Month: August 2022

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Security News: Miami Man Arrested and Charged with Bank Fraud and Identity Theft

Source: United States Department of Justice News

CLEVELAND – First Assistant U.S. Attorney Michelle M. Baeppler announced that Sedric J. Lewis, age 35, of Miami, Florida, was charged in a four-count indictment with two counts of bank fraud and two counts of aggravated identity theft in the Northern District of Ohio.

According to the indictment, in June 2019, Lewis used the personal identifying information of another individual to open a bank account with JPMorgan Chase Bank. In addition, the indictment alleges that in August 2019, Lewis deposited into the same JPMorgan Chase Bank account a fraudulent check bearing the forged signature of another individual.

Lewis was arrested on Thursday, Aug. 25, 2022, in Miami.

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, a 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.

This case was investigated by the FBI Cleveland Division and is being prosecuted by Special Assistant United States Attorney Jason W. White.

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Security News: Violent New Haven Drug Trafficker Sentenced to 13 Years in Federal Prison

Source: United States Department of Justice News

Vanessa Roberts Avery, United States Attorney for the District of Connecticut, announced that MICHAEL SMITH, also known as “Head,” 36, of New Haven, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 156 months of imprisonment, followed by four years of supervised release, for narcotics trafficking, gun possession and money laundering offenses.

According to court documents and statements made in court, in 2019, the DEA New Haven Task Force began an investigation into a New Haven-based drug trafficking network headed by Smith.  The investigation, which included court-authorized wiretaps, revealed that Smith and his associates were distributing heroin and crack cocaine throughout the New Haven area.  Smith’s girlfriend, Keilah Boria, maintained bank accounts that Smith used to launder the cash proceeds of his drug trafficking activity.  From 2016 to 2019, Boria deposited more than $200,000 in cash into the bank accounts.  Boria rented vehicles for Smith that Smith used to conduct his drug trafficking activity.

In December 2019, Smith was intercepted on a wiretap describing having shot at a rival drug dealer.  New Haven Police collected 31 shell casings from a location in the Fair Haven neighborhood where the shooting occurred.  Smith was arrested on December 23, 2019.

Smith has been detained since his arrest.  On April 15, 2021, he pleaded guilty to conspiracy to distribute and to possess with intent to distribute heroin and cocaine base (“crack”), possession of a firearm in furtherance of a narcotics trafficking offense, and conspiracy to launder the proceeds of a specified unlawful activity.

Boria pleaded guilty to related charges and, on September 14, 2021, was sentenced to nine months of imprisonment.

This investigation has been conducted by the DEA New Haven Task Force, the Internal Revenue Service – Criminal Investigation Division, and the New Haven, West Haven, Hamden, East Haven, North Haven, Ansonia, Meriden and Derby Police Departments.

The case is being prosecuted by Assistant U.S. Attorneys John T. Pierpont, Jr. and Elena L. Coronado through the Organized Crime Drug Enforcement Task Forces (OCDETF) Program.  OCDETF identifies, disrupts and dismantles drug traffickers, money launderers, gangs and transnational criminal organizations through a prosecutor-led and intelligence-driven approach that leverages the strengths of federal, state and local law enforcement agencies.  Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

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Security News: Former NBA Player Terrence Williams Pleads Guilty To Defrauding The NBA Players’ Health And Welfare Benefit Plan

Source: United States Department of Justice News

Terrence Williams Led a Sprawling Scheme to Defraud the NBA’s Health and Welfare Benefit Plan Out of More Than $5 Million and, Following His Arrest, Threatened a Witness

Damian Williams, the United States Attorney for the Southern District of New York, announced today that TERRENCE WILLIAMS pled guilty to conspiracy to commit health care and wire fraud, and aggravated identity theft, in connection with a scheme to defraud the National Basketball Association (“NBA”) Players’ Health and Welfare Benefit Plan (the “Plan”). WILLIAMS pled guilty before U.S. District Judge Valerie E. Caproni.  Sentencing is scheduled for January 25, 2023.

U.S. Attorney Damian Williams said: “Williams led a scheme involving more than 18 former NBA players, a dentist, a doctor, and a chiropractor, to defraud the NBA Players’ Health and Welfare Benefit Plan of millions of dollars.  Williams also impersonated others to help him take what was not his—money that belonged to the Plan.  I thank our law enforcement partners in the FBI for their hard work investigating this pervasive scheme.”   

According to the Indictment, public court filings, and statements made in court:

The Plan is a health care plan providing benefits to eligible active and former players of the NBA and their family members.  From at least 2017 through at least 2021, WILLIAMS, and more than a dozen others, engaged in a widespread scheme to defraud the Plan by submitting and causing to be submitted fraudulent claims for reimbursement of medical and dental services that were not actually rendered.  Over the course of the scheme, the defendants submitted and caused to be submitted to the Plan false claims totaling at least approximately $5 million.

WILLIAMS orchestrated the scheme to defraud the Plan.  WILLIAMS recruited other Plan participants to defraud the Plan by offering to provide them with false invoices to support their fraudulent claims.  WILLIAMS’s co-defendants, including a dentist in California and a doctor in Washington State, provided WILLIAMS with fraudulent invoices that WILLIAMS sent to other co-conspirators.  WILLIAMS also recruited non-medical professionals to copy invoices made by medical offices, which WILLIAMS provided to co-conspirators and were used to defraud the Plan.  WILLIAMS conspired with others to submit fraudulent claims to the Plan in exchange for kickback payments to WILLIAMS of at least $300,000.

To verify that certain services were medically necessary, the Plan sometimes requires participants to provide, from a medical provider, a letter of medical necessity establishing that necessity of the provided services.  WILLIAMS fraudulently created and transferred letters of medical necessity for three co-conspirators.  Those letters were unusual in several respects: they were not on letterhead, contained unusual formatting, had grammatical errors, and one of the letters misspelled a purported patient’s name.

WILLIAMS also impersonated others in furtherance of the scheme.  WILLIAMS pretended to be employees of the Plan’s administrative manager.  In one instance, WILLIAMS created an email account designed to appear as an email account used by the Plan’s administrative manager.  WILLIAMS used that account to attempt to frighten a co-defendant so that the co-defendant would re-engage with WILLIAMS and would pay kickback to WILLIAMS.

On other occasions, WILLIAMS used another email account he created to threaten another co-defendant—a doctor who created fraudulent invoices for WILLIAMS.  WILLIAMS used this email account to pretend to be employees of the Plan’s administrative manager and demand that this co-defendant pay WILLIAMS a “fine” or the “employees” would tell the authorities about the submission of fraudulent invoices.  Through these threats and deception, WILLIAMS obtained approximately $346,000 from this particular co-defendant.

In or about April 2022, after WILLIAMS was charged and arrested in this case, and while on pretrial release, WILLIAMS texted threats to a witness including that the witness was “talking way to[o] f[—]ing much,” to “shut the f[–]k up,” and “me spitting in your face is exactly what you’ll see.”  Following a motion by the Government on May 6, 2022, as a result of this obstructive conduct, Judge Caproni remanded WILLIAMS.

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WILLIAMS, 35, of Seattle, Washington, pled guilty to one count of conspiracy to commit health care and wire fraud, which carries a maximum term of twenty years in prison; and one count of aggravated identity theft, which carries a mandatory minimum sentence of two years in prison.  As part of his guilty plea, WILLIAMS agreed to pay restitution of $2,500,000 to the Plan and to forfeit $653,672.55 to the United States.

The sentencing of WILLIAMS is scheduled for January 25, 2023, before Judge Caproni.

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Ryan B. Finkel and Daniel G. Nessim are in charge of the prosecution.

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Security News: Factoring Scheme Lands Canyon Lake Man in Prison with Hefty Restitution and Forfeited Assets

Source: United States Department of Justice News

SAN ANTONIO – A Canyon Lake man was sentenced yesterday to 97 months in prison and over $8.9 million in restitution for his role in a scheme to defraud several San Antonio financial institutions. He was also ordered to pay a $2.9 million money judgment for the proceeds derived from his criminal activity.

According to court documents, Ronald Wayne Schroeder, 49, along with his co-defendants, Jill Martin Alvarado, 60, of Irving; Rigo Alvarado, 57, of Barstow; Ryan Martinez, 58, of San Antonio; and Phyllis Joe Martinez, 80, of San Antonio, conspired to defraud various financial institutions of money by factoring false and fraudulent invoices.  Factoring is when a company sells specific accounts receivable to a third party at a discounted price to accelerate its cash flow. 

Schroeder used fraud and deceit to factor false invoices for companies owned by his co-defendants.  Schroeder would factor these false invoices with Southwest Bank and Bank of San Antonio (BOSA).  Schroeder and other co-conspirators would then use that money for their own personal enrichment or to pay off old invoices owed to the financial institutions much like a Ponzi scheme where money from new investors is used to pay old investors. 

Three companies involved in the scheme included: Nerd Factory, which was owned by Ryan Martinez and later, Phyllis Martinez; Alvy’s Logistics, which is owned by Jill and Rigo Alvarado; and, Republic Logistics, a fake company created and used by Schroeder to steal money for himself.  According to the court records, false and fraudulent invoices from Nerd Factory were factored by Southwest Bank and then Bank of San Antonio.  That money would then be used by the owners of Nerd Factory, Ryan Martinez and later, Phyllis Martinez, for legal fees in a pending criminal federal case or as unearned profit.  Alvy’s Logistics and Nerd Factory also sent back some of the money obtained to Schroeder.

In addition to using false and fraudulent invoices for actual companies, Schroeder submitted the fake invoices from Republic Logistics to BOSA for payment.  Schroeder then used this money to purchase expensive items, such as cars, RVs, an airplane, boat, and a beach house as well as $50,000 in landscaping and the installation of a $100,000 pool. In its forfeiture proceedings, the United States seized and forfeited several items, including a Shelby Mustang and proceeds for the sale of a Port Aransas property, and sold Schroeder’s interest in a Columbia single engine aircraft.

On December 9, 2021, Schroeder pleaded guilty to one count of conspiracy to commit bank fraud. 

“Today’s sentencing demonstrates that our office has and will continue to aggressively pursue and prosecute fraud against financial institutions,” said Executive Assistant U.S. Attorney Kristy Callahan.  “This type of fraud damages the economy and eventually the consumer.  Along with our partners in law enforcement, this office will hold accountable those who commit fraud, divest them of criminal proceeds, and use federal remedies to recover victim losses.”

Schroeder’s co-defendants all pleaded guilty to one count of conspiracy to commit bank fraud.   Phyllis Martinez was sentenced to time served and ordered to pay restitution of $289,984; Jill Alvarado was sentenced to time served and ordered to pay restitution of $3,904,924.92; Rigo Alvarado was sentenced to 48 days imprisonment and ordered to pay restitution of  $3,904,924.92; and Ryan Martinez is still pending sentencing.

The FBI investigated the case. The U.S. Marshal Service assisted with the recovery of property derived from criminal proceeds.

Assistant U.S. Attorneys Joseph E. Blackwell prosecuted the case.  Assistant U.S. Attorney Fidel Esparza III handled the asset forfeiture proceedings.

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Security News: Defendant Admits To 2014 Murder

Source: United States Department of Justice News

Damian Williams, the United States Attorney for the Southern District of New York, announced that DONOVAN GRANT pled guilty today in Manhattan federal court to participating in the armed robbery of Jercar Brooks in the Bronx on January 23, 2014.  As part of his guilty plea, GRANT admitted that during the robbery, he shot and killed Brooks.  GRANT is scheduled to be sentenced before the Honorable Alvin K. Hellerstein on November 28, 2022.

U.S. Attorney Damian Williams said:  “Eight years ago, Jercar Brooks was murdered inside his apartment in the Bronx.  Thanks to the tireless efforts of the New York City Police Department and the Federal Bureau of Investigation, Donovan Grant has now been held accountable for this senseless crime.  Together with our law enforcement partners, this Office will continue to bring justice to the victims of violent crime.”

According to the allegations in the Superseding Indictment and other documents filed in federal court, as well as statements made in public court proceedings:

On January 23, 2014, GRANT planned to rob Brooks at gunpoint during a supposed marijuana deal.  GRANT brought a gun and bag of pretend money to Brooks’ apartment located at 634 East 233rd Street in the Bronx, intending to take the marijuana by force if the plan to deceive Brooks was unsuccessful.   During the course of the armed robbery, GRANT shot Brooks two times and killed him.  GRANT fled the building, taking with him the box of marijuana that he had planned to steal. 

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GRANT, 60, of Brooklyn, New York, pled guilty to one count of Hobbs Act robbery, in violation of Title 18, United States Code, Section 1951, which carries a maximum term of twenty years in prison. 

The maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Mr. Williams praised the outstanding investigating work of the FBI and the NYPD.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant U.S. Attorneys Jason Swergold and Mollie Bracewell are in charge of the prosecution.