Month: February 2023

Source: United States Department of Justice News

A federal jury convicted a Texas man today for his role in a scheme to fraudulently obtain and launder millions of dollars in forgivable Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

According to court documents and evidence presented at trial, Abdul Fatani, 57, of Richmond, conspired with others to submit fraudulent PPP loan applications by falsifying the number of employees and the average monthly payroll expenses of the applicant businesses. In total, the co-conspirators sought over $35 million through more than 80 fraudulent PPP loans. Fatani distributed over $500,000 in fraudulent loan proceeds to his co-conspirators and himself using bogus payroll checks and laundered a portion of the proceeds by transferring the funds from one of his bank accounts to another bank account he controlled.

Fatani was convicted of one count of conspiracy to commit wire fraud, one count of wire fraud, and one count of unlawful monetary transactions (money laundering). He is scheduled to be sentenced on May 8 and faces a maximum penalty of 20 years in prison for conspiracy and wire fraud and 10 years in prison for money laundering. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

In addition, 15 other individuals have pleaded guilty to their involvement in the loan fraud scheme.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas; Inspector General Hannibal “Mike” Ware of the SBA Office of Inspector General (SBA-OIG); Special Agent in Charge Catherine Huber of the Federal Housing Finance Agency Office of Inspector General (FHFA-OIG); Special Agent in Charge Mark B. Dawson of Homeland Security Investigations (HSI) Houston Field Office; Acting Inspector General Tyler Smith of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC-OIG); and Inspector General J. Russell George of the Treasury Inspector General for Tax Administration (TIGTA) made the announcement.

The SBA-OIG, FHFA-OIG, HSI, FDIC-OIG, and TIGTA investigated the case.

Trial Attorneys Kate McCarthy, Spencer Ryan, Della Sentilles, and Louis Manzo of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Rodolfo Ramirez for the Southern District of Texas are prosecuting the case. 

The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP. Since the inception of the CARES Act, the Fraud Section has prosecuted over 200 defendants in more than 130 criminal cases and has seized over $78 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds. More information can be found at https://www.justice.gov/criminal-fraud/ppp-fraud.

In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Source: United States Department of Justice News

ERIE, Pa. – A resident of Franklin, Pennsylvania, pleaded guilty in federal court to a charge of violating federal firearms laws, United States Attorney Cindy K. Chung announced today.

Phillip John Dechant, 39, 739 Buffalo Street, Franklin, Pennsylvania, pleaded guilty to one count before United States District Judge Susan Paradise Baxter.

In connection with the guilty plea, the court was advised that on or about April 22, 2020, Dechant possessed numerous firearms while being a convicted felon. As part of his plea agreement, Dechant agreed to a sentence of forty (40) months of imprisonment to be followed by three years of supervised release.

Judge Baxter scheduled sentencing for June 8, 2023 at 1:30 p.m. The law provides for a total sentence of 10 years in prison, a fine of $250,000, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the prior criminal history, if any, of the defendant.

Pending sentencing, the court continued Dechant on bond.

Assistant United States Attorney Christian A. Trabold is prosecuting this case on behalf of the government.

The Department of Homeland Security, Immigration and Customs Enforcement conducted the investigation that led to the prosecution of Dechant. This case is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and gun violence, and to make our neighborhoods safer for everyone. On May 26, 2021, the Department launched a violent crime reduction strategy strengthening PSN based on these core principles: fostering trust and legitimacy in our communities, supporting community-based organizations that help prevent violence from occurring in the first place, setting focused and strategic enforcement priorities, and measuring the results.

Source: United States Department of Justice News

PORTLAND, Maine: A Falmouth man was sentenced today in U.S. District Court in Portland for federal program fraud and wire fraud.

U.S. District Judge Nancy Torresen sentenced Joshua Cory Frances, 46, to five years in prison and two years of supervised release. He was also ordered to pay $87,351 in restitution and to forfeit a 27-foot Boston Whaler boat, two marine outboard engines and a trailer. Frances pleaded guilty on October 27, 2021.

According to court records, Frances was the Commander of Maine Task Force One (MTF1), which was overseen by the Maine Emergency Management Agency (MEMA) and funded from grants from the Federal Emergency Management Agency (FEMA) and through Maine Medical Center (MMC). Comprised primarily of physician assistants and emergency medical technicians, MTF1 augmented emergency medical service personnel for specific events in Maine and northern New England.

In 2015 and 2016, Frances converted to his own use property under the care of MTF1 and MMC, including a 44-foot sailing vessel, a 27-foot Boston Whaler boat and two marine outboard engines. Frances also falsely represented himself to be an employee of the U.S. Department of Homeland Security (DHS) and a member of law enforcement to the Defense Logistics Agency and other victims to improperly obtain over $150,000 worth of property, some of which he later converted to his own use.

“The DHS Office of Inspector General (DHS-OIG) will continue to work with our law enforcement partners to investigate and bring to justice individuals who fraudulently claim affiliation with DHS for personal gain. This sentence should send a clear message that these fraudsters will be held accountable,” said Dr. Joseph V. Cuffari, Inspector General of DHS.

“The sentencing announced today is the result of a joint investigative effort to seek justice against an individual who defrauded government programs,” stated Patrick J. Hegarty, Special Agent in Charge of the Defense Criminal Investigative Service, the investigative arm of the Department of Defense (DoD), Office of Inspector General. “The fraudulent conduct in this case undermined the integrity of the DoD’s disposition services program, which is designed to transfer excess DoD property to federal, state and local law enforcement agencies that make honest representations to the United States.”

DHS-OIG investigated the case with assistance from the Defense Criminal Investigative Service, Maine Attorney General’s Office, Maine Department of Health and Human Services, Maine Bureau of Motor Vehicles, and the Falmouth Police Department. Valuable support was provided by the FBI, MEMA, the Towns of Falmouth and Brunswick, FEMA and MMC.

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Source: United States Department of Justice News

NEW ORLEANS, LOUISIANA – U.S. Attorney Duane A. Evans announced today that CHRIS BAO NGUYEN (“NGUYEN”), age 30, of Marrero, Louisiana, pled guilty on February 7, 2023 to receipt of child pornography in violation of Title 18, United States Code, Sections 2252(a)(2) and (b)(1).

According to documents filed in federal court, the case against NGUYEN began as a result of a CyberTip report from the National Center for Missing and Exploited Children (“NEMEC”) to the Louisiana Bureau of Investigation (“LBI”). Homeland Security Investigations (“HSI”) special agents along with the Jefferson Parish Sheriff’s Office and LBI executed a federal search warrant at NGUYEN’s home in Marrero. HSI’s investigation determined NGUYEN received images and videos depicting the sexual exploitation of minors.

NGUYEN faces a mandatory minimum sentence of five (5) years and a maximum sentence of twenty (20) years imprisonment, and/or a fine of up to $250,000.00, or the greater of twice the gross gain to the defendant or twice the gross loss to any person of the offense under Title 18, United States Code, Section 3571. In addition, NGUYEN faces a term of supervised release of no less than five (5) years and up to life after his release from prison as well as a mandatory $100 special assessment fee.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section, 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 to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.    

U.S. Attorney Evans praised the work of the U.S. Department of Homeland Security, Homeland Security Investigations, the Louisiana Bureau of Investigation, and the Jefferson Parish Sheriff’s Office in investigating this matter. The prosecution of this case is being handled by Assistant U.S. Attorney Brian M. Klebba, Chief of the Financial Crimes Unit.

 

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Source: United States Department of Justice News

PORTLAND, Maine: A Rockport man pleaded guilty today in U.S. District Court in Portland to a bank fraud scheme in which he filed nine fraudulent Paycheck Protection Program (PPP) loan applications and received over $1 million in fraud proceeds.

According to court records, Mark X. Haley II, 42, filed fraudulent PPP loan applications at two banks for businesses he controlled. Haley listed false employee and payroll information on each application and submitted fraudulent documents to support the false information to the banks. These documents included false federal employment tax returns, fake timesheets and falsified bank records. As a result of the scheme, Haley fraudulently obtained $1,010,581 in PPP funds. He used some of the funds to make a down payment on a sailboat.

Haley faces up to 30 years in prison and a $1 million fine. He also faces up to five years of supervised release. Haley will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office. A federal district judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The Internal Revenue Service, Criminal Investigations investigated the case.

“While many legitimate businesses used PPP loans to keep their businesses afloat, Mark Haley, motivated by personal greed, set his sails on a scheme to obtain lavish luxuries,” said Joleen Simpson, Special Agent in Charge of IRS- Criminal Investigation’s Boston Field Office. “Today’s plea should serve as a stark reminder that criminals, such as Haley, will be held accountable for their misdeeds.”

Paycheck Protection Plan (PPP): The PPP was a COVID-19 pandemic relief program administered by the Small Business Administration (SBA) that provided forgivable loans to small businesses for job retention and certain other expenses. The PPP permitted participating third-party lenders to approve and disburse SBA-backed PPP loans to cover payroll, fixed debts, utilities, rent/mortgage, accounts payable and other bills incurred by qualifying businesses during, and resulting from, the COVID-19 pandemic. PPP loans were fully guaranteed by the SBA.

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