Federal Grand Jury Returns a Federal Criminal Indictment Alleging Physician Michael Schuster Unlawfully Distributed Prescription Drugs

May 2, 2013

The Federal Bureau of Investigation (FBI) on May 1, 2013 released the following:

Grand Jury Returns Indictment Charging Manhattan Physician with Unlawfully Distributing Prescription Drugs

TOPEKA, KS— A grand jury has returned an indictment charging a physician in Manhattan, Kansas with unlawfully distributing prescription drugs, U.S. Attorney Barry Grissom said today.

Physician Michael Schuster, 53, who operates Manhattan Pain and Spine in Manhattan, Kansas, is charged with four counts: one count of conspiracy to illegally distribute controlled substances, one count of unlawful distribution of controlled substances, one count of unlawfully distributing controlled substances to a person under 21 years old and one count of maintaining a premises in furtherance of unlawful drug distribution.

The indictment alleges that Schuster employed unlicensed staff members who distributed controlled substances to patients using Schuster’s signature on prescriptions while he was traveling out of the state or out of the country. Schuster was out of the office when a total of 540 patients received prescriptions for medications including oxycodone, morphine, hydromorphone, methadone, oxymorphone, tapentadol, fentanyl, amphetamine, methylphenidate, hydrocodone, alprazolam, clonazepam, diazepam, and zolpidem.

Schuster initially was charged in a criminal complaint filed April 23, 2013, in U.S. District Court in Topeka. According to an investigator’s affidavit, the investigation began early in 2012 when the Riley County Police Department received reports that Schuster was issuing prescriptions for high dosages of scheduled drugs based on minimal or cursory physical examinations.

The indictment returned today states that controlled substances may be dispensed and distributed lawfully by means of a prescription that is issued for a legitimate medical purpose by a practitioner acting in the usual course of professional practice. The practitioner must be registered with the Drug Enforcement Administration. Signing a blank prescription and having unauthorized, unlicensed individuals who are not registered with the DEA distribute controlled substances is not a lawful prescription.

The indictment alleges Schuster routinely pre-signed blank prescription forms with the intent that his unlicensed staff members would use them to issue controlled substances to patients while he was not at the clinic.

Count two of the indictment alleges Schuster caused unlicensed staff using blank prescriptions to distribute controlled substances while he was out of the clinic at various locations including Russia, South Africa, Uruguay, Canada, New York, Chile, Argentina, Brazil, and Israel.

Count three alleges that on June 16, 2010, Schuster caused oxycodone to be distributed to a person under the age of 21, who is identified in the indictment as Rex V.

Count four alleges that from April 2007 to August 2012 Schuster knowingly maintained a premises, his office at 1135 Westport Drive in Manhattan, Kansas, for the purpose of unlawfully distributing controlled substances.

The indictment also seeks the forfeiture of all the proceeds from the crimes.

Upon conviction, the crimes carry the following penalties:

Conspiracy: A maximum penalty of 20 years in federal prison and a fine up to $1 million. If death or bodily injury results from the crime, the penalty is not less than 20 years.

Unlawful distribution of controlled substances: A maximum penalty of 20 years in federal prison and a fine up to $1 million. If death or bodily injury results from the crime, the penalty is not less than 20 years.

Unlawful distribution of controlled substances to a person under 21 years old: A maximum penalty of 20 years in federal prison and a fine up to $1 million. If death or bodily injury results from the crime, the penalty is not less than 20 years.

Maintaining drug involved premises: A maximum penalty of 20 years and a fine up to $500,000.

Investigating agencies include the Riley County Police Department; the Federal Bureau of Investigation; the Department of Defense, Criminal Investigative Service (DCIS); the Department of Health and Human Services, Office of Inspector General (HHS-OIG); the Drug Enforcement Administration (DEA); the Department of Homeland Security-Homeland Security Investigations (DHS-HSI); and the Diplomatic Security Service (DSS).

In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.”

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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

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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.


Plymouth Doctor Indicted on Charges Alleging Illegal Drug Distribution and Medicare Fraud

September 16, 2012

The Federal Bureau of Investigation (FBI) on September 14, 2012 released the following:

“An indictment was unsealed today charging Dr. Mikhayl Soliman, 59, of Plymouth, Michigan, with Medicare fraud and distribution of prescription drugs, United States Attorney Barbara L. McQuade announced today.

McQuade was joined in the announcement by the Special Agent in Charge Robert Corso, Drug Enforcement Administration, Detroit Division; Special Agent in Charge, Robert D. Foley, III, Federal Bureau of Investigation; Special Agent in Charge Lamont Pugh, Health and Human Services, Office of Inspector General; and Police Chief Jason Wright, City of Wayne, Michigan.

The 10-count indictment charges that between 2007 and 2012, Dr. Soliman billed Medicare for services not rendered and distributed controlled substances outside the course of usual medical practice and for no legitimate purpose. During that time frame, Dr. Soliman billed Medicare for approximately $4,155,565 in claims. The majority of the claims were for physician home visits that were purportedly provided when Dr. Soliman was not present in the home, as required by Medicare. Dr. Soliman is also charged with providing prescriptions for OxyContin, Vicodin, and other pharmaceutical narcotics in exchange for cash payments outside the course of usual medical practice and for no legitimate purpose.

“Medicare is intended to provide health care funds for our most vulnerable citizens,” U.S. Attorney McQuade said. “Doctors and other providers who steal taxpayer money by cheating the Medicare program will be prosecuted.”

Robert Corso, DEA Special Agent in Charge said, “Today’s arrest is another example of DEA’s determination to combat the troubling prescription drug abuse problem in this country. Dr. Soliman abused his position of trust and jeopardized the lives of many individuals by illegally distributing highly addictive opiate painkillers. Today’s arrest of Dr. Soliman makes it clear that the DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines.”

Robert D. Foley, III, FBI Special Agent in Charge said, “These charges represent a serious abuse of the health care system. Those motivated by greed who unlawfully take from a system designed to care for patients, will be tirelessly pursued by the FBI and prosecuted for their crimes.”

“Today’s arrest sends a clear message that the unlawful distribution of controlled substances and the fraudulent billing of Medicare will not be tolerated” said Lamont Pugh III, Special Agent in Charge of the Chicago Region for the U.S. Department of Health and Human Services, Office of Inspector General. “The OIG, working with our federal, state, and local partners, will continue to fight to protect the safety of patients and taxpayer dollars.”

Soliman was arrested today and appeared in federal court this afternoon for his arraignment.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

The case was investigated by special agents of the DEA, FBI, HHS-OIG, and the City of Wayne Police Department. The case is being prosecuted by Special Assistant U.S. Attorney Justin Bidwell.”

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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

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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.


Grand Jury Indicts 11 Allegedly Linked to an Inland Empire Loan Modification Scam That Targeted Financially Distressed Homeowners

September 13, 2012

The Federal Bureau of Investigation (FBI) on September 12, 2012 released the following:

“LOS ANGELES— Federal agents this morning arrested 10 defendants who worked at a Rancho Cucamonga-based business that allegedly offered bogus loan modification programs to financially distressed homeowners. As a result of the scheme allegedly run out of 21st Century Real Estate Investment Corp. and several related companies, more than 4,000 financially distressed homeowners lost at least $7 million in fees they paid to the company, and many homeowners lost their homes to foreclosure.

Those taken into custody this morning were among 11 defendants named in a federal indictment unsealed today following an investigation by the Federal Bureau of Investigation, IRS-Criminal Investigation, the United States Postal Inspection Service, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), and the Federal Housing Finance Agency, Office of Inspector General.

According to the indictment, during an 18-month period that began in June 2008, a Rancho Cucamonga woman, Andrea Ramirez, operated 21st Century and several other companies. According to the indictment, 21st Century “defrauded financially distressed homeowners by making false promises and guarantees regarding 21st Century’s ability to negotiate loan modifications from the homeowners’ mortgage lenders, falsely representing that 21st Century was operating a loan modification program sponsored by the United States government, instructing homeowners to cease communication with their mortgage lenders and to cease making their mortgage payments.”

“The housing crisis provided fraud artists a new avenue to exploit people in financial distress,” said United States Attorney André Birotte Jr. “Many of the victims in this alleged scheme were in desperate financial straits, and shameless financial predators promised relief they could not deliver. As a result, many homeowners went into foreclosure and now have to deal with the ramifications of losing their homes.”

Ramirez and the other 21st Century employees contacted distressed homeowners through cold calls, newspaper ads and mailings, and various 21st Century-controlled websites that advertised loan modification services. Once they contacted the distressed homeowners, according to the indictment, Ramirez and other 21st Century employees often falsely told clients that the company was operating through a federal government program, that they would be able to obtain new mortgages with specific interest rates and reduced payments, and that attorneys would negotiate loan modifications with their lenders. Ramirez and other 21st Century employees regularly instructed financially distressed homeowners to cease making mortgage payments to their lenders and to cut off all contact with their lenders because they were being represented by 21st Century. On some occasions, Ramirez and other 21st Century employees would tell homeowners that 21st Century was using the fees paid by the homeowner to make mortgage payments, when in fact Ramirez and 21st Century simply were keeping the homeowner’s money.

Christy Romero, Special Inspector General at SIGTARP, stated: “Ramirez and her co-conspirators are charged with fraudulently operating 21st Century to exploit the hardships of homeowners fighting to keep a roof over their head. As alleged, these con artists swindled distressed homeowners by lying about their affiliation with federal housing programs and giving money-back guarantees that the homeowners would get a lower mortgage payment if they paid an advance fee. SIGTARP and our law enforcement partners are committed to shutting down schemes that prey on those who can least afford it by falsely claiming an affiliation with TARP’s housing programs.”

Leslie P. DeMarco, Special Agent in Charge of the IRS-Criminal Investigation’s Los Angeles Field Office, said: “Using the guise of a federally sponsored loan modification program and the assurance of a qualified legal team, the defendants preyed on financially distressed homeowners allegedly depriving them of much needed money and property. Those who find ways to fraudulently benefit from government programs meant to help struggling homeowners keep their homes will be brought to justice.”

The 11 defendants named in the indictment are:

  • Andrea Ramirez, who also used the names Andrea Parker and Lisa Evans, 44, of Rancho Cucamonga;
  • Christopher Paul George, 42, Rancho Cucamonga, who surrendered this morning to authorities;
  • Michael Bruce Bates, who also used the names Michael Bruce Myers and Robert Allen Castro, 61, of Moreno Valley;
  • Crystal Taiwana Buck, 37, of Long Beach;
  • Michael Lewis Parker, 34, of Pomona, who is currently a fugitive being sought by federal authorities;
  • Catalina Deleon, 35, of Glendora;
  • Hamid Reza Shalviri, 50, Montebello, who self-surrendered this morning after being contacted by federal agents;
  • Yadira Garcia Padilla, 35, of Rancho Cucamonga;
  • Mindy Sue Holt, 53, of San Bernardino;
  • Iris Melissa Pelayo, 42, of Upland; and
  • Albert DiRoberto, 59, of Fullerton.

The defendants arrested this morning are expected to be arraigned this afternoon during their initial court appearances in United States District Court in Riverside.

“Fraudulent loan modification scams affect consumers at the most basic level, jeopardizing their ability to retain ownership of their homes,” said B. Bernard Ferguson, Inspector in Charge of the U.S. Postal Inspection Service-Los Angeles Division. “The U.S. Postal Inspection Service will investigate these crimes to protect consumers and when the nation’s mail system is used for illegal or dangerous use.”

Steve Linick, the Federal Housing Finance Agency Inspector General, stated: “The government created programs intended to assist homeowners by allowing them to remain in their homes during these troubling financial times. Anyone attempting to engage in schemes designed to exploit struggling homeowners and the government programs created to help those same homeowners will ultimately be brought to justice.”

All 11 defendants are charged with nine felony counts—five counts of mail fraud, three counts of wire fraud, and one count of conspiracy. Each count in the indictment carries a statutory maximum penalty of 20 years’ imprisonment.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

This prosecution is part of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 United States Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit http://www.stopfraud.gov.”

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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

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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.


Indictment Charges Alleged Dental Clinic Operator Involved in $20 Million Medicaid Fraud Scheme

June 12, 2012

The Federal Bureau of Investigation on June 11, 2012 released the following:

“David B. Fein, United States Attorney for the District of Connecticut, today announced that a federal grand jury in New Haven has returned a nine-count indictment charging Gary F. Anusavice, also known as “Gary Andrews,” “Gary Andrus,” and “Gary Francis,” 59, of North Kingstown, Rhode Island, with various offenses related to his involvement in a $20 million Medicaid fraud scheme. The indictment was returned on June 7, 2012. Anusavice has been detained since his arrest on May 24, 2012.

“By surreptitiously operating dental clinics in Connecticut, this defendant allegedly defrauded the Medicaid program of more than $20 million over a two-year period,” said U.S. Attorney Fein. “We are committed to protecting American taxpayers from health care fraud, which can increase costs and jeopardize the integrity of our health care system. I want to commend HHS-OIG, IRS-Criminal Investigation, and the FBI for their investigative efforts and thank the Connecticut Attorney General’s Office, which provided invaluable assistance during the course of this investigation.”

According to the indictment, the Medicaid program is a joint federal-state program that provides funds for medical services to lower-income individuals who qualify for benefits. The program is jointly administered by the U.S. Department of Health and Human Services and supervised by the Centers for Medicare and Medicaid Services. In Connecticut, the Medicaid program is administered by the State of Connecticut Department of Social Services (DSS).

The indictment alleges that Anusavice was previously a registered dentist in Massachusetts and Rhode Island. In July 1997, Anusavice sustained a felony conviction in Massachusetts for submitting false health care claims and was subject to disciplinary proceedings in both Massachusetts and Rhode Island. Based on Anusavice’s Massachusetts disciplinary proceedings, the U.S. Department of Health and Human Services notified Anusavice in April 1998 that he was being excluded from participation in Medicare and state health care programs, including Medicaid. As part of that notice, Anusavice was informed that, as an excluded individual, he may not “submit claims or cause claims to be submitted” for payment from the federal Medicaid program. Further, Anusavice was advised that Medicaid reimbursement payments are prohibited to any entity in which he serves as an “employee, administrator, operator, or in any other capacity.”

In November 2005, Anusavice surrendered his right to practice dentistry in Rhode Island for 18 months, and the Massachusetts Board of Registration in Dentistry permanently revoked Anusavice’s license to practice dentistry in Massachusetts in 2006.

The indictment alleges that, from 2009 to April 2011, Anusavice owned and operated several dental clinics in Connecticut but used a licensed dentist, who is referred to in the indictment as “Co-Conspirator 1,” to act as the nominal head of the dental clinics. The clinics included Landmark Dental in West Haven, Dental Group of Connecticut in Trumbull, and Dental Group of Stamford. After Co-Conspirator 1 provided false Medicaid Provider Enrollment Applications to DSS, which failed to disclose Anusavice’s ownership or control interest in the dental clinics and Anusavice’s disciplinary history, the dental practices received nearly $21 million in Medicaid reimbursements from the Connecticut Medicaid program, which payments were prohibited given Anusavice’s exclusion from the Medicaid program. Anusavice, in turn, received more than $3 million in payments from the clinics through nominee entities that he controlled.

As alleged in a previously filed criminal complaint, at the dental clinics, Anusavice was involved in reviewing patient charts, suggesting dental procedures to be performed, reviewing billing records, reviewing income reports, interviewing and hiring dentists, and providing overall management direction to the offices.

The indictment charges Anusavice with conspiring with others to fraudulently obtain money from the Connecticut Medicaid program by submitting Medicaid claims and concealing and misrepresenting Anusavice’s prior disciplinary and criminal history, his ownership interest in the dental clinics, and his exclusion from the Medicaid program. This charge carries a maximum term of imprisonment of five years.

The indictment also charges Anusavice with one count of health care fraud, which carries a maximum term of imprisonment of 10 years, and two counts of wire fraud, which carry a maximum term of imprisonment of 20 years, on each count. Anusavice also is charged with four counts of making false statements involving the Medicaid Program, and one count of concealment and failure to disclose an event affecting the Medicaid Program. Each of these charges carries a maximum term of imprisonment of five years.

The indictment also seeks the forfeiture of Anusavice’s Rhode Island home, his 2008 Mercedes automobile, and $91,700 in cash that was seized at the time of his arrest.

U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

This matter is being investigated by the U.S. Department of Health and Human Services, Office of Inspector General; the Internal Revenue Service-Criminal Investigation; and the Federal Bureau of Investigation. The Connecticut Attorney General’s Office provided assistance and cooperation throughout the investigation.

This case is being prosecuted by Assistant United States Attorneys Susan Wines and Richard Molot and Special Assistant United States Attorney Sean Beaty. U.S. Attorney Fein encouraged individuals who suspect health care fraud to report it by calling the Health Care Fraud Task Force at 203-777-6311 or 1-800-HHS-TIPS.”

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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.


Southern District of Florida Securities and Investment Fraud Initiative Results in Charges Against 15 Individuals in 12 Separate Cases

June 5, 2012

The Federal Bureau of Investigation (FBI) on June 4, 2012 released the following:

“To Date, 85 Defendants Have Been Charged as Part of the Initiative

Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Eric I. Bustillo, Regional Director, Securities and Exchange Commission (SEC), Southeast Region; and Linda Charity, Interim Commissioner, State of Florida’s Office of Financial Regulation (OFR), announced the most recent results of the Southern District of Florida Securities and Investment Fraud Initiative (the Initiative), first announced in December 2010 and designed to combat securities and investment fraud and protect the interests of the investing public.

The Initiative was established to address the increase in securities and investment fraud schemes in the Southern District of Florida. In addition to the U.S. Attorney’s Office, FBI, SEC, and OFR, other participating agencies in the Initiative include the Internal Revenue Service, Criminal Investigation Division (IRS-CID), U.S. Secret Service (USSS), U.S. Postal Inspection Service, Federal Deposit Insurance Corporation, Office of Inspector General (FDIC-OIG), U.S. Commodity Futures Trading Commission (CFTC), and the Federal Trade Commission (FTC) Southeast Region. These law enforcement and regulatory agencies have shared intelligence and combined their resources to combat securities and investment fraud, including Ponzi schemes, affinity fraud schemes, prime bank/high-yield investment scams, business opportunity fraud, promoter/micro-cap/“pump and dump” schemes, foreign exchange (FOREX) frauds, false bankruptcy petitions, and other schemes to defraud individual investors. Among the goals of the Initiative are to alert the public about the prevalence of these types of schemes, to educate the public on how to avoid falling prey to these schemes, and to highlight the law enforcement response to the problem.

The Southern District of Florida ranks second in the nation in securities and investment fraud investigations and prosecutions. Using the strike force model successfully developed in the health care and mortgage fraud areas, the Securities and Investment Fraud Initiative has yielded similar success. Since its inception in December 2010, the Initiative has resulted in charges against 85 defendants in the Southern District of Florida, resulting in more than $1.5 billion in restitution ordered. Today, we are announcing charges against 15 individuals in 12 separate cases.

U.S. Attorney Wifredo A. Ferrer stated, “Our primary goal in creating the Securities and Investment Fraud Initiative was to protect investors from fraud and to restore the integrity of the securities market. Too often, we hear from victims who have lost their entire lives’ savings or their retirement nest egg to one of these unscrupulous schemers. Today, we hope to educate the public about the need to be alert and to verify before trusting and investing. If something sounds too good to be true, it usually is.”

“The fraud from these stock market manipulation schemes could have defrauded numerous innocent investors out of millions of dollars. Because the FBI and our partners were able to disrupt these schemes early on through our undercover operations, the investing public was protected,” said John V. Gillies, Special Agent in Charge of the FBI’s Miami Field Office. “The law enforcement efforts announced today also serve to send a message that the FBI and its partners will continue to target those who would chip away at the trust and confidence in the securities markets.”

Eric I. Bustillo, Director of the SEC’s Miami Regional Office, said, “This Initiative is a testament to our allegiance to investors and our commitment to prosecute those who seek to defraud them. When we say we’re determined to stamp out microcap fraud, that’s not a slogan. That’s a pledge.”

“I commend the hard work of investigators from the Florida Office of Financial Regulation, as well as other state and federal regulatory and law enforcement agencies,” said Linda Charity, Interim OFR Commissioner. “These partnerships are essential to effectively combat securities fraud and help protect Florida’s investors.”

Below is a summary of the cases being announced today. These cases involve a variety of frauds, including fraudulent Federal Reserve notes, illegal kickback schemes, market manipulation schemes, and more traditional Ponzi schemes.

Fraudulent Federal Reserve Notes:

U.S. vs. Cleland Ayison, 12-80056-CR-DIMITROULEAS

Ayison, 32, of Tampa, was arrested today on charges of possessing a fraudulent $500,000,000 Federal Reserve Note.

Illegal Kickback Schemes:

U.S. vs. Michael Cimino and Joseph Repko, 12-2733-MJ-GARBER

Cimino, 59, of Philadelphia, Pennsylvania, the director and chairman of the board for Sure Trace Security Corporation (SSTY), and Repko, 63, of Hobe Sound, Florida, SSTY’s chief financial officer and president, were arrested today on a criminal complaint charging them with conspiring to commit mail fraud by paying kickbacks to a pension fund fiduciary to induce the fiduciary to misappropriate money from a pension fund in order to buy restricted common stock at inflated prices. SSTY, a Utah corporation, was purportedly involved in the anti-counterfeiting technology business.

U.S. vs. Ryan Coblin, 11-80159-CR-RYSKAMP

Coblin, 41, of Boca Raton, was the president of Delivery Technology Solutions Inc., a domestic and international delivery company catering to corporations. Coblin was charged by information in September 2011 and pled guilty on March 8, 2012 to engaging in a scheme to pay kickbacks to a hedge fund fiduciary to induce the fiduciary to misappropriate money from a hedge fund in order to buy restricted common stock at inflated prices. Sentencing is scheduled for July 13, 2012.

Market Manipulation Schemes:

U.S. vs. Kevin Brennan, Donald Huggins, and Marc Seaver Page, 12-60064-CR-COHN

Today, charges were unsealed against defendants Brennan, 60, of Pittsburgh, Pennsylvania, the CEO of Optimized Transportation Management Inc. (OPTZ), a Delaware freight transportation company; Huggins, 64 of St. Petersburg, Florida, an investor in OPTZ; and Marc Seaver Page, 50, of Tiburon, California. The defendants are charged with engaging in a scheme to manipulate the publicly quoted share price and trading volume of OPTZ common stock.

U.S. vs. Douglas Hague, 12-60124-CR-WILLIAMS

Hague, 65, of Boca Raton, was the President of Clean Coal Technologies Inc., a corporation that purportedly converted low-grade coal to high-grade clean-burning coal. He was charged by information on June 1, 2012 with engaging in a scheme to pay kickbacks to a pension fund fiduciary to induce the fiduciary to misappropriate money from a pension fund in order to buy restricted common stock at inflated prices.

U.S. vs. Harold Steven Bonenberger, 12-60125-CR-COHN

Bonenberger, 56, of Carlsbad, California, was CEO of Angel Acquisition Corp. (AGEL), a Nevada corporation that purportedly managed assets. Bonenberger was charged by information on June 1, 2012 with engaging in a scheme to manipulate the publicly quoted share price and trading volume of AGEL common stock.

U.S. vs. Robert Cotton, 12-60126-CR-DIMITROULEAS

Cotton, 61 of Houston, Texas, was the President of Cotton and Western Mining Inc. (CWRN), a Nevada corporation that purportedly exported and mined iron minerals. Cotton was charged by information on June 1, 2012 with engaging in a scheme to manipulate the publicly quoted share price and trading volume of CWRN common stock.

U.S. vs. Matthew A. Connor, 12-2732-MJ-GARBER

Connor, 36, of Amherst, Virginia, a shareholder of and consultant for KCM Holdings Corporation (KCMH) was arrested today on a criminal complaint charging him with engaging in a scheme to manipulate the publicly quoted share price and trading volume of KCMH stock, in violation of the wire fraud statute. KCMH was purportedly in the business of providing strategic consulting services to clients.

U.S. vs. Scott Haire, 12-2734-MJ-GARBER

Haire, 42, of Coral Springs, President of Wound Management Technologies Inc. (WNDM), a Texas corporation that purportedly developed advanced wound care products. Haire was charged by criminal complaint with engaging in a scheme to manipulate the publicly quoted share price and trading volume of WNDM common stock. Haire is expected to surrender on June 6, 2012.

Ponzi Schemes:

U.S. vs. Juan Carlos Rodriguez, 12-20148-CR-DIMITROULEAS

Rodriguez, 49, of Miami, was indicted on March 6, 2012 for committing wire fraud in the execution of a Ponzi scheme. According to the indictment, Rodriguez was the sole officer and director of MDN Financial Group Inc., a Miami company that solicited approximately $5.2 million from investors with promises that the company would invest in stocks, bonds, and precious metals. Rodriguez would recruit colleagues and friends to invest in MDN Financial, promising them 20, 30, 40, and even 50 percent returns. In fact, Rodriguez did not invest the money he was given by investors. Instead, he used more than $1 million of the money to pay for personal expenses like credit card bills. A calendar call is scheduled for July 20, 2012.

U.S. vs. George Elia, 12-60077-CR-WILLIAMS

Elia, 68, formerly of Fort Lauderdale, is scheduled to be arraigned on June 6, 2012 on charges of operating a Ponzi scheme in which he recruited investors by making false claims about the potential returns on investments. Elia was the president of International Consultants & Investment Group LC., a corporation based in Broward County.

U.S. vs. Aner Menendez, 12-20389-CR-SCOLA

Menendez was arrested today on charges of mail and wire fraud. Menendez was the sole member and manager of De Forcade and recruited investors by claiming he was a skilled foreign currencies trader. Through a series of misrepresentations, he exploited social relationships to convince his victims to invest their savings with him. After receiving their money, Menendez made no investments for victims, instead spending their savings on himself and others.

In addition to the 12 criminal cases announced above, the SEC has filed nine separate civil injunctive actions against 12 individuals and eight microcap companies, charging them with violations of the antifraud provisions of the federal securities laws and seeking, among other relief, permanent injunctions, disgorgement, and financial penalties. These defendants, including several CEOs and their companies and three penny stock promoters, are charged with securities fraud for their roles in various illicit kickback and market manipulation schemes.

Regarding the continued results of the Initiative, other members stated as follows:

IRS Special Agent in Charge José A. Gonzalez stated, “IRS-Criminal Investigation Division is pleased to lend our forensic financial expertise to uncover financial wrongdoings by those who commit investment fraud. Make no mistake, whether on Wall Street or Main Street, swindlers will be thoroughly investigated and swiftly brought to justice.”

U.S. Postal Inspector in Charge Henry Gutierrez stated, “The U.S. Postal Inspection Service is committed to working with its law enforcement partners to stop investment fraud. We are particularly focused on fraud committed against often-targeted pension funds, in which victims have deposited their hard-earned money.”

Cindy Liebes, Director of the Federal Trade Commission Southeast Region, stated, “The Federal Trade Commission is also working to stop investment fraud and has filed several actions. Most recently, the FTC has sued Sterling Precious Metals LLC, Matthew Meyer, Francis Ryan Zofay, and Kerry Marshall for operating an investment scheme that allegedly took in almost $10 million by targeting elderly consumers and conning them into buying precious metals on credit without clearly disclosing significant costs and risks. In March, the FTC brought a similar action against Anthony J. Columbo, Premier Precious Metals Inc., Rushmore Consulting Group Inc., and PPM Credit Inc.”

Other Recent Cases Resulting from the Initiative

In addition to the cases announced above, the Initiative boasts a number of other recent cases, a few of which are highlighted below:

U.S. vs. Anthony Zito, 12-20030-CR-WILLIAMS

Zito, 64, of Naples, Florida, was charged in connection with a $7.5 million investment scheme. Zito owned and operated a firm named Gladius Investments (Gladius). Zito founded Gladius in 2004 and acted as the company’s officer, director, and president. Gladius purported to invest in silver on the commodities market on behalf of investors who entrusted Gladius with their money. On June 8, 2010, for example, Gladius’ internal database showed that the company had approximately 130 investors, that Gladius had invested in 1,271,500 ounces of silver on behalf of its investors, and that the total value of that silver was $19,708,250. In fact, however, Gladius’ actual trading account statement showed that Gladius had no more than 50,000 ounces of silver investments that month and that the total value of the trading account was about $672,000. The investors in Gladius lost approximately $7.5 million as a result of Zito’s fraud. On March 30, 2012, Zito was sentenced to five years in prison for conspiring to commit wire fraud in connection with the fraudulent investment scheme. In addition, Zito was ordered to pay $7.5 million in restitution to the victims of his crime. The court also ordered the forfeiture of half the value of Zito’s house, as well as his cars and bank accounts.

U.S. vs. Douglas Newton, 11-60150-CR-COOKE

On May 9, 2012, Newton was convicted after trial of two counts of mail fraud, four counts of securities fraud, and one count of conspiring to commit securities fraud. Sentencing is scheduled for August 29, 2012. According to evidence presented during the trial, Newton operated Billy Martin’s USA, a retail company that was delinquent with its lease payments at the Trump Plaza in New York City. In need of funding, Newton turned to a cooperating defendant who arranged a meeting with an undercover FBI agent. Newton attended a meeting in Broward County, Florida, where he agreed on video to bribe a pension fund manager to invest the pension fund investors’ money in Real American Brands. In addition, to hide the illegal bribes, the defendant entered into a fraudulent consulting agreement and sent fictitious e-mails to the undercover FBI agent. Newton also claimed in the recorded meetings to have business relationships with Jeffrey Sebelia, the winner of the “Project Runway TV” contest, and country singer Carrie Underwood. In total, Newton paid $12,000 in bribes to the purported pension fund and received a total of $40,000 from the fund. The defendant used the money to pay for his golf club, home owner fees, and his utilities.

U.S. vs. Yan Skwara, 11-60294-CR-WILLIAMS

Skwara, 47, of San Diego, California, was the president of U.S. Farms, Inc., a Nevada corporation that promoted wellness-based products. Skwara pled guilty on April 20, 2012 to engaging in a scheme to pay kickbacks to a pension fund fiduciary to induce the fiduciary to misappropriate money from a pension fund in order to buy restricted common stock at inflated prices. Sentencing is scheduled for July 3, 2012.

U.S. vs. Gaston E. Cantens, 12-20005-CR-WILLIAMS

On April 4, 2012, Gaston E. Cantens, 73, of Miami, was sentenced to five years in prison for conspiring to commit mail and wire fraud in connection with a fraud committed at Royal West Properties Inc. (Royal West). According to documents filed with the court and statements made during the sentencing hearing, Cantens was the president of Royal West Properties Inc. and recruited individuals to invest in Royal West by promising investors a fixed rate of return and that their investments would be guaranteed by properties or mortgages that acted as collateral. Cantens used his extensive ties to the South Florida community, including his ties to Belen Jesuit Preparatory School, to recruit investors to the fraud. Cantens told investors that their money were collateralized by individual properties but failed to inform them that the collateralized properties had previously been assigned to other investors. Cantens received moneys from investors based on these misrepresentations, and used the moneys for his personal benefit and to further the fraud scheme.

An indictment or information is merely an accusation and defendants are presumed innocent until proven guilty.”

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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.


Fifty-Nine South Florida Residents Charged as Part of Nationwide Coordinated Takedown by Medicare Fraud Strike Force Operations

May 3, 2012

The Federal Bureau of Investigation (FBI) on May 2, 2012 released the following:

107 Individuals Charged Nationally for Submitting Approximately $452 Million in Fraudulent Billing; South Florida Responsible for more than $137 Million in False Billings

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida; John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; Christopher B. Dennis, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); and Henry Gutierrez, Postal Inspector in Charge, U.S. Postal Inspection Service, Miami Division, announced that 59 South Florida residents were charged for their alleged participation in various schemes to defraud Medicare out of more than $137 million. The charges in South Florida are part of a nationwide takedown by Medicare Fraud Strike Force operations in seven cities that resulted in charges against 107 individuals, including doctors, nurses and other licensed professionals, for their alleged participation in Medicare fraud schemes involving approximately $452 million in false billing. This coordinated takedown involved the highest amount of false Medicare billings in a single takedown in strike force history.

The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state, and local investigators designed to combat Medicare fraud. Approximately 400 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies participated in the national takedown.

U.S. Attorney Wifredo A. Ferrer stated, “The Medicare program is a valuable and limited trust fund to provide much needed services for the poor, the elderly and the sick. Among the dozens of fraudsters charged in South Florida in this operation are clinic owners, nurses, therapists, patient recruiters, pharmacy owners, accountants, former social workers, and even beneficiaries, all of whom stole precious health care dollars through a variety of schemes. These get rich quick schemes at the expense of the most vulnerable in our society are unacceptable. We will continue to fight health care fraud on all fronts: we will prosecute each link in the fraud chain and each evolving fraud scheme.”

“The results we are announcing today are at the heart of an administration-wide commitment to protecting American taxpayers from health care fraud, which can drive up costs and threaten the strength and integrity of our health care system,” said Attorney General Eric Holder. “We are determined to bring to justice those who violate our laws and defraud the Medicare program for personal gain. As today’s takedown reflects, our ongoing fight against health care fraud has never been more coordinated and effective.”

“More than half of those charged in a record setting health care fraud takedown today were from the Miami area. The local fraud totaled more than $137 million. Sadly, in Miami, multi-million-dollar health care fraud cases are no longer shocking in their magnitude or frequency,” said John V. Gillies, Special Agent in Charge of the FBI’s Miami Office. “Here’s my message clear and simple: you can run, but as evidenced by today’s nationwide takedown, you can’t hide.”

“Medicare fraud diverts precious resources from those who are eligible and need it most,” said Christopher B. Dennis, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s region covering Florida. “Today’s action should send a strong message that we will continue to track the evidence to ensure that those involved are held accountable.”

U.S. Postal Inspector in Charge Henry Gutierrez stated, “Medicare fraud is an assault on resources for our most needy and vulnerable citizens. This joint effort by the South Florida law enforcement community demonstrates that those who engage in these illegal schemes will be prosecuted to the full extent of the law.”

The South Florida defendants are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, health care fraud, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, mental health services, and physical and occupational therapy. According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and oftentimes never provided. In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could submit fraudulent billing to Medicare for services that were medically unnecessary or never provided.

Specifically, the South Florida cases announced as part of the nationwide Medicare Fraud Strike Force takedown include:

U.S. v. Odalys Fernandez, Kelvin Soto, Yumidia Naranjo, Jose Guerra, Yanuris Lima, and Servando Raya, Case No. 12-20230-CR-Ungaro

In this six-defendant case, two registered nurses employed by Ideal Home Health (Odalys Fernandez and Kelvin Soto) are charged with conspiracy to commit health care fraud for purportedly providing services, such as skilled nursing and physical therapy, to homebound beneficiaries. In fact, however, the services were either medically unnecessary or were never provided. As part of the scheme, the defendants falsified medical paperwork to make it appear as if they had provided the services. Four other defendants (Yumidia Naranjo, Jose Guerra, Yanuris Lima, and Servando Raya) are alleged to be patient recruiters who paid Medicare beneficiaries so they would serve as patients at Ideal Home Health. Ideal, in turn, submitted more than $40 million in false billings to Medicare. This case is being prosecuted by Assistant U.S. Attorney Daniel Bernstein.

U.S. v. Eulises Escalona, Case No. 12-20293-CR-Lenard

This indictment charges Eulises Escalona with one count of conspiracy to commit health care fraud, one count of conspiracy to defraud the United States and to receive and pay health care kickbacks, and five counts of payment of health care kickbacks stemming from a $42 million home health care fraud scheme. According to the indictment, Escalona owned and operated Willsand Home Health, Inc. (Willsand), a home health agency that purportedly provided home health and physical therapy services to eligible Medicare beneficiaries. In fact, however, from January 2006 through November 2009, Escalona and others paid kickbacks to Medicare beneficiaries to induce them to become patients at Willsand regardless of medical need and to falsely attest that they had received the purported services. In addition, Escalona and others paid kickbacks to patient recruiters and to doctors who signed fraudulent prescriptions and plans of care (POCs) for unnecessary home health services for patients at Willsand. To execute the scheme, Escalona and others falsified patient files and POCs to make it appear as if the patients had qualified for and actually received home health services. In this way, Willsand allegedly submitted approximately $42 million in false claims to Medicare for services it claimed to have provided to approximately 622 beneficiaries. This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.

U.S. v. Rodolfo Nieto, Jr., Case No. 12-20290-CR-Altonaga

This indictment charges Rodolfo Nieto, Jr., owner and operator of Ronat Home Health Care, Inc. (Ronat), with one count of conspiracy to defraud the United States and to receive and pay health care kickbacks and three counts of receipt of kickbacks for his participation in a $60 million home health care fraud scheme. According to the indictment, from January 2006 through November 2009, Nieto accepted kickbacks in return for recruiting Medicare beneficiaries for placement at Nany Home Health, Inc. (Nany). Nieto allegedly caused Nany to submit claims to Medicare for home health services, including insulin injections and physical therapy, purportedly provided through Ronat. According to the indictment, Nany submitted approximately $60 million in false claims to the Medicare program for services that it purportedly provided to approximately 1474 beneficiaries. This case is being prosecuted by Trial Attorney Joseph S. Beemsterboer of the Criminal Division’s Fraud Section.

U.S. v. Maggie Leon, Yuderkis Pena Garcia and Eduardo Vilau, Case No. 12-20274-CR-Seitz

In this case, defendants Maggie Leon, Yuderkis Pena Garcia, and Eduardo Vilau, owners of Leon Medical and Leah Medical, were charged with conspiracy to commit health care fraud and health care fraud for submitting false claims to private insurance companies that were Medicare Advantage contractors under Part C of the Medicare program. As alleged in the indictment, the defendants submitted approximately $1,826,000 in false claims for expensive cancer and HIV injections that were not medically necessary and were not actually provided to the Medicare beneficiaries. In addition, the indictment alleges that the defendants conspired to pay kickbacks to Medicare beneficiaries so that they would serve as patients at Leah and Leon. This case is being prosecuted by Assistant U.S. Attorney Christopher J. Clark.

U.S. v. Ricardo Martinez, Case No. 12-20316-CR-Martinez

This indictment charges defendant Ricardo Martinez with health care fraud and paying kickbacks to patients. The indictment alleges that the defendant paid kickbacks and bribes to beneficiaries so that they would serve as patients at Rima Medical. The indictment further alleges that Martinez, through Rima Medical, submitted approximately $1,706,701 in false claims for expensive cancer and HIV injections to private insurance companies that were Medicare Advantage contractors under Part C of the Medicare program. This case is being prosecuted by Assistant U.S. Attorney Christopher J. Clark.

U.S. v. Yaquelin Colls, Pedro Colls, and Jesus Fernandez, Case No. 12-20315-CR-Seitz

This indictment charges defendants Yaquelin Colls, Pedro Colls, and Jesus Fernandez with conspiracy to commit health care fraud, substantive health care fraud, conspiracy to pay health care kickbacks, and substantive charges of paying kickbacks. More specifically, the indictment alleges that the defendants owned and operated Ma Medical and Therapy Services, Inc. (Ma Medical), and caused the submission of $972,068 in false medical claims for expensive cancer and HIV injections to a private insurance company that was a Medicare Advantage provider under Part C of the Medicare program. In a similar scheme, the defendants submitted $55,642 in false claims to another private insurance company under Part C of the Medicare program through a second clinic, Healthy Touch Rehab Center Inc. (Healthy Touch), which they also owned and operated at the same address as Ma Medical. The indictment further alleges that the defendants conspired to pay kickbacks and bribes to beneficiaries so that they would serve as patients at Ma Medical and Healthy Touch. This case is being prosecuted by Assistant U.S. Attorney Christopher J. Clark.

U.S. v. Roberto L. Valdes Gonzalez, Francisca Gema Valdez, Gilberto Faure, and Alberto Sotolongo, Case No. 12-20275-CR-Moore

In this case, defendants Jose L. Valdes Gonzalez, a/k/a “Roberto Gonzalez,” Alberto Sotolongo, a/k/a “Ruben,” Gilberto Faure, and Francisca Gema Valdes were charged with conspiracy to commit health care fraud and substantive counts of health care fraud in connection with the operation of Ilva Pharmacy, Inc. More specifically, the indictment alleges that between 2009 and 2011, the defendants caused Ilva Pharmacy to submit approximately $1.3 million in false claims for prescription drugs that were not provided to Medicare and private insurance companies that were Medicare Advantage contractors under Part D of the Medicare program. The indictment additionally charges Gonzalez and Sotolongo with offering and paying kickbacks to Medicare beneficiaries to induce them to serve as patients at Ilva Pharmacy. This case is being prosecuted by Assistant U.S. Attorney John Couriel.

U.S. v. Alina De Armas, Case No. 12-20282-CR-Zloch

In this case, defendant Alina De Armas is charged with health care fraud and with paying kickbacks to patients. The information alleges that De Armas offered and paid kickbacks to Medicare beneficiaries to induce them to serve as patients at Ultratech Medical Supplies, Inc., d/b/a Guines Pharmacy. In this way, from 2007 through 2011, De Armas caused the submission through Guines Pharmacy of approximately $3.6 million in false claims for prescription drugs to Medicare and private insurance companies that were Medicare Advantage contractors under Part D of the Medicare program. This case is being prosecuted by Assistant U.S. Attorney John Couriel.

U.S. v. Isaura Bou-Melendez and Gricel Font, Case No. 12-20113-CR-MGC

In this case, Isaura Bou-Melendez and Gricel Font are charged with conspiracy to commit health care fraud. Bou and Font, licensed therapists, owned and operated a comprehensive outpatient rehabilitation facility, Font & Bou Rehab Associates, Inc. The information alleges that from January 2006 through February 2010, Font and Bou allegedly submitted approximately $6.9 million in false claims to Medicare for physical and occupational therapy services that were not medically necessary or not provided as claimed. This case is being prosecuted by Assistant U.S. Attorney Jon Juenger.

U.S. v. Maritza Claudia Fernanda Lorza Ramirez, and James Arley Velasco Gonzalez, Case No. 12-60090-CR-KMW

This indictment charges defendants Maritza Lorza Ramirez and James Velasco Gonzalez with conspiracy to commit money laundering and substantive counts of money laundering. More specifically, the indictment alleges that between January 2006 and December 2010, Lorza and Velasco laundered approximately $3 million in health care fraud proceeds for several companies using their own corporations, including Celebration Home Services, Inc., 4 All Your Needs, Inc., VPP Staffing, Inc, and Work Force Innovations, Inc. This case is being prosecuted by Assistant U.S. Attorney Jon Juenger.

U.S. v. Orlando Conrado Piedra Jr., Case No. 12-60091-CR-KMW

This indictment charges Orlando Piedra, an accountant, with conspiracy to commit money laundering and substantive counts of money laundering. More specifically, the indictment alleges that between June 2007 and September 2009, Piedra laundered approximately $500,000 in health care fraud proceeds for several companies through his own company, Media Health Consultants, Inc. This case is being prosecuted by Assistant U.S. Attorney Jon Juenger.

U.S. v. Armando “Manny” Gonzalez, John Thoen, Wondera Eason, Paul Thomas Layman, Alexandra Haynes, Serena Joslin, Ivon Perez, Daniel Martinez, Raymond Rivero, Case No. 12-20291-CR-Altonaga

Armando “Manny” Gonzalez, John Thoen, Wondera Eason, Paul Thomas Layman, Alexandra Haynes, and Serena Joslin are charged with one count of conspiracy to commit health care fraud through a company called Health Care Solutions Network (HCSN). Additionally, defendants Gonzalez, Daniel Martinez, Raymond Rivero, and Ivon Perez are charged with conspiracy to receive and pay health care kickbacks; defendants Martinez, Rivero, and Perez are charged with substantive counts of soliciting and receiving health care kickbacks; defendants Gonzalez and Thoen are charged with one count of conspiracy to commit money laundering; and defendant Gonzalez is charged with substantive counts of money laundering. More specifically, the indictment alleges that between November 2004 and March 2011, Gonzalez, Thoen, Eason, Layman, Haynes, and Joslin conspired to submit approximately $63 million in false claims to Medicare and Medicaid for mental health services that were neither necessary nor provided. The indictment also alleges that Gonzalez conspired with owners of Assisted Living Facilities (ALFs), including Martinez, Rivero, and Perez to pay and receive health care kickbacks in exchange for referring Medicare beneficiaries to HCSN. This case is being prosecuted by Trial Attorney Steven Kim of the Criminal Division’s Fraud Section.

U.S. v. Sarah Da Silva Keller, Case No. 12-20289-CR-Cooke

Sarah Da Silva Keller is charged with one count of conspiracy to commit health care fraud. More specifically, the criminal information alleges that between April 2006 and February 2008, Keller conspired with others at HCSN to submit false claims to Medicare for mental health services that were neither medically necessary nor provided. The information further alleges that HCSN submitted approximately $63 million in false claims to Medicare. This case is being prosecuted by Trial Attorney Steven Kim of the Criminal Division’s Fraud Section.

U.S. v. Alba Serrano, Case No. 12-20285-CR-Seitz

Alba Serrano is charged with one count of conspiracy to commit health care fraud. The criminal information alleges that Serrano, the owner of Elsa’s House of the Elderly, a Miami-Dade ALF, referred residents from her ALF to American Therapeutic Corporation (ATC) in exchange for kickbacks. ATC was a Community Mental Health Center (CMHC) that submitted false claims for intensive mental health services, called Partial Hospitalization Program, based on Serrano’s Medicare beneficiary referrals. This case is being prosecuted by Trial Attorney Steven Kim of the Criminal Division’s Fraud Section.

U.S. v. Bobby Ramnarine, Case No. 12-20288-CR-Middlebrooks

Bobby Ramnarine is charged with one count of conspiracy to commit health care fraud. The criminal information alleges that Ramnarine, the owner of Elmina’s ALF, in Broward County, recruited residents from Elmina’s to become patients at ATC in exchange for kickbacks. ATC submitted false claims for PHP services based on Ramnarine’s Medicare beneficiary referrals. This case is being prosecuted by Trial Attorney Steven Kim of the Criminal Division’s Fraud Section.

U.S. v. Giuseppe Pellerito, Case No. 12-20292-CR-Cooke

In this case, defendant Giuseppe Pellerito is charged with conspiracy to receive health care kickbacks and substantive counts of receiving kickbacks. The indictment alleges that Pellerito, the owner of Florida Sober House (FSH), received kickbacks for recruiting residents from FSH to become patients at ATC. ATC, in turn, submitted false claims for PHP based on Pellerito’s referrals. This case is being prosecuted by Trial Attorney Steven Kim of the Criminal Division’s Fraud Section.

U.S. v. Hassan Collins, Case No. 12-20286-CR-Moore

Hassan Collins is charged with one count of conspiracy to pay and receive health care kickbacks. According to the criminal information, Collins was the owner of New Way Recovery Inc. (NWR), which operated several halfway houses in Broward County. Collins allegedly received kickbacks for recruiting Medicare beneficiaries who resided at NWR to become patients at ATC. This case is being prosecuted by Trial Attorney Steven Kim of the Criminal Division’s Fraud Section.

U.S. v. Jean Luc Veraguas, Case No. 12-20287-CR-Moreno

Jean-Luc Veraguas is charged with one count of conspiracy to commit health care fraud. The criminal information alleges that Veraguas was the owner of Neu Ways Inc., which operated several halfway houses in Broward County. Veraguas allegedly referred residents at his houses to ATC in exchange for kickbacks. This case is being prosecuted by Trial Attorney Steven Kim of the Criminal Division’s Fraud Section.

U.S. v. Pablo Orama, Vivian Augustine, a/k/a Vivian Salazar, Ariane Marchioro Amorim, Jose Orelvis Ortega, Marlen Diosdada Garcia, Ivon Perez, Marianela Terrero, Jose Abreu-Gonzalez, Elba M. Caicedo, Carlos A. Herrera, Marisela Sherwood, Nancy Diaz, Daymi Fuentes Gil, Olga Martinez Rodriguez, Yuria Perez Rivero, and Joel Loyola, Case No. 12-20265-CR-Middlebrooks(s)

In this case, 16 defendants are charged with conspiracy to pay and receive health care kickbacks and substantive counts of paying and receiving kickbacks in connection with a federal health care program. According to the indictment, defendant Pablo Orama was the owner of Superstar Home Health, a Miami-Dade County home health agency that purportedly provided skilled nursing services and physical therapy to homebound Medicare beneficiaries. Vivian Augustine and Ariane Amorim were employees of the company. Jose Orelvis Ortega, Marlen Garcia, Ivon Perez, Marianela Terrero, Jose Abreu-Gonzalez, Elba Caicedo, Carlos Herrera, Marisela Sherwood, and Nancy Diaz were recruiters who offered money to Medicare beneficiaries in return for their agreement to serve as patients at Superstar. Defendants Daymi Fuentes Gil, Olga Rodriguez, Yuria Rivero, and Joel Loyola were Medicare beneficiaries who accepted kickbacks in return for agreeing to serve as patients at Superstar. This case is being prosecuted by Assistant U.S. Attorney Eric E. Morales.

U.S. v. Jorge Luis Reyes and Waldo Gonzalez, Case No. 12-14030-CR-Moore

This indictment charges Jorge Luis Reyes and Waldo Gonzalez, owners of a medical clinic that purported to treat HIV-positive Medicare beneficiaries at locations in Miami-Dade and St. Lucie Counties. According to the indictment, between November 2005 and January 2009, the defendants submitted approximately $15,201,162 in fraudulent claims to Medicare for treatment that was not provided, and in many cases would not have been medically necessary. The majority of the fraudulent claims (more than $13.6 million) were submitted to private insurance companies that were a Medicare Advantage contractor under Part C of the Medicare program. This case is being prosecuted by Assistant U.S. Attorney Marc Osborne.

U.S. v. Manotte Bazile, Case No. 12-20284-CR-Lenard

Defendant Manotte Bazile, a former social worker and licensed intern at Biscayne Milieu, was charged with health care fraud conspiracy for purportedly treating patients who did not qualify for PHP treatment. This case is part of larger indictment involving of Biscayne Milieu, a CMHC that was involved in the submission of $57 million in false claims to Medicare for purportedly providing PHP services to Medicare beneficiaries who did not qualify for or receive the treatments that were billed to Medicare. In this case, Bazile assisted non-U.S. citizen patients by completing immigration forms on their behalf that falsely indicated that the patients suffered from mental illnesses, thereby fraudulently enabling the patients to avoid taking the citizenship test. This case is being prosecuted by Assistant U.S. Attorney Alicia Shick.

U.S. v. Roselyn Nicole Charles, Case No. 12-20283-CR-Ungaro

Defendant Roselyn Nicole Charles, a former patient recruiter at Biscayne Milieu, was charged with conspiracy to pay health care fraud kickbacks. More specifically, the criminal information alleges that Charles recruited patients to participate in Biscayne Milieu’s PHP in exchange for kickbacks. These patients, who did not qualify for PHP treatment, were promised assistance with their U.S. citizenship applications in exchange for their participation in Biscayne Milieu’s PHP. This case is part of larger indictment of Biscayne Milieu, a CMHC that was involved in the submission of more than $57 million in false claims to Medicare for purportedly providing PHP services to Medicare beneficiaries who did not qualify for PHP treatment or receive the treatments that were billed to Medicare. This case is being prosecuted by Assistant U.S. Attorney Alicia Shick.

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, the Eastern District of Michigan, the Southern District of Texas, the Central District of California, the Middle District of Louisiana; the Northern District of Illinois, and the Middle District of Florida; and agents from the FBI, HHS-OIG, and state Medicaid Fraud Control Units.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,330 defendants who collectively have falsely billed the Medicare program for more than $4 billion. Miami was the first Strike force city in the nation, and the model for others that followed.

An indictment or information is only an accusation and defendants are presumed innocent until proven guilty.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.”

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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.


Mohammad Nawaz Khan, Iquila Begum Khan, Mohammad Shahbaz Khan, Gurdev Kaur Johl, and Kewal Singh Arrested by the FBI in an Alleged $5 Million Fraud Scheme

May 2, 2012

The Federal Bureau of Investigation (FBI) on May 1, 2012 released the following:

“Five Arrested in Sutter and Yuba Counties for $5 Million Fraud Scheme

SACRAMENTO, CA— United States Attorney Benjamin B. Wagner announced that five individuals have been arrested in Sutter and Yuba Counties for their participation in a long-running unemployment and disability fraud scheme.

Mohammad Nawaz Khan, 56, and Iqila Begum Khan, 31, both of Live Oak; and Mohammad Shahbaz Khan, 56, Gurdev Kaur Johl, 67, and Kewal Singh, 74, all of Yuba City, were arrested today. They are scheduled to appear before U.S. Magistrate Judge Kendall J. Newman at 2:00 p.m. today. Also charged in the complaint, but not arrested is Mohammad Adnan Khan, 32, of Live Oak.

According to the criminal complaint, the defendants began forming a series of companies with the Employment Development Department in 1989. The most recent company was formed in 2011. All of these companies purported to be farm labor contractors that provided labor to harvest various agricultural crops in Sutter and Yuba Counties.

However, undercover operations by a number of confidential sources showed that these businesses were in fact selling wages to hundreds of individuals in Northern California. The defendants would charge an individual approximately $250 for $1,000 in wages. The purchaser, who never performed any work for the defendants’ companies, would then claim to be laid off and file for unemployment benefits, disability benefits, or both.

When interviewed by EDD, the individuals who claimed to have worked for these companies would oftentimes not know the location where they worked, or the name of their supervisor. Sometimes they would report earnings that greatly exceeded the agricultural norms for the area. Many of the employees reported by these companies were between 50 and 70 years old and claimed that their duties consisted of picking peaches and harvesting walnuts, physically demanding work.

According to the criminal complaint, in order to further the fraud, the defendants used the name “Mohammed Khan,” used each other’s business addresses, repeatedly hired and laid off each other, and continually changed the names of the businesses.

The investigation is ongoing in order to determine the full extent of the fraud. A preliminary analysis of EDD claim records has found more than 2,000 potentially fraudulent unemployment and disability claims and more than $5 million lost.

This case is the product of an extensive investigation by the Federal Bureau of Investigation, the United States Department of Labor, Office of Inspector General, and the Investigation Division of the California Employment Development Department. Assistant United States Attorney Jared C. Dolan is prosecuting the case.

If convicted, the defendants face a maximum statutory penalty of 20 years in prison. The actual sentence, however, will be determined after conviction at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables The charges are only allegations. Each of the defendants listed is presumed innocent, unless and until proven guilty.”

US v. Khan et al – Federal Criminal Complaint

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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

————————————————————–

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.