Month: July 2022

Source: United States Department of Justice News

CHARLESTON, W.Va. – A Charleston man pleaded guilty today to wire fraud, admitting to a scheme to defraud the Paycheck Protection Program (PPP) of over $41,666 in COVID-19 relief loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

According to court documents and statements made in court, Malik Breckenridge, 26, of Charleston, applied for and obtained two PPP loans on behalf of his purported business, Malik Breck, between April 4, 2021, and August 10, 2021. Malik Breck was not a registered business entity in West Virginia and was not engaged in substantial, legitimate business activity on or before February 15, 2020. Breckenridge admitted that he falsely stated that Malik Breck was established in 2014 and operating on February 15, 2020. Breckenridge further admitted that he submitted a false Internal Revenue Service (IRS) Form 1040, Schedule C Profit or Loss from Business reporting that Malik Breck had earned $180,489 in gross income during 2019.

The CARES Act is a federal law enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the authorization of forgivable loans to small businesses for job retention and certain approved expenses, through the PPP. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities.

A Florida lender processed both of Breckenridge’s PPP loan applications. Each loan totaled $20,833. Breckenridge admitted that he later applied to have both PPP loans forgiven even though he had not spent the loan proceeds on permissible business expenses. The SBA forgave the loans on August 8, 2021.

“This is the first fraud conviction related to COVID-19 in the Southern District of West Virginia, and sadly, it probably won’t be the last,” said United States Attorney Will Thompson. “PPP funds offered a lifeline to small businesses during the pandemic, and this office is determined to hold accountable those who undermine these needed programs through fraud and abuse. This office will continue to prosecute those who take advantage of government programs that are designed to help people who are hurting.”

Thompson commended the West Virginia State Police and the United States Secret Service for their investigative work in the case.

Breckenridge is scheduled to be sentenced on November 17, 2022, and faces a maximum penalty of 20 years in prison, three years of supervised release and a $250,000 fine. Breckenridge also agrees that he owes $41,666 in restitution.

United States District Judge Irene C. Berger presided over the hearing. Assistant United States Attorney Kathleen Robeson is prosecuting the case.

On May 17, 2021, 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. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. 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.

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. 2:22-cr-84.

 

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Source: United States Department of Justice News

CAMDEN, N.J. – Two New Jersey men pleaded guilty today to defrauding New Jersey state and local health benefits programs and other insurers by submitting fraudulent claims for medically unnecessary prescriptions, Attorney for the United States Vikas Khanna announced.

John Sher, 40, of Margate, New Jersey, and Christopher Broccoli, 50, of West Deptford, New Jersey, both pleaded guilty before U.S. District Judge Robert B. Kugler to superseding informations charging them each with one count each of conspiracy to commit health care fraud.

According to documents filed in this case and statements made in court:

Sher and Broccoli were part of a criminal conspiracy in which state and local government employees were recruited and compensated to receive medically unnecessary compound prescription medications. Sher and Broccoli caused the pharmacy benefits administrator to pay out millions of dollars for medically unnecessary compound prescription medications for individuals they recruited into the scheme. Sher directly received $327,897 and Broccoli directly received $150,315 from the scheme. 

Sher and Broccoli were previously charged in March of 2019 alongside others in an indictment with conspiracy to commit health care fraud and wire fraud and other offenses.  Conspiracy leader William Hickman pleaded guilty in June of 2020 to defrauding New Jersey health benefits programs and other insurers out of more than $50 million. Conspirator Michael Sher pled guilty in March of 2018 to defrauding New Jersey health benefits programs and other insurers out of more than $7 million. Conspirators Brian Pugh and Thomas Schallus both pleaded guilty on July 14, 2022, to conspiring to commit health care fraud as part of the same scheme. Charges remain pending against co-defendant Thomas Sher, who is set to proceed to trial before Judge Kugler in Camden federal court on August 15, 2022. The charges and allegations against him are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

John Sher and Broccoli each face a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for Sher is scheduled for Dec. 5, 2022, and for Broccoli, Dec. 6, 2022. 

Attorney for the United States Khanna credited special agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge James in Dennehy in Newark; special agents of IRS – Criminal Investigation, under the direction of Special Agent in Charge Tammy Tomlins in Newark; and the U.S. Department of Labor Office of Inspector General, New York Region, under the direction of Special Agent in Charge Jonathan Mellone, with the investigation leading to today’s guilty pleas.

The government is represented by Assistant U.S. Attorney Christina O. Hud of the Criminal Division, Deputy Chief of the Criminal Division Desiree L. Grace, and Chief of the Opioid Abuse Prevention & Enforcement Unit R. David Walk Jr.

Source: United States Department of Justice News

First Assistant U.S. Attorney Michelle M. Baeppler announced today that a Cleveland man was charged in a 16-count indictment with illegally obtaining more than $400,000 in pandemic unemployment insurance benefits using other people’s personal identifying information.

Osi Mokwunye, 44, was charged with one count of conspiracy to commit mail and wire fraud, five counts of mail fraud, five counts of wire fraud, and five counts of aggravated identity theft.

According to court documents, from July to November 2020, the defendant and his coconspirators are accused of submitting and causing the submission of fraudulent applications for pandemic unemployment insurance benefits to the California Employment Development Department (EDD), and other State Workforce Agencies around the country.

As part of the scheme, the indictment states that the members of the conspiracy knowingly made false statements and omissions on pandemic unemployment insurance benefits applications regarding employment history, residency and more to appear eligible to receive benefits.  As a result, it is alleged that the defendant and his coconspirators caused the California EDD and other State Workforce Agencies to approve more than $400,000 in unemployment insurance benefits in the names of unwitting individuals.  According to the indictment, the benefits were pre-loaded on bank-issued debit cards and sent through the U.S. mail to the defendant’s home.  After receiving the debit cards, it is alleged that the defendant used the cards to make cash withdrawals at various ATMs in the Northern District of Ohio.

An indictment is only a charge and is not evidence of guilt.  The defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

If convicted, the defendant’s sentence will be determined by the court after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offenses and the characteristics of the violation.  In all cases, the sentence will not exceed the statutory maximum; in most cases, it will be less than the maximum.

The FBI Cleveland, Department of Labor (DOL) and the United States Postal Inspection Service (USPIS) investigated this case.  This case is being prosecuted by Assistant U.S. Attorney Erica D. Barnhill.

Source: United States Department of Justice News

ELKINS, WEST VIRGINIA – Joshua Dewayne Simmons, of Elkins, West Virginia, was sentenced today to 24 months of incarceration for a drug charge, United States Attorney William Ihlenfeld announced.

Simmons, 29, pleaded guilty in February 2022 to one count of “Distribution of Methamphetamine—Aiding and Abetting.” Simmons admitted to selling methamphetamine in November 2020 in Randolph County.

Assistant U.S. Attorney Stephen D. Warner prosecuted the case on behalf of the government. The Mountain Region Drug Task Force investigated.

Chief U.S. District Judge Thomas S. Kleeh presided.

Source: United States Department of Justice News

WHEELING, WEST VIRGINIA – Steven Kyle, of Weirton, West Virginia, has admitted to a drug charge, United States Attorney William Ihlenfeld announced.

Kyle, also known as “Young Boi,” 31, pleaded guilty today to one count of “Distribution of Methamphetamine.” Kyle admitted to selling methamphetamine in May 2021 in Ohio County.

Kyle faces up to 20 years of incarceration and a fine of up to $1,000,000. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

Assistant U.S. Attorney Clayton J. Reid is prosecuting the case on behalf of the government. The Ohio Valley Drug Task Force, a HIDTA-funded initiative, investigated.

U.S. Magistrate Judge James P. Mazzone presided.