Springfield Man Sentenced to 19 Years for Child Sexual Exploitation

Source: United States Department of Justice News

SPRINGFIELD, Mo. – A Springfield, Mo., man who was the subject of an undercover investigation in the United Kingdom has been sentenced in federal court on child sexual exploitation charges.

Kody Ryan Kelso, 31, was sentenced by U.S. District Judge Stephen R. Bough to 19 years and seven months in federal prison without parole. The court also sentenced Kelso to spend 15 years on supervised release following incarceration.

On July 6, 2022, Kelso pleaded guilty to one count of the sexual exploitation of a child to produce child pornography and to one count of using the internet and a cell phone to coerce and entice a child under the age of 14 to engage in illicit sexual activity.

Both of the offenses to which Kelso pleaded guilty are related to an undercover law enforcement operation in the United Kingdom. Kelso used an online service named My LOL, a teen dating site with chat features, to contact a person he believed to be a 13-year-old girl, but in reality was an undercover law enforcement officer. Kelso asked her to have sexual intercourse with him and repeatedly requested sexually explicit images during online chats from Jan. 7 to Feb. 2, 2021. Kelso also provided his email address and asked her to use Google hangouts to send sexually explicit photos outside the MYLOL platform.

In addition to the information from Europol, investigators received two Cybertips from the National Center for Missing and Exploited Children regarding Kelso’s online activity and posting a child pornography video online.

On June 16, 2021, Springfield police officers executed a search warrant at Kelso’s apartment and he was arrested. Officers seized 19 electronic devices. Investigators found 26 images and 39 video files of child pornography on Kelso’s computers. According to court documents, Kelso had multiple conversations with other users who had clearly identified themselves as minors and sought to have them produce sexually explicit images and entice them into engaging in sexual conduct. The records from MyLOL reveal that Kelso had contacted 560 additional MyLOL users, all of which were listed as being between the age of 13 and 17 years old. He started each conversation by asking if the child had an “age limit” and would introduce sexual topics.

Kelso’s behavior was not limited to MyLOL. On his devices, law enforcement discovered approximately 7,900 different chat threads with different users, over multiple social media applications, including Discord, Facebook Messenger, Google Hangouts, Instagram, Kik, Skype, and Text Now. Kelso sometimes sent child pornography, or pornographic images of himself, to these children and requested nude images.

This case was prosecuted by Assistant U.S. Attorney Stephanie L. Wan. It was investigated by the Springfield, Mo., Police Department, the FBI, and Homeland Security Investigations.

Project Safe Childhood

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.”

Key West Labor Staffing Conspirator Pleads Guilty to Immigration Fraud

Source: United States Department of Justice News

A former Key West resident pleaded guilty today to an immigration conspiracy related to the operation of several Key West labor staffing companies.

According to court documents and statements made in court, from January 2016 through at least January 2021, Oleksandr Morgunov, formerly of Key West, helped operate Paradise Choice LLC, Paradise Choice Cleaning LLC, Tropical City Services LLC and Tropical City Group LLC, all of which were labor staffing companies in southern Florida. The staffing companies facilitated the employment of individuals in hotels, bars and restaurants in Key West and other locations, even though the employees were not authorized to work in the United States. 

Morgunov acknowledged that he and his co-conspirators defrauded the IRS out of more than $7.9 million in employment taxes.

Morgunov is scheduled to be sentenced on January 31, 2023. He faces a maximum penalty of ten years in prison for conspiring to harbor aliens and induce them to remain in the United States. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida made the announcement.

The U.S. Department of Homeland Security’s Homeland Security Investigations and IRS-Criminal Investigation are investigating the case.

Senior Litigation Counsel Sean Beaty and Trial Attorneys Jessica A. Kraft and Nicholas J. Schilling, Jr., of the Tax Division and Assistant U.S. Attorney Chris Clark of the Southern District of Florida are prosecuting the case.

Ambulance Company Settles Allegations of Billing Medicare for Unnecessary, Non-Emergency Ambulance Transportation

Source: United States Department of Justice News

Fairview Heights, Ill. – HealthOne Critical Care Transport Service, Inc. d/b/a MedicOne Medical 
Response (“MedicOne”) of Marion, Illinois, has agreed to pay $302,124.37 in a civil settlement 
agreement resolving allegations the company improperly billed Medicare for scheduled, non- 
emergency ambulance transportation.

The government alleges MedicOne’s former location in Mount Vernon, Illinois, routinely billed 
Medicare for non-emergency ambulance transports to regularly scheduled dialysis treatments when the 
services did not meet Medicare requirements. MedicOne typically picked up patients at their 
residences or nursing homes and transported the patients to and from dialysis treatment three times 
per week, sometimes for years. The government alleges many of MedicOne’s non-emergency ambulance 
transports did not meet Medicare requirements for coverage because the services were not medically 
necessary, particularly when the patients safely rode in other forms of transportation – such as 
personal vehicles, medical transport cars, and wheelchair vans – to medical appointments and social 
outings.

The Medicare program paid MedicOne hundreds of dollars per round-trip ambulance transport taking 
patients to dialysis treatments. To resolve the allegations, MedicOne will pay the United States
$302,124.37 for claims submitted to Medicare between April 2016 and January 2020.

“Billing for unnecessary ambulance transports wastes taxpayer dollars and drains critical funds 
from the Medicare program,” said U.S. Attorney Rachelle Aud Crowe. “Our office is committed to 
protecting the integrity of federal health care programs.”

“Health care providers that bill Medicare for medically unnecessary services improperly divert 
funds needed to care for beneficiaries while increasing the financial burden on taxpayers,” stated 
Special Agent in Charge Curt L. Muller of the Department of Health and Human Services Office of 
Inspector General (HHS-OIG). “Along with our law enforcement partners, we will continue to 
investigate health care schemes to protect the integrity of federal health care programs.”

“Public health insurance programs, such as Medicare, can incur significant financial loss when 
their programs are exploited. Those losses cost the government and ultimately impact every American 
– contributing to the rising cost of health care for everyone,” said Federal Bureau of 
Investigation (FBI) Springfield Special Agent in Charge David Nanz. “This settlement is a result of 
the FBI’s commitment to work with our federal and state partners to ensure that federally funded 
health care programs are not abused by providers.”

This matter was investigated by HHS-OIG, the FBI, and the Illinois  tate Police Medicaid Fraud
Control Unit in response to a hotline complaint submitted to HHS-OIG. Assistant U.S. Attorney Laura 
Barke prosecuted the case.
Anyone who suspects health care fraud, waste, or abuse is encouraged to report it by calling 1-800- 
HHS-TIPS or visiting https://oig.hhs.gov/fraud/report-fraud/.

The claims resolved by the settlement are allegations only, and there has been no determination of
liability.

Real Estate Developer and Attorney Both Admit to Multimillion-Dollar Mortgage Fraud Scheme

Source: United States Department of Justice News

TRENTON, N.J. – A New Jersey real estate developer and attorney each admitted today to conspiring to orchestrate a mortgage fraud scheme that led to over $3.5 million in losses, U.S. Attorney Philip R. Sellinger announced.

Victor Santos, aka Vitor Santos, 63, of Watchung, New Jersey, and Fausto Simoes, 69, of Millington, New Jersey, each pleaded guilty by videoconference to Count One of an indictment charging them with conspiracy to commit bank fraud before U.S. District Judge Michael A. Shipp in Trenton federal court.

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

From September 2007 through November 2008, Santos, a real estate developer, and Simoes, an attorney, conspired with each other and others to fraudulently obtain mortgage loans with a total value of more than $4 million. Santos orchestrated the scheme to recruit fake, or “straw” buyers to purchase 12 properties in Newark. Using the identity and credit of these straw buyers allowed Santos, Simoes, and their conspirators to conceal their identities from the lender as the actual purchasers of the properties. Santos and others induced people to be straw buyers by agreeing to pay each straw buyer at least $5,000, secure tenants to lease the purchased properties, and cover costs associated with the property, including fees associated with the real estate purchases and the mortgage payments on each of the fraudulently obtained mortgages. Santos, Simoes, and others also caused the submission of fraudulent and false loan applications and documents to the mortgage lender.

Simoes conducted the closings of 10 of the fraudulent transactions and helped perpetuate the fraud by falsely reporting that the straw buyers were providing the cash required at closing when, in fact, Simoes received those funds from a shell company controlled by Santos and another conspirator. For several transactions, Simoes also failed to disclose to the lender that the shell company controlled by Santos and another conspirator would receive a substantial payout from the loan proceeds.

Shortly after the properties were acquired, Santos and his conspirators broke their promises to pay the mortgages. The straw buyers, in whose names the mortgages were obtained and thus were responsible for the payments, did not have enough money to pay the fraudulently obtained mortgages and defaulted, which caused the lender, Fannie Mae, and insurers to lose more than $3.5 million. 

Conspiracy to commit bank fraud carries a maximum potential penalty of 30 years in prison, a fine of $1 million or twice the gross gain to the defendants or twice the gross loss to others whichever is greatest. Sentencing for Santos is scheduled for April 12, 2023, and for Simoes, April 13, 2023.

Two other conspirators previously pleaded guilty and are awaiting sentencing.

U.S. Attorney Sellinger credited special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, and special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the guilty pleas.

The government is represented by Special Assistant U.S. Attorneys Charlie Divine and Kevin DiGregory of the Federal Housing Finance Agency, Office of Inspector General, assigned to U.S. Attorney’s Office’s Economic Crimes Unit in Newark.

Syracuse Man Sentenced to 15 Years for Drug Conspiracy and Distribution

Source: United States Department of Justice News

SYRACUSE, NEW YORK – Eric F. Jackson, aka “The Mexican,” aka “Pops,” age 49, of Syracuse, was sentenced Tuesday to 180 months in prison for his leadership of a drug-trafficking organization that distributed methamphetamine in Onondaga County and elsewhere in Central New York.

The announcement was made by United States Attorney Carla B. Freedman and Frank A. Tarentino III, Special Agent in Charge of the U.S. Drug Enforcement Administration (DEA), New York Division.

As part of his prior guilty plea, Jackson admitted that beginning no later than May 2020 through April 2021, he conspired with others to transport methamphetamine from California to locations in the Northern District of New York, including Syracuse, for distribution. Jackson admitted that in furtherance of the conspiracy, in December 2020, a coconspirator drove with approximately 4.6 kilograms of pure methamphetamine from California destined for Syracuse but was intercepted by police and arrested in Oklahoma City. Jackson also admitted that he arranged for methamphetamine to be shipped by a common carrier to addresses in the Syracuse area, which were provided by coconspirators. In addition to participating in the conspiracy, Jackson admitted that he personally distributed more than 50 grams of pure methamphetamine to another individual in Syracuse. Jackson further admitted that at the time of his arrest in April 2021, at a small convenience store on Park Street in Syracuse, New York, he possessed approximately $17,460 in drug proceeds, and more than 350 grams of pure methamphetamine, which he intended to distribute.

United States District Judge David N. Hurd also ordered Jackson to serve a 5-year term of supervised release to follow his release from prison, the forfeiture of the $17,460 of seized currency, and ordered Jackson to pay a money judgment of $1,300.

This case is being investigated by DEA, U.S. Internal Revenue Service Criminal Investigation (IRS-CI), New York State Police-Violent Gang and Narcotics Enforcement Team (NYSP-VGNET), Onondaga County (New York) Sheriff’s Office, Onondaga County District Attorney’s Office, Syracuse Police Department, Oklahoma City Police Department, San Bernardino County (California) Sheriff’s Office, and is being prosecuted by Assistant U.S. Attorney Matthew J. McCrobie.