Month: May 2022

Source: United States Department of Justice News

Greenbelt, Maryland – Edward T. Buford III, age 70, of Silver Spring, Maryland, pleaded guilty on May 4, 2022, to conspiracy to commit mail fraud and healthcare fraud. As part of his guilty plea, Buford will be required to pay $1,267,630 in restitution.

The guilty plea was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Wayne Jacobs of the Federal Bureau of Investigation – Washington Field Office Criminal Division; Special Agent in Charge Maureen Dixon, Office of Investigations, Office of Inspector General of the Department of Health and Human Services; Special Agent in Charge Michael McGill of the Social Security Administration – Office of Inspector General, Philadelphia Field Division; and Daniel W. Lucas, Inspector General for the District of Columbia.

According to his guilty plea, from January 2013 to May 2018, Buford and others devised and executed a scheme to defraud Medicaid for the District of Columbia by filing fraudulent Medicaid claims for dental services to Medicaid beneficiaries, receiving the fraudulently obtained funds from Medicaid, and recruiting Medicaid beneficiaries to fuel the scheme through the payment of kickbacks and bribes. 

Buford was a licensed dentist in Washington, D.C. and the owner and Chief Executive Officer of International Dental Associates, Inc. (IDA), a dental clinic located in Washington, D.C.  Before 2015, Buford was enrolled as a Medicaid provider, however, in April 2015, Medicaid suspended payments to Buford under his provider number.  

After Buford’s provider number was suspended in 2015, Buford and his business partner/IDA manager (Co-conspirator 1) continued to submit claims to Medicaid through IDA’s provider number.  In April 2016, Buford and Co-conspirator 1 re-enrolled IDA as a provider in Medicaid.  Within IDA’s application, Buford and Co-conspirator 1 failed to disclose Buford’s suspension from Medicaid.  

Buford and his co-conspirators caused the submission of Medicaid claims by Buford and IDA for a variety of dental services, including dentures.  As part of the conspiracy, Buford and Co-conspirator 1 offered and paid kickbacks to Co-conspirator 2 and other patient recruiters in exchange for referring Medicaid beneficiaries to IDA for dental services, even though Medicaid would not pay claims had it known they were procured through kickbacks.  Medicaid paid substantially more for dentures than for many other dental services, including dental cleanings, and Buford and Co-conspirator 1 paid Co-conspirator 2 larger cash kickbacks for beneficiaries that agreed to be fitted for dentures—approximately $50 per beneficiary—than for beneficiaries who only agreed to receive dental cleanings.

At Buford and Co-conspirator 1’s direction, Co-conspirator 2 offered Medicaid beneficiaries cash bribes to induce them to visit and accept dental services from IDA.  Buford and his co-conspirators typically paid higher amounts to beneficiaries who agreed to be fitted for dentures than those who only agreed to receive cleanings.  Even though dentures required multiple visits to fit and deliver, Buford and his co-conspirators paid the beneficiaries only for the initial visit—after which Buford and his co-conspirators could bill Medicaid for the dentures—and numerous beneficiaries never returned to IDA after receiving the cash bribe.  Accordingly, Buford and his co-conspirators stored hundreds of undelivered dentures on IDA’s premises, many of which had been billed to and paid for by Medicaid.  

As part of the scheme to defraud, Buford maintained a Post Office box in Silver Spring, Maryland as IDA’s billing address and received the fraudulently obtained funds at that location.  For example, on September 21, 2017, Buford caused Medicaid to mail a check for $17,397 to the Maryland P.O. box for services purportedly provided to 11 Medicaid beneficiaries. 

Based on the amount that Medicaid paid to Buford and IDA for dentures that were not delivered, the actual loss to Medicaid was at least approximately $1,267,630. 

Buford faces a maximum sentence of 20 years in federal prison followed by 3 years of supervised release for conspiracy to commit mail fraud and healthcare fraud.  U.S. District Judge Theodore D. Chuang has scheduled sentencing for August 3, 2022, at 9:00 a.m.

United States Attorney Erek L. Barron commended the FBI, HHS-OIG, the D.C. Office of the Inspector General’s Medicaid Fraud Control Unit, SSA-OIG for their work in the investigation.  Mr. Barron thanked Assistant U.S. Attorneys Jessica C. Collins and Rajeev R. Raghavan, who are prosecuting the case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach. 

# # #

Source: United States Department of Justice Criminal Division

An indictment was unsealed yesterday charging the CEO of Mining Capital Coin (MCC), a purported cryptocurrency mining and investment platform, for allegedly orchestrating a $62 million global investment fraud scheme.

“Cryptocurrency-based fraud undermines financial markets worldwide as bad actors defraud investors and limits the ability of legitimate entrepreneurs to innovate within this emerging space,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division.  “The department is committed to following the money — whether physical or digital — to expose criminal schemes, hold these fraudsters accountable, and protect investors.”

According to the indictment, Luiz Capuci Jr., 44, of Port St. Lucie, Florida, the CEO and founder of MCC, misled investors about MCC’s cryptocurrency mining and investment program, under which investors could invest in MCC by purchasing “Mining Packages.” Under this program, Capuci and his co-conspirators touted MCC’s purported international network of cryptocurrency mining machines as being able to generate substantial profits and guaranteed returns by using investors’ money to mine new cryptocurrency. Capuci also touted MCC’s own cryptocurrency, Capital Coin, as a purported decentralized autonomous organization that was “stabilized by revenue from the biggest cryptocurrency mining operation in the world.” As alleged in the indictment, however, Capuci operated a fraudulent investment scheme and did not use investors’ funds to mine new cryptocurrency, as promised, but instead diverted the funds to cryptocurrency wallets under his control.  

“This office is committed to protecting consumers from unscrupulous fraudsters seeking to capitalize on the relative novelty of digital currency,” said U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida. “As with any emerging market, those who invest in cryptocurrency must beware of profit-making opportunities that appear too good to be true.”

The indictment further alleges that Capuci touted and fraudulently marketed MCC’s purported “Trading Bots” as an additional investment mechanism for investors to invest in the cryptocurrency market. Capuci claimed that MCC joined with “top software developers in Asia, Russia, and the U.S.A. to create an improved version of Trading Bot[s] that [were] tested with new technology never seen before.” Capuci further represented that MCC’s Trading Bots operated in “very high frequency, being able to do thousands of trades per second,” and that each of MCC’s Trading Bots would generate daily returns for investors. As he did with the Mining Packages, however, Capuci allegedly operated an investment fraud scheme with the Trading Bots and was not, as he promised, using MCC Trading Bots to generate income for investors, but instead was diverting the funds to himself and co-conspirators.  

“Virtual currency markets are growing rapidly, and unfortunately so are crypto currency investment scams,” said Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division. “The FBI and our law enforcement partners are committed to investigating financial fraud wherever it occurs, including in the virtual currency space.” 

Capuci is also alleged to have recruited promoters and affiliates to promote MCC and its various investment programs through a multi-level marketing scheme, commonly known as a pyramid scheme. For successfully luring investors to invest, Capuci promised MCC’s network of promoters and affiliates a range of gifts, from Apple watches and iPads to luxury vehicles such as a Lamborghini, Porsche, and even Capuci’s personal Ferrari. Capuci further concealed the location and control of the fraud proceeds obtained from investors by laundering the funds internationally through various foreign-based cryptocurrency exchanges. 

“This case should serve as a warning to any individuals who look to illegally capitalize on the perceived ambiguity of the emerging crypto market to take advantage of innocent investors” said HSI Miami Special Agent in Charge Anthony Salisbury. “HSI will continue to work with our partners to pursue anyone who utilizes these types of schemes to victimize would be customers.”

Capuci is charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to commit international money laundering. If convicted of all counts, he faces a maximum total penalty of 45 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. 

The FBI Miami Field Office and HSI’s Miami Field Office are investigating the case.

Trial Attorneys Kevin Lowell and Sara Hallmark of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Yisel Valdes of the Southern District of Florida are prosecuting the case.

An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice News

SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Jason Michael Herman, age 39, of Pine Grove, PA, was sentenced on May 5, 2022, to 120 months’ imprisonment to be followed by a 10-year term of supervised release, by United States District Court Judge Robert D. Mariani, for possessing visual depictions of minors engaged in sexually explicit conduct.  

According to United States Attorney John C. Gurganus, during the Fall of 2020, Herman uploaded 9 videos (or approximately 675 images) of child pornographic content onto an internet-based social media application, including images showing the abuse of minors under the age of 12, and sent the videos to other users.  At the time of this offense, Herman had a prior 2007 New Jersey conviction for possessing child pornography, the existence of which resulted in an enhancement of his federal sentence to a mandatory term of imprisonment of 120 months.  At sentencing, Judge Mariani also ordered that Herman comply with the Sex Offender Registration and Notification Act (SORNA).

The case was investigated by the Federal Bureau of Investigation (FBI) – Philadelphia Division.  Assistant United States Attorney Jeffery St. John prosecuted the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit  www.usdoj.gov/psc. For more information about internet safety education, please visit  www.usdoj.gov/psc and click on the tab “resources.”

# # #

Source: United States Department of Justice

“The Justice Department is committed to addressing the crisis of missing or murdered Indigenous persons with the urgency it demands. That commitment is reflected in the strength of our partnerships across the federal government, including with the Department of the Interior as we take the next steps in launching the Not Invisible Act Commission. The Commissioners announced today will play a critical role in our efforts to better meet the public safety needs of Native communities. The Justice Department will continue to work alongside our Tribal partners with respect, sincerity, and a shared interest in the wellbeing of Tribal communities.”

–Attorney General Merrick B. Garland, May 5, 2022

The Justice Department joins its partners across the federal government, as well as people through American Indian and Alaska Native communities, in recognizing May 5, 2022 as National Missing or Murdered Indigenous Persons Awareness Day. Today and every day, the Department of Justice considers it a priority to respond to the crisis of Missing or Murdered Indigenous Persons (MMIP).

Earlier today, the Departments of Justice and Interior announced the members of the joint Commission under the Not Invisible Act. Deputy Attorney General Lisa Monaco joined Secretary of the Interior Deb Haaland at a virtual event announcing the members of the Commission. Read Deputy Attorney General Monaco’s remarks here. 

The Director of the Justice Department’s Office of Tribal Justice, Tracy Toulou, will serve as a co-chair of the Commission. He will be joined by representatives from across the department, including from law enforcement and grantmaking components. The Commissioners announced today represent a diverse range of experiences, expertise and perspectives, and include survivors who can speak firsthand to the urgency of the Commission’s work, as well as Tribal leaders and members.

Commissioners will issue recommendations to the Attorney General and Secretary of the Interior on how to improve intergovernmental coordination, as well as how to identify best practices for federal, state, local and Tribal law enforcement when responding to the violence directed at American Indians and Alaska Natives.   

 MMIP Steering Committee

In November 2021, the President issued a new Executive Order, which reflected a whole-of-government response to promoting public safety in Native communities. In a November 15 directive, Deputy Attorney General Monaco identified the department’s work to address missing or murdered indigenous persons as “a priority for its law enforcement components,” and launched a Steering Committee dedicated to marshalling the department’s personnel and resources to this effort. The Steering Committee has made Tribal engagement the cornerstone of its work, and through those ongoing conversations, has heard the need for better communication and coordination between federal, state, local and Tribal law enforcement.

Consistent with Savanna’s Act, the department has directed each of its U.S. Attorney’s Offices with Tribal land to develop regionally appropriate guidelines for responding to MMIP cases.  The Department has also issued guidance to and conducted training with each of its 94 U.S. Attorneys’ Offices on how to develop these guidelines. U.S. Attorney’s Offices have held consultations with federal, state, and Tribal partners in their districts to develop guidelines tailored to their specific communities and will finalize those plans this month. Once those plans are finalized, the department’s relevant law enforcement components will modify their own protocols to incorporate the guidelines. State, local and Tribal law enforcement should contact their local U.S. Attorney’s Office for more information on the department’s guidance. You can learn more about the department’s efforts to implement Savanna’s Act here.

Department Announces New National Native American Outreach Services Liaison

The department announced today a new position to spearhead its efforts better reach Native victims, survivors and families: a National Native American Outreach Services Liaison. The Liaison will work in our Executive Office for U.S. Attorneys and help ensure that victims and their families have a voice within the department as they navigate all stages of the criminal justice system. You can find the posting for this new position here. 

Department Launches New Dedicated MMIP Website

Last month, the Department launched a new page on our Tribal Justice and Safety website dedicated to elevating the issue of MMIP. This new website serves as a central hub of resources for families and victims and also promotes transparency about the Department’s law enforcement efforts. 

VAWA Reauthorization Promotes Public Safety in Tribal Communities 

Also this year, the department helped advance the reauthorization of the Violence Against Women Act and its important provisions to promote safety in Tribal communities, including the expansion of Special Tribal Criminal Jurisdiction, which recognizes the authority of Tribal courts to exercise jurisdiction over crimes of family violence, including child abuse, that are often precursors to missing or murdered person cases. 

Source: United States Department of Justice News

The United States is seeking the forfeiture of a more than 30,000-square-foot mega-mansion in the Holmby Hills neighborhood of Los Angeles, pursuant to a civil forfeiture complaint filed that alleges that the mansion was purchased with bribes paid by an Armenian businessman to the family of Gagik Khachatryan, a former high-ranking Armenian public official.

Gagik Khachatryan, 66, who was known as the “Super Minister,” because of his significant responsibilities, served as Chairman of the State Revenue Committee of the Republic of Armenia from 2008 to 2014 and as Minister of Finance for the Republic of Armenia from 2014 to 2016. In the complaint, which was filed Monday in U.S. District Court for the Central District of California, the United States alleges that businessman Sedrak Arustamyan paid Khachatryan and his family more than $20 million in bribes in exchange for favorable tax treatment of his businesses. The bribe payments allegedly were used to purchase the Holmby Hills property, which had been recently listed for sale for $63,500,000.

Gagik Khachatryan and his sons are charged in Armenia with receiving bribes in violation of the criminal code of the Republic of Armenia. Criminal charges are also pending in Armenia against Arustamyan for paying bribes.

This matter was investigated by the FBI’s Eurasian Organized Crime Task Force (EOCTF) and the U.S. Marshals Service. The Republic of Armenia’s Prosecutor General’s Office and National Security Service provided critical assistance.  The EOCTF is composed of multiple law enforcement agencies including the FBI, IRS-Criminal Investigation, the U.S. Postal Inspection Service, the Glendale Police Department, the Los Angeles Police Department, and the Los Angeles County Sheriff’s Department.

Trial Attorney D. Hunter Smith of the Kleptocracy Asset Recovery Initiative of the Criminal Division’s Money Laundering and Asset Recovery Section and Assistant U.S. Attorney Maxwell Coll for the Central District of California are litigating the forfeiture.

The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Money Laundering and Asset Recovery Section, in partnership with federal law enforcement agencies, and often with U.S. Attorneys’ Offices, to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. In 2015, the FBI formed International Corruption Squads across the country to address national and international implications of foreign corruption. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov or visit https://tips.fbi.gov/.

A civil complaint is merely an allegation, and the government has the burden of establishing the assets are subject to forfeiture by a preponderance of the evidence.