FBI: Two Men Charged with Allegedly Defrauding Charter Flight Company, Other Luxury Brands of Hundreds of Thousands of Dollars

August 5, 2013

The Federal Bureau of Investigation (FBI) on August 5, 2013 released the following:

“NEWARK, NJ—Two men were arrested by federal agents early this morning in Akron, Ohio for conspiracy to defraud an aviation company out of charter flights and other businesses out of services and luxury goods, U.S. Attorney Paul J. Fishman announced.

Dante G. Dixon, 45, of Miami, Florida, and Christopher L. Henderson, 32, of Akron, Ohio, were charged by complaint with conspiracy to commit wire fraud. They made their initial court appearances before U.S. Magistrate Judge Kathleen Burke in Akron federal court and were ordered held until they can be transported to New Jersey.

According to the complaint:

From May 2013 through June 2013, Dixon and Henderson and others allegedly conspired to fraudulently obtain at least four private charter flights from Jet Aviation, an international business aviation service with its United States’ headquarters in Teterboro, New Jersey. Dixon, Henderson, and others also conspired to obtain tens of thousands of dollars in other luxury goods and services, all via sham lines of credit issued to a well-known financial institution for the defendants and others’ use, by misrepresenting that they and others were employees at the financial institution.

On May 5, 2013, an individual using the name Josh Stevens called Jet Aviation’s offices in Chicago, Illinois and Van Nuys, California to inquire about its private charter flight services. That individual identified himself as being employed as a senior vice president at a well-known financial institution and provided an e-mail address purporting to be affiliated with the financial institution. It was later determined that this e-mail address was not, in fact, affiliated with the financial institution. A Jet Aviation employee sent an e-mail to the provided e-mail address. The e-mail from Jet Aviation contained a draft charter services agreement, which was signed by Josh Stevens and returned to Jet Aviation on May 9, 2013. The agreement falsely listed Josh Stevens as a senior vice president, Dixon as a vice president, and Henderson as a vice president of international affairs at the well-known financial institution.

On May 21, 2013, based on the false information provided by Josh Stevens, a Jet Aviation employee created an account and a $350,000 line of credit for the defendants and others. The line of credit was in the name of the financial institution on behalf and for the use of the defendants and others. Dixon and Henderson and others used the sham line of credit to take at least four private charter flights.

On June 7, 2013, a Jet Aviation employee at Teterboro met Dixon and Henderson before they boarded their charter flight to Miami, Florida. During the meeting, the defendants identified themselves as being employees at the financial institution. The Jet Aviation employee then contacted the financial institution and was informed that Dixon and Henderson and others were not, and had never been, employees at the financial institution.

As a result of their misrepresentations to Jet Aviation, Dixon and Henderson and others fraudulently obtained private high-end charter flights and limousine car services with a total value of $175,790. Jet Aviation never received payment from the defendants and others, or from the financial institution’s line of credit, for any of the services provided to the defendants and others, including the approximately $164,911 in charter flights and the approximately $10,879 in limousine services.

Dixon and Henderson and others made similar misrepresentations about their purported employment at the financial institution to other luxury service providers, including to a Tiffany & Co. store in Bal Harbour, Florida, and to The W South Beach Hotel in Miami, Florida. These misrepresentations resulted in the defendants and others fraudulently obtaining, via sham lines of credit with Tiffany and The W, approximately $19,991 in watches, sunglasses, sterling silver and leather business card holders, and men’s cologne from Tiffany, and approximately $25,466 in overnight hotel stays at The W.

The investigation has revealed that the financial institution was not aware that Dixon and Henderson and others were using its corporate identity. As a result of their scheme, Dixon and Henderson and others fraudulently obtained more than $220,000 in luxury goods and services.

The charge of conspiracy to commit wire fraud with which the defendants are charged is punishable by a maximum potential penalty of 20 years in prison, and a maximum fine of $250,000 or twice the gain or loss resulting from the defendants’ crimes.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s arrests.

The government is represented by Assistant U.S. Attorney Aaron Mendelsohn of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit http://www.stopfraud.gov.”

Federal Wire Fraud

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Dr. Dennis B. Barson, Jr. and Dario Juarez Indicted by a Houston Federal Grand Jury Alleging a Conspiracy to Defraud Medicare of $2.1 Million in Less Than Two Months and Health Care Fraud

June 27, 2013

The Federal Bureau of Investigation (FBI) on June 25, 2013 released the following:

“Austin Doctor Charged with Defrauding Medicare of $2 Million in Less Than Two Months

HOUSTON— Dr. Dennis B. Barson, Jr., 40, and his medical clinic administrator, Dario Juarez, 53, have been charged in a 20-count indictment alleging a conspiracy to defraud Medicare of $2.1 million in less than two months, United States Attorney Kenneth Magidson announced today.

The indictment, returned under seal on June 19, 2013, alleges the fraudulent billing was for rectal sensation tests and electromyogram (EMG) studies of the anal or urethral sphincter which were never performed. The indictment also charges Barson, of Austin, and Juarez, of Beeville, with health care fraud for filing false claims with Medicare for medical procedures which were never performed.

Barson was arrested this morning, at which time the indictment was unsealed. He is expected to make his initial appearance today before a U.S. magistrate judge in Austin. Juarez is already in custody serving time for practicing medicine without a license.

According to the allegations in the indictment, Barson was the only practicing doctor at a medical clinic located at 8470 Gulf Freeway in Houston. It was Juarez, however, who allegedly represented himself either to be a doctor or a physician’s assistant and was the one who actually saw patients, according to the indictment. It is alleged that Barson and Juarez caused Medicare to be billed for procedures on 429 patients in just two months. Barson and Juarez also allegedly billed Medicare for seeing more than 100 patients on 13 different days, including a high of 156 patients on July 13, 2009.

Each of the 19 health care fraud counts and the conspiracy charge carries a maximum penalty of 10 years in a federal prison and a $250,000 fine, upon conviction.

The criminal charges are the result of a joint investigation conducted by agents of the FBI, the Department of Health and Human Services-Office of Inspector General, and the Medicaid Fraud Control Unit of the Texas Attorney General’s Office. This case will be prosecuted by Assistant United States Attorney Al Balboni and Special Assistant United States Attorney Adrienne Frazior.

An indictment is an accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Federal Contractors Accused of $6.5M Fraud

November 7, 2011

Courthouse News Service on November 7, 2011 released the following:

“By DAVID LEE

(CN) – A federal grand jury in San Antonio accused three government contractors of conspiring to defraud the Air Force of $6.5 million through false invoices. Donald Dean Brewer, 62, of Clovis, N.M., his wife, Sherri Lynn Brewer, 62, and James McKinney, 60, of San Antonio, were named in a 17-count indictment.

They are charged with one count of conspiracy to defraud the United States, 12 counts of wire fraud and four counts of major fraud against the United States, the U.S. Attorney for the Western District of Texas said.

The Brewers and McKinney are accused of creating a sham subcontracting business, Enterprise and Deployment LLC, to insert it as an extra subcontractor between prime contractors and Ark Systems, a company for which McKinney worked for as vice president of government systems.

By submitting false invoices, the defendants allegedly caused prime contractors to overcharge the Air Force by including Enterprise and Deployment’s fraudulent charges in the prime contractor invoices.

The indictment claims that from July 2002 through 2008, the obtained about $33.5 million in subcontracts for Enterprise and Deployment, enriching themselves by almost $6.5 million.

Donald Brewer worked for KARTA Technologies, as medical systems infrastructure modernization program manager at Brooks City Base in San Antonio. Both KARTA and Ark contracted with the Air Force. KARTA provided engineers and analysts to evaluate projects and proposals and Ark installed electronics at government medical facilities.

“Allegedly, the taxpayers were overcharged $6 million by a company created by the defendants,” General Services Administration Inspector General Brian D. Miller said in a statement. “This is why we need ethics laws for federal contractors who can in effect steer taxpayer dollars to their own pockets.”

The conspiracy charge carries a statutory maximum penalty of 5 years in federal prison. Each wire fraud charge is punishable by up to 20 years in federal prison and each major fraud charge by up to 10 years.”

————————————————————–

Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Hospice Owner Charged in an Alleged Health Care Fraud and Embezzlement Scheme

October 13, 2011

The Federal Bureau of Investigation (FBI) on October 12, 2011 released the following:

“PHILADELPHIA— An indictment was unsealed today charging Matthew Kolodesh, a/k/a “Matvei Kolodech,” with conspiracy to defraud Medicare of more than $14 million through his home hospice business, announced United States Attorney Zane David Memeger. Kolodesh was arrested this morning. According to the indictment, Kolodesh’s business, Home Care Hospice, Inc. (“HCH”), located at 2801 Grant Avenue in Philadelphia, submitted claims totaling approximately $14.3 million for patients that were not eligible for or did not receive the hospice services billed to Medicare. Kolodesh also allegedly diverted $9.36 million dollars from HCH’s operating account for his own personal use, such as extensive renovations to his house, travel expenses, college tuition for his son, and a luxury automobile. This also included substantial sums of cash siphoned from the HCH operating account through kickbacks from HCH vendors using a system of phony and inflated invoicing, and a cash kickback scam through sham charitable donations made in the name of the hospice.

Kolodesh is charged with conspiracy to commit health care fraud, 21 counts of health care fraud, 11 counts of money laundering, and two counts of mail fraud.

The indictment alleges that Kolodesh and his co-conspirator, identified only as “A.P.,” would pay health care professionals, including doctors, for referring patients to HCH even when those patients were not eligible or appropriate for hospice services. In an effort to mask the alleged kickback scheme, HCH fraudulently represented that some of those health care professionals were paid for services as medical directors, advisors, or hospice physicians.

Among the ineligible patients, the indictment alleges, were patients who were not terminally ill and patients who were on the service list for more than six months. At the direction of Kolodesh and A.P., it is further alleged that HCH staff would routinely “doctor” or alter patient charts to make it appear on paper as though the patient’s medical condition was worse than it actually was. The staff was also allegedly directed to bill certain claims at a higher, more costly rate of service than was actually provided to the patient.

In February 2007, HCH was notified that it was subject to a claims review audit. According to the indictment Kolodesh, through A.P., directed members of HCH staff to falsify documentation to be submitted for the audit. In September 2007, HCH was notified that it had exceeded its cap for Medicare reimbursement and would have to repay $2,625,047 to the government program. At that point, it is alleged, Kolodesh ordered a mass discharge of patients and A.P. had 79 hospice patients discharged in October 2007 and a total of 128 discharged by January 2008, some of whom had been ineligible for hospice or inappropriately maintained on hospice service in excess of six months. Of those discharged patients, 16 were admitted to Kolodesh’s other hospice business, Community Home Health in Bucks County. Once the Medicare cap was resolved, it is alleged that 11 of those patients were returned to HCH.

The indictment further charges that in August and September 2005, Kolodesh and A.P. applied for a low interest loan worth $2.5 million with the Philadelphia Industrial Development Corporation. The purpose of PIDC loan is to stimulate business investment and create jobs in the city of Philadelphia. According to the indictment, Kolodesh indicated that the funds were to be used to acquire and renovate a property for his business and the creation of 50 jobs in Philadelphia at the 2801 Grant Avenue site of HCH. In reality, Kolodesh knew that between August 2005 and July 2009, the job quota was not being met, and in the summer of 2008 he allegedly set up a sham office for CHH (his Bucks County health care business) at that location and falsely identified 73 CHH employees as working at the office location on Grant Avenue who, in fact, had never worked there.

Information Regarding the Defendant

Name: Matthew Kolodesh
Address: Churchville, PA
Age: 49

If convicted of all charges, Kolodesh faces a statutory maximum sentence of 370 years in prison. The government will also seek restitution to Medicare in the amount of $14.3 million and proceeds from the money laundering.

The case was investigated by the Federal Bureau of Investigation and the Department of Health and Human Services Office of Inspector General. It is being prosecuted by Assistant United States Attorney Suzanne B. Ercole.

An indictment or information is an accusation. A defendant is presumed innocent unless and until proven guilty.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Minnetta Walker an Ex-TSA Officer Admits to Aiding Drug Suspects Through the Buffalo Niagara International Airport

August 29, 2011

The Buffalo News on August 26, 2011 released the following:

“By Dan Herbeck

Says she helped them get through security

A former federal security officer admitted Friday that she helped members of a local drug gang smuggle cash through the Buffalo Niagara International Airport.

Minnetta Walker, who was arrested in March after an 11-month investigation, admitted that she helped an alleged member of the drug ring use a fake name for traveling and helped him bypass security scanners at the airport.

The 43-year-old Buffalo woman also admitted that she once warned two of the man’s alleged drug associates that federal agents were tailing them in the airport.

The case raises disturbing questions:

  • Did Walker, an employee of the U.S. Transportation Security Administration, act alone?
  • Is her case an indication of serious security problems at the airport?
  • If Buffalo drug dealers can evade airport security to smuggle cash, could terrorists use the same methods to smuggle dangerous weapons or substances?

Federal officials said they could not provide specific answers to those questions Friday afternoon, but no other officials of the TSA or the airport are charged in the case, according to U.S. Attorney William J. Hochul Jr.

Hochul said he hopes the case will cause the TSA to take a close look at security at airports in Buffalo and other cities, to determine whether improvements need to be made.

“It is certainly of concern to the Department of Justice,” said Hochul, the region’s chief federal prosecutor. “I would certainly recommend that there be an ongoing review … There definitely needs to be a learning experience [for] all of us.”

The tactics Walker used are being closely examined to make sure others cannot repeat them, said George W. Gast, who oversees airport security as chief of the Niagara Frontier Transportation Authority Police.

Walker was arrested after an investigation by Buffalo agents of the FBI, NFTA Police, the Drug Enforcement Administration and U.S. Immigration & Customs Enforcement.

In a related case Thursday, a former employee of the Buffalo city clerk’s office pleaded guilty to a felony, admitting that she made up a false birth certificate that an alleged drug dealer, Derek Frank, used for interstate travel.

Regina McCullen, 53, a former customer assistant who was fired by the city in May, pleaded guilty to an identity fraud conspiracy charge.

The Buffalo News learned that at least one other person — an individual who is close to McCullen and works for an airline — is also expected to be charged criminally in the case.

Walker has not been charged with receiving payoffs or gratuities of any kind from the drug traffickers she helped, Hochul said. The prosecutor said he really doesn’t know at this point why Walker did it.

When District Judge Richard J. Arcara asked Walker why she helped the drug dealers, she had little information for him.

“I don’t know … I wasn’t thinking,” she said.

But her court-appointed attorney, James DeMatteo, said Walker told him she did have a reason, and it wasn’t money.

“She told me that Derek Frank is a close friend of her family, and that she did this for one reason — to help a friend,” DeMatteo said. “I know the government doesn’t believe her, but I don’t know of one piece of evidence they have that she got money from any of these guys. She certainly hasn’t been out buying expensive cars or jewelry.”

Walker is sorry for her actions, and after taking her plea, she “burst into tears” in a courthouse elevator and “was almost out of control,” DeMatteo said.

“She’s made a huge mistake. She’s lost an excellent job with a decent paycheck and excellent benefits,” DeMatteo said.

Before the TSA fired her after her arrest, Walker told a judge she made about $40,000 annually as a behavioral detection officer at the airport.

Her job was to walk around the airport, looking for suspicious individuals who might be planning some criminal activity. Instead, she admitted she spent at least some of her working hours accompanying drug suspects as they walked through security checkpoints without undergoing close examination of themselves or their carry-on luggage.

Because Walker was close by Frank’s side, other TSA workers let him slide through the checkpoints with a minimum of scrutiny, authorities said.

According to a TSA spokeswoman, Lisa Farbstein, it would be unfair for Walker’s actions to reflect on more than 47,000 TSA workers who work to ensure the safety of travelers.

TSA worked closely with federal prosecutors and agents on the probe, Farbstein said.

“The agency aggressively investigates all allegations of misconduct,” Farbstein said. She said the agency has a “zero tolerance” approach to illegal actions such as Walker’s.

While Walker is believed to be the first TSA worker to be criminally charged in Buffalo, the agency has had scandals in other cities.

In February, two TSA officers at Kennedy International Airport were charged with stealing $39,000 from a piece of luggage. A TSA supervisor in Newark, N.J., was charged last year with stealing thousands of dollars from foreign passengers, mostly people who could not speak English.

After an internal investigation in June, the TSA announced that it would seek the termination of 30 workers at the Honolulu International Airport in Hawaii. The probe focused on the improper screening of passenger baggage.

Speaking about the Buffalo probe on Friday, Hochul commended the work of the lead prosecutor on the case, Mary Catherine Baumgarten.

Under advisory sentencing guidelines, Walker faces a federal prison term in the probable range of 18 to 24 months. She pleaded guilty to conspiring to defraud the federal government.”

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

Bookmark and Share


111 Individuals Charged with Alleged Federal Health Care Crimes

February 24, 2011

Last week the Medicare Fraud Strike Force charged 111 individuals in nine cities, including doctors, nurses, health care company owners and executives, and others, for their alleged participation in Medicare fraud schemes involving more than $225 million in false billing. It was also announced the Medicare Fraud Strike Force will expand operations to two additional cities – Dallas and Chicago. The operation is the largest-ever federal health care fraud takedown.

The individuals are accused of various health care fraud-related crimes, including conspiracy to defraud the Medicare program, criminal false claims, violations of the anti-kickback statutes, money laundering and aggravated identity theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, physical and occupational therapy, nerve conduction tests and durable medical equipment.

Nine individuals were charged in Houston for alleged schemes involving $8 million in fraudulent Medicare claims for physical therapy, durable medical equipment, home health care and chiropractor services. In Dallas, seven individuals were indicted for allegedly conspiring to submit $2.8 million in false billing to Medicare related to durable medical equipment and home health care.

In Chicago, charges were filed against 11 individuals allegedly associated with businesses that have billed Medicare more than $6 million for home health, diagnostic testing and prescription drugs.

The remaining charges were filed in Miami, Detroit, Brooklyn, Tampa, Los Angeles and Baton Rouge.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Litigation, International Extradition and OFAC SDN Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

Bookmark and Share


NY State Senator and Son Indicted for Alleged Fraud Scheme

December 15, 2010

Yesterday a federal grand jury in Brooklyn returned an indictment charging Pedro Espada, Jr., a New York State Senator for the 33rd Senatorial District in the Bronx, New York, and his son, Pedro Gautier Espada, with five counts of embezzlement from a nonprofit health care network receiving federal funding, and one count of conspiracy. The individuals’ initial appearances are scheduled for today at 2:00 p.m. before United States Chief Magistrate Judge Steven M. Gold at the United States Courthouse in Brooklyn, New York.

As detailed in the indictment, from 2005 through 2009, the individuals allegedly abused their positions at Soundview Healthcare Center (Soundview), a network of health care clinics located in the Bronx, through a number of alleged schemes designed to divert Soundview funds to their personal use and for the benefit of favored family members and friends. The total amount allegedly embezzled exceeded $500,000.

Pedro Espada founded Soundview in 1978 as a charitable not-for-profit organization under Section 501(c)(3) of the Internal Revenue Code. Soundview receives more than $1 million per year in federal grant money from the United States Department of Health and Human Services, as well as millions of dollars more in Medicare and Medicaid reimbursements.

If convicted, the individuals face a maximum sentence of 10 years’ imprisonment on each of the embezzlement counts and five years’ imprisonment for conspiracy, as well as a fine of $250,000 on each count of conviction. Because Pedro Espada is a state senator, and therefore considered a public official, his sentence may be more severe than his son’s.

It is also important to keep in mind that an indictment merely contains allegations. When the government presents its case to the grand jury, legally they are not required to show any evidence or call any witnesses. Further, there is no opportunity for the accused individual(s) to present a defense. Unfortunately, the grand jury hears only one side of the story before granting an indictment.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

Bookmark and Share