was sentenced on November 26, 2018, to serve consecutive prison sentences of 27 months and 24 months, respectively, after engaging in a mail theft, bank fraud, and aggravated identity theft scheme. United States District Court Judge Alan B. Johnson imposed the sentences. After serving her prison sentences, Wheeler will be under court-ordered supervision for three years. The court also ordered Wheeler to pay $300 in special assessments and make restitution to the victims of her conduct. The court has not yet determined the amount of restitution.

Between November of 2017 and February of 2018, Wheeler and various associates committed a spree of mail thefts in Laramie County, Wyoming. Along with stealing mail from dozens of postal customers, Wheeler and her associates stole identities, opened unauthorized accounts, made unauthorized deposits and withdrawals, forged stolen checks, and engaged in other related illegal activity. The Laramie County Sheriff’s Office, Cheyenne Police Department, and United States Postal Inspection Service investigated the mail theft scheme. With the assistance of various concerned citizens, the investigators identified Wheeler and her associates.

“The United States Department of Justice and my office are committed to defending the integrity of the United States Mail,” said U.S. Attorney Klaassen. “Any theft of mail, with or without monetary loss, is a federal felony punishable by up to five years in prison. My office will continue to prosecute those who steal mail in the District of Wyoming.”

“The U.S. Postal Inspection Service would like to thank the diligent witnesses in this case who reported suspicious activity involving the U.S. Mail,” said Lesley Allison, Acting Inspector-in-Charge of the Denver Division. “Along with the quick response from local law enforcement, the actions of the victims and witnesses in this case allowed the Postal Inspector to quickly identify these defendants, who were responsible for stealing mail from numerous victims. As we enter into the busy holiday mailing season,” Ms. Allison said, “this sentence marks a great example of what can happen when the public and law enforcement work together with Postal Inspectors to stop mail theft in our communities.”

Ms. Allison reminds the public to call 911 if they see suspicious activity involving the U.S. Mail. The public can also reach the U.S. Postal Inspection Service by dialing its 24/7 hotline, 1-877-876-2455, and asking for a “Representative.” Finally, the public can report crimes involving the mail via the Inspection Service website: https://postalinspectors.uspis.gov/. The Inspection Service takes each report of mail theft seriously, and works closely with local law enforcement to identify those responsible for such crimes.

University Of Puerto Rico Settles Misuse Of Grant Funds Case

SAN JUAN, Puerto Rico– On November 21, 2018, the United States Government recovered the sum of $1,772,790.00 from the University of Puerto Rico (UPR) as part of a settlement agreement reached in connection to claims of misuse of grant funds provided to the UPR by the National Aeronautics and Space Administration (NASA), Department of Energy (DOE), and the National Science Foundation (NSF). The investigation revealed that the UPR did not comply with the time and effort reporting requirements of salaries and wages to ensure that payroll for the various grants was correctly and appropriately charged for the 2011 calendar year. The UPR provided various certifications asserting compliance with grant rules, when in fact, their records failed to reconcile the budget amounts reported to NASA, DOE, and NSF. Under the False Claims Act, Title 31, United States Code, Sections 3729, et seq., for the period of the covered conduct, the United States can recover up to three times the amount of loss and civil monetary penalties ranging from $5,500.00 to $11,000.00 per claim, in addition to debarment from future participation in federal funding.

The Office of the Inspector General of NASA, DOE and NSF involved in this investigation are deeply committed to fighting fraud, waste and abuse, and ensuring that federal funding is used for its intended purposes and recipients.

“The NASA Office of Inspector General will continue to aggressively investigate any attempt to defraud NASA grants, contracts, and operations,” said NASA Inspector General Paul Martin. “The NASA OIG appreciates the cooperative efforts of the entire investigative and prosecution team during this multi-year investigation and congratulates the team for reaching a final civil settlement in this matter.”

“It is imperative that federal award recipients use grant money appropriately, and that they track and support their award expenditures using effective accounting systems and accurate time and effort reports,” said Allison Lerner, Inspector General of the National Science Foundation. “The NSF Office of Inspector General is committed to vigorously pursuing oversight of taxpayer funds devoted to scientific research and I commend the U.S. Attorney’s Office and our investigative partners for their strong support in this effort.”

“The U.S. Department of Energy Office of Inspector General is committed to ensuring the integrity of our grant recipients by holding accountable those who choose to engage in false claims and mischarging schemes. This settlement is the result of a joint investigation which protected the government from inflated claims. We appreciate the efforts of the Department of Justice in pursuing this matter and will continue to work collaboratively with our investigative partners to aggressively investigate those who seek to defraud government programs,” said Acting Inspector General April G. Stephenson.

“The United States Attorney’s Office will continue to investigate grant fraud matters on both Criminal and Civil grounds and will aggressively pursue actions against those who submit false claims to the United States,” said U.S. Attorney Rosa Emilia Rodríguez-Vélez. “I commend the hard work and dedication of the Office of Inspector General and the prosecutorial team that handled the case.”

The matter was prosecuted by Assistant U.S. Attorney David O. Martorani-Dale, Affirmative Civil Enforcement Coordinator, and Assistant U.S. Attorney Hector E. Ramírez-Carbó, Chief of Civil Division.

Alaska Woman Pleads Guilty to Defrauding Anchorage Medical Practice

Anchorage, Alaska – U.S. Attorney Bryan Schroder announced that an Alaska woman pleaded guilty in federal court for devising multiple schemes to defraud an Anchorage medical practice through various means.

Jill Diane Applebury, aka: “Jill Wetzsteon,” 53, d/b/a Applebury Accounting Services, of Anchorage, pleaded guilty today before Chief U.S. District Judge Timothy M. Burgess to four counts of bank fraud, one count of wire fraud, and one count of fraudulent transactions with an access device. The sentencing hearing has been scheduled for March 29, 2019, at 9:00 a.m.

According to court documents, from the mid-1990’s until March 2013, Jill Applebury was an independent contractor who performed bookkeeping services for an Anchorage medical practice, which was owned and operated by an Anchorage physician. From at least 2004 until March 22, 2013, Jill Applebury defrauded the Anchorage medical practice in several ways.

According to admissions made in connection with her guilty plea, one such scheme stems from May 2008 to January 2010, when Jill Applebury used the medical practice’s funds to pay her Federal Income Tax Withholding without authority. Specifically, Jill Applebury executed unauthorized and fraudulent transactions from the medical practice’s business bank account to the IRS, thereby having the medical practice pay her IRS individual income tax account.

Another scheme involved the medical practice’s profit-sharing plan. Employees of the medical practice were eligible to participate in its profit-sharing plan, which was overseen by a third-party administrator. Independent contractors did not qualify for the plan; however, Jill Applebury falsely represented to the third-party administrator that she had become a full-time employee of the medical practice in 2009, making her eligible to participate in the profit-sharing plan beginning in 2010. In all, Jill Applebury fraudulently caused the physician to unknowingly allocate $62,722.90 to her in unauthorized profit-sharing plan contributions for the years 2010 and 2011.

In April and May 2011, Jill Applebury devised a scheme to defraud the medical practice by fraudulently transferring funds from the medical practice’s business bank account to pay for charges on her personal credit card, which she shared with her husband Darin Applebury, including charges for travel and dining. Additionally, between 2004 and March 22, 2013, Jill and Darin Applebury used the medical practice’s business credit card to pay for items for their own personal and/or business benefit. The unauthorized charges included cell phone service for the Appleburys and members of their family, internet service for their residence, business licenses for businesses owned by Jill and Darin Applebury, automobile insurance for their personal vehicles, and other personal items.

The investigation also revealed that in October 2012, Jill Applebury fraudulently used the medical practice’s business credit card to purchase nearly $3,000 of medical products for her husband’s business, Rapid Recovery Medical Service, Inc. The fraudulent credit card purchases were made using the physician’s name and address without the knowledge and permission of the Anchorage physician.

Jill Applebury faces a maximum sentence of up to 30 years in prison, as well as a period of supervised release, restitution, and monetary penalties. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any of the defendant.

The Federal Bureau of Investigation (FBI) and the Anchorage Police Department (APD) conducted the investigation leading to the charges in this case. This case is being prosecuted by Assistant U.S. Attorney Retta-Rae Randall.

Original PressReleases…

Former D.C. Schools Employee and Business Owner Plead Guilty to Federal Charge in Bid-Rigging Scheme

Schools Employee Helped Steer Nearly $300,000 Contract to Her Friend

WASHINGTON – A former employee of the District of Columbia Public Schools and a business owner, her longtime friend, pled guilty today to a federal mail fraud charge stemming from a bid-rigging scheme involving a government contract valued at nearly $300,000.

The announcement was made by U.S. Attorney Jessie K. Liu, Nancy McNamara, Assistant Director in Charge of the FBI’s Washington Field Office, and District of Columbia Inspector General Daniel W. Lucas.

Amber R. Crowder, 39, of Washington, D.C., also known as Amber Hines, and Shauna Marie Brumfield, 40, of Sacramento, Calif., also known as Shauna Snell, each pled guilty in the U.S. District Court for the District of Columbia. The charge carries a statutory maximum of 20 years in prison and potential financial penalties. The Honorable Senior Judge John D. Bates scheduled Brumfield’s sentencing for Feb. 5, 2019, and Crowder’s sentencing for Feb. 11, 2019.

According to a Statement of Facts agreed to by both defendants as part of their plea, Crowder worked as a program manager in the Office of Special Education (OSE) of the District of Columbia Public Schools (DCPS). In the summer of 2012, Crowder was tasked with identifying and recommending a company to aid in the scheduling of meetings related to individual education plans for special education students. Brumfield and Crowder agreed to work together to obtain the contract.

On Aug. 7, 2012, Brumfield created a company called A Simple Solution to bid on the contract. Brumfield and Crowder were partners in A Simple Solution. Crowder was not identified in any company filings or listed on any communications to DCPS in order to conceal her ownership interest in A Simple Solution. At the time, Brumfield and Crowder were also partners in another company called Education Connection, which provided tutoring services to special education students. Crowder was not identified in any Education Connection company filings or listed on any Education Connection communications to DCPS.

OSE chose A Simple Solution for the administrative assistant contract over several local qualified companies based on written documentation prepared by Crowder and her personal recommendation. In that documentation, Crowder falsely stated that A Simple Solution was an experienced company. Crowder falsely claimed that her contact person for A Simple Solution was “Marie Matthews,” which was an alias used by Brumfield. Crowder did not disclose that she was on the payroll of Education Connection. A Simple Solution bid $298,800 for the contract because Crowder disclosed to Brumfield that the expected budget for the contract was $300,000. Two separate contracts were signed to cover the entire school year. Crowder’s boyfriend signed the first contract as the purported A Simple Solution Chief Financial Officer, while Brumfield’s boyfriend signed the second contract as the purported A Simple Solution branch manager in order to make it appear that A Simple Solution was an established company with multiple employees.

As a result of the fraud, from October 2012 through March 2014, the District of Columbia Public Schools paid approximately $222,000 to A Simple Solution. Brumfield transferred approximately $19,164 of those funds from A Simple Solution’s bank account to Crowder’s personal bank account.

In announcing the pleas, U.S. Attorney Liu, Assistant Director in Charge McNamara, and Inspector General Lucas commended the work of those who investigated the case from the FBI’s Washington Field Office and the District of Columbia Office of the Inspector General. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Diane Lucas, Paralegal Specialists Joshua Fein and Aisha Keys, and former Paralegal Specialists Jessica Mundi and Kristy Penny. Finally, they commended the work of Assistant U.S. Attorneys Anthony Saler and Kondi Kleinman, who investigated and prosecuted the case.

Original PressReleases…

Government Contractors Found Guilty in $11 Million Veteran Set-Aside Fraud Scheme

Company and owner fraudulently misused “service-disabled veteran-owned small business” status to defraud the Department of Veterans Affairs and Army Corps of Engineers

SAN DIEGO, CA – A federal jury today convicted Andrew Otero and his company, A&D General Contracting, Inc. (“A&D”), on charges that they fraudulently obtained $11 million in federal contracts specifically set aside for service-disabled veteran-owned businesses.

The evidence demonstrated that Otero had no military experience. Yet Otero (on behalf of A&D) and veteran Roger Ramsey (on behalf of Action) participated in a conspiracy to defraud the government by forming a joint venture (“the JV”) – and falsely representing that Action and the JV qualified as service-disabled veteran-owned small businesses (“SDVOSB”). Based on the false claim to SDVOSB eligibility, the conspirators fraudulently obtained approximately $11 million in federal government construction contracts or task orders with the Department of Veterans Affairs (“VA”) and the Army Corps of Engineers (“ACE”).

As proven at trial, the fraudulent conspiracy involved set-aside contracts that could only be bid upon by legitimate service-disabled veteran-owned small businesses – a designation that did not apply to Otero or A&D. To appear qualified, Otero and Ramsey initially executed an agreement to create the JV (“the JV Agreement”), which stated that Ramsey’s company (Action) would be the managing venturer, employ a project manager for each of the set-aside contracts, and receive the majority of the JV’s profits.

However, as proved at trial, six months later, Otero and Ramsey signed a secret side agreement that made clear the JV was ineligible under the SDVOSB program. For example, the side agreement said the parties created the JV so that A&D could simply “use the Disabled Veteran Status of Action Telecom” to bid on contracts. The side agreement also stated that A&D – not Action – would run the construction jobs. They also agreed that “A&D will keep 98% of every payment; Action Telecom will receive 2% of every payment.”

In addition to the secret side agreement, the evidence demonstrated several ways in which the JV did not operate as a legitimate SDVOSB, but was essentially controlled by Otero and A&D. For example, although Ramsey (a service-disabled veteran) nominally served as president of Action and the JV, he actually worked full-time for another telecommunications company. Otero and A&D, not Ramsey, controlled the day-to-day management, daily operation and long-term decision making of the JV. Among other things, Otero and A&D appointed an A&D employee as the project manager for every contract and task order.

“Our nation strives to repay the debt of gratitude we owe to our veterans by setting aside some government contracts for veterans with service-related disabilities,” said United States Attorney Adam Braverman. “These unscrupulous contractors abused this program through a cynical and illegal ‘rent-a-vet’ scheme. They are now being held fully accountable for robbing truly deserving vets of important economic opportunities.”

All four defendants are also facing civil charges in United States v. Otero, et al., Case No. 15CV0441-JAH, a case alleging violations of the false claims act based on the similar misconduct.

The defendants were ordered to appear before U.S. District Judge John Houston for sentencing on February 19, 2019 at 10:30 a.m.

This case is being prosecuted by Assistant United States Attorneys Rebecca Kanter and Aaron Arnzen.

CORPORATE DEFENDANTS

A&D General Contracting, Inc., Santee, California

INDIVIDUAL DEFENDANTS

Andrew Otero El Cajon, CA

Criminal Case No. 17CR0879-BEN

SUMMARY OF CHARGES

Count 1: Conspiracy to defraud and commit offenses (18 U.S.C. § 371)

Maximum penalties: 5 years’ imprisonment; 3 years’ supervised release; a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest; and a mandatory special assessment of $10

Count 2-4: Major fraud against the United States (18 U.S.C. § 1031)

Maximum penalties: 10years’ imprisonment; supervised release; a fine of $1,000,000 per count ($5,000,000 total); and a mandatory special assessment of $100

Counts 5-7: Wire fraud (18 U.S.C. § 1343)

Maximum penalties: 20 years’ imprisonment; a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest; and a mandatory special assessment of $100

10, 14: False statements (18 U.S.C. § 1001)

Maximum penalties: 5 years’ imprisonment; a fine; and a mandatory special assessment of $100

AGENCIES

Department of Veterans Affairs, Office of Inspector General