Stolen Valor: Bucks County, PA Man Pleads Guilty To Faking A Military Career As A Navy SEAL, Stealing From The Government, And Straw Purchasing Firearms

The U.S. Attorney's Office Eastern District of Pennsylvania released the below:

PHILADELPHIA – United States Attorney William M. McSwain announced that Richard Meleski, 58, of Chalfont, PA, pleaded guilty to multiple charges, including healthcare fraud, mail fraud, stolen valor, and aiding and abetting straw purchases of firearms.

In November 2019, Meleski was charged by Indictment for his scheme to defraud the government of hundreds of thousands of dollars in benefits. To perpetrate the scheme, Meleski faked serving in the U.S. military, specifically the Navy SEALs, and falsely represented that he had been a Prisoner of War, in order to secure healthcare benefits from the Veterans Administration (VA) worth over $300,000. Due to his false representation as a POW, the defendant received healthcare from the VA in Priority Group 3, effectively receiving healthcare before other deserving military service members. In reality, Meleski never served a single day in the United States military.

Meleski also filed for monetary compensation from the VA for PTSD he supposedly suffered during an armed conflict in Beirut in which he rescued injured service members. In his application for disability benefits for PTSD, Meleski falsely represented that he had been awarded the Silver Star for heroic actions during his time as a Navy SEAL. Again, Meleski never served a single day in the United States military and of course was never awarded any service medals. Meleski also submitted another application to the VA for monetary compensation in which he included obituaries of actual Navy SEALs alongside whom he had supposedly served. In short, he traded on the actions of true heroes in an attempt to bolster his false application for monetary benefits.

The defendant also filed for disability benefits from The United States Social Security Administration (SSA) for injuries he claimed to have received during his time in the service. Meleski falsely testified under oath in connection with an SSA Disability proceeding.

After being arrested for fraud, it was discovered that the defendant had also engaged in aiding and abetting the straw purchase of two separate firearms; he also pleaded guilty to this conduct.

“Meleski faked a record as a decorated U.S. Navy SEAL in order to steal numerous forms of compensation,” said U.S. Attorney McSwain. “Everything about this case is profoundly offensive. Our veterans fought for the freedoms we hold dear, and we owe them a debt that we can never fully repay. But holding individuals like Meleski accountable for their crimes is one small way that we can honor our veterans’ service.”

The case was investigated by Department of Veterans Affairs Office of the Inspector General, Social Security Administration Office of the Inspector General, and the Bureau of Alcohol, Tobacco and Firearms. It is being prosecuted by Special Assistant United States Attorney Megan Curran.

Stolen Valor: Montgomery County Man Indicted For Faking A Military Career And Stealing From The Government

The U.S. Attorney’s Office Eastern District of PA released the below information:

PHILADELPHIA – United States Attorney William M. McSwain announced that Richard Meleski, 58, of Chalfont, PA, was arrested and charged by Indictment with healthcare fraud, mail fraud, Stolen Valor, creating fraudulent military discharge papers, and making false statements stemming from his scheme to defraud the Veterans’ Administration (VA) of hundreds of thousands of dollars in benefits.

The Indictment alleges that the defendant faked serving in the U.S. military, specifically the Navy SEALs, and even falsely represented that he had been a Prisoner of War, in order to secure healthcare benefits from the VA worth over $300,000. Due to these false representations, Meleski received healthcare from the VA in Priority Group 3, effectively receiving healthcare before deserving military service members. In reality, the defendant never served a single day in the U.S. military.

Meleski also allegedly filed for monetary compensation from the VA for Post-Traumatic Stress Disorder (PTSD) he claimed to have suffered as a result of an armed conflict in Beirut in which he had supposedly rescued injured teammates. In his application for disability benefits for PTSD, Meleski also falsely represented that he had been awarded the Silver Star for his heroic actions during his supposed time as a Navy SEAL. He also allegedly submitted another application to the VA for monetary compensation in which he used the obituaries of actual Navy SEALs, claiming that he had served alongside them.

Finally, Meleski also allegedly filed for disability benefits from the Social Security Administration (SSA) for injuries that were supposedly aggravated by his service in the U.S. military. He falsely testified under oath about these injuries in connection with a SSA Disability proceeding.

“These allegations are truly shocking and a huge insult to anybody who has worn our country’s uniform. If proven, Meleski deserves to face the consequences under the law. My Office will aggressively root out and prosecute this type of conduct with the seriousness of purpose that it deserves,” said U.S. Attorney McSwain.

If convicted, the defendant faces a maximum possible sentence of 68 years imprisonment, 3 years supervised release, a $2,250,000 fine, a $900 special assessment, and restitution of $302,121.21.

The case was investigated by Department of Veterans Affairs-Office of the Inspector General and Social Security Administration-Office of the Inspector General, and is being prosecuted by Special Assistant United States Attorney Megan Curran.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

Pennsylvania State Senator And Pennsylvania Democratic Party Official Charged In Vote Buying Scheme

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

A Pennsylvania State Senator and a Pennsylvania Democratic Party Official were charged in a federal indictment for their involvement in a bribery and fraud scheme related to the 2011 election for Democratic Ward Leader for Philadelphia’s Eighth Ward. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division made the announcement. 

Lawrence “Larry” Farnese, 47, and Ellen Chapman, 62, both of Philadelphia, were charged with conspiracy, mail fraud, wire fraud, and violations of the Travel Act.  According to the indictment, at the time of the alleged illegal conduct, Farnese was a Pennsylvania State Senator and a candidate for Democratic Ward Leader of the Eighth Ward and Chapman was a member of the Eighth Ward Democratic Committee.

The indictment alleges that from May to December 2011, Farnese and Chapman devised a bribe scheme in which Farnese paid $6,000 to a college study-abroad program for Chapman’s daughter in exchange for Chapman’s agreement to use her position with the Eighth Ward Democratic Committee to support Farnese in the upcoming ward leader election.  According to the indictment, Chapman had originally intended to support a different candidate in the ward leader election.  The indictment also alleges that Farnese made the $6,000 payment using campaign funds and disguised the true purpose of the payment by falsely listing it as a “donation” on the campaign’s finance report. 

The charges and allegations in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

This case was investigated by the FBI and is being prosecuted by Trial Attorneys Jonathan Kravis and Peter Halpern of the Criminal Division’s Public Integrity Section.  

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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 NECC Indictment

Buyer Beware: Philadelphia Area Pair Charged in eBay Scam

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

PHILADELPHIA—Kareem Cameron, a/k/a “Shareef Ali,” 49, and Alecia Susan Brown, 38, both of Wyncote, PA, were charged by indictment, unsealed today, in an Internet scam involving an online auction site. The defendants, who were arrested today, are each charged with conspiracy to commit mail and wire fraud, one count of mail fraud, and four counts of wire fraud, announced United States Attorney Zane David Memeger.

The indictment alleges that Cameron and Brown conspired to operate an Internet scam in which Cameron, through various eBay user names and aliases, offered luxury items, including BMWs and Rolex watches, for sale on the Internet auction site. It is further alleged that Cameron did not possess or did not intend to deliver the goods he offered for sale, or the goods were not in the condition he advertised.

According to the indictment, Cameron instructed victim buyers to send a payment, via wire transfer, to his bank account or to the account of co-defendant Alecia Brown. After Cameron received payment, he either shipped goods that did not match the description or were inferior in quality to those he advertised for sale, or he shipped nothing at all. The indictment charges that the pair defrauded their victims of approximately $186,439.

If convicted of all charges, the defendants each face a maximum possible sentence of 125 years in prison, a fine of up to $1.75 million, three years of supervised release, and a $700 special assessment.
The case was investigated by the U.S. Postal Inspection Service and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorney Karen M. Klotz.

An Indictment, Information or Criminal Complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

Government Contractor, Its Owner, And Two Employees Charged In Multi-Million-Dollar Fraud Scheme

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

PHILADELPHIA—Devos Ltd., doing business as Guaranteed Returns (“Guaranteed Returns”), in Holbrook, NY, its Chief Executive Officer, Dean Volkes, and two others were charged by indictment, unsealed today, in a multi-million dollar scheme to defraud customers, including the government. Volkes, 51, of Port Jefferson, NY, Donna Fallon, 50, of Miller Place, NY, and Ronald Carlino, 66, of Deer Park, NY, are all charged in a conspiracy to obstruct justice and were arrested this morning, announced United States Attorney Zane David Memeger.

The indictment alleges that more than $116 million worth of drug products had been returned for refund and more than $14 million of those drugs belonged to federal government agencies, including the Department of Defense and the Veterans Administration. Other victims include numerous hospitals, pharmacies, and long-term care facilities.

Fallon serves as Chief Financial Officer for Guaranteed Returns and Carlino is an Information Technology employee. All four defendants are charged with conspiring to obstruct justice by concealing and destroying records involved in a Defense Department investigation, six counts of obstruction of justice, and three counts of lying to federal agents about those records. Volkes, Guaranteed Returns, and Fallon are also charged with money laundering conspiracy. Volkes and Guaranteed Returns are charged in 18 counts of wire fraud, 14 counts of mail fraud and one count of conversion of government property.

According to the indictment, Guaranteed Returns was in the business of managing the returns of pharmaceutical products for healthcare providers, including the Department of Defense (DoD) and the Veterans Administration. Manufacturers of pharmaceutical products frequently allow expired drugs to be returned for a refund. Guaranteed Returns handled this process for healthcare provider clients in exchange for a fee based on a percentage of the return value.

The indictment charges that Guaranteed Returns promised its clients that it would hold the clients’ “indate” (not yet expired) drug products until they expired, and then return them on the clients’ behalf, in exchange for a fee. Instead, according to the indictment, Guaranteed Returns, at the direction of CEO Dean Volkes, stole a significant portion of the “indate” drug products that it received from its clients; returned the drugs to the manufacturers; and kept the resulting refund money for itself and Dean Volkes.

The indictment further alleges that during the course of the scheme, a federal grand jury sitting in this district began investigating the diversion of funds under a contract with the DoD. During that investigation, an agent from the Defense Criminal Investigative Service met with Dean Volkes and served him with a grand jury subpoena requiring Guaranteed Returns to turn over records related to the DoD contract. Volkes and other Guaranteed Returns employees stated that they would comply with the subpoena. Instead, it is charged that with the help of Donna Fallon and Ronald Carlino, they destroyed some records and concealed others, and then lied to the investigating agents about why the records were not produced.

“The defendants in this case found a way to defraud the government, hospitals, pharmacies, and long-term care facilities by exploiting the system for returning expired drugs to pharmaceutical companies,” said Memeger. “My office will continue to aggressively prosecute and seek to recover illegal proceeds from those who use our precious health care dollars to enrich themselves at the expense of everyone else.”

“Fraud against the government amounts to stealing from American taxpayers, in service of pure greed,” said FBI Special Agent-in-Charge Edward J. Hanko said. “The FBI takes that very seriously, and we’re committed to tracking and shutting down financial fraud schemes.”

If convicted of all charges, defendant Guaranteed Returns faces a possible fine of over $200 million along with a $4,400 special assessment; Volkes faces a maximum possible statutory sentence of 810 years in prison, a fine of over $200 million, three years of supervised release, and a $4,400 special assessment; Fallon faces a maximum possible statutory sentence of 160 years in prison, a fine of over $200 million, three years of supervised release, and a $1,100 special assessment; and Carlino faces a maximum possible statutory sentence of 140 years in prison, a $2.5 million fine, three years of supervised release, and a $1,000 special assessment.

This case was investigated by the Defense Criminal Investigative Service and the Federal Bureau of Investigation. It is being prosecuted by Assistant United States Attorneys Nancy Rue and Paul Shapiro.

An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.

Husband and Wife Admit Roles in Million-Dollar Scam Involving City Ink and Toner Cartridges

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

PHILADELPHIA—Derek and Danita Willis, 49 and 35, respectively, of Russellville, Arkansas, pleaded guilty today to taking part in a scheme between January 2006 and January 2012 that defrauded the city of Philadelphia of more than $1 million. The couple pleaded guilty to five counts of mail fraud, obstruction of justice for the destruction of documents related to the fraud scheme, and perjury for knowingly making false statements to the grand jury on May 8, 2012. A sentencing hearing is scheduled for October 10, 2014.

The Willises owned Laser Cartridge Plus Inc. (LCP), a business located in Russellville. They were contacted by Calvin Duncan who, at the time, worked for the Philadelphia Water Department (PWD) as a mailroom clerk. As part of his responsibilities, Duncan was responsible for mail deliveries and purchasing supplies, including printer ink and toner cartridges, for the administrative offices of PWD.
Duncan submitted requests for approval to purchase printer ink and toner cartridges, falsely claiming that the cartridges were for PWD employees. After receiving the printer ink and toner cartridges from the approved vendors at the city of Philadelphia’s expense, Duncan sold the printer ink and toner cartridges to Laser Cartridge Plus Inc. at prices significantly lower than those usually charged by ink and toner cartridge vendors. The Willises knew that the cartridges had been stolen. Derek Willis dealt directly with Duncan prior to 2005 when he tasked Danita Willis with arranging to buy the illegally obtained printer ink and toner cartridges from Duncan. Duncan mailed the illegally obtained printer ink and toner cartridges to LCP using United Parcel Service (UPS).

The scheme caused the city of Philadelphia to pay approximately $1,368,091.19 on purchase orders and shipping costs for printer ink and toner cartridges never intended to be used by PWD employees. Additionally, Derek and Danita Willis paid Duncan approximately $545,412.79, which was not due to him, for the printer ink and toner cartridges purchased with the city of Philadelphia funds and shipped to LCP using PWD’s UPS shipping account. Duncan pleaded guilty on August 9, 2013, and will be sentenced on July 18, 2014.

Derek Willis faces a maximum possible sentence of 120 years in prison, a maximum fine of $2.25 million, a $900 special assessment, and supervised release; Danita Willis faces a maximum possible sentence of 110 years in prison, a maximum fine of $1.75 million, a $700 special assessment, and supervised release.

The case was investigated by the Federal Bureau of Investigation and the city of Philadelphia Office of the Inspector General. It is being prosecuted by Assistant United States Attorney Tomika N. Stevens.