component: Civil Rights Division

body_text: WASHINGTON – Following a comprehensive investigation, the Justice Department announced today that the City of Lexington, Mississippi (City), and Lexington Police Department (LPD) engage in a pattern or practice of conduct that deprives people of their rights under the U.S. Constitution and federal law. Lexington is a town of approximately 1,200 people, located about an hour outside of Jackson, Mississippi. Specifically, the Justice Department finds that LPD unlawfully Arrests, jails and detains people who cannot pay fines or fees, without assessing their ability to pay; Uses excessive force; Conducts stops, searches and arrests without probable cause, including jailing people on illegal “investigative holds” and arresting people solely because they owe outstanding fines; Imposes money bail without justification or assessment of ability to pay; Jails people without prompt access to court; Violates the rights of people engaged in free speech and expression, including by retaliating against people who criticize the police; Discriminates against Black people; and Operates under an unconstitutional conflict of interest because LPD’s funding depends on the money it raises through its enforcement. “Today’s findings show that the Lexington Police Department abandoned its sacred position of trust in the community by routinely violating the constitutional rights of those it was sworn to protect,” said Attorney General Merrick B. Garland. “The Justice Department’s investigation uncovered that Lexington police officers have engaged in a pattern or practice of discriminating against the city’s Black residents, used excessive force, and retaliated against those who criticize them. Additionally, Lexington’s approach to fines and fees — including unlawfully arresting, jailing, and detaining people based on their failure to pay money without assessing if they can afford to do so — has been devastating for its residents. Being poor is not a crime, but practices like these amount to punishing people for poverty. People in that community deserve better, and the Justice Department is committed to working with them, the City, and the Police Department to make the City safer for all its citizens.” “Public safety depends on public confidence in our justice system,” said Deputy Attorney General Lisa Monaco. “The Lexington Police Department’s incarceration of individuals because they could not afford to pay fines — as detailed in today’s findings report — undermined that confidence and violated the civil rights of Lexington residents. I’m grateful to the Civil Rights Division for its thorough investigation and continued work to address these findings.” “Lexington is a small, rural community but its police department has had a heavy hand in people’s lives, wreaking havoc through use of excessive force, racially discriminatory policing, retaliation, and more. In every corner of our country, police officers must respect people’s constitutional rights and treat people with dignity,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “After an extensive review, we found that police officers in Lexington routinely make illegal arrests, use brutal and unnecessary force, and punish people for their poverty — including by jailing people who cannot afford to pay fines or money bail. For too long, the Lexington Police Department has been playing by its own rules and operating with impunity — it’s time for this to end. Our findings report furthers the Justice Department’s commitment to ensuring fairness and the rule of law.” “Police have the authority to enforce the law, not to act as debt collectors for the City, extracting payments from the poor with threats of jail,” said U.S. Attorney Todd Gee for the Southern District of Mississippi. “No matter how large or small, every police department has an obligation to follow the Constitution.” Based on the department’s investigation, over the past two years, LPD has made nearly one arrest for every four people in town, primarily for low-level offenses and traffic violations. That is more than 10 times the per capita arrest rate for Mississippi as a whole. Many of these arrests were for non-criminal conduct, like owing outstanding fines and using profanity. Most of those arrested are Black people. In 2023, Black people were 17.6 times more likely to be arrested by LPD than white people were. When making low-level arrests, LPD uses tactics normally reserved for serious offenses. For example, LPD officers broke down a Black man’s door to arrest him for swearing at a public official. In another case, while attempting to arrest a man for having a tinted windshield, officers followed the man’s car to his house, forced their way into his home, and tased him for 15 seconds. On the same day the Justice Department opened the investigation, LPD officers chased a man accused only of disturbing a business and tased him nine times. LPD’s enforcement strategy has put hundreds of people in debt to the police department. In a town of about 1,200 people, the total sum of outstanding fines owed to LPD is more than $1.7 million. The department also found that LPD lacks any meaningful accountability system and that people experiencing poverty who are accused of crimes in Lexington regularly lack access to counsel, both of which allow LPD’s misconduct to continue unchecked. The Justice Department opened its investigation on Nov. 8, 2023. Career attorneys and staff in the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the Southern District of Mississippi conducted the investigation. The team was assisted in this investigation by experts in law enforcement practices. The team conducted an extensive review of LPD’s records, including hundreds of arrest reports and municipal court records and hundreds of hours of body-worn camera footage. The team also interviewed City and LPD leadership and line officers, accompanied officers on ride-alongs, observed the Lexington Municipal Court, and met with dozens of community members. In February, while the investigation was ongoing, the department issued a letter to the City of Lexington raising significant concerns regarding their practice of jailing people for unpaid fines without first assessing whether they can afford to pay them. The City and LPD cooperated fully with the investigation. The City and LPD have committed to working cooperatively with the department to address the violations identified in the department’s findings. The department conducted this investigation pursuant to 34 U.S.C. § 12601 (Section 12601), which prohibits law enforcement officers from engaging in a pattern or practice of conduct that deprives people of rights protected by the Constitution or federal law. Section 12601 authorizes the Attorney General to file a lawsuit in federal court seeking court-ordered remedies to eliminate a pattern or practice of unlawful conduct. This investigation reflects the Justice Department’s efforts to ensure constitutional policing and to combat unlawful practices with respect to fines and fees. The department previously addressed policing for profit in its findings on the Ferguson Police Department in Missouri in 2015. The consent decree that followed has resulted in the dismissal of about 63,000 citations and a reduction of over $1 million in fines and fees. In July 2022, the department filed a Statement of Interest in Coleman v. Brookside , explaining that judges, prosecutors, and police violate the Constitution when they are motivated by profit rather than justice. And in April 2023, the department issued a Dear Colleague Letter containing updated guidance on fines and fees for state and local courts. The department will be conducting outreach to members of the Lexington community for input on remedies to address the department’s findings. Individuals may submit recommendations to Community.LexingtonMS@usdoj.gov . The Justice Department will hold a public community meeting on Sept. 26 at 6:00 p.m. CT at St. Paul C.O.G.I.C. Fellowship Hall, 17214 Highway 17 South, Lexington, MS 39095. Members of the public are encouraged to attend. Additional information about the Justice Department’s Civil Rights Division is available on its website at www.justice.gov/crt . Additional information about the U.S. Attorney’s Office for the Southern District of Mississippi is available at www.justice.gov/usao-sdms. Information specific to the Civil Rights Division’s Police Reform Work can be found at www.justice.gov/crt/file/922421/download.


title: Two Russian nationals charged in connection with operating billion-dollar money laundering services; Justice Department seizes web domains for multiple illicit crypto exchanges

component: Criminal Division

body_text: ALEXANDRIA, Va. – Today, the Justice Department announced actions coordinated with the Department of State, Department of the Treasury, and other federal and international law enforcement partners to combat Russian money laundering operations. The actions involved the unsealing of an indictment charging a Russian national with his involvement in operating multiple money laundering services that catered to cybercriminals, as well as the seizure of websites associated with three illicit cryptocurrency exchanges. “Today's actions highlight the Department’s continued disruption of malicious cyber actors and their criminal ecosystem,” said Deputy Attorney General Lisa Monaco. “The two Russian nationals charged today allegedly pocketed millions of dollars from prolific money laundering and fueled a network of cyber criminals around the world, with Ivanov allegedly facilitating darknet drug traffickers and ransomware operators. Working with our Dutch partners, we shut down Cryptex, an illicit crypto exchange, and recovered millions of dollars in cryptocurrency.” “Every step cybercriminals take in their pursuit of money leaves another track that leads us to their doorstep,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “And if you follow them on their path of greed, they will lead us to you. We will not stop, because while domains can always be seized, justice is unyielding.” “The Secret Service is relentless in pursuing those engaged in criminal activity,” said Assistant Director Brian Lambert of the U.S. Secret Service. “I thank our domestic and foreign partners for their efforts on this case, as we continue our work bringing to justice those engaged in transnational criminal activity.” According to court documents unsealed today in the Eastern District of Virginia, Russian national Sergey Ivanov, known online as “Taleon,” among other aliases, was charged with one count of conspiracy to commit and aid and abet bank fraud for providing payment processing support to the carding website Rescator, and one count of conspiracy to commit money laundering for laundering proceeds from the carding website Joker’s Stash. (“Carding” is the unlawful acquisition of and trade in stolen credit and debit card information for fraudulent purposes.) Ivanov allegedly operated for nearly two decades as a professional cyber money launderer, advertising his services to other cybercriminals on exclusive Russian-speaking criminal forums. Over the years, Ivanov’s laundering services and payment systems have catered to cybercrime marketplaces, ransomware groups, and hackers responsible for significant data breaches of major U.S. companies. Ivanov allegedly created and/or operated Russian payment and exchange services UAPS, PinPays, and PM2BTC, which provided money transfer and laundering services directly to criminals. Cryptocurrency blockchain analysis revealed that, between July 12, 2013, and August 10, 2024, cryptocurrency addresses associated with Ivanov’s alleged money laundering services conducted transactions totaling approximately $1.15 billion in value. Approximately 32% of all traced bitcoin sent to these addresses originated from other cryptocurrency addresses associated with criminal activity. For example, more than $158 million of bitcoin flowing into Ivanov’s addresses allegedly represented fraud proceeds, more than $8.8 million allegedly represented proceeds from known ransomware payments, and approximately $4.7 million allegedly originated from darknet drug markets. The U.S. Secret Service has obtained court authorization to seize domains associated with the UAPS and PM2BTC websites. The Rescator carding website allegedly sold stolen payment card data from U.S. financial institutions and personally identifiable information (PII) of U.S. citizens. For example, the website allegedly advertised the sale of data from up to 40 million payment cards and the PII of approximately 70 million people that had been stolen from a major U.S. retail victim in 2013. The breach cost the U.S. retail victim at least $202 million in expenses and caused damage to the U.S. retail victim’s customers, who became targets of identity theft by other cybercriminals. Ivanov allegedly provided payment processing support for the Rescator carding site through the UAPS and PinPays services for purchases made on the site using bitcoin. Additionally, Russian national Timur Shakhmametov, known online as “JokerStash” and “Vega,” among other aliases, is charged in the same indictment with one count of conspiracy to commit and aid and abet bank fraud, one count of conspiracy to commit access device fraud, and one count of conspiracy to commit money laundering related to his work in operating the carding website Joker’s Stash and laundering the proceeds. Joker’s Stash offered for sale data from approximately 40 million payment cards annually, totaling hundreds of millions of payment cards overall, and was one of the largest known carding markets in history. Estimates of its profits range from $280 million to more than $1 billion. Shakhmametov and others allegedly promoted Joker’s Stash and its products by advertising the Joker’s Stash website and its stolen payment card data on numerous online cybercrime forums. Separately, the U.S. Secret Service executed a seizure order from the District of Maryland against two website domain names used to support the cryptocurrency money laundering exchange “Cryptex.net.” According to court records unsealed today, Cryptex.net and Cryptex.one were associated with the administration and operation of Cryptex, which offers complete anonymity to Cryptex users by allowing them to register for accounts without providing know-your-customer compliance requirements. Like UAPS and PM2BTC, Cryptex advertised itself directly to cybercriminals. According to a company that provides blockchain analytics services to law enforcement, there have been more than 37,500 transactions involving bitcoin addresses associated with Cryptex, amounting to a total value of approximately 62,586 bitcoin, or $1.4 billion at the time the transactions were made. Of that amount, about 31% of the bitcoin sent, or $441 million, originated from cryptocurrency addresses associated with criminal conduct, including $297 million of fraud proceeds and more than $115 million of proceeds from ransomware payments. Nine percent of all bitcoin sent to Cryptex, or $162 million, originated from cryptocurrency addresses associated with services often used by cybercriminals. Further, 28% of all bitcoin sent from Cryptex was sent to companies or darknet markets sanctioned by the United States. The seizure of these domains by the government will prevent the owners and third parties from using the sites for money laundering. Individuals visiting those sites now will see a message indicating that the site has been seized by the federal government. As part of the coordinated actions taken today, our Dutch partners seized the servers hosting PM2BTC and Cryptex. Those servers have been taken offline at various locations around the world, and the Dutch have seized cryptocurrency from those servers worth over $7 million. In coordination with the department’s actions, other U.S. government agencies and foreign law enforcement partners are also taking related actions. The U.S. Department of State issued reward offers up to $11 million through its Transnational Organized Crime Rewards Program for information leading to the arrest and/or conviction of Ivanov and others involved in the operation of his money laundering services, and for Shakhmametov and others involved in the operation of Joker’s Stash. Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an order that identifies PM2BTC as being of “primary money laundering concern” in connection with Russian illicit finance. Concurrently, Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Cryptex and Ivanov . The U.S. Secret Service Cyber Investigative Section is investigating the case. Assistant U.S. Attorney Zoe Bedell for the Eastern District of Virginia is prosecuting the case against Ivanov and Shakhmametov. Trial Attorney Jeff Pearlman and Senior Counsel Jessica Peck of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Thomas Sullivan for the District of Maryland are handling the investigation into Cryptex. The Justice Department’s Office of International Affairs also provided assistance in these matters. The Netherlands Police, Dutch Fiscal Information and Investigation Service, International Cooperation Department of the Central Criminal Police of the State Police of Latvia, Europol, National Cyber-Forensics & Training Alliance, German Federal Criminal Police Office, and UK National Crime Agency provided invaluable assistance. The text of FinCEN’s order can be found here . More information on the individuals and entities that OFAC designated today can be found here . A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. An indictment is merely an accusation. The defendant is presumed innocent until proven guilty.


title: California Man Indicted for Distribution of Child Pornography

component: USAO - Pennsylvania, Middle

body_text: HARRISBURG- The United States Attorney’s Office for the Middle District of Pennsylvania announced that Nathaniel Sean Deleon, age 20, of Tulare, California, was indicted by a federal grand jury on charges of distribution of child pornography. According to United States Attorney Gerard M. Karam, on November 24 and 25, 2023, Deleon distributed child pornography in Cumberland County, Pennsylvania. The case was investigated by the Federal Bureau of Investigation and the Pennsylvania State Police. Assistant United States Attorney David C. Williams is prosecuting the case. This case was brought as part of Project Safe Childhood , a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc For more information about internet safety education, please visit www.usdoj.gov/psc and click on the tab "resources". The maximum penalty under federal law for these offenses is 20 years, with a mandatory minimum sentence of five years, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines. Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court. # # #


title: Fort Wayne Man Sentenced to 360 Months in Prison

component: Federal Bureau of Investigation (FBI)

body_text: FORT WAYNE–Henry E. Underwood, 30 years old, of Fort Wayne, Indiana, was sentenced by United States District Court Chief Judge Holly A. Brady after pleading guilty to attempted murder of a federal witness, announced United States Attorney Clifford D. Johnson. Underwood was sentenced to 360 months in prison followed by 5 years of supervised release. Chief Judge Brady further ordered this sentence to run consecutive to the sentence in Underwood’s other federal case, 1:20-CR-33. In that case, Underwood received a total sentence of 102 months of imprisonment and 3 years of supervised release for illegally possessing a firearm as a convicted felon and for contempt of court. According to documents in the case, codefendant Tyshon Powell operated a drug stash house in Fort Wayne in 2018, and the FBI’s Fort Wayne Safe Streets Gang Task Force raided this house in March 2018, finding drug trafficking evidence and a firearm. To distance himself from this residence, Powell had paid a person to rent the stash house. In order to keep the renter silent about their arrangement, Powell elicited the help of a fellow gang member as a middleman who in turn recruited Underwood to kill the renter. Underwood agreed to kill the renter/witness to prevent their testimony. On June 1, 2018, Underwood went to the witness’ house and shot at him/her at least three times, hitting their torso, arms, hands, and head. Despite being severely injured, the witness survived. “This Defendant was the paid gunman for a drug dealer who desired to avoid prison by killing witnesses,” said United States Attorney Clifford D. Johnson. “Both dealer and the gunman are rightfully now long-term residents in federal prison. This prosecution shows that my office will vigorously prosecute all persons who engage in illegal drug distribution and those who attempt to obstruct the workings of our criminal justice system, which relies upon the cooperation of witnesses, by violence and/or threat of violence of witnesses.” “Rather than face the consequences for his own illegal actions, this defendant tried to permanently silence a potential witness by taking the witness’ life,” said FBI Indianapolis Special Agent in Charge Herbert J. Stapleton. “This sentence should serve as a warning to others who would contemplate such violent acts of intimidation that you will be brought to justice.” This case was investigated by the Federal Bureau of Investigation’s Fort Wayne Safe Streets Gang Task Force, which includes the FBI, the Fort Wayne Police Department, the Indiana State Police, the Allen County Sheriff’s Department, with the assistance of the Fort Wayne Police Department’s Homicide Section and the Indiana State Police Laboratory Division. The case was prosecuted by Assistant United States Attorneys Anthony W. Geller and Stacey R. Speith. This case was 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.


title: Browning man admits assault in burning woman with hot knife on Blackfeet Indian Reservation

body_text: GREAT FALLS — A Browning man accused of burning a woman on the hand with a hot knife in a residence on the Blackfeet Indian Reservation admitted to an assault charge today, U.S. Attorney Jesse Laslovich said. The defendant, Dale Ray Racine, 32, pleaded guilty to assault with a dangerous weapon. Racine faces a maximum of 10 years in prison, a $250,000 fine and three years of supervised release. A plea agreement in the case calls for a sentence of between 41 months and 51 months in prison and three years of supervised release. Chief U.S. District Judge Brian M. Morris presided. The court will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Sentencing was set for Jan. 30, 2025. Racine remained detained pending further proceedings. The government alleged in court documents that in the early morning hours of Feb. 14, Racine was drinking at a residence in Browning. The victim, Jane Doe, also was present. At some point, Racine placed a green knife in a wood stove until it was red hot. Racine removed the knife from the fire and burned Doe with it. Doe reported to law enforcement and medical providers that Racine was trying to brand her neck. Doe held up her hand to stop the branding, at which point Racine intentionally burned her hand. Doe was treated for second-degree burns to her hand. The U.S. Attorney’s Office is prosecuting the case. The Blackfeet Law Enforcement Services and FBI, with assistance from the U.S. Marshals Service, investigated the case. XXX


title: Two Russian Nationals Charged in Connection with Operating Billion Dollar Money Laundering Services

body_text: The Justice Department today announced actions coordinated with the Department of State, Department of the Treasury, and other federal and international law enforcement partners to combat Russian money laundering operations. The actions involved the unsealing of an indictment charging a Russian national with his involvement in operating multiple money laundering services that catered to cybercriminals, as well as the seizure of websites associated with three illicit cryptocurrency exchanges. “Today's actions highlight the Department’s continued disruption of malicious cyber actors and their criminal ecosystem,” said Deputy Attorney General Lisa Monaco. “The two Russian nationals charged today allegedly pocketed millions of dollars from prolific money laundering and fueled a network of cyber criminals around the world, with Ivanov allegedly facilitating darknet drug traffickers and ransomware operators. Working with our Dutch partners, we shut down Cryptex, an illicit crypto exchange and recovered millions of dollars in cryptocurrency.” “Cryptex promised its cybercriminal customers a safe space to launder their illicit proceeds anonymously,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “But the coordinated actions announced today — including seizing the Cryptex domains, servers, and proceeds — should put cybercriminals on notice that there are no safe spaces for cybercriminals online. The Criminal Division will continue to work with its domestic and international partnerships to disrupt platforms that enable cybercrime and render those platforms unprofitable.” “Every step cybercriminals take in their pursuit of money leaves another track that leads us to their doorstep,” said U.S. Attorney Jessica D. Aber for the Eastern District of Virginia. “And if you follow them on their path of greed, they will lead us to you. We will not stop, because while domains can always be seized, justice is unyielding.” “The Secret Service is relentless in pursuing those engaged in criminal activity,” said Assistant Director Brian Lambert of the U.S. Secret Service. “I thank our domestic and foreign partners for their efforts on this case, as we continue our work bringing to justice those engaged in transnational criminal activity.” According to court documents unsealed today in the Eastern District of Virginia, Russian national Sergey Ivanov, known online as “Taleon,” among other aliases, was charged with one count of conspiracy to commit and aid and abet bank fraud for providing payment processing support to the carding website Rescator, and one count of conspiracy to commit money laundering for laundering proceeds from the carding website Joker’s Stash. “Carding” is the unlawful acquisition of and trade in stolen credit and debit card information for fraudulent purposes. Ivanov allegedly operated for nearly two decades as a professional cyber money launderer, advertising his services to other cybercriminals on exclusive Russian-speaking criminal forums. Over the years, Ivanov’s laundering services and payment systems have catered to cybercrime marketplaces, ransomware groups, and hackers responsible for significant data breaches of major U.S. companies. Ivanov allegedly created and/or operated Russian payment and exchange services UAPS, PinPays, and PM2BTC, which provided money transfer and laundering services directly to criminals. Cryptocurrency blockchain analysis revealed that between July 12, 2013, and Aug. 10, cryptocurrency addresses associated with Ivanov’s alleged money laundering services conducted transactions totaling approximately $1.15 billion in value. Approximately 32% of all traced bitcoin sent to these addresses originated from other cryptocurrency addresses associated with criminal activity. For example, more than $158 million of bitcoin flowing into Ivanov’s addresses allegedly represented fraud proceeds, more than $8.8 million allegedly represented proceeds from known ransomware payments, and approximately $4.7 million allegedly originated from darknet drug markets. The U.S. Secret Service has obtained court authorization to seize domains associated with the UAPS and PM2BTC websites. The Rescator carding website allegedly sold stolen payment card data from U.S. financial institutions and personally identifiable information (PII) of U.S. citizens. For example, the website allegedly advertised the sale of data from up to 40 million payment cards and the PII of approximately 70 million people that had been stolen from a major U.S. retail victim in 2013. The breach cost the U.S. retail victim at least $202 million in expenses and caused damage to the U.S. retail victim’s customers, who became targets of identity theft by other cybercriminals. Ivanov allegedly provided payment processing support for the Rescator carding site through the UAPS and PinPays services for purchases made on the site using bitcoin. Additionally, Russian national Timur Shakhmametov, known online as “JokerStash” and “Vega,” among other aliases, is charged in the same indictment with one count of conspiracy to commit and aid and abet bank fraud, one count of conspiracy to commit access device fraud, and one count of conspiracy to commit money laundering related to his work in operating the carding website Joker’s Stash and laundering the proceeds. Joker’s Stash offered for sale data from approximately 40 million payment cards annually, totaling hundreds of millions of payment cards overall, and was one of the largest known carding markets in history. Estimates of its profits range from $280 million to more than $1 billion. Shakhmametov and others allegedly promoted Joker’s Stash and its products by advertising the Joker’s Stash website and its stolen payment card data on numerous online cybercrime forums. Separately, the U.S. Secret Service executed a seizure order from the District of Maryland against two website domain names used to support the cryptocurrency money laundering exchange “Cryptex.net.” According to court records unsealed today, Cryptex.net and Cryptex.one were associated with the administration and operation of Cryptex, which offers complete anonymity to Cryptex users by allowing them to register for accounts without providing know-your-customer compliance requirements. Like UAPS and PM2BTC, Cryptex advertised itself directly to cybercriminals. According to a company that provides blockchain analytics services to law enforcement, there have been more than 37,500 transactions involving bitcoin addresses associated with Cryptex, amounting to a total value of approximately 62,586 bitcoin, or $1.4 billion at the time the transactions were made. Of that amount, about 31% of the bitcoin sent, or $441 million, originated from cryptocurrency addresses associated with criminal conduct, including $297 million of fraud proceeds and more than $115 million of proceeds from ransomware payments. Nine percent of all bitcoin sent to Cryptex, or $162 million, originated from cryptocurrency addresses associated with services often used by cybercriminals. Further, 28% of all bitcoin sent from Cryptex was sent to companies or darknet markets sanctioned by the United States. The seizure of these domains by the government will prevent the owners and third parties from using the sites for money laundering. Individuals visiting those sites now will see a message indicating that the site has been seized by the federal government. As part of the coordinated actions taken today, our Dutch partners seized the servers hosting PM2BTC and Cryptex. Those servers have been taken offline at various locations around the world, and the Dutch have seized cryptocurrency from those servers worth over $7 million. In coordination with the department’s actions, other U.S. government agencies and foreign law enforcement partners are also taking related actions. The U.S. Department of State issued reward offers up to $11 million through its Transnational Organized Crime Rewards Program for information leading to the arrest and/or conviction of Ivanov and others involved in the operation of his money laundering services, and for Shakhmametov and others involved in the operation of Joker’s Stash. Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an order that identifies PM2BTC as being of “primary money laundering concern” in connection with Russian illicit finance. Concurrently, Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Cryptex and Ivanov . The U.S. Secret Service Cyber Investigative Section is investigating the case. Assistant U.S. Attorney Zoe Bedell for the Eastern District of Virginia is prosecuting the case against Ivanov and Shakhmametov. Trial Attorney Jeff Pearlman and Senior Counsel Jessica Peck of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Thomas Sullivan of the District of Maryland are handling the investigation into Cryptex. The Justice Department’s Office of International Affairs also provided assistance in these matters. The Netherlands Police, Dutch Fiscal Information and Investigation Service, the International Cooperation Department of the Central Criminal Police of the State Police of Latvia, Europol, the National Cyber-Forensics & Training Alliance, the German Federal Criminal Police Office, and the UK National Crime Agency provided invaluable assistance. The text of FinCEN’s order can be found here . For more information on the individuals and entities that OFAC designated today, click here .


title: Former Commercial Airline Pilot Sentenced to Over Three Years in Prison for Tax Evasion

component: USAO - Minnesota

body_text: MINNEAPOLIS – A former commercial airline pilot has been sentenced to 41 months in prison followed by two years of supervised release for filing false tax returns, failing to file tax returns, and making false claims, announced U.S. Attorney Andrew M. Luger. According to court documents and evidence presented at trial, Charles Randall Sorensen, 72, of Minnetonka, was a commercial airline pilot who retired in 2016. In January 2017, Sorensen filed a fraudulent tax return for the 2015 tax year, falsely claiming that he was entitled to a $55,365 tax refund. In reality, Sorensen owed more than $49,000 in income taxes that year. In March 2017, Sorensen filed a fraudulent tax return for the 2016 tax year, falsely claiming that he was entitled to a $123,370 tax refund. In reality, he owed more than $175,000 in taxes that year. The IRS conducted an audit of Sorensen’s 2015 and 2016 tax returns and found that Sorensen fraudulently received more than $150,000 in tax refunds to which he was not entitled and owed more than $290,000 in taxes, interest, and penalties for those tax years. According to the evidence presented at trial, Sorensen refused to pay his tax debt and took steps to actively evade the IRS’s collection efforts by hiding his income and assets in bank accounts in the name of shell religious non-profits and by liquidating his retirement accounts and converting the funds into cryptocurrency. Sorensen also failed to file federal income tax returns for 2017, 2018, and 2019. It is estimated that Sorensen owes the United States more than $300,000. On May 31, 2024, Sorensen was found guilty by a federal jury on two counts of filing a false tax return, one count of tax evasion, three counts of failing to file a tax return, and one count of making a false claim. He was sentenced today by Chief Judge Patrick J. Schiltz. This case is the result of an investigation conducted by IRS – Criminal Investigation. Assistant U.S. Attorneys Michael P. McBride and Campbell Warner prosecuted the case.


title: New Orleans Man Pleads Guilty to Being Felon in Possession of Firearm

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

body_text: NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced on Wednesday, September 18, 2024, TRAVIS JORDAN, ( “JORDAN”) , age 39, a resident of Orleans Parish, pled guilty to being a felon in possession of a firearm, in violation of Title 18, United States Code, Sections 922(g)(1) and 924(a)(8). JORDAN faces up to 15 years of imprisonment, a fine of up to $250,000, up to 3 years of supervised release, and a mandatory special assessment fee of $100.00. On February 18, 2024, attempted to enter the Saint Bar in Orleans Parish, but was refused due to intoxication. JORDAN became angry and started an altercation with a bar employee. While doing so, a firearm fell from JORDAN’s waistband. JORDAN tried to reach for the firearm, but another bar employee kicked the gun away, took possession of it and placed the gun inside the bar. A third employee restrained JORDAN until police arrived. This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results. U.S. Attorney Evans praised the work of the Bureau of Alcohol, Tobacco, Firearms, and Explosives and the New Orleans Police Department. The case is being prosecuted by AssistantUnited States Attorney Inga Petrovich of the Violent Crime Unit.


title: Columbia Man Sentenced to Federal Prison for Drug Charges

component: USAO - South Carolina

body_text: COLUMBIA, S.C. —Lontre Jason Wise, 52, of Columbia was sentenced to 13 years in federal prison after pleading guilty to possession with the intent to distribute both crack cocaine and marijuana. Evidence obtained in the investigation revealed that the Columbia Police Department Organized Crime and Narcotics Unit received an anonymous complaint about the sale of illegal narcotics at a residence located on House Street. The complainant stated there was constant foot and vehicle traffic at the residence, which people were only observed being at the residence for minutes at a time. Based on the information provided from the complainant, a confidential informant went to the residence on two different occasions to purchase marijuana. During both occasions, the confidential informant purchased the marijuana from Wise. Based on the complaint and controlled purchases, a search warrant was obtained for the residence and executed by CPD. During the search, the police located Wise and immediately took him into custody on arrest warrants for the distribution of marijuana. Wise was searched and the police found a clear container containing crack cocaine on him. During the search of the residence, a black book bag was located and contained a large clear plastic bag of marijuana. The book bag also contained a 9mm caliber handgun and a .38 caliber revolver. The police located a safe underneath the couch with a black pouch that contained pieces of crack cocaine, Wise’s South Carolina driver’s license, social security card, debit card, and money. Wise told the officers that the safe was his. There was multiple hand rolled cigars containing marijuana found throughout the living room of the residence and on a plate on the couch. United States District Judge Joseph F. Anderson, Jr. sentenced Wise to 156 months imprisonment, to be followed by a three-year term of court-ordered supervision. There is no parole in the federal system. This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Columbia Police Department’s Organized Crime and Narcotics Unit. Assistant U.S. Attorney William K. Witherspoon is prosecuting the case. ###


title: South Bend Man Sentenced to 57 Months in Prison

body_text: SOUTH BEND – Atlantis Griffin, 39 years old, of South Bend, Indiana, was sentenced by United States District Court Judge Damon R. Leichty after pleading guilty to being a convicted felon in possession of a firearm, announced United States Attorney Clifford D. Johnson. Griffin was sentenced to 57 months in prison followed by 1 year of supervised release. According to documents in the case, in February 2024, Griffin was driving in Mishawaka with a loaded handgun, cocaine, and over $1,000 cash. A traffic stop resulted in the recovery of the gun, drugs, and cash. Griffin had previously been convicted of a felony offense and, as such, was prohibited from possessing the firearm in this case. This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives with assistance from the Mishawaka Police Department and the St. Joseph County Police Department. The case was prosecuted by Assistant United States Attorney Joel Gabrielse. This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results .


title: Le Mars Man Sentenced to Federal Prison for Meth and Firearm Convictions

component: USAO - Iowa, Northern

body_text: Timothy Mullally, 49, from Le Mars, Iowa, was sentenced September 25, 2024 to 66 months’ imprisonment. Mullally pled guilty on May 16, 2024, in federal court in Sioux City to one count of conspiracy to distribute methamphetamine and one count of prohibited person in possession of firearms. At the plea and sentencing hearings evidence showed that between January 2022 through September 2022, Mullally and others distributed more than two kilograms of methamphetamine. Evidence showed that on two occasions in August and September 2022 Mullally distributed more than 800 grams of pure methamphetamine to an individual cooperating with law enforcement. During investigation of this matter, law enforcement and United States Postal Inspection Service interdicted a three-pound package of methamphetamine coming from California to Mullally’s house in September 2022. During the investigation, including search warrants at Mullally’s properties and vehicles, law enforcement seized $5,830 and two firearms. Mullally admitted to being a regular user of methamphetamine, and thereby was prohibited from possessing firearms. Sentencing was held before United States District Court Judge Leonard T. Strand. Mullally was sentenced to 66 months’ imprisonment, $1,000 fine, and must serve a three-year term of supervised release following imprisonment. There is no parole in the federal system. Mullally remains in the custody of the United States Marshal until he can be transported to a federal prison. The case was prosecuted by Assistant United States Attorney Shawn S. Wehde and was investigated by Tri-State Drug Task Force based in Sioux City, Iowa, that consists of law enforcement personnel from the Drug Enforcement Administration; Sioux City, Iowa, Police Department; Homeland Security Investigations; Woodbury County Sheriff’s Office; South Sioux City, Nebraska, Police Department; Nebraska State Patrol; Iowa National Guard; Iowa Division of Narcotics Enforcement; United States Marshals Service; South Dakota Division of Criminal Investigation; and Woodbury County Attorney’s Office. Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl . The case file number is 22-4083. Follow us on Twitter @USAO_NDIA.


title: Lexington Man Convicted of Fraudulently Obtaining COVID Relief Loans and COVID Relief Rental Assistance

component: USAO - Kentucky, Eastern

body_text: LEXINGTON, Ky. – A Lexington man, Vonnie McDaniels, 35, was found guilty on Wednesday, by a federal jury sitting in Lexington, of four counts of wire fraud, for fraudulently applying for three Small Business Administration (SBA) Covid-19 relief loans and for fraudulently applying to the Lexington Fayette Urban County Government’s (LFUCG) federally funded Housing Stabilization Program (HSP), a tenant rent relief program; two counts of aggravated identity theft for submitting tenant rent relief applications, pretending to be his tenants; six counts of money laundering; and two counts of committing an offense while on conditions of release. He was convicted following a three-day trial. According to the evidence at trial, McDaniels submitted a materially false application to the SBA, to obtain an Economic Injury Disaster Loan (EDIL), for one business, fraudulently obtaining a $100,000 loan. The Defendant also submitted three materially false Payment Protection Program (PPP) applications, for the same business and for another business that was no longer in operation at the time of the pandemic. Two of the three PPP applications were eventually funded, and McDaniels obtained $93,231. McDaniels also inflated numbers on his applications to increase the loan amount and uploaded fraudulent tax documents to support his numbers. In 2020, he obtained a total of $193,231 in disaster relief funds from the SBA. The theft was discovered by law enforcement when preparing for an earlier trial, back in June 2021, when McDaniels was previously convicted of bank fraud and aggravated identity theft. McDaniels used the SBA loan proceeds to pay off personal credit cards and loans, free up home equity lines of credit, purchase a new property in South Carolina, and pay his unlawfully obtained mortgage, which had been the subject of his June 2021 bank fraud trial. In 2021, McDaniels also submitted a materially false application to LFUCG’s HSP for tenant rent relief for two properties. McDaniels uploaded fraudulent leases, vastly inflating the monthly rent amount and pretended to be his two tenants when he submitted the tenant portions of the application. McDaniels solicited personal identifying information from his tenants, told his tenants about the rent relief program, and informed his tenants that they did not qualify. Then, he fraudulently obtained $45,000 in Covid rental relief assistance, while he continued to make his tenants pay their monthly rent. He committed these offenses while subject to conditions of release, following his prior conviction. Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky, and Kathy Enstrom, Special Agent in Charge, Office of Inspector General, Federal Deposit Insurance Corporation, jointly announced the jury’s verdict. The investigation was conducted by the Federal Deposit Insurance Corporation – Office of Inspector General. Assistant U.S. Attorneys Brittany Dunn-Pirio and Andrea Mattingly Williams are representing the United States in the case. McDaniels is scheduled to appear for sentencing on January 24, 2025. He faces up to 20 years in prison, and a mandatory minimum sentence of two years for aggravated identity theft. However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal sentencing statutes before imposing a sentence. McDaniels also faces potential fines, a forfeiture money judgment, and a judgment of restitution, as ordered by the Court. 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, among other methods, 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. 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 at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. — END —


title: Behavioral Healthcare Company Executive Pleads Guilty to Healthcare Fraud

component: USAO - Massachusetts

body_text: BOSTON – The Chief Executive Officer of Dana Group Associates, who is also the former Chief Operating Officer of Prime Behavioral Health, pleaded guilty today to a scheme to defraud health care benefit programs by directing false billing for patient visits. Miguel Saravia, 42, of Hanson, pleaded guilty to six counts of health care fraud. U.S. District Court Judge Allison D. Burroughs scheduled sentencing for Jan. 2, 2025. From approximately 2017 to 2022, Saravia directed a group of individuals with no billing or medical training to enter Current Procedural Terminology codes (CPT) for therapy services that were not provided and to upcode CPT codes used for psychotherapy visits. Saravia submitted, or directed the submission of, false claims for treatment that was not provided or for more complex and expensive treatment than was provided. The charge of health care fraud carries a sentence of up to 10 years in prison, up to three years of supervised release, and a fine of up to $250,000, or twice the gross gain or loss from the offense. 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. Acting U.S. Attorney Joshua S. Levy; Roberto Coviello, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General; Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division; Insurance Fraud Bureau Executive Director Anthony DiPaolo; and Harry Chavis, Jr., Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. Assistant U.S. Attorneys Kelly B. Lawrence and Mackenzie A. Queenin of the Health Care Fraud Unit and Lindsey Ross and Steven Sharobem of the Affirmative Civil Enforcement Unit are prosecuting the case.


title: Rochester man sentenced for stealing mail using stolen postal key

component: USAO - New York, Western

body_text: ROCHESTER, N.Y. - U.S. Attorney Trini E. Ross announced today that Legend Terrance Davis, 21, of Rochester, NY, who was convicted of possession of United States Postal Service key and theft of mail, was sentenced to serve three years’ probation to include six months home detention, and 50 hours of community service, by U.S. District Judge Frank P. Geraci, Jr. Assistant U.S. Attorney Katelyn M. Hartford, who handled the case, stated that in October 2023, Davis unlawfully possessed a United States Postal Service key, which had been stolen from a mail carrier. On October 1 and October 2, 2023, Davis, and others, used the stolen key to steal mail from mailboxes near the Brighton Station Post Office on N. Winton Road, near the Greece Post Office on Latta Road, and near the Jefferson Road Post Office on Jefferson Road, all in Rochester, NY. The sentencing is the result of an investigation by the U.S. Postal Inspection Service, under the direction of Boston Division Inspector-in-Charge Ketty Larco-Ward and the Monroe County Sheriff’s Office, under the direction of Sheriff Todd Baxter. # # # #


title: Montgomery Man Found Guilty of Conspiring to Bring Cocaine into Alabama from Texas

component: USAO - Alabama, Middle

body_text: Montgomery, Alabama – On September 25, 2024, a federal jury convicted 45-year-old Vanshun Traywick, a resident of Montgomery, Alabama, on federal drug conspiracy charges, announced Acting United States Attorney Kevin Davidson. According to court records and evidence presented during Traywick’s trial, in 2020, law enforcement began an investigation related to a suspected drug-trafficking operation bringing cocaine from Texas to Montgomery. The investigation revealed that Traywick ordered kilogram quantities of cocaine from a co-conspirator, 45-year-old Michael Golden, from Houston, Texas. The cocaine would be delivered to Montgomery by another co-conspirator, Rufus Flanagan, 56, also from Houston. On October 20, 2020, law enforcement in Montgomery conducted a traffic stop of a semi-truck driven by Flanagan. Upon searching the vehicle, officers found a bag with approximately one kilogram of cocaine inside. In addition to arranging for the purchase of large quantities of cocaine from Golden, the investigation also revealed that, on October 13, 2020, Traywick purchased two ounces of cocaine from another co-conspirator, 51-year-old Deneco Nettles, also from Montgomery. The jury found Traywick guilty on two counts of conspiracy to distribute cocaine. Following his conviction, Traywick faces a sentence between 5 and 40 years in federal prison. Earlier this year, Golden, Flanagan, and Nettles all pleaded guilty to federal drug conspiracy charges. On June 18, 2024, Nettles received a sentence of 18 months in prison. Golden’s sentencing hearing is scheduled for December 3, 2024. Flanagan’s sentencing hearing is scheduled for December 5, 2024. A sentencing hearing for Traywick will be scheduled in the coming months. This case was 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. The Drug Enforcement Administration, Alabama Law Enforcement Agency, and Montgomery Police Department investigated this case. Assistant United States Attorneys Mark E. Andreu, Justin L. Jones, and B. Chelsea Wilson are prosecuting the case.


title: Rochester man pleads guilty to purchases made on illicit online marketplace

body_text: ROCHESTER, N.Y. -- U.S. Attorney Trini E. Ross announced today that Brandon Hall, 23, of Rochester, NY, pleaded guilty before U.S. District Judge Frank P. Geraci, Jr. to possessing 15 or more unauthorized access devices with intent to defraud, which carries a maximum penalty of 10 years in prison and a $250,000 fine. Assistant U.S. Attorney Charles M. Kruly, who is handling the case, stated that since August 2018, the FBI has been investigating an illicit online marketplace known as Genesis Market, whose operators compile stolen data, such as computer and mobile device identifiers, email addresses, usernames, and passwords, from malware-infected computers around the globe and package it for sale on the market. Purchases made through Genesis Market are conducted using virtual currency, such as bitcoin. Between November 2019, and February 2021, Hall deposited approximately $224.50 worth of bitcoin in a Genesis account that he had created, using an account he maintained at Coinbase to fund these transactions. Hall used the funds he deposited in his Genesis account to 12 packages containing approximately 1,146 unauthorized access devices. The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent-in-Charge Matthew Miraglia and the Rochester Police Department, under the direction of Chief David Smith. Sentencing is scheduled for January 16, 2024, before Judge Geraci.


title: Charlotte Man Pleads Guilty To Brandishing AR-15 Rifle During Restaurant Robbery

component: USAO - North Carolina, Western

body_text: CHARLOTTE, N.C. – Jermond Santa Lowery, Jr., 29, of Charlotte, appeared in federal court today and pleaded guilty to brandishing an AR-15 rifle during a restaurant robbery, announced Dena J. King, U.S. Attorney for the Western District of North Carolina. Robert M. DeWitt, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, and Chief Johnny Jennings of the Charlotte Mecklenburg Police Department (CMPD), join U.S. Attorney King in making today’s announcement. According to plea documents and court proceedings, on October 31, 2023, Lowery entered a Waffle House restaurant located in Charlotte. Upon entering the restaurant, Lowery brandished an AR-15 rifle and told the employees, “You better get back.” As the employees began to flee out of the restaurant’s back door, Lowery ordered them to come back and open the register. He also threatened the employees, telling them, “I’ll kill you right now.” Lowery then removed the cash register from the restaurant and left. Law enforcement arrested Lowery on November 1, 2023. Lowery pleaded guilty to brandishing a firearm in furtherance of a crime of violence, which carries a minimum penalty of seven years and a maximum penalty of life in prison. Lowery remains in federal custody. A sentencing date has not been set. The FBI and CMPD investigated the case. Assistant U.S. Attorney Shavonn Bennette of the U.S. Attorney’s Office in Charlotte is prosecuting the case. This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.


title: Asheville Man Is Sentenced To 57 Months In Prison For Possession Of A Firearm By A Felon

body_text: ASHEVILLE, N.C. – Dion Lamont Lowman, 48, of Asheville, was sentenced today to 57 months in prison followed by three years of supervised release for possession of a firearm by a felon, announced Dena J. King, U.S. Attorney for the Western District of North Carolina. Chief U.S. District Judge Martin Reidinger ordered Lowman to begin serving the federal sentence after the defendant completes the 19-month state sentence he is currently serving for a drug conviction. Robert J. Murphy, Special Agent in Charge of the Atlanta Field Division of the Drug Enforcement Administration (DEA), which oversees the Charlotte District Office, and Chief Michael Lamb of the Asheville Police Department (APD), join U.S. Attorney King in making today’s announcement. According to filed court documents and court proceedings, on June 13, 2023, APD officers encountered Lowman in Asheville. The officers, who knew that Lowman had outstanding arrest warrants, observed Lowman drive a vehicle with a South Carolina license plate and proceeded to follow him. The officers continued to follow Lowman, and saw the defendant park his vehicle into the back parking area of a residence. The officers then observed another individual get into Lowman’s front passenger side. While the officers were pulling up, they observed the other individual quickly exit Lowman’s vehicle and walk away. The officers approached Lowman’s vehicle and ordered the defendant to come out. Lowman complied and the officers placed Lowman and the other individual under arrest. The officers then searched Lowman’s vehicle and seized a loaded firearm. The officers checked the firearm’s serial number and determined it was stolen. Lowman has prior criminal convictions, to include drug trafficking, and he is prohibited from possessing a firearm. On April 15, 2024, Lowman pleaded guilty to possession of a firearm by a felon. In making today’s announcement, U.S. Attorney King thanked the DEA and the Asheville Police Department for their investigation of the case. Assistant U.S. Attorney Christopher Hess of the U.S. Attorney’s Office in Asheville prosecuted the case. This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.


title: Smithtown Man Pleads Guilty to $1 Million Covid-19 Fraud

component: USAO - New York, Eastern

body_text: Earlier today, at the federal courthouse in Central Islip, Carmine G. Agnello pleaded guilty to wire fraud in connection with his receipt of approximately $1.1 million in small business loans under the United States Small Business Administration’s Economic Injury Disaster Loan Program (EIDLP). Today’s proceeding was held before United States District Judge Nusrat J. Choudhury. When sentenced, Agnello faces up to 30 years in prison, as well as restitution totaling more than $940,000 and a fine of up to $2.2 million. Breon Peace, United States Attorney for the Eastern District of New York, and Daniel Brubaker, Inspector in Charge, United States Postal Inspection Service, New York Division (USPIS), announced the guilty plea. “The defendant shamefully used the public health and economic crisis of the COVID-19 pandemic as an opportunity to line his pockets with stolen funds,” stated United States Attorney Peace. “The reality is, those who engaged in blatant theft of taxpayer dollars intended to assist legitimate businesses and their employees during the COVID-19 pandemic should know that despite the passage of time, there is no free pass for their crimes and they will be vigorously prosecuted by the Office.” “Agnello allegedly used over $1 Million in COVID relief funds for his own financial gain. Government money that was intended to assist struggling businesses during the COVID-19 pandemic. Postal Inspectors will relentlessly pursue any individuals who scheme to defraud the government and steal taxpayer funds. We, along with our law enforcements partners, will not end this pursuit of justice until those who take advantage of the U.S. Mail to commit fraud are held fully accountable. Today’s guilty plea is proof of that fact. I would like to thank our partners in Homeland Security Investigations and the United States Attorney's Office, Eastern District of New York, for their work on this investigation,” stated USPIS Inspector in Charge Brubaker. Congress created the EIDLP as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Enacted on March 29, 2020, the CARES Act provided emergency financial assistance in connection with economic effects of the COVID-19 pandemic. One source of relief provided by the CARES Act was the EIDLP, which provided low-interest financing to small businesses, renters and homeowners in regions affected by declared disasters. As set forth in court filings, between April 2020 and November 2021, amid the COVID-19 pandemic, Agnello fraudulently applied for, and received, at least three EIDLP loans totaling approximately $1.1 million that he submitted on behalf of Crown Auto Parts & Recycling, LLC (Crown), a Jamaica, Queens-based business that he operated. As part of the scheme, Agnello submitted documentation to the Small Business Administration and financial institution responsible for disbursing the funds, that falsely claimed he had no criminal record when, in reality, he had a 2018 misdemeanor conviction. Agnello also submitted false information about the number of employees that worked for Crown and the intended use of the loan proceeds. Instead of using the funds for disaster relief, Agnello diverted them for his personal use, including by investing approximately $420,000 in a cryptocurrency business. The government’s case is being handled by the Criminal Section of the Office’s Long Island Division. Assistant United States Attorney Bradley T. King is in charge of the prosecution. The Defendant : CARMINE G. AGNELLO Age: 38 Smithtown, New York E.D.N.Y. Docket No. 24-CR-366 (NJC)


title: Greensboro Clinic Owner Is Sentenced To 52 Months In Prison For Defrauding Medicaid

body_text: CHARLOTTE, N.C. – Aljihad Shabazz, 45, of Kernersville, N.C., was sentenced today to 52 months in prison followed by two years of supervised release for his role in a scheme that defrauded the North Carolina Medicaid Program (Medicaid) of more than $4.7 million, announced Dena J. King, U.S. Attorney for the Western District of North Carolina. In addition to the prison term imposed, U.S. District Judge Frank D. Whitney also ordered Shabazz to pay $4,711,159.88 in restitution. Robert M. DeWitt, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, Donald “Trey” Eakins, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, Charlotte Field Office (IRS-CI), and North Carolina Attorney General Josh Stein, who oversees the North Carolina Medicaid Division (MID), join U.S. Attorney King in making today’s announcement. According to court records and the sentencing hearing, Shabazz was the owner and operator of Reign & Inspirations, LLC (R&I), a clinic that provided outpatient behavioral services in Greensboro and surrounding areas. Between 2017 and 2020, Shabazz conspired with other individuals to carry out an extensive health care fraud scheme involving the fraudulent submissions of fake reimbursement claims to Medicaid, for services that were never provided to Medicaid beneficiaries. Court records show that Shabazz obtained the personal identifying information (PII) of Medicaid beneficiaries through community outreach programs, including football and mentoring programs, and misused the beneficiaries’ PII to create and submit hundreds of fraudulent reimbursement claims and to receive payment for services that were never in fact provided by R&I. Over the course of the scheme, Shabazz used the beneficiaries’ PII to submit more than 1,500 fraudulent reimbursement claims to Medicaid, some of which claimed that R&I provided services that exceeded 24 hours in a single day. Court records show that the reimbursement payments made by Medicaid were deposited in bank accounts under Shabazz’s control. Shabazz used a portion of the fraudulent proceeds to pay kickbacks to his co-conspirators and to cover personal expenses, including to pay for personal travel, luxury items, and timeshares, and to make cash withdrawals. On June 14, 2023, Shabazz pleaded guilty to health care fraud conspiracy and money laundering conspiracy. He will be ordered to report to the Federal Bureau of Prisons upon designation of a federal facility. In announcing Shabazz’s sentence, Judge Whitney stated that, “There are serious consequences for stealing from government funded programs such as Medicaid and Medicare.” The FBI in Charlotte, IRS-CI, and NCDOJ’s Medicaid Investigations Division investigated the case. Assistant U.S. Attorneys Michael E. Savage and Special Assistant U.S. Attorney Kristina Fleisch with the U.S. Attorney’s Office in Charlotte prosecuted the case.


title: Assistant Attorney General Kristen Clarke Delivers Remarks Announcing the Justice Department Findings of Civil Rights Violations by the Lexington, Mississippi Police Department and City of Lexington

body_text: Remarks as Prepared for Delivery Good afternoon. My name is Kristen Clarke, Assistant Attorney General for the Civil Rights Division at the U.S. Justice Department. Joining me is Todd W. Gee, U.S. Attorney for the Southern District of Mississippi. We are here today to announce the findings from our pattern or practice investigation into the City of Lexington, Mississippi, and the Lexington Police Department. We find reasonable cause to believe that the Lexington Police Department and the City of Lexington engage in a pattern or practice of conduct that violates the First, Fourth and 14th Amendments of the Constitution, Safe Streets Act and Title VI of the Civil Rights Act of 1964. Specifically, we find that the Lexington police use excessive force; unlawfully stop, search and arrest people — including by jailing people on illegal “investigative holds” — unlawfully jail people without affording prompt access to court; violate the rights of people engaged in free speech and expression, including by retaliating against critics of the police; and unlawfully discriminate against Black people. The department also unlawfully arrests, jails and detains people based on their failure to pay money without assessing their ability to pay; unlawfully arrests people just because they owe outstanding fines; and imposes money bail without justification and, again, without assessing ability to pay. The fact that fines and fees fund the department drives its law enforcement, resulting in a crude policing-for-profit scheme. The Lexington Police Department operates under an unconstitutional financial conflict of interest. Lexington’s focus on revenue and its overly aggressive form of policing leaves the people of Lexington harassed, feeling helpless and hopeless. For example, on the day we opened our investigation, Lexington officers chased a man down and tased him until he foamed at the mouth. In the previous months, police officers had repeatedly arrested the man for minor offenses most police departments would have handled with a ticket. For stealing sugar packets from a gas station, the man spent 13 days in jail. He spent four days in jail for taking a second cup of coffee after paying for the first. Each time, the Lexington police kept him in jail because he could not afford to pay the fines or the $50 processing fee Lexington charges for every arrest. Especially for a person in poverty, these fines are no small thing. Even though he has no money, the man owes the Lexington Police Department over $7,500. At no point did the police or city assess his ability to pay those fines. In America, being poor is not a crime, but in Lexington, their practices punish people for poverty. On Feb. 29, we provided official notice to Lexington city officials and the police department about our concerns regarding illegal arrests and detentions that penalize people for lacking resources. Lexington has made some changes in response to our notice. But, as today’s findings show, more meaningful reform is necessary. Lexington’s fines and fees have been absolutely devastating for the people who live there. Although Lexington is in one of the poorest counties in America, people owe the police department $1.7 million in outstanding fines. The Lexington municipal court has issued bench warrants for over 650 people based on unpaid fines — equivalent to roughly half of Lexington’s population. Based on these warrants, police officers have unlawfully arrested and jailed people, using the leverage of incarceration to extract more money from them. Other times, the Lexington police send people to jail for days or weeks for minor offenses. These people wait in jail until they can go before a judge or they can get enough money together to pay their fines. This, too, violates people’s civil rights. For example, the Lexington police arrested a Black man for allegedly taking $15 worth of gas. The police told him his fine was $300. He couldn’t pay it. The police sent him to jail until the next scheduled court date — two weeks later. Unjustly enforcing fines and fees creates a two-tiered system of justice that can perpetuate a cycle of poverty. It also fuels a financial conflict of interest for the police department. The police must enforce the law even-handedly, not based on generating revenue. Lexington, though, focused its law enforcement on strategies that generated income, even at times linking officers’ paychecks to the number of arrests they made. Over the past two years, Lexington has made nearly one arrest for every four people in town — more than 10 times the per capita arrest rate for Mississippi. The Lexington police also illegally arrest people for using profanity, and they retaliate against people who film officers or criticize the police. The First Amendment protects swearing, yet the Lexington police broke down a man’s back door and arrested him for swearing in a public place. The First Amendment also protects the right to film or criticize officers. But when a man filmed officers approaching his suicidal brother with their guns raised, a police officer batted the man’s phone out of his hand, pushed him to the ground and arrested him. While making arrests, the Lexington police frequently use excessive force. We found instances in which officers used a taser like a cattle prod to punish people or to make them comply more quickly with officers’ orders. For example, officers used a taser to shock a Black man 18 times until he was covered in his own vomit and unable to speak or walk. Officers punch, hit or kick people who are unarmed and handcuffed. One officer kicked a Black man in the groin so hard that he wet himself. Another used his gun to repeatedly hit a Black man already in handcuffs. An officer knocked an elderly Black man unconscious. Nor are children spared from attack. An officer grabbed a Black child by the neck and shoved him into a patrol car, banging the child’s head against the door frame. Black people bear the brunt of the Lexington Police Department’s illegal conduct. Lexington’s former police chief, Sam Dobbins, who regularly spoke disrespectfully to Black men, set in motion the aggressive enforcement of low-level violations. Dobbins left the department when recordings of him using other racial slurs were released. Officials told us that with Dobbins gone, so too was the problem. We found, however, that the discriminatory practices he initiated continue unabated. Lexington officers frequently tase, punch and beat Black people without justification, while we identified no such use of force on white people. Low-level traffic violations that resulted in arrest for Black people yielded only warnings or citations for white people. The result? 98% of people arrested for traffic offenses are Black. This pattern of racial discrimination not only violates the law. It also erodes the community’s trust in law enforcement, the judicial system, and the government more broadly. According to the Bureau of Justice Statistics, half of America’s police departments have 10 officers or fewer. Every person in the United States enjoys certain fundamental civil rights, regardless of the size of their town, the contents of their bank account or the color of their skin. Residents of rural and underserved communities have the same rights and deserve the same protection as people who live major cities. The Justice Department is committed to providing that protection. Police misconduct in smaller communities may not always garner national attention, but rest assured, the Justice Department is watching. No city, no town, no law enforcement agency is too large or too small to evade our efforts to safeguard the constitutional rights that every American enjoys. Small and mid-sized police departments must not be allowed to violate people’s civil rights with impunity. To the people of Lexington, I want you to know that we heard you. We listened carefully to your testimonies. We thank you for having the courage to speak out. The Lexington Police Department and the City of Lexington have agreed to cooperate with the Justice Department to address the challenges we outline today. As we begin the hard, essential work of rebuilding trust and restoring equal justice under law, we need to continue to hear from the Lexington community in the coming days and weeks. We stand with the people of Lexington to extend justice to all its residents, rich and poor, regardless of their race. I’ll now welcome U.S. Attorney Todd Gee.


title: Asheville Drug Trafficker On Federal Supervised Release For Firearms Conviction Is Sentenced To 12+ Years In Prison

body_text: ASHEVILLE, N.C. – Douglas Aaron Holcomb, 48, of Asheville, was sentenced today to 151 months in prison followed by five years of supervised release for trafficking methamphetamine, announced Dena J. King, U.S. Attorney for the Western District of North Carolina. This sentence runs consecutive to an additional 24 months in prison Holcomb was sentenced to on May 30, 2024, for violating his federal supervised release. Bennie Mims, Special Agent in Charge of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), Charlotte Field Division, Sheriff Lowell S. Griffin of the Henderson County Sheriff’s Office (HCSO), and Sheriff Chuck Owenby of the Transylvania County Sheriff’s Office, join U.S. Attorney King in making today’s announcement. According to filed court documents and court proceedings, in June 2023, Holcomb was placed on federal supervised release after serving a prison term for a federal firearms offense. On June 27, 2023, law enforcement in Henderson County observed Holcomb driving a vehicle with an expired license plate and proceeded to conduct a traffic stop. Over the course of the stop, a police K9 alerted to the presence of drugs. Law enforcement searched Holcomb’s vehicle and located a black backpack in the middle of the back seat floor. Inside the backpack, law enforcement found a pistol brace device designed to convert a semiautomatic pistol to function with a stock as a rifle would, and a box of 28 rounds of .45 caliber ammunition. Law enforcement also opened the hood and searched the engine compartment of the vehicle. There, law enforcement located a plastic container and a black zippered pouch attached to the vehicle with blue painter’s tape. The plastic container contained over 100 grams of methamphetamine and a 1911 style .45 caliber pistol magazine containing eight rounds of .45 caliber ammunition. The black zippered pouch contained a Sig Sauer model 1911, .45 caliber pistol loaded with one round of .45 caliber ammunition in the chamber and a magazine containing seven rounds of .45 caliber ammunition. In total, officers recovered 51 rounds of .45 caliber ammunition from Holcomb’s possession. On February 26, 2024, Holcomb pleaded guilty to possession with intent to distribute methamphetamine. In making today’s announcement, U.S. Attorney King thanked the ATF, the Henderson County Sheriff’s Office, and the Transylvania County Sheriff’s Office for their investigation of the case. The U.S. Attorney’s Office in Asheville and Special Assistant U.S. Attorney Annabelle Chambers prosecuted the case. Ms. Chambers is a state prosecutor with the office of the 43rd Prosecutorial District and was assigned by District Attorney Ashley Welch to serve as SAUSA with the U.S. Attorney’s Office in Asheville. Ms. Chambers is sworn in both state and federal courts. The SAUSA position is a reflection of the partnership between the office of the 43rd Prosecutorial District and the United States Attorney’s Office. The SAUSA position helps ensure the effective and vigorous prosecution of federal court cases that impact the counties within the 43rd Prosecutorial District. This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.


title: Pennsylvania Man Sentenced to 78 Months in Prison For $4.8 Million Cares Act Loan Fraud Scheme

component: USAO - New Jersey

body_text: TRENTON, N.J. – A Pennsylvania man was sentenced today to 78 months in prison for his role in a scheme to fraudulently obtain over $4.8 million in federal Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) for himself and others, U.S. Attorney Philip R. Sellinger announced. Darryl Duanne Young, aka “Darryl Duanne Isom Young,” 61, of Kingston, Pennsylvania, pleaded guilty before U.S. District Judge Peter G. Sheridan in Trenton federal court on Nov. 14, 2023, to an information charging him with one count of conspiracy to commit bank fraud and one count of money laundering. U.S. District Judge Georgette Castner imposed the sentence today in Trenton federal court. “This defendant admitted taking advantage of government programs that were specifically designed to provide needed financial assistance to Americans during the COVID-19 pandemic,” U.S. Attorney Sellinger said. “Combatting pandemic fraud in all of its forms is a top priority for this office and our law enforcement partners. Together, we will continue to root out those who have exploited the suffering of others to line their own pockets, and bring them to justice.” “COVID-19 relief funds were meant to assist honest, hardworking Americans during an unprecedented time of hardship in our country, not to aid those trying to enrich their lives through deception,” Special Agent in Charge Jenifer L. Piovesan, IRS Criminal Investigation, Newark Field Office, said. “Mr. Young’s sentence today reinforces that individuals who defraud our federal programs will be held accountable.” “This sentencing should serve as a resounding message to anyone who wants to utilize the US Mail to defraud the American taxpayer. Postal Inspectors will continue to aggressively work with our partners in law enforcement and the US Attorney’s Office to hold these types of fraudsters accountable,” stated Christopher A. Nielsen, Inspector in Charge of the Philadelphia Division. “Mr. Young and his fellow conspirators committed crimes and selfishly profited from the Paycheck Protection Program and the Economic Injury Disaster Loans; Mr. Young exploited Federal assistance programs intended to help those in need during a national crisis. This sentence now holds him accountable for his criminal acts,” said Michelle L. Anderson, Acting Inspector General for the SSA. “I thank our law enforcement partners for working to pursue perpetrators who fraudulently profit from Federal benefit programs. I appreciate the collaboration among the investigating agencies and the work of the U.S. Attorney’s Office for prosecuting this case.” “Today’s sentencing sends a clear message that those who fraudulently obtained funds from COVID-19 relief programs will be held accountable,” Special Agent in Charge Patricia Tarasca of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG) said. “The FDIC OIG remains committed to working with our law enforcement partners to investigate and bring to justice those who participate in fraudulent schemes and threaten to undermine the integrity of our Nation’s banking system.” “Darryl Duanne Young defrauded the federal government of nearly $5 million in pandemic relief funds for his own personal gain and will now pay the price for his crimes,” said Brian Tucker, Special Agent in Charge, Eastern Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau. “We are proud to have worked with our federal law enforcement partners and the U.S. Attorney’s Office to hold Mr. Young accountable for his crimes.” “Young will serve time for selfishly pocketing millions of dollars in emergency funds our government intended to give qualified Americans and small businesses who needed economic assistance in the wake of the COVID-19 pandemic,” said HSI Newark acting Special Agent in Charge Spiros Karabinas. “HSI Newark and our law enforcement partners are committed to ensuring justice is served in cases where individuals perpetrated illicit schemes for personal gain during an unprecedented public health crisis.” According to documents filed in this case and statements made in court: Young engaged in a scheme to illegally obtain for himself and his conspirators over $4.8 million in loans authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Young submitted and directed others to submit fraudulent PPP and EIDL loan applications, which fabricated numbers of employees and misrepresented company information, to induce lenders to approve the loan applications that they otherwise would not have approved. Among other things, Young submitted falsified tax documents and bank statements to a victim lender in support of PPP loan applications. Young personally received over $230,000 in PPP loans for businesses he controlled and received a percentage of loan proceeds for assisting in submitting fraudulent applications on behalf of others. In addition to the prison term, Judge Castner sentenced Young to three years of supervised release and ordered restitution of $5.28 million. U.S. Attorney Sellinger credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jenifer L. Piovesan; postal inspectors of the U.S. Postal Inspection Service in Newark, under the direction of Inspector in Charge Christopher A. Nielsen Philadelphia Division; special agents of the Social Security Administration, Office of the Inspector General, under the direction of Acting Special Agent in Charge Corwin Rattler; special agents of the U.S. Attorney’s Office for the District of New Jersey, under the direction of Special Agent in Charge Thomas Mahoney; special agents of the Board of Governors of the Federal Reserve System - Consumer Financial Protection Bureau, Office of Inspector General, under the direction of Special Agent in Charge Brian Tucker; special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak; special agents of the Federal Deposit Insurance Corporation – Office of the Inspector General, under the direction of Special Agent in Charge Patricia Tarasca in New York; and special agents of Homeland Security Investigations Newark, under the direction of Acting Special Agent in Charge Spiros Karabinas, with the investigation leading to the sentencing. The government is represented by Assistant U.S. Attorneys Katherine M. Romano and David E. Dauenheimer of the U.S. Attorney’s Office’s Health Care Fraud Unit in Newark. 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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. The District of New Jersey COVID-19 Fraud Enforcement Strike Force is one of the five strike forces established throughout the United States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud. The strike forces focus on large-scale, multi-state pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven teams designed to identify and bring to justice those who stole pandemic relief funds.


title: Acadia Healthcare Company Inc. to Pay $19.85M to Settle Allegations Relating to Medically Unnecessary Inpatient Behavioral Health Services

component: Civil Division

body_text: Acadia Healthcare Company Inc., a Delaware corporation with its principal place of business in Franklin, Tennessee, has agreed to resolve allegations that it violated the False Claims Act and related state statutes by knowingly billing for medically unnecessary inpatient behavioral health services or for services that did not meet federal and state regulations. Acadia Healthcare Company owns and operates inpatient behavioral health facilities throughout the United States, including The Pavilion at HealthPark LLC, doing business as Park Royal Hospital in Ft. Myers, Florida; Riverwoods Behavioral Health LLC, doing business as Lakeview Behavioral Health in Norcross, Georgia, and as Riverwoods Behavioral Health System in Riverdale, Georgia; Ten Broeck Tampa LLC, doing business as North Tampa Behavioral Health in Wesley Chapel, Florida; PHC of Michigan LLC, doing business as Harbor Oaks Hospital in New Baltimore, Michigan; and Seven Hills Hospital LLC, doing business as Seven Hills Hospital in Henderson, Nevada (collectively, Acadia). The United States contended that, between 2014 and 2017, Acadia knowingly submitted false claims for payment to Medicare, Medicaid and TRICARE for inpatient behavioral health services that were not reasonable or medically necessary. In particular, the United States contended that Acadia admitted beneficiaries who were not eligible for inpatient treatment and failed to properly discharge beneficiaries when they no longer needed inpatient treatment and had improper and excessive lengths of stay. The United States further alleged that Acadia knowingly failed to provide adequate staffing, training and/or supervision of staff, which resulted in assaults, elopements, suicides and other harm resulting from these staffing failures. In addition, Acadia allegedly failed to provide inpatient acute care in accord with federal and state regulations, including, but not limited to, by failing to provide active treatment, to develop and/or update individualized assessments and treatment plans, to provide adequate discharge planning and to provide required individual and group therapy. Under the settlement agreement, Acadia will pay $16,663,918 to the United States to resolve its liability under the False Claims Act for its allegedly false Medicare, Medicaid and TRICARE billings. The Medicaid program is jointly funded by the states and the federal government, and pursuant to separate settlement agreements, Acadia will pay an additional $3,186,082 to Florida, Georgia, Michigan and Nevada to resolve their state law claims against Acadia. “This settlement demonstrates the Justice Department’s commitment to ensuring that federal healthcare programs pay only for services that are needed and properly provided,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “It is particularly important that health care providers satisfy these requirements when providing services to a vulnerable patient population, such as residents of an inpatient behavioral health facility.” “Federal health care programs rely upon the honesty and credibility of participating providers,” said U.S. Attorney Roger B. Handberg for the Middle District of Florida. “The Justice Department will hold accountable those who seek to exploit these programs for personal gain, jeopardizing the health of patients.” “Medical providers who participate in federally funded health care programs must follow the law when billing Medicare, Medicaid and Tricare,” said Special Agent in Charge Tamala E. Miles of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “This settlement illustrates HHS-OIG’s commitment to protecting the integrity of these taxpayer-funded programs and the well-being of enrollees seeking treatment. Working closely with the United States Attorney’s Office and other law enforcement partners, we will continue to thoroughly investigate such fraudulent billing schemes.” “Billing TRICARE for medically unnecessary inpatient behavioral health services or for services that did not meet federal and state regulations impacts our ability to reimburse providers in a timely manner for care that is needed to keep our military ready to defend the nation,” said Rear Admiral Matthew Case of the U.S. Navy and Acting Assistant Director for Health Care Administration for the Defense Health Agency. “We thank our state and federal partners for their work on this case, and the whistleblowers who came forward for their bravery. As a result, we are able to continue delivering one of the most comprehensive and affordable health benefits available to any American.” The settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Franka Tirado, Brian Snyder and Jamie Thompson, all former employees of Acadia. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam cases are captioned U.S. ex rel. Tirado, et al. v. Park Royal Hospital et al. , Case No. 2:17-cv-201-FtM-99 (MDFL), and U.S. ex rel. Thompson v. Acadia Healthcare Company Inc., et al. , Case No. 2:18-cv-543-FtM-38CM (MDFL). The whistleblower share of the federal portion of the settlement will be $3,166,144.42. The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and U.S. Attorney’s Office for the Middle District of Florida, as well as the National Association of Medicaid Fraud Control Units, with assistance from HHS-OIG and the Department of Defense Criminal Investigative Service. The investigation and resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to HHS at 800-HHS-TIPS (800-447-8477). Senior Trial Counsel Sarah Arni of the Civil Division’s Fraud Section and former Senior Litigation Counsel Lindsay Griffin for the Middle District of Florida handled the matter. The claims resolved by the settlements are allegations only. There has been no determination of liability. Settlement