DOT employee admits to extortion

Source: United States Department of Justice News

HOUSTON – A 54-year-old Lyford man had entered a guilty plea to extortion under color of law, announced U.S. Attorney Alamdar S. Hamdani.

Patrick Gorena was a border investigator for Department of Transportation (DOT)’s Federal Motor Carrier Safety Administration.  

As part of his plea, Gorena admitted that when auditing a trucking company, he did not report safety violations that would have exposed the company to potential fines and the loss of their DOT license. In return, Gorena demanded $3,500.

However, he ultimately accepted $2,000 from an undercover law enforcement officer posing as a representative of the trucking company.

U.S. District Judge David Hittner will impose sentencing April 18. At that time, Gorena faces up to 20 years in prison.

He was permitted to remain on bond pending that hearing.

The Department of Transportation – Office of the Inspector General and FBI conducted the investigation. Assistant U.S. Attorney Richard Hanes is prosecuting the case along with Trial Attorney Lauren Castaldi of the Justice Department’s Public Integrity Section.

Florida Woman Sentenced to Prison for False Statement to Investigator Related to Pediatric Asthma Drug Study

Source: United States Department of Justice

A federal judge sentenced a Florida woman to prison for making a false statement to a government investigator related to a clinical trial that studied the effectiveness of asthma drugs in children.

Jessica Palacio, 37, of Miami, was convicted by a jury on Sept. 13, 2022, for lying to a U.S. Food and Drug Administration (FDA) investigator during a 2017 regulatory inspection of the firm conducting the drug trial. On January 12, U.S. District Judge Darrin P. Gayles sentenced Palacio to 36 months in prison and three years of supervised release.

According to evidence presented at trial, Palacio worked from 2013 to 2015 as a clinical research coordinator at a clinical trial firm in Miami called Unlimited Medical Research (UMR). UMR was one of many companies hired to conduct a clinical trial designed to investigate the safety of an asthma medication in children. The drug manufacturer identified issues in the trial performed by the company based on a review of data and notified the FDA.

In May 2021, a grand jury in Miami returned a two-count indictment against Palacio alleging a scheme to falsify medical records to make it appear as though pediatric subjects made scheduled visits to UMR, received physical exams from a clinical investigator, and took study drugs as required, when in fact these events had not occurred. The indictment alleged that when Palacio was confronted by an FDA regulatory investigator about her role in the clinical trial conducted by UMR, she submitted a false affidavit claiming that she had performed a screening visit of a child subject when she had not.

Following trial, the jury found Palacio guilty of both conspiring to commit wire fraud and with making a false statement. The court subsequently granted a defense motion for a judgment of acquittal on the conspiracy charge but denied a motion for judgment of acquittal as to the false statement charge.

“Clinical trials play a critical role in establishing drug safety and efficacy,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head  of the Justice Department’s Civil Division. “The Justice Department will work closely with its law enforcement partners to protect the integrity of this important process.”

“Reliable and accurate data from clinical trials is the cornerstone of FDA’s evaluation of a new drug,” said Special Agent in Charge Justin C. Fielder in the FDA Office of Criminal Investigations Miami Field Office. “Compromised clinical trial data could impact the agency’s decisions about the safety and effectiveness of the drug under review. Today’s sentencing demonstrates that those who attempt to subvert the regulatory functions of the FDA by making false statements to the agency to cover up falsified data will be held accountable for their actions.”

Four co-conspirators previously pleaded guilty and were sentenced for their roles in the scheme at UMR. Yvelice Villaman Bencosme, M.D., 66, of Miami, was sentenced to 36 months’ imprisonment, and Lisett Raventos, 48, also of Miami, was sentenced to 30 months’ imprisonment. In addition, Maytee Lledo, 52, of Hialeah, Florida, was sentenced to 14 months’ imprisonment, which the court later modified to time served, and Olga Torres, 50, of Miami, was sentenced to 3 years’ probation.    

The FDA Office of Criminal Investigations investigated the case.

The case was prosecuted by Senior Litigation Counsel David A. Frank and Trial Attorney Marilee L. Miller from the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Kyrsten Melander for Enforcement at FDA’s Office of Chief Counsel.

Justice Department Secures Resolution in Sexual Harassment Lawsuit Against Schuylkill County, Pennsylvania

Source: United States Department of Justice News

SCRANTON – The Justice Department announced today that it has reached a settlement with Schuylkill County, Pennsylvania, to resolve the department’s claims in Doe et al. v. Schuylkill County et al., a lawsuit filed in the U.S. District Court for the Middle District of Pennsylvania alleging violations of Title VII of the Civil Rights Act of 1964 (Title VII).

The consent decree resolves the department’s allegations that County Commissioner George F. Halcovage, Jr., sexually harassed four female employees and that those employees suffered retaliation when they opposed Halcovage’s sexual harassment. The complaint also alleged multiple incidents of sexual advances, coercion of sexual intercourse, and inappropriate sex-based comments occurring over many years.  

“All people deserve to go to work each day without fear of sexual harassment and retaliation when they oppose that harassment,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “This resolution sends a clear message that the Justice Department will not tolerate sexual harassment and retaliation especially when it is perpetrated by an elected official who abuses the powers of their office.”   

“Today, by this consent decree, we emphasize that local governments must have comprehensive policies and training to prevent sexual harassment and retaliation by public servants,” said U.S. Attorney Gerard M. Karam.  “No official can abuse their power and position to a workforce they were elected to supervise, and this settlement provides steps the County must take to prevent and address this abusive behavior.”

Under the terms of the consent decree, if approved by the court, the County will, among other things, retain a consultant from a list of consultants approved by the Justice Department.  The consultant will conduct a workplace climate survey, propose improvements to the County’s equal employment opportunity policies, and develop a new sexual harassment training program.  The consent decree also includes restrictions on Commissioner Halcovage, who has refused to resign from his position and who can only be removed, under state law, through impeachment in the Pennsylvania House of Representatives and conviction in the Pennsylvania Senate.    

The four women harassed by Halcovage, who have additional claims under state and federal law against Schuylkill County and several individual Defendants, will continue to pursue their claims.

This lawsuit is part of the Civil Rights Division’s Sexual Harassment in the Workplace Initiative.  The Initiative is aimed at eradicating sexual harassment in state and local government workplaces. It focuses on litigation, outreach, and development of effective remedial measures to address and prevent future sex discrimination and harassment.

Trial Attorneys Allan Townsend and Amber Trzinski Fox of the Civil Rights Division’s Employment Litigation Section and by Assistant U.S. Attorney Michael Butler of the U.S. Attorney’s Office for the Middle District of Pennsylvania prosecuted this case. 

The full and fair enforcement of Title VII is a top priority of the Civil Rights Division’s Employment Litigation Section.  Additional information about the Civil Rights Division and the Employment Litigation Section is available on its websites www.justice.gov/crt and www.justice.gov/crt/employment-litigation-section.   

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2 guilty in $1 million COVID fraud scheme

Source: United States Department of Justice News

HOUSTON – A 30-year-old Orlando, Florida, man has admitted to conspiracy to commit wire fraud in connection with a scheme to defraud the United States of COVID related disaster loan proceeds, announced U.S. Attorney Alamdar S. Hamdani.

Dylan Kinlock entered his plea of guilty today. Co-defendant Felicia Garza, 36, Houston, pleaded guilty to the same charge Jan. 9.

Kinlock and Garza admitted they devised a scheme to solicit others to fraudulently apply for Paycheck Protection Program (PPP) loans the Coronavirus Aid, Relief and Economic Security (CARES) Act provided. The two utilized victims’ personal information to create falsified documents and applied for a PPP loan on their behalf.

The fraud scheme resulted in at least 241 fraudulent PPP loans which led to the distribution of more than $1 million Kinlock received at least $709,665 in fee income from individuals he assisted in securing the fraudulent PPP Loans.

Numerous individuals residing in the Southern District of Texas applied for PPP loans through Kinlock. They all reported that Kinlock attached fraudulent documents to their application without their knowledge, and that the applications contained false statements about the number of employees their business had. 

The false documents included fictitious Schedule C tax forms reporting profit or loss from a business, 1099-MISC forms and invoices reporting incorrect income to qualify for the loans. Kinlock solicited each of his victims to execute a contract with him in which they agreed to share a portion of their PPP loans.

After Kinlock’s clients received their PPP loan funds, Kinlock directed the client to send him his fee through various means including direct deposit into his bank account or electronic payment methods Zelle, CashApp or Venmo. Kinlock’s fee ranged from $3000 to $4,000 per loan or 20% of the amount his client received.

He used the monies to pay off his home in Florida. As part of his plea, he has agreed to forfeit that residence.

The CARES Act is a federal law enacted March 27, 2020, to provide emergency financial assistance to the millions of Americans who suffered the economic effects caused by the COVID-19 pandemic.

Senior U.S. District Judge David Hittner accepted the pleas and set sentencing for April 11. At that time, each faces up to 20 years in prison and a possible $250,000.

Kinlock was permitted to remain on bond pending sentencing. Garza also remains on bond.  

IRS – Criminal Investigation conducted the investigation. Assistant U.S. Attorney Jay Hileman is prosecuting the case.

Plainville Man Sentenced to 25 Years in Federal Prison for Child Exploitation Offenses

Source: United States Department of Justice News

Vanessa Roberts Avery, United States Attorney for the District of Connecticut, and Matthew B. Millhollin, Special Agent in Charge, Homeland Security Investigations (HSI), Boston, announced that KYLE FASOLD, 52, of formerly of Plainville, was sentenced today by U.S. District Judge Michael P. Shea in Hartford to 300 months of imprisonment, followed by 15 years of supervised release, for child exploitation offenses.

“This defendant’s reprehensible conduct involved a tremendous violation of trust and the ultimate invasion of privacy,” said U.S. Attorney Avery.  “The many victims in this case, several of whom provided impact statements to the court and bravely spoke at today’s sentencing, will have to manage their trauma for the remainder of their lives.  May this sentence serve as fair warning to anyone involved in this type of reprehensible behavior, and anyone who believes that they can engage in illicit dark web activity anonymously.  Our law enforcement partners will find you and bring you to justice.” 

“Fasold betrayed the trust of the families who put their children in his care,” said HSI Special Agent in Charge Millhollin.  “I hope this significant sentence brings a measure of justice to those he harmed with his crimes.  This case was brought to light by the remarkable work of HSI’s cyber investigations.  We will not cease in our efforts to track down predators like Fasold who victimize children.”

According to court documents and statements made in court, on March 6, 2020, after an investigation revealed that Fasold had uploaded images of child pornography to the dark web, HSI special agents, with the assistance of the Plainville Police Department and Connecticut State Police, executed a court-authorized search of Fasold’s residence and seized numerous electronic devices.  Analysis of the seized devices revealed that between June 2017 and March 2020, Fasold surreptitiously recorded at least 36 minors, as well as several adults, by placing video-recording devices in locations where he knew minors would likely be partially or fully naked, including bathrooms in his residence, the girl’s locker room in Plainville High School, and the bathroom adjacent to the coach’s office in Plainville High School.  Fasold edited the videos to produce hundreds of images depicting lascivious exhibition of the victims’ genitals or pubic area, and uploaded numerous images to the dark web.

At time of the offense, Fasold was a parent volunteer for a youth recreational swim program in Plainville.

Investigators also found on Fasold’s seized devices numerous images and videos depicting child sexual abuse that Fasold did not produce.

Fasold has been detained since his arrest on March 6, 2020.  On September 29, 2022, he pleaded guilty to one count of production of child pornography and one count of distribution of child pornography.           

This investigation was conducted by Homeland Security Investigations (HSI), the Plainville Police Department and the Connecticut State Police.  The case was prosecuted by Assistant U.S. Attorney Nancy V. Gifford.

This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood Initiative, which is aimed at protecting children from sexual abuse and exploitation.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

To report cases of child exploitation, please visit www.cybertipline.com.