Month: January 2023

Source: United States Department of Justice News

A Florida doctor was sentenced today to 20 years in prison for engaging in a massive multi-year scheme to bill health care benefit programs for fraudulent tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction. This case was brought as part of the Department of Justice’s Sober Homes Initiative.

“For nearly a decade, Michael Ligotti exploited vulnerable patients seeking addiction treatment, a reprehensible abuse of trust by a physician,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “This defendant will now serve many years in federal prison for using his medical license to authorize fraudulent tests and treatments for addicted patients at treatment centers and sober homes throughout South Florida. This marks the largest addiction fraud treatment case ever charged by the Department of Justice, demonstrating our continuing commitment to tackling health care fraud throughout the country.”

According to court documents, Michael J. Ligotti, D.O., 48, of Delray Beach, served as Medical Director or Authorizing Physician for over 50 sober homes, substance abuse treatment facilities, and clinical testing laboratories in the Palm Beach County area, often signing standing orders for expensive, medically unnecessary urine drug tests for patients at various addiction treatment facilities. These facilities routinely sent patients’ urine specimens to clinical testing laboratories, which then billed health care benefit programs for unnecessary urine drug tests, often thousands of dollars for a single test. In exchange for Ligotti’s authorization of these urine drug tests, the treatment centers required their patients to regularly visit Ligotti’s clinic, Whole Health LLC, for additional treatment and testing, or allowed Ligotti’s staff to come to their facilities to conduct tests and treatment there. This allowed Ligotti to profit by billing patients’ private health insurance plans for duplicative, medically unnecessary, and expensive urine drug tests, blood tests, and other addiction treatments. As a result of this conduct, which took place from 2011 to 2020, health care benefit programs were billed over $746 million and paid approximately $127 million for fraudulent urine drug tests and addiction treatments. Ligotti pleaded guilty to conspiracy to commit health care and wire fraud in the Southern District of Florida in October 2022 and was ordered today to surrender his medical license.  

“The victims are real, and the losses are immense,” said Acting Special Agent in Charge Chad Yarbrough of the FBI Miami Field Office. “Instead of ensuring the proper treatment of the vulnerable patients under his care in over 50 sober homes, Michael J. Ligotti gamed the system for millions of dollars in ill-gotten gains. The investigators who unraveled this scam are to be commended for their diligence and commitment. The FBI and our partners will continue to pursue those individuals who use our health care system to prey on the vulnerable and steal from the taxpayers.”

“The results in this case reinforce our commitment and determination to pursue those who would defraud Amtrak’s health care programs and target vulnerable populations,” said Special Agent in Charge Mike Waters of the Amtrak Office of Inspector General’s Eastern Field Office. “Our agents will continue to work closely with the task force and partner agencies to hold perpetrators accountable and protect Amtrak’s resources, its employees, and their dependents.”

The FBI Miami Division Palm Beach Resident Agency, with assistance from DEA West Palm Beach Diversion Group; IRS Criminal Investigation Miami Field Office; Amtrak Office of Inspector General; Department of Labor ERISA; Florida Department of Financial Services, Division of Investigative and Forensic Services; and Palm Beach County Office of the State Attorney investigated the case.

Senior Litigation Counsel James V. Hayes and Trial Attorney Ligia M. Markman of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Alexandra Chase, Chief, Transnational, Trafficking & Cyber Crimes Unit for the Southern District of Florida prosecuted the case.

The National Rapid Response Strike Force, Los Angeles Strike Force, and Miami Strike Force of the Criminal Division, Fraud Section, and the U.S. Attorneys’ Offices for the Southern District of Florida and Central District of California lead the Department of Justice’s Sober Homes Initiative, which was initiated in September 2020 to prosecute defendants who exploit vulnerable patients seeking treatment for drug and/or alcohol addiction. Since its inception, the Sober Homes Initiative has resulted in charges and guilty pleas or convictions involving 28 criminal defendants in two judicial districts in connection with over $1 billion in alleged false billings for fraudulent tests and treatments for vulnerable patients seeking treatment for drug and/or alcohol addiction. 

Source: United States Department of Justice News

Man Apprehended After Using the Dark Web

            WASHINGTON – John Green, 81, of the District of Columbia, was sentenced today to 54 months in prison for accessing and downloading child pornography.  The sentence was announced by U.S. Attorney Matthew M. Graves, and Special Agent in Charge Wayne A. Jacobs, of the FBI Washington Field Office’s Criminal and Cyber Division. 

            Green pleaded guilty on October 25, 2022, in the U.S. District Court for the District of Columbia, before the Honorable Colleen Kollar-Kotelly.  Green must also pay $18,000 in restitution to his victims. Upon completion of his prison term, he will be placed on five years of supervised release and will be required to register as a sex offender for 15 years. 

            According to the government’s evidence, in May of 2019, Green used his computer to access a website on the Dark Web that offered individuals the opportunity to access and download child sexual abuse material, featuring children as young as infants. At the time of this criminal offense, Green was 78 years old.  In July of 2021, law enforcement obtained a search warrant for Green’s home.  A laptop computer was seized which, when forensically examined, was found to contain over nine hundred images and videos of child pornography.  Additionally, numerous DVDs and books were discovered which featured children in various states of undress, and in sexually explicit situations.

            This case was brought as part of the Department of Justice’s Project Safe Childhood initiative and investigated by the FBI’s Child Exploitation and Human Trafficking Task Force, which includes members of the FBI’s Washington Field Office and MPD. In February 2006, the Attorney General created Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the U.S. Attorney’s Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

            In announcing the sentence, U.S. Attorney Graves and Special Agent in Charge Jacobs commended the work of those who investigated the case from the FBI’s Child Exploitation and Human Trafficking Task Force, which includes members of the FBI’s Washington Field Office and MPD’s Youth Investigations Division. They acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Amy E. Larson, who prosecuted the case.

Source: United States Department of Justice News

          LOS ANGELES – A Tarzana man pleaded guilty today to federal criminal charges for running a nearly $6 million scheme in which he knowingly sold used skin-tightening medical devices that were deliberately misbranded as new, as well as counterfeit devices that he claimed were to be used with fat-reducing laser machines.

          Kambiz Youabian, 49, pleaded guilty to a two-count information charging him with mail fraud and introducing a misbranded medical device into interstate commerce.

          According to his plea agreement, Youabian owned and operated MSY Technologies Inc., a West Los Angeles-based company that did business under the names “Thermagen” and “Global Electronic Supplies” (GES).

          From March 2016 to June 2022, Youabian purchased used transducers, which are medical devices used to tighten the skin of dermatology patients by delivering ultrasound energy to a patient’s skin. Used properly, transducers are designed to provide no more than 2,400 treatments. After this number is reached, the devices are considered depleted and should be disposed of in accordance with health code regulations.

          Through GES, Youabian purchased depleted transducers for nominal sums, typically $50. Youabian then remanufactured the depleted transducers and added fabricated serial numbers to make the transducers appear to be new.

          Then, through his Thermagen company, Youabian fraudulently marketed and sold – for many times more than he paid for them – the remanufactured transducers to health care providers and customers as “new” transducers with 2,400 remaining treatments. To conceal his connection to Thermagen, Youabian used names of fabricated Thermagen employees on correspondences with victim providers and used out-of-state commercial mailboxes for Thermagen’s return of address on shipments, which he sent through the U.S mail.

          For example, in February 2020, Youabian, through Thermagen’s website, sold a device falsely advertised as “new” and “containing 2,400 lines” – and with a retail price of $1,695 – to a buyer. Youabian then shipped the device – which contained a fake serial number – from Los Angeles to Florida via the United States Postal Service.

          Youabian also shipped counterfeit PAC keys, medical devices used to operate laser machines designed to reduce fat on patients, through the mail.

          He then transferred his ill-gotten gains to bank account his controlled, including accounts he opened in the names of MSY Technologies, himself, and his au pair.

          In June 2022, law enforcement executed search warrants at Youabian’s home and the GES-Thermagen office in West Los Angeles.

          In the GES-Thermagen office, law enforcement seized 75 transducers in various states of refurbishment, a manufacturing workstation containing tools and transducer parts, and detailed records of GES and Thermagen’s expenses.

          Youabian admitted in his plea agreement to unlawfully selling thousands of medical devices, including transducers and PAC keys, and receiving at least $5,821,474 in fraudulent proceeds that should have been paid to the companies that are the sole U.S. distributors for these devices. Youabian also admitted to causing reputational harm to the device manufacturers and distributors of these medical devices.

          United States District Judge Dale S. Fischer scheduled a June 26 sentencing hearing, at which time Youabian will face a statutory maximum sentence of 23 years in federal prison.

          The U.S. Food and Drug Administration Office of Criminal Investigations and the United States Postal Inspection Service investigated this matter.

          Assistant United States Attorney Gregory D. Bernstein of the Major Frauds Section is prosecuting this case.

Source: United States Department of Justice News

OKLAHOMA CITY – WILLIAM JOSEPH DANIEL, 46, of Stephens County, was sentenced last week to serve eighteen months in federal prison for sexual battery, announced United States Attorney Robert J. Troester.

On June 8, 2022, a federal grand jury returned a two-count indictment against Daniel for offenses he committed while employed with the Marlow Public School System.  These incidents occurred between February 1, 2022, and May 12, 2022.  Count 1 alleged Daniel touched the body and private parts of a student in a lewd and lascivious manner.  Count 2 alleged Daniel digitally penetrated the private parts of the same student.

Daniel pled guilty to sexual battery on July 8, 2022, and was sentenced on January 6, 2023, to serve eighteen months in federal prison by U.S. District Judge David L. Russell.  Judge Russell also ordered that upon release from prison, Daniel must serve three years of supervised release.  Daniel was remanded to federal custody at the conclusion of the sentencing hearing.  Upon his release from prison, Daniel will be required to register as a sex offender.

This case was prosecuted in federal court because the victim is a member of a federally recognized Indian tribe and the crime occurred within the boundaries of the Chickasaw Nation, and within the Western District of Oklahoma.  This case is a result of an investigation by the FBI Oklahoma City Field Office and the Marlow Police Department.  Assistant U.S. Attorney Tiffany Noble prosecuted the case.

Reference if made to the public record for additional information.

Source: United States Department of Justice News

PORTLAND, Ore.—A former Portland attorney was sentenced to federal prison today for defrauding more than one hundred clients out of millions of dollars in insurance proceeds and using the stolen money to bankroll a lavish lifestyle.

Lori E. Deveny, 57, was sentenced to 101 months in federal prison and three years’ supervised release. Deveny was also ordered to pay more than $4.5 million in restitution to her victims.

“It’s hard to overstate the extraordinary impact Ms. Deveny’s crimes had on the many innocent and vulnerable victims who trusted her. As a former attorney, she had a special responsibility to her clients and to the public, but she repeatedly abused this trust and prioritized her own needs. This is a just sentence for serious crimes,” said Ethan Knight, Chief of the Economic Crimes Unit for the U.S. Attorney’s Office.

“The cruelest thing of all is knowingly providing false hope. Having already suffered losses, Ms. Deveny’s clients deserved an attorney who represented their best interests. What they got instead was someone who inflicted more loss,” said Special Agent in Charge Bret Kressin, IRS Criminal Investigation (IRS-CI), Seattle Field Office. “Today, Ms. Deveny is receiving what she never provided her clients: a picture of reality that those who choose to defraud will face the consequences of their actions.”

“While serving as an attorney, Ms. Deveny brazenly stole money that should have gone to pay for health care for her clients for serious injuries and ailments. Instead, that money funded things like big game hunting trips to Africa and home remodeling. She took advantage of people who were physically and emotionally hurting by forging insurance checks, stealing the funds and lying to her clients about the payouts,” said Kieran L. Ramsey, Special Agent in Charge of the FBI Portland Field Office. “These actions not only got her disbarred but are now putting her behind bars. The FBI applauds our partners at IRS-CI and the U.S. Attorney’s Office, as we continue to bring to justice those who commit this kind of unconscionable financial fraud that harms the people in our shared community.”

According to court documents, between April 2011 and May 2019, Deveny used manipulation and deceit to systematically defraud at least 135 clients out of more than $3.8 million in insurance proceeds she held in trust on their behalf. To accomplish her scheme, Deveny stole her clients’ identities, forged insurance checks made payable to them, deposited client funds into her personal bank accounts, and continually lulled clients into a false sense of hope that they would receive compensation for their injuries. Many of Deveny’s victims were particularly vulnerable to her criminal behavior after sustaining serious brain and bodily injuries and never received the insurance payouts they were owed.

The Oregon State Bar Client Security Fund (CSF), Wells Fargo Bank, and the IRS also suffered losses as a result of Deveny’s scheme. The CSF made partial restitution payments to some of Deveny’s clients, resulting in a loss of more than $1.2 million. This is one of the largest losses in the Oregon State Bar’s history and resulted in the organization raising dues for all members for two years to cover the cost of the payments. Wells Fargo Bank lost more than $52,000 because Deveny stole and forged a check and the IRS sustained a tax loss of more than $621,000 when Deveny failed to report the money she stole from her clients on her personal income tax returns.

All told, Deveny’s crimes resulted in total losses to all victims of more than $4.5 million.

Deveny used the proceeds of her scheme to pay more than $150,000 on foreign and domestic airline tickets, more than $173,000 on African safari and big game hunting trips, $35,000 on taxidermy expenses, $125,000 on home renovations, $195,000 in mortgage payments, more than $220,000 in cigars and related expenses, $58,000 on pet boarding and veterinary costs, $41,000 on recreational vehicle expenses, $50,000 for a Cadillac luxury vehicle, and $60,000 on stays at a luxury nudist resort in Palm Springs, California.

On May 7, 2019, a federal grand jury in Portland returned a 24-count indictment charging Deveny with mail, bank, and wire fraud; aggravated identity theft; money laundering; and filing a false tax return. 

On June 27, 2022, she pleaded guilty to one count each of mail, wire, and bank fraud; money laundering; and filing a false tax return; and two counts of aggravated identity theft.

This case was investigated by IRS-CI and the FBI with assistance from the Portland Police Bureau. It was prosecuted by Claire M. Fay, Assistant U.S. Attorney for the District of Oregon.