Put a Freeze on Winter Fires: Electrical Fire Safety

Electrical Fire Safety

Electrical fires in our homes claim the lives of 280 Americans each year. Many of these fires are caused by incorrectly installed wiring and overloaded circuits and extension cords.

Winter fires can be prevented! The following electrical fire safety tips can help you maintain a fire-safe home this winter season.

•           Routinely check your electrical appliances and wiring.

•           Frayed wires can cause fires. Replace all worn, old or damaged appliance cords immediately.
•           Replace any electrical tool if it causes even small electrical shocks, overheats, shorts out, or gives off smoke or sparks.
•           Keep electrical appliances away from wet floors and counters; pay special care to electrical appliances in the bathroom and kitchen.
•           Buy electrical products evaluated by a nationally recognized laboratory, like UL.
•           Keep clothes, curtains, and other potentially combustible items at least three feet from all heaters.
•           If an appliance has a three-prong plug, use it only in a three-slot outlet. Never force it to fit into a two-slot outlet or extension cord.
•           Don't allow children to play with or around electrical appliances like space heaters, irons, and hair dryers.
•           Use safety closures to "child-proof" electrical outlets.
•           Use electrical extension cords wisely; never overload extension cords or wall sockets.
•           Immediately shut off, then professionally replace, light switches that are hot to the touch and lights that flicker.

For more information on electrical fire safety, visit the U.S. Fire Administration's website.

ICE announces creation of Public Advocate position

WASHINGTON — As part of the agency's ongoing detention reform initiative and other enforcement-related initiatives, U.S. Immigration and Customs Enforcement (ICE) today announced its first Public Advocate, ICE Senior Advisor Andrew Lorenzen-Strait. Lorenzen-Strait will serve as a point of contact for individuals, including those in immigration proceedings, NGOs and other community and advocacy groups, who have concerns, questions, recommendations or other issues they would like to raise.

"As our first Public Advocate, Andrew Lorenzen-Strait will work to expand and enhance our dialogue with the stakeholder community," said ICE Director John Morton. "We want the public to know that they have a representative at this agency whose sole duty is to ensure their voice is heard and their interests are recognized, and I'm confident Andrew will serve the community well in this capacity."

Lorenzen-Strait has served with ICE since 2008, first as an advisor and analyst on policies related to immigration enforcement, detention and juveniles and most recently, as the senior advisor for Enforcement and Removal Operation's (ERO) detention management division. In 2007, Lorenzen-Strait was named the Maryland Attorney of the Year for Pro Bono Service for his work with Community Legal Services of Prince George's County.

In his new role as public advocate, Lorenzen-Strait will report directly to the Office of Enforcement and Removal Operations (ERO) Director Gary Mead and will be responsible for:

•           Assisting individuals and community stakeholders in addressing and resolving complaints and concerns in accordance with agency policies and operations, particularly concerns related to ICE enforcement actions involving U.S. citizens;

•           Informing stakeholders on ERO policies, programs, and initiatives and enhance understanding of ERO's mission and core values;
•           Engaging stakeholders and building partnerships to facilitate communication, foster collaboration, and solicit input on immigration enforcement initiatives and operations; and
•           Advising ICE leadership on stakeholder findings, concerns, recommendations, and priorities as they relate to improving immigration enforcement efforts and activities.

The creation of the Public Advocate position is another milestone is ICE's ongoing work to enact significant policy changes and improvements to focus the agency's immigration enforcement resources on sensible priorities that promote public safety, border security and the integrity of the immigration system. In addition to implementing policies and processes that ensure discretion is used in deciding the types of individuals ICE prioritizes for removal from the country, the agency has also embarked upon a long-term detention reform initiative. These reform efforts are focused on prioritizing the health and safety of detainees in our custody while increasing federal oversight and improving the conditions of confinement within the detention system.

ICE will continue to analyze its policies and the results of its programs, making improvements where necessary to meet our priorities.

Brownsville Mother and Daughter-in-Law Guilty in Health Care Fraud Scheme

McALLEN, TX—Felicitas Velez Alanis, 51, and her daughter-in-law, Erika Ortega Alanis, 27, both of Brownsville, Texas, have entered pleas of guilty to conspiracy to commit health care fraud, United States Attorney Kenneth Magidson announced today along with Texas Attorney General Greg Abbott.

Felicitas Alanis owned and operated Vel-Ala Inc.—a Texas corporation which did business as Nisi Medical Equipment and Supplies in and around Brownsville, Harlingen and elsewhere in South Texas. Her daughter-in-law, Erika Alanis, assisted in the day-to-day operation of the company. Nisi Medical Equipment and Supplies was enrolled with the Texas Medicaid program to provide durable medical equipment (DME) to Texas Medicaid beneficiaries. The term DME means medical equipment and supplies used in the home and includes blood-testing strips, blood glucose monitors, alcohol wipes, diabetic supplies, and other medically necessary items.

The government alleged that the two women submitted more than $646,000 in false and fraudulent bills to the Texas Medicaid program for diabetic supplies which Nisi Medical Equipment and Supplies never purchased or supplied to Medicaid beneficiaries. The delivery records and billing records of Nisi show that the Texas Medicaid program was routinely billed for more items than were actually delivered and the purchase records revealed that the Texas Medicaid program was billed for medical supplies and items that Nisi had never purchased. Medicaid paid more than $554,000 on the false and fraudulent claims submitted.

Felicitas and Ericka Alanis admitted in court today that they conspired to send false and fraudulent bills to the Texas Medicaid program in the name of Nisi Medical Equipment and Supplies between on or about Jan. 1, 2005, through on or about Oct. 12, 2006, and that they routinely billed the Medicaid program for allegedly providing 200 boxes of alcohol prepartion pads to Medicaid beneficiaries when in fact only one box of alcohol preparation pads was ever delivered.

The women have been allowed to remain on bond pending their sentencing hearing, which is set for April 16, 2012, at which time they face a maximum punishment of 10 years in prison and up to a $250,000 fine plus up to three years of post-prison supervised release. Restitution may also be ordered.

The investigation leading to the charges in this case was conducted by the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant United States Attorney Casey N. MacDonald and Special Assistant United States Attorney Rex G. Beasley are prosecuting the case.

Joseph Martinez Pleads Guilty to Production of Child Pornography Charge

Plea Agreement Requires 15-Year Prison Sentence and Lifetime Supervised Release

ALBUQUERQUE—This morning in federal court, Joseph Martinez, 53, of Tijeras, N.M., entered a guilty plea to a superseding indictment charging him with production of a visual depiction of a minor engaged in sexually explicit conduct under a plea agreement with the U.S. Attorney’s Office, announced U.S. Attorney Kenneth J. Gonzales.

Under the terms of the plea agreement, Martinez will be sentenced to 15 years of imprisonment to be followed by a lifetime of supervised release. Martinez also will be required to register as a sex offender after he completes his prison sentence. Martinez has been in federal custody since his arrest on August 26, 2009. He remains detained pending his sentencing hearing, which has yet to be scheduled.

In entering his guilty agreement, Martinez admitted that, between March 1992 and March 1998, he persuaded, induced, enticed, coerced, and encouraged a minor male child (victim) to engage in sexually explicit conduct so that he (Martinez) could produce a visual depiction of that conduct. Martinez admitted that this course of conduct occurred in Bernalillo County, N.M.

In his plea agreement, Martinez acknowledged that, if he proceeded to trial, the victim would testify that Martinez took sexually explicit photos of him when he was between the ages of 6 and 12 years old. Martinez also acknowledged that an inmate with whom he had contact while in jail would testify that Martinez admitted that police found sexually explicit photographs of the victim, including photographs showing Martinez engaged in sexual activity with the victim. The inmate also would testify that Martinez admitted that Martinez began this pattern of criminal activity when the victim was approximately 5 years old.

Under the terms of the plea agreement, Martinez is required to withdraw his pending motion to suppress the victim’s testimony. Martinez also waives his rights to appeal his conviction and sentence.

The case is being prosecuted by Assistant U.S. Attorneys Charlyn E. Rees and Presliano Torrez, and was investigated by Federal Bureau of Investigation and the Bernalillo County Sheriff’s Office. The case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit Projectsafechildhood.gov.

Defendant Charged with Investor Fraud Who Fled to Middle East is Arrested

AHMED ALABADI, a 44-year-old citizen of Iraq and former resident of Dearborn, was arrested at Detroit Metropolitan Wayne County Airport on the evening of Friday February 3, 2012, announced United States Attorney Barbara McQuade. Alabadi was arrested on an indictment for bank fraud, attempted bank fraud, and money laundering. McQuade was joined in the announcement by Special Agent Andrew G. Arena, Federal Bureau of Investigation and Brian Moskowitz, Special Agent in Charge, U.S. Immigration and Customs Enforcement, Office of Homeland Security Investigations in Detroit.

The indictment alleges that Alabadi solicited investments from individuals, many of Iraqi descent, by promising that the funds would be used in various rebuilding projects in Iraq. Alabadi promised large returns for the investments. In reality, however, Alabadi did not use the investors’ money for such projects. Instead, he operated a Ponzi scheme by using money from subsequent investors to pay earlier investors. Alabadi fled to the Middle East as investors began discovering the fraud.

An indictment is only a charge and is not evidence of guilt. It will be the government’s burden to prove guilt beyond a reasonable doubt.

The case is being prosecuted by Assistant United States Attorney Louis P. Gabel.

If any individual believes that he or she was a victim of Alabadi’s fraud they should contact Special Agent Philip Reed of the FBI at (313) 965-2323.

Marin Man Sentenced to 96 Months for Possession of Child Pornography

San Rafael Psychologist and Founder of Independent Learning Schools Ordered to Pay $50,000 to National Center for Missing and Exploited Children

SAN FRANCISCO—Donald Tosti was sentenced Feb. 2, 2012, to eight years in prison and ordered to pay $50,000 in restitution for possessing child pornography, United States Attorney Melinda Haag announced.

Tosti was convicted on Sept. 14, 2011, on two charges of possessing child pornography. During the trial, evidence showed that Tosti was found to possess child pornography after taking his computer to CompUSA for repair. A search of Tosti’s home and office revealed a large collection of child pornography, including depictions of the rape of very young children. In sentencing Tosti, United States District Court Judge Jeffrey S. White emphasized the size of his collection and the graphic and extreme nature of the child pornography images as aggravating factors in imposing his sentence.

Tosti, 76, of San Rafael, Calif., was indicted by a federal grand jury on Oct. 6, 2009, with one count of possession of child pornography. A second charge was added by the grand jury on Nov. 24, 2010, based on additional child pornography found after Tosti’s arrest.

The sentence was handed down by Judge White following a bench trial on two counts in violation of Title 18, United States Code, section 2252(a)(4)(B). Judge White also sentenced the defendant to a five-year period of supervised release and ordered him to pay $50,000 in restitution to the National Center for Missing and Exploited Children. The defendant is scheduled to begin serving the sentence on April 2, 2011.

Owen Martikan is the Assistant U.S. Attorney who prosecuted the case with the assistance of Rosario Calderon. The prosecution is the result of a four-year investigation by the Federal Bureau of Investigation, with the assistance of the San Rafael Police Department.

Two Arrested In KCK Charged With Firearms Violations

KANSAS CITY, KAN. – Two men arrested Wednesday morning in Kansas City, KAN., have been charged with federal firearms violations, U.S. Attorney Barry Grissom said today.

Dominic N. Hayes, 33, Kansas City, KAN., and Troyton Mozingo, 31, Kansas City, KAN., both are charged with one count of unlawful possession of a firearm after a felony conviction. Hayes was arrested Wednesday morning at a storage facility near 74th and State in Kansas City, KAN. Mozingo was arrested at a duplex in the 1200 block of North 64th Drive after a brief police chase.

The two appeared Friday in U.S. District Court in Kansas City, KAN., on a criminal complaint alleging they unlawfully possessed a .40 caliber HS product pistol and a 7.62 caliber Chinese made SKS rifle. Both were prohibited by federal law from possessing firearms because of prior felony convictions.

If convicted, they face a maximum penalty of 10 years in federal prison and a fine up to $250,000. The Kansas City, KAN., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives investigated. Assistant U.S. Attorney Terra Morehead is prosecuting.

CBP Officers make Two Large Marijuana Busts at New Mexico Ports

El Paso, TX – U.S. Customs and Border Protection (CBP) officers working at the Santa Teresa and Columbus ports of entry seized 1,124 pounds of marijuana in two seizures Thursday. The seizures capped off a busy enforcement week which netted area CBP officers more than 3,000 pounds of marijuana.

 “CBP officers are working hard and the results are impressive,” said Ana Hinojosa, Director of Field Operations in El Paso. “Every day they are making a positive contribution to our community by stopping drug smugglers, illegal immigrants, and other violators before they enter the country and cause harm.”

CBP officers at the Columbus port of entry seized 605 pounds of marijuana Thursday morning after a 1997 Dodge pickup truck entered the port from Mexico. CBP officers selected the vehicle for a secondary examination during which an x-ray scan revealed anomalies in the appearance of the vehicle. CBP officers continued their exam and spotted suspicious bundles inside the truck. CBP drug sniffing dog “Bingo” searched the vehicle and gave a positive alert for drugs. CBP officers removed 370 marijuana-filled bricks from the floor, quarter panels, back wall and bed of the truck.

CBP officers arrested the driver of the truck, 29-year-old Eliazar Parra Suarez of Nuevo Casas Grandes, Chihuahua, Mexico. He was turned over to U.S. Immigration and Customs Enforcement HSI special agents to face federal charges including importation of a controlled substance and possession with intent to distribute a controlled substance.

CBP officers at the Santa Teresa port of entry seized 519 pounds of marijuana Thursday afternoon after a 1991Kenworth semi-truck towing a flatbed trailer loaded with another flatbed trailer entered the port from Mexico. CBP officers selected the vehicle for a secondary examination during which an x-ray scan revealed anomalies in the appearance of the shipment. CBP drug sniffing dog “Murphy” searched the trailer and gave a positive alert for drugs. CBP officers drilled into the fifth-wheel area of the trailer and obtained a green leafy substance which tested positive for marijuana. CBP officers removed nine metal boxes from the secret compartment. The boxes contained 519 pounds of tightly compressed marijuana. No arrests were made.

CBP officers working at area ports of entry made a total of 21 drug seizures during the week. The enforcement activity netted 3,085 pounds of marijuana in 19 busts and 14.7 pounds of cocaine in two additional seizures.

CBP officers working at area ports this week recorded 77 immigration violations. Intended immigrants made up a large group of the violators. A total of 44 were identified through thorough document exams. In these cases, individuals will use a legally issued border-crossing card (laser visa) to live or work in the U.S., which is not authorized. Violators generally lose their documents and are returned to Mexico. The balance of the immigration violations included false claims to citizenship, impostors, visa overstays, alien smugglers, counterfeit documents and people entering the country without proper inspection.

CBP officers working at area ports made 15 drug seizures during the week including 993 pounds of marijuana in 14 busts and less than one pound of heroin in one additional seizure.

CBP agriculture specialists working at area ports this week made nine seizures of prohibited food and agricultural items resulting in $2,075 in fines being assessed. Prohibited items seized included pork, bologna, pork tamales, chicharones, apples, guavas, and fresh eggs. These items are prohibited because they pose a threat of illness or disease to people, livestock or the agriculture industry.

CBP officers working at area ports also identified 15 people who were fugitives or otherwise being sought by law enforcement agencies. They also recorded three export violations, one currency seizure, and a live birds seizure. While anti-terrorism is the primary mission of U.S. Customs and Border Protection, the inspection process at the ports of entry associated with this mission results in impressive numbers of enforcement actions in all categories.

U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of our nation's borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws.

CBP Officers Intercept Illicit Currency

Nogales, AZ. — Customs and Border Protection officers assigned to Tucson Field Office seized nearly $261,000 in unreported U.S. currency Tuesday from a woman headed for Mexico through the Dennis DeConcini Port.

Officers conducting outbound inspections selected a 40-year-old Mexican woman and her teen-age son for additional questioning, and a closer examination of their Buick sedan. When officers noticed someone had tampered with the gas tank, they decided to remove it for further inspection. Inside the tank, officers found 21 packages containing $260,640.

The unreported funds and vehicle were processed for seizure. The woman was arrested and turned over to U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Her son was released to family members without further incident.

Since launching the Southwest Border Initiative in March 2009, unprecedented shifts in staffing and infrastructure at Arizona’s ports have improved the focus and intensity of operations. These shifts are resulting in more narcotics interceptions; while tougher outbound enforcement is yielding record interceptions of unreported currency, weapons and wanted felons.

Individuals arrested are charged with a criminal complaint, which raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

CBP's Office of Field Operations is the primary organization within Homeland Security tasked with an anti-terrorism mission at our nation’s ports. CBP officers screen all people, vehicles and goods entering the United States while facilitating the flow of legitimate trade and travel. Their mission also includes carrying out border-related duties, including narcotics interdiction, enforcing immigration and trade laws, and protecting the nation's food supply and agriculture industry from pests and diseases.

U.S. Customs and Border Protection is the unified border agency within the Department of Homeland Security charged with the management, control and protection of our nation's borders at and between the official ports of entry. CBP is charged with keeping terrorists and terrorist weapons out of the country while enforcing hundreds of U.S. laws

Duluth Man Sentenced to 90 Months for Interstate Transportation of Stolen Vehicle

MADISON, WI—John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced Gale A. Rachuy, 61, of Duluth, Minn., was sentenced on February 3, 2012, by U.S. District Judge William M. Conley to 90 months in federal prison, followed by three years of supervised release, for interstate transportation of a stolen motor vehicle.

Rachuy pleaded guilty to this charge on November 8, 2011, which involved obtaining vehicles in northwestern Wisconsin through the use of worthless checks and transporting the vehicles to Minnesota. His sentence will be served concurrently with a previously imposed Minnesota state sentence.

In sentencing the defendant, Judge Conley departed upward from the otherwise applicable sentencing guideline range of 37 to 46 months because of the defendant’s extensive criminal history. Rachuy has 28 convictions, mostly for fraud. Judge Conley said he was “astounded” by Rachuy’s record and that Rachuy is “the epitome of a white-collar career offender.” The judge went on to say the defendant has shown “no compunction about committing additional crimes,” and that the sentence “is necessary to protect the public from a financial predator.”

The charges against Rachuy were the result of an investigation conducted by the Eau Claire office of the Federal Bureau of Investigation, Superior Police Department, Douglas County Sheriff’s Office, Duluth Police Department, and Carlton County (Minnesota) Sheriff’s Department. The prosecution of this case has been handled by Assistant U.S. Attorneys Stephen P. Sinnott and Grant C. Johnson.

Medical Device Company Smith & Nephew Resolves Foreign Corrupt Practices Act Investigation

Agrees to Pay $16.8 Million Penalty Related to Bribery in Greece

WASHINGTON—Smith & Nephew Inc. has entered into a deferred prosecution agreement with the Department of Justice to resolve improper payments by the company and certain affiliates in violation of the Foreign Corrupt Practices Act (FCPA), the Department of Justice announced today. The matter is part of an investigation into bribery by medical device companies of physicians employed by government institutions.

Smith & Nephew, a Delaware corporation, is headquartered in Memphis, Tenn., and is a wholly owned subsidiary of Smith & Nephew plc, an English company traded on the New York Stock Exchange. The company manufactures and sells medical devices worldwide.

Smith & Nephew acknowledged responsibility for the actions of its affiliates, subsidiaries, employees and agents who made various improper payments to publicly employed health care providers in Greece from 1998 until 2008 to secure lucrative business.

According to the criminal information filed today in U.S. District Court in the District of Columbia in connection with the agreement, Smith & Nephew, through certain executives, employees and affiliates, agreed to sell products at full list price to a Greek distributor based in Athens, and then pay the amount of the distributor discount to an offshore shell company controlled by the distributor. These off-the-books funds were then used by the distributor to pay cash incentives and other things of value to publicly employed Greek health care providers to induce the purchase of Smith & Nephew products. In total, from 1998 to 2008, Smith & Nephew, its affiliates and employees authorized the payment of approximately $9.4 million to the distributor’s shell companies, some or all of which was passed on to physicians to corruptly induce them to purchase medical devices manufactured by Smith & Nephew.

The agreement recognizes Smith & Nephew’s cooperation with the department’s investigation, thorough self-investigation of the underlying conduct, and the remedial efforts and compliance improvements undertaken by the company. As part of the agreement, Smith & Nephew will pay a $16.8 million penalty and is required to implement rigorous internal controls, cooperate fully with the department and retain a compliance monitor for 18 months.

In a related matter, Smith & Nephew reached a settlement today with the U.S. Securities and Exchange Commission, under which Smith & Nephew agreed to pay $5.4 million in disgorgement of profits, including pre-judgment interest.

This case is being prosecuted by Trial Attorney Kathleen M Hamann of the Criminal Division’s Fraud Section with assistance from the FBI Washington Field Office’s dedicated FCPA squad.

The Justice Department acknowledges and expresses its appreciation for the assistance provided by the authorities of the 8th Ordinary Interrogation Department of the Athens Court of First Instance (international police) and the Athens Economic Crime Squad in Greece, as well as the significant coordination with and assistance by the Securities and Exchange Commission’s Division of Enforcement.

Dhafir Ordered to Serve 264-Month Jail Term on Resentencing

Sentence Mirrors Original Sentence Received in 2005 Following Four-Month Trial in Syracuse

SYRACUSE, NY—United States Attorney Richard S. Hartunian announced this afternoon that U.S. District Judge Norman A. Mordue today resentenced Rafil Dhafir, a former physician from Manlius, New York, to a term of 264 months in jail, and ordered him to pay $865,272.76 in restitution. A Syracuse jury had found Dhafir guilty on 59 federal counts following a four-month jury trial in 2004-2005. Today’s rehearing was conducted following a decision by the United States Court of Appeals for the Second Circuit that asked District Judge Mordue to consider an alternative way of calculating Dhafir’s sentence. The sentence imposed today mirrors the original sentence imposed by Judge Mordue at Dhafir’s sentencing in 2005.

Dhafir’s 59 felony convictions included violations of the U.S. sanctions against Iraq (a national security violation), a multi-million-dollar money laundering conspiracy, substantive money laundering offenses, a conspiracy to impair and impede the operation of the Internal Revenue Service (IRS), causing the filing of a false tax document, tax evasion, visa fraud, health care fraud, false statements, and mail fraud and wire fraud (defrauding donors to his purported charity Help The Needy). In re-sentencing Dhafir, Judge Mordue emphasized that Dhafir’s criminal conduct involved multiple violations of law which took place throughout a four-year period. Judge Mordue also pointed out that Dhafir could have accomplished his humanitarian goals without violating the law if he had chosen to do so. Accordingly, the court concluded that the sentence originally imposed was sufficient, but not longer than necessary, taking into account all of the relevant sentencing factors.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service, the Social Security Service-Office of Inspector General, the United States Postal Inspection Service, the Defense Criminal Investigative Service, the Department of Health and Human Services, and the New York State Police. The prosecution was handled by the Syracuse Office of the U.S. Attorney’s Office for the Northern District of New York.

Collecting DNA from Juveniles

This report examines the laws, policies, and practices related to juvenile DNA collection, as well as their implications for the juvenile and criminal justice systems. This report considers the following questions:

1. How have state agencies, including juvenile justice agencies and state
laboratories, implemented juvenile DNA collection laws?
2. What are the number and characteristics of juveniles with profiles included in CODIS?
3. How have juvenile profiles in CODIS contributed to public safety or other
justice outcomes?
4. What improvements to policies and practices should be made?

This report is the result of an NIJ-funded project but was not published by the U.S. Department of Justice.

Read the Report
Collecting DNA from Juveniles (PDF)

Pharmacy Owner Pleads Guilty to Conspiring to Commit Health Care Fraud

MCALLEN, TX—Sara Elicia Garza, 55, of Mission, Texas, has been convicted of conspiracy to commit health care fraud, United States Attorney Kenneth Magidson announced today along with Texas Attorney General Greg Abbott. Garza is a pharmacist and the owner and operator of Sara’s Pharmacy and Gift Corner located in Mission.

Garza pleaded guilty to conspiracy to commit health care fraud at a hearing held earlier today before U.S. District Judge Randy Crane. At that hearing, Garza admitted she participated in the conspiracy to defraud the Texas Medicaid/Vendor Drug program by submitting false and fraudulent claims for prescription medication that was not dispensed or provided. Specifically, Garza admitted the claims were false and fraudulent for one or more of a variety of reasons—medications were never provided or dispensed, the beneficiary had never seen the physician purporting to prescribe the medication, prescription medications were written for the treatment of medical conditions that the beneficiary did not have, claims were for refills of prescription medications authorized by a physician but which the beneficiary did not request and did not receive, and/or that the prescription medications were never dispensed to beneficiaries but were billed (referred to as “running extras” by Garza and her co-conspirators) in lieu of collecting co-pay for prescriptions that were actually dispensed or in lieu of collecting money for purchases from the Sara’s Pharmacy Gift Store.

Garza also admitted that to cover up the fraud and conspiracy, she and her co-defendant, Valerie Flores, 38, also of Mission, along with other unindicted co-conspirators, forged prescriptions, doctors’ signatures on prescriptions, patients’ signatures on logs that purportedly indicated that a customer beneficiary had received medications, and altered pharmacy records. Flores previously pleaded guilty to conspiracy to commit health care fraud on Dec. 16, 2011, and is scheduled for sentencing April 5, 2012.

Garza faces a maximum punishment of 10 years in prison and up to a $250,000 fine plus up to three years of post-prison supervised release. Her sentencing hearing is set for April 16, 2012. Garza was permitted to remain on bond pending sentencing, at which time the court will also decide the amount of restitution to be ordered in the matter.

In July 2011, agents from the FBI and the Medicaid Fraud Control Unit of the Texas Attorney General’s Office executed a federal search warrant and seized documents and computers at Sarah’s Pharmacy and Gift Store. The pharmacy closed on or about Oct. 28, 2011.

The investigation leading to the charges in this case was conducted by the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant United States Attorney Casey N. MacDonald and Special Assistant United States Attorney Rex G. Beasley are prosecuting the case.

Baltimore Financial Adviser Sentenced in Scheme to Defraud Vulnerable Clients of $838,350

Stole from a Trust Held for a Child Suffering from Cerebral Palsy, from the Child’s Mother and from an Elderly Woman

BALTIMORE—U.S. District Judge Catherine C. Blake sentenced Ralph Edward Thomas, Jr., age 53, of Reisterstown, Maryland, today to four years in prison followed by three years of supervised release for mail fraud in connection with defrauding his clients. Judge Blake also ordered Thomas to pay $838,350.34 in restitution, the amount of loss suffered by his clients, and to forfeit property in order to pay such amount, including funds held in investment accounts owned by Thomas, his home in Reisterstown and luxury automobiles.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Chief James W. Johnson of the Baltimore County Police Department.

According to Thomas’ plea agreement, a trust account was established in 1994 to benefit a child suffering from cerebral palsy. The child’s mother was appointed as the trustee. The trust account was funded by the proceeds of a $3 million medical malpractice settlement, which were used to buy an annuity. The annuity was supposed to pay the child a minimum of $3,990 a month.

Thomas was a vice president of Harbor Financial Services, a subsidiary of Harbor Bank. After meeting the child’s mother at Harbor Bank in December 2001, Thomas established complete control over the child’s trust account, which was moved to the Harbor Bank. From December 17, 2001 through June 30, 2010, the annuity payments were deposited directly into the trust account. Although the annuity payments averaged $6,287.53 per month, Thomas disbursed only $1,000 to $1,500 a month from the trust account to the mother for the care of the child. He withdrew the remaining monthly balance by obtaining the mother’s signature on blank withdrawal slips, and deposited the funds into his personal bank accounts. Thomas withdrew a total of $756,963.98 from the trust account which he used for his personal benefit. Thomas purchased a home in Reisterstown, Maryland on July 30, 2009 using $100,000 of the stolen funds.

Furthermore, from June 2006 to May 2009, Thomas obtained three mortgages totaling $205,000 on the mother’s home in her name without her permission. As a result, the mother incurred $26,886.36 in closing costs and losses. Thomas also stole $12,500 from the mother’s personal account held at Harbor Bank.

Finally, from February 2004 through July 2010, Thomas was employed as a financial adviser by Wells Fargo Advisors, LLC. Thomas admits that $75,000 was fraudulently withdrawn from an account held by an elderly Wells Fargo customer. Of the $75,000 withdrawn, $42,000 was used to pay Thomas’ personal credit card accounts or other personal benefits.

United States Attorney Rod J. Rosenstein praised the FBI and Baltimore County Police Department for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Gregory R. Bockin, who prosecuted the case.

New Haven Man Sentenced to Two Years in Federal Prison for Distributing Crack

David B. Fein, United States Attorney for the District of Connecticut, announced that RAYMOND RICE, 41, of New Haven, was sentenced today by Senior United States District Judge Ellen Bree Burns in New Haven to 24 months of imprisonment, followed by three years of supervised release, for distributing crack cocaine.

This matter stems from a joint law enforcement investigation conducted by the FBI New Haven Safe Streets Task Force, the DEA New Haven Task Force, the New Haven Police Department and the Hamden Police Department. Through the use of court-authorized wiretaps, investigating officers identified and dismantled a large drug-trafficking organization that was centered in the Newhallville section of New Haven and Hamden, and was responsible for the distribution of crack cocaine and cocaine throughout the Greater New Haven area.

According to court documents and statements made in court, from June 2010 through October 2010, RICE was intercepted several times over a wiretap ordering distribution quantities of crack cocaine from other members of the drug trafficking organization, which he then sold to his own customer base for profit.

On April 21, 2011, RICE pleaded guilty to one count of conspiracy to possess with intent to distribute cocaine base (“crack cocaine”).

Forty-seven individuals have been charged in federal court with various narcotics offenses as a result of this investigation.

This matter was investigated by the Federal Bureau of Investigation’s New Haven Safe Streets Task Force (composed of members of members of the New Haven, Ansonia, Milford and East Haven Police Department, and the Connecticut State Police and the Connecticut Department of Correction), the Drug Enforcement Administration’s New Haven Task Force (composed of members of the New Haven, West Haven, Meriden, Ansonia, Hamden and Branford Police Departments), along with substantial participation by members of the New Haven and Hamden Police Departments. The United States Marshals Service also has assisted the investigation.

The investigation was funded in significant part by the United States Attorney’s Office Organized Crime Drug Enforcement Task Force and supported by the Office’s Project Safe Neighborhoods and Anti-Gang programs.

This matter is being prosecuted by Assistant United States Attorneys Christopher M. Mattei and Robert M. Spector.

Nine Indicted for Conspiring to Receive, Distribute, and Possess Child Pornography

WASHINGTON—Nine men have been indicted in the Western District of Virginia for allegedly conspiring to receive, distribute, possess, and access with intent to view child pornography, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, U.S. Attorney Timothy J. Heaphy of the Western District of Virginia and Assistant Director Gordon M. Snow of the FBI’s Cyber Division, announced today.

An indictment returned under seal on Jan. 25, 2012, and unsealed today, charges Jesse Leon Coleman, 47, of Lynchburg, Va.; Thomas Syfor, 71, of Bethlehem, Pa.; Matthew Ackerman, 49, of Bethlehem, Pa.; Peter Franklin Ortiz, 56, of Greenville, S.C.; Manuel Antonio Mares, 56, of Miami; Jeremy Hart Yost, 25, of West Bend, Ore.; Richard Phillip Allen, 65, of Redondo Beach, Calif.; and James Calvin Boyd, 58, of Pell City, Ala., with one count of conspiring to receive, distribute, possess and access with the intent to view child pornography. Coleman is also charged with one count of receiving child pornography and one count of accessing with intent to view child pornography. The ninth defendant, known as “Andy Danilov,” is believed to reside in Russia.

Coleman, Ortiz, Yost and Boyd were arrested yesterday, and Allen self-surrendered to authorities yesterday. Syfor, Ackerman and Mares were arrested at earlier dates.

According to the indictment, beginning in August 2010, Danilov distributed e-mails to a group of individuals, including the defendants, that allegedly contained links to compressed files and file attachments depicting minors engaged in sexually explicit conduct. Danilov often used the screen name “Cinemaboy” in the e-mails.

If convicted, each defendant faces a maximum penalty of 20 years in prison, a $250,000 fine and lifetime supervised release on the conspiracy count. In addition, Coleman faces a maximum penalty of 20 years in prison, a $250,000 fine and lifetime supervised release on the receipt count and 10 years in prison, a $250,000 fine and lifetime supervised release on the access count.

The investigation of the case was conducted by the FBI Innocent Images Operations Unit. The case is being prosecuted by Assistant U.S. Attorney Nancy Healey of the Western District of Virginia and Trial Attorney Chantel Febus of the Child Exploitation and Obscenity Section in the Justice Department’s Criminal Division.

An indictment is only a charge and not evidence of guilt. Defendants are innocent until proven guilty beyond a reasonable doubt.

Federal Jury Convicts Husband and Wife in Conspiracy to Embezzle from City of Garland, Texas

Five Defendants Previously Convicted in This Conspiracy That Caused a Nearly $2 Million Loss to the City

DALLAS—Following a three-day trial before Chief U.S. District Judge Sidney A. Fitzwater, late yesterday a federal jury convicted Kenneth Wayne Brown and his wife, Leah Michele Brown, of Westminster, Texas, for their roles in a conspiracy to embezzle funds from the City of Garland, Texas, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. They were each convicted on one count of conspiracy to commit theft from a program receiving federal funds and each faces a maximum statutory sentence of five years in prison, a $250,000 fine and restitution. Both Kenneth Brown, 50, and Leah Brown, 46, remain on bond. Their sentencing hearings are set for May 18, 2012.

Five defendants have previously been convicted for their roles in the conspiracy. In early December 2011, Duane Milford Stailey, 44, and his wife, Sharon Ware Stailey, 46, both of Leonard, Texas, pleaded guilty to the same conspiracy charge and are scheduled to be sentenced on March 2, 2012 by Judge Fitzwater. In early October 2011, Jerry Don Diviney, 69, of Durant, Oklahoma, pleaded guilty and will be sentenced on March 9, 2012.

The former risk management adjustor for the City of Garland, Patricia Leathers, 63, of Rowlett, Texas, pleaded guilty in December 2010 and is presently serving a 57-month sentence. Her sister, Connie M. Powell, 60, of Garland, pleaded guilty to her role involving checks exceeding $64,000, resulting in a three-year term of probation.

According to trial testimony and case documents, Leathers obtained checks issued by the City of Garland by submitting false claims for reimbursement for damage to vehicles, homes, and landscaping purportedly caused by City trucks or employees. Diviney provided Leathers with names and addresses to use for the false claims and deposited or cashed many of the checks. He then shared the proceeds with Leathers. The Browns and the Staileys negotiated checks payable to themselves and others and returned the bulk of the cash to Diviney and Leathers. The total loss to the City has been determined to be $1,968,479.

The investigation was conducted by the FBI, the Garland Police Department and the Garland Offices of the City Attorney and Internal Auditor. Assistant U.S. Attorneys Katherine Miller and Brian McKay are prosecuting.

Four Pounds of Methamphetamine Seized in Washington County

GREENEVILLE, TN—A multi-agency investigation resulted in the arrest of six persons on January 31, 2012, after law enforcement agents found four pounds of methamphetamine at a rural Washington County, Tennessee home. All six were arrested on complaints relating to their immigration status, made their initial appearances on February 1, 2012, and detained pending their arraignment which is scheduled for February 15, 2012, at the James H. Quillen Federal Courthouse in Greeneville, Tennessee.

The six individuals were Jose Cruz Guevara-Cazarez, 55; Rosalva Guadalupe Robeldo, 48; Arnoldo Ayala Guevara,49; Habraham Enrique Guevara, 26; Emilio Beltran Sanchez, 31; and Enrique Rivas, 33. Guevara-Cazarez, Robledo, and Habraham Enrique Guevara lived in Limestone, Tennessee; Arnold Guevara, Sanchez, and Rivas lived in Oklahoma City, Oklahoma. All except Rivas are natives of Culiacan, Sinaloa, Mexico.

“This case falls within the wide range of transnational crimes that are tailor made to be dealt with using HSI’s numerous authorities,” said Raymond R. Parmer, Jr., Special Agent in Charge of Homeland Security Investigations (HSI) in New Orleans. “This joint investigation demonstrates to individuals who think they can commit such acts without repercussions that HSI and our law enforcement partners are committed to ensuring the integrity of our governmental systems, and constant vigilance over our national security.”

United States Attorney William C. Killian noted, “The cooperative efforts of federal, state and local law enforcement were critical in effectuating these arrests.”

The agencies which participated in the arrests include the Federal Bureau of Investigation, Drug Enforcement Administration, Homeland Security Investigations, the First Judicial District Drug Task Force, the Washington County Sheriff’s Office, the Johnson City Police Department, the Greene County Sheriff’s Office, and the Greeneville Police Department.

Members of the public are reminded that these are only charges and that every person is presumed innocent until their guilt has been proven beyond a reasonable doubt.

Two Principals of Collapsed Foreign Currency Trading Firm Sentenced to Federal Prison for $17 Million Fraud Scheme

CHICAGO—Two principals of a foreign currency trading firm that collapsed in 2007 were sentenced to 17 years and 12.5 years in federal prison, respectively, after pleading guilty to fraud charges for operating a Ponzi-type scheme that diverted millions of dollars to themselves to finance lavish lifestyles and that caused more than 1,000 victim investors worldwide to lose nearly $17 million. Charles G. Martin, 46, formerly of Glencoe, Ill., and Malibu, Calif., was sentenced today to 204 months, while John E. Walsh, 63, of Lake Forest, Ill., was sentenced yesterday to 150 months in prison. Both men were arrested and charged in January 2009 and subsequently cooperated with the government and pleaded guilty in May 2011 to wire and commodities fraud and tax evasion counts. The sentences were announced by Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois; Robert D. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Alvin Patton, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

The sentences were imposed by U.S. District Judge Virginia Kendall, who also ordered mandatory restitution of $16,976,554, jointly and severally, against both defendants. The judge also granted a forfeiture judgment against Walsh for $10 million and indicated that she will enter a similar order against Martin. The government has so far recovered in excess of $1 million from the liquidated proceeds of the defendants’ seized assets and personal property, as well as from bank accounts, safety deposit boxes, and third-party recipients of fraudulently obtained funds.

Walsh was ordered to begin serving his sentence on March 28 and Martin on March 29.

Martin and Walsh were principals of One World Capital Group, LLC, which was formed in 2005, and was based in Winnetka, Ill., with an office in New York. In December 2007, the Commodity Futures Trading Commission obtained a court order prohibiting further trading activity and freezing the firm’s remaining assets, which totaled $677,932. At the same time, One World had approximately $17,654,486 in unpaid customer liabilities. The CFTC and the National Futures Association assisted in the investigation.

According to the court documents, Martin acted as a principal of One World, even though he was prohibited from holding such a position with a National Futures Association member, and Walsh served as the president and primary manager of the trading firm. They marketed over the counter foreign currency (“forex”) trading services in which they were to serve as the customers’ counterparty. In reality, however, One World’s trading platform operated as a front to placate customers whose margin funds were being systematically misappropriated by them. They concealed the misappropriation from customers, as well as government and industry regulators, by making false representations. For example, they solicited new customers without telling them that the value of their investments with One World would be immediately diminished upon deposit due to a shortfall in One World’s customer trading account.

The defendants used customer funds they misappropriated to finance extravagant lifestyles. Credit card and bank records show that Martin spent more than $1 million at a strip club and restaurants, nearly $1 million at elite hotels and another $1 million renting flight time on private jets. He purchased a fleet of luxury vehicles, donated hundreds of thousands of dollars to celebrity charity events, and hired personal security guards to accompany him in public. Similarly, Walsh used his One World credit card to charge personal expenses, including more than $140,000 of jewelry. He also used $70,000 in One World funds for country club expenses and $1,425,000 to purchase a second home in Lake Forest.

In January 2009, federal agents searched Martin’s residence on Sheridan Road in Glencoe and Walsh’s residence on Wharton Drive in Lake Forest, and seized dozens of items from Martin, including fine watches and jewelry, antique furniture, oriental rugs, a piano, artwork, and various high-end electronics. From Walsh, agents seized jewelry, cash proceeds from the sale of his former residence on Salisbury Lane in Lake Forest, and a BMW that he transferred to his son.

In addition to the luxury items they lavished upon themselves, bank records showed that Martin and Walsh spent significant amounts of funds diverted from One World to help finance the production of a motion picture that had listed Martin as a contributing producer. In 2007, bank records show that Martin and Walsh spent more than $500,000 on the movie.

The government is being represented by Assistant U.S. Attorney Joel Hammerman.

The case falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit: StopFraud.gov.

Photo Released in Second Comerica Bank Robbery

The FBI Bank Robbery Task Force needs your help in identifying the man who robbed the Comerica Bank located at 2337 West Holcombe in Houston, Texas, earlier today. It was the second robbery of a Comerica Bank location in Houston today. The two robberies do not appear to be related at this time.

At approximately 1:05 p.m., the man entered the bank and approached a teller. He initially pretended to conduct legitimate bank business, then handed the teller a note which demanded money and threatened he had gun. The robbery verbally repeated the demand and threatened to pull out a weapon. No weapon was observed by the teller. The teller provided the robber with some cash. No one was physically hurt during the robbery.

The bank robber is described as a black male, 20-25, 5’8”-5’9” tall, with an average build, light complexion, and clean shaven. He wore a black business suit, white shirt, black tie, black sunglasses, and a Rice University baseball cap.

Crime Stoppers of Houston is offering up to $5,000 for information leading to the charging and arrest of this robber, or any felony suspect. If you have information about this crime, please call the Crime Stoppers Tip Line at 713-222-TIPS (8477), or the Houston office of the FBI at 713-693-5000.

East Greenwich, New Jersey Man Sentenced to 20 Years in Prison for Offering Child Rape Videos on Internet

CAMDEN, NJ—An East Greenwich, N.J., man was sentenced today to 240 months in prison for advertizing child pornography for others to download over the Internet, including videos of infants being sexually assaulted, U.S. Attorney Paul J. Fishman announced. Robert J. Paratore, 47, previously pleaded guilty to an information charging him with one count of advertising and offering to share child pornography. Paratore entered his guilty plea before U.S. District Judge Jerome B. Simandle, who also imposed the sentence today in Camden federal court.

According to documents filed in this case and statements made during Paratore’s guilty plea proceeding:

From at least as early as May 29, 2009, Paratore, who was then the CFO of Akers Biosciences, Inc., used his work computer in Thorofare, N.J., to download computer files that contained child pornography—including images of prepubescent children and infants engaged in sexually explicit conduct. Paratore then advertised his 76 gigabyte collection and shared the images with others over the Internet using peer-to-peer file-sharing—communication via special software which makes it possible for computers to link together over the Internet to form a network for sharing digital files between users.

Law enforcement officials who executed a search warrant at Paratore’s place of employment in Thorofare found child pornography on his work computer and over 100 CDs or DVDs of the material in his truck parked outside.

Paratore acknowledged that the images and videos he made available included depictions of children who were clearly minors. The titles of the files offered by Paratore, such as “!!!NEW tod rape.1. mpg,” graphically described the ages of the victims and the acts of sexual assault which had been recorded.

In addition to the prison term, which took into account Paratore’s prior federal conviction for possession of child pornography, Judge Simandle sentenced Paratore to a lifetime of supervised release. As part of his guilty plea, Paratore agreed to forfeit the computers that he used to commit the offense as well as 167 CDs and DVDs and a two gigabyte thumb drive containing child pornography. Paratore has also agreed to disclose information to law enforcement about eight individual victims he personally sexually abused. Those investigations are continuing. Paratore is also required to register as a sex offender.

U.S. Attorney Fishman credited special agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge George C. Venizelos; investigators with the Gloucester County Prosecutor’s Office, under the direction of Prosecutor Sean F. Dalton; and the West Deptford and Monroe Township Police Departments with the investigation leading to the sentence.

The government is represented by Assistant U.S. Attorney Jacqueline M. Carle of the U.S. Attorney’s Office Criminal Division in Camden.

Defense counsel:

Assistant Federal Public Defender Maggie F. Moy Esq., Camden

Ten-Year Sentences Handed Down to Men Who Grew Marijuana in the Chequamegon-Nicolet National Forest

MADISON, WI—John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that Cesar Tinoco, 21, Abraham Ramirez, 29, and Jorge Lopez-Ontiveros, 25, all citizens of Mexico, were each sentenced this week by U.S. District Judge Barbara B. Crabb to 10 years in federal prison for their involvement in a conspiracy to manufacture marijuana in the Chequamegon-Nicolet National Forrest during 2011. All three men pleaded guilty to the conspiracy charge in November of 2011.

Evidence summarized by the government at the plea hearings established that Tinoco, Ramirez and Lopez-Ontiveros were apprehended in early August 2011 along with Jose Esqueda-Garcia, 19, of Mexico, Moises Lopez-Ontiveros, 21, of Mexico, and Norberto Burciaga, 40, of St. Paul, Minnesota, after the marijuana grow they tended in the forest was raided by more than 200 law enforcement officers from over a dozen different local, state, and federal agencies. The grow location had initially been discovered in November of 2010 by hunters who reported the find to police. Police monitored the area in 2011 to determine if persons involved in the grow would return to use the area again. After months of monitoring and surveillance, law enforcement officers raided the campsite of the suspected growers and seized over 9,400 marijuana plants that had been planted, fertilized, and watered by the men. Initially, four of the five men at the camp eluded capture until the following day when Burciaga arrived from Minnesota to pick them up. Sawyer County deputies observed Burciaga’s truck, which investigators were familiar with based on the surveillance over the summer, and stopped it as it headed back toward Minnesota, apprehending Burciaga and four of the suspects who had fled and stayed in the forest overnight.

The three remaining defendants, Norberto Burciaga, 40, St. Paul, Minn., Jose Esqueda-Garcia, 19, Mexico, and Moises Lopez-Ontiveros, 21, Mexico, will be sentenced within the next two weeks.

The charges against the defendants were the result of an investigation by the Wisconsin Department of Justice-Division of Criminal Investigation; Ashland County Sheriff’s Department; Drug Enforcement Administration; U.S. Forest Service; Federal Bureau of Investigation; Wisconsin Department of Natural Resources; Northwest Area Crime Unit (comprised of Sawyer, Douglas and Washburn County Sheriffs’ Departments and Superior Police Department); U.S. Customs and Border Protection; and Great Lakes Indian Fish & Wildlife Commission. The prosecution of the case has been handled by Assistant U.S. Attorney Robert A. Anderson.

Potomac, Maryland Man Sentenced for Wire Fraud

OXFORD, MS—Felicia C. Adams, United States Attorney for the Northern District of Mississippi, and Daniel McMullen, Special Agent in Charge of the Federal Bureau of Investigation (FBI) in Mississippi, announce that:

Sanjeet “Sonny” Veen, 47, of Potomac, Maryland, was sentenced today by United States Senior District Judge Glen H. Davidson in Oxford, following his guilty plea last year to a charge of wire fraud. Judge Davidson ordered Veen to serve 40 months in prison, followed by three years’ supervised release. He was also ordered to pay restitution in the amount of $6,890,000 to Cambridge Trading, in care of Dunlap & Kyle Company, Inc.

At his plea hearing, Veen admitted to taking orders from Dunlap & Kyle for tires from foreign manufacturers, submitting deceptive invoices for tires never received, and receiving payment for said tires.

“Left unchecked, corporate fraud threatens our economy, workforce, and consumers,” stated Daniel McMullen, Special Agent in Charge of the FBI in Mississippi. “The sentence of Sanjeet Veen is the result of the persistence and dedication of the agents, analysts, and prosecutors who worked on this complex case, and I applaud their efforts.”

This case was investigated by the Federal Bureau of Investigation and was prosecuted by Assistant United States Attorney Charlie Spillers.

DME Business Owner Lands in Federal Prison for 10 Years for Health Care Fraud and Identity Theft Scheme

Court Considered Additional Evidence Related to Obstruction of Justice

MCALLEN, TX—Juan De Leon, 41, of Edinburg, Texas and owner of United DME Inc., was sentenced today to 120 months in federal prison without parole for his role in a health care fraud and identity theft scheme, United States Attorney Kenneth Magidson and Texas Attorney General Greg Abbott announced today.

Following a four-day trial and approximately an hour of deliberations in late September 2011, a federal jury in McAllen convicted De Leon on charges of conspiracy, health care fraud, and aggravated identity theft related to his scheme to submit fraudulent claims to Medicare and Medicaid for a variety of medical items including power wheelchairs and diabetic supplies. At a hearing this morning, U.S. District Judge Randy Crane, who presided over the trial, sentenced De Leon to 120 months in federal prison, the statutory maximum prison sentence for health care fraud, and ordered him to pay $750,000 in restitution to Medicare and Medicaid. De Leon will also have to serve a three-year term of supervised release upon completion of his prison term.

De Leon owned and operated United DME Inc.—a durable medical equipment (DME) company located in Weslaco, Texas. During the trial, the United States presented evidence that from 2007 through 2010, De Leon directed his employees to submit false and fraudulent claims to Medicare and Medicaid for power wheelchairs that were not delivered and for diabetic supplies and other medical items that were not delivered. The jury heard evidence that instead of providing the medically necessary power wheelchairs prescribed by the patients’ doctors, De Leon would instead provide the patients with less expensive, and more difficult to operate, scooters that they could not use. In other cases, De Leon or his staff submitted claims to Medicare and Medicaid for medical items allegedly delivered after the beneficiary had passed away. According to evidence at trial, De Leon attempted to conceal the scheme by altering records contained within patient files including backdating delivery tickets and forging patient signatures on delivery tickets.

At today’s sentencing hearing, the United States presented additional evidence that during the investigation and prosecution of the case, De Leon obstructed justice by altering and forging patient files prior to producing them to investigators. In addition, De Leon attempted to influence and intimidate government witnesses by instructing them to lie to investigating agents about various matters.

Previously on bond, De Leon was ordered into federal custody following the jury’s verdicts in September where he has remained and will remain pending transfer to a Bureau of Prisons facility to be determined in the near future.

This case was investigated by the FBI, U.S. Department of Health and Human Services-Office of Inspector General, and the Texas Attorney General’s Medicaid Fraud Control Unit. Assistant United States Attorney Greg Saikin and Special Assistant United States Attorney Rex Beasley prosecuted the case.