Monthly Archives: October 2013

Two Army National Guard Soldiers Plead Guilty to Schemes to Defraud U.s. Army National Guard Bureau

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Two current U.S. Army National Guard soldiers have pleaded guilty for their role in bribery and fraud schemes that caused a total of at least $70,000 in losses to the U.S. Army National Guard Bureau.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas made the announcement.

Sergeant Annika Chambers, 28, of Houston, pleaded guilty today to one count of conspiracy and one count of bribery. Specialist Elisha Ceja, 27, of Barboursville, W.V., previously pleaded guilty to the same charge on Oct. 1, 2013. The cases against both defendants arise from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to illegally obtain fraudulent recruiting bonuses.  To date, the investigation has led to charges against 25 individuals, 17 of whom have pleaded guilty.

According to court documents filed in both cases, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker, Inc. (Docupak) to administer the Guard Recruiting Assistance Program (G-RAP).  The G-RAP was a recruiting program that offered monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard.  Through this program, a participating soldier could receive up to $3,000 in bonus payments for referring another individual to join.  Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account.  To participate in the program, soldiers were required to create online recruiting assistant accounts.

Ceja and Chambers both admitted that they paid Army National Guard recruiters for the names and Social Security numbers of potential Army National Guard soldiers.  They further admitted that they used the personal identifying information for these potential soldiers to falsely claim that they were responsible for referring the potential soldiers to join the Army National Guard.

As a result of these fraudulent representations, Ceja collected approximately $12,000 in fraudulent bonuses, and Chambers collected approximately $17,000 in fraudulent bonuses.  The charge of bribery carries a maximum penalty of 15 years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.  The charge of conspiracy carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.

Ceja and Chambers are scheduled to be sentenced before U.S. District Judge Lee H. Rosenthal in Houston on Dec. 19, 2013, and March 11, 2013, respectively.

These cases are being investigated by Special Agents from the San Antonio Fraud Resident Agency of Army Criminal Investigation Command’s Major Procurement Fraud Unit. The cases are being prosecuted by Trial Attorneys Sean F. Mulryne, Mark J. Cipolletti, and Heidi Boutros Gesch of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas.

GEORGIA REAL ESTATE INVESTMENT COMPANY AND OWNER PLEAD GUILTY TO CONSPIRACIES TO RIG BIDS AND COMMIT MAIL FRAUD FOR THE PURCHASE OF REAL ESTATE AT PUBLIC FORECLOSURE AUCTIONS

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WASHINGTON — A Georgia real estate investor and his company pleaded guilty today for  their role in conspiracies to rig bids and commit mail fraud at public real estate  foreclosure auctions in Georgia, the Department of Justice announced.

Separate felony charges were filed on  Sept. 25, 2013, in the U.S. District Court for the Northern District of Georgia  in Atlanta, against Penguin Properties LLC and its owner, Seth D. Lynn.

According to court documents, from  at least as early as Feb. 6, 2007 until at least Jan. 3, 2012, Penguin  Properties and Lynn conspired  with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public  real estate foreclosure auctions in Fulton County, Ga.  Penguin Properties and Lynn were also charged with a  conspiracy to use the mail to carry out a scheme to fraudulently acquire title  to selected Fulton County properties sold at public auctions, to make and  receive payoffs and to divert money to co-conspirators that would have gone to  mortgage holders and others by holding second, private auctions open only to  members of the conspiracy.  The  department said that the selected properties were then awarded to the  conspirators who submitted the highest bids in the second, private auctions.

Charges  were also brought against Penguin Properties and Lynn for their involvement in  similar conspiracies in DeKalb County, Ga., from at least as early as July 6,  2004 until at least Jan. 3, 2012.

“Today’s charges are the first to be filed in the state of  Georgia in the Antitrust Division’s ongoing investigation into anticompetitive conduct  in real estate foreclosure auctions,” said Bill Baer, Assistant Attorney  General in charge of the Department of Justice’s Antitrust Division.  “The division’s investigation has already  resulted in dozens of guilty pleas in other states, and the division remains  committed to eliminating anticompetitive practices at foreclosure auctions.”

The  department said that the primary purpose of the conspiracies was to suppress  and restrain competition and to conceal payoffs in order to obtain selected  real estate offered at Fulton and DeKalb County public foreclosure auctions at  non-competitive prices.  When real estate  properties are sold at these auctions, the proceeds are used to pay off the  mortgage and other debt attached to the property, with remaining proceeds, if  any, paid to the homeowner.  According to  court documents, these conspirators paid and received money that otherwise  would have gone to pay off the mortgage and other holders of debt secured by  the properties, and, in some cases, the defaulting homeowner.

“The core of this case was about an unlevel field  and one of unfairness with regard to the auction/bidding process of foreclosed  properties,” said Mark F. Giuliano, Special  Agent in Charge of the FBI Atlanta Field Office.  “The FBI remains committed in  providing investigative resources to the U.S. Department of Justice’s Antitrust  effort to address such matters.”

A violation of the Sherman Act carries a maximum penalty of 10  years in prison and a $1 million fine for individuals and a $100 million fine  for corporations.  The maximum fine for a  Sherman Act charge may be increased to twice the gain derived from the crime or  twice the loss suffered by the victims of the crime if either amount is greater  than the statutory maximum fine.  A count  of conspiracy to commit mail fraud carries a maximum penalty of 20 years in  prison and a fine of $250,000 for an individual, and a fine of $500,000 for a  corporation.  The respective maximum  fines for the conspiracy to commit mail fraud charge may be increased to twice  the gross gain the conspirators derived from the crime or twice the gross loss  caused to the victims of the crime by the conspirators.

The investigation is being conducted  by Antitrust Division attorneys in Atlanta and the FBI’s Atlanta Division, with  the assistance of the Atlanta Field Office of the Housing and Urban Development  Office of Inspector General and the U.S. Attorney’s Office for the Northern  District of Georgia.  Anyone with  information concerning bid rigging or fraud related to public real estate  foreclosure auctions should call 404-331-7113 or visit www.justice.gov/atr/contact/newcase.htm.

Today’s  charges were brought in connection with the President’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 www.StopFraud.gov.

Washington Post: Senior officer, NCIS agent are among those arrested in Navy bribery scandal

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This is an article on the Navy Bribery Scandal which involves the handiwork of AUSA’s Laura E. Duffy and the always publicity avoiding Mark Pletcher from the SDCA:

http://www.washingtonpost.com/world/national-security/senior-officer-ncis-agent-are-among-those-arrested-in-navy-bribery-scandal/2013/10/19/e9a1e9b6-3753-11e3-bda2-e637e3241dc8_story.html

Vietnamese National Charged in Widespread International Scheme to Steal and Sell Hundreds of Thousands of U.s. Persons’ Personally Identifiable Information

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A Vietnamese national has been indicted in the District of New Hampshire for allegedly participating in an international scheme to steal and sell hundreds of thousands of Americans’ personally identifiable information (PII) through various underground websites that he operated.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney John P. Kacavas of the District of New Hampshire, and Resident Agent in Charge Holly Fraumeni of the U.S. Secret Service’s Manchester Field Office made the announcement after the indictment was unsealed.

Hieu Minh Ngo, 24, a Vietnamese national, was charged in a 15-count indictment filed under seal in November 2012, charging him with conspiracy to commit wire fraud, substantive wire fraud, conspiracy to commit identity fraud, substantive identity fraud, aggravated identity theft, conspiracy to commit access device fraud, and substantive access device fraud.  Ngo was arrested upon his entry into the United States in February 2013.  The statutory maximum penalties are five years on the identity fraud and identity fraud conspiracy counts, two years each on the aggravated identity theft counts, 20 years on the wire fraud count and wire fraud conspiracy counts, 10 years on the substantive access device fraud count and five years on the conspiracy to commit access device fraud count.

According to the indictment, from 2007 through 2012, Ngo and other members of the conspiracy acquired, offered for sale, sold, and/or transferred to others packages of PII for more than 500,000 individuals.  These packages, known as “fullz,” typically included a person’s name, date of birth, social security number, bank account number and bank routing number.  During this same time, Ngo and other members of the conspiracy acquired, offered for sale, sold, and/or transferred to others stolen payment card data, which typically included the victim account holder’s payment card number, expiration date, card verification value number, account holder name, account holder address and phone number.

The indictment alleges that Ngo operated one or more online marketplaces for various carding activities, known as carder forums, where he stored and offered for sale “fullz” and other PII, including “fullz” of individuals located in the District of New Hampshire.  On two carder forums, Ngo and his co-conspirators offered buyers the option to obtain a specified quantity of “fullz” or to submit a query of a particular name to obtain that person’s associated PII.  Ngo and his co-conspirators allegedly offered several categories of PII, depending on how recently the data had been acquired, and charged higher prices for more recent data.  Ngo allegedly made arrangements with others who, after paying a fee, could access and then and re-sell the stolen payment card data, “fullz” and other PII.  Ngo and his co-conspirators created one or more accounts with a digital currency service and used those accounts to receive funds for the stolen payment card data, “fullz” and other PII that they sold.

The case was investigated by the U.S. Secret Service and is being prosecuted by Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.

Operators of Michigan Adult Day Care Centers Convicted in $3.2 Million Medicare Fraud Scheme

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A federal jury in Detroit today convicted the owner and the program coordinator of two Flint, Mich., adult day care centers for their participation in a $3.2 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan; Acting Special Agent in Charge John Robert Shoup of the FBI Detroit Field Office; and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Detroit Office made the announcement.

Glenn English, 53, was found guilty in U.S. District Court for the Eastern District of Michigan of one count of conspiracy to commit health care fraud and seven counts of health care fraud for directing a psychotherapy fraud scheme through New Century Adult Day Program Services LLC and New Century Adult Day Treatment Inc. (collectively known as New Century).

Richard Hogan, 67, an unlicensed social worker who worked as a program coordinator at New Century, was found guilty of one count of conspiracy to commit health care fraud.

The defendants were charged in a superseding indictment returned Dec. 11, 2012.  Another individual charged in the superseding indictment, Donald Berry, awaits trial at a later date.

According to evidence presented at trial, English owned and operated New Century as an adult day care center through which he billed Medicare for individual and group psychotherapy services.  As shown at trial, New Century brought in mentally disabled residents of Flint-area adult foster care homes (AFCs), as well as people seeking narcotic drugs, and used their names to bill Medicare for psychotherapy that was not provided.  The evidence showed that English and Hogan lured drug seekers to New Century with the promise that they could see a doctor there who would prescribe for them the narcotics they wanted if they signed up for the psychotherapy program.  New Century used the signatures and Medicare information of these AFC residents and drug seekers to claim that it was providing them psychotherapy, when in fact it was not.
The evidence also showed that English directed New Century employees to fabricate patient records to give the false impression that psychotherapy was being provided.  Social workers and untrained employees wrote fake progress notes for therapy sessions that never occurred.  Further, English and New Century employees directed New Century clients to pre-sign sign-in sheets for months at a time, and used these signatures to claim to Medicare they had provided services.  On multiple occasions, New Century billed Medicare as if its social workers had provided over 24 hours of care in a single day.

From March 2010 through April 2012, New Century billed approximately $3.2 million and received more than $988,000 from Medicare.

The health care fraud conspiracy count carries a maximum potential penalty of 10 years in prison; each count of health care fraud carries a maximum penalty of 10 years in prison.  Sentencing for both defendants is scheduled for Feb. 27, 2014.

The investigation was led by the FBI and HHS-OIG and was brought by the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

LIBOR update: Wall Street Journal Ordered Not to Divulge Libor Names

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Journal Ordered Not to Divulge Libor Names

U.K. Prosecutors Win Injunction Amid Investigation

“A British judge ordered the Journal and David Enrich, the newspaper’s European banking editor, to comply with a request by the U.K.’s Serious Fraud Office prohibiting the newspaper from publishing names of individuals not yet made public in the government’s ongoing investigation into alleged manipulation of the London interbank offered rate, or Libor.”

Former Los Angeles-area Pastor Sentenced for Role in $11 Million Medicare Fraud Scheme

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A pastor and owner of a Los Angeles-area medical supply company was sentenced today for his role in a power wheelchair fraud scheme that defrauded Medicare out of more than $11 million.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office; and Special Agent in Charge Joseph Fendrick of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse made the announcement.

Charles Agbu, 58, of Carson, Calif., was sentenced by U.S. District Judge George H. Wu to serve 87 months in prison and was ordered to pay $5,788,725 in restitution to Medicare.  In December 2012, Agbu pleaded guilty to conspiracy and money laundering charges based on his role as owner and operator of Bonfee Inc., a fraudulent durable medical equipment (DME) supply company that Agbu operated with his daughter and co-defendant, Obiageli Agbu, and members of his family from a nondescript office building in Carson.  Agbu admitted that he paid patient recruiters and doctors to provide him with fraudulent prescriptions for expensive, highly specialized power wheelchairs and other DME that he, Obiageli Agbu and their co-conspirators used in submitting more than $11 million false claims to Medicare.  Agbu billed the power wheelchairs to Medicare at a rate of approximately $6,000 per wheelchair even though he paid approximately $900 wholesale per wheelchair.  In many cases, the Medicare beneficiaries to whom Agbu and his co-conspirators claimed they supplied the power wheelchairs and DME did not have any legitimate medical need for the medical equipment, and, in some cases, never received the medical equipment from Agbu’s company.  At the time Agbu engaged in this fraud, he was a pastor at Pilgrim Congregational Church in South Central Los Angeles.

On Sept. 30, 2013, and Oct. 2, 2013, Agbu’s co-defendants, Alejandro Maciel, 43, of Huntington Park, Calif., and Dr. Emmanuel Ayodele, 65, of Los Angeles, were sentenced to serve 41 and 37 months in prison and ordered to pay $5,388,755 and $6,355,949 in restitution to Medicare, respectively.  Two other co-defendants, Dr. Juan Van Putten and Candelaria Estrada, have pleaded guilty to Medicare fraud charges and are scheduled for sentencing on Dec.12, 2013, and Oct. 31, 2013, respectively.  Obiageli Agbu was convicted by a jury on nine counts of conspiracy to commit health care fraud and health care fraud on July 19, 2013.  Her sentencing date has not been set.

The case is being investigated by the FBI, HHS-OIG and the California Department of Justice and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.  The case is being prosecuted by Trial Attorneys Jonathan T. Baum and Alexander Porter of the Criminal Division’s Fraud Section.

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 its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Sacramento Bee: “Patricia Davis, former Assistant Director, USDOJ Civil Division, joins GeyerGorey LLP”

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Sacramento Bee: “Patricia Davis, former Assistant Director, USDOJ Civil Division, joins GeyerGorey LLP”

MainJustice.Com: “Former Civil Division Fraud Leader Joins White Collar Firm”

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MainJustice.Com: “Former Civil Division Fraud Leader Joins White Collar Firm”

Patricia Davis, former Assistant Director, Fraud Section, Civil Division, joins GeyerGorey LLP

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Sweet Lime Portrait Design, Family Photography, Baby Photography, Maternity Photography
Patricia Davis, a twenty-year veteran of the Department of Justice, has joined GeyerGorey LLP as of counsel.  She previously served as Assistant Director, Fraud Section, Civil Division, U.S. Department of Justice, where she was responsible for investigating and prosecuting hundreds of cases involving fraud on government healthcare, procurement and grant/loan programs.  Prior to joining the Department, Ms. Davis was Deputy Counsel to the Inspector General at the General Services Administration.  She is the eleventh former DOJ prosecutor to join the boutique law firm in less than a year.

(See the firm’s Representative Matters by clicking here [this is not a comprehensive list and does not yet incorporate any of Ms. Davis’s experience])

 “The scope and breadth of Pat’s experience is unparalleled.  Much of the Civil Division’s enforcement program focusing on Defense Department contracts and pharmaceuticals rested squarely on her shoulders,” said Brad Geyer, one of the firm’s founding partners.  “We are delighted that Pat has decided to join us.”

Robert Zastrow, who was Verizon’s Assistant General Counsel for 15 years before co-founding the firm in October 2012, added,“ Pat Davis is an excellent addition to our corporate compliance and white collar practice.”

 “I believe that Pat brings our firm to a new level in terms of our ability to get cases placed appropriately and to enhance the chances that our qui tam (False Claims Act) cases will be adopted by the government,” said Hays Gorey, a firm co-founder.  “With Pat’s terrific background and deep legal knowledge, we are uniquely positioned to develop cases so that they are ready, when filed, to be transitioned immediately to the appropriate U.S. Attorney’s Office or the Civil Division of the Department of Justice.”

Headquartered in Washington, D.C., with offices in New York, Boston, Philadelphia and Dallas, GeyerGorey LLP specializes in white collar criminal defense, particularly investigations and cases involving allegations of economic crimes, including violations of the federal antitrust laws (price fixing, bid rigging, territorial and customer allocation agreements), the procurement and grant fraud statutes, the securities laws, the Foreign Corrupt Practices Act, the False Claims Act and other whistleblower actions.  The firm also conducts internal investigations of possible criminal conduct and provides advice regarding compliance with antitrust, anti-bribery and other laws and regulations, in addition to advising on voluntary and mandatory disclosure issues. For further information, please call Patricia Davis at (202) 559-1456 or email [email protected].