title: U.S. Attorney's Office Alerts Consumers On Common Holiday Scams

component: USAO - North Carolina, Western

body_text: CHARLOTTE, N.C. – The U.S. Attorney’s Office is warning the public of a potential uptick in cyberscams during the holiday season and is cautioning everyone to remain alert against cybercriminals targeting online consumers, particularly older adults. “The holiday season is a time for joy and generosity, but it’s also a time when cybercriminals seek to target unsuspecting consumers and exploit increased online activity,” said U.S. Attorney Dena J. King. “Whether you’re buying gifts, donating to charity, or searching for a seasonal job, staying vigilant against online scams is the best way to keep the spirit of the season merry and bright.” 2023 Holiday Scams According to the FBI’s 2023 Internet Crimes Report (IC3) North Carolina ranked in the top 15 states for online financial fraud, both in filed complaints and monetary losses. The report indicates that last year $12.5 billion in financial losses were reported to the FBI. The report also indicates that IC3 received complaints about online shopping and “non-delivery” schemes, which generally spike during the holiday season. Here are the most common scams that consumers may come across this time of the year: Fake Online Stores or “Lookalike Stores.” Be on the lookout for online stores that are either entirely fake or made to look like legitimate stores. Watch out for red flags, such as deeply discounted prices especially for in-demand items, like electronics, jewelry, and clothing. Be particularly careful with social media ads that link to bogus online stores or product listings. These scams target shoppers looking to buy luxury or hard-to-find items at an affordable price. Consumers may end up with stolen credit card information or paying for an item that is never received. Missed Delivery/Non-Delivery Notification. With the rise in online shopping, lots of packages arrive at our front door during the holiday season. Beware of fake delivery notification emails or text messages alerting you of a missed package delivery. Think twice before clicking on the link provided in a text or email, as it may direct you to a website designed to steal your information. Make sure you pay attention to the domain address of the link to ensure it is a reputable delivery site and be especially cautions with delivery websites that ask for your personal or payment information to complete a package delivery. Gift Card Scams. Gift card scams involve either scamming consumers into buying fake gift cards or tricking consumers into using gift cards to pay for fraudulent goods or services. For example, avoid online stores or advertisements that purport to sell commercial gift cards at deeply discounted prices. While they may have you believe you are buying a gift card on sale, in fact you may end up receiving a gift card with zero money value. Instead, purchase gift cards from reputable retailers. Fake Charities. During the holidays, cybercriminals seek to take advantage of consumers’ generosity through fraudulent charities, GoFundMe campaigns, and other charitable causes. These types of scams can be particularly difficult to decipher, so before donating money be extra cautious about selecting a charity. If donating online, research the charity thoroughly, check with the Better Business Bureau, and take a look at the charity’s URL and website for telltale signs of fraud, including misspellings, bad grammar, and no contact information. For GoFundMe type of donations research the organizer or the group behind the campaign making a donation. Phishing Emails or Texts. Cybercriminals take advantage of the hustle and bustle of the holiday season to dupe consumers via phishing emails or texts that contain suspicious links. Be particularly mindful of purported communications from your bank or credit card company, warning you that your account has been compromised. These phishing emails or texts generally prompt you to click on the provided link to log into your account to update your compromised information, so scammers can steal your information. Also avoid clicking on emails that promise free giveaways, prompt you to claim a prize, or ask you to confirm a reservation or other booking. If you receive this type of communication do not use the provided link. For example, if it’s an email related to a compromised bank account, instead of using the link in the email, go to your bank’s main website to log into your account. Fraudulent Seasonal Jobs . Employment scams tend to increase during the holiday season, as scammers prey on individuals seeking to make extra money. Be mindful of fake job ads, especially online job listings that offer really good money for very little work. Do not ever pay upfront for any equipment or training you need for a new job. Also, do not readily provide your personal identifying information (social security number, date of birth, address, etc.) or your financial and banking information without confirming the job is legitimate. Be particularly mindful of money mule schemes, in which a fake employer asks you to cash a check through your bank, keep a portion of the money, and then send the rest of the money back to the employer. Scams Targeting Older Adults The U.S. Attorney’s Office also cautions that older adults are particularly vulnerable of becoming victims of online fraud, not only during the holidays, but throughout the year. According to the FBI’s IC3 2023 report, adults 60 years and older reported the highest monetary losses, with a combined $3.4 billion lost to financial fraud. As part of the ongoing efforts to educate older adults about online scams and financial fraud, today the U.S. Attorney’s Office co-hosted a scam alert seminar in Charlotte, during which participants received important information about financial fraud. Following the presentation, attendees participated in a game of “Fraud Bingo,” a fun activity designed to deliver information and practical tips on how to prevent the financial exploitation and victimization by scammers. “Online scams targeting the elderly remain a growing concern in North Carolina,” said U.S. Attorney King. “It’s our duty to protect our vulnerable older population from financial fraud and prevent its devastating financial impact on seniors. Fraud Bingo is a fun and engaging way to deliver information that can help older adults understand how scammers operate, learn the tactics they use, and find out how to protect themselves from financial harm.” Some examples of financial fraud targeting older Americans are: Lottery Phone Scams – in which the callers convince seniors that a large fee or taxes must be paid before they can receive lottery winnings. Grandparent Scams – which convince seniors that their grandchildren are in trouble and need money to make rent, repair a car, or even money for bail. Romance Scams – which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose. Tech Support Scams – which convince victims to pay for non-existent problems with their computers. IRS Imposter Scams – which defraud victims by posing as IRS agents and claiming that victims owe back taxes. Sham Business Opportunities – which convince victims to invest in lucrative business opportunities or investments. Here are some tips that can help avoid falling victim to a financial scam: Don’t share personal information with anyone you don’t know. Don’t pay a fee for a prize or lottery winning. Don’t click on pop-up ads or messages. Delete phishing emails and ignore harassing phone calls. Don’t send gift cards, checks, money orders, wire money, or give your bank account information to a stranger. Don’t fall for a high-pressure sales pitch or a lucrative business deal. If a scammer approaches you, take the time to talk to a trusted friend or family member. Keep in mind that if you send money once, you’ll be a target for life. Remember, it’s not rude to say, “NO.” A good rule of thumb is, if it’s too good to be true, it’s likely a scam. To report elder fraud please call the Justice Department’s Elder Fraud Hotline at 1-833-FRAUD-11 (833-372-8311). If you believe you are the victim of an online scam call the FBI and file a report with the FBI’s Internet Crime Complaint Center at IC3.gov or contact local law enforcement.


title: Man Sentenced to 18 Years in Prison for Robberies

component: Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF)

body_text: AKRON, Ohio – Timothy Hyatt, 36, of Akron, has been sentenced to 18 years in prison by U.S. District Judge Charles Fleming after pleading guilty to four counts of interference with commerce by means of robbery, and two counts of using, carrying, and brandishing a firearm during a crime of violence. According to court documents, from December 2023 to January 2024, Hyatt entered multiple businesses to commit robberies. He threatened employees with a loaded firearm, and in one instance, shots were exchanged between Hyatt and an employee who had obtained a firearm. Hyatt was shot during the scuffle and left the business. After he was treated at a local hospital for a gunshot wound, he was taken to the Akron Police Department, read his Miranda rights, and eventually confessed to committing four robberies. The business locations Hyatt robbed were: Panera Bread, Cuyahoga Falls, Dec. 19, 2023 Sav-a-Lot, Akron, Dec. 27, 2023 Game Stop, Akron, Dec. 29, 2023 Taco Bell, Akron, Jan. 1, 2024 This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Akron Police Department, and the Cuyahoga Falls Police Department. This case was prosecuted by Assistant U.S. Attorney Joseph Dangelo for the Northern District of Ohio.


title: Former Department of Defense Deputy Chief Sentenced to Federal Prison for Dogfighting Charges

component: USAO - Maryland

body_text: Baltimore , Maryland – U.S. District Judge Richard D. Bennett sentenced Frederick Douglass Moorefield, Jr., age 64, Arnold, Maryland, to 18 months in federal prison, six months of home detention, and a $20,000 fine, followed by three years of supervised release, for his involvement in a multi-state dogfighting conspiracy. In addition to the fine, Judge Bennett ordered Moorefield to pay a forfeiture money judgment of $21,576. Erek L. Barron, U.S. Attorney for the District of Maryland announced the sentence with Acting Special Agent in Charge David Geist of the Federal Bureau of Investigation, Washington Field Office- Criminal and Cyber Division; Special Agent in Charge Charmeka Parker of the U.S. Department of Agriculture Office of Inspector General; Special Agent in Charge Christopher Dillard of the Department of Defense Office of Inspector General; Defense Criminal Investigative Service – Mid-Atlantic Field Office; U.S. Marshal for Maryland Clinton Fuchs; and Anne Arundel County Police Chief Amal E. Awad. According to the guilty plea, federal agents began investigating Moorefield’s connection to dogfighting after officers from Anne Arundel County Animal Control responded to a report of two dead dogs found in a plastic dog food bag in Annapolis, Maryland in November 2018. Investigators found mail addressed to Moorefield inside the bag and a necropsy determined that the dogs bore wounds and scarring patterns consistent with dogfighting. Eventually, investigators determined that Moorefield was affiliated with a dogfighting enterprise known as the “DMV Board,” which operated in and around Virginia, Maryland, and Washington, D.C. Numerous other members of the DMV Board have been convicted on dogfighting charges in the Eastern District of Virginia. Moorefield operated under the kennel name “Geehad Kennels” and used his home in Arnold to keep, train, and breed dogs for dogfighting for more than 20 years. A review of Moorefield’s phone and iCloud account showed numerous message exchanges regarding dogfighting with other members of the DMV Board. In addition to arranging fights and wagers, Moorefield and other members of the DMV Board discussed the breeding and training of fighting dogs, procuring supplies for the maintenance and feeding of fighting dogs, and criminal investigations and prosecutions of dogfighters. Additionally, it was discovered that Moorefield and others discussed the indictments of DMV Board members and speculated about the identity of a “snitch” in the group. Moorefield’s messages also contained several exchanges arranging, or “hooking,” dogfights. In these conversations, Moorefield would “call out a weight” by identifying the weight and sex of the dog he wanted to sponsor in the fight. Other dogfighters would then propose a fight against their own dogs or match Moorefield with another contact who had a dog in the same weight class. The dogfighters then agreed on wagers and set a date for the fight, usually six to eight weeks after the match was made. In addition to stating the amount to be paid to the winner of the fight, dogfighters agreed on forfeit, or “fit” payments, to be made if a dogfighter backed out of the fight prior to the scheduled date. After hooking a fight, Moorefield trained his dogs in a process known as a “keep.” Moorefield’s typical keep schedule for a dog involved physical training (using treadmills, weighted collars, and other accessories), a diet plan, and the use of steroids. Moorefield obtained steroids and other veterinary drugs through various contacts in his dogfighting network instead of through legitimate veterinary prescriptions. When Moorefield sponsored a dog in a fight, the fight ended only when a dog died or when the owner forfeited the match—either through the dog “quitting” the fight or the owner “picking up” the dog. If one of Moorefield’s dogs lost a fight, but did not die, Moorefield killed the dog. One method Moorefield used to kill the dogs was utilizing a device that consisted of jumper cables connected directly to an ordinary plug. Moorefield plugged the device into a wall socket and attached the cables to the dog, electrocuting it. Between January 2019 and October 2023, Moorefield sent and received monetary payments related to dogfighting through CashApp. Sometimes, transactions were given misleading labels to disguise the true nature of the transferred money. For example, in 2022, Moorefield received a $1,000 transaction labeled as a “housewarming gift” from a known dogfighter. It was determined that Moorefield has lived at the same address for over two decades. On September 6, 2023, agents searched Moorefield’s residence, recovering five pit-bull-type dogs from large metal cages in a windowless room in the basement. Additionally, agents found several containers of animal medication, dog food, and protein powder in the same room, in addition to the jumper-cable device Moorefield used to kill dog. Law enforcement also seized a large folded-up, blood-stained piece of carpet from a shed on the property. Moorefield used the carpet as the floor of an arena to stage dogfights or “rolls” (brief test fights between dogs to evaluate the dogs’ fighting ability). When interviewed by agents, Moorefield stated that he had only obtained four of the five dogs found on the property within the past week. The fifth dog, which Moorefield did not obtain within the past week, exhibited calloused skin, an old injury, and fleas. As a result, the dog was humanely euthanized after exhibiting extreme aggression toward both human caretakers and other dogs. Moorefield bred and/or trained all five dogs recovered from his property for the purposes of sponsoring them in dogfights. At the time Moorefield was charged in this case, he was the Deputy Chief Information Officer for Command, Control, and Communications for the Office of the Secretary of Defense. U.S. Attorney Barron commended the FBI, the U.S. Department of Agriculture – Office of the Inspector General, the Defense Criminal Investigative Service, the U.S. Marshals Service, the Anne Arundel County Police Department, Anne Arundel County Animal Control, and the U.S. Attorney’s Office for the Eastern District of Virginia for their valuable assistance in the investigation. Mr. Barron also thanked Assistant U.S. Attorney Alexander Levin who prosecuted the federal case. For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach . # # #


title: Former CNMI Bar Association Executive Director Sentenced to 18 months in Federal Prison for Fraud Scheme

component: Federal Bureau of Investigation (FBI)

body_text: SAIPAN, C.N.M.I. – SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that on December 10, 2024, defendant Peonie Cabrera, age 40, from Saipan was sentenced by the Honorable Frances M. Tydingco-Gatewood in the United States District Court for the Northern Mariana Islands to 18 months imprisonment for two counts of Bank Fraud, in violation of 18 U.S.C. § 1344(2), and two counts of Wire Fraud, in violation of 18 U.S.C. § 1343. The Court also ordered five years of supervised release following imprisonment, 100 hours of community service, $249,706 in restitution, and a mandatory $400.00 special assessment fee. From January 2019 to August 2023, Cabrera served as the Executive Director of the Northern Mariana Bar Association (NMBA). Her duties included managing membership fees for the office. During that time, she diverted over $200,000 of NMBA funds through federally insured bank accounts for personal use. She presented fraudulent payroll documents and paychecks for signature by NMBA board members. These were drawn upon NMBA’s bank account and made payable to Cabrera. She also withdrew cash from NMBA’s savings account for personal use on 13 occasions. She further used NMBA’s bank accounts to make over 150 payments to her PayPal account for personal use. During 2020 through 2023, Cabrera also diverted payments from NMBA members via other electronic payment accounts for her personal use. “Cabrera’s lengthy criminal conduct left a trail of victims,” stated United States Attorney Anderson. “Bar members should expect that their mandatory payments are put to good use in support of the legal profession. Additionally, these funds often provide critical support for many bar-related activities, including mock trials, that benefit our communities. Hopefully the sentence imposed by the Court will act as a deterrent for this defendant.” “This sentencing is a reminder that the FBI and our law enforcement agency partners are dedicated to rooting out corruption within our communities,” said FBI Honolulu Special Agent in Charge Steven Merrill, “Peonie Cabrera was in a trusted role when she stole over $150,000 from her colleagues for her own personal use. Let this serve as a reminder to all who are tempted to use their positions of power to unjustly enrich themselves. We will continue to investigate allegations of fraud at all levels.” The investigation was investigated by the Federal Bureau of Investigation and prosecuted by Eric S. O’Malley, Assistant United States Attorney in the District of the Northern Mariana Islands.


title: Rhode Island Man Sentenced to 10 Years in Prison for his Role in Wide-Ranging Fentanyl Trafficking Conspiracy that Spanned Across the Country

component: USAO - Massachusetts

body_text: BOSTON – A Rhode Island man was sentenced in federal court in Boston for his role in a fentanyl trafficking organization involved in the manufacturing and distribution of fentanyl pills that spanned across Massachusetts, Rhode Island, New York, Texas and North and South Carolina. Erik Ventura, 36, was sentenced by U.S. District Court Judge Leo T. Sorokin to 10 years in prison, to be followed by five years of supervised release. In May 2024, Ventura pleaded guilty to a superseding indictment charging him with conspiracy to distribute and possess with intent to distribute 400 grams or more of fentanyl. In July 2024, Jasdrual Perez pleaded guilty and is scheduled to be sentenced on Dec. 16, 2024. Ventura and Perez were arrested and charged in February 2022 and have remained in custody since. In September 2019, an investigation began into a drug trafficking organization (DTO) lead by Jasdrual Perez, based in Providence, Rhode Island, known to manufacture large quantities of fentanyl pills designed to appear like pharmaceutical grade oxycodone/Percocet pills and distribute them and other controlled substances throughout the United States. Ventura was a trusted member of the DTO and maintained one of the drug stash locations. Ventura transported cash and kilogram quantities of drugs to and from New York on behalf of the DTO, distributed thousands of fentanyl pills to wholesale customers in Massachusetts and was paid by the DTO for his work as a drug distributor. Ventura also distributed fentanyl and cocaine to his own customers, including one who suffered a non-fatal overdose at a DTO stash house where Ventura resided. In February 2022, two industrial grade pill presses, approximately 20 kilograms of powdered fentanyl, pressed fentanyl pills and other items, including kilograms of pill binder used in the large-scale manufacturing of clandestinely pressed fentanyl pills, were seized. United States Attorney Joshua S. Levy; Stephen Belleau, Acting Special Agent in Charge of the Drug Enforcement Administration, New England Field Division; and Jonathan Wlodyka, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston made the announcement today. Special assistance in the investigation was provided by the United States Attorney’s Office for the District of Rhode Island; the Federal Bureau of Investigation, Providence Resident Agency; the Drug Enforcement Administration, Providence Field Office; Rhode Island State Police; and the Cranston, Warwick and West Warwick Police Departments. Assistant U.S. Attorneys Lindsey E. Weinstein and Kunal Pasricha of the Narcotics & Money Laundering Unit are prosecuting the case. This operation is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) Strike Force Initiative, which provides for the establishment of permanent multi-agency task force teams that work side-by-side in the same location. This co-located model enables agents from different agencies to collaborate on intelligence-driven, multi-jurisdictional operations to disrupt and dismantle the most significant drug traffickers, money launderers, gangs, and transnational criminal organizations. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF . The details contained in the charging documents are allegations. The remaining defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in the court of law.


title: New York Man Sentenced to 69 Months in Prison for Hacking, Credit Card Trafficking and Money Laundering Conspiracies

body_text: BOSTON – A New York City man has been sentenced in federal court in Boston for conspiracies to engage in computer hacking, trafficking in stolen payment card numbers and money laundering. Vitalii Antonenko, 32, was sentenced by United States District Judge William G. Young to time served plus 10 days (69 months and 18 days in prison) to be followed by three years of supervised release. The Court ordered Antonenko to pay approximately $1.8 million in restitution to a victim in the case. In September 2024, Antonenko pleaded guilty to one count of conspiracy to gain unauthorized access to computer networks and to traffic in unauthorized access devices, and one count of money laundering conspiracy. Antonenko was arrested and detained in March 2019 on money laundering charges at New York’s John F. Kennedy International Airport after he arrived there from Ukraine carrying computers and other digital media that held hundreds of thousands of stolen payment card numbers. He was indicted by a federal grand jury in May 2020. Antonenko and co-conspirators scoured the internet for computer networks with security vulnerabilities that were likely to contain credit and debit card account numbers, expiration dates, and card verification values (Payment Card Data) and other personally identifiable information (PII). They used a hacking technique known as a “SQL injection attack” to access those networks without authorization, extracted Payment Card Data and other PII, and transferred it for sale on online criminal marketplaces. Once a co-conspirator sold the data, Antonenko and others used Bitcoin as well as traditional bank and cash transactions to launder the proceeds in order to disguise their nature, location, source, ownership and control. The conspiracy’s victims included a hospitality business and non-profit scientific research institution, both located in eastern Massachusetts. United States Attorney Joshua S. Levy and Andrew Murphy, Special Agent in Charge of the U.S. Secret Service, Boston Field Office made the announcement today. Assistant U.S. Attorney Seth B. Kosto, Chief of the Securities, Financial & Cyber Fraud Unit, prosecuted the case.


title: Revere Man Pleads Guilty to Ammunition Offense in Connection with Everett Shooting

body_text: BOSTON – A Revere man pleaded guilty yesterday in federal court in Boston to illegally possessing ammunition in connection with a January shooting in a residential neighborhood of Everett. Kenneth Munoz, 27, pleaded guilty to one count of being a felon in possession of ammunition. U.S. Senior District Court Judge William G. Young scheduled sentencing for April 9, 2025. On the afternoon of Jan. 2, 2022, three individuals fired over 20 shots in an Everett neighborhood causing ballistic damage in the surrounding area, including bullet holes inside of bedrooms and living rooms in surrounding residences. The shooting was captured on video surveillance from nearby residences. Munoz was identified as one of the two shooters. Munoz is prohibited from possessing firearms and ammunition due to prior convictions. The charge of being a felon in possession of ammunition provides for a sentence of up to 10 years in prison, up to three years of supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case. United States Attorney Joshua S. Levy, James M. Ferguson, Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives, Boston Field Division, Everett Police Chief Paul Strong and Chelsea Police Chief Keith E. Houghton made the announcement. Assistant U.S. Attorney Sarah Hoefle of the Organized Crime & Gang Unit is prosecuting the case.


title: Michigan Man Sentenced for Methamphetamine Trafficking

component: USAO - West Virginia, Northern

body_text: CLARKSBURG, WEST VIRGINIA – Drake D. Dodson-Williams, 33, of Southgate, Michigan, was sentenced to 70 months in federal prison for possession with intent to distribute methamphetamine. According to court documents and statements made in court, Dodson-Williams was the leader of a drug trafficking organization, operating from Michigan to Harrison County, West Virginia. During a traffic stop on Dodson-Williams’s vehicle, officers seized cocaine, heroin, methamphetamine, and cash. The defendant has a criminal history that includes multiple drug convictions. Dodson-Williams will serve three years of supervised release following his prison sentence. Assistant U.S. Attorney Christie Utt prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives; the Greater Harrison Drug Task Force, a HIDTA-funded initiative; and the Harrison County Sheriff’s Office investigated. Chief U.S. District Judge Thomas S. Kleeh presided.


title: Justice Department Announces Resolution of Criminal and Civil Investigations into McKinsey & Company’s Work with Purdue Pharma L.P.; Former McKinsey Senior Partner Charged with Obstruction of Justice

body_text: BOSTON — McKinsey & Company Inc. (McKinsey), a global management consulting firm based in New York, has agreed to pay $650 million to resolve a criminal and civil investigation into the firm’s consulting work with opioids manufacturer Purdue Pharma L.P. (Purdue). The resolution pertains to McKinsey’s advice to Purdue concerning the sales and marketing of Purdue’s extended-release opioid drug, OxyContin, including a 2013 engagement in which McKinsey advised on steps to “turbocharge” sales of OxyContin. Today’s resolution marks the first time a management consulting firm has been held criminally responsible for advice resulting in the commission of a crime by a client and reflects the Justice Department’s ongoing efforts to hold actors accountable for their roles in the opioid crisis. The resolution is also the largest civil recovery for such conduct. Additionally, a former McKinsey senior partner who worked on Purdue matters has been charged with obstruction of justice in federal court in Abingdon, Virginia. Martin E. Elling, 60, a U.S. citizen currently residing in Bangkok, Thailand, has been charged with one count of knowingly destroying records, documents and tangible objects with the intent to impede, obstruct and influence the investigation and proper administration of a matter within the jurisdiction of the Justice Department. Elling has agreed to plead guilty and is expected to appear in federal court in Abingdon to enter his plea and for sentencing at later dates. As part of the government’s resolution with McKinsey, the company has entered into a five-year deferred prosecution agreement (DPA) in connection with a criminal Information filed in U.S. District Court for the Western District of Virginia against McKinsey’s U.S. subsidiary (McKinsey & Company Inc. United States, “McKinsey U.S.”). The information charges McKinsey U.S. with one felony count of knowingly destroying records, documents and tangible objects with the intent to impede, obstruct, and influence the investigation and proper administration of a matter within the jurisdiction of the Justice Department; and one misdemeanor count of knowingly and intentionally conspiring with Purdue and others to aid and abet the misbranding of prescription drugs, held for sale after shipment in interstate commerce, without valid prescriptions. McKinsey has agreed to pay a penalty of over $231 million, a forfeiture amount of over $93 million (reflecting all money it was paid by Purdue from 2004 to 2019) and a payment of $2 million to the Virginia Medicaid Fraud Control Unit to resolve the criminal allegations. McKinsey also has entered into a civil settlement agreement in which it will pay over $323 million to resolve its liability under the False Claims Act for allegedly providing advice to Purdue Pharma L.P. that caused the submission of false and fraudulent claims to federal healthcare programs for medically unnecessary prescriptions of OxyContin, as well as allegedly failing to disclose to the U.S. Food and Drug Administration (FDA) conflicts of interest arising from McKinsey US’s concurrent work for Purdue and the FDA. This brings the total payments under the global resolution to $650 million. Today’s filing includes a 71-page Agreed Statement of Facts , which provides a detailed account of McKinsey’s work with Purdue relating to OxyContin. As part of the resolution, McKinsey has agreed to implement a significant compliance program, including a system of policies and procedures designed to identify and assess high-risk client engagements. As part of this compliance program, McKinsey will implement new document retention procedures and training for all partners, officers and employees who provide or implement advice to clients. This compliance program is in addition to the provisions negotiated between McKinsey and the Department in a concurrent resolution with McKinsey & Company Africa that was announced on Thursday, Dec. 5. McKinsey has also agreed that it will not do any work related to the marketing, sale, promotion or distribution of controlled substances during the five-year term of the DPA. The resolution requires McKinsey’s Managing Partner to certify, on an annual basis, the firm’s compliance with its obligations under the DPA and federal law. “This global resolution shows the department’s commitment to holding accountable those who played key roles in fueling the opioid crisis,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Consulting companies cannot advise their clients to break the law, and then skirt responsibility when their clients do so.” “For the first time in history, the Justice Department is holding a management consulting firm and one of its senior executives criminally responsible for the sales and marketing advice it gave resulting in the commission of crime by a client,” said U.S. Attorney Christopher R. Kavanaugh for the Western District of Virginia. “This ground-breaking resolution demonstrates the Justice Department’s ongoing commitment to hold accountable those companies and individuals who profited from our Nation’s opioid crisis.” “McKinsey schemed with Purdue Pharma to ‘turbocharge’ OxyContin sales during a raging opioid epidemic — an epidemic that continues to decimate families and communities across the nation. Today’s groundbreaking resolution makes clear our office’s commitment to holding powerful companies accountable for their part in the opioid epidemic, even if they did not make, sell, or dispense the drugs,” said U.S. Attorney Joshua Levy for the District of Massachusetts. “Consulting firms like McKinsey should get the message: if the advice you give to companies in boardrooms and PowerPoint presentations aids and abets criminal activity, we will come after you and we will expose the truth.” “No amount of money can make-up for the devastating impact and heartbreaking loss of life the opioid crisis has inflicted on the people of Massachusetts, and our country. But today’s settlement is a sobering reminder that if you try to capitalize on a crisis by putting profits over patient safety — and then try to obstruct a federal investigation — you will pay a hefty price,” said Special Agent in Charge Jodi Cohen of the FBI Boston Field Office. “McKinsey is now being held criminally and financially accountable for devising an aggressive marketing strategy that was in reality a roadmap to boost sales of highly addictive opioids. Their actions resulted in powerful prescription painkillers being used in an unsafe, ineffective, and medically unnecessary manner. As both health care consumers, and taxpayers, this type of fraud negatively impacts all of us.” “McKinsey’s management consulting work with Purdue Pharmaceuticals significantly contributed to a devastating public health crisis affecting American families and communities nationwide,” said Inspector General Christi A. Grimm of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG is committed to holding accountable those who violate the law and put the public at risk, including health care consultants who are complicit in fraudulent schemes.” “Aiding and abetting in the potential misbranding and illegal distribution of controlled substances poses a danger to U.S. consumers,” said Special Agent in Charge George A. Scavdis of the FDA Office of Criminal Investigations Metro Washington Field Office. We will continue to investigate and bring to justice companies whose actions put profits over patient safety.” “Today’s resolution holds this defendant accountable for its role in the aggressive marketing and promotion of opioids. Their actions led to medically unnecessary opioid prescriptions, which compromised the integrity of VA’s healthcare system that cares for our nation’s veterans,” said Department of Veterans Affairs (VA) Inspector General Michael J. Missal. “We thank our law enforcement partners for their diligent work in bringing this case to closure.” “It shocks the conscience that a major consulting corporation would actively seek to increase the submission of fraudulent claims for medically unnecessarily opioid prescriptions in the midst of the opioid crisis,” said Inspector General Krista A. Boyd of the U.S. Office of Personnel Management Office of the Inspector General. “The outstanding efforts of our law enforcement partners and colleagues at the Department of Justice led to this ground-breaking result. We must hold accountable those who prey upon the most vulnerable Americans in the name of increased profits.” As described in the DPA, McKinsey received credit for its cooperation with the United States in connection with the criminal investigation, including providing updates regarding information obtained through is internal investigation; highlighting documents of interest in voluminous productions; and facilitating interviews. McKinsey also engaged in extensive remedial measures, including voluntarily stopping all work in 2019 on any opioid-specific business issues; terminating two senior partners, including Elling, who communicated about deleting opioid-related documents concerning Purdue; hiring a new chief legal officer and chief ethics and compliance officer; significantly enhancing its new client selection framework; and deploying a formalized diligence review and intake process for all clients. McKinsey has agreed to continue to cooperate with the United States. McKinsey’s Criminal Liability for Misbranding The criminal misbranding charge was based on McKinsey’s advice to Purdue Pharma L.P. as set forth in the Agreed Statement of Facts filed today. Between 2004 and 2019, McKinsey contracted with Purdue on 75 different engagements in the United States. In 2007, a Purdue affiliate pleaded guilty to misbranding OxyContin, from 1996 through 2001, by falsely marketing it as less addictive, less subject to abuse and diversion, and less likely to cause dependence and withdrawal than other pain medications, and Purdue entered into a five-year corporate integrity agreement (CIA) with HHS-OIG. After the 2007 guilty plea, McKinsey partners maintained close contact with Purdue, and in 2009, worked with Purdue to enhance “brand loyalty” for OxyContin and protect market share. In 2010 McKinsey worked with Purdue to obtain FDA approval for a version of OxyContin that was reformulated with abuse-deterrent properties. Following the introduction of reformulated OxyContin in August 2010, OxyContin sales immediately began to decline. Purdue studied the drivers for this decline and attributed it, in large part, to a drop in prescriptions for individuals abusing OxyContin and increases in regulatory safeguards intended to hinder medically unnecessary prescribing of OxyContin. In May 2013, Purdue retained McKinsey to conduct a rapid assessment of the underlying drivers of OxyContin performance, identify key opportunities to increase near-term OxyContin revenue and develop plans to capture priority opportunities. This 2013 effort was called Evolve to Excellence, or “E2E,” and included McKinsey advising Purdue on how to “turbocharge” the sales pipeline for OxyContin by, among other strategies, intensifying marketing to High Value Prescribers, included prescribers who were writing opioid prescriptions for uses that were unsafe, ineffective, and medically unnecessary. McKinsey consultants spoke with Purdue about the concerns and increasing reluctance of pharmacists and pharmacy chains to fill prescriptions for OxyContin as abuse of the drug rose. McKinsey consultants also went on several “ride-alongs” with Purdue sales representatives in the field, as these sales representatives called on prescribers and pharmacists. In notes about one of these ride-alongs, a McKinsey consultant wrote, in part, “Pharmacist; [had] a gun and was shaking; abuse is definitely a huge issue[.]” In August 2013, McKinsey partners met with certain members of the Purdue Board of Directors (members of the family that controlled Purdue) to present McKinsey’s findings and proposal; as one McKinsey partner reported afterwards, “[b]y the end of the meeting the findings were crystal clear to everyone and they gave a ringing endorsement of ‘moving forward fast.’” McKinsey also described for Purdue the financial value at stake: “hundreds of millions, not tens of millions.” For Purdue and McKinsey, E2E was a financial success. Their targeting of High Value Prescribers slowed OxyContin’s declining sales and kept Purdue’s profits flowing at the expense of public health. After the conclusion of McKinsey’s work for Purdue on E2E, McKinsey performed additional work with Purdue that also sought to maximize OxyContin sales by further targeting sales efforts to High Value Prescribers. Obstruction of Justice by Former McKinsey Senior Partner According to the charging documents filed today, Elling served as the Director of the client services team for approximately 30 of McKinsey’s engagements with Purdue. He had a senior, relationship-focused role with respect to the E2E engagement and was involved in securing the engagement for McKinsey. On July 4, 2018, Elling allegedly emailed another senior partner: “Just saw in the FT that [Purdue board member] is being sued by states attorneys general for her role on the [Purdue] Board. It probably makes sense to have a quick conversation with the risk committee to see if we should be doing anything other [than] eliminating all our documents and emails. Suspect not but as things get tougher there someone might turn to us.” According to court documents, forensic analysis of Elling’s McKinsey-issued laptop found that Elling in fact removed materials related to McKinsey’s work for Purdue from the laptop, as well as a Purdue-related folder from his Outlook email account. Elling faces a maximum penalty of 20 years in prison, three years of supervised release and a fine up to $250,000 for the obstruction of justice charge. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. False Claims to Federal Healthcare Programs The department’s civil False Claims Act settlement resolves allegations that, from 2013 to 2014, McKinsey US, by advising Purdue to turbocharge OxyContin marketing to High Value Prescribers, some of whom were already prescribing very large quantities of OxyContin, as a means to increase OxyContin sales, and despite its awareness of the opioid crises, thereby knowingly caused false and fraudulent claims for OxyContin to be submitted to Medicare, Medicaid, TRICARE, the Federal Employees Health Benefit Program and the Veterans Health Administration. Along with the civil settlement, McKinsey US entered into a five-year Corporate Integrity Agreement with HHS-OIG. The CIA, HHS-OIG’s first with a management consulting firm, contains novel obligations regarding risk assessment and quality control. First, the CIA requires McKinsey’s Compliance Committee to establish a robust risk evaluation process, evaluating engagement risks and providing quality oversight for certain client deliverables. Second, it requires McKinsey to establish a Quality Review Program to assess the quality of McKinsey’s advice to certain life sciences and health care clients with the dual goals of ensuring that McKinsey complies with applicable laws and does not provide or assist clients with plans, advice, or strategies that violate the law. HHS-OIG will select an independent Compliance Expert to review McKinsey’s systems and processes under the Quality Review Program and to review a sample of McKinsey client engagements, including the advice provided to those clients. False Claims to FDA The department’s civil False Claims Act settlement also resolves allegations that, from 2014 to 2017, McKinsey US knowingly misled the FDA by assigning consultants to concurrently work on both FDA projects and competitively sensitive Purdue projects, contrary to McKinsey US’ conflict of interest policy. While soliciting a contract from the FDA, McKinsey US represented to the FDA that it had a conflict-of-interest policy in which its consultants serving the FDA would not be assigned to a competitively sensitive project for a significant period of time following an assignment for FDA. The FDA then awarded McKinsey US the first in a series of contracts on a project relating to the monitoring of the safety of FDA-regulated products. McKinsey US admitted that it did not inform the FDA that its consultants worked on the Purdue projects around the same time those consultants also worked on the FDA project. Assistant U.S. Attorney Randy Ramseyer for the Western District of Virginia; Assistant U.S. Attorneys Amanda P. Masselam Strachan and William B. Brady for the District of Massachusetts; Senior Trial Counsel Kristen M. Echemendia of the Civil Division’s Commercial Litigation Branch, Fraud Section; Trial Attorneys Jessica Harvey and Steven R. Scott of the Civil Division’s Consumer Protection Branch; and Special Assistant U.S. Attorneys and Assistant Attorneys General Kristin Gray and Kimberly Bolton of the Virginia Office of the Attorney General’s Medicaid Fraud Control Unit are prosecuting the criminal case against Elling and McKinsey. The civil resolution was handled by Senior Trial Counsel Christopher Terranova of the Civil Division’s Commercial Litigation Branch, Fraud Section. The FDA Office of Criminal Investigations, FBI and Offices of the Inspector General of the Department of Health and Human Services, Department of Veterans Affairs and Office of Personnel Management investigated the case, with assistance from the Department of Justice’s Computer Crimes and Intellectual Property Section Cybercrime Lab. The details contained in the charging documents and civil resolution are merely allegations. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.


title: Calhoun County Man Sentenced for a Firearms Conviction

body_text: CLARKSBURG, WEST VIRGINIA – Victor L. Carpenter, 57, of Mt. Zion, West Virginia, was sentenced today to 57 months in federal prison for the unlawful possession of a firearm. According to court documents and statements made in court, Carpenter was on state probation for malicious assault and drug charges in Calhoun County. During a probation home visit, officers located a 16-gauge shotgun and ammunition. The gun had been altered with a shortened stock and barrel. Carpenter is prohibited from having firearms because of the felony convictions in Calhoun County. Carpenter will serve three years of supervised release following his prison sentence. Assistant U.S. Attorney Andrew Cogar prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the West Virginia State Police investigated. Chief U.S. District Court Judge Thomas S. Kleeh presided.


title: HOPE Family Drug Summit

component: USAO - West Virginia, Southern

body_text: Click here to register for this IN-PERSON only Summit HOPE Family Drug Summit (Healing, Opportunities and Possibilities to Empower) January 15, 2025 University of Charleston West Virginia families impacted by Substance Use Disorder (SUD) are welcome and encouraged to attend the West Virginia HOPE Family Drug Summit. The Summit will provide opportunities for SUD survivors, families and professionals who support them to share information, build connections, foster collaboration and strengthen partnerships to provide HOPE to those suffering from SUD and their children and families. This free event will convene a wide range of stakeholders, including families impacted by the drug crisis in West Virginia, to better meet the comprehensive needs of families and those seeking recovery. Audience: Individuals and family members impacted by SUD, recovery and treatment professionals, probation, parole, courts, social workers, school personnel, victim advocates, and others providing services and support to SUD impacted individuals and families. Sponsored in partnership with: Drug Enforcement Administration, Louisville Division Federal Public Defender’s Office, SDWV First Choice Services Jobs & Hope West Virginia Legal Aid of West Virginia Mission West Virginia West Virginia Center for Children’s Justice West Virginia Department of Homeland Security West Virginia Fusion Center West Virginia Public Defender Services West Virginia Supreme Court of Appeals hope_family_drug_summit_program_final.pdf


title: Federal Jury Convicts Berrien County Man Of Possession With Intent To Distribute Controlled Substances

component: USAO - Michigan, Western

body_text: GRAND RAPIDS – U.S. Attorney for the Western District of Michigan Mark Totten today announced that a federal jury convicted Willie David Lark, 53, of Benton Township, Michigan, of possession with intent to distribute 50 grams or more of methamphetamine, 40 grams or more of fentanyl, and quantities of cocaine and cocaine base. Lark will be sentenced at a later date. “Illicit street drugs can kill,” said U.S. Attorney Mark Totten . “In particular, xylazine and fentanyl drug mixtures place users at a higher risk of suffering a fatal drug poisoning. Just a speck of fentanyl can be lethal, and naloxone (Narcan) does not reverse the potentially deadly effects of xylazine. While we can never prosecute our way out of a drug epidemic, my office is committed to disrupting the flow of these poisons into our communities.” According to evidence admitted at trial, in August 2022, investigators searched Lark’s residence in Benton Township, Michigan in connection with an ongoing drug investigation. Inside Lark’s safe, investigators found over 188 grams of 100% pure methamphetamine, also known as “ice,” over 100 grams of a mixture containing fentanyl and xylazine, over 70 grams of cocaine, and over 31 grams of cocaine base. Investigators found additional evidence inside the house that proved Lark intended to sell these drugs. The jury also heard that approximately two weeks later, in September 2022, when investigators arrested Lark, they found additional quantities of fentanyl, cocaine, and cocaine base in his pants pocket that he intended to sell. In Lark’s truck, investigators also found a key to the safe in his residence that was previously searched and found to contain drugs. According to the Centers for Disease Control (see here ), in 2023 at least 107,543 people died from drug poisoning across the United States, which is near the all-time high of 111,029 deaths in 2022. In Michigan, at least 2,931 people died from drug poisoning in 2023. Approximately 75% of the 2023 drug poisoning deaths across the United States were due to fentanyl. While 2024 data shows the number of deaths has started to decline, the number remains high. Learn more about the dangers of xylazine, a non-opioid sedative or tranquilizer, here . The following services are available for people experiencing addiction, or their friends and loved ones: Substance Abuse and Mental Health Services Administration (SAMHSA) Helpline, 1-800-662-4357, www.samhsa.gov/find-support/in-crisis . Cope Network (providing free Naloxone and other harm reduction services in Barry, Berrien, Branch, Cass, Calhoun, St. Joseph, and Van Buren Counties), 269-580-8290, www.copenetwork.org . The Grand Rapids Red Project (providing free Naloxone and other harm reduction services in Kent and Muskegon Counties), 616-456-9063 (Kent County), 231-563-6865 (Muskegon County), www.redproject.org . The Michigan Department of Health and Human Services has a webpage that identifies county-by-county services. The Drug Enforcement Administration and Michigan State Police Southwest Enforcement Team are investigating this case, and Assistant U.S. Attorney Austin J. Hakes is prosecuting it. This case is part of the U.S. Department of Justice’s Organized Crime Drug Enforcement Task Force (OCDETF) Program. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF . # # #


title: Newark Businessman Admits Bribing Former Newark Deputy Mayor And Director Of Newark Department Of Economic And Housing Development

component: USAO - New Jersey

body_text: NEWARK, N.J. – A Newark business owner admitted bribing a former city official in exchange for that official’s assistance in acquiring and redeveloping Newark-owned properties, U.S. Attorney Philip R. Sellinger announced. Frank Valvano, Jr., 57, of Florham Park, New Jersey, pleaded guilty before U.S. District Judge Madeline Cox Arleo in Newark federal court to two counts of an indictment charging him with honest services fraud and bribery. “As he admitted in court, Frank Valvano, Jr. provided cash, jewelry, and other benefits to a public official in exchange for the official’s use of his influence to further Valvano’s private business interests, defrauding the people of Newark of their right to the official’s honest services. He corrupted the public official’s independent judgment and violated the public trust for his own financial gain. Our office will continue to work with our law enforcement partners to make sure that the people of New Jersey are protected from public officials whose greed overrides their sworn duty to serve the people and from the individuals who bribe those officials.” U.S. Attorney Philip R. Sellinger According to documents filed in the case and statements made in court: Valvano admitted bribing Carmelo Garcia – who served as deputy mayor and director of the Newark Department of Economic and Housing Development (DEHD) and executive vice president and chief real estate officer of the Newark Community Economic Development Corporation (NCEDC) – in exchange for Garcia’s assistance with the acquisition and redevelopment of city-owned property. From 2017 through April 2019, Valvano, Irwin Sablosky, and others provided significant monetary payments and other benefits to Garcia while he was serving as a high-level Newark official, and prior to that, as an executive officer of the NCEDC (now known as Invest Newark), in exchange for Garcia’s use of his official positions and influence within the city of Newark and the NCEDC to advance real estate development matters of interest to Sablosky and Valvano. These matters included obtaining preliminary designation letters for Sablosky and Valvano and securing Newark-approved redevelopment agreements (RDAs) that allowed them to purchase and acquire various Newark-owned properties for redevelopment, and to ensure that Garcia did not use his influence and authority to act against their interests. In addition to cash, Valvano and Sablosky also gifted Garcia jewelry, including multiple high-end watches and chains, from their pawnbroker and jewelry business. They also paid for Garcia’s expenses on a trip to Miami, Florida. Phone records and text messages obtained by law enforcement show extensive communication between Garcia, Valvano, Sablosky, and others throughout this period of time, including text messages in which Garcia arranged to personally collect cash provided by Valvano and Sablosky. In one instance, in June 2018, Valvano and Sablosky, through an intermediary, supplied Garcia, then the city’s acting deputy mayor and director of the city’s DEHD, $25,000 in cash as part of the stream of bribes provided to Garcia. The Travel Act charge in Count 19 of the indictment carries a maximum potential penalty of 5 years in prison. The bribery charge in Count 26 carries a maximum penalty of 10 years in prison. All charges are punishable by a fine of $250,000 or twice the amount of the pecuniary gain from the offense. Sentencing is scheduled for April 16, 2025. Valvano originally was charged by indictment in October 2021 with Sablosky, 64, of Springfield, New Jersey, and Garcia, 49, of Hoboken, New Jersey. Garcia previously pleaded guilty to conspiracy to defraud the city of Newark and the NCEDC of Garcia’s honest services, honest services wire fraud, and receiving bribes in connection with the business of a federally funded local government and organization and is awaiting sentencing. Sablosky previously pleaded guilty to conspiracy to honest services wire fraud and bribery and is awaiting sentencing. U.S. Attorney Sellinger credited special agents of the FBI’s Newark Field Office, under the direction of Acting Special Agent in Charge Nelson I. Delgado; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jenifer I. Piovesan, and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Vicky Vazquez, with the investigation leading to today’s plea. The government is represented by Elaine K. Lou, Deputy Chief of the Criminal Division, and Katherine J. Calle and Edeli Rivera of the U.S. Attorney’s Office’s Special Prosecutions Division. valvanoetal.indictment.pdf


title: Honduran Man Sentenced to 63 Months in Federal Prison for Drug Conviction

component: USAO - Louisiana, Middle

body_text: United States Attorney Ronald C. Gathe, Jr. announced that U.S. District Judge Brian A. Jackson sentenced Marvin Martinez-Ruiz, age 42, of Honduras, to 63 months in federal prison following his conviction for possession with intent to distribute methamphetamine and cocaine. In addition to the term of imprisonment, the Court further sentenced Martinez-Ruiz to serve three years of supervised release. According to admissions made as part of his guilty plea, on August 21, 2023, deputies with the East Baton Rouge Sheriff’s Office conducted a traffic stop on a white van for improper lane use. The driver of the van was identified as Martinez-Ruiz and after obtaining consent to search the van, deputies located 416.1 grams of methamphetamine, 150.9 grams of cocaine, and two digital scales inside the van. After being advised of his Miranda rights, Martinez-Ruiz admitted that the narcotics belonged to him. This case was investigated by the Drug Enforcement Administration, East Baton Rouge Parish Sheriff’s Office, Lafayette Parish Sheriff’s Office, and Baton Rouge Police Department, and was prosecuted by Assistant United States Attorney Jeremy S. Johnson.


title: Suffolk County Corrections Officers Charged with COVID Unemployment and Loan Fraud

body_text: BOSTON – Two corrections officers employed by the Suffolk County Sherriff’s Department were arrested today for allegedly submitting fraudulent information in an effort to obtain loans through CARES Act programs like the Pandemic Unemployment Assistance (PUA) program and the Paycheck Protection Program (PPP). Christnel Orisca, 25, of Boston, was indicted by a federal grand jury on five counts of wire fraud and one count of making a false statement to a financial institution, arising out of PUA, traditional Unemployment Insurance (UI) and PPP loan benefits obtained prior to his employment at the Suffolk County Sherriff’s Department. Jasmine Murphy, 38, also of Boston, was indicted on seven counts of wire fraud and one count of making a false statement to a financial institution, arising out of PUA and PPP loan benefits obtained prior to her employment at the Suffolk County Sherriff’s Department and UI benefits obtained prior to and during her employment there. The defendants were arrested this morning and will appear in federal court in Boston at 1:30 PM and 1:45 PM today. “This case highlights the critical importance of protecting taxpayer-funded programs like the CARES Act from fraud and abuse,” said United States Attorney Joshua S. Levy. “These defendants, who hold positions of public trust as corrections officers, are alleged to have knowingly exploited pandemic relief programs intended to support small businesses and unemployed workers during a time of unprecedented crisis. Such conduct not only undermines the integrity of these programs but also betrays the public’s trust. My office remains steadfast in holding accountable those who engage in such schemes and ensuring that federal relief funds are used for their intended purpose – helping those in genuine need.” “An important part of the mission of the Office of Inspector General is to investigate allegations of fraud involving COVID-19 pandemic unemployment insurance programs. We will continue to work with our law enforcement partners to investigate these types of allegations,” said Special Agent-in-Charge Jonathan Mellone, U.S. Department of Labor, Office of Inspector General. “Today’s arrest sends a clear message that those seeking to fraudulently receive benefits will be investigated and prosecuted. DHS OIG is grateful for our continued partnership with our law enforcement partners as we continue fighting corruption,” said Inspector General Joseph V. Cuffari, Ph.D., U.S. Department of Homeland Security, Office of Inspector General. According to the charging document, Orisca has been a Corrections Officer with the Suffolk County Sherriff’s Department since late 2021. It is alleged that Orisca fraudulently applied for pandemic unemployment and small business loan benefits while working full-time, initially for a security company and later for a delivery company. While employed full-time, it is alleged that Orisca collected approximately $54,700 in unemployment benefits and small business loan funds. According to the indictment, Murphy has been a Corrections Officer with the Suffolk County Sherriff’s Department since approximately January 2022. It is alleged that Murphy fraudulently applied for pandemic unemployment and small business loan benefits while working for trucking and workforce services companies. It is alleged that Murphy collected approximately $44,346 in unemployment benefits and small business loan funds to which she was not entitled. In both of their PUA applications, it is alleged that Orisca and Murphy made fraudulent representations about their employment status and thereafter falsely claimed, on a weekly basis, that they did not work and did not receive any income during the prior week. In their PPP loan applications, it is alleged that Orisca and Murphy submitted false statements to SBA-approved lenders, including about the income and/or payroll of their purported small businesses, in order to obtain their loans. According to the charging documents, they also made false representations on forms submitted to request that their PPP loans be forgiven. The charge of wire fraud provides for a sentence of up to 20 years in prison, three years of supervised release and a $250,000 fine. The charge of making false statements to a financial institution provides for a sentence of up to 30 years in prison, five years of supervised release and a $1 million fine. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case. U.S. Attorney Levy, DOL-OIG SAC Mellone and DHS-OIG Inspector General Cuffari made the announcement today. The U.S. Postal Inspection Service, Boston Police Department and the Suffolk County Sheriff’s Department provided valuable assistance with the investigation. Assistant U.S. Attorneys Adam Deitch and Dustin Chao of the Public Corruption Unit are prosecuting the case. On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus and https://www.justice.gov/coronavirus/combatingfraud . Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the https://www.justice.gov/disaster-fraud/webform/ncdf-disaster-complaint-form . The details contained in the charging document are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.


title: Texas Man Pleads Guilty to Federal Dogfighting Offenses

component: ENRD - Environmental Crimes Section

body_text: Jesus Allen Stephens, of Waskom, Texas, pleaded guilty yesterday to felony charges related to his participation in a major dogfighting event in November 2021 in Waskom. According to court documents, Stephens organized and hosted a large-scale dogfighting event on family-owned property in Harrison County, Texas, on Nov. 13, 2021. Stephens and others arranged to fight dogs at the event for gambling and entertainment purposes. Prior to the event, Stephens announced a series of up to 14 matches and sent multiple individuals GPS coordinates to the property. The fight included out-of-state participants. Law enforcement personnel who disrupted the event found a dogfighting pit structure, a severely injured dog and other dogfighting evidence. Several pit bull-type dogs were also found at Stephens’s residences in addition to items commonly used for dog fighting purposes, such as treadmills and heavy chains. Under federal law, it is illegal to fight dogs in a venture that affects interstate commerce and to possess, train, transport, deliver, sell, purchase or receive dogs for fighting purposes. Stephens pleaded guilty to conspiracy, sponsoring and exhibiting a dog in a dogfight and possessing a dog for dogfighting purposes. Stephens faces up to five years in prison and a $250,000 fine for each count. Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division (ENRD), U.S. Attorney Damien M. Diggs for the Eastern District of Texas and Special Agent in Charge Lyonel Myrthil of the FBI’s New Orleans Field Office made the announcement. The FBI’s Shreveport, Louisiana, and Tyler, Texas, Resident Agencies are investigating this case. Deputies with the Harrison County, Texas, Sheriff’s Office have also provided invaluable assistance. Trial Attorney Sarah Brown and Senior Trial Attorney Ethan Eddy of ENRD’s Environmental Crimes Section are prosecuting the case with assistance from James Noble of the U.S. Attorney’s Office for the Eastern District of Texas.


title: Mexican Felon Sentenced to Federal Prison for Drug Trafficking and Firearm Charge

component: USAO - South Carolina

body_text: SPARTANBURG, S.C. —Sergio Magallan-Tinoco, a/k/a “John Migo,” 45, of Michoacan, Mexico, was sentenced to 15 years in federal prison for possession with intent to distribute over five kilograms of cocaine and possession of a firearm in furtherance of the drug trafficking crime. Evidence presented to the court showed that in the Fall of 2023, law enforcement in the Upstate conducted controlled purchases of fentanyl and cocaine from Magallan-Tinoco. Law enforcement later obtained a search warrant for Magallan-Tinoco’s residence, locating additional fentanyl and cocaine, along with a money counter, scales, and a loaded .380 caliber handgun. Magallan-Tinoco was found to be responsible for trafficking 20 kilograms of cocaine. Magallan-Tinoco has a prior conviction for possession with intent to distribute cocaine. United States District Judge Donald C. Coggins sentenced Magallan Tinoco to 180 months imprisonment to be followed by a five year term of supervised release. A $400,000 forfeiture judgment was also issued against him. There is no parole in the federal system. This prosecution is part of an Organized Crime Drug Enforcement Task Forces (OCDETF) investigation. OCDETF identifies, disrupts, and dismantles the highest-level drug traffickers, money launderers, gangs, and transnational criminal organizations that threaten the United States by using a prosecutor-led, intelligence-driven, multi-agency approach that leverages the strengths of federal, state, and local law enforcement agencies against criminal networks. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF . This case was investigated by Homeland Security Investigations, Border Enforcement Security Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives, Spartanburg County Sheriff’s Office, Cherokee County Sheriff’s Office, Greenville County Sheriff’s Office, and Greenville County Multi-Jurisdictional Drug Enforcement Unit. Assistant U.S. Attorney Jamie Schoen is prosecuting the case. ###


title: Brooklyn Man Sentenced to Three Years in Prison for Bank Fraud and Identity Theft

body_text: BOSTON – A Brooklyn was sentenced yesterday in federal court in Boston in connection with a scheme to steal over $3 million in COVID relief tax credits using the stolen identity of a corporate executive in New Jersey. Isaiah Aaron Tenryk, 28, was sentenced by U.S. District Court Judge Denise J. Casper to three years in prison followed by three years of supervised release. In September 2024, Tenryk pleaded guilty to bank fraud conspiracy, bank fraud and aggravated identity theft. Tenryk and his co-conspirators used a fraudulent driver’s license and the New Jersey executive’s name and Social Security number to open an account at a bank in Boston. Tenryk then deposited an approximately $3 million Employee Retention Tax Credit check, payable to the executive’s company, into the fraudulent account. In the days after Tenryk deposited the check, co-conspirators tried unsuccessfully to transfer the funds out of the account. Tenryk was arrested when he returned to the bank to attempt to wire money out of the account. A co-conspirator, Linval Jackson, of Queens, was arrested in July 2024. United States Attorney Joshua S. Levy; Jonathan Wlodyka, Acting Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service’s Boston Division made the announcement. Assistant U.S. Attorney Kriss Basil of the Securities, Financial & Cyber Fraud Unit is prosecuting the case.


title: Boston Man Pleads Guilty to Sexual Exploiting Minor

body_text: BOSTON – A Boston man pleaded guilty yesterday in federal court in Worcester to child exploitation offenses. Jalen Latimer, 26, of Roxbury, pleaded guilty to one count of conspiracy to commit sex trafficking and two counts of sexual exploitation of a minor. U.S. District Court Judge Margaret R. Guzman scheduled sentencing for March 18, 2025. Latimer is currently in state custody on related offenses. The defendant was previously charged by criminal complaint with one count of sexual exploitation of a minor on Feb. 16, 2024. In July 2023, Latimer conspired with another individual to sex traffic a minor victim. In July 2022, Latimer used two other minor victims to engage in sexually explicit conduct for the purpose of producing child pornography. Latimer was arrested in February 2024 and is facing charges by state authorities in Worcester Superior Court of rape of a child, aggravated indecent assault and battery of a child, human trafficking of a minor and depicting a minor in sexual conduct. The charge of sexual exploitation of a minor provides for a mandatory minimum sentence of 15 years and up to 30 years in prison, up to a lifetime of supervised release and a fine of $250,000. The charge of conspiracy to commit sex trafficking provides of a sentence of up to life in prison, up to a lifetime supervised release and a fine of up to $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case. United States Attorney Joshua S. Levy; Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Worcester Police Chief Paul B. Saucier; and Oxford Police Chief Michael K. Daniels made the announcement. Valuable assistance was provided by Rhode Island State Police and Massachusetts State Police. Assistant U.S. Attorney Kristen M. Noto of the Worcester Branch Office is prosecuting the case. This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc .


title: Fort Pierce Duo Sentenced to Prison for Cocaine Trafficking and Illegal Firearms Possession

component: USAO - Florida, Southern

body_text: MIAMI – On Dec. 4, two Fort Pierce men were sentenced to prison by Senior U.S. District Judge Donald L. Graham following convictions on gun and drug charges. Joseph Acevedo, 40, was sentenced to 101 months in prison, to be followed by four years of supervised release. Stanley Rumowski, 49, was sentenced to 96 months in prison, to be followed by three years of supervised release. Rumowski was also ordered to pay a fine of approximately $20,000. On July 18, a jury sitting in Fort Pierce, convicted both men of trafficking cocaine and Rumowski was convicted of possessing a firearm during the drug trafficking offense. According to evidence presented during the trial, Acevedo and Rumowski were business partners in a failing marijuana cultivation business. When the two men were driving back to Fort Pierce, from Miami, they were pulled over in Martin County, Florida by Martin County Sheriff’s Deputies. Following a canine sniff of their vehicle, law enforcement discovered a loaded firearm and approximately half a kilogram of cocaine. During the trial, text messages between the two men were introduced to prove their knowledge and intent to possess and distribute the cocaine. U.S. Attorney Markenzy Lapointe for the Southern District of Florida, Anthony Salisbury, Special Agent in Charge, Homeland Security Investigations (HSI), Miami Field Office, and Sheriff William D. Snyder of the Martin County Sheriff’s Office made the announcement. HSI Fort Pierce investigated this matter with significant assistance from the Martin County Sheriff’s Office. This case was prosecuted by Assistant U.S. Attorney Breezye Telfair. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov under case number 24-cr-14010. ###


title: University Club of Milwaukee Agrees to Pay Over $1 Million to Resolve Claim that It Wrongfully Obtained Paycheck Protection Program Loan

component: USAO - Wisconsin, Eastern

body_text: Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that the University Club of Milwaukee has agreed to pay $1,003,993.86 to settle claims that the club improperly obtained a loan through the Paycheck Protection Program (“PPP”) administered by the United States Small Business Administration (“SBA”). The PPP loan program, enacted in March 2020, provided emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. The program allowed eligible businesses and non-profits to receive loans guaranteed by the federal government and, if the borrower spent the funds on qualified expenses, the federal government would repay the loan on the borrower’s behalf. Congress directed the SBA to guarantee PPP loans “under the same terms, conditions, and processes” as ordinary small business loans administered by the agency. 15 U.S.C. § 636(a)(36)(B). With respect to loan eligibility, Congress expressly endorsed the SBA’s regulation explaining what entities would be ineligible for loans. 15 U.S.C. § 636(a)(37)(A)(iv)(III)(aa). For decades, this regulation has explained that “[p]rivate clubs and businesses which limit the number of memberships for reasons other than capacity” are not eligible for loans through the SBA. 13 C.F.R. § 120.110(i). The University Club of Milwaukee operates a private country club and dining facilities, which are not open to the general public. According to the government, at the time the University Club of Milwaukee applied for a PPP loan and for loan forgiveness, the club limited its membership for reasons other than capacity and, therefore, was ineligible to participate in the PPP. “The Paycheck Protection Program was an important but limited resource made available by Congress to assist small businesses around the country suffering the financial impacts of the COVID-19 pandemic,” said United States Attorney Haanstad. “But in making this resource available, Congress made a legislative determination that public funds would not be provided to private clubs that restricted their membership for reasons other than capacity. This settlement represents the continued efforts of the Small Business Administration and the Department of Justice to enforce Congress’s legislative determination and protect the public fisc.” Assistant United States Attorney Aaron R. Wegrzyn represented the government in connection with this matter, in coordination with Kandace Zelaya in the SBA’s Office of Litigation and Office of General Counsel. While the settlement resolves the government’s allegations against the University Club of Milwaukee with respect to its PPP loan, the club does not admit liability and no court has made any determination as to liability. # # # For Additional Information Contact: Public Information Officer Kenneth.Gales@usdoj.gov 414-297-1700 Follow us on Twitter


title: United States Obtains Consent Decree Against Lilmor Management, Morris Lieberman, And Others To Abate Lead Paint And Improve Housing Conditions Across More Than 2,500 Apartments In Largely Low And Moderate-Income Neighborhoods

component: USAO - New York, Southern

body_text: Damian Williams, the United States Attorney for the Southern District of New York; Lisa F. Garcia, the Regional Administrator for Region 2 of the U.S. Environmental Protection Agency (“EPA”); Matthew Ammon, the U.S. Department of Housing and Urban Development (“HUD”) Office of Lead Hazard Control and Healthy Homes; and Rae Oliver Davis, the Inspector General of the HUD Office of the Inspector General (“HUD OIG”), announced today that the United States, together with the State of New York, filed a civil lawsuit against LILMOR MANAGEMENT LLC (“LILMOR”), MORRIS LIEBERMAN (“LIEBERMAN”), and related LLCs (the “LLC DEFENDANTS”) (collectively, the “Defendants”), alleging that since 2012 the Defendants have violated federal law relating to lead-based paint safety and maintained a public nuisance in approximately 2,700 apartments, including more than 2,500 still owned by the LLC Defendants and more than 2,400 apartments currently managed by LILMOR and LIEBERMAN. Among other things, the U.S. and the State of New York allege that the Defendants’ apartments are riddled with peeling lead paint and lead dust; infested by rats, mice, and roaches; damp from perpetual leaks and covered with growing mold; and otherwise a danger to human health. More than 130 children living in the Defendants’ apartments have tested positive for elevated blood-lead levels since 2012. The parties simultaneously filed a Consent Decree that would resolve the lawsuit and impose extensive relief, including requiring the Defendants to pay $3.575 million in penalties and $2.925 million in restitution to affected tenants, and requiring Defendants to identify and abate all lead-based paint (at an estimated cost of $10 million) and remediate substandard housing conditions across more than 2,500 apartments, subject to the oversight of an independent Housing Specialist selected by the U.S. and New York State. U.S. Attorney Damian Williams said: “New Yorkers are entitled to protection from lead-paint hazards and other unsafe conditions in their homes. Landlords must comply with federal lead paint laws, and they cannot neglect their residential properties in ways that create a public nuisance. The consent decree we filed today, if entered by the Court, would provide the most extensive relief ever achieved in a case of this kind, including requiring the defendants to make 2,500 apartments safe and sanitary and to pay $6.5 million, including nearly $3 million in restitution to impacted tenants.” EPA Regional Administrator Lisa F. Garcia said: “Our message to housing authorities, landlords, and renovators is loud and clear – Follow The Law – if you persist in cutting corners and putting public health at risk, we will pursue a violation and you will pay a hefty fine. There is no excuse for these violations. Rather than protecting children from lead poisoning, Lilmor Management Company LLC and the other named defendants systematically violated lead paint safety regulations. EPA appreciates the partnership with HUD, the U.S. Department of Justice and New York State officials on this action that underscores our joint commitment to protect our children and families from lead hazards.” HUD Director Matthew Ammon said: “Today’s settlement means that thousands of families in New York City will have their apartments tested for lead and made lead safe. HUD’s partnering with DOJ and EPA on this case is part of the whole-of-government approach that is vital for addressing lead hazards in homes nationally.” HUD-OIG Inspector General Rae Oliver Davis said: “The defendants’ failure to maintain safe and healthy living conditions for tenants, particularly the hundreds of children who have tested positive for elevated blood-lead levels, is simply unacceptable. This consent decree holds the defendants accountable for its egregious conduct. It provides important relief for victims and will require the defendant to take meaningful action to protect tenants from future exposure to health hazards. My office will continue to work with DOJ, HUD, EPA, and our local partners such as the New York Attorney General in addressing critical health and safety issues and safeguarding the well-being of families nationwide from preventable hazards such as lead poisoning.” Exposure to lead-based paint dust is the most common cause of lead poisoning, which can lead to severe, irreversible health problems, particularly in children. Lead poisoning can affect children’s brains and developing nervous systems, causing reduced IQ, learning disabilities, and behavioral problems. Federal law seeks to protect tenants from these grave threats. In particular, the federal Lead Disclosure Rule requires landlords and their agents to inform tenants about the risks of lead exposure in their apartments before entering lease agreements and to disclose known facts about the presence of lead paint and lead paint hazards in their housing. The federal Renovation, Repair, and Painting Rule (“RRP Rule”) provides work-practice standards and related requirements to minimize the risk of lead exposure during renovation projects. As alleged in the U.S. and New York State’s Complaint filed in the district court, LIEBERMAN is the co-owner and principal of LILMOR, which currently manages a portfolio of more than 2,400 apartments and previously managed others. Many of the apartments are owned by the LLC DEFENDANTS. The apartments are largely located in communities where families have low to moderate incomes and are disproportionately burdened by environmental and other health hazards. For years, the Defendants systematically failed to provide their tenants with disclosures about lead-based paint and lead-based paint hazards in their apartments, as required by the Lead Disclosure Rule. LILMOR and LIEBERMAN also failed to protect tenants when conducting renovation work as required by the RRP Rule, creating risks of exposure to toxic dust. Furthermore, the Defendants failed to properly maintain their residential properties, leading to apartments that were so unsafe and unsanitary as to present a public nuisance. * * * In the Consent Decree, LILMOR and LIEBERMAN admit, acknowledge, and accept responsibility for the following, among other things: Defendants own, control, or manage, in whole or in part, 49 residential buildings containing 2,539 units in New York City, all of which were built prior to 1978. Government records show that, since 2012, more than 130 children have tested positive for elevated blood-lead levels while living in an apartment owned or controlled by one or more of the Defendants. Disclosures Prior to November 2020, LILMOR and LIEBERMAN failed to provide tenants entering new and renewal leases with known information relating to lead-based paint or lead-based paint hazards and/or records in the possession or control of the Defendants relating to lead-based paint or lead-based paint hazards, as required by the federal Lead Disclosure Rule. In hundreds of apartments they rented, LILMOR and LIEBERMAN knew of lead-based paint or previous lead-based paint hazards because of prior lead-based paint hazard violations issued by the New York City Department of Housing Preservation and Development (“HPD”) or the New York City Department of Health and Mental Hygiene (“DOHMH”), but LILMOR and LIEBERMAN did not disclose this fact to tenants as required by the Lead Disclosure Rule. Prior to the dates upon which government records show that children tested positive for elevated blood-lead levels while residing in the Defendants’ apartments, LILMOR and LIEBERMAN had received citations for lead-based paint hazard violations from HPD or DOHMH for at least 18 of these apartments but did not disclose the fact that these apartments contained lead-based paint to the tenants when they signed their leases or lease renewals. Lead-Safe Work Practices LILMOR and LIEBERMAN lacked federal certification to conduct repairs and renovations that required lead-safe work practices pursuant to the RRP Rule, did not provide maintenance staff with equipment necessary to perform RRP-Rule-compliant work, and did not train maintenance staff on lead-safe work practices. LILMOR and LIEBERMAN provided no instructions to its maintenance staff to prevent them from conducting work that was required to be performed in accordance with lead-safe work practices. Their work-order database nevertheless reflects that work subject to the RRP Rule was conducted by their maintenance staff. Through at least 2020, LILMOR and LIEBERMAN failed to follow lead-safe work practices required by federal and local law in covered repair and renovation projects for which they engaged an entity that worked solely or principally for them. During this time, the entity did not employ lead-safe work practices. Furthermore, although LILMOR had arranged for this entity to receive EPA certifications required by the RRP Rule in 2010 and 2020, the entity was not certified to conduct work covered by the RRP Rule from 2015 to 2020. In a period spanning from 2019 to the present, HPD issued violations to Defendants under applicable housing code provisions: more than 966 times for lead-based paint hazards, more than 2331 times for rodent or roach infestations, more than 1465 times for mold, more than 1492 times for leaks, and more than 85 times for lack of heat. The Consent Decree agreed upon by the parties requires the Defendants, among other things, to do the following: Identify and abate all lead-based paint across 49 buildings containing more than 2,500 apartments. Eliminate substandard conditions throughout this housing portfolio. Engage an independent Housing Specialist, selected by the U.S. and the State of New York, to oversee the Defendants’ work under the consent decree. Pay a $3.25 million civil penalty to the U.S. Pay $3.25 million to New York State, of which $325,000 will be a civil penalty and $2.925 million will be used to pay restitution to tenants harmed by Defendants’ conduct. Provide rent-abatement credits for tenants affected by lead-based paint violations and substandard conditions. Provide tenant education efforts to tenants related to the hazards of lead-based paint. To provide public notice and afford members of the public the opportunity to comment on the Consent Decree, the decree will be lodged with the District Court for a period of at least 30 days before it is submitted for the Court’s approval. Mr. Williams thanked EPA and HUD attorneys and staff and HUD OIG for their critical work in this matter. Mr. Williams also thanked the Housing Protection Unit of the New York Attorney General’s Office for coordinating in pursuing the federal and state claims resolved in the Consent Decree. This case is being handled by the Environmental Protection Unit of the Office’s Civil Division. Assistant U.S. Attorneys Zack Bannon and Jacob Lillywhite are in charge of the case.


title: Oak Creek company to pay over $2.3 million to resolve allegations it submitted false claims to obtain a Paycheck Protection Program Loan

body_text: Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on December 3, 2024, Zund America, Inc., a corporation located in Oak Creek, Wisconsin, agreed to pay $2,300,825 to resolve allegations that it violated the False Claims Act by submitting false claims to obtain a Paycheck Protection Program (PPP) loan for which it was not eligible. Congress created the PPP in March 2020 to provide emergency financial assistance to Americans suffering from the economic effects of the COVID-19 pandemic. Under the PPP, eligible businesses could receive loans guaranteed by the SBA and, if the business spent the loan proceeds on qualified expenses, SBA would repay the loan and any accrued interest on the borrower’s behalf. In December 2020, Congress authorized certain borrowers who received an earlier PPP loan to obtain an additional “second-draw” loan. The second-draw loan program included additional eligibility requirements. Under the second-draw loan rules, for a company to be deemed a small business eligible for a second loan, the company, together with any corporate affiliates, had to employee 300 or few individuals. Zund America is owned by a Swiss holding company, Zund Holding AG. Through common ownership and management, Zund America is affiliated with 19 other Zund entities that operate across the globe. In February 2021, Zund America received a second-draw PPP loan, which the SBA later repaid. The United States alleges that Zund America was not eligible for this loan because Zund America and its affiliates had more than 300 employees. “Congress created the PPP to help small businesses and their employees survive the COVID-19 pandemic,” said U.S. Attorney Haanstad. “To make funds available as quickly as possible and save jobs, Congress and the SBA trusted companies to certify that they complied with the eligibility rules. Unfortunately, Zund America did not fulfill its obligations, and instead submitted false information to obtain its second-draw loan. This settlement requires Zund America to repay the SBA plus a substantial penalty.” “The favorable settlement in this case is the product of enhanced efforts by federal agencies such as the Small Business Administration working with the U.S. Attorney’s Office, SBA’s Office of Inspector General and other Federal law enforcement agencies, as well as private individuals who uncover fraudulent conduct to recover the product of this fraud as well as penalties,” said SBA General Counsel Therese Meers. The government’s investigation resulted from a whistleblower complaint filed under the qui tam provisions of the False Claims Act. The whistleblower will receive a share of the settlement. This case is pending as United States ex rel. GNGH 2, Inc. v. Zund America, Inc. , No. 24-cv-0661. Together with the SBA, Assistant United States Attorney Michael Carter represented the government in this matter. The settlement agreement states allegations only; Zund America, Inc., does not admit liability for the allegations. # # # For Additional Information Contact: Public Information Officer Kenneth.Gales@usdoj.gov 414-297-1700 Follow us on Twitter


title: Texas Man Indicted on Child Sexual Exploitation Charges

component: Criminal - Child Exploitation and Obscenity Section

body_text: NASHVILLE - An indictment was unsealed today in the Middle District of Tennessee charging a Texas man for child sexual exploitation offenses. According to court documents, between October 2018 and May 2019, Philip Taylor Sobash, 34, of Austin, then a practicing physician, engaged in an online sexually explicit relationship with Minor Victim 1, who resided in the Middle District of Tennessee. This online relationship allegedly began after they connected on a dating website that facilitates “sugar daddy” relationships. Although Minor Victim 1 represented that she was 18 when she signed up for the website, the site did not verify the age of its users. As alleged, after their communications moved to text message, Minor Victim 1 quickly informed Sobash of her true age and sent him a photo of her driver’s license, which confirmed that she was a minor. Sobash allegedly requested that Minor Victim 1 produce and send him sexually explicit images of herself and provided her thousands of dollars in cash and gifts to entice her to do so. Over the course of more than seven months, Minor Victim 1 allegedly sent hundreds of sexually explicit photos and videos to Sobash, most of which constituted child sexual abuse material (CSAM). Although Sobash allegedly assured Minor Victim 1 that the images she sent him would remain private between them, he distributed the images online. This led to unknown persons contacting Minor Victim 1 and attempting to blackmail her to produce more CSAM. Court filings indicate that the FBI discovered in 2024 that Minor Victim 1’s CSAM was available for sale on a publicly accessible website and was labeled with Minor Victim 1’s first and last name. The CSAM was part of a larger collection of sexually explicit images and videos of about 70 young women and girls called the “DiscreetGent” collection. According to court documents, evidence from various sources that indicates Sobash is “DiscreetGent” and is responsible for the sexually explicit imagery found in the online collection. The court filings further allege that in addition to Minor Victim 1, at least four other victims featured in the “DiscreetGent” collection were minors at the time they created CSAM for Sobash. Sobash allegedly sent electronic payments to Minor Victim 1 and the other minor victims, sometimes with sexual comments attached, and Sobash’s Apple iCloud account contained copies of Minor Victim 1’s CSAM. Sobash was arrested earlier today in the Western District of Texas. He is charged with one count of sexual exploitation of a minor, one count of coercing a minor to engage in prostitution or unlawful sexual activity, and one count of receipt of child pornography. If convicted, he faces a mandatory minimum penalty of 15 years in prison and a maximum penalty of 30 years in prison on the sexual exploitation of a minor count, a mandatory minimum penalty of 10 years in prison and a maximum penalty of life in prison on the coercing a minor to engage in prostitution or unlawful sexual activity count, and a mandatory minimum penalty of five years in prison and a maximum penalty of 20 years in prison for the receipt of child pornography count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Anyone who believes they or their minor dependent was victimized by Sobash is asked to visit the following FBI website and complete a short online questionnaire: www.fbi.gov/SobashVictims . Acting U.S. Attorney Thomas J. Jaworski for the Middle District of Tennessee; Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Criminal Division; and Assistant Director Chad Yarbrough of the FBI Criminal Investigative Division made the announcement. The FBI’s Child Exploitation Operational Unit is investigating the case. Assistant U.S. Attorney Monica R. Morrison and Trial Attorney Adam Braskich of the Criminal Division’s Child Exploitation and Obscenity Section are prosecuting the case. This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc . An indictment is merely an allegation. The defendant is presumed innocent until proven guilty in a court of law. # # # # #