Month: May 2022

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Security News: Former Brooklyn Resident Pleads Guilty to $3 Million Tax Return and Covid-Relief Fraud Schemes

Source: United States Department of Justice News

Defendant Used Shell Companies to Falsely Generate Unearned Tax Refunds and Claim COVID-19 Emergency Relief Earmarked for Distressed Businesses

Earlier today, in federal court in Brooklyn, Patrick Poux pleaded guilty to filing false applications for hundreds of thousands of dollars in COVID-19 emergency relief loans in 2020 under the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL).  Poux also pleaded guilty to fraudulently generating and submitting false tax return applications claiming millions of dollars in unearned tax refunds between 2016 and 2019.  Today’s proceeding was held before United States Magistrate Judge Robert M. Levy.  When sentenced, Poux faces up to 30 years in prison and a fine of up to $1 million.

Breon Peace, United States Attorney for the Eastern District of New York, and Thomas Fattorusso, Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI), announced the guilty plea.

“It was money not well earned, or well spent. The defendant admitted to preparing and filing false applications for millions of dollars’ worth of COVID-19 disaster relief funds and tax refunds and then spending that money on a life coach and luxury goods,” stated United States Attorney Peace.  “This Office will vigorously prosecute individuals who steal taxpayer dollars, especially from critically important government programs designed to help struggling small businesses and families stay afloat during the pandemic.”

“Patrick Poux orchestrated an elaborate scheme to create false W-2 forms with excessively high federal withholdings, attempting to gain millions by using shell companies he controlled to get fraudulent tax refunds for him and his co-conspirators.  Poux’s fraud went on to include COVID-19 loan applications for companies that had no operations or employees,” said Special Agent in Charge Fattorusso.  “Poux lived a rich lifestyle filled with luxury goods while stealing hundreds of thousands of dollars from those who need the funds for their businesses to thrive. U.S. taxpayers have paid the bill for his lavish purchases for far too long, and today’s guilty plea ensures that Poux will soon pay it back by facing the consequences of his actions.”

The CARES Act was enacted on March 29, 2020 to provide emergency financial assistance in connection with economic effects of the COVID-19 pandemic.  One source of relief provided by the CARES Act was the allocation of funds for the issuance of forgivable loans to small businesses for job retention and certain other expenses through the PPP.  The PPP allowed qualifying small businesses to receive unsecured loans on favorable terms, which they were required to use for certain specified expenses, including payroll costs, interest on mortgages, rent, and utilities.  The PPP provided for forgiveness of the loan if recipient businesses spent the proceeds on these specified expenses within a limited time period and used a certain percentage for payroll costs.  

Similarly, the EIDL program was a program that provided low-interest financing to small businesses, renters and homeowners in regions affected by declared disasters. The CARES Act authorized the SBA to provide EIDLs of up to $2,000,000 to eligible small businesses experiencing substantial financial disruption due to the COVID-19 pandemic.

As set forth in court filings, between March 2020 and September 2020, amid the COVID-19 pandemic, Poux fraudulently applied for PPP and EIDL loans and grants totaling approximately $320,000, on behalf of himself and corporate entities he controlled.  Poux received approximately $183,000 in COVID-19 relief loans and grants to which he was not entitled, and he spent those funds on personal expenses, including a life coach and luxury goods from stores such as Saks Fifth Avenue.

As also set forth in court filings, between 2016 and 2019, Poux and others used false wage and withholding information in income tax returns to obtain tax refunds to which they were not entitled.  To advance the scheme, Poux created false tax forms for shell companies that had no operations or employees.  He gave co-conspirators tax forms that falsely reported that the co-conspirator had worked at a shell company and had withheld income—even though the co-conspirator never worked at the shell company.  Using these falsified forms, co-conspirators could claim substantial refunds from the United States Internal Revenue Service (IRS).  In return, Poux received a percentage of such refunds.  Poux and others submitted approximately 250 claims seeking a total of approximately $2.8 million in tax refunds from the IRS.

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorney Adam Amir is in charge of the prosecution.

The Defendant:

PATRICK POUX
Age: 45
Snellville, GA

E.D.N.Y. Docket No. 22-CR-117 (BMC)

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Security News: Chatham County illegal alien sentenced to prison for luring teen into sexual activity

Source: United States Department of Justice News

SAVANNAH, GA:  An illegal alien has been sentenced to a decade in federal prison after pleading guilty to luring a teen into participating in sexual activity.

Alejandro Pedroza-Romero, a/k/a “Zuleyka Luna,” a/k/a “Alex Luna,” 37, a citizen of Mexico illegally present in the United States who resided in Garden City, Ga., was sentenced to 120 months in prison after pleading guilty to Coercion and Enticement, said David H. Estes, U.S. Attorney for the Southern District of Georgia. After completion of his prison term Pedroza-Romero will be subject to deportation.

There is no parole in the federal system.

“Alejandro Pedroza-Romero flaunted the sovereignty of the United States by illegally entering, and then preyed on vulnerable victims on American soil,” said U.S. Attorney Estes. “Putting him behind bars automatically protects children from this predator.”

As described in court documents and testimony, Pedroza-Romero came to the attention of the Thunderbolt, Ga., Police Department in January 2021 when a minor victim reported Pedroza-Romero paid the victim for sexual acts. FBI agents later interviewed and arrested Pedroza-Romero after analyzing multiple electronic communications between Pedroza-Romero and the minor victim.

“This case is a perfect example of how partnerships between the FBI and our local law enforcement agencies are vital in protecting our citizens and in particular, children, our most vulnerable citizens,” said Keri Farley, Special Agent in Charge of FBI Atlanta. “The severity of this sentence is the greatest message we can send to anyone would seek to take advantage of a child in this way.”

The case was investigated by the FBI and the Thunderbolt Police Department, and prosecuted for the United States by Assistant U.S. Attorneys Jennifer J. Kirkland and Project Safe Childhood Coordinator Tara M. Lyons, with assistance from Assistant U.S. Attorney Noah J. Abrams.

Anyone with information on suspected child sexual exploitation can contact the National Center for Missing and Exploited Children at 800-843-5678, or https://report.cybertip.org/.

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Security News: Charleston Man Sentenced for Firearm and Fentanyl Crimes

Source: United States Department of Justice News

CHARLESTON, W.Va. – A Charleston man was sentenced to eight years and nine months in prison, to be followed by three years of supervised release, for being a felon in possession of ammunition and for possession with the intent to distribute fentanyl.

According to court documents and statements made in court, Dana Stevenson, 31, illegally possessed 9mm caliber ammunition on July 5, 2021. The ammunition was recovered at the scene of a daytime shooting at Central and Glenwood avenues on Charleston’s West Side.

Approximately five weeks after this incident, on August 12, 2021, South Charleston Police officers attempted to stop a vehicle driven by Stevenson, who fled at a high rate of speed. Stevenson was eventually apprehended and officers recovered approximately 38 grams of fentanyl and drug paraphernalia from the vehicle. The quantity of fentanyl and the presence of certain paraphernalia established that Stevenson intended to distribute the drug.

Federal law prohibits a person with a prior felony conviction from possessing a firearm or ammunition. Stevenson knew he was prohibited from possessing ammunition because of his 2018 federal felony convictions in the Southern District of West Virginia for the distribution of heroin within 1,000 feet of a school and for being a felon in possession of a firearm.

United States Attorney Will Thompson made the announcement and commended the investigative work of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the Charleston Police Department, and the South Charleston Police Department.

United States District Judge Joseph R. Goodwin imposed the sentence. Assistant U.S. Attorneys Nowles Heinrich and Stephanie S. Taylor prosecuted the case.

This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Southern District of West Virginia. Related court documents and information can be found on PACER by searching for Case No. 2:21-cr-161.

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Security News: Woman Awaiting Sentencing in Health Care Fraud Case again Charged with Committing Health Care Fraud

Source: United States Department of Justice News

Leonard C Boyle, United States Attorney for the District of Connecticut, today announced that NICOLE STEINER, formerly known as Nicole Balkas, 32, of Stratford, was arrested yesterday on a criminal complaint charging her with committing health care fraud after pleading guilty and while released on bond in another health care fraud case.

Following her arrest, Steiner appeared before U.S. Magistrate Judge S. Dave Vatti in Bridgeport and was released on a $250,000 bond into home detention and under electronic monitoring.

According to court documents and statements made in court, on April 28, 2021, Steiner pleaded guilty to one count of health care fraud related to her operation of Helping Hands Academy, LLC, in Bridgeport, which provided applied behavior analysis services to children diagnosed with Autism Spectrum Disorder (ASD), and was enrolled as a participating provider in the Connecticut Medicaid Program (“Medicaid”).  From December 2018 to October 2020, Steiner submitted and caused to be submitted fraudulent claims to Medicaid for applied behavior analysis services that were purportedly provided to Medicaid clients.  She submitted claims for dates of service when no applied behavior analysis services of any kind had been provided to the Medicaid clients identified in the claims, and she inflated the number of hours for certain claims even when applied behavior analysis had been provided to the Medicaid clients identified in the claims.  Steiner also submitted false Medicaid claims in 2020 using a former employee’s name and performing provider number.

After the Connecticut Department of Social Services (DSS), which administers the Medicaid program in Connecticut, terminated Helping Hands Academy as a provider, Steiner made several false statements and submitted an altered document to DSS in an effort to rescind the termination and to receive payment for previously submitted claims.

Medicaid suffered a loss of $551,311.85 as a result of Steiner’s admitted conduct.

After her guilty plea, Steiner was released on a $50,000 bond pending sentencing.

It is alleged that, while she was awaiting sentencing in her case, Steiner was a silent partner in another company that provided applied behavior analysis services to children diagnosed with ASD called New Beginnings Children’s Behavioral Health LLC.  Steiner was responsible for billing claims to Medicaid, managing payroll, and recruiting and screening potential employees, and she and had access to and used her business partner’s email and other online accounts to operate the company.  Steiner and the company engaged in health care fraud by billing Medicaid for thousands of dollars in services not rendered and, in particular, billing for services not rendered by Steiner.

If convicted of the new charge, Steiner faces a maximum term of imprisonment of 10 years, which must be imposed consecutively to the sentence she receives in her initial health care fraud case.

This investigation is being conducted by the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) and the Federal Bureau of Investigation.

U.S. Attorney Boyle acknowledged the valuable cooperation of the Connecticut Department of Social Services in the investigation.

This case is being prosecuted by Assistant U.S. Attorney David T. Huang.

People who suspect health care fraud are encouraged to report it by calling 1-800-HHS-TIPS.

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Security News: Ithaca Man Pleads Guilty to Receipt and Possession of Child Pornography

Source: United States Department of Justice News

SYRACUSE, NEW YORK – Leroy Reed, age 53, of Ithaca, New York, pled guilty today before Senior United States District Judge Thomas J. McAvoy to one count of receipt of child pornography and one count of possession of child pornography, announced United States Attorney Carla B. Freedman, Janeen DiGuiseppi, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation (FBI) and New York State Police Superintendent Kevin P. Bruen. 

Reed, who remains detained pending his sentencing scheduled for September 20, 2022, faces at least 15 years in prison and up to 60 years imprisonment on the charges.  The Court will also impose a term of supervised release of between 5 years and life. A defendant’s sentence is imposed by a judge based on the statute the defendant is charged with violating, the U.S. Sentencing Guidelines, and other factors.

As part of his guilty plea, Reed, admitted that from February 2020 to March 2021 he used a computer to download child pornography over the internet using peer-to-peer file sharing software. A subsequent search of Reed’s apartment revealed that he was in possession of 55 images and 94 video files depicting child pornography.  Reed is a registered sex offender who was convicted in 2002 of Rape in the First Degree involving a victim who was 15 years old.

Reed’s case was investigated by the FBI Syracuse Mid-State Child Exploitation Task Force, comprised of FBI Special Agents and Investigators of the New York State Police, Bureau of Criminal Investigation (BCI), with assistance from the Tompkins County Sheriff’s Office.  The case is being prosecuted by Assistant U.S. Attorney Geoffrey J. L. Brown as a part of Project Safe Childhood.

Launched in May 2006 by the Department of Justice, Project Safe Childhood is led by United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (CEOS), and is designed to marshal federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit https://www.justice.gov/psc.