CHICAGO –(ENEWSPF)--May 7, 2015.  A Chicago investment adviser was sentenced today to 36 months imprisonment for fraudulently using new investor funds, including funds from elderly investors, to pay off old investors, leading to a loss of almost $1 million.  The defendant, JOSEPH HENNESSY, 54, of Western Springs, was also ordered to pay restitution in the amount of $645,900 to the victims of the fraud and was sentenced to three years of supervision after his release by U.S. District Court Judge Harry D. Leinenweber.  Hennessy was ordered to report to the Federal Bureau of Prisons on June 23, 2015.   Hennessy pled guilty on December 16, 2014 to one count of wire fraud.

Hennessy operated Resource Planning Group, Inc., a registered investment adviser with the U.S. Securities and Exchange Commission, in Chicago.  Hennessy also formed and operated the Midwest Opportunity Fund, a private equity fund that targeted for purchase and investment small to medium-sized companies based in the Midwest.

“What you did involved a massive abuse of trust that needs to be punished,” stated Judge Leinenweber when imposing the sentence, “People relied on you.” 

According to court records, between May 2009 and February 2010, Hennessy solicited investors to invest in the Midwest Opportunity Fund, and offered a high interest rate between 10% to 15% per year with a short maturity date of between two and six months.  Hennessy falsely represented to the investors that their funds would be used to invest in small to medium-sized companies.  However, Hennessy used the new investor funds to pay off old investors in the Midwest Opportunity Fund.  Hennessy also misappropriated funds from the accounts of two elderly investors and forged their names on wire transfer forms without their authorizations. Hennessy used the elderly investors’ funds to repay existing investors in the Midwest Opportunity Fund.

“Defendant Joseph Hennessy owed a fiduciary duty to his clients.  He was an investment adviser tasked with managing his clients’ money.  However, when defendant went into debt with the Midwest Opportunity Fund, he used client money like a personal piggybank, selling promissory notes and transferring funds out of new client accounts to pay off old debtors,” argued Assistant United States Attorney Sunil Harjani in the government’s sentencing memorandum. 

The case was prosecuted by Assistant U.S. Attorney Sunil Harjani.

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 Chicago office of the U.S. Securities and Exchange Commission provided assistance with the investigation.

Source: justice.gov

Settlement Compensates Affected Borrowers and Allows Bank to Continue Motorcycle Lending Using Revised Dealer Compensation Policies

CHICAGO—(ENEWSPF)—May 7, 2015. Evergreen Bank Group of Oak Brook, Illinois, will eliminate or limit the discretion it gives to motorcycle dealers to increase interest rates as part of a settlement of a federal lawsuit alleging a pattern or practice of national origin and race discrimination in motorcycle lending, the Justice Department announced today.  In addition to the elimination of dealer discretion, which is consistent with a policy that Evergreen voluntarily adopted in March 2014, the settlement will provide $395,000 in compensation for victims of Evergreen’s past discrimination.

The settlement, which remains subject to court approval, was filed today with the department’s complaint in the U.S. District Court of the Northern District of Illinois.  The complaint alleges that Evergreen violated the Equal Credit Opportunity Act (ECOA), by charging approximately 2,200 Hispanic and African-American borrowers higher interest rates than non-Hispanic white borrowers between January 2011 and March 2014.  The complaint alleges that Evergreen’s FreedomRoad Financial motorcycle lending unit charged borrowers higher interest rates because of their national origin or race, and not because of the borrowers’ creditworthiness or other objective criteria related to borrower risk.  This discriminatory charge would result in the average victim paying about $200 to $250 extra during the term of the loan.

“The department, in cooperation with our partner agencies, continues to closely examine the motor vehicle lending market for potential discrimination,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division.  “We thank Evergreen for recognizing the risk of discrimination caused by discretionary dealer markups, and adopting new dealer compensation policies that substantially reduce that risk.”

Rather than taking applications directly from consumers, Evergreen makes most of its motorcycle loans through roughly 400 motorcycle dealers nationwide who help their customers pay for their new or used motorcycle by submitting their loan applications to Evergreen. 

Until March 2014, Evergreen’s business practice, like many other motor vehicle lenders, allowed motorcycle dealers subjective and unguided discretion to vary a loan’s interest rate from the price Evergreen initially set.  The initial price set by Evergreen reflected the borrower’s objective credit-related factors.  Dealers received greater payments from Evergreen on loans that included a higher interest rate markup.  The department’s December 2013 lawsuit against Ally Financial Inc. and Ally Bank, which resulted in a settlement providing $80 million in borrower compensation, involved a similar compensation system.

In March 2014, Evergreen eliminated motorcycle dealers’ discretion to increase interest rates.  Instead, Evergreen adopted a policy of always compensating dealers based on a percentage of the loan principal amount that does not vary based on the loan’s interest rate.  No discrimination was observed when the United States analyzed loans made under the new policy.  The settlement allows Evergreen to continue using the revised compensation policy it adopted in March 2014.

The lawsuit originated from a March 2013 referral by the Federal Deposit Insurance Corporation (FDIC) to the Justice Department’s Civil Rights Division.  Evergreen is regulated by the FDIC.  

The Justice Department’s enforcement of fair lending laws is conducted by the Fair Lending Unit of the Housing and Civil Enforcement Section in the Civil Right Division.  Since the Fair Lending Unit was established in February 2010, it has filed or resolved 38 lending matters under the Fair Housing Act, the Equal Credit Opportunity Act, and the Servicemembers Civil Relief Act.  The settlements in these matters provide over $1.2 billion in monetary relief for impacted communities and individual borrowers.  The Attorney General’s annual reports to Congress on ECOA highlight the department’s accomplishments in fair lending and are available at www.justice.gov/crt/publications.

The Civil Rights Division, the U.S. Attorney’s Office for the Northern District of Illinois, and the FDIC are members of the Financial Fraud Enforcement Task Force.  President Obama established this task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force 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 www.StopFraud.gov.

The settlement provides for an independent administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department identifies as victims of Evergreen’s discrimination.  The department will make a public announcement and post information on its website once more details about the compensation process become available.  Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department at this time.  Individuals who believe that they may have been victims of lending discrimination by Evergreen and have questions about the settlement may contact the department at 202-514-4713.

A copy of the complaint and proposed settlement order, as well as additional information about fair lending enforcement by the United States Department of Justice, can be obtained from the United States Department of Justice website at www.justice.gov/fairhousing.

Related Material:

Download Evergreen Complaint (51.43 KB)

Download Evergreen Consent Order (77.57 KB)

Source: justice.gov

CHICAGO —(ENEWSPF)--May 13, 2015.  Two Postal Service employees were arrested today for allegedly opening and stealing the contents of Express Mail and Priority Mail parcels, which included narcotics.  The defendants, Aramis Brown and Zaphronsia Wheeler, were arrested following an investigation by United States Postal Service Office of Inspector General (Postal OIG) and the United States Postal Inspection Service (USPIS).

Brown, 29, of Chicago, and Wheeler, 39, of Chicago, were charged by criminal complaints that were unsealed following their initial appearances today. They appeared today before Magistrate Judge Michael T. Mason in U.S. District Court and were released on a $4500 bond.

According to the complaint affidavits, Brown and Wheeler are Postal Service employees at the International Service Center located at O’Hare Airport, Chicago, Illinois (“International Service Center”) and allegedly have been opening and stealing the contents of Express Mail and Priority Mail parcels. These rifled Express and Priority Mail parcels fit the general profile for parcels which contain narcotics, in that they are sent from narcotics source states, from fictitious senders or to fictitious recipients, and narcotics sniffing canines alert to the parcels.  The defendants are alleged to have stolen contents, some which included narcotics, out of Express and Priority Mail parcels from at least 16 pieces of mail on at least seven occasions.

The arrests and charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Scott Caspall, Special Agent-In-Charge of the Chicago Great Lakes Area Field Office of the U.S. Postal Service Office of Inspector General; and Tony Gomez, Postal Inspector in Charge, U.S. Postal Inspection Service.  Cook County Sheriff’s Office, Plainfield and Romeoville Police Departments assisted in the investigation.

The government is being represented by Special Assistant U.S. Attorney William Novak.

Theft of mail and narcotics offenses carries a maximum penalty of 5 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 public is reminded that a complaint 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:

CHICAGO —(ENEWSPF)--May 14, 2015.  A Bolingbrook man was sentenced today to 24 months in federal prison for  violating U.S. export laws by attempting to ship a thermal imaging camera from his company in Schaumburg to a company in Pakistan without obtaining a license from the U.S. Commerce Department, federal law enforcement officials announced today.  The defendant, Bilal Ahmed, 34, of Bolingbrook, Illinois, was also ordered to complete a term of two years of supervision after his release by U.S. District Judge Rebecca R. Pallmeyer.  Ahmed was ordered to report to the Federal Bureau of Prisons on July 17, 2015.  Ahmed pled guilty to one count of willfully violating export control regulations, specifically the International Emergency Economic Powers Act, between June 2009 and March 2014. 

Ahmed was the owner, president, and registered agent of Trexim Corporation, an Illinois corporation based in Schaumburg, which was in the business of purchasing items for export from the United States.  The defendant was regularly involved in the negotiation, purchase, and export of materials from United States manufacturers to overseas locations, including Pakistan.  The defendant received orders for goods from Pakistani entities, including Pakistan’s Space and Upper Atmosphere Research Commission, also known as SUPARCO, and then purchased and exported those items to the Pakistani entities, including to SUPARCO.  Ahmed knew that the export of goods, particularly the export of goods designated as “dual use” items, was controlled in some instances by the Department of State and the Department of Commerce and was aware that certain items required a license issued from either the Department of State or the Department of Commerce in order to be exported from the United States.

The items exported by Ahmed included, among other things, a FLIR HRC-U thermal imaging camera, carbon fiber to make “bullet proof-vests,” and microwave laminate, all to Pakistan.  Each of those items was on a Commerce Department list of controlled export goods for reasons of national security and regional stability.  A license was required to ship the items to Pakistan.  The defendant exported and attempted to export those items to Pakistan without ever having applied for such a license.

“For a period of at least four years, defendant made it his business to export items from the United States to overseas locations, without obtaining the necessary licenses and approvals when required.  In fact, based just on the purchase orders recovered from defendant’s computer at the time of his arrest, purchase orders reflected the export of approximately 203 items from the United States to Pakistan,” stated Assistant U.S. Attorney Bethany Biesenthal in the government’s sentencing memorandum.

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 Edward Holland, Supervisory Special Agent  of the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement. The Justice Department’s National Security Division provided assistance in the case.

The government was represented by Assistant U.S. Attorney Bethany Biesenthal.

Source: justice.gov

ILLINOIS--(ENEWSPF)--May 14, 2015. Enviro-Safe Refrigerants Inc. of Pekin, Illinois, has agreed to pay a $300,000 civil penalty and cease marketing and sale of unapproved flammable hydrocarbon refrigerants as substitutes for ozone depleting substances (ODS).  ODS are being phased out of production and importation because they deplete the Earth’s stratospheric ozone layer.  As part of the United States’ transition away from ODS, the Environmental Protection Agency’s (EPA) Significant New Alternatives Policy (SNAP) Program evaluates and approves substitute refrigerants so that they can safely and legally replace ODS.  EPA evaluates these potential substitute refrigerants according to health, safety and environmental criteria.  The Clean Air Act addresses ODS and establishes standards and requirements where a substitute for an ODS is sought to be introduced to the marketplace.

According to the two-count complaint, filed simultaneously with the settlement today in the Central District of Illinois, Enviro-Safe allegedly violated Clean Air Act requirements through the marketing and sale of two flammable hydrocarbon refrigerant products, ES 22a and ES 502a, as substitutes for ODS without providing the requisite information to EPA for review and approval.  EPA has not approved any flammable hydrocarbon as a replacement for ODS in systems not specifically designed for flammable refrigerants and has warned that use of flammable refrigerants in those systems presents a risk of fire or explosion.

“With this settlement, Enviro-Safe will pay a penalty, stop its nationwide sales of unapproved flammable refrigerants and ozone depleting substances, and notify consumers of potential safety hazards from these products,” said Assistant Attorney General John C. Cruden of the Department of Justice’s Environment and Natural Resources Division.  “This civil action illustrates how the requirements of the Clean Air Act guard consumer safety and the health of our environment each and every day.”

“The actions Enviro-Safe will be required to take under this consent decree will protect consumers and the environment from a potentially dangerous product,” said Regional Administrator Susan Hedman of EPA.

In addition to paying a penalty and halting non-compliant sales, the company will also state on the label of any flammable refrigerant, its website and other marketing materials that the refrigerant is “flammable to an open flame or spark” and to “proceed with caution if used in systems designed for non-flammable refrigerants.”  Labels must also include any use restrictions for approved substitutes.  The company will notify by mail all known past customers that purchased products labeled “ES 12a,” “ES 22a” and “ES 502a” of potential safety hazards associated with such products.

The consent decree is subject to a 30-day comment period and final approval by the court. A copy of the consent decree is available on the Department of Justice website at www.usdoj.gov/enrd/Consent_Decrees.html.

Source: justice.gov

Chicago, IL-(ENEWSPF)- A Chicago man was arrested this May 14 and is facing federal gun charges for being a felon in possession of a firearm. The defendant, LABAR SPANN, was arrested following an investigation by the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Chicago Police Department.

SPANN, 36, of the 800 block of North Francisco Street, was arrested at his residence and charged by criminal complaint that was unsealed following his initial appearance May 14. He appeared today before U.S. Magistrate Judge Michael T. Mason and was ordered to remain in custody pending a detention hearing at 2:00 p.m. on Monday in U.S. District Court.

According to the complaint, on September 14, 2014, Spann, a convicted felon, knowingly possessed a firearm, namely a Glock 19, model 19C, .9 mm caliber handgun while with two individuals, L.H. and K.C., at Midwest Sporting Goods, a firearms store and shooting range, located in Lyons, Illinois. Allegedly, one of the individuals, L.H., rented a Glock 19C pistol and proceeded to the firing line with Spann and K.C. while Spann allegedly loaded a magazine with 9 mm ammunition into the firearm and then shot at the target, emptying the magazine. Spann then allegedly loaded additional magazines into the firearm twice and handed it to L.H., then K.C., who each shot at targets and emptied the magazines.

If convicted of being a felon-in-possession of a firearm, the defendant could be sentenced to a maximum 10 years’ imprisonment and a $250,000 maximum fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The arrest and charges were 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 Chicago Office; Carl Vasilko, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and Chicago Police Superintendent Garry McCarthy.

The government is being represented by Assistant U.S. Attorneys Peter S. Salib, Timothy J. Storino and Tobara Richardson.

The public is reminded that an indictment 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: FBI.GOV

CHICAGO--(ENEWSPF)--May 18, 2015.  A federal jury in Chicago on May 15, 2015, convicted the administrator and biller of a Schaumburg, Illinois, in-home visiting physician group for their participation in a $4.5 million health care fraud scheme that included billing Medicare for services rendered to patients who were dead and services rendered by medical professionals who worked over 24 hours in a day.

ROCKFORD —(ENEWSPF)--May 21, 2015. SOULA APOSTOLOPOULOS, 46, of Woodstock, Ill., formerly of Barrington Hills, Ill., pled guilty yesterday before U.S. District Judge Philip G. Reinhard to making false statements in her bankruptcy case. She was indicted on October 21, 2014, along with her husband, DANIEL APOSTOLOPOULOS.

According to the plea agreement, on March 13, 2010, Soula Apostolopoulos filed a Chapter 7 bankruptcy Petition, and made false statements on the Statement of Financial Affairs that she signed under penalty of perjury. According to the indictment, Soula Apostolopoulos fraudulently concealed income she received from her interest in a Chicago restaurant she previously purchased with her husband, as well as her interest in Wisconsin real estate and in financial accounts during the year preceding the filing of her bankruptcy.

Providing material false statements or documents under penalty of perjury in a bankruptcy case carries a maximum penalty of 5 years in prison, a fine of up to $250,000, or twice the gross gain or gross loss resulting from that offense, whichever is greater. The judge may also impose a sentence of probation of one to five years, and a term of supervised release of up to three years. The Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines.

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

The guilty plea 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 Federal Bureau of Investigation.

The government is represented by Assistant U.S. Attorney Michael D. Love.

Related Material:

Plea Agreement

Source: justice.gov

ROCKFORD —(ENEWSPF)--May 21, 2015.  A former Sandwich, Ill. business owner was sentenced yesterday in federal court by U.S. District Judge Frederick J. Kapala for making a false statement to a financial institution. The defendant, STEVEN J. MOORHOUSE, 62, was sentenced to 21 months in federal prison, to be followed by 3 years supervised release, and was ordered to pay restitution of $881,012.38 to Old Second National Bank, Aurora, Ill. Moorhouse, who was President and majority owner of Jefsco Manufacturing Co., Inc., a manufacturing business, pled guilty to the charge on Jan. 12, 2015.

According to the plea agreement, during July 2009, Moorhouse sought a lender to make business loans to Jefsco and began to provide Jefsco’s financial information to Old Second National Bank (OSNB). The plea agreement further states that on Dec. 4, 2009, Moorhouse provided OSNB with a document that falsely inflated the value of the accounts receivable owed to Jefsco by hundreds of thousands of dollars. Moorhouse admitted he was aware that the amount of loan proceeds that OSNB would disburse would be, in part, determined by the amount of receivables.

The sentencing was announced today by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Christy Romero, Special Inspector General for the Troubled Asset Relief Program; and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The investigation was conducted jointly by the Office of the Special Inspector General for the Troubled Asset Relief Program and the Federal Bureau of Investigation.

The government was represented by Assistant U.S. Attorney Michael D. Love.

Source: justice.gov

CHICAGO —(ENEWSPF)--May 26, 2015.  A southwest suburban pharmacist was indicted on federal charges for health care fraud, federal law enforcement officials announced today.  The defendant, WALTER BEICH, the owner and licensed pharmacist at Lockport Pharmacy, Inc. operating as Corwin Pharmacy, was charged in a twelve-count indictment returned by a federal grand jury last week, alleging he participated in a scheme to defraud various health care benefit programs in the amount of $2,400,000.  The indictment also charges Beich with aggravated identity theft for his use of patient and physician names and identifying information during his scheme. The indictment also seeks forfeiture in the amount of $2.4 million, the amount of the alleged loss to the health care providers.  Beich, 61, of Lockport, Illinois, was arraigned in federal court this morning and was released on a $4,500 unsecured bond and is scheduled for a status in front of U.S. District Court Judge John W. Darrah on June 26, 2015.  

According to the indictment, Beich participated in a scheme to defraud Medicare, Medicaid, Blue Cross Blue Shield, Humana, and United Healthcare by filing fraudulent claims for prescription drugs that were not dispensed to his customers or he had switched out for less-expensive supplements instead of FDA-approved prescription drugs. The indictment also alleges that Beich had his employees create fake prescriptions to make it appear as if a physician had phoned-in certain prescriptions. In addition, the indictment alleges that Beich obtained physician sample drugs and then submitted insurance claims for dispensing these sample drugs as if he obtained those drugs through commercial distribution channels. The indictment also alleges that Beich dispensed a foreign-sourced drug to customers instead of the prescription Viagra.

Health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, and restitution is mandatory. Aggravated identity theft carries a mandatory prison term of two years’ incarceration, served consecutively to any other term of imprisonment imposed. Upon a conviction, 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; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG; and James Vanderberg, Special Agent-in-Charge of the Chicago Regional Office of the U.S. Department of Labor-OIG.

The government is being represented by Assistant U.S. Attorney Samuel B. Cole. 

The public is reminded that a complaint 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

CHICAGO —(ENEWSPF)--May 27, 2015.  A former chief of staff for a Chicago alderman was sentenced today to 15 months in prison for accepting a $7,500 cash bribe in exchange for obtaining the alderman’s letter of support for a license to sell alcohol in the alderman’s ward.  The defendant, CURTIS V. THOMPSON, JR., 63, of Chicago, pled guilty in December 2014 to federal program bribery, in accepting a bribe from an individual who claimed he wanted to open a convenience store but was actually a cooperating witness in an FBI undercover investigation.  U.S. District Court Judge Samuel Der-Yeghiayan also sentenced Thompson to one year of supervision after his release and to forfeit $7,500, the amount of the bribe.  Thompson was ordered to surrender to the U.S. Bureau of Prisons on September 1, 2015.

According to court documents, Thompson accepted 75 $100 bills in a Christmas card that the cooperating witness gave him at the alderman’s holiday party in December 2013.  Thompson admitted that he used the money he received to pay personal expenses.

“Over the years, time and time again, officials have demonstrated their greed,” said Judge Der-Yeghiayan while imposing sentence.  “His job was to serve the citizens of Chicago, and he did not.” 

“He (Thompson) readily joined the ranks of corrupt public officials who have chosen to line their pockets at the public’s expense,” argued Assistant U.S. Attorney Megan Church in the government’s sentencing memorandum. “He gave the residents of Chicago one more reason to doubt its leaders and public officials; one more reason to question the legitimacy of their municipal government; and one more reason to give into the cynicism of a “where’s mine?”

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 government was represented by Assistant U.S. Attorneys Megan Church and Bethany Biesenthal.

Source: justice.gov

CHICAGO —(ENEWSPF)--May 27, 2015.  An area psychologist pled guilty today to engaging in a health care fraud scheme to defraud the Medicare program, federal law enforcement officials announced today.  SHARON A. RINALDI, a licensed psychologist, was charged in a five-count indictment returned in October 2012 with defrauding Medicare by submitting thousands of false claims for providing psychotherapy services to Medicare beneficiaries residing in skilled nursing homes in the Chicago area.  Rinaldi submitted false claims to Medicare seeking a total reimbursement of approximately $1.1 million and as a result of those false claims, Medicare paid Rinaldi at least $447,155 in funds to which she was not entitled.  Rinaldi, 60, of Inverness, pled to one count of health care fraud before U.S. District Court Judge Robert M. Dow.  Rinaldi also has agreed to forfeit of more than $100,000 that was seized from her home and a personal bank account in September 2012.

According to the plea, between December 2008 and August 2012, Rinaldi claimed that she provided services to Medicare beneficiaries who were deceased at the time; that she provided services on certain dates when she was in other locations, such as Las Vegas and San Diego; and she inflated the number of hours that she had provided services on particular dates, often exceeding 24 hours in a single day.

Health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine, and restitution is mandatory.  Upon a conviction, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The plea was announced today 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 Chicago; and ; Lamont Pugh III, Special Agent-in-Charge of the Chicago Regional Office of the HHS-OIG.

The government is represented by Assistant U.S. Attorney Paul Tzur.

Related Material:

Plea Agreement

Source: justice.gov

CHICAGO ―(ENEWSPF)--May 27, 2015.  Two men were indicted on April 29, 2015, by a federal grand jury in an indictment unsealed today for allegedly intending to defraud ATMs in and around Chicago by altering the settings of the ATMs so that the actual amounts disbursed far exceeded the withdrawal requests as well as the balance of the accounts from which the withdrawal requests were made.  The funds that were fraudulently obtained totaled approximately $185,000. The defendants, Trent Ratliff and Fredrick Lee, were charged in a 10-count indictment.  Both defendants were charged with one count of conspiracy to commit computer access fraud as well as separate counts of computer access fraud, corresponding to specific ATM withdrawals.

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.

Ratfliff, 52, of Chicago, and Lee, 60, of Chicago, were arraigned today before the Honorable Gary Feinerman and were released on a $4,500 bond.  Both defendants have a status date on August 24, 2015. The indictment seeks forfeiture of approximately $185,000.            According to the indictment, Ratliff and Lee, using debit cards that were registered in their own names from various banks or using debit cards that were registered in the names of several other individuals, deposited, or caused to be deposited, nominal sums of money on these debit cards.  Between September 2010 and January 2011, using these debit cards, Ratliff and Lee accessed the management function of various ATMs in and around Chicago, without authorization from the owners of the ATMs, and altered the settings so that the ATMs falsely recorded, incorrectly reported, and transmitted debit amounts that exceeded the balance of the debit card accounts. In many cases, Ratliff and Lee altered the ATM settings so that account debits were recorded and reported by the ATM as one-twentieth of the actual funds that the ATM disbursed.  In other words, a request for $100 from an altered ATM resulted in the disbursement of $2,000.  Following the withdrawal of money from these ATMs, Ratliff and Lee again accessed the management function of the ATMs and changed the settings back so that subsequent account debits from that ATM were recorded and reported as being equal to the actual funds disbursed.

Each count of the indictment carries a maximum penalty of 5 years in prison and a $250,000 fine.  If convicted, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines.

The government is being represented by Assistant United States Attorney Naana Frimpong.

The public is reminded that 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

CHICAGO ―(ENEWSPF)--May 28, 2015.  A Chicago lawyer was indicted on federal charges alleging that he evaded the payment of income tax on income he received over the course of two decades, including income he received in connection with the State of Illinois’s lawsuit against various tobacco companies. 

Daniel P. Soso, 63, of Alsip, was charged with one count of income tax evasion.  The indictment alleges that in 1996, the Illinois Attorney General entered into a written contract with several law firms who represented the State of Illinois in its lawsuit against certain tobacco companies to recover, among other things, money damages incurred by the State of Illinois as a result of the sale of tobacco products to residents of the State of Illinois.  In addition, the contract provided that the law firms representing the State of Illinois, including Law Firm B, would share a “contingent fee” equal to ten percent of the total monetary recovery realized by the State of Illinois in its planned lawsuit.  The indictment further alleges that Soso, Individual A (an individual formerly licensed to practice in Illinois) and Individual B (a partner of Law Firm B) entered into agreements to pay Soso and Individual A a portion of the attorney fees awarded in the tobacco lawsuit and concealed these agreements from the State of Illinois, the Illinois Attorney General and others. 

The indictment further alleges that between 1993 and 2013, Soso failed to pay approximately $779,615.86 in taxes, which amount included taxes due from the income Soso received from the tobacco lawsuit.  Further, the indictment alleges that Soso took a variety of acts to evade the payment of these taxes, to include the use of nominee bank accounts; making false statements to the IRS concerning his sources of income; and causing the circumvention of levies issued by the IRS to third parties to recoup taxes due from Soso.

The defendant will be arraigned at a later date in U.S. District Court.  The charge carries a maximum sentence of five years in prison and a $100,000 fine.  If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

Zachary T. Fardon, United States Attorney for the Northern District of Illinois, announced the indictment with Stephen Boyd, Special Agent in Charge of the Internal Revenue Service Criminal Investigative Division Chicago and Robert J. Holley, Special Agent-in-Charge of the Federal Bureau of Investigation Chicago. The government is being represented by Assistant U.S. Attorneys Amarjeet S. Bhachu, Michael T. Donovan and Andrew K. Polovin.

The public is reminded that an indictment contains merely 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

CHICAGO —(ENEWSPF)--May 28, 2015.  A Naperville man pled guilty today to 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 by information earlier this month 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 sentenced on September 11, 2015 by U.S. District Court Judge Gary Feinerman and remains in federal custody since his arrest in September 2014. 

According to court documents, Howard was employed by an FAA contractor at the Chicago Air Route Traffic Control Center (the “Control Center”) in Aurora, Illinois. Howard worked on telecommunications matters at the Control Center and at other FAA facilities for approximately eight years. 

Howard pled guilty to 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; Robert J. Holley, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation; and Carl Vasilko, Special Agent in Charge of the Chicago Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives.

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

Individuals impacted by the September 26, 2014 fire who wish to receive notice about future court hearings, including sentencing, are encouraged to contact the U.S. Attorney’s Office’s Victim Hotline number at 866-364-2621 (press #3), or by email at usailn.victim.aa@usdoj.gov.

The charge 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 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.

Related Material:

Plea Agreement
Victim Resources

Source: justice.gov

Chicago --(ENEWSPF)--May 29, 2015.  A drug trafficker who used the illicit website “Silk Road” for worldwide drug sales was sentenced yesterday to 10 years’ imprisonment for selling millions of dollars’ worth of illegal drugs for bitcoins.  The defendant, Cornelis Jan Slomp, 23, of Woerden, the Netherlands, pled guilty in April 2014 to conspiracy to import and distribute various controlled substances worldwide.  Slomp was also ordered to forfeit $3,030,000 in illegal drug proceeds from his criminal enterprise.  Slomp has been in federal custody since his arrest in August 2013.

"The crime is an extraordinarily serious one given the amounts involved, there's no question about that," said U.S. District Court Judge Matthew F. Kennelly said in imposing the sentence.  

Slomp, who operated under the username “SuperTrips,” conducted more than 10,000 illegal online drug transactions and received approximately 385,000 in bitcoins as payment for his illegal drug sales.  By his own admissions and as confirmed by law enforcement’s examination of the data retrieved from the Silk Road server, Slomp was the world’s largest drug trafficker on Silk Road.

Shortly before law enforcement agents shut down the Silk Road web site in August 2013, Chicago Homeland Security Investigations (HSI) agents arrested Slomp when he traveled from the Netherlands to Miami, Florida.  At the time, Slomp had arranged to spin off his United States illegal drug trafficking business to his largest U.S.-based wholesale re-distributor of illegal drugs, Angel William Quinones, of Largo, Florida.  Quinones, who was later arrested, has since pleaded guilty in federal court in Tampa and has been sentenced to 70 months’ imprisonment for his role in Silk Road drug trafficking activity.

According to court documents, for an eighteen-month period from March 2012 through about August 2013, Slomp distributed worldwide approximately: 104 kilograms of powder 3,4-methylenedioxy-N-methylamphetamine (MDMA); 566,000 ecstasy pills containing MDMA; four kilograms of cocaine; three kilograms of Benzodiazepine; and substantial quantities of amphetamine, lysergic acid diethylamide (LSD), and marijuana, in addition to allowing for substantial quantities of methamphetamine, ketamine, and Xanax to be distributed on his SuperTrips Silk Road vendor account. 

“The public is harmed when illegal drugs are sold in the United States as well as in this district.  This harm to the public is magnified when drug traffickers such as the defendant use sophisticated modern technology to reach larger segments of the population as well as to further conceal their identities and criminal activity.  Here, the defendant used one of the most sophisticated dark websites of its time to sell enormous quantities of illegal drugs to wholesale redistributors, retailers, and users of drugs across the country – indeed, throughout the world – in more than 10,000 transactions,” argued Assistant United States Attorney Andrew S. Boutros in the government’s sentencing memorandum. 

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Gary Hartwig, Special Agent-in-Charge of HSI Chicago.

The case was prosecuted by Assistant U.S. Attorney Andrew S. Boutros.

Source: justice.gov

CHICAGO ―(ENEWSPF)--May 29, 2015.  The leader of a drug trafficking organization who created and managed a heroin distribution operation run via a hotline telephone between 2008 and 2012 on the city’s west side was sentenced to 20 years in federal prison yesterday, federal law enforcement officials announced.  The defendant, PIERRE HENDERSON, was responsible for supervising the distribution of over 30 kilograms of heroin, a federal judge determined before imposing the sentence.

Henderson, 37, of Chicago, pleaded guilty to conspiracy to distribute heroin in December 2014. U.S. District Judge Ronald A. Guzman imposed the 20-year sentence on Wednesday. Henderson’s brother, Eric Henderson, 35, pleaded guilty to conspiracy to distribute heroin in January 2014. In March 2015, U.S. District Judge Ronald A. Guzman sentenced Eric Henderson to 200 months in federal prison.

The defendant’s organization sold tens of thousands of user quantities to individuals from all over the Chicagoland area, “argued Assistant U.S. Attorney Shoba Pillay in the government’s sentencing memorandum. “His conduct directly contributed to the drug trafficking and attendant violence plaguing the streets of the city of Chicago and the heroin addiction crisis now afflicting this city.”

According to court documents, the Henderson brothers were involved in prolific daily sales of heroin to customers who called into the hotline to order heroin. After placing their phone orders the Henderson brothers’ customers traveled from all over the Chicagoland area to the city’s west-side to purchase heroin from street-level distributors, who worked for the Henderson brothers.

The Henderson brothers were among 8 federal defendants who were arrested in May 2013 following an FBI investigation, code-named Operation Heroin Hotline, of a phone-order heroin trafficking operation. 

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 investigation was led by the FBI and was conducted under the umbrella of the U.S. Organized Crime Drug Enforcement Task Force (OCDETF) in coordination with the Chicago Police Department.  

The government is being represented by Assistant United States Attorneys Shoba Pillay and Lindsay Jenkins. 

Source: justice.gov

ROCKFORD —(ENEWSPF)--May 29, 2015.  A Rockford, Ill. man was charged yesterday in federal court with possessing with the intent to distribute narcotic drugs.  ANTHONY ROSS, 34, of Rockford, Ill., was charged with possessing with the intent to distribute cocaine, cocaine base (crack cocaine), and heroin on May 28, 2015.  According to the complaint, Ross was taken into custody outside an apartment on 23rd Street in Rockford.  When law enforcement officers went into the apartment to execute a search warrant, they found $1,205 in cash, two loaded semi-automatic pistols, and numerous packages of cocaine, cocaine base and heroin.  When law enforcement officers went to a second location that day, a residence on Orchard Avenue in Rockford, they found over a kilogram of cocaine and 214 grams of heroin.

ROSS was brought before U.S. Magistrate Judge Iain D. Johnston yesterday for an initial appearance.  He was ordered to be held pending a detention hearing and a preliminary hearing on June 2, 2015, at 2:30 p.m.

Possession with the intent to distribute of the charged narcotic drug Controlled Substances carries a maximum potential penalty of up to 20 years in prison, at least 3 years of supervised release following imprisonment, and a fine of up to $1,000,000.  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 a complaint is only a charge 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.

The charge was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; CARL VASILKO, Special Agent-in-Charge of the Chicago Office of the Bureau of Alcohol, Tobacco, Firearms and Explosives; JOSEPH P. BRUSCATO, Winnebago County State’s Attorney; and GARY CARUANA, Winnebago County Sheriff.  Officers of the Rockford Police Department assisted in the investigation.

The government is being represented by Assistant U.S. Attorney John G. McKenzie.

Related Material:

Complaint

Source:justice.gov

CHICAGO ―(ENEWSPF)--June 1, 2015.  A former owner and operator of Selectcare Health, Inc., a provider of outpatient physical and respiratory therapy located in Park Ridge and Skokie, was sentenced to federal prison for engaging in a $2.5 million health care fraud scheme. Ankur Roy, 38, of Miami Beach, Florida, was sentenced last Friday to 75 months in prison followed by 3 years of supervision after his release by U.S. District Court Judge Gary Feinerman.  Roy was also ordered to forfeit more than $2.5 million in proceeds he and his codefendants gained by defrauding Medicare and Blue Cross Blue Shield of Illinois.  Roy was ordered to surrender to the Federal Bureau of Prisons on July 15, 2015.  Roy was charged in 2013 with two co-defendants who both pled guilty; Dipen Desai, who was sentenced to 27 months’ imprisonment in December 2014, and Akash Patel, who is scheduled to be sentenced in July.  Roy was convicted of five counts of the indictment by a jury in July 2014.   

Between March and May 2011, Roy and his co-defendants submitted false and fraudulent health insurance claim forms to Medicare and Blue Cross Blue Shield for respiratory therapy services that they knew were never provided to patients. Roy, who proposed the scheme to his co-defendants as a means to extricate themselves from debt, designed the scheme to avoid raising red flags with Medicare and Blue Cross Blue Shield’s fraud detection systems. As a result of these false claims, Medicare and Blue Cross Blue Shield paid defendants over $2.5 million. Defendant took over $600,000 of that sum and used it for his own personal purposes, including for personal expenses, paying off credit card bills and repaying his student loan.

“Defendant Roy’s fraud deprived Medicare and Blue Cross Blue Shield of over $2.5 million, a substantial sum of money that should have gone to pay for medical services for senior citizens, and not to line his and his partners’ pockets,”  Assistant U.S. Attorney Maureen Merin argued at sentencing.

The sentence today 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 Chicago; Lamont Pugh III, Special Agent in Charge of the Chicago Regional Office of Health and Human Services, Office of Inspector General; and James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor Office of Inspector General in Chicago.

The government was represented by Assistant U.S. Attorney Maureen Merin. 

Source: justice.gov

CHICAGO ―(ENEWSPF)--June 1, 2015.  A Skokie man was indicted last week for international parental kidnapping of his three children and traveling with them to Turkey without their mother’s consent, permission or knowledge.  MURTAZA ALI, 44, of Skokie, was charged with one count of international parental kidnapping by a federal grand jury.  Ali was arrested on May 6 upon his return to O’Hare International Airport with the children, and remains in federal custody.  Ali is scheduled to be arraigned Tuesday, June 2 at 10:00, in front of U.S. District Judge Samuel Der-Yeghiayan.

According to the court documents, Ali is a Pakistani-national, and with individual A, has three minor children.  According to Individual A, on the evening of May 2, 2015, she was at a social gathering.  Ali, along with the three children, was scheduled to pick her up after the event.  He did not pick her up, and when she arrived home, Ali and the three children were not home, the house was a mess, and the passports and luggage were missing.  An investigation by Skokie Police Department determined Ali’s last known location was believed to be near O’Hare Airport. 

Ali, along with the three children, boarded a Turkish Airlines flight at O’Hare Airport and arrived in Istanbul, Turkey on May 2.  According to Individual A, Ali called her from Turkey and stated that he had the three children and that he was traveling to Pakistan.  According to information obtained from Turkish Airlines and other law enforcement agents, there was reason to believe that Ali was planning to board a flight from Turkey bound for Karachi, Pakistan, with the children. He was arrested on a federal complaint when he and his three children returned to the United States on May 6.

The arrest and indictment were 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 William A. Ferrara, Chicago Director of Field Operations, Customs and Border Protection. Skokie Police Department assisted in the investigation.

The government is being represented by Assistant U.S. Attorney Heather McShain.

International parental kidnapping carries a maximum sentence of three years in prison and a $250,000 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 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