Healthcare Fraud: David Williams Was Arrested On a Federal Complaint Charging Him With Engaging In a Scheme To Defraud Insurance Companies

Fort Worth Man Arrested on $25 Million Health Care Fraud Scheme

FORT WORTH, Texas — A Fort Worth, Texas, man, David Williams, 54, was arrested yesterday by special agents with the Federal Bureau of Investigation on a federal complaint charging him with engaging in a scheme to defraud insurance companies by submitting over $25 million in false and fraudulent claims for medical services. The announcement was made today by U.S. Attorney John Parker of the Northern District of Texas.

Williams made his initial appearance yesterday before U.S. Magistrate Judge Jeffrey L. Cureton and will remain on bond pending further court hearings.

According to the criminal complaint affidavit, between November 2012 through August 2017, Williams advertised on his website, getfitwithdave.com that he offered in-home fitness training and therapy through his company, “Kinesiology Specialists.” Williams identified himself as “Dr. Dave” and stated that he served clients in most of Texas, Las Vegas, Denver, Tucson, Seattle, and Orlando. Through his website, Williams told potential clients that he was accepting most health care insurance coverage plans.

In order to bill insurance companies for his services, Williams registered as a health care provider with the Centers for Medicare and Medicaid Services. In completing the application, Williams falsely certified that he was a health care provider. Williams enrolled as a health care provider at least nineteen times under different names or variations of his name and his company names and falsely certified that he was a health care provider in each application. Williams would then bill the insurance companies as if he were a medical physician and as if he had provided care requiring medical decision making of high complexity when Williams actually provided fitness and exercise training to his clients.

According to the criminal complaint affidavit, Williams recruited potential clients through the use of flyers, the internet, and word-of-mouth. Once recruited, Williams would typically meet with or speak with the new client over the phone and review their health history and goals for their planned fitness training. Williams would then typically assign a personal trainer to that individual. The personal trainer typically met with the client between one and three times a week for approximately one hour and provided fitness training. Williams would then bill insurance companies for each training session using inaccurate codes and on certain occasions, billed for services that neither he nor his staff, ever provided.

Between November 2012 through August 2017, Williams was paid in excess of $3.9 million in relation to his fraudulent billing of United HealthCare Services, Inc., Aetna, Inc., and Cigna.

A federal criminal complaint is a written statement of the essential facts of the offense charged, and must be made under oath before a magistrate judge. A defendant is entitled to the presumption of innocence until proven guilty. The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment. The maximum statutory penalty for the charged offense is 10 years in federal prison and a $250,000 fine.

The investigation is being conducted by the FBI. Assistant U.S. Attorney P.J. Meitl is in charge of the prosecution.

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Financial Fraud: Anthony A. Shaw Sentenced On Charges Of Taking Illegal Gratuities, Income Tax Evasion And Making False Statements

Former Army Manager Sentenced to Prison for Taking $1 Million in Illegal Gratuities

PITTSBURGH – A resident of Rochester Hills, Michigan, has been sentenced in federal court to 46 months incarceration and a $100,000 fine, on charges of taking illegal gratuities, income tax evasion and making false statements to federal law enforcement officers, United States Attorney Soo C. Song announced today.

Judge Schwab imposed the sentence on Anthony A. Shaw, 55, of Rochester Hills, Michigan.

According to the information presented to the court, Shaw was a Deputy Project Manager responsible for directing development of and managing government contracts for combat vehicle systems such as U.S. Army High Mobility Multipurpose Wheeled Vehicle (hereinafter Humvees) at the U.S. Department of Army, Tank-Automotive and Armaments Command (TACOM). TACOM is located in Warren, Michigan, and is the Department of Defense’s facility responsible for contracting for design, production, modification and maintenance of vehicles used by the Armed Services. During a wartime buildup, it has been responsible for as much as $65 billion of contracts.

Because of his position at TACOM, Shaw came to know the Buckner brothers, who were 50/50 owners of Ibis Tek, LLC (hereinafter Ibis Tek). Ibis Tek’s main office was located at 912 Pittsburgh Street, Butler, Pennsylvania 16002, and it had an office at Ibis Tek Victory Road facility, 220 South Noah Drive, Saxonburg, PA 16056. Ibis Tek manufactured both military and commercial products but specialized in the development of transparent armor and accessory products for tactical and military combat vehicles. The Buckners were perennially interested in getting TACOM business. Over time, Ibis Tek held several subcontracts and prime contracts for TACOM.

In addition to his TACOM job, Shaw purchased houses in the Detroit area, and either flipped them or rented them. He owned more than 90 houses when the housing market sank in 2008. Shaw came from Detroit to the Buckners and complained about carrying more than $400,000 of credit card debt, explained that he needed money to avoid bankruptcy, which could result in him losing his job. As a result, from 2008 through 2011 Shaw took $1,055,500 in illegal gratuities from the Buckners. Shaw failed to pay income tax on these monies and ran up a criminal tax liability of $325,800. In addition, when federal agents interviewed Shaw, he lied to them by denying that he ever traveled in a car, a boat or an airplane owned by Thomas Buckner or John Buckner, and denied that he ever stopped to see Thomas or John Buckner in Pennsylvania while on a motorcycle trip, when in fact, he had done each of these things.

There are two more related guilty pleas entered in this investigation and each of these defendants is awaiting sentencing.

Harry H. Kramer, 52, of Wexford, Pennsylvania, pleaded guilty to one count of fraud for his role as CFO of Ibis Tek in a $6,085,709 fraud scheme against TACOM. Counts Two and Three charged him with filing false returns for Ibis Tek for 2009 and 2010.

David S. Buckner, of Warren, Michigan, (no relation to Thomas or John Buckner) pleaded guilty to a one-count information charging him with impeding the IRS by acting as a financial intermediary who received and then paid out money from Ibis Tek, LLC to Anthony Shaw, for the purpose of concealing that the monies were income of Shaw.

“Today’s sentencing, the third of five related cases, is the successful product of a joint investigation conducted by the Defense Criminal Investigative Service (DCIS), the Internal Revenue Service, Criminal Investigation, the U.S. Army Criminal Investigation Command and the U.S. Attorney’s Office, Western District of Pennsylvania,” stated Leigh-Alistair Barzey, Special Agent-in-Charge, DCIS Northeast Field Office. “Confidence in the integrity of the public officials working in the DoD procurement process and supply chain is of vital importance to all Americans. DCIS is committed to working with its law enforcement partners to investigate any violations of this public trust.”

“IRS-Criminal Investigation provides financial investigation expertise in our work with our law enforcement partners,” said IRS Acting Special Agent in Charge Ed Wirth. “Pooling the skills of each agency makes a formidable team as we investigate allegations of wrong-doing. Today’s sentence demonstrates our collective efforts to enforce the law and ensure public trust”.

Assistant United States Attorney Nelson P. Cohen prosecuted this case on behalf of the government.

Acting United States Attorney Soo C. Song commended the Special Agents of the Department of Defense, Defense Criminal Investigative Service, the Internal Revenue Service, Criminal Investigation, and the U.S. Army Criminal Investigation Division for the investigation leading to the successful prosecution of these defendants.

Intellectual Property: Jerry Jindong Xu Charged With Conspiracy To Steal Trade Secretsty: Jerry Jindong Xu Charged With Conspiracy To Steal Trade Secrets

Former Chemours Employee Charged With Conspiracy To Steal Trade Secrets In Connection With Plan To Sell Trade Secrets To Chinese Investors

Former Employee Intended To Infringe On Chemours’ Lucrative Sodium Cyanide Business

WILMINGTON, Del. – A federal grand jury in Wilmington has charged a former Chemours employee with conspiring to steal trade secrets and attempting to monetize them with Chinese investors, announced Acting U.S. Attorney David Weiss and Gordon B. Johnson, Special Agent in Charge of the FBI Baltimore Division.

According to the indictment, the conspiracy involved sodium cyanide, a chemical used in mining and for which Chemours is the world’s largest producer.  Chemours, based in Wilmington, performs the research and development for sodium cyanide at the Experimental Station in Wilmington.  Sodium cyanide is most often used to mine gold, silver, and other precious metals.  Earlier this summer, Chemours broke ground on a $150 million sodium cyanide plant in Mexico.

The individual charged in the indictment is Jerry Jindong Xu, who moved from China to North America in 2011 while employed by DuPont, and became a Chemours employee when Chemours spun off of DuPont in 2015.  Xu, terminated by Chemours in 2016, was a marketing professional specializing in sales of sodium cyanide.  Xu was aided by an unnamed co-conspirator, who was also a longtime DuPont employee before leaving the company in 2014 to open a cyanide and mining consulting business.

According to the indictment, Xu completed several overt acts in furtherance of the conspiracy.  His main objective was either to help investors build a competing sodium cyanide plant or become an import competitor in North America.  Over the course of one year, all while employed at Chemours, he:

  • Misled colleagues and fabricated assignments in order to accumulate vast amounts of pricing and other information, including obtaining passwords for spreadsheets.
  • Contacted potential Chinese investors to solicit funding for building a sodium cyanide plant. They would communicate in English and Chinese, sometimes over an encrypted Chinese messaging service.
  • Explained to one Chinese investor that he wanted to do this project “for himself and not to slave away at this only to benefit someone else”
  • During a 2016 trip to China, accessed Chemours documents and told his co-conspirator he had “out-of-the-big (sic) ideas cooking” that he was anxious to discuss. He also asked how much their plant project would be worth.  “Would you say in the millions?”
  • Created a company, made his wife the director, and executed a non-disclosure agreement with his co-conspirator.
  • Asked for and received a tour of Chemours’ sodium cyanide plant, during which he secretly took pictures of plant system diagrams and sent them to himself.
  • In the week after he was notified of his termination, he copied and/or sent himself many Chemours confidential documents, and then falsely certified that he had returned all Chemours files.

Xu is charged with conspiracy to commit theft of trade secrets, in violation of 18 U.S.C. § 1832(a)(5).  The maximum penalties he faces are 10 years imprisonment and a $250,000.00 fine.  Xu was arrested in New York in August and arraigned in Wilmington on September 28, 2017.

Chemours was formed in July of 2015 after the DuPont Corporation separated its performance chemicals business line from its other business.   Chemours is a publicly traded corporation with its corporate headquarters located in Wilmington, Delaware.   It is the world’s largest sodium cyanide producer.

“We are committed to prosecuting anyone—be they rogue actors or foreign nations—who tries to line their pockets by jeopardizing the hard work our businesses perform every day,” said Acting U.S. Attorney Weiss. “This brazen conduct goes to the heart of intellectual property protection and our office will aggressively and diligently pursue anyone who breaks laws and threatens corporate innovation.”

FBI Special Agent-in-Charge Johnson said, “The FBI investigation and this indictment reveal a broken trust from a company employee who stole trade secrets in a structured, multi-faceted fashion,” said Special Agent in Charge Gordon B. Johnson of the FBI’s Baltimore Division.  “The FBI will vigorously investigate cases whenever trade secrets are stolen or otherwise compromised.  Private sector entities should be alert to protect trade secrets, and report indicia of their theft to the FBI.”

The case is being prosecuted by Assistant United States Attorneys Jamie McCall and Alexander Mackler.  The investigation, which is ongoing, is being conducted by the FBI.

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Financial Fraud: Jason T. Posey Guilty For His Role In Orchestrating a Scheme to Steal From Charitable Foundations

Former Congressional Staffer Pleads Guilty to Extensive Fraud and Money Laundering Scheme

HOUSTON – A former congressional staffer pleaded guilty today for his role in orchestrating a scheme to steal hundreds of thousands of dollars from charitable foundations and the individuals who ran those foundations to pay for personal expenses and to illegally finance a former congressman’s campaigns for public office, announced Acting U.S. Attorney Abe Martinez and Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division.

Jason T. Posey, 46, formerly of Houston and currently residing in Mississippi, pleaded guilty to one count of mail fraud, one count of wire fraud and one count of money laundering before Chief U.S. District Judge Lee H. Rosenthal of the Southern District of Texas. Sentencing is set for March 29, 2018.

According to admissions made in connection with Posey’s plea, Posey served as director of special projects for former U.S. Congressman Stephen E. Stockman, 60, of the Houston area, from in or around January 2013 until in or around November 2013. Posey admitted that, at Stockman’s direction, he and another congressional staffer, Thomas Dodd, 38, also of the Houston area, illegally funneled $15,000 of charitable proceeds into Stockman’s campaign bank account and caused the campaign to file reports with the Federal Election Commission (FEC) that falsely stated that the money was a contribution from their parents and from the staffers themselves. According to Posey’s admissions, Stockman also directed Posey to send a letter to a charitable donor that falsely stated the donor’s $350,000 donation had been used to support a charitable endeavor, when the funds were actually used for other purposes to include Stockman’s campaigns for public office.

In connection with his plea, Posey also admitted he and Stockman raised $450,571.65 to support Stockman’s 2014 Senate campaign by falsely representing to a donor that the funds would be used to support a legitimate independent expenditure by an independent advocacy group Posey headed. In fact, according to Posey, Stockman personally directed and supervised the activities of the purportedly independent group, including the printing and mailing of hundreds of thousands of copies of a pro-Stockman publication to Texas voters. Posey also admitted he submitted a false affidavit to the FEC in order to conceal the scheme.

Dodd pleaded guilty on March 20 to conspiracy to commit mail and wire fraud and conspiracy to make illegal conduit contributions and false statements to the FEC.

Stockman’s trial is scheduled to begin on Jan. 29, 2018. The charges and allegations against him are merely accusations. He is presumed innocent until and unless proven guilty.

The FBI and IRS-CI are investigating the case. Assistant U.S. Attorney Melissa Annis is prosecuting the case along with Trial Attorneys Ryan J. Ellersick and Robert J. Heberle of the Criminal Division’s Public Integrity Section.

Financial Fraud: Joseph Felix Strevell Sentenced To Be Followed By a Three-Year Term of Supervised Release And Five Counts of Perjury

Former NYS Deputy Secretary of State Sentenced to Serve Thirty Months in Prison for Perjury
Gave False Sworn Testimony About Personal and Family Expenditures

ALBANY, NEW YORK – Joseph Felix Strevell, 56, of Castleton, New York, was sentenced today to serve 30 months in prison, to be followed by a three-year term of supervised release, in connection with his guilty plea to five counts of perjury.

The announcement was made by Acting United States Attorney Grant C. Jaquith, New York State Police Superintendent George P. Beach, II, and Vadim D. Thomas, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI).

As part of his guilty plea, Strevell admitted that from 1997 to 1999, he served as a Deputy Secretary of State for the State of New York. He left that position in December 1999 to serve as the head of the state-funded Institute for Entrepreneurship, which he led until July 2001. In 2007, Strevell pled guilty in federal court to defrauding New York State while leading the Institute, including using Institute funds to give himself a $95,000.00 lump-sum raise without the approval of the Institute’s Board of Directors. He also admitted to improperly using Institute funds to pay for his personal expenses and those of his family.

In March 2009, the United States District Court for the Northern District of New York entered a judgment against Strevell for this conviction, requiring him to pay $111,500.00 in restitution to New York State, the victim of his offense. The judgment required Strevell to pay restitution at a minimum rate of $100 per month, or 10 percent of his gross monthly earnings, whichever was greater, and to pay full restitution immediately if at any time he had the resources to do so.

In December 2014, the Civil Division of the U.S. Attorney’s Office for the Northern District of New York deposed Strevell under oath to determine whether he was complying with his restitution obligation. When questioned about how he was able to make a $75,440.00 down payment on a lease with an option to purchase a 138.55-acre horse farm in Rensselaer County in April and May 2013, Strevell falsely testified that his mother and aunt provided most of the funds to make the down payment. In fact, neither Strevell’s mother, nor aunt, contributed any money toward the down payment.

Strevell also lied during that deposition about whether he had paid for his daughter’s wedding in May 2014, falsely testifying that he contributed only “a couple thousand dollars” toward wedding expenses. In fact, Strevell paid for most of the wedding, contributing more than $30,000.00, including $10,435.00 in cash to one vendor directly, and transferring tens of thousands of dollars from his business to his daughter.

This case was investigated by the New York State Police and the FBI, and was prosecuted by Assistant U.S. Attorneys Jeffrey C. Coffman and Michael Barnett.

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Financial Fraud: DAVID STASIOR Charged For Providing Financing And Financial Advice to an Illegal Brothel

Manhattan U.S. Attorney Announces Charges Against Massachusetts Businessman For Money Laundering, Financial Support For Manhattan Brothel

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Charles Brandeis, the Special Agent in Charge of the New York Field Office of the U.S. Department of State’s Diplomatic Security Service (“DSS”), and Philip Bartlett, the Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), announced charges today against a Massachusetts businessman, DAVID STASIOR, for providing financing and financial advice to an illegal brothel operating in Manhattan, and conspiring with the brothel owner to use the proceeds from the brothel to promote the brothel’s activities. STASIOR was arrested by agents from DSS, the USPIS, and the U.S. Attorney’s Office for the Southern District of New York this morning and will be presented in federal court in Massachusetts later today.

This case arises from a multiple-year-long investigation in which 17 additional individuals have previously been charged with conspiracy to commit money laundering and conspiracy to violate the Travel Act. The previously charged individuals have included the owners of a network of at least 10 brothels in Manhattan, and individuals who provided advertising services for these brothels. These brothels were independently owned but worked cooperatively, and employed prostitutes who typically came to the United States from South Korea pursuant to fraudulently obtained visas or visa waivers. STASIOR allegedly provided financing for one of these brothels, whose owner was previously charged and pled guilty to money laundering conspiracy.

Acting U.S. Attorney Joon H. Kim stated: “For years, the defendant allegedly helped launder the proceeds of an illegal brothel operation in Manhattan, providing start-up money, ongoing financial advice, and record-keeping services. As alleged, the defendant financially supported and profited from this business that exploited vulnerable women and laundered money.”

Special Agent in Charge Charles Brandeis stated: “DSS continues to disrupt and dismantle transnational criminal organizations seeking to profit from the entry and illicit activities of vulnerable foreign nationals. This investigation demonstrates the global reach of the Diplomatic Security Service.”

Inspector in Charge Philip R. Bartlett stated: “This arrest represents the continued effort of law enforcement to put a stop to illegal activity wherever it is found. Many claim prostitution is the oldest profession in the world. The anonymity of the internet was used to hide the identity of its operators, keeping law enforcement in the dark. As in this case, what is done in the dark will always be revealed in the light.”

According to the Complaint:

Since 2012, DSS, USPIS, and the U.S. Attorney’s Office for the Southern District of New York have been investigating a group of brothels (the “Brothels”) operating in and around New York. Each of the Brothels was independently owned and operated, but the owners of the Brothels worked cooperatively through, among other things, the sharing of approved customer lists and information. STASIOR started out as a customer of the Brothels. In 2013, he provided a co-conspirator (“CC-1”) with financing to open a brothel (the “Brothel”), while requiring the co-conspirator to make periodic payments from the Brothel’s proceeds in return for his investment.

The Brothel used a website to advertise the women prostituted in the Brothel, as well as an online aggregator of advertisements to advertise the Brothel. The management of online advertising and payment for this advertising was coordinated by the defendant and CC-1, among others. STASIOR sent multiple emails to CC-1 in which he provided business advice to the Brothel, including advice on how to use online advertising for the Brothel to increase the Brothel’s profits. STASIOR’s emails included spreadsheets that listed him as a “Partner” in the business and itemized the Brothel’s prostitution revenues and the various expenses involved in running the Brothel, including the cost of advertising. In these emails, STASIOR also itemized the payments made to him out of the Brothel’s proceeds, and stated that he was concerned about the Brothel’s profitability to ensure that CC-1 would be able to “pay back” the “debt” that had been incurred by his investment in the Brothel.


STASIOR, 53, of Concord, Massachusetts, is charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to violate the Travel Act, which carries a maximum sentence of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html

Mr. Kim praised the outstanding efforts of DSS, USPIS, and the criminal investigators working in the United States Attorney’s Office for the Southern District of New York. He added that the investigation is ongoing.

This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Danielle R. Sassoon and Thane Rehn are in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Small Business Fraud: Sage Tee and Ms. Laura Shikashio Have Agreed to Pay to Resolve Allegations That They Violated The False Claims Act – FCA

Owner of Hanford Subcontractor to Pay $235,000 to Settle Small Business Fraud Allegations

Spokane – Joseph H. Harrington, Acting United States Attorney for the Eastern District of Washington, announced that the U.S. Department of Justice (DOJ) and Sage Tee LLC (Sage Tee), a subcontractor at the Department of Energy’s (DOE) Hanford Site, and its owner, Laura Shikashio, have reached an agreement wherein Sage Tee and Ms. Shikashio have agreed to pay $235,000 to resolve allegations that they violated the False Claims Act (FCA) in connection with bidding – receiving two small business subcontracts at DOE’s Hanford nuclear site.

Between 2005 and 2016, Washington Closure Hanford, LLC (WCH), a jointly owned by AECOM, Bechtel National Inc., and CH2M Hill Companies Ltd., was a DOE prime contractor that was awarded a multi-billion dollar River Corridor Closure Contract (RCC) at DOE’s Hanford Site. WCH was responsible for environmental remediation on Hanford’s River Corridor. WCH workers were responsible for cleaning up waste sites at Hanford, decontaminating and decommissioning former plutonium production nuclear reactors and surplus facilities, and disposing of contaminated waste. The RCC required WCH to award a certain percentage of subcontracts to eligible and qualified small and disadvantaged businesses, including woman-owned small businesses. Pursuant to the WCC, DOE fully reimbursed WCH for the amounts WCH paid to subcontractors so long as they were reasonable and allowable under the contract.

The case originally arose out of a whistleblower complaint filed in U.S. District Court by Savage Logistics LLC, a Hanford-area small business, and Salina Savage, its owner. In December 2013, the United States filed a Complaint intervening in the lawsuit, alleging that WCH, Sage Tee LLC (an entity that purported to be a small, disadvantaged business), Laura Shikashio, the owner of Sage Tee, and another entity known as Federal Engineers and Constructors (FE&C), violated the False Claims Act (FCA) with respect to two multi-million dollar subcontracts arranged between WCH and Sage Tee. The Complaint alleges that WCH, Sage Tee, Ms. Shikashio, and FE&C knowingly misrepresented Sage Tee to be a qualified disadvantaged small business in order to he eligible for two multi-million dollar subcontracts that were designated for truly qualified small disadvantaged businesses. The Complaint further alleges that Sage Tee was not a legitimate small, disadvantaged business; rather it was a pass-through front company for FE&C, which performed substantially all of the work on WHC’s improperly awarded subcontracts. This settlement resolves Sage Tee and Ms.

Shikashio’s liability. See attached Settlement Agreement.

Last month, FE&C agreed to pay $2.0 Million to resolve its own liability exposure. WCH continues to deny liability and the United States’ case against WCH continues.

Joseph H. Harrington said, “Small business fraud not only harms the taxpayers and the vital cleanup mission at Hanford, but also legitimate small, disadvantaged businesses that are cheated from the opportunity to fairly compete for and perform DOE subcontracts. I want to commend the Department of Energy Office oflnspector General (DOE-OIG) and the Small Business Administration Office of Inspector General (SBA-OIG) for the outstanding efforts investigating and uncovering the scheme perpetrated here. Harrington added, “The United States Attorney’s Office for the Eastern District of Washington, together with our federal law enforcement partners, will continue to vigorously pursue large and small business fraud at Hanford.”

“The false statements in this case were intended to deceive the government into believing that a woman-owned small, disadvantaged business was performing valuable work as a government subcontractor,” said Small Business Administration Acting Inspector General Hannibal “Mike” Ware. “OIG will aggressively pursue parties that, through fraud, gain access to SBA’s small business contracting programs. I want to thank the U.S. Attorney’s Office for their dedication to enforcing compliance in SBA’s contracting programs.”

Department of Energy Acting Inspector General April G. Stephenson said, “The Department of Energy Office of Inspector General is committed to ensuring the integrity of Departmental contracts and financial expenditures. We will continue to investigate allegations of fraudulent diversion of tax dollars throughout DOE programs. This settlement is a result of our staffs dedicated work to ensure public funds are properly used for the mission-related purposes for which they are intended. We appreciate the support of Department of Justice’s and Department of Energy’s attorneys in these matters.”

The Savage whistleblowers will receive approximately $47,000 of the $235,000 settlement DOJ reached with Sage Tee and Shikashio due to their own private efforts in reporting and exposing the described scheme to the DOE and DOJ.

DOE-OIG and SBA-OIG conducted the investigation on the Relators’ whistleblower complaint. The DOJ’s lawsuit is being prosecuted by Tyler H.L. Tornabene, Vanessa R.Waldref, and Daniel Fruchter, Assistant United States Attorneys for the Eastern District of Washington.

This case is captioned United States of America ex rel. Salint;J Savage, Savage Logistics LLC, vs. Washington Closure Hanford LLC, Federal Engineers and Constructors, Inc., Sage Tee LLC, and Laura Shikashio, EDWA Cause No. CV-10-5051-SMJ.

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Tax Fraud: Thomas G. Buckner And John. P. Buckner Sentenced on Charges of Major Fraud Against the U.S. Department of Defense And Income Tax Evasion Violations

Brothers Sentenced to Prison for Defrauding U.S. Department of Defense

PITTSBURGH – Thomas G. Buckner, 66, of Gibsonia, Pa., and his brother, John. P. Buckner of Lyndora, Pa., have been sentenced in federal court to 30 months incarceration and a $500,000 fine, and 24 months incarceration and a $300,000 fine, respectively, on charges of major fraud against the U.S. Department of Defense and income tax evasion violations, United States Attorney Soo C. Song announced today.

According to the information presented to the court, the Buckner brothers were 50/50 owners of Ibis Tek, LLC. Ibis Tek’s main office was located at 912 Pittsburgh Street, in Butler, Pennsylvania, and it had an office at Ibis Tek Victory Road facility, 220 South Noah Drive, in Saxonburg, Pennsylvania. Ibis Tek manufactured both military and commercial products but specialized in the development of transparent armor and accessory products for tactical and military combat vehicles. Ibis Tek itself was not charged with any violations.

TACOM, located in Warren, Michigan, was responsible for letting and overseeing contracts on behalf of the U.S. Department of Defense, including contracts concerning High Mobility Multipurpose Wheeled Vehicle (Humvees). Ibis Tek had a subcontract to produce Vehicle Emergency Escape Window (VEE Window) Kits for Humvees. The Buckners inflated Ibis Tek’s costs to manufacture the VEE Window kits by creating Alloy America, LLC, (Alloy) a company that was co-located at Ibis Tek that the Buckners controlled, by using Alloy to purchase the frames in China for $20 per frame, and by using false invoices from Alloy to make it appear that Ibis Tek paid $70 per frame. In addition, the Buckners sold scrap aluminum collected in the manufacturing process but failed to credit that money to TACOM. The losses to TACOM were $6,085,709.

The income tax evasion charges against the Buckner brothers arose from not reporting the cash from sales of scrap aluminum, and for taking unallowable business deductions described below. Thomas Buckner repaid the I.R.S. more than $940,000 in restitution, penalties and interest; John Buckner repaid more than $980,000 in restitution, penalties and interest.

The contract fraud violations described above formed the basis for False Claims Act charges against the Buckner brothers brought by the Affirmative Civil Enforcement (ACE) Unit of the U.S. Attorney’s Office. Attorneys on both sides agreed on a civil settlement of $12,171,580.00. On Friday, October 6, 2017, the Buckner brothers made the final payment to the Department of the Treasury on their civil settlement.

Acting U.S. Attorney Song said, “The imposition of years of imprisonment, coupled with more than $2.7 million in restitution and fines, justly resolves the multi-year investigation into the $6 million fraudulent scheme of these defendants against the United States.”

There were three related guilty pleas entered in this investigation and each of these defendants is awaiting sentencing.

Harry H. Kramer, 52, of Wexford, Pennsylvania, pleaded guilty to one count of fraud for his role as CFO of Ibis Tek in the above described scheme against TACOM. Counts Two and Three charged him with filing false returns for Ibis Tek for 2009 and 2010.

David S. Buckner, of Warren, Michigan, (no relation to Thomas or John Buckner) pleaded guilty to a one-count Information charging him with impeding the IRS by acting as a financial intermediary who received and then paid out money from Ibis Tek, LLC to Anthony Shaw, for the purpose of concealing that the monies were income of Shaw.

Anthony A. Shaw, 55, of Rochester Hills, Michigan, pleaded guilty to a five-count Information. Shaw, formerly a civilian employee at TACOM, was a Deputy Project Manager responsible for directing development of and managing government contracts for combat vehicle systems such as Humvees. Shaw was charged in Counts One and Two with demanding and receiving a total of $1,055,500 of illegal gratuities paid by checks, cash and wire transfers by Thomas Buckner to and through David Buckner’s company, D & B Cycle Parts and Accessories, for Shaw’s benefit. Counts Three and Four charged Shaw with income tax evasion for 2009 and 2010 for not reporting the illegal gratuities. In Count Five Shaw was charged with making false statements when he denied that he had socialized with Thomas Buckner and John Buckner, and denied that he had traveled in a car, boat and an airplane owned by Thomas Buckner or John Buckner.

These cases were investigated by the Special Agents of the Department of Defense, Defense Criminal Investigative Service, the Internal Revenue Service, Criminal Investigation, and the U.S. Army Criminal Investigation Division.

“IRS-Criminal Investigation provides financial investigation expertise in our work with our law enforcement partners,” said IRS Acting Special Agent in Charge Ed Wirth. “Pooling the skills of each agency makes a formidable team as we investigate allegations of wrong-doing. Today’s sentences demonstrate our collective efforts to enforce the law and ensure public trust.”

Assistant United States Attorney Nelson P. Cohen prosecuted this case on behalf of the government.

Acting United States Attorney Soo C. Song commended the Special Agents of the Department of Defense, Defense Criminal Investigative Service, the Internal Revenue Service, Criminal Investigation, and the U.S. Army Criminal Investigation Division for the investigation leading to the successful prosecution of these defendants.

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Financial Fraud: ROBERT JON SCHLYER Convicted on Federal Fraud Charges For Scheming to Provide Falsified Documents to Prevent Foreclosure

Federal Jury Convicts Lawyer on Charges of Defrauding an Elderly Couple and a Bank to Prevent Foreclosure on Aurora Property

CHICAGO — A lawyer licensed to practice in Illinois has been convicted on federal fraud charges for scheming to provide falsified documents to prevent foreclosure on a nearly $2 million parcel of land in Aurora. The fraud left an elderly couple out of $300,000.

The jury in federal court in Chicago convicted ROBERT JON SCHLYER, 47, of Portage, Ind., of two counts of wire fraud affecting a financial institution, and one count of bank fraud.

Schlyer’s fraud scheme occurred while representing two clients, co-schemers KEVIN LEBEAU and BRIAN BODIE, in connection with a foreclosure lawsuit. Evidence at trial revealed that Schlyer provided false and fraudulent documents to an elderly couple and Amcore Bank in order to postpone foreclosure on the Aurora property.

The jury returned the guilty verdicts on Oct. 6, 2017, after a four-day trial. U.S. District Judge Amy J. St. Eve set sentencing for Jan. 31, 2018, at 9:15 a.m. Each count carries a maximum sentence of 30 years in prison.

The conviction was announced by Joel R. Levin, Acting United States Attorney for the Northern District of Illinois; and John P. Selleck, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

According to evidence at trial, in 2004 Amcore Bank received a mortgage on the 10.4-acre property in Aurora after issuing a $1.9 million loan for the refinancing and redevelopment of the property. Lebeau and Bodie executed a full personal guarantee for the loan. By the fall of 2005, Lebeau and Bodie had failed to make the required payments, the loan was in default, and the bank filed a foreclosure lawsuit to seize the property.

During the scheme, Schlyer, who acted as Lebeau’s and Bodie’s attorney in the foreclosure suit, obtained $300,000 from an elderly retired couple by providing them with fake documents that made it seem like they were making a safe investment in the redevelopment and that it would be secured by a trust. Schlyer also claimed to be the trustee of the purported trust. In reality, there was no trust and Schlyer was not a trustee. Schlyer and his co-schemers also concealed from the elderly couple the foreclosure suit and LeBeau’s and Bodie’s inability to pay the bank debt. A portion of funds obtained from the elderly couple through the fraud was used to pay down the bank loan.

Together with his co-schemers, Schlyer furnished fraudulent and fabricated documents to the bank, including forged documents that made it appear that investors had committed approximately $1.5 million to the redevelopment of the property. Eventually the foreclosure occurred, and the property was sold in 2010 at a significant loss to the bank.

LeBeau, of Aurora, and Bodie, of Chicago, were previously convicted in the case and are awaiting sentencing before U.S. District Judge Robert W. Gettleman.

The government is represented by Assistant U.S. Attorneys Kartik K. Raman and Amarjeet S. Bhachu.

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Financial Fraud: Metropolis of London Is Preparing With a New Court Against Cybercrime And Fraud

A new state-of-the-art court docket to tackle cyber crime and fraud within the financial sector is to open inside the metropolis of London.

The metropolis of London business enterprise has introduced plans for a new centralised court docket complex with a focus on fraud and cyber crime, in an effort to uphold London’s recognition as an global felony centre publish-Brexit.

Ministers say the courtroom will decorate Britain’s recognition as a rustic where banking and finance is underpinned by way of the guideline of regulation, and help the government tackle the developing risk of laptop crime.

The new 18-courtroom complex is to be located on or around Fleet Street. As well as economic and cyber crime cases, it would also hear other criminal and civil disputes, taking over the work of a clutch of other courts in the City, such as the City of the London Magistrates’ Court and the Mayor’s and City of London Court, which mostly hears tenancy disputes.

The plans are the latest sign that the UK is moving to modernise and expand capacity in order to guard its pre-eminence as an international legal centre. Other countries are attempting to woo businesses seeking legal redress by establishing new courts, some based on English law and hearing cases in English.

The focus on economic crime also reflects the increase in recent years in prosecutions by the Serious Fraud Office as well as the introduction of legislation such as the Criminal Finances Act, which came into force on September 30.

The act creates a new offence of the facilitation of tax evasion and gives Britain’s economic crime fighting agencies new powers to tackle the sources of hidden wealth.

London has become notorious as a haven for money-laundering, with inquiries from overseas authorities investigating the trail of dirty cash flowing to the UK rising to a record level.

The number of cyber attacks on businesses in the UK has also increased dramatically. Last November — and shortly after Tesco Bank was hit by a cyber bank robbery affecting tens of thousands of customer — Amber Rudd, the home secretary, labelled economic crime a national security threat.

The new “state-of-the-art, multi-purpose replacement” complex will not include the Central Criminal Court, commonly known as the Old Bailey. A feasibility study to work out costs and funding sources is expected to complete in early 2018.

No budget has yet been set for the new complex, but reducing the number of expensive court sites in London will have been a factor in the proposal. The nearby Rolls Building, which has 31 courtrooms and opened in 2011, cost £300m.

Critics of the Rolls Building said the money would have been better spent on reversing cuts to legal aid, where there has been a big rise in people having to represent themselves in court

The City of London Corporation said: “The court’s close proximity to some of the world’s leading technology, financial and professional services firms in the Square Mile will enable the judiciary to be at the forefront of tackling criminal activity and resolving disputes. It would also benefit from its position near the Rolls Building, the Royal Courts of Justice, Old Bailey and Inns of Court.”

Dominic Raab, justice minister, said the court would reinforce the City’s “world-leading reputation as the number one place to do business and resolve disputes” and called it “a terrific advert for post-Brexit Britain”.

Britain’s judges have moved to counter the perception that by leaving the EU Britain will lose ground to other jurisdictions. In July, Lord Neuberger, the former president of the Supreme Court, said Brexit “does not alter the fact that lawyers and judges in the UK are as internationally minded and expert as they ever have been”.

Cyber crime | Most common UK online offences

These are the ten most common cyber-crimes in the UK, with number of cases reported in the year to June 2016

1. Bank account fraud – 2,356,000

Criminals trick their way to get account details. For example: “Phishing” emails contain links or attachments that either take you to a website that looks like your bank’s, or install malware on your system. A 2015 report by Verizon into data breach investigations has shown that 23pc of people open phishing emails.

2. Non-investment fraud – 1,028,000

AKA Ponzi schemes. Examples include penny stocks, pension liberation, and investment in commodities, such as wine or art, that later prove worthless

3. Computer virus – 1,340,000

Unauthorised software damages or takes control of your machine. For example: “Ransomware” encrypts your files and pictures then demands a payment to restore your access to it

4. Hacking – 681,000

Criminals exploit security weaknesses to illegally access other machines or networks. They steal sensitive data or subvert machines for their own purposes, such as sending spam or launching other cyber attacks

5. Advance fee fraud – 117,000

The victim is promised access to a great deal of money in return for a smaller upfront payment. For example, the classic “Nigerian Prince” email scam

6. Other fraud – 116,000

One example is “solicitor scams”, where a solicitor’s website is hacked, then clients asked to divert large payments into the criminals’ bank accounts.

7. Harassment and stalking – 18,826

Threats, abuse and online bullying – what’s commonly been termed “trolling” on social media

8. Obscene publications – 6,292

Pornography that meets the definition of the Obscene Publications Act, thus generally involving some form of physical abuse

9. Child sexual offences – 4,184

Assault, grooming, indecent communication, coercing a child to witness a sex act. These crimes may be being under-reported

10. Blackmail – 2,028

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Law School Scam: Charlotte School of Law Closes

Charlotte School of Law, a beset revenue driven law school, has closed down, state authorities affirmed — making it the country’s second authorize law school to close its entryways this year.

Law School Scam

Despite the fact that Charlotte Law did not issue a formal shutting notice, its permit to work in North Carolina terminated, it had no endorsed arrangement to show understudies and, as of Tuesday, it never again had a site.

The North Carolina lawyer general’s office, which has been examining the law school for a while, affirmed that the school had shut.

“I need to express my mistake for the understudies and their families influenced by Charlotte School of Law’s disappointment,” Josh Stein, the lawyer general, said in an announcement on Tuesday.

The law school had been holding on by almost nothing for quite a long time despite tumbling enlistment after the American Bar Association’s accreditors put it on post trial supervision in November.

The lawyer general’s office has been inspecting whether Charlotte Law’s understudies had the expected data to select for the school’s law degree.

The lawyer general’s office advised the government Education Department that Charlotte Law was never again authorized to work in the state. Without a permit, “Charlotte School of Law is currently required to be shut,” Mr. Stein said in his announcement.

Prior this year, trustees of Whittier College in California declared the conclusion of Whittier Law School, the main completely certify law school to surrender to decreases in understudy enlistments and educational cost income.

Charlotte Law had battled with those same issues and that’s only the tip of the iceberg. The A.B.A’s. authorizing body had put the school on post trial supervision subsequent to discovering its exposures for understudies missed the mark concerning prerequisites. Not long after, the government Education Department refered to the school for “generous distortions” to understudies about its consistence with accreditation principles.

A week ago, the University of North Carolina’s leading body of governors, which regulates authorizing of state instructive organizations, said the school’s permit lapsed on Aug. 10.

Joshua N. Ellis, representative for the University of North Carolina framework, said that Charlotte Law had been working since June 21 on a confined permit that relied upon meeting a few conditions. One of them was that the government Education Department decide if Charlotte Law understudies could take an interest in elected understudy credit programs.

Charlotte Law had already demanded that its understudy advances would be reestablished, yet the check clearly ran out on its endeavors.

Neither the school nor its leader, Chidi Ogene, reacted to calls or messages on Tuesday to affirm the school’s status.

As of the fall of 2016, Charlotte Law had around 700 understudies enlisted, and in the vicinity of 2010 and 2016, got $337.1 million in government understudy credits for educational cost and understudy everyday costs, as indicated by Law School Transparency, a charitable association that tracks information about the country’s law schools.

As of late enlisted understudies are qualified for finish credit absolution, Mr. Stein, the lawyer general, said. He added that he had kept in touch with Betsy DeVos, the training secretary, for the understudy borrowers.

“I asked her to pronounce that uncommon conditions exist with this conclusion — a move that would extend credit pardoning rights to every one of the understudies who left Charlotte School of Law amid or after the 2016 fall semester,” he said.

Starting at now, understudies who pulled back from the school over the most recent 120 days can have their obligation released, yet the individuals who pulled back over 120 days prior would not be qualified.

Charlotte Law was one of three battling revenue driven schools claimed by the InfiLaw Corporation, some portion of Sterling Partners, a private value firm with workplaces in Baltimore and Chicago. The others are Arizona Summit Law School and Florida Coastal School of Law.

InfiLaw, situated in Naples, Fla., did not react to endeavors to get in touch with them.

Faultfinders have griped that Charlotte Law has more than once pushed back an end date to bring down the understudy credit release sums it should pay.

Kyle McEntee, official chief of Law School Transparency, and a commentator of Charlotte Law, stated, “The school and its eager proprietors have fizzled their understudies, the Charlotte people group and the lawful calling.”

Mr. Stein concurred, taking note of that “while great lawyers have moved on from Charlotte School of Law, the school over and over again neglected to convey for its understudies.”

“Charlotte School of Law told understudies they would be ‘prepared to rehearse upon graduation,’ yet less than one out of five approaching understudies of the Class of 2016 graduated, did the certified lawyer’s exam and landed a position that required the degree for which they spent more than $100,000.”

Selected understudies and others were not educated by the school that it would close down, however were told casually by R. Lee Robertson Jr., leader of the school’s graduated class affiliation.

Mr. Robertson said he talked on Monday to the break dignitary, Paul A. Meggett, and discovered that the school’s permit had lapsed and that the American Bar Association had not endorsed Charlotte Law’s option showing get ready for its present understudies.

“It creates the impression that there is no way ahead,” Mr. Robertson wrote in his email to approximately 2,200 school graduated class. “Our law school, it appears, is shutting, as of now.”

Rectification: August 16, 2017

A prior form of this article misquoted the era when the Charlotte School of Law got $337.1 million in government understudy credits for educational cost and understudy everyday costs. It was in the vicinity of 2010 and 2016, not a year ago.

Financial Fraud: Pacific Western Bank Paid to Resolve Allegations That First California Bank For Facilitating The Embezzlement Scheme of Kinde Durkee

Pacific Western Bank Pays $1.75 Million To Resolve Firrea Allegations Relating To Kinde Durkee Embezzlement Scheme

FRESNO, Calif. — Pacific Western Bank (“PacWest”) has paid $1.75 million to resolve allegations that First California Bank, which PacWest acquired in 2013, violated Section 951 of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), codified at 12 U.S.C. § 1833a, by facilitating the embezzlement scheme of Kinde Durkee, United States Attorney Phillip A. Talbert announced.

Durkee, a former accountant for political campaigns and nonprofit organizations, controlled hundreds of client accounts held at First California. Over several years, Durkee siphoned millions of dollars from those client accounts to her own operating account at First California via unauthorized check transfers. Durkee pled guilty to federal mail fraud charges in March 2012.

The United States alleges that First California allowed Durkee to carry out her fraud scheme by ignoring obvious warning signs that Durkee was stealing from her clients and by failing to comply with the bank’s internal protocols and procedures designed to prevent and detect fraud. Given these failures by First California, Durkee’s fraud continued unabated for years and resulted in millions of dollars in losses to Durkee’s customers.

“People who commit white collar crimes such as embezzlement, fraud, and money laundering often use the banking system to facilitate their crimes,” U.S. Attorney Talbert said. “The Department of Justice will continue to hold accountable financial institutions that allow such conduct to occur by turning a blind eye to obvious criminal activity.”

“The FBI is committed to protecting the American people by investigating violations of law by all entities, including sophisticated financial institutions,” said Special Agent in Charge Sean Ragan of the FBI Sacramento field office. “One of the FBI’s mission priorities is combatting major white-collar crime, and that includes the investigation of not only individuals engaged in fraud, but financial institutions that facilitate such activity.”

“Integrity is a cornerstone of the banking industry,” said Wade V. Walters, Special Agent in Charge, FDIC Office of Inspector General, Office of Investigations, San Francisco Region. “The Federal Deposit Insurance Corporation Office of Inspector General is committed to ensuring that individuals or entities seeking to undermine that integrity will be held accountable.”

This case was the product of an investigation by the Federal Bureau of Investigation and the FDIC Office of Inspector General. Assistant U.S. Attorney Vincente A. Tennerelli represented the United States in this matter.

The claims settled by this agreement are allegations only, and there has been no determination of liability. The settled claims relate exclusively to conduct by First California prior to its acquisition by PacWest Bancorp in 2013.

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Cyber Crime: Ryan S. Lin Charged That He Conducted an Extensive Cyberstalking

Massachusetts Man Arrested and Charged with Cyberstalking Former Roommate

Defendant engaged in extensive online harassment and privacy intrusions

Boston – A Massachusetts man was arrested last night on charges that he conducted an extensive cyberstalking campaign against his former roommate, a 24-year-old Massachusetts woman, as well as her friends, family members, and other associates.

Ryan S. Lin, 24, of Newton, was charged with one count of cyberstalking and will appear in U.S. District Court in Boston later today for an initial appearance.

It is alleged that Lin engaged in an extensive, multi-faceted campaign of computer hacking and cyberstalking that began in April 2016 and continued until the date of his arrest, against a 24-year-old female victim, her family, friends and institutions associated with her. Lin, the victim’s former roommate, allegedly hacked into the victim’s online accounts and devices, stealing private photographs, personally identifiable information, and private diary entries that contained highly sensitive details about her medical, psychological and sexual history. It is alleged that Lin then distributed the victim’s private photographs and diary entries to hundreds of others.

Lin allegedly created and posted fraudulent online profiles in the victim’s name (with her photographs and home address) and solicited rape fantasies, including “gang bang” and other sexual activities, which in turn caused men to show up at her home. In addition, it is alleged that Lin falsely and repeatedly reported to law enforcement that there were bombs at the victim’s Waltham residence. Lin also allegedly created a false social media profile in the name of the victim’s roommate in Waltham and posted that he was going to “shoot up” a school in a nearby town. These threats were part of a larger pattern of threats to local schools and other institutions in her community.

“Mr. Lin allegedly carried out a relentless cyber stalking campaign against a young woman in a chilling effort to violate her privacy and threaten those around her,” said Acting United States Attorney William D. Weinreb. “While using anonymizing services and other online tools to avoid attribution, Mr. Lin harassed the victim, her family, friends, co-workers and roommates, and then targeted local schools and institutions in her community. Mr. Lin will now face the consequences of his crimes.”

“Those who think they can use the Internet to terrorize people and hide behind the anonymity of the net and outwit law enforcement should think again,” said Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division. “The Department of Justice will be relentless in its efforts to identify, arrest, prosecute, and punish the perpetrators of these horrendous acts and seek justice on behalf of their victims.”

“As alleged, Mr. Lin orchestrated an extensive, multi-faceted campaign of computer hacking and online harassment that caused a huge amount of angst, alarm, and unnecessary expenditure of limited law enforcement resources,” said Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “This kind of behavior is not a prank, and it isn’t harmless. He allegedly scared innocent people, and disrupted their daily lives, because he was blinded by his obsession. No one should feel unsafe in their own home, school, or workplace, and the FBI and our law enforcement partners hope today’s arrest will deter others from engaging in similar criminal conduct.”

“I want to thank the Waltham Police Detectives and the FBI Investigators who worked so diligently to bring this party to justice,” said Waltham Police Chief Keith D. MacPherson. “I also want to thank the Superintendent and the Waltham School Department for their efforts working in conjunction with law enforcement. I also want to recognize the Waltham Police Department Safety Officer and the School Resource Officers for their hard work ensuring the safety of our school children and faculty. This has been a lengthy and complex investigation involving many agencies and remains ongoing. We appreciate the patience and understanding of those in our community who were affected by these criminal acts and thank those who have allowed us to work towards the best result possible in our attempts to put an end to these disruptions.”

The charging statute provides for a sentence of no greater than five years in prison and three years of supervised release. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

Acting U.S. Attorney Weinreb, Acting Assistant Attorney General Blanco, FBI SAC Shaw, and Waltham Police Chief MacPherson made the announcement today. The U.S. Attorney’s Office would also like to thank the Middlesex County District Attorney’s Office and Watertown, Newton and Wellesley Police Departments. Assistant U.S. Attorney Amy Harman Burkart of Weinreb’s Cybercrime Unit and Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section are prosecuting the case.

The details contained in the charging document are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

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Mortgage Fraud: Robert Pena Pleaded Guilty in Connection With Defrauding the Government National Mortgage Association – Ginnie Mae

Mortgage Company President Pleads Guilty to Defrauding Ginnie Mae

BOSTON – The president and founder of a Falmouth mortgage company pleaded guilty yesterday in federal court in Boston in connection with defrauding the Government National Mortgage Association (Ginnie Mae) out of approximately $2.5 million.

Robert Pena, 68, of Falmouth, pleaded guilty to one count of conspiracy and six counts of wire fraud. U.S. Senior District Court Judge Mark L. Wolf scheduled sentencing for Jan. 5, 2018.

Pena was president and founder of the now-defunct mortgage company, Mortgage Security Inc. (MSI), which contracted with Ginnie Mae, a government-run corporation charged with making housing more affordable by injecting capital into the U.S. housing market. Ginnie Mae guarantees the timely payment of principal and interest to investors in bonds backed by government-sponsored mortgage loans, such as those offered by the Federal Housing Administration and the U.S. Department of Veterans Affairs.

MSI contracted with Ginnie Mae to pool eligible residential mortgage loans and then sell Ginnie Mae-backed mortgage bonds to investors. MSI was responsible for servicing the loans in the pools it created, including collecting principal and interest payments from borrowers, as well as loan payoffs, and placing those funds into accounts held in trust by Ginnie Mae, which would ultimately pass them along to investors. Among other things, Ginnie Mae required issuers like MSI to provide regular reports concerning the status of the loans in the pools.

Beginning in 2011, Pena began diverting money that borrowers were sending to MSI. Specifically, Pena deposited high-dollar, loan-payoff checks into bank accounts unknown to Ginnie Mae and then used those funds for personal and business expenses. Pena also diverted borrowers’ escrow funds and mortgage-insurance premiums for his own use. In total, Pena took approximately $2.5 million, which Ginnie Mae then had to pay to the investors whose investments it had guaranteed. Pena also attempted to cover up his scheme by providing false reports to Ginnie Mae about the status of the loans MSI was servicing.

The charging statues provide 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 or loss. 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 D. Weinreb; Christina Scaringi, Special Agent in Charge of the U.S. Department of Housing and Urban Development, Office of Inspector General, Northeast Regional Office; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement. Valuable assistance was provided by the U.S. Department of Veterans Affairs, Office of Inspector General; the U.S. Department of Agriculture, Office of Inspector General; and the Falmouth Police Department. Assistant U.S. Attorney Brian LaMacchia of Weinreb’s Civil Division is prosecuting the case.

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Investment Fraud: MICHAEL SCRONIC Charged With Securities Fraud And Wire Fraud Arising Out of His Execution of a $19 Million Ponzi Scheme

Westchester Hedge Fund Manager Arrested For Running A Ponzi Scheme

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced that MICHAEL SCRONIC, a hedge fund manager in Westchester County, was arrested this morning and charged with securities fraud and wire fraud arising out of his execution of a $19 million Ponzi scheme through the Scronic Macro Fund. SCRONIC will be presented before United States Magistrate Judge Lisa Margaret Smith in White Plains federal court later today.

Acting U.S. Attorney Joon H. Kim said: “Michael Scronic allegedly stole more than $19 million from investors by lying about the performance of his investment fund, and then spent much of that money on his own lavish lifestyle. Hedge fund managers who lie to their investors and steal their money, as Scronic is alleged to have done, will always be in our sights as targets for federal prosecution.”

FBI Assistant Director William F. Sweeney Jr. said: “Scronic’s alleged get-rich-quick scheme was, in fact, a plan to deceive investors, luring them into a false sense of security about their investments by overselling the reliability and success of the fund. The FBI will continue to identify and investigate those who defraud investors. We ask anyone who has information related to investor fraud submit a tip at https://tips.fbi.gov/.”

According to the allegations contained in the Complaint[1] unsealed today in White Plains federal court:

SCRONIC, a graduate of Stanford University and the University of Chicago’s business school, raised more than $19 million from 45 investors in the Scronic Macro Fund (the “Fund”) from April 2010 to the present. SCRONIC told investors that the Fund had positive returns in all but one of the 22 quarters from January 2012 through June 2017, with the highest reported quarterly return being 13.4 percent in the fourth quarter of 2014. In reality, the Fund lost money in 28 out of 29 quarters of its operation, with a total net loss of about $15.7 million before commissions. The Fund’s only positive quarter was its first quarter of operation in 2010.

As a result of these trading losses, the total assets SCRONIC claimed the Fund had in each quarter far exceeded its actual assets. For example, SCRONIC sent account statements to investors that together showed total fund assets of $21.7 million as of June 30, 2017. On that date, the combined balance of SCRONIC’s brokerage and bank accounts was $102,376.

In addition to losing money on trades, SCRONIC used investor money for personal expenses. His personal expenditures averaged more than $500,000 a year since January 2012 and included monthly rent of $12,275 on his primary residence in Westchester, mortgage payments on a vacation home in Stratton, Vermont, fees for multiple beach and country clubs, including a $30,000 payment to the Stratton Mountain Club in July 2017, and miscellaneous items charged to credit cards in amounts averaging more than $15,000 a month.

In recent months, SCRONIC has been unable to pay redemptions requested by existing Fund investors. Between June and August of this year, four Fund investors requested redemptions totaling about $1.5 million. SCRONIC has not had sufficient funds on hand to pay these redemptions. He instead has told these investors that the Fund would pay redemptions only at quarter end, that he was too busy and preoccupied with a relative’s medical condition to pay redemptions, and that he was unavailable to pay redemptions because he was on vacation. In some cases, SCRONIC ignored redemption requests.


SCRONIC, 46, of Westchester County, New York, is charged with one count of securities fraud and one count of wire fraud. Each charge carries a maximum sentence of 20 years in prison.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge.

Mr. Kim praised the investigative work of the FBI. Mr. Kim also thanked the Securities & Exchange Commission for its assistance in the investigation.

In a related case, the Securities & Exchange Commission brought a civil action today against SCRONIC in U.S. District Court in White Plains.

The criminal case is being prosecuted by the Office’s White Plains Division. Assistant U.S. Attorney James McMahon and Special Assistant U.S. Attorney Daniel Loss are in charge of the prosecution.

 


As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations and every fact described should be treated as an allegation.

Health Care Fraud: Jason Cerge Pleaded Guilty For Defrauding TRICARE – a Health Insurance Program For Members of The Military

Pharmaceutical Employee Admits Scheme To Defraud Military Health Insurance Program

NEWARK, N.J. – A Media, Pennsylvania, man today admitted defrauding TRICARE – a health insurance program for members of the military and their families – by submitting fraudulent claims for medically unnecessary prescriptions, Acting U.S. Attorney William E. Fitzpatrick announced.

Jason Cerge, 41, a pharmaceutical sales representative, pleaded guilty before U.S. District Judge John Michael Vazquez in Newark federal court to an information charging him with conspiracy to commit health care fraud.

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

Cerge admitted that from September 2014 through May 2015, he participated in a scheme to defraud TRICARE by knowingly submitting fraudulent claims for medically unnecessary prescription compounded medications – including scar creams, pain creams, and metabolic supplements – that were marketed by an entity referred to in the information as “Company A.” The conspirators knew that TRICARE reimbursed pharmacies between $2,500 and $18,800 for each of these compounded medications. The conspirators entered into agreements with certain compounding pharmacies nationwide to receive a percentage of the amount reimbursed for each prescription diverted to that pharmacy.

Cerge was recruited into the scheme by Peter Pappas, 45, of Drexel Hill, Pennsylvania. Cerge then recruited a former member of the U.S. military, a conspirator identified in the information as “CC-2,” to approach other members of the military and their families. CC-2 paid cash bribes to TRICARE beneficiaries in exchange for their TRICARE information and agreement to receive medically unnecessary prescription compounded medications.

Cerge placed these TRICARE beneficiaries’ information onto preprinted prescription forms and presented them to a New Jersey physician for a signature. Cerge knew that the physician would immediately sign the prescriptions without examining or speaking with the patients.

Afterwards, the prescriptions were faxed to certain compounding pharmacies associated with Company A who would bill TRICARE for the medication. These compounding pharmacies then paid Company A a percentage of each prescription paid by TRICARE, which was then distributed to Cerge and other members of the conspiracy.

As part of his plea agreement, Cerge must forfeit $12,816.24 in criminal proceeds he received for his role in the scheme and pay restitution of at least $204,198.11.

Cerge faces a statutory maximum term of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 30, 2018.

Three other defendants – Peter Pappas, Stephanie Naar, and Julie Andresen – have pleaded guilty to their roles in the scheme and await sentencing.

Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; and the U.S. Department of Defense, Office of the Inspector General, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey, with the ongoing investigation leading to the guilty plea.

The government is represented by Assistant U.S. Attorney Erica Liu of the United States Attorney’s Office Health Care and Government Fraud Unit in Newark.

The New Jersey U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.36 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

Defense counsel: Scott Godshall Esq., Media, Pennsylvania

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Identity Theft: Corry E. Pearson Guilty Of One Count of Conspiracy to Commit Wire Fraud

Owner of Tax Preparation Business Convicted of Wire Fraud, Aggravated Identity Theft and Money Laundering

Corry E. Pearson, 28, of Riviera Beach, was found guilty by a jury of one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, sixteen counts of wire fraud, in violation of 18 U.S.C. § 1343, eight counts of aggravated identity theft, in violation of 18 U.S.C. § 1028A, two counts of money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i), and two counts of money laundering, in violation of 18 U.S.C. § 1957.

Benjamin G. Greenberg, Acting United States Attorney for the Southern District of Florida, Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Sarah J. Mooney, Chief, West Palm Beach Police Department, and Frank J. Kitzerow, Chief, Jupiter Police Department, made the announcement.

According to the evidence presented at trial, from 2012 through 2014, the defendant and his accomplices submitted more than 1600 federal income tax returns. In some cases, they used Tax King, Inc., a tax preparation business operated by the defendant, to file the returns. In other cases, they filed the returns using home tax preparation software, and falsely represented that the taxpayers had prepared and filed the returns themselves. Almost all the returns were fraudulent. In some cases, the defendant and his accomplices stole other people’s identities and filed Federal income tax returns in the victims’ names, collecting the refunds for themselves. The defendant and his accomplices also falsely reported that money had been withheld from taxpayers’ wages and gambling winnings, falsely claimed that the taxpayers were entitled to education credits when they had not in fact attended school in the years in question, and filed fraudulent returns in the names of inmates who were serving long sentences during the tax year of the return. In order to disguise their own identities, the defendant and his accomplices listed victims of identity theft as tax preparers on the returns they filed and directed that the refunds be deposited onto debit cards and into accomplices’ bank accounts. In total, the returns filed by the defendant and his accomplices sought at least $6,117,430 in tax refunds. Based on those returns, the Treasury paid out at least $1,356,240 in refunds.

Co-defendant Stephane Cindy Anor, 27, of West Palm Beach, pled guilty on August 29, 2017 to one count of conspiracy to commit wire fraud. Sentencing for Anor is scheduled for November 9, 2017.  Irene Wilson, 51, of Riviera Beach, a defendant in a related case, pled guilty to one count of conspiracy to defraud the United States through false claims. On September 22, 2017, Wilson was sentenced to 12 months’ home confinement.

Sentencing for Pearson is scheduled for December 19, 2017 before U.S. District Judge Beth Bloom. Pearson faces a maximum possible statutory sentence of 20 years in prison for the conspiracy to commit wire fraud, 20 years in prison on each count of wire fraud, 20 years in prison on each count of money laundering, in violation of 18 U.S.C. § 1956(a)(1)(B)(i), 10 years in prison on each count of money laundering, in violation of 18 U.S.C. § 1957, and a mandatory sentence of 2 years in prison on each count of aggravated identity theft.

Mr. Greenberg commended the investigative efforts of IRS-CI, the West Palm Beach Police Department and Jupiter Police Department. This case is being prosecuted by Assistant U.S. Attorneys Marc Osborne and Roger Stefin.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.

Original PressReleases…

Financial Fraud: Five Defendants Charged With Scheme to Steal Victims Credit Cards And Defraud Them

Five members of credit card theft ring plead guilty

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

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

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

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

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

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

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

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

  • Quentin Pickett, 25, of Jonesboro, Georgia, pleaded guilty to wire fraud conspiracy and aggravated identity theft on September 25, 2017, and agreed to the entry of a restitution order in the amount of $1,759,301.14.  Pickett is scheduled to be sentenced on January 10, 2018.
  • Cornelius Henderson, 23, of Riverdale, Georgia, pleaded guilty to wire fraud conspiracy and aggravated identity theft on September 25, 2017, and agreed to the entry of a restitution order in the amount of $429,142.26.  Henderson is scheduled to be sentenced on January 9, 2018.
  • LaSuhn Turner, 25, of Stockbridge, Georgia, pleaded guilty to wire fraud conspiracy on August 30, 2017, and agreed to the entry of a restitution order in the amount of $70,483.05.  Turner is scheduled to be sentenced on December 5, 2017.
  • Brandon Foster, 24, of Stockbridge, Georgia, pleaded guilty to wire fraud conspiracy on August 24, 2017, and agreed to the entry of a restitution order in the amount of $14,831.00.  Foster is scheduled to be sentenced on November 17, 2017.

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

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

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

For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.PressEmails@usdoj.gov (link sends e-mail) or (404) 581-6016.  The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.

Original PressReleases…

Health Care Fraud: Three Whistleblowers, Known As Relators, Filed Two Lawsuits Under The Qui Tam Provision of The False Claims Act

Four Area Hospitals to Pay Millions to Resolve Ambulance Swapping Allegations

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

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

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

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

Three Whistleblowers, Known As Relators, Filed Two Lawsuits Under The Qui Tam Provision of The False Claims Act

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

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

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

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

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

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

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

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

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

Original PressReleases

Tax Fraud: Justin Manning Indicted on Charges of Wire Fraud, Money Laundering And Filing false Tax Returns

Aurora Man Indicted for Fraud and Money Laundering

DENVER — Justin Manning, age 40, of Aurora, Colorado, was indicted by a federal grand jury on September 26, 2017 on charges of wire fraud, money laundering and filing false tax returns, Acting United States Attorney Bob Troyer and IRS Criminal Investigation Special Agent in Charge Steven Osborne announced. Today, October 2, 2017, Manning is scheduled to appear before a U.S. Magistrate Judge where he will be advised of his rights and the charges pending against him.

According to information contained in the indictment, between 2012 and 2015, Manning was employed as an asset protection manager and assistant store manager at a local Walmart. In those job positions, Manning had access to blank Money Network Checks used in Walmart’s Money Network System.

Beginning in approximately October 2013 and continuing through January 2015, Manning fraudulently filled out money network checks, and caused others to fill out the checks, in the name of third parties in order to deceive other Walmart employees into believing they were legitimate checks. Manning used his management positions to access the store’s register bags. He took cash from the store’s register bags and replaced it with fraudulent Money Network Checks totaling the same amount as the cash taken so that the register bags maintained the correct total balance and other Walmart employees would not realize cash had been taken from the bags. Manning has been charged with thirteen counts of wire fraud related to the processing of the fraudulent Money Network Checks.

Manning also knowingly engaged in financial transactions utilizing the proceeds of the wire fraud. Specifically, Manning is charged with three counts of money laundering for using cash proceeds derived from the fraud to purchase a diamond wedding ring set and a Toyota 4Runner and for transferring funds between accounts at a financial institution.

Additionally, in March 2014 and 2015, Manning filed U.S. Individual Income Tax Returns for the 2013 and 2014 tax years, respectively. When he filed these tax returns, Manning knew that he had intentionally not reported as income the cash he took as part of his fraudulent scheme.

Manning is charged with thirteen counts of wire fraud, three counts of money laundering and two counts of filing false tax returns. The indictment also includes a forfeiture count under which the government seeks to divest Manning of the proceeds obtained through the fraud. Wire fraud carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000 per count. Money laundering carries a penalty of not more than 10 years in federal prison, and a fine of up to $250,000 per count. False tax statement carries a penalty of not more than 3 years in prison and a fine of up to $100,000.

This case is being investigated by Internal Revenue Service – Criminal Investigation (IRS CI). This case is being prosecuted by Assistant U.S. Attorney Pegeen Rhyne.

The charges contained in the indictment are allegations, and the defendant is presumed innocent until proven guilty.

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