CHICAGO—(ENEWSPF)—February 13, 2015. The Department of Justice announced today that an Illinois physician, Dr. Michael J. Reinstein, pleaded guilty to a federal crime for receiving illegal kickbacks and benefits totaling nearly $600,000 from two pharmaceutical companies in exchange for regularly prescribing an anti-psychotic drug — clozapine — to his patients.  Reinstein also agreed to pay the United States and the state of Illinois $3.79 million to settle a parallel civil lawsuit alleging that, by prescribing clozapine in exchange for kickbacks, Reinstein caused the submission of false claims to Medicare and Medicaid for the clozapine he prescribed for thousands of elderly and indigent patients in at least 30 Chicago-area nursing homes and other facilities. 

“The Department of Justice is committed to ensuring that physicians who accept payments from pharmaceutical manufacturers to influence prescribing decisions are held accountable,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division.  “Schemes such as this one undermine the health care system and take advantage of elderly patients who are among the most vulnerable health care recipients.”

“Physicians must prescribe medications for their patients solely on the basis of the patients’ best medical interests and not because those decisions were improperly influenced by kickbacks and other financial favors,” said U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.

Both the criminal and civil cases involve the promotion of generic clozapine, a rarely prescribed anti-psychotic drug that has serious potential side effects and is generally considered a drug of last resort, particularly for elderly patients.  While clozapine has been shown to be effective for treatment-resistant forms of schizophrenia, it is also known to cause numerous side effects, including a potentially deadly decrease in white blood cells, seizures, inflammation of the heart muscle and increased mortality in elderly patients.

Reinstein pleaded guilty to one count of violating the federal Medicare and Medicaid Anti-Kickback Statute at his arraignment in U.S. District Court after he was charged on Feb. 3.

The civil settlement resolves a civil action filed against Reinstein by the federal government for accepting payments from pharmaceutical manufacturer Teva Pharmaceuticals USA Inc. and a subsidiary, IVAX LLC, to induce the use of generic clozapine.  The United States alleged that in exchange for these payments, Reinstein prescribed clozapine for Medicare and Medicaid beneficiaries.  The United States also alleged that Reinstein submitted and/or caused to be submitted to both Medicaid and Medicare claims for “pharmacologic management” of those patients for whom he prescribed clozapine.  However, Reinstein allegedly did not engage in meaningful pharmacological management, because his prescribing decisions for his clozapine patients were based on the kickbacks he received rather than his independent medical judgment or the individual needs of his patients.  In March 2014, Teva Pharmaceuticals USA Inc. and IVAX LLC, paid the United States and the state of Illinois $27.6 million to settle allegations that they violated the state and federal False Claims Acts by making payments to Reinstein in return for him prescribing clozapine to his patients.

As set forth in the plea agreement, the payment scheme involving Reinstein began in August 2003, when Reinstein agreed to switch his patients to generic clozapine if IVAX agreed to pay Reinstein $50,000 under a one-year “consulting agreement” and to provide other benefits to Reinstein, in violation of the federal Medicare and Medicaid Anti-Kickback statute.  In addition to direct payments to Reinstein, IVAX allegedly also provided all-expenses paid trips to Miami for Reinstein, his wife and various employees of Reinstein.  Reinstein quickly became the largest prescriber of generic clozapine in the country and prescribed the drug to many elderly patients.  Allegedly, the payments and other forms of remuneration from IVAX and later Teva Pharmaceuticals continued for many years and resulted in the submission of thousands of false claims to the Medicare Part D and Illinois Medicaid programs. 

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs.  The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient. 

The plea agreement and civil settlement illustrate the government’s emphasis on combating health care fraud and mark another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $23.6 billion through False Claims Act cases, with more than $15.1 billion of that amount recovered in cases involving fraud against federal health care programs.

The U.S. Attorney’s Office for the Northern District of Illinois represented the United States in connection with the plea agreement.  The civil settlement with Reinstein was the result of a coordinated effort by the U.S. Attorney’s Office for the Northern District of Illinois, the Civil Division’s Commercial Litigation Branch, the Department of Health and Human Services’ Office of Inspector General, the FBI and the Illinois Attorney General’s Office.

Except to the extent admitted by Reinstein in his guilty plea, the claims resolved by the civil settlement are allegations only, and there has been no determination of liability.  The civil case is captioned United States v. Reinstein, Civil Action, No. 12-C-9167 (N.D. Ill.).

Related Material:

Settlement Agreement

Plea Agreement

Source: justice.gov

CHICAGO −(ENEWSPF)--February 13, 2015.  A man who allegedly sex trafficked an underage girl by force was charged in a criminal complaint in U.S. District Court in Chicago.  The defendant, ALLEN C. IROEGBULEM, 24, of Roselle, Illinois, was charged with sex trafficking of a minor.  The charges were announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Robert J. Holley, Special Agent-in-Charge of the Chicago office of the Federal Bureau of Investigation.

Iroegbulem appeared today before U.S. District Court Judge Daniel Martin at the Dirksen Federal Courthouse, was will remain in custody pending a detention hearing.  The defendant was charged in a criminal complaint filed on February 4, 2015.

According to the complaint, beginning in December 2013, and continuing through February 2014, the defendant transported “Minor A” from the Chicagoland area to Rockford, Illinois, where he arranged for the minor to perform commercial sex acts with at least four men in exchange for money, all in the same night.  The minor continued to perform sex acts at the direction of the defendant in hotel rooms throughout the Chicagoland area, at a house on the west-side of Chicago and in Wisconsin, where the minor was continually ordered to perform sex acts with several men at one time, over the course of three months.   In addition, Iroegbulem physically assaulted the minor. 

The complaint also states that the defendant provided another minor, “Minor C,” with drugs in a hotel room, causing her to pass out.   He then arranged for two men to perform sex acts on Minor C while she was in a drugged state.   

The investigation was conducted jointly by the FBI and the Carol Stream Police Department and assisted by the McHenry County State’s Attorney’s Office, the McHenry County Sheriff’s Department, the Woodstock Police Department, the DuPage County Sheriff’s Office, and the Schaumburg Police Department.

If convicted, the defendant faces a maximum penalty of life in prison.

The public is reminded that a complaint is not evidence of guilt and that all defendants in a criminal case are presumed innocent until proven guilty in a court of law.

The government is being represented by Assistant United States Attorney Bethany Biesenthal.

Source: justice.gov

CHICAGO —(ENEWSPF)--February 18, 2015.  A River Forest man was sentenced today to 12 ½ years in federal prison for mailing and emailing threatening communications to kill Chicago area politicians and River Forest police officers, as well as oil executives in Texas and California.  A jury found the defendant, RONALD HADDAD, Jr., 39, guilty in April 2014 of all 30 counts against him ― 28 counts of mailing threats and two counts of emailing threats.  U.S. District Judge Virginia Kendall imposed the sentence today in Federal Court.

“This is a very serious case, with very real victims,” said Judge Kendall in imposing the sentence, “the response was a tremendous drain on the City.”  The judge also ordered Haddad to serve three years of supervised release following his sentence.  Haddad is in federal custody, and since he was arrested and charged in 2009, he underwent several mental competency evaluations.

“From December 2007 through January 2009, [Haddad] carried out an unrelenting campaign to terrorize public officials and private citizens in Chicago and across the country.  [His] threat letters promised death to anyone who failed to obey him . . . .  Terror is what [he] sought, and that is what he achieved,” the government argued in a sentencing memo.

The evidence at trial showed that Haddad sent multiple threatening communications in three waves starting in Dec. 2007, again in June and July 2008, and again in January 2009.  The first group of letters, addressed to individuals such as former Chicago Mayor Richard M. Daley and former Chicago Ald. Bernard Stone, contained white powder.  The letters in June and July 2008 contained a brown substance, and the letters and packages in January 2009 contained an oily substance or shotgun shells that appeared to be rigged to explode.  None of the substances or shells proved to be harmful but witnesses who opened the letters and packages testified that they were fearful when they opened them.     

The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Chicago Police Superintendent Garry F. McCarthy.    The government was represented by Assistant U.S. Attorney William Ridgway.

Source: justice.gov

CHICAGO—(ENEWSPF)—February 19, 2015. Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois, Special Agent in Charge Gary Hartwig of Homeland Security Investigations Chicago, Special Agent in Charge James C. Lee of the Internal Revenue Service’s (IRS) Chicago Office and Special Agent in Charge Brian Reihms of the Department of Defense Criminal Investigative Service in Chicago announced today that an Arlington Heights, Illinois, company, its president and a former employee were indicted on federal charges for unlawfully exporting and importing military articles, including components used in night vision systems and an M1A1 Abrams tank, which is the main battle tank used by the U.S. Armed Forces.  The defendants were charged in an indictment returned by a federal grand jury in January and made public this week.

Vibgyor Optical Systems Inc., a company located in Arlington Heights, purported to manufacture optics and optical systems, including items that were to be supplied to the U.S. Department of Defense (DOD).  Instead of manufacturing the items in Illinois, as it claimed, Vibgyor illegally sent the technical data for, and samples of, the military articles to manufacturers in China, then imported the items from China to sell to its customers—including DOD prime contractors.  Bharat “Victor” Verma, 74, of Arlington Heights, Vibgyor’s president, and Urvashi “Sonia” Verma, 40, of Chicago, a former Vibgyor employee and owner of a now-defunct company that operated as a subcontractor for Vibgyor, were also charged in the indictment.

According to the indictment, between November 2006 and March 2014, the defendants conspired to defraud the United States and violate the Arms Export Control Act (AECA) and International Traffic in Arms Regulations.  The AECA prohibits the export or import of defense articles and defense services without first obtaining a license from the U.S. Department of State and is one of the principal export control laws in the United States.  Under the International Traffic in Arms Regulations, any person seeking to import items designated as defense articles on the United States Munitions Import List is required to obtain a permit to do so from the Bureau of Alcohol, Tobacco, Firearms and Explosives.  Vibgyor won subcontracts to supply optical components and systems to DOD prime contractors by misrepresenting the location of manufacture of the items it supplied.  Bharat Verma falsely claimed that the items Vibgyor supplied were manufactured in domestically, when they actually had been manufactured in China, based on information illegally exported to Chinese manufacturers.  In addition to illegally providing technical data for a military item to China, Urvashi Verma attempted to ship an example of one of the military items to the Chinese manufacturer.  

“The Arms Export Control Act and the International Traffic in Arms Regulations are vital to preventing embargoed countries from gaining access to our sensitive military technology, and to ensuring that our armed forces are not issued substandard equipment,” said U.S. Attorney Fardon.  “Where companies and individuals seek to violate the AECA and the International Traffic in Arms Regulations, we will not hesitate to act."

Vibgyor, Bharat Verma and Urvashi Verma are charged with one count of conspiracy to violate both the AECA and the International Traffic in Arms Regulations; one count of conspiracy to defraud the United States—each offense is punishable by up to five years’ imprisonment—and one count of  violating the AECA, with a maximum possible penalty of 20 years in prison and a fine up to $1,000,000.  Vibgyor and Bharat Verma were also charged with international money laundering, an offense with a maximum possible sentence of 20 years’ imprisonment and a fine up to $500,000.  The defendants are scheduled to be arraigned Friday, Feb. 20, 2015, before U.S. Magistrate Judge Sidney I. Schenkier.    

The case is being prosecuted by Trial Attorney Casey Arrowood of the Justice Department’s National Security Division, and Assistant U.S. Attorneys Diane MacArthur, Bolling W. Haxall and Shoba Pillay of the Northern District of Illinois.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Source: justice.gov

Chicago −(ENEWSPF)--February 23, 2015.  Bryce Woods, 37, an employee of Take Action, Inc., and Inner Arts, Inc., which claimed to provide psychotherapy services to Medicare beneficiaries residing in skilled nursing homes in the Chicago area, was sentenced today by U.S. District Court Judge Virginia M. Kendall to 70 months in federal prison for submitting false claims totaling more than $1.5 million to Medicare for psychotherapy services.  Codefendant Keenan R. Ferrell, 55, who was the owner and operator of Take Action, Inc., and Inner Arts, Inc., as well as a licensed psychologist in Illinois, was sentenced to 88 months in federal prison back in August 2014.

“This is an abuse of a program designed for people who need it,” remarked U.S. District Judge Kendall in imposing the sentence today. “This was an egregious fraud.”  Judge Kendall also ordered both Woods and Ferrell to serve two-year terms of supervised release and to pay $1,525,496 in restitution.

Ferrell and Woods, both of Chicago, were each convicted of six counts of health care fraud at a jury trial in June 2013.  The defendants were convicted of submitting false claims to Medicare for over five years. In each fraudulent claim, Ferrell and Woods represented that Ferrell had provided 45-50 minutes of one-on-one psychotherapy to patients living in skilled nursing homes, when in fact, the sessions were conducted by Woods, psychology graduate students recruited by Ferrell, or others with limited or no supervision.

Knowing that psychotherapy services were reimbursable by Medicare only when performed by an enrolled provider or when “incident to” the services of an enrolled provider, Ferrell and Woods arranged for Ferrell, who was an enrolled Medicare provider and licensed medical doctor, to authorize Inner Arts and Take Action to accept assignment of his claims to Medicare.   Ferrell and Woods arranged with psychology graduate students and others to see patients at various skilled nursing facilities.  Ferrell himself did not attend or otherwise participate in or supervise any therapy sessions conducted in the nursing homes.  As a result, Ferrell was not physically present and immediately available when Take Action and Inner Arts therapists were in nursing homes to visit with patients.  As part of the scheme, Ferrell and Woods billed Medicare for more patient visits than had actually been conducted. The defendants also billed Medicare for psychotherapy sessions that Ferrell purportedly provided to patients who in fact were deceased at the time of the purported sessions.  In his sentencing arguemnt, Assistant U.S. Attorney Paul Tzur said, “Defendant Woods filed over 31,000 separate claims to Medicare, which was an out and out lie.”

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge for the Chicago Office of the Federal Bureau of Investigation; and Lamont Pugh, Special Agent-in-Charge of the Health and Human Services, Office of Inspector General. 

The government is represented by Assistant U.S. Attorney Paul Tzur.  The case was investigated by the FBI and the Health and Human Services, Office of Inspector General.

Source: justice.gov

CHICAGO —(ENEWSPF)--February 24, 2015.  A suburban physician whose medical license was suspended was sentenced today to 18 months in prison for health care fraud and illegally prescribing controlled substance medications.  The defendant, SATHISH NARAYANAPPA BABU, who owned Anik Life Sciences Medical Corp., pled guilty in September 2014 to illegally prescribing oxycodone and other controlled substances, and fraudulently billing Medicare approximately $500,000, and fraudulently collecting approximately $216,000, for services he did not provide.  Babu, 48, of Bolingbrook, operated Anik Life Sciences, a home-visiting physician’s office, in Darien and, previously, in Arlington Heights. 

U.S. District Court Judge John J. Tharp also imposed a term of three years of supervised release and a restitution amount of $221,012.  Babu agreed to forfeit the approximately $126,000, which was seized at the time of his arrest and will be credited toward the restitution ordered.  Also forfeited were three automobiles ― a 2013 BMW, a 2001 BMW, and a 2010 Lexus.  Babu was ordered to begin serving his sentence on May 13, 2015.

“This crime wasn’t an isolated act, it was a calculated, systematic effort to milk Medicare,” commented Judge Tharp while imposing sentence, “The defendant was stealing money from those in need….putting many in need at risk.” Babu admitted that he engaged in a scheme to defraud Medicare from approximately November 2011 through February 2014.  In addition, Babu admitted that between November 2012 and December 2013, he issued multiple prescriptions for controlled substances to a patient, who was actually an undercover agent, despite never having seen or examined the patient.  Babu also permitted unlicensed personnel associated with Anik Life Sciences to issue prescriptions to the patient.  During the same period, Babu submitted false claims to Medicare for services provided to the patient that were not rendered by Babu or another licensed medical professional.

According to court documents, the undercover agent posed as a healthy individual covered by Medicare and seeking physician services to obtain prescription medication, including oxycodone.  The agent claimed to have shoulder pain from a previous injury and to be on disability.  On approximately 10 occasions, representatives from Anik Life Sciences, none of whom were licensed as physicians, nurses, or other medical professionals, visited the undercover agent in his purported apartment.

Babu caused unlicensed personnel from Anik Life Sciences to provide medical care ― including prescriptions issued under Babu’s name and DEA registration number for controlled substances ― to the undercover agent and then billed Medicare for that care.  Medicare and its contractor paid about $4,000 to cover the costs of the prescriptions that Babu issued to the undercover agent.

In addition to the undercover agent, Babu had other patients, whom he certified and re-certified as eligible for home health services under Medicare, and submitted claims for care he provided, including home visits and diagnostic testing and review, without regard to whether the claimed services were medically necessary.  Babu hired three foreign medical school graduates who were not licensed physicians in the United States to conduct home visits and advertised these individuals as “MDs” or doctors.  Babu submitted Medicare claims indicating that he personally conducted the patient visits and provided comprehensive medical evaluations that he did not actually perform.

Babu also maintained an office staff that he directed to order certain diagnostic tests for every patient, including ultrasound and autonomic nervous system testing, without regard to medical necessity.  He further prescribed controlled substances to patients who he had never seen or examined and permitted his unlicensed staff to fill out prescriptions and order refills for patients.

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Dennis A. Wichern, Special Agent-in-Charge of the Chicago Field Division of the Drug Enforcement Administration; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The government was represented by Assistant U.S. Attorney Sarah Streicker. 

Source: justice.gov

CHICAGO—(ENEWSPF)—February 26, 2015. A federal court in Chicago has permanently barred Laurie G. Helfer, aka Laurie G. Powell, individually and doing business as Laurie’s Freelance & Tax Preparation Services and Tax Lady Laurie Inc., from preparing federal tax returns for others and from operating a tax return business, the Justice Department announced today.  The defendant was also ordered to surrender any existing Preparer Tax Identification Number (PTIN) or Electronic Filing Identification Number (EFIN) registered in her name or in any name used for any purpose by Helfer.

The civil injunction order, to which the defendant consented, was signed by Judge Harry D. Leinenweber of the U.S. District Court for the Northern District of Illinois.

According to the complaint, Helfer promised her customers that she could obtain tax refunds for them by amending their tax returns from prior years.  Helfer allegedly fabricated expenses from businesses that she concocted and entered those expenses on a Schedule C-Profit or Loss From Business that she filed with her customers’ amended tax returns.  The complaint alleged that the expenses offset her customers’ income from prior years and illegally generated a refund.  Helfer also prepared original returns for customers during tax-filing season using this same scheme.  The complaint further alleged that, in an attempt to avoid detection by the Internal Revenue Service (IRS), Helfer stopped signing the tax returns that she prepared and frequently changed the locations in which she prepared her customers’ tax returns, including various Chicago-area hotel rooms.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2015.  The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters.  Information about these cases is available on the Justice Department website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Material:

Helfer Injunction Order

Source: justice.gov

CHICAGO—(ENEWSPF)—April 17, 2015. A Chicago man was sentenced today to a 120 month term of imprisonment for taking control of two Chicago-area home health companies and using them to bilk Medicare out of more than $20 million. JACINTO “JOHN” GABRIEL, JR., 48, has been in custody since February 2014, when he entered a guilty plea to charges of conspiracy to commit health care fraud and tax evasion.

In sentencing Gabriel, U.S. District Judge Charles Norgle ordered him to pay $23.3 million in restitution to the Medicare program and $1.5 million to the Internal Revenue Service.

According to sentencing papers filed by the government, Gabriel fraudulently obtained confidential background information of hundreds of Medicare beneficiaries and then used that information to sign them up as patients of Perpetual Home Health, Inc. and Legacy Home Healthcare Services, companies that he controlled. “Gabriel used elderly patients as commodities to bill Medicare. Patients were intentionally misdiagnosed with medical conditions that they did not have, and then used to bill Medicare for treatment that they did not need,” the government wrote in its sentencing memorandum.

Gabriel was charged with eleven other defendants, including doctors and company employees who were enlisted to help implement the scheme. In pleading guilty to the charges, Gabriel admitted to directing company staff to alter and create patient records and doctor’s orders to support fraudulent Medicare claims; to make payments to doctors and others for referring patients and signing doctor’s orders; and to divert proceeds of the fraud scheme to him through friends, associates, and shell companies.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, Robert J. Holley, Special Agent-in-Charge of the Federal Bureau of Investigation’s Chicago office, Lamont Pugh III, Special Agent-in-Charge of the Chicago regional office of the U.S. Department of Health and Human Service’s Office of Inspector General, and Stephen Boyd, Acting Special Agent-in-Charge of the Internal Revenue Service’s Criminal Investigation Division in Chicago. The government was represented by Assistant U.S. Attorneys Brian Havey, Raj Laud, and Sam Cole.

Source: justice.gov

CHICAGO ―(ENEWSPF)--April 21, 2015.  A former North Chicago school board member, and the last defendant of five,  was sentenced today to 30 months in federal prison for receiving at least $566,000 in kickbacks from three co-defendants who controlled several different transportation companies that received more than $21 million in student bus contracts over nearly a decade.

The defendant, ALICE SHERROD, 63, of North Chicago, pleaded guilty in September 2013 to one count each of wire fraud and filing a false federal income tax return. Sherrod admitted that between 2001 and 2010 she schemed to deprive the approximately 4,000-student North Chicago Community Unit School District 187 (NCSD) of her honest services. Sherrod, who was the school district’s Director of Transportation, participated in the fraud scheme with four co-defendants, including Gloria Harper, who was the former President of the North Chicago school board. The three co-defendants funneled kickbacks totaling at least $800,000 to Harper and Sherrod and made more than $9.6 million in profits.

“Unlike three of her co-defendants, she was in a position of public trust that affected poor children.  She did not think about who she was hurting.  And this went on for more than five years.”  U.S. District Judge Sharon Johnson Coleman said in imposing the sentence today.  Judge Coleman ordered Sherrod to serve her sentence beginning August 31, 2015.  The judge also ordered Sherrod to pay approximately $7.2 million in restitution.

“The North Chicago School District has one of the highest low-income populations in the state. But rather than looking out for the interests of the district’s taxpayers and the children who depended on the schools for education, Sherrod selfishly used her position to enrich herself, and then filed false tax returns,” Assistant U.S. Attorney Matthew Getter argued in the government’s sentencing memorandum.

All five defendants pled guilty last year and have been sentenced.  In addition to Sherrod’s sentence of 30 months imposed today, Gloria Harper, 64, of Berwyn and formerly of Gurnee, received a 10 year sentence, Tommie Boddie, 69, of Harvest, Ala., and formerly of Wadsworth received a one-day term of imprisonment followed by a three year term of supervised release including nine months’ home confinement; Derrick Eubanks, 50, of Lake Villa received six months’ imprisonment; and Barrett White, 55, of Matteson, received a one day term of imprisonment followed by a one year term of supervised release during which White will spend the first six months of supervised release serving weekend imprisonment.  

Sherrod, who was District 187's transportation director from 2001 to July 2010, used her  position, along with Harper, to enrich themselves secretly by soliciting and accepting gifts and cash from their three co-defendants in exchange for favorable official action regarding student transportation contracts. Initially, Harper and Sherrod received kickbacks of approximately $4,000 to $5,000 a month but, by 2003, they were collecting approximately $20,000 a month.

From the late 1990s until mid-2003, the NCSD contracted with various companies to provide student transportation, including T&M Transportation, which was owned in part and controlled by Boddie, and Eubanks Transportation, which was owned in part and controlled by Eubanks. In 2001, Harper and Sherrod met with Boddie and agreed they would arrange for the NCSD to increase the number of students that T&M transported in exchange for kickback payments.

In May 2003, Harper suggested to Boddie and Eubanks that they join together to form one company ― Safety First Transportation, Inc., which won the NCSD’s transportation contract in 2003, and Harper, Sherrod, Boddie, and Eubanks agreed that they would split the profits from the contract. After an IRS audit of Safety First in 2006-2007, White, who had been acting as the “bagman” for the kickbacks, began receiving funds from Safety First as both an employee and a contractor, even though he provided little service other than being the bagman.

In April 2008, the defendants agreed to set up a new company, Quality Trans, LLC, to replace Safety First and to assume its contracts with the school district. All five agreed to continue splitting profits from Quality Trans, and Boddie, Eubanks and White continued making cash payments to Harper and Sherrod.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Stephen Boyd, Special Agent-in-Charge of the Internal Revenue Service Criminal Investigation Division in Chicago. The North Chicago School District cooperated with the investigation.

Source: justice.gov

CHICAGO—(ENEWSPF)—April 23, 2015. The U.S. District Court for the Northern District of Illinois entered a consent decree for permanent injunction against Wholesome Soy Products Inc., Julia Trinh and Paul Trinh to prevent them from distributing adulterated mung bean and soybean sprouts, the Department of Justice announced today.

The department filed a complaint in the U.S. District Court for the Northern District of Illinois on April 3, at the request of the U.S. Food and Drug Administration (FDA).  According to the complaint, Wholesome Soy received, processed, manufactured, prepared, packed, held and distributed ready-to-eat mung bean and soybean sprouts.  Wholesome Soy operated at 1150 West 40^th Street in Chicago.

“We must work to ensure that the food we buy from store shelves is safe and produced under sanitary conditions,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “The Department of Justice will continue to work with our partners at FDA to accomplish that goal.”

The complaint alleged that Julia Trinh is the owner and president of Wholesome Soy, and that until recently, she was responsible for purchasing supplies and equipment, managing contracts and agreements with contractors, handling customer service, hiring, firing, scheduling training, implementing procedures and maintaining quality assurance.  The complaint also alleged that Paul Trinh was a manager at Wholesome Soy, and that until recently, he was responsible for production operations, sprout processing and training new hires.

The complaint alleged that the company’s food was prepared, packed and/or held under insanitary conditions and that the defendants failed to institute practices and procedures necessary to ensure that the company can receive, process, manufacture, prepare, pack, hold and distribute food under sanitary conditions.

According to the complaint, the FDA conducted inspections of the company’s facility from Aug. 12, 2014 through Sept. 3, 2014, and in October 2014.  As described in the complaint, FDA found insanitary conditions and significant sanitary deficiencies in the October inspection that were repeat observations from the previous inspection.  The repeated deficiencies included employee practices that allowed for potential contamination of food contact surfaces and food products; cleaning practices that were inadequate; pest control measures that were ineffective; equipment and utensils that were not properly maintained; and a sprout production environment that was not properly maintained.

In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree for permanent injunction.  Under the permanent injunction, Wholesome Soy, Julia Trinh and Paul Trinh are permanently restrained from directly or indirectly receiving, processing, manufacturing, preparing, packing, holding and/or distributing at the facility at 1150 West 40^th Street any article of food, unless the defendants make several changes to their facility, including remedial measures and an implementation of a Listeria monitoring program.   

The government is represented by the Civil Division’s Consumer Protection Branch with the assistance of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division. 

Related Material:

Consent Decree

Source: justice.gov

CHICAGO ―(ENEWSPF)--April 23, 2015.  A federal grand jury returned a two count indictment charging BRUCE H. NIGGEMANN with receiving and possessing child pornography, federal law enforcement officials announced today.

Niggemann, 65, of West Dundee, was indicted April 16 on one count of receiving and one count of possessing child pornography, all via computer. The indictment was under seal until Niggemann’s arrest this morning. Niggemann was arraigned earlier today in U.S. District Court before Judge Charles R. Norgle, Sr. He remains in federal custody until a detention hearing scheduled for April 27, 2015 at 11:30 before Magistrate Judge Sheila M. Finnegan.

The indictment also seeks forfeiture of a laptop computer and a desktop computer and hard drives that were seized at Niggemann’s residence when special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) executed a federal search warrant at Niggemann’s residence in West Dundee.

In the circumstances in this case, receiving child pornography carries a maximum sentence of 40 years and a mandatory minimum sentence of 15 years in prison, while the count of possession carries a maximum sentence of 20 years, and a mandatory minimum sentence of ten years. Each count also carries a maximum fine of $250,000. If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Gary Hartwig, Special Agent-in-Charge of HSI in Chicago. The Kane County Sheriff’s Office assisted in the investigation.

The government is being represented by Assistant U.S. Attorney Kaarina Salovaara. 

An indictment contains only charges and is not evidence of guilt.  The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Related Material:

Indictment

Source: justice.gov

ROCKFORD —(ENEWSPF)--April 23, 2015.  Two Chicago area men were arrested yesterday after being indicted by a federal grand jury in Rockford and charged with conspiring to manufacture, possess and distribute 1,000 or more marijuana plants. Arrested were: GEORGE H. BACUS, 51, of Niles, Ill., and JEREMIAH N. CLEMENT, 37, of Des Plaines, Ill. Also charged in the indictment were YOUSIF Y. PIRA, 62, of Chicago, Ill., and JUSTIN T. PAGLUSCH, 33, of Ingleside, Ill. The indictment alleges that between Jan. 2, 2013, and Jan. 6, 2015, the defendants conspired to illegally grow and store marijuana in a warehouse located at 1916 11th Street in Rockford. According to the indictment, Bacus initially contracted to purchase the warehouse on Jan. 2, 2013. The indictment alleges that Clement later entered into a lease with an option to purchase the warehouse. The warehouse was destroyed by a fire on Jan. 6, 2015.

Bacus is scheduled to appear before U. S. Magistrate Judge Iain D. Johnson for an initial appearance today at 3:00 p.m. in federal court in Rockford. Clement is scheduled to appear in federal court in Hartford, Connecticut at 1:30 p.m today. Arrest warrants for Pira and Paglusch were issued on April 21, 2015, and both are still at large.

The charge carries a mandatory minimum sentence of 10 years in prison and a maximum of life in prison and a $10 million fine. If convicted, the court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment is only a charge and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Carl J. Vasilko, Special Agent-in-Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms & Explosives; and Derek Bergsten, Chief of the Rockford Fire Department. The Winnebago County Sheriff’s Department Narcotics Unit and Rockford Police Department Narcotics Unit assisted in the investigation.

The government is represented by Assistant U.S. Attorney Joseph C. Pedersen.

Related Material:

Indictment

Source: justice.gov

CHICAGO —(ENEWSPF)--April 23, 2015.  A former Miami Dade County Department of Corrections and Rehabilitation prison guard was sentenced today to 36 months in federal prison by U.S. District Court Judge Charles R. Norgle for his role in a scheme involving theft of prison inmates’ identities which were used to file false tax returns.

The defendant, CORNELIUS CRUMITY, pleaded guilty in May 2014, to one count each of aggravated identity theft and mail fraud in a two-count information, admitting that beginning in January 2008 and continuing through April 2011, he stole at least 50 inmate identities and filed fraudulent federal income taxes, attempting to cause the IRS to issue refunds in amounts totaling approximately $356,000. As a result of his conduct, the defendant caused the United States Treasury to suffer loss of at least $55,888. Judge Norgle also imposed a period of one year supervision after his release. Crumity has been ordered to report to the Bureau of Prisons on July 1, 2015.

Crumity, 39, of Pembroke Pines, Florida, was employed by the Miami-Dade County Department of Corrections and Rehabilitation (the “MDCDC”) as a prison guard. In that position, defendant had access to MDCDC databases and records which included the personal information of inmates, such as names and social security numbers. At various times, without the knowledge or authority of the MDCDC, the defendant accessed and copied the names and social security numbers of inmates who were incarcerated by the MDCDC, and used their names and social security numbers to file false and fraudulent tax returns with the Internal Revenue Service. Crumity filed the false and fraudulent tax returns without the knowledge or authorization of the inmates whose personal identifying information he had obtained from the MDCDC.

When preparing and filing the fraudulent tax returns, Crumity knowingly included false and fabricated W-2s, and false employer, wage and withholding information designed to result in significant tax withholding refunds to the purported filers, generally between $5,600 and $6,100 per return. In addition, he provided false home addresses for the purported filers, where defendant or his co-schemer in Illinois, David Mobley, received mail. In addition, in some instances, defendant caused the United States Treasury to credit the fraudulent tax withholding refunds to debit cards possessed by him or Mobley. After the defendant received the fraudulently issued refunds, he used the funds to his own benefit.

“Few crimes cause greater harm to society than law enforcement corruption,” stated Assistant U.S. Attorney Brian Hayes in the Government’s Sentencing Memorandum. “These ill effects are compounded when committed in a correctional institution, sending a message to inmates that directly contradicts the government’s goals of rehabilitation and reform.”

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Tony Gomez, Postal Inspector in Charge of the U.S. Postal Inspection Service, Chicago; and Stephen Boyd, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.

The government was represented by Assistant U.S. Attorney Brian Hayes.

Source: justice.gov

CHICAGO —(ENEWSPF)--April 29, 2015.  A Chicago man was sentenced yesterday to 90 months in federal prison by U.S. District Court Judge Edmond E. Chang for his role in a scheme involving theft of hundreds of identities which were used to file approximately 395 false and fictitious tax returns claiming refunds in amounts totaling approximately $357,539. 

The defendant, ROBERT BROWN, pleaded guilty in January 2015 to one count each of aggravated identity theft and wire fraud in a six-count indictment, admitting that beginning in January 2010 and continuing through March 2014, in cooperation with his co-defendant, he submitted fraudulent federal income tax returns using the misappropriated personal identifying information of approximately 332 taxpayers, causing the IRS to issue refunds.  Several of the identities were stolen from residents of nursing homes and assisted living facilities.  Judge Chang also ordered Brown to pay restitution in amount of $308,829, which is the amount that Brown caused the IRS to pay in fraudulently claimed tax refunds, and imposed a period of 3 years of supervision after his release.  Brown is currently in federal custody.

Brown, 30, of Chicago, and co-defendant Lorenzo Brown, obtained personal identifying information from victim taxpayers, including names, social security numbers, and dates of birth, without the knowledge or consent of the victim taxpayers. Co-defendant Lorenzo Brown gave the misappropriated names, social security numbers, and dates of birth to defendant, who knew that Brown obtained the misappropriated identifying information from the residents of nursing homes and assisted living facilities, including the social security number and other personal identifying information.  The defendant prepared fraudulent tax returns and electronically filed those fraudulent tax returns claiming fraudulent refunds based upon false income and false tax withholding information, using the identifying information provided to him by his co-defendant.  The defendant caused the IRS to send fraudulently claimed tax refunds via prepaid debit card, United States Treasury check, or electronic funds transfers to bank accounts in the name of the co-defendant, who withdrew the funds from the bank accounts and provided portions of these funds to defendant.

  “This defendant used the personal identifying information of many victims, including the vulnerable elderly and disabled victims who reside in nursing homes and assisted living facilities, for his own personal gain,” stated Assistant U.S. Attorney Kelly Greening in the Government’s Sentencing Memorandum, “He profited greatly off of the use of the victims’ information.”

Co-Defendant Brown is scheduled to be sentenced June 25, 2015, by U.S. District Court Judge Chang.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Stephen Boyd, Special Agent-in-Charge of the Chicago Office of the Internal Revenue Service Criminal Investigation Division.

The government was represented by Assistant U.S. Attorney Kelly Greening.

Source: justice.gov

CHICAGO —(ENEWSPF)--April 29, 2015.  A high-ranking leader of the Black Disciples street gang was sentenced today to 15 years in federal prison after being convicted of narcotics distribution.  The defendant, WALTER BLACKMAN, 52, of Gary, Indiana, pleaded guilty in August 2014 to distribution of illegal narcotics.  Today’s sentence was imposed by United States District Court Judge Edmond E. Chang.  Blackman has been in federal custody since his arrest in April 2013.  He must serve at least 85 percent of his sentence.

Blackman was a high-ranking leader of the Black Disciples street gang in Chicago.  He distributed drugs – including crack cocaine, powder cocaine, and heroin – and controlled the Black Disciples gang members’ drug trafficking in the city of Chicago’s far south side, including the violence-plagued Roseland and Altgeld Gardens communities.  According to the government’s sentencing memorandum, Blackman admitted that he had approximately 500 subordinate gang members underneath his control in his territory in “the hundreds,” being part of the Roseland neighborhood of Chicago named for the three-digit streets. 

Blackman’s charges in this case, namely sixteen counts of drug distribution, are a small sample of his larger drug trafficking operation in and outside the Black Disciples street gang – an operation that encompassed multiple drug types, multiple years, and multiple states. The defendant was a repeat and large scale supplier of controlled substances, selling and distributing crack cocaine, powder cocaine, and heroin in the Chicago area and elsewhere, including Wisconsin, to numerous wholesale customers. 

The Court held Blackman responsible for distributing approximately 4,000 grams of crack cocaine, 1,000 grams of powder cocaine, and approximately 390 grams of heroin.  Blackman also possessed firearms during his drug trafficking activities. 

“This sentence holds the defendant accountable for the narcotics enterprise he controlled, and for his role in the accompanying gang and gun violence that harms our communities,” said Zachary T. Fardon, United States Attorney for the Northern District of Illinois.  “I want to thank our local, state, and federal law enforcement partners for their brave and outstanding work which has resulted in a major impact on this street gang’s narcotics operation and illegal activities,” Mr. Fardon added.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The Internal Revenue Service’s Criminal Investigation Division and the Chicago Police Department’s Gang Investigations Division also had significant roles in the investigation, which was conducted through the federal High Intensity Drug-Trafficking Area (HIDTA) Task Force and under the umbrella of the Organized Crime Drug Enforcement Task Force (OCDETF).  The Indianapolis, Milwaukee, Minneapolis and Omaha offices of the FBI also assisted with the investigation.   

The government was represented by Assistant U.S. Attorneys Carol A. Bell and Sarah Streicker.

Source: justice.gov

CHICAGO —(ENEWSPF)--April 29, 2015.  A River Grove man was sentenced to 3 years in prison today as a result of his conviction for impersonating an employee of the U.S. Marshals Service on two occasions in 2013.  The defendant, ROBERT P. ROZYCKI, 39, pledguilty to the offense in November 2014.  U.S. District Court Judge John J. Tharp, who imposed the sentence, also ordered Rozycki to one year of supervised release to include mental health treatment.  Rozycki has been in custody since his arrest in June, 2014.

According to court records, in March 2013, Rozycki was at a McDonald’s restaurant located in Chicago’s Wrigleyville neighborhood wearing clothing and paraphernalia which he intended to resemble the duty uniform of a Deputy U.S. Marshal, including a dark long-sleeved t-shirt worn under a grey golf shirt, khaki cargo pants, a law enforcement utility belt equipped with handcuffs and a police radio, and a thigh holster containing what appeared to be a firearm. While dressed in this fashion, he approached a customer, and after a brief but heated exchange, he directed the customer to stand up.  When the customer refused, Rozycki forcibly placed the customer in handcuffs and escorted him out of the restaurant. He released the customer a short time later at the direction of a McDonald’s manager.

In addition, in May 2013, the defendant was in the parking lot of the same McDonald’s restaurant wearing clothing and paraphernalia which he intended to resemble the duty uniform of a Deputy U.S. Marshal similar to the earlier impersonation. In addition, his car, a black Crown Victoria, was equipped to resemble a law enforcement vehicle with LED emergency lights, was parked in the same lot.

“The defendant usurped the authority of a legitimate law enforcement agent when he donned the uniform and equipment of a Deputy U.S. Marshal,” wrote Assistant U.S. Attorney Kathryn L. Maliza in the Government’s Sentencing Memorandum.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Roberto Robinson, Acting United States Marshal for the Northern District of Illinois.

The case was prosecuted by Assistant U.S. Attorney Kathryn Malizia.

Source: justice.gov

CHICAGO —(ENEWSPF)--May 1, 2015.  A Naperville man was charged by information today on federal charges he set fire to the Chicago Air Route Traffic Control Center in Aurora on September 26, 2014, federal law enforcement officials announced today.  Brian Howard, 37, of Naperville, was charged with one count of willfully setting fire to, damaging, destroying or disabling an air navigation facility; and one count of using fire to commit a federal felony. Howard will be arraigned at a date yet to be determined in U.S. District Court and remains in federal custody since his arrest in September 2014. 

The Chicago Air Route Traffic Control Center (the “Control Center”) is located in Aurora, Illinois. The Control Center is responsible for safely guiding airplanes at high altitudes across its geographic territory. Given its central location, the Control Center is one of the nation’s largest and most important. It controls the air space over parts of Illinois, Indiana, Iowa, Wisconsin, and Michigan; provides air traffic services to the Chicago and Milwaukee metropolitan areas; and handles approximately 3,000,000 aircraft operations per year. 

According to court documents, Howard was employed by an FAA contractor. He worked on telecommunications matters at the Control Center and at other FAA facilities for approximately eight years. 

On September 26, 2014, at approximately 5:00 a.m., Howard entered the Control Center using his FAA-issued credentials. He was carrying a black Pelican suit case. Approximately 30 minutes after entering the Control Center, Howard posted a Facebook message that stated, in part, “Take a hard look in the mirror, I have. And this is why I am about to take out [the Control Center] and my life. April, Pop, love you guys and I am sorry. Leaving you with a big mess.”

Several minutes later, an individual who worked at the Control Center contacted 911 and notified emergency personnel that the Control Center was on fire. First responders arrived on the scene to heavy smoke. They observed that a floor panel had been lifted exposing the Control Center’s telecommunications cables, some of which had been severed and set on fire. First responders also saw a gas can next to the floor panel that had been pulled away, the nozzle to the gas can, a towel that appeared to have been burned, and a black Pelican suit case.

Howard is charged with intentionally damaging and disabling the telecommunication infrastructure at the Control Center, and setting fire to the area which housed these key components.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The government is being represented by Assistant U.S. Attorney Andrew K. Polovin.

The charge alleged in the information of willfully setting fire to, damaging, destroying or disabling an air navigation facility, or willfully interfering by force or violence with the operation of that facility, likely endangering the safety of aircraft in flight, carries a maximum penalty of 20 years in prison and a maximum fine of $250,000 or twice the gross loss caused by Defendant’s actions.

The charge alleged in the information of using fire to commit a federal felony carries a mandatory penalty of 10 years in prison, which must be in addition to any sentence imposed for the underlying felony.

If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an information contains only charges and is not evidence of guilt.  The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.   

Source: justice.gov

CHICAGO —(ENEWSPF)--May 6, 2015.  A former Vice-President of a brewing company was charged in a twenty count indictment yesterday along with seven co-defendants, as a result of an alleged scheme to defraud the company of at least $7 million by submitting false estimates and invoices that billed for fictitious promotional and marketing events.  DAVID COLLETTI, 58, of Chicago, was charged in a federal grand jury indictment  with mail and wire fraud along with seven other co-defendants; RODERICK GROETZINGER, 61, of North Carolina, ANDREW VALLOZZI, 53, of Florida, JAMES RITTENBERG, 72, of Chicago, SCOTT DARST, 68, of Las Vegas, THOMAS LONGHI, 57, of Florida, FRANCIS BUONAURO Jr., 72, of Florida, and MARYANN ROZENBERG, 57, of Wisconsin. All eight defendants will be arraigned at a date determined by U.S. District Court. 

The indictment alleges that COLLETTI, as a Vice-President, oversaw the marketing, promotion, and sale of beer for the victim company, which hired third-party vendors to organize and hold events and promotions designed to market the company’s beer.  According to the indictment, GROETZINGER, VALLOZZI, RITTENBERG, DARST, LONGHI, BUONARO, and ROZENBERG controlled entities which claimed to provide third-party vendor services to the victim company during the course of the alleged scheme.  The entities included Beverage Industry Marketing Services, Rave Media, Events Marketing Network LLC, AVA Advertising, Inc., AVA Marketing and Communications, LLC, Food and Beverage Network, Inc., Prime Promotions, Inc.,  P&D Marketing, Inc., Longhi Golf Operations, F&B Marketing, and Golden Logistics. 

The indictment alleges that during COLLETTI’s tenure at the company, he worked with GROETZINGER, VALLOZZI, RITTENBERG, DARST, LONGHI, BUONARO, and ROZENBERG to submit false estimates and invoices in the name of entities which falsely billed the company for fictitious promotional events and for events at inflated prices.  The estimates and invoices misrepresented the date, location, cost and type of events that were supposedly being held to market the company’s products.  The fictitious events included supposed food and beer pairings, trainings, and promotions for certain customer accounts, held at casinos, hotels, and flea markets. 

The indictment alleges that COLLETTI oversaw the approval of a number of these false invoices for payment and the company paid in excess of $7 million to the defendants’ entities.  Subsequently, some of the defendants arranged for COLLETTI to receive a portion of the payments.  According to the indictment, the defendants used the victim company’s money, for among other things, defendants’ personal expenses, collectible firearms, international golf trips, hunting trips, investments in a hotel and bar, and an arena football team. 

The indictment seeks forfeiture of at least $7 million.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.

The government is being represented by Assistant U.S. Attorneys Jessica Romero and Jennie Levin.

Each count of mail or wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, or an alternate fine of twice the loss or twice the gain, whichever is greater, and restitution is mandatory.  If convicted, the Court must impose a reasonable sentence under federal sentencing statutes and the advisory United States Sentencing Guidelines.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.   

Related Material:

Indictment

Source: justice.gov

CHICAGO ―(ENEWSPF)--May 6, 2015.   Ten assorted pistols, rifles, shotguns, and a revolver have been seized and a Palos Hills man is facing federal firearms charges as a result of an investigation led by the Bureau of Alcohol, Tobacco, Firearms and Explosives.  Over the course of the investigation, the defendant illegally sold eight firearms to a confidential informant, and two additional firearms were seized from the defendant’s residence at the time of his arrest in March 2015.

Steven Riley, 23, of Palos Hills, was charged yesterday in a seven count indictment by a federal grand jury on charges of being a felon-in-possession of firearms and dealing firearms without a federal license.  Riley was arrested on a federal complaint in March 2015, and remains on bond.  Riley will be arraigned on a date to be determined by U.S. District Court Judge Virginia M. Kendall.

According to the complaint, beginning in October 2014 through February 2015, Riley sold numerous firearms to a confidential informant (CI).  In recorded conversations between Riley and the CI, Riley discussed the importance of removing the serial numbers so that the firearms could not be traced.  Riley also supplied the CI with ammunition at three of the five controlled purchases; one of the guns purchased by the CI was loaded with ammunition. 

According to the charges, the CI purchased eight firearms in total from Riley; four rifles, three shotguns, and a revolver, many of which had obliterated serial numbers.  Riley is also charged with illegal possession of two loaded semi-automatic pistols recovered at his residence during the execution of a search warrant.  In addition, the indictment seeks forfeiture of 1,872 rounds of ammunition seized from his residence on the day of his arrest. 

Being a felon-in-possession of a firearm carries a maximum sentence of 10 years in prison and a $250,000 fine.  Dealing firearms without a federal license carries a maximum sentence of five years in prison and a $250,000 fine.  If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois and Carl Vasilko, Special Agent in Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives.  The Hickory Hills Police Department assisted in the investigation.

The government is being represented by Assistant U.S. Attorney Elizabeth Pozolo.

Criminal complaints are not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Related Material:

Indictment

Source: justice.gov

CHICAGO —(ENEWSPF)--May 6, 2015.  Former Chicago police officer Francis Zoller was the final defendant to be sentenced today in the six year investigation Operation Tow Scam, led by the Federal Bureau of Investigation.  Zoller, 46, of Chicago, pled guilty on June 11, 2014 to one count of attempted extortion under color of official right and one count of mail fraud.  U.S. District Court Judge Samuel Der-Yeghiayan sentenced Zoller to 12 months and one day in prison, followed by a term of one year of supervised release.  Judge Der-Yeghiayan also ordered Zoller to pay restitution in the amount of $14,020, and to report to the Bureau of Prisons on August 11, 2015. 

According to the court documents, Zoller engaged in a pattern of extortion of tow truck drivers and was also willing to stage an accident with one of them which led an insurance company to issue a check for $17,000 for damage that never occurred.  Zoller used the authority of his office to extort money from his favored tow drivers, but he also misused his office to privilege those drivers over other towing companies who sought to obtain vehicle tows at accidents.  “Zoller’s misuse of his authority on the streets of Chicago harmed the Chicago Police Department, the citizens he was sworn to protect and the tow truck drivers who were trying to make a living at accident scenes,” argued Assistant U.S. Attorney Michael Donovan in the government’s sentencing memorandum.

In total, 15 defendants were charged with extortion, tax fraud, lying to federal agents and accessing federal law enforcement database information.  Of the 15 defendants, 14 pled guilty and one was convicted at trial.  Of the 15 defendants, 11 are former police officers, including Zoller.  Those convicted in connection to the Operation were: 

Jimmie Akins, former CPD officer, pled guilty to attempted extortion under color of official right and filing a false tax return, and was sentenced to 18 months imprisonment;

Michael Ciancio, formerCPD officer, pled guilty to attempted extortion under color of official right, and was sentenced to 24 months imprisonment;

Scott Campbell, former CPD officer, pled guilty to mail fraud and tax misdemeanor, and was sentenced to one year of probation;

Joseph Grillo, formerCPD officer, pled guilty to mail fraud, and was sentenced to two years probation;

James Athans, pled guilty tomail fraud and tax fraud and was sentenced to a year and a day in prison;

Joseph DeMichael, pled guilty to mail fraud, and was sentenced to two years probation;      

Juan Prado, former CPD officer,pled guilty to attempted extortion under color of official right, and was sentenced to 46 months imprisonment;

James Wodnicki, former CPD officer, pled guilty to attempted extortion under color of official right and was sentenced to 24 months imprisonment;

Marcos Hernandez, formerCPD officer, pled guilty to improper access of a federal database, and was sentenced to two years probation;

Givoanni Rodriguez, pled guilty to making false statements to a federal officer, and was sentenced to two years probation;

Deavalin Page, former CPD officer,convicted after a jury trial of attempted extortion under color of official right, and was sentenced to 51 months imprisonment;

Gregory Garibay, former CPD officer, pled guilty to attempted extortion under color of official right and mail fraud, and was sentenced to 24 months imprisonment;

Brian Chandler, pled guilty to wire fraud and bank larceny, and was sentenced to 20 months imprisonment;

Ali Haleem, former CPD officer,pled guilty to attempted extortion under color of official right and selling firearms to a felon, and was sentenced to 15 months imprisonment. 

 Zoller’s sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  The Chicago Police Department, Office of Internal Affairs, and the Internal Revenue Service, Criminal Investigative Division, assisted in the investigation.         

The government was represented by Assistant United States Attorneys Michael Donovan and Maggie Schneider.

Source: justice.gov