Month: April 2022

Source: United States Department of Justice News

Special Attorneys Michael Wheat (619) 546-8437, Joseph Orabona (619) 546-7951, Janaki Chopra (619) 546-8817, Colin McDonald (619) 546-9144, and Andrew Chiang (619) 546-8756

NEWS RELEASE SUMMARY – April 20, 2022

HONOLULU, Hawaii – A federal jury has found former Big Island pain doctor Rudolph B. Puana guilty of all 38 counts of an indictment charging him with conspiracy to distribute oxycodone and fentanyl and distribution of oxycodone and fentanyl outside the course of professional practice and without a legitimate medical purpose.  Immediately following the jury’s verdict, Chief District Judge J. Michael Seabright ordered Puana to be remanded into custody. 

Following a three-week trial, the jury deliberated for less than one day and convicted Puana of distributing substantial quantities of oxycodone, a Schedule II controlled substance, to his close friends to sell to pay for tuition at one of the most expensive private schools in the State of Hawaii and to purchase cocaine. The jury also found that Puana provided another friend with oxycodone and fentanyl to pay for cocaine they used to party together on Oahu.  Prior to the jury trial, Puana pleaded guilty to being an addict in possession of approximately seven firearms.  At the guilty plea hearing on March 28, 2022, Puana admitted that between 2014 and 2018 he was addicted to hydrocodone, a Schedule II controlled substance, while possessing the seven firearms, which included handguns, rifles, and a shotgun. 

During the trial, the United States proved that Puana used cocaine with his friends and introduced his best friend to Puana’s “trinity”—cocaine, opioids, and alcohol—which combined to prolong and even out the “high.” Puana also popped hydrocodone pills—which he referred to as his “skittles”—in front of one of his friends.  Puana said he obtained his “skittles” from the “doctor’s candy store.”  Puana also left his script pad with his best friend and falsified medical records to legitimize a medical purpose for the substantial amount of oxycodone he provided to his friends.  While addicted and abusing drugs, Puana distributed more than 7,810 oxycodone 30mg pills to his friends so that they could sell them to pay for tuition and cocaine. The street value of the oxycodone he supplied to his friends exceeded $117,000.

To conceal his crimes, Puana fabricated handwritten medical records for his closest friends, which included false drug tests.  During their testimony, Puana’s friends admitted that Puana was not their pain doctor and that they had never gone to his clinic (previously the Puana Pain Clinic) for any medical visits, even though Puana falsely documented that they were examined there. In addition to falsifying the clinic’s files, Puana also kept a secret notebook hidden in the clinic’s drug closet. The notebook was handwritten by Puana to cover up his multi-year addiction to hydrocodone. 

“The unlawful diversion of prescription drugs is one of the most serious problems plaguing our communities, and it is fueling the opioid epidemic that is ravaging families across the country,” said U.S. Attorney Randy S. Grossman. “The conviction of a pain doctor abusing his power and position to distribute highly addictive and dangerous oxycodone and fentanyl sends a strong message to any medical professional acting outside the regular course of practice and prescribing opioids without a legitimate medical need.”

“Today’s guilty verdict is a testament that no doctor should use his license to unlawfully distribute controlled substances and falsify medical records to conceal his crimes,” said FBI Special Agent in Charge Steven Merrill.  “The FBI will continue to work with our partners to hold those who abuse their positions of trust accountable, and to protect the public.”

During trial, the prosecution relied on a multitude of documentary evidence, including Puana’s false clinic files, Puana’s handwritten notebook, pharmacy records, text messages, and other business records, as well as the testimony of Puana’s closest friends, federal agents, a forensic accountant, a medical expert, and police officers, among others, to prove Puana intentionally distributed oxycodone and fentanyl outside the usual course of professional practice and without a legitimate medical purpose.

Chief District Judge Seabright of the District of Hawaii, who presided over the trial, set sentencing for Rudolph B. Puana on September 12, 2022, at 1:30 p.m.

U.S. Attorney Grossman praised prosecutors Michael Wheat, Joseph Orabona, Colin McDonald, Janaki Chopra, and Andrew Chiang, and FBI agents in Honolulu for their excellent work on this case.

DEFENDANTS                                 Case Number: CR 19-00015 JMS-WRP                            

Rudolph B. Puana                               Age: 50                       Waimea, Hawaii

SUMMARY OF CONVICTIONS

Count 1 – Conspiracy to Distribute or Dispense Oxycodone and Fentanyl – Title 21, U.S.C., Sections 841(a)(1) and 846

Maximum Penalty: Twenty years in prison, $250,000 fine.

Counts 3-38 – Distributing or Dispensing Oxycodone – Title 21, U.S.C., Section 841(a)(1)

Maximum Penalty: Twenty years in prison per count, $250,000 fine per count.

Count 39 – Distributing or Dispensing Fentanyl – Title 21 U.S.C., Section 841(a)(1)

Maximum Penalty: Twenty years in prison, $250,000 fine

Count 54 – Unlawful Possession of Firearm While Addicted to Controlled Substance – Title 18, U.S.C. Section 922(g)(3)

Maximum Penalty: Ten years in prison, $250,000 fine

AGENCY

Federal Bureau of Investigation

Honolulu Division

Source: United States Department of Justice News

Assistant U. S. Attorney Nicholas Pilchak (619) 546-9709  

NEWS RELEASE SUMMARY – April 20, 2022

SAN DIEGO – Three men were sentenced in federal court today for engaging in a years-long, nation-wide fraud conspiracy that stole victims’ financial information from ATMs and gas pumps in San Diego and across the country, and then used the stolen information to make fake credit and debit cards.

Davit Simonyan was sentenced to 46 months in prison, together with forfeiture of $642,347.16 and restitution of $116,408.00. His brother, Vahram Simonyan, was sentenced to 33 months in prison, forfeiture of $642,053.31, and identical restitution. Arsen Galstyan was sentenced to 18 months in prison and $47,796.00 in forfeiture and an identical restitution award, based on his conviction for fraud.

Including today’s defendants, a total of seven people have admitted to participating in the conspiracy, and in a related money laundering conspiracy, that together netted over $1 million in ill-gotten gains.

In sentencing the men, U.S. District Judge Michael M. Anello observed that “this was a huge criminal enterprise, nationwide.” 

Throughout the scheme, the coconspirators stole unwitting victims’ credit and debit card information by using skimming devices installed in common points of sale such as gas pumps and ATMs.  With the stolen information in hand, the conspirators made a host of unauthorized cards that they then used to buy postal money orders and make withdrawals from victims’ accounts. According to court documents, the fraud victimized consumers in New York, Illinois, Missouri, Oklahoma, and across Southern California, including in San Diego. 

The defendants’ scheme inflicted both real and attempted losses of at least $1.2 million, according to their plea agreements.  The two lead defendants—brothers Davit and Vahram Simonyan—each admitted to obtaining over $642,000 in stolen money over the course of the conspiracy, which stretched from 2017 to 2020. They also acknowledged structuring their withdrawals from the banks to avoid bank reporting requirements.  For example, in one month alone, the Simonyan brothers withdrew $91,500 in cash from a single bank account. 

Davit Simonyan also staged a phony car accident in order to commit insurance fraud, according to his plea agreement.  He planned an accident involving cars insured by two of his codefendants, including Arsen Galstyan, who was also sentenced today.  Then Simonyan had one of the damaged vehicles repaired at a collision shop owned by an unindicted co-conspirator who kicked back thousands of dollars to Simonyan and his brother as part of their money laundering scheme.  Davit Simonyan admitted that by staging a car accident, he caused the reckless risk of serious bodily injury. 

“Identity thieves may believe that they can make easy money by stealing from unwitting victims in our community,” said U.S. Attorney Randy Grossman. “But this office will ensure that those defrauding the public will be brought to justice.”  Grossman thanked the prosecution team, the U.S. Secret Service and the U.S. Postal Inspection Service for their excellent work on this case.

“We are thankful to all those who partnered with us in the investigation and prosecution of this organized criminal network. The Secret Service, along with our collaborative law enforcement partners, continue to work tirelessly investigating this type of skimming case, which targets unsuspecting victims,” said San Diego Acting Special Agent in Charge Timothy Scott. “We will continue to use all investigative means necessary to bring to justice those perpetrating these crimes.”

“Today’s sentencing is an example of our commitment and dedication to protect the American public from becoming victimized and to prevent Postal Service products from criminal attack and misuse,” said Carroll Harris, Inspector in Charge of the Los Angeles Division of the U.S. Postal Inspection Service.  “Working with our law enforcement partners we seek to stop these criminals and hold them accountable for their actions.”  

Other conspirators to face sentencing have all received prison time.  On April 21, 2021, co-defendant Arsen Minasyan was sentenced by U.S. District Judge Michael M. Anello to 37 months in custody.  He was ordered to forfeit $75,145.90 and to pay restitution to victims in the amount of $109,834.14.  Judge Anello sentenced co-defendant Mukuch Mkrtchyan on October 14, 2021, to 24 months in prison, forfeiture of $28,077.11, and restitution of $116,070.  Co-defendant Smbat Shahinyan was also sentenced to 24 months in prison and similar financial penalties on January 12, 2022.

The remaining defendant, Gor Plavchyan, is scheduled to be sentenced on May 4, 2022.

Anyone who believes that they may be a victim of this offense can visit the U.S. Department of Justice’s large case website for more information: www.justice.gov/largecases. 

DEFENDANTS                                 Age                             Case Number 20cr314-MMA                  

1. Davit Simonyan                            30                                                      Residence: Glendale, California
2. Vahram Simonyan                        34                                                      Residence: Glendale, California
3. Arsen Minasyan                            34                                                      Residence: Terminal Island FCI
4. Gor Plavchyan                              26                                                      Residence: Winnetka, California
5. Arsen Galstyan                             40                                                      Residence: Glendale, California
6. Mukuch Mkrtchyan                      32                                                      Residence: Fair Oaks, California
7. Smbat Shahinyan                          41                                                      Residence: Glendale, California

SUMMARY OF CHARGES

Conspiracy to Launder Monetary Instruments, in violation of Title 18, United States Code, Section 1956(h) (Defendants 1 through 3 only)

Maximum Penalty: twenty years in prison; fine of $500,000 or twice the value of the property involved

Conspiracy to Possess Fifteen or More Unauthorized Access Devices, in violation of Title 18, United States Code, Sections 1029(b)(2), 1029(a)(3), and 1029(c)(1)(A)(i) (Defendants 1 and 3–7 only)

Maximum Penalty: five years in prison; fine of $250,000 or twice the gross gain or loss

AGENCY

United States Secret Service

U.S. Postal Inspection Service

Source: United States Department of Justice News

Remarks as Prepared

Good afternoon. I am joined by Clay Joyner, U.S. Attorney for the Northern District of Mississippi, and Darren LaMarca, U.S. Attorney for the Southern District of Mississippi.

We are here today to announce that the Department of Justice has completed a thorough investigation of conditions at the Mississippi State Penitentiary (also known as Parchman). We conducted the investigation under the Civil Rights of Institutionalized Persons Act. Based upon our investigation, we conclude that there is reasonable cause to believe that conditions at Parchman constitute a pattern or practice of violations of the Eighth and Fourteenth Amendments to the U.S. Constitution. The constitutional violations include uncontrolled violence between incarcerated persons, inadequate mental health treatment and suicide prevention measures, and over-reliance on restrictive housing, also known as “solitary confinement”, in a manner that endangers physical and mental health. These conditions have resulted in 10 homicides and 12 suicides at Parchman since 2019.

The department has issued a written report explaining its conclusions and identifying the minimum remedial measures necessary to correct the constitutional violations. We have shared our 59-page report with Mississippi officials, and we will make it available to the public.

Established in 1901, Parchman is located in Sunflower County, Mississippi, within the Mississippi Delta, and is the State’s oldest prison. Parchman’s incarcerated population is nearly 2,000. “Black Mississippians account for 70% of Parchman’s incarcerated population, while making up 37% of the state’s population.”

The Supreme Court has said: “There is no iron curtain drawn between the Constitution and the prisons of this country.” Under the Eighth Amendment, prison officials have a constitutional obligation to ensure reasonable care and safety for individuals under their supervision. No one’s sentence should include deliberate indifference by prison officials that leads to death or serious harm. The Constitution safeguards the inherent dignity of every human being, including those serving time in our prisons and jails.

The foundation of the Justice Department’s work to improve public safety is, and always has been, community trust. Unconstitutional conditions of confinement in our country’s state and local prisons and jails breach that trust, which is why the department is committed to investigating conditions and practices within these institutions when and where warranted. Currently, the department is enforcing 13 settlements concerning conditions in adult jails and prisons, including 10 consent decrees. We are engaged in litigation against Alabama over the constitutionality of conditions in its prisons for men, and just last year, we opened new investigations into state prisons in Georgia and five juvenile facilities in Texas.

The importance of the department’s work in remedying unconstitutional conditions of confinement is significant and far-reaching. Over two million people currently reside in our nation’s prisons and jails. People of color and those with mental illness are disproportionately represented among them. Indeed, one study observed that mental illness and substance use disorders “represents a substantial component of the public health burden of mass incarceration,” which is driven by “structural inequalities in race, class, law enforcement, health care and social services.

My colleagues will discuss the specific findings about Parchman in greater detail, but as a result of our team’s investigation, we have concluded that the conditions at Parchman are severe, systemic, and exacerbated by serious deficiencies in staffing and supervision, which has resulted in serious harm and a substantial risk of serious harm to persons confined at the prison. For example, our report details that on Dec. 31, 2019, just hours before midnight, a fight in Parchman’s Unit 29 sparked what would become a prison riot lasting several weeks. In the months leading up to the riot, there had been widespread reports about unlivable and unsanitary conditions throughout Parchman; violent murders and suicides on the rise; staffing plummeting to dangerous levels; and mounting concerns that gangs were filling the void left by inadequate staff presence and gaining increasing control of Parchman through extortion and violence. Despite notice of these issues, records show the Parchman staff that was caught off guard by the riot and ultimately was unable to adequately and quickly respond. The aftermath revealed that five individuals incarcerated at Parchman had been murdered, and three others committed suicide during the month of January 2020 alone.

As another example, many persons incarcerated at Parchman spend months and even years in restrictive housing under egregious environmental conditions. We found the conditions in restrictive housing pose a substantial risk of serious harm from psychological deterioration for all persons confined in restrictive housing for prolonged periods of time. This is the first time the department has concluded that a prison’s use of restricted housing violated the constitutional rights of persons without serious mental illness. My colleagues will share more information about this and related findings, in their remarks.

We want to acknowledge and thank Mississippi officials for cooperating with our investigation. Our goal is to try to reach a consensual resolution with Mississippi on the actions necessary to address the constitutional violations we have identified.  

Our investigation of three other Mississippi Department of Corrections (MDOC) facilities, (Southern Mississippi Correctional Institute, Central Mississippi Correctional Facility, and Wilkinson County Correctional Facility), remains ongoing.

I will now turn it over to Clay Joyner, U.S. Attorney for the Northern District of Mississippi, and Darren LaMarca, U.S. Attorney for the Southern District of Mississippi, for their remarks.