U.S. Law Enforcement Targets Fraud Facilitators, Doubling Last Year’s Enforcement: Agencies Increase Awareness About How Fraudsters Use and Recruit Money Mules

The Justice Department released the below information:

The Department of Justice, FBI, U.S. Postal Inspection Service and five other federal law enforcement agencies announced the completion of the fourth annual Money Mule Initiative, which targeted networks of individuals through which international fraudsters obtain proceeds of fraud schemes. These individuals, sometimes referred to as money mules, receive money from fraud victims and forward the illicit funds, often to overseas perpetrators. 

By receiving and transferring illicit funds, money mules facilitate a wide range of fraud schemes, including those that often predominately impact older Americans — like romance scams and lottery fraud — and those that target companies through business e-mail compromise schemes. Money mules also assist the theft of funds earmarked for pandemic relief, including unemployment insurance and small business loan funds. Some money mules are aware that their actions facilitate international fraud schemes. Others, however, first interact with fraud schemes as victims and may be unaware that their actions are furthering criminal activity.         

U.S. law enforcement took action to address 4,750 money mules over the last 10 weeks; enforcement actions occurred in every state in the country. These actions more than doubled the number of actions taken during last year’s effort. Agencies are also conducting outreach to educate the public about how fraudsters use money mules and how to avoid unknowingly assisting fraud by receiving and transferring money.

“Without money mules, many foreign fraudsters targeting American consumers, businesses and pandemic relief funds could not reap the proceeds of their schemes,” said Associate Attorney General Vanita Gupta. “The department and its partners will use every tool at our disposal — consumer education, disruption and prosecution — to cripple foreign fraudsters’ ability to get money from victims’ pockets to perpetrators’ bank accounts.”

Law Enforcement Actions

The department’s Consumer Protection Branch and the FBI led the initiative with the U.S. Postal Inspection Service. Other participating agencies were the Department of Labor Office of Inspector General, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Small Business Administration Office of Inspector General, U.S. Secret Service and U.S. Treasury Inspector General for Tax Administration. The campaign was conducted simultaneously with a Europol initiative, the European Money Mule Action (EMMA). Additionally, in several districts, including the District of Arizona and the Northern District of Georgia, federal law enforcement have been working closely with their state and local law enforcement counterparts.

“This year’s Money Mule Initiative successfully halted the activity of hundreds of money mules worldwide thanks to the persistence and partnership of the FBI and our federal, state, local and international partners,” said Executive Assistant Director Brian Turner of the FBI's Criminal, Cyber, Response and Services Branch. “Money mules make it easier for criminals to hide their activity, and harder for law enforcement to follow their tracks. Today’s announcement is an unmistakable warning for those who move money for criminal enterprises: even if you don’t know you’re committing a crime, acting as a money mule is illegal and punishable, and the FBI and our partners will use all available tools to disrupt the flow of funds to criminal networks.”

“The U.S. Postal Inspection Service takes great pride in our history of protecting the public from being deceived by scammers,” said Chief Postal Inspector Gary Barksdale for the U.S. Postal Inspection Service. “We work hard to safeguard vulnerable consumers through aggressive criminal investigations, as well as proactive consumer outreach, as part of our mission to protect those who might fall victim to cleverly designed deceptive offers. The Money Mule Initiative is another example of our law enforcement commitment, and that of our law enforcement partners, to vigorously pursue individuals who knowingly or unknowingly participate in criminal activity of this nature; bring them to justice and stop them in their tracks from victimizing the American public.”

The thousands of actions taken by law enforcement ranged from warning letters to civil and administrative actions, to criminal prosecutions. Law enforcement served approximately 4,670 letters warning individuals that their actions were facilitating fraud schemes. These letters outlined the potential consequences for transferring money acquired illegally. Civil or administrative actions were filed against 11 individuals, and through seizures and voluntary return of funds, law enforcement obtained nearly $3.7 million in fraud proceeds.

Additionally, more than 30 individuals were criminally charged for their roles in receiving and forwarding victim payments or otherwise laundering fraud proceeds. These cases included:

The Consumer Protection Branch and U.S. Attorney’s Office for the Central District of California charged four individuals who laundered gift cards purchased by fraud victims.

Two U.S. Attorney’s Offices, the District of Rhode Island and the Western District of Pennsylvania, indicted individuals who, among other conduct, personally collected money from grandparent scam victims.

The U.S. Attorney’s Office for the Western District of Tennessee charged an individual who facilitated the theft of unemployment insurance funds.

The U.S. Attorney’s Office for the Southern District of New York indicted a ring of individuals who laundered money for romance scams and business email compromise fraud schemes.

The charges also consisted of cases brought against individuals who facilitated business email compromise schemes, including charges brought by the U.S. Attorney’s Offices for the Eastern District of Virginia, the Eastern District of Wisconsin and the Western District of Kentucky. Additional charges were brought against money mules by U.S. Attorney’s Offices for the Northern District of Georgia, the Eastern District of Louisiana, and the District of Nebraska.

Criminal charges are merely allegations. Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Community Outreach and Prevention

Agencies also turned their attention to educating the public about how fraudsters recruit individuals to serve as money mules, signs of money mule activity and steps that should be taken if someone has unknowingly facilitated fraud by moving money.

These efforts included:

U.S. Postal Inspection Service created fliers that were displayed in post offices across the country during the Money Mule Initiative.

FBI’s Internet Crime Complaint Center (IC3) released a money mule public service announcement.

The Department of Labor Office of Inspector General provided information about money mule activity to state work force agencies.

The Department’s Elder Justice Coordinators educated their communities about money mule’s activity.

Members of the Attorney General’s Coronavirus Fraud Enforcement Task Force used outreach materials created by the Pandemic Response Accountability Committee (PRAC) to educate the public about the use of money mules to steal pandemic relief funds.

Other government agencies joining the public awareness effort included the Consumer Financial Protection Bureau, which created new money mule scam awareness materials, as well as the Department of Health and Human Services’ Administration for Community Living and AmeriCorps Seniors. By increasing awareness of money mule activity, these efforts and others sought to prevent individuals from becoming involved in money mule activity.

For more information on money mules, please visit https://www.justice.gov/civil/consumer-protection-branch/money-mule-initiative.

Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice. Additional information about the Consumer Protection Branch and its elder fraud enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).    

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. 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. 

Five Fraudsters Indicted For Million Dollar Scheme Targeting Thousands Of U.S. Servicemembers And Veterans

The U.S. Justice Department released the below information:

A 14-count indictment has been unsealed today in San Antonio, Texas, charging five individuals with coordinating an identify-theft and fraud scheme targeting servicemembers and veterans. The charged defendants, who were based both in the Philippines and the United States, are alleged to have used the stolen personal identifying information (PII) of thousands of military members to access Department of Defense and Veterans Affairs benefits sites and steal millions of dollars. 

The defendants, Robert Wayne Boling Jr., Fredrick Brown, Trorice Crawford, Allan Albert Kerr, and Jongmin Seok, were charged with multiple counts of conspiracy, wire fraud, and aggravated identify theft based on their alleged leading roles in the theft and exploitation of victim PII to conduct their fraud scheme. Boling (a U.S. citizen), Kerr (an Australian citizen), and Seok (a South Korean citizen) were arrested in the Philippines. Brown and Crawford, both U.S. citizens, were arrested in Las Vegas and San Diego respectively. Brown has been detained pending trial. Crawford is awaiting a detention hearing.

“The crimes charged today are reprehensible and will not be tolerated by the Department of Justice. These defendants are alleged to have illegally defrauded some of America’s most honorable citizens, our elderly and disabled veterans and servicemembers,” said Attorney General William P. Barr. “Through today’s action, the Department is honoring our pledge to target elder fraud schemes, especially those committed by foreign actors using sophisticated means, and to protect the veterans of our great country. I am proud of the quick and effective work done on this case by our Consumer Protection Branch and the U.S. Attorney’s Office for the Western District of Texas, with strong investigative support from the Departments of Defense and Veterans Affairs. We all will continue to work together to ensure that our veterans and servicemembers are protected from fraud.”

“Our message is pretty simple,” said U.S. Attorney Bash. “It doesn’t matter where on this planet you reside. If you target our veterans, we’re coming for you. Our veterans were willing to risk everything to protect this Nation from foreign threats. Now it’s our turn to seek justice for them.”

“The compromise of personally identifiable information can significantly harm our service members, veterans and their families and we will aggressively investigate such matters,” said Glenn A. Fine, Principal Deputy Inspector General, performing the duties of the Inspector General of the Department of Defense Office of Inspector General. “This indictment and the coordinated actions of our criminal investigative component, the Defense Criminal Investigative Service, demonstrate our commitment to swift action against those who attempt to enrich themselves through identify theft, money laundering, and conspiracy. The DoD OIG, working in partnership with the Department of Justice, will continue to identify, disrupt, and bring to justice those who threaten military members, retirees, and veterans through fraud and corruption.” 

“VA is working with DoD to identify any instances of compromised VA benefits accounts,” said James Hutton, VA assistant secretary for public and intergovernmental affairs. “Just as importantly, VA has taken steps to protect Veterans’ data and are instituting additional protective measures.”

According to the indictment, the defendants’ identity-theft and fraud scheme began in 2014 when Brown, then a civilian employee at a U.S. Army installation, stole thousands of military members’ PII, including names, dates of birth, social security numbers, and Department of Defense identification numbers. Brown is alleged to have then provided the stolen information to Boling, who exploited the information in various ways together with his Philippines-based co-defendants Kerr and Seok.

As asserted in the indictment, Boling, Kerr, and Seok specifically used the stolen information to compromise a Department of Defense portal designed to enable military members to access benefits information online. Once through the portal, the defendants are alleged to have accessed benefits information.  Access to these detailed records enabled the defendants to steal or attempt to steal millions of dollars from military members’ bank accounts. The defendants also stole veterans’ benefits payments. After the defendants had compromised military members’ bank accounts and veterans’ benefits payments, Boling allegedly worked with Crawford to recruit individuals who would accept the deposit of stolen funds into their bank accounts and then send the funds through international wire remittance services to the defendants and others. Evidence of the defendants’ scheme was detected earlier this year, advancing the investigation that led to the indictment.

The unsealed indictment was announced today in San Antonio by U.S. Attorney John Bash of the Western District of Texas, Deputy Assistant Attorney General David Morrell, and Director Gustav Eyler of the Department of Justice’s Consumer Protection Branch.

The Departments of Defense and Veterans Affairs are coordinating with the Department of Justice to notify and provide resources to the thousands of identified victims. Announcements also will follow regarding steps taken to secure military members’ information and benefits from theft and fraud.

An indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.

The United States is represented by Trial Attorneys Ehren Reynolds and Yolanda McCray Jones of the Department of Justice’s Consumer Protection Branch and Assistant United States Attorney Joseph Blackwell of the U.S. Attorney’s Office for the Western District of Texas. The matter was investigated by agents of the Defense Criminal Investigative Service, and counsel Matthew Freund, along with substantial investigative support from the U.S. Postal Inspection Service, the U.S. Army Criminal Investigation Command, and the Veterans Benefits Administration’s Benefits Protection and Remediation Division. The U.S. Department of State’s Diplomatic Security Service, Philippine law enforcement partners, and the U.S. Attorneys’ Offices for the District of Nevada, the Southern District of California, and the Eastern District of Virginia also provided assistance. Resources from the Department of Justice’s Servicemembers and Veterans Initiative and its Transnational Elder Fraud Strike Force aided in the matter’s investigation and prosecution.

Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In particular, this past March, the Department announced the largest elder fraud enforcement action in American history, charging more than 260 defendants in a nationwide elder fraud sweep.  The Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.   

Additional information about the Consumer Protection Branch and its enforcement efforts can be found at www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the Western District of Texas, visit its website at https://www.justice.gov/usao-wdtx. Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice; information on the Servicemember and Veterans Initiative is at https://www.justice.gov/servicemembers. 

My Crime Beat Column: Consumer Beware, Postal Inspector Warns Of Mail Fraud And Crooked Schemes

The below column appeared in the South Philadelphia American in August of 1997:

"Congratulations! You've just won the National Sweepstakes for one million dollars!"

Well, maybe not.

You see, the caller who just informed you over the telephone that you'll soon be a millionaire added subtlety that you will be required to mail in an advance fee of of $5,000 for "administrative costs."

I ventured over to the U.S. Postal Inspection Service's Bala Cynwyd offices to discuss this type of fraud with Tony Wolchasty, a postal inspector, and Judy Starliper, the Philadelphia Division's public information officer and forfeiture specialist.

"Mail fraud is a scheme to defraud an individual or a business using the U.S. Mail to carry out the scheme," Wolchasty said.

Wolchasty went on to explain that a change in the law now includes mail carried by Federal Express, UPS and other private firms. The law was amended because criminals were using the private companies to circumvent the law.

Mail fraud is the oldest consumer protection law in the U.S. and is one of the most effective tools in fighting white collar and organized crime. Millions of dollars are lost each year through mail fraud, which cheats not only the poor and the elderly, but also business people and the consumer as well. Prevalent schemes include insurance, banking, false billings and advance-fee selling swindles; charity schemes, promotions of fake health cures, franchise schemes, beauty devices, fast-working diets and sex stimulants; chain letters, lotteries, and solicitations for the sale of advertising specialty items.

Wolchasty has been a postal inspector for more than 25 years. He works on a fraud team with three other inspectors who investigate complaints from businesses, consumers, and organizations like the Better Business Bureau.

"There are myriad schemes out there and it all depends on the ingenuity and resourcefulness of the promoter," Wolchasty explained. "You have the common schemes, what we call your "work at home" schemes an chain letters. We also have more sophisticated schemes involving investments of thousands and millions of dollars."

Wolchasty said frauds against businesses include "false billings" schemes where a business gets a bill for a product or a service that was never rendered or provided, but the bill is paid anyway because the small amount of money. With a mass mailing, enough companies pay to make it a very profitable scheme,

"Boiler Room" schemes are when you have a room full of telephone operators pitching schemes. Wolchasty said they started out in boiler room basements, hence the name, but today they operate in large office complexes. Senior citizens are the most vulnerable victims.

"These people are so good, they make you believe you really won something. But if someone says you won something and asks you to pay expenses, you should automatically know it's not going to be legitimate," Starliper said.

"No matter how enticing it is, think about what was just proposed," Wolchasty added. "The caller will say that what's coming to you will be more than enough to offset this small amount of money you'll have to pay up front. Let the buyer beware. If you don't know who you are dealing with, don't deal with them."

Wolchasty spoke of one case where a company promised people they were getting cash bonuses and all they had to do was send in money for taxes, shipping and handling and other associated fees.

"People from all around the country bought into this and sent this company over $600,000 in a space of seven months. Then the company completely shut down. We were able to catch up to them and all of them pleaded guilty," Wolchasty said. "They were fairly sophisticated. They worked with "lead brokers" who sell lists of names, addresses, phone numbers and the amount of money sent to promotions in the past. If they gave three thousand, the pitch person will call and ask for a thousand an probably get it."

Who could be victimized twice, I asked? Wolchasty replied that some people are victimized twice and more.                           
                 
"Seniors are predominantly the victims in these cases. They grew up at a time where their word was gold. These people may have problems or a death in the family an this call comes at that inopportune time when they could use some extra money. The con artists are on the phone for hours getting their confidence, building a rapport, and maybe they are the only person they have talked to on the phone in months."

As the forfeiture specialist, Starliper handles the property seized from criminal cases. The 18-year Inspection Service veteran said the forfeiture funds are used for law enforcement's fight against crime. Starliper spoke of a major restitution case she worked involving 22,000 people.

"I was contacted by family members who had no idea that their loved one had been taken." Starliper said. "I advise those with elderly relatives to check their mail and see who they are sending money to."

Wolchasty added that one should keep copies of the advertisements and any literature and envelopes used in a scam. And don't give out your bank account number or Social Security number.

"If someone wants to file a complaint, go to your local Post Office and they'll direct you to the Postal Inspection Service," Starliper said. "You can also call 895-8450 or 1-800-FRAUDIS."

14 Indicted in Connection with New England Compounding Center and Nationwide Fungal Meningitis Outbreak

The U.S. Justice Department released the below information:

A 131-count criminal indictment was unsealed today in Boston in connection with the 2012 nationwide fungal meningitis outbreak, the Justice Department announced.  Barry J. Cadden, owner and head pharmacist of New England Compounding Center (NECC) and NECC’s supervisory pharmacist Glenn A. Chin were charged with 25 acts of second-degree murder in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia.   

The outbreak was caused by contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC, located in Framingham, Massachusetts.  The U.S. Centers for Disease Control and Prevention (CDC) reported that 751 patients in 20 states were diagnosed with a fungal infection after receiving injections of NECC’s MPA.  Of those 751 patients, the CDC reported that 64 patients in nine states died. 

Twelve other individuals, all associated with NECC, including six other pharmacists, the director of operations, the national sales director, an unlicensed pharmacy technician, two of NECC’s owners, and one other individual were charged with additional crimes including racketeering, mail fraud, conspiracy, contempt, structuring, and violations of the Food, Drug and Cosmetic Act.

“As alleged in the indictment, these employees knew they were producing their medication in an unsafe manner and in insanitary conditions, and authorized it to be shipped out anyway, with fatal results,” said Attorney General Eric Holder.  “With the indictment and these arrests, the Department of Justice is taking decisive action to hold these individuals accountable for their alleged participation in grievous wrongdoing.  Actions like the ones alleged in this case display not only a reckless disregard for health and safety regulations, but also an extreme and appalling indifference to human life.  American consumers have a right to know that their medications are safe to use, and this case proves that the Department of Justice will always stand resolute to ensure that right, to protect the American people, and to hold wrongdoers accountable to the fullest extent of the law.”

“Every patient receiving treatment deserves the peace of mind and knowledge that the medicine they are receiving is safe,” said Acting Associate Attorney General Stuart Delery.  “When people and companies violate that trust and break the law, the consequences to patients and their families can be catastrophic.  That’s why it remains a priority of the Department to use every tool at our disposal to protect patients’ safety and hold bad actors accountable.”

“Those who produce and sell the drugs that we take have a special responsibility to make sure that they prepare those drugs under suitable conditions, and that what leaves their facilities is safe,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “The indictment charges that the defendants’ conduct in this case was corrupt and carried out with a complete disregard to the public’s health.  The department‘s Consumer Protection Branch along with our law enforcement partners is steadfast in our commitment to use every criminal and civil tool at our disposal to hold accountable those who are willing to put our lives at risk in the reckless pursuit of their profits.”

“Ever since the outbreak occurred, we have been committed to bringing to justice the individuals responsible for the deaths and suffering of so many innocent victims,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts.  “The indictment announced today is the first step in that process which addresses alleged criminal wrongdoing at NECC, a business that prioritized production and profit over safety.  We will make every effort to ensure that licensed pharmacists, and those working with them, are held to a standard of care that protects the public from unsafe and dangerous medications.” 

“Two years after the fungal meningitis outbreak, our hearts continue to go out to the victims of this tragedy and to their families,” said FDA Commissioner Margaret A. Hamburg M.D.  “Our work on behalf of all patients who want and deserve medicines that do not subject them to undue risk is far from done.  The FDA will continue to work aggressively on many fronts with the states, the Department of Justice, and others to protect the American public from unsafe compounded drug products.” 

“Threats to public health, as alleged in today's indictment, are a priority for the FBI,” said Assistant Director Joseph S. Campbell of the FBI’s Criminal Division.  “Together with our law enforcement and regulatory agency partners, we are determined to stop practices that jeopardize patients' health and violate the public trust.  These types of investigations are complex and resource intensive.  We greatly appreciate the efforts of our partners in this case and look forward to working with them to effectively identify criminal activities and combat fraudulent and abusive health practices in the future.”

The 14 individuals charged in the indictment are Barry J. Cadden, 48, of Wrentham, Massachusetts; Glenn A. Chin, 46, of Canton, Massachusetts; Gene Svirskiy, 33, of Ashland, Massachusetts; Christopher M. Leary, 30, of Shrewsbury, Massachusetts; Joseph M. Evanosky, 42, of Westford, Massachusetts; Scott M. Connolly, 42, of East Greenwich, Rhode Island; Sharon P. Carter, 50, of Hopkinton, Massachusetts; Alla V. Stepanets, 34, of Framingham, Massachusetts; Gregory A. Conigliaro, 49 of Southborough, Massachusetts; Robert A. Ronzio, 40, of North Providence, Rhode Island; Kathy Chin, 42, of Canton, Massachusetts; Michelle Thomas, 31 of Cumberland, Rhode Island; Carla Conigliaro, 51, of Dedham, Massachusetts and Douglas A. Conigliaro, 53, of Dedham, Massachusetts.  

The 25 second-degree murders are included in the indictment as predicate racketeering acts under the Racketeer Influenced and Corrupt Organizations Act (RICO).  These charges relate to patients who received NECC MPA and died in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia. As a general matter, and depending on particular state law, second-degree murder does not require the government to prove Cadden and Chin had specific intent to kill the 25 patients, but rather that Cadden and Chin acted with extreme indifference to human life.  According to the indictment, Cadden and Chin knew that NECC was making MPA in a manner and in an environment in which they could not assure that the drug was sterile as it was identified to be.  Despite knowing that they were making the MPA in an unsafe manner and in insanitary conditions, Cadden and Chin nonetheless allegedly directed and authorized the shipping of MPA to NECC customers nationwide.  It is alleged that Cadden and Chin were aware that doctors would inject MPA into their patients’ bodies, and that if the MPA was not in fact sterile, it could kill them. 

The 25 murder racketeering acts comprise only a portion of the broad racketeering scheme charged in the indictment.  The indictment also alleges that NECC’s other pharmacists knowingly made and sold numerous drugs in a similar unsafe manner and in insanitary conditions.  The unsafe manner alleged in the indictment includes, among other things, the pharmacists’ failure to properly sterilize NECC’s drugs, failure to properly test NECC’s drugs for sterility, and failure to wait for test results before sending the drugs to customers.  The insanitary conditions alleged in the indictment include, among other things, NECC’s lack of proper cleaning and NECC’s failure to take any action when its own environmental monitoring repeatedly detected mold and bacteria within NECC’s clean room suite of rooms throughout 2012. 

It is further alleged that NECC repeatedly took steps to shield its operations from regulatory oversight by the FDA by claiming to be a pharmacy dispensing drugs pursuant to valid, patient-specific prescriptions.  In fact, NECC routinely dispensed drugs in bulk without valid prescriptions.  The indictment alleges that NECC even used fictional and celebrity names on fake prescriptions to dispense drugs. 

Finally, the indictment charges Carla Conigliaro, the majority shareholder of NECC, and her husband Douglas Conigliaro with transferring assets following the fungal meningitis outbreak.  Specifically, the indictment charges that after NECC declared bankruptcy, and the bankruptcy court ordered the shareholders not to transfer assets, Carla and Doug Conigliaro transferred approximately $33.3 million to eight different bank accounts opened after the NECC bankruptcy. 

Cadden and Chin face a maximum of up to life in prison if convicted on all counts. 

“Although no VA patients were affected by the fungal meningitis outbreak, VA unknowingly purchased a variety of pharmaceutical products over a three year period from NECC that were intentionally produced in an unsafe manner under insanitary conditions,” said Assistant Inspector General for Investigations James J. O’Neill for the Office of Inspector General, Department of Veterans Affairs.  “We are pleased to have contributed to this outstanding multi-agency criminal investigation.”

“Today's results are part of an ongoing effort by the Defense Criminal Investigative Service and its law enforcement partners to protect the integrity of the Department of Defense's health care program and the quality of care our service members receive,” said Deputy Inspector General for Investigations James B. Burch for the U.S. Department of Defense Office of the Inspector General.  “The Defense Criminal Investigative Service will continue to pursue allegations of health care fraud that put the Warfighter at risk.”

“The U.S. Postal Inspection Service is pleased to join our federal partners in this announcement” said Postal Inspector in Charge Shelly A. Binkowski of the Boston Division.  “What's particularly disturbing about this case is that through their alleged misrepresentation and greed, these defendants put the health and well-being of others at a high level of risk.  This criminal action today demonstrates the commitment and vigilance of postal inspectors and other federal agents to pursue criminals who prey on the public in such an egregious way.”

In announcing the indictment today, Attorney General Holder and U.S. Attorney Ortiz acknowledged the assistance and cooperation of Michigan State Attorney General Bill Schuette.  The state of Michigan had the most deaths during the outbreak.

The investigation was conducted by the FDA Office of Criminal Investigations and the FBI with assistance by the Defense Criminal Investigative Service, U.S. Department of Defense, Office of Inspector General; Department of Veterans Affairs Office of Inspector General and U.S. Postal Inspection Service. The case is being prosecuted by Assistant U.S. Attorneys George P. Varghese and Amanda P.M. Strachan of the Health Care Fraud Unit for the U.S. Attorney’s Office in the District of Massachusetts, and Trial Attorney John W.M. Claud of the Civil Division’s Consumer Protection Branch.

The details contained in the indictment are allegations.  The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

Victims with questions about today’s charges may call 1-888-221-6023 or emailusama.victimassistance@usdoj.gov

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Civil Division

 NECC Indictment

Camden, NJ Drug Trafficking Organization Charged With Selling Heroin, Methamphetamine, And Assault Weapons

The U.S. Justice Department released the below information:

CAMDEN, NJ—Four members of a drug trafficking organization allegedly responsible for distributing heroin and crystal methamphetamine in the Camden area were arrested today by federal, state and local law enforcement officers, U.S. Attorney Paul J. Fishman announced.

Arrested this morning were the alleged leader of the conspiracy, Wendell Fleetwood, a/k/a “Dell,” 28, of Camden and Sicklerville, N.J, and three other members of the conspiracy: Wendell Bethea, a/k/a “Rell,” a/k/a “Ruger;” 25, of Camden and Maple Shade, N.J.; and Julio Alvarado, 25, and Erica Fleetwood, 24, both of Camden. A fifth federal defendant, Brandon Jones, 25, of Camden, remains at large. The charges are the result of an investigation by the Camden County Crime Collaboration (C-4).

Each defendant was charged in a federal criminal complaint unsealed today with one count of conspiracy to distribute 100 grams or more of heroin and 50 grams or more of methamphetamine. The defendants are also charged in separate counts in connection with distribution of heroin and/or methamphetamine to an undercover officer.

Wendell Fleetwood and Bethea are additionally charged with possessing methamphetamine with intent to distribute. Bethea faces three counts in connection with selling three high-capacity assault weapons to an undercover officer, as well as a handgun that had been used in a recent homicide. The defendants are scheduled to make their initial court appearances this afternoon before U.S. Magistrate Judge Karen M. Williams in Camden federal court.

“Because of C-4—our collaborative partnership with state and local law enforcement—as well as the more robust Camden County PD and its community policing orientation, and other efforts, Camden is becoming safer every day,” U.S. Attorney Fishman said. “We are grateful that all of our law enforcement partners share our vision and commitment to make Camden the safe city its residents deserve.”

“While the success of this operation hinged on the teamwork of many agencies, it was the bravery, selflessness and dedication of the law enforcement officers involved that made these significant arrests possible,” Camden County Prosecutor Mary Eva Colalillo said.

According to the complaint:

From November 2013 through October 2014, the defendants engaged in a conspiracy to distribute illegal drugs—primarily heroin—in and around Camden. Through the authorized interception of cell phone calls and texts, the use of various surveillance methods, controlled undercover purchases and other means, law enforcement learned that Wendell Fleetwood was the leader of the drug trafficking organization (the “Wendell Fleetwood DTO”). He supplied wholesale quantities of heroin to Bethea and Alvarado, who either resold it to other distributors or repackaged it into smaller quantities for sale to customers.

In intercepted calls, Bethea, Jones and Alvarado and their associates discussed and directed the purchasing, processing, packaging, storing and distributing of heroin, as well as its quality and the pricing and collection of the proceeds from its sale. In addition to replacing their cellular phones after only a couple weeks of use and speaking in code to avoid detection by law enforcement, the Wendell Fleetwood DTO allegedly used Erica Fleetwood to relay drug-related messages from her brother, Wendell, to Bethea and Jones. Jones, Alvarado and Erica Fleetwood also conducted counter surveillance for the DTO.

The Wendell Fleetwood DTO also replaced their vehicles frequently to avoid detection, renting cars or obtaining vehicles which were stolen or fraudulently obtained.

“Camden’s drug gangs victimize the city in so many ways—through the poison they sling, and the violence tied to the trade,” Edward J. Hanko, FBI Special Agent in Charge, said. “The FBI’s South Jersey Violent Offender and Gang Task Force, alongside our law enforcement partners, is committed to dismantling these despicable drug trafficking organizations.”

“Heroin abuse has been a major issue facing New Jersey,” Carl J. Kotowski, Special Agent in Charge of the Drug Enforcement Administration’s New Jersey Division, said. “The arrest of these individuals highlights the fact that members of DEA will continue to do its part to remove those responsible for putting those drugs on the street.”

The conspiracy count with which each defendant is charged carries a minimum potential penalty of 10 years in prison, a maximum of life in prison and a $10 million fine. The firearms charges faced by Bethea each carry a maximum penalty of 10 years in prison and a $250,000 fine.

“The dismantling of this sophisticated criminal network wouldn’t have been possible without the dedication and cooperation of all the law enforcement partners who worked long and hard to identify these suspects and ensure their arrest,” Camden Police Chief J. Scott Thomson said. “The removal of these individuals from the community this morning will have an immediate positive impact on public safety in Camden as the supply of illegal drugs and guns on Camden’s streets has just been reduced.”
“The success of this collaboration proves the value of sharing intelligence with others in law enforcement,” Col. Rick Fuentes, Superintendent of the N.J. State Police, said. “Multiple agencies were targeting different individuals who turned out to be working together to push drugs into the South Jersey region. This was a well-organized group who went to great lengths to avoid detection, such as speaking in code and frequently changing cell phones.”

U.S. Attorney Fishman credited special agents of the FBI, Cherry Hill Resident Agency’s South Jersey Violent Offender and Gang Task Force, under the direction of Special Agent in Charge Hanko; special agents of the DEA, Maple Shade Resident Office’s High Intensity Drug Trafficking Area Group, under the direction of Special Agent in Charge Kotowski; investigators of the N.J. State Police’s Violent and Organized Crime Bureau, Trafficking South Unit, under the direction of Superintendent Fuentes; investigators with the Camden County Prosecutor’s Office, under the direction of Prosecutor Colalillo; detectives of the Camden County Police Department—Metro, under the direction of Chief J. Scott Thomson, with the investigation leading to today’s charges.

He also thanked the U.S. Postal Inspection Service, under the direction of Inspector in Charge David W. Bosch; and the Camden County Sheriff’s Office, under the direction of Charles H. Billingham, for their roles in the case. He also thanked U.S. Immigration and Customs Enforcement—Homeland Security Investigations; the N.J. Office of Attorney General, Division of Criminal Justice; the Delaware River Port Authority, the Burlington County Prosecutor’s Office, the Gloucester City Police Department and the Cherry Hill Police Department for their roles in the investigation.

The government is represented by Deputy U.S. Attorney Nelson S.T. Thayer Jr. and Special Assistant U.S. Attorney Michael Angermeier of the U.S. Attorney’s Office Criminal Division in Camden.
The charges and allegations contained in the complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.

This case was developed through the work of the Camden County Crime Collaboration. Every federal, state and local law enforcement agency and prosecutor’s office responsible for combating drug trafficking, gang activity and violent crime in Camden has come together in one location to share intelligence, develop strategies and support the investigative and prosecutorial efforts of its partners. C-4 has merged the individual missions of the various law enforcement agencies into a single strategic attack on drug trafficking and drug-related violent crime. This coordination greatly enhances the law enforcement community’s ability to identify and prosecute Camden’s most dangerous criminals.

Jamaican Citizen Pleads Guilty In Connection With International Lottery Scheme Based In Jamaica

The U.S. Justice Department released the below information today:

Oneike Mickhale Barnett pleaded guilty today in the U.S. District Court for the Southern District of Florida in Ft. Lauderdale to one count of conspiracy to commit wire fraud, the Justice Department, U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and U.S. Marshals Service announced.  Barnett, a Jamaican citizen, was charged in connection with a lottery scheme based in Jamaica that fraudulently induced elderly victims in the U.S. to send Barnett and his co-conspirators thousands of dollars to cover fees for lottery winnings that victims had not won.

 

This prosecution is part of the Department of Justice’s effort, working with federal and local law enforcement, to combat fraudulent lottery schemes in Jamaica preying on American citizens.  According to the U.S. Postal Inspection Service, Americans have lost tens of millions of dollars to fraudulent foreign lotteries and sweepstakes. 

“All too often, what appears to be an unexpected lottery win is in fact a pernicious lottery scam, and one that cheats unsuspecting Americans out of their hard-earned savings,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “The Department of Justice will continue our crackdown on those responsible for lottery schemes, particularly schemes that target the elderly.”

“As is evident by the prevalence of international lottery scams, fraudsters have no bounds,” said Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida.  “While we will continue to combat fraud vigorously, and pursue and prosecute fraudsters using all legal means available to us, now more than ever, the public needs to be mindful of these schemes to avoid falling prey to them.  As I have previously stated, so long as fraudsters continue to line their pockets with the hard earned money of our most vulnerable citizens, we will be there to prosecute them and bring them to justice.”

Barnett was arrested in Orlando, Fla., in August 2013 following his indictment by a federal grand jury in Ft. Lauderdale on Aug. 9, 2012.  As part of his guilty plea, Barnett acknowledged that, had the case gone to trial, the U.S. would have proved beyond a reasonable doubt that, from 2008 through 2012, Barnett was a member of a conspiracy in which elderly victims were informed that they had won a large amount of money in a lottery and were induced to pay bogus fees in advance of receiving their purported lottery winnings.  Barnett also acknowledged that the government would have proved that he knew the claims of lottery winnings were completely fabricated and that he, along with his co-conspirators, kept the victims’ money for their own benefit without paying any lottery winnings.  Barnett also acknowledged that the government would have proved that, in an effort to convince the victims that the lottery winnings were real, the conspirators sent them written and electronic communications discussing their purported lottery winnings, which claimed to be from a genuine sweepstakes company and from federal agencies including the Internal Revenue Service and the Federal Reserve.  In fact, these communications were not from a genuine sweepstakes company or from agencies of the United States.        

                              

“The United States Postal Inspection Service is dedicated to investigating and uncovering lottery fraud from Jamaica and combating such fraud,” said U.S. Postal Inspector in Charge for the Miami Division Ronald Verrochio. 

 

“Lottery fraud from Jamaica against American citizens is a very challenging problem, but as this case demonstrates, law enforcement in the U.S. working with our partners in Jamaica will continue to aggressively pursue such scammers even if they base their operations outside of the U.S.,” said Special Agent in Charge for Homeland Security Investigations in Miami Alysa D. Erichs.

 

“Working with our law enforcement partners at the Postal Inspection Service and Homeland Security Investigations, the Marshals Service was pleased to be able to help catch this defendant and bring him to justice,” said Acting U.S. Marshal Neil DeSousa.  

 

Assistant Attorney General Delery and U.S. Attorney Ferrer commended the investigative efforts of the U.S. Postal Inspection Service, Homeland Security Investigations, the U.S. Marshals Service and Jamaica’s Major Organized Crime and Anti-Corruption Task Force.  The case is being prosecuted by Assistant U.S. Attorney Bertha Mitrani and Consumer Protection Branch, Civil Division Assistant Director Jeffrey Steger and trial attorney Kathryn Drenning. 

Individual Arrested In Florida In Connection With Lottery Scam In Jamaica

The U.S. Justice Department released the below information today:

A Jamaican citizen charged in connection with the operation of a fraudulent lottery was arrested Tuesday in Orlando, Fla., following his indictment by a federal grand jury in Fort Lauderdale, Fla., on Aug. 9, 2012, the Justice Department, U.S. Postal Inspection Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and U.S. Marshals Service announced today.  Oneike Mickhale Barnett was arrested based on charges that he and his co-conspirators ran a lottery scam in Jamaica that fraudulently induced elderly victims in the United States to send them thousands of dollars to cover fees for lottery winnings that victims had not in fact won.  The indictment unsealed with Barnett’s arrest forms part of the government’s crackdown on fraudulent lottery scams based in Jamaica.

 

Beginning in October 2008, Barnett and his co-conspirators are alleged to have contacted victims in the U.S., announced that the victims had won cash and prizes and persuaded the victims to send them thousands of dollars in fees to release the money.  The victims never received cash or prizes.  The defendant and his co-conspirators allegedly made calls from Jamaica using Voice Over Internet Protocol technology that allowed them to use a telephone number with a U.S. area code.  According to the indictment, Barnett convinced victims to send money to middlemen in South Florida, who forwarded the money to Jamaica.

 

“Lottery scams that target older Americans, such as the one alleged here, are the most pernicious kind of fraud – often swindling seniors out of their life savings,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “The Justice Department will continue to combat these schemes and bring those responsible to justice.”

 

 “The alleged lottery scheme in this case is most vile because it targeted the elderly, one of the most vulnerable members in our society,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida.  “While the scam was based in Jamaica, it targeted victims in the United States, including South Florida.  We will continue to pursue and prosecute those responsible for these illegal schemes in an effort to bring those responsible to justice and protect those in our society.” 

 

Barnett was charged with conspiracy and 37 counts of wire fraud, and with committing these offenses via telemarketing.  If convicted, he faces a statutory maximum sentence of 30 years per count, a possible fine and mandatory restitution.

           

 “This arrest highlights the joint effort between U.S. and Jamaican law enforcement to prosecute those who prey on our nation’s senior citizens,” said U.S. Postal Inspector in Charge for the Miami Division Ronald Verrochio.  “The mission of the Postal Inspection Service is to protect consumers by ensuring the nation’s mail system is not used as a tool for fraud.” 

 

Special Agent in Charge for Homeland Security Investigations in Miami Alysa D. Erichs added, “These individuals are preying on some of the most vulnerable members in our communities.  We will continue to work with our partners in Jamaica and other law enforcement agencies to put these criminal enterprises out of business.”  

 

Acting U.S. Marshal Neil DeSousa said, “The U.S. Marshals Service in the Southern District of Florida, along with the Jamaica Foreign Field Office and the Organized Crime Drug Enforcement Task Force, remain committed to locating and apprehending criminals who defraud elderly Americans.  We will continue to work with the U.S. Postal Inspection Service and Department of Homeland Security on the JOLT task force in the ongoing effort to combat lottery fraud targeting some of our most vulnerable citizens.”

 

U.S. Attorney Ferrer and Assistant Attorney General Delery both commended the investigative efforts of the U.S. Postal Inspection Service, Homeland Security Investigations, the U.S. Marshals Service and Jamaica’s Major Organized Crime and Anti-Corruption Task Force.  The case is being prosecuted by Assistant U.S. Attorney Bertha Mitrani and Consumer Protection Branch, Civil Division attorneys Jeffrey Steger and Kathryn Drenning.

 

An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.