Month: February 2023

Source: United States Department of Justice News

A Puerto Rico man is scheduled to make his initial appearance this afternoon at the federal courthouse in Manhattan to face commodities fraud, commodities market manipulation, and wire fraud charges in connection with the manipulation of the Mango Markets decentralized cryptocurrency exchange. 

According to court documents, Avraham Eisenberg, 27, engaged in a scheme to fraudulently obtain approximately $110 million worth of cryptocurrency from the cryptocurrency exchange Mango Markets and its customers and achieved this objective by artificially manipulating the price of certain perpetual futures contracts. He was previously arrested on Dec. 26, 2022, in San Juan, Puerto Rico, pursuant to a criminal complaint and ordered detained.

“Exploiting decentralized finance platforms is the new frontier of old school financial crimes in which criminals abuse emerging technologies for their own personal gain,” said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division. “With this prosecution, the Criminal Division is sending the message that no matter the mechanism used to commit market manipulation and fraud, we will work to hold those responsible to account.”

Mango Markets is a decentralized cryptocurrency exchange that allows investors to, among other things, purchase and borrow cryptocurrencies and cryptocurrency-related financial products.  Mango Markets is run by the Mango Decentralized Autonomous Organization (the Mango DAO). The Mango DAO has its own crypto token named MNGO, which investors can buy and sell. Holders of the MNGO token are allowed to vote on changes to the Mango Markets platform and issues related to the governance of the Mango DAO.

“As alleged, Avraham Eisenberg manipulated the Mango Markets cryptocurrency exchange in order to obtain over $100 million in illicit profits for himself,” said U.S. Attorney Damian Williams for the Southern District of New York. “Through his scheme, Eisenberg left others holding the bag. Market manipulation is illegal in all of its forms, and this office is committed to prosecuting such schemes wherever they occur – including the cryptocurrency markets.”

“The defendant is alleged to have executed a scheme through which he fraudulently acquired over $100 million worth of cryptocurrency,” said Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office. “The FBI is dedicated to safeguarding the integrity of all financial markets and will ensure any individual willing to exploit one be held responsible in the criminal justice system.”

Eisenberg is charged in the Southern District of New York with one count of commodities fraud, one count of commodities manipulation, and one count of wire fraud. If convicted, he faces a maximum penalty of 10 years in prison for the commodities fraud count, maximum penalty of 10 years in prison for the commodities manipulation count, and maximum penalty of 20 years in prison for the wire fraud count.

The FBI is investigating the case with assistance from Homeland Security Investigations and IRS Criminal Investigation. The Commodity Futures Trading Commission and the Securities and Exchange Commission initiated parallel civil proceedings.

National Cryptocurrency Enforcement Team (NCET) Trial Attorney Jessica Peck and Assistant U.S. Attorneys Thomas Burnett and Noah Solowiejczyk for the Southern District of New York are prosecuting the case.

The NCET was established to combat the growing illicit use of cryptocurrencies and digital assets. Under the Criminal Division, the NCET conducts and supports investigations into individuals and entities that enable the use of digital assets to commit and facilitate a variety of crimes, with a particular focus on virtual currency exchanges, mixing and tumbling services, and infrastructure providers. The NCET also sets strategic priorities regarding digital asset technologies, identifies areas for increased investigative and prosecutorial focus, and leads the department’s efforts to collaborate with domestic and foreign government agencies as well as the private sector to aggressively investigate and prosecute crimes involving cryptocurrency and digital assets.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice News

A federal grand jury in the Western District of Wisconsin returned an indictment yesterday charging Kevin Breslin, 56, of Hoboken, New Jersey, and KBWB Operations, LLC, doing business as Atrium Health and Senior Living (Atrium) in Park Ridge, New Jersey, with a scheme to defraud Medicare and Medicaid in connection with the delivery of or payment for health care benefits, items, or services.

The indictment alleges that the scheme operated from January 2015 to September 2018. The indictment charges the defendants with health care fraud, six counts of wire fraud, three counts of mail fraud, conspiracy to commit tax fraud, and conspiracy to commit money laundering.

According to the indictment, Breslin was the Chief Executive Officer of Atrium, which operated 24 skilled nursing facilities and nine assisted living facilities in Wisconsin and Michigan. These facilities included:

1. Atrium Post Acute Care of Appleton, Wisconsin;
2. Atrium Post Acute Care of Black River Falls, Wisconsin;
3. Atrium Post Acute Care of Bloomer, Wisconsin;
4. Atrium Post Acute Care of Chetek, Wisconsin;
5. Atrium Post Acute Care of Chilton, Wisconsin;
6. Atrium Post Acute Care of Ellsworth, Wisconsin;
7. Atrium Post Acute Care of Kewaunee, Wisconsin;
8. Atrium Post Acute Care of Lancaster, Wisconsin;
9. Atrium Post Acute Care of Little Chute, Wisconsin;
10. Atrium Post Acute Care of Marshfield, Wisconsin;
11. Atrium Post Acute Care of Menominee, Michigan;
12. Atrium Post Acute Care of Mineral Point, Wisconsin;
13. Atrium Post Acute Care of Neenah, Wisconsin;
14. Atrium Post Acute Care of New Holstein, Wisconsin;
15. Atrium Post Acute Care of Oconto Falls, Wisconsin;
16. Atrium Post Acute Care of Plymouth, Wisconsin;
17. Atrium Post Acute Care of Shawano, Wisconsin, at Birch Hill,
18. Atrium Post Acute Care of Shawano, Wisconsin, at Evergreen,
19. Atrium Post Acute Care of Shawano, Wisconsin, at Maple Lane,
20. Atrium Post Acute Care of Stevens Point, Wisconsin;
21. Atrium Post Acute Care of Two Rivers, Wisconsin;
22. Atrium Post Acute Care of Weston, Wisconsin;
23. Atrium Post Acute Care of Williams Bay, Wisconsin; and
24. Atrium Post Acute Care of Wisconsin Rapids, Wisconsin.

The indictment alleges that from January 2015 through September 2018, Atrium billed Medicare for over $189,000,000 and received over $49,000,000 and that they billed Medicaid for over $218,000,000 and received over $93,000,000. The indictment alleges that when the defendants obtained money from Medicare and Medicaid, they certified that they would follow all required quality of care standards, but they did not do so, and that they would operate their facilities with adequate staffing, supplies, and services, but they did not do so.

The indictment alleges that as part of the scheme to defraud, Breslin and Atrium diverted funds from the Wisconsin facilities through guaranteed payments to Atrium owners, guaranteed monthly return-on-investment payments to investors that were financing the construction of skilled nursing facilities in New Jersey, and construction costs for the New Jersey facilities. The indictment further alleges that the diversion of funds caused inadequate care of residents, including a shortage of clean diapers, inadequate wound care supplies, inadequate cleaning supplies, and a lack of durable medical equipment and respiratory supplies. In addition, the diversion of funds caused non-payment to vendors, which caused numerous services to be cut off, including physical therapy for residents, fire alarm monitoring services, phone and internet services preventing staff from obtaining prescription orders and accessing electronic medical records systems, and necessary repairs and maintenance of the physical plant facilities.

In addition, the indictment alleges that Breslin and Atrium withheld insurance premiums from employees’ paychecks but failed to pay those monies over to the third-party administrator for use in paying health claims, causing payment of employees’ health claims to be stopped. The indictment further alleges that the defendants withheld 401(k) retirement savings account contributions from employees’ paychecks but failed to pay those monies over to the third-party pension administrator.

The indictment also alleges that Breslin and Atrium evaded payment to the Wisconsin Department of Revenue and the Internal Revenue Service of state and federal income taxes and employment taxes withheld from employees’ paychecks.

If convicted, Breslin and Atrium face penalties of five years in federal prison on the conspiracy to commit tax fraud charge, and 20 years on each health care fraud, wire fraud, mail fraud, and conspiracy to commit money laundering charge. The conspiracy to commit tax fraud charge and each of the health care, wire and mail fraud charges carry a $250,000 fine; the money laundering charge carries a $500,000 fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division and U.S. Attorney Timothy M. O’Shea for the Western District of Wisconsin made the announcement.

The U.S. Department of Health and Human Services, Office of Inspector General; IRS Criminal Investigation; the U.S. Department of Labor, Employee Benefits Security Administration; the Wisconsin Department of Justice, Medicare Fraud Control and Elder Abuse Unit; and the FBI investigated this case.

Assistant U.S. Attorney Daniel Graber for the Western District of Wisconsin and Trial Attorney Karla-Dee Clark of the Consumer Protection Branch of the Justice Department’s Civil Division are prosecuting the case.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice 2

                        17.       Atrium Post Acute Care of Shawano, Wisconsin, at Birch Hill,

                        18.       Atrium Post Acute Care of Shawano, Wisconsin, at Evergreen,

                        19.       Atrium Post Acute Care of Shawano, Wisconsin, at Maple Lane,

                        20.       Atrium Post Acute Care of Stevens Point, Wisconsin;

                        21.       Atrium Post Acute Care of Two Rivers, Wisconsin;

                        22.       Atrium Post Acute Care of Weston, Wisconsin;

                        23.       Atrium Post Acute Care of Williams Bay, Wisconsin; and

                        24.       Atrium Post Acute Care of Wisconsin Rapids, Wisconsin.

 The indictment alleges that from January 2015 through September 2018, Atrium billed Medicare for over $189,000,000 and received over $49,000,000 and that they billed Medicaid for over $218,000,000 and received over $93,000,000.  The indictment alleges that when the defendants obtained money from Medicare and Medicaid, they certified that they would follow all required quality of care standards, but they did not do so, and that they would operate their facilities with adequate staffing, supplies, and services, but they did not do so.

The indictment alleges that as part of the scheme to defraud, Breslin and Atrium diverted funds from the Wisconsin facilities through guaranteed payments to Atrium owners, guaranteed monthly return-on-investment payments to investors that were financing the construction of skilled nursing facilities in New Jersey, and construction costs for the New Jersey facilities.  The indictment further alleges that the diversion of funds caused inadequate care of residents, including a shortage of clean diapers, inadequate wound care supplies, inadequate cleaning supplies, and a lack of durable medical equipment and respiratory supplies.  In addition, the diversion of funds caused non-payment to vendors, which caused numerous services to be cut off, including physical therapy for residents, fire alarm monitoring services, phone and internet services preventing staff from obtaining prescription orders and accessing electronic medical records systems, and necessary repairs and maintenance of the physical plant facilities. 

In addition, the indictment alleges that Breslin and Atrium withheld insurance premiums from employees’ paychecks but failed to pay those monies over to the third-party administrator for use in paying health claims, causing payment of employees’ health claims to be stopped.  The indictment further alleges that the defendants withheld 401(k) retirement savings account contributions from employees’ paychecks but failed to pay those monies over to the third-party pension administrator. 

The indictment also alleges that Breslin and Atrium evaded payment to the Wisconsin Department of Revenue and the Internal Revenue Service of state and federal income taxes and employment taxes withheld from employees’ paychecks.

If convicted, Breslin and Atrium face penalties of five years in federal prison on the conspiracy to commit tax fraud charge, and 20 years on each health care fraud, wire fraud, mail fraud, and conspiracy to commit money laundering charge.  The conspiracy to commit tax fraud charge and each of the health care, wire and mail fraud charges carry a $250,000 fine; the money laundering charge carries a $500,000 fine. 

Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division and U.S. Attorney Timothy M. O’Shea for the Western District of Wisconsin made the announcement.

The charges against Breslin and Atrium are the result of an investigation by the U.S. Department of Health and Human Services, Office of Inspector General; IRS Criminal Investigation; the U.S. Department of Labor, Employee Benefits Security Administration; the Wisconsin Department of Justice, Medicare Fraud Control and Elder Abuse Unit; and the Federal Bureau of Investigation.  Assistant U.S. Attorney Daniel Graber and Trial Attorney Karla-Dee Clark of the Consumer Protection Branch of the Justice Department’s Civil Division are handling the prosecution. 

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice 2

A federal grand jury in Las Vegas returned an indictment yesterday charging three individuals with operating a mail fraud scheme that defrauded thousands of U.S. victims, many of whom were elderly and vulnerable.

According to court documents, Kimberly Stamps, 46, of Gilbert, Arizona; John Kyle Muller, 56, of Boulder, Colorado; and Barbara Trickle, 78, of Las Vegas, conspired to operate a fraudulent mass-mailing scheme that deceived thousands of consumers into paying fees for falsely promised prizes. The indictment alleges that, from 2012 to 2018, the defendants mailed millions of prize notices that led victims to believe they were specially chosen to receive a large cash prize and would receive the prize if they paid a small fee. Victims who paid the requested fee, however, did not receive the promised cash prize. Although the notices appeared to be personalized correspondence, they were merely mass-produced form letters that were bulk-mailed to recipients whose names and addresses appeared on mailing lists purchased and rented by the defendants.

“The department is committed to investigating and prosecuting mass-market schemes that harm seniors and other vulnerable persons,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We devote substantial resources to these investigations and prosecutions, in furtherance of our commitment to protecting the financial security of all Americans.”

“Today’s indictment reflects the commitment of Postal Inspectors to protect older Americans from scams that prey on the vulnerable,” said Inspector in Charge Eric Shen of the United States Postal Inspection Service (USPIS) Criminal Investigations Group. “These individuals took advantage of the euphoria of winning a prize to bilk victims out of their money, when in fact they knew there was no prize waiting; all while violating a previous cease and desist order to stop their fraudulent behavior. Now they have been brought to justice for their crimes and will face their comeuppance for their illegal activity.”

The indictment alleges that Stamps and Muller selected and edited the prize-notice mailings, set the mailing schedules, and collected and processed victim payments. Trickle – aware of the deceptive nature of the mailings and that victims were in fact deceived – produced the physical mailings, introduced them to the U.S. Mail, and assisted with managing the data that Stamps and Muller used to target consumers for repeated victimization. 

According to the indictment, Stamps, Muller, and Trickle continued to operate their fraudulent mass-mailing scheme in violation of a United States Postal Service cease-and-desist agreement and consent order reached in 2012. The agreement and order had permanently barred Stamps and anyone working with her from mailing fraudulent prize notices.

The indictment charges each of the three defendants with conspiracy to commit mail and wire fraud, along with multiple counts of mail fraud and wire fraud. The defendants are expected to make their initial appearances on Feb. 15 before a U.S. magistrate judge in the U.S. District Court for the District of Nevada. Each charge in this case carries a statutory maximum sentence of 20 years in prison, and a statutory maximum fine of $250,000 or twice the gross gain or gross loss from the offense. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The USPIS investigated the case.

Trial Attorneys Carolyn Rice and Charles Dunn of the Department of Justice Civil Division’s Consumer Protection Branch prosecuted this case, with assistance from the U.S. Attorney’s Office for the District of Nevada.

The department’s extensive and broad-based efforts to combat elder fraud seeks to halt the widespread losses seniors suffer from fraud schemes. The best method for prevention, however, is by sharing information about the various types of elder fraud schemes with relatives, friends, neighbors, and other seniors who can use that information to protect themselves.

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish, and other languages are available.

For more information about the Consumer Protection Branch, visit its website at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of Nevada visit their websites at www.justice.gov/usao-nv.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.