Month: February 2023

Source: United States Department of Justice News

COLUMBUS, Ohio– A federal grand jury has indicted two Texas men for their roles in one or more alleged conspiracies involving wire fraud, money laundering and tax fraud.

Charges pending against John K. Eckerd, Jr., 58, of Dallas, and Afif Baltagi, 45, of Houston, were unsealed yesterday.

It is alleged that Eckerd is the leader of the multi-state conspiracy.

Conspiring with previously convicted and sentenced defendant Jason E. Adkins, 46, of Jackson, Ohio, Eckerd, Baltagi, and others orchestrated a $50 million Ponzi scheme that defrauded more than 50 investors.

According to the indictment, from 2012 until at least in or around late 2018, Eckerd represented himself to potential investors as an entrepreneur and businessman with expertise in the market for off-the-road tires. Off-the-road tires are over-sized tires that are used on earth moving equipment and/or mining equipment. Eckerd had control of or access to many corporations allegedly used as part of the scheme.

Baltagi worked in logistics for a freight company that had access to a storage yard in Houston where off-the-road tires were stored.

Co-conspirators allegedly solicited millions of dollars from investor-victims under false pretenses. Investors were told their money would be used to buy off-the-road tires at a steep discount, and that the tires would then be re-sold to a buyer at a much higher rate. Investors were promised a 15 to 20 percent rate of return on investment, generally within 180 days.

Eckerd, Baltagi, Adkins, and others corresponded with the potential investors face-to-face, as well as through a combination of phone calls, text messages, and, on occasion, emails. It is alleged they used private planes to showcase their inventory and appear wealthy and successful. Defendants also allegedly provided investors with elaborate, fraudulent paperwork regarding the purported deals. The co-conspirators requested large investments and loans, most to be funded through wire transfers.

It is alleged defendants rarely bought or sold tires, and when they did, they used the same tires as the basis for multiple deals, promising multiple investors that they each owned the same tires. Baltagi allegedly used his employer’s tire yard to deceive investors.

Another previously convicted defendant, Todd Wilkin, 60, of Hillsboro, Ohio, posed as a neutral third-party seller of off-the-road tires in deals arranged by Adkins. In actuality, Wilkin was working with Adkins as part of the Ponzi scheme. Wilkin pleaded guilty in January 2022 to participating in the fraud scheme and awaits sentencing.

Eckerd, Adkins and others allegedly conspired to launder the proceeds from their Ponzi scheme by creating numerous corporate entities and associated bank accounts. It is alleged that Eckerd had control of many of the business accounts but that he instructed others to place the accounts in other people’s names.

Eckerd also allegedly lied on his tax forms and conspired with others to avoid paying taxes he owed, resulting in a tax loss of more than $1 million for tax years 2013 and 2014. Eckerd failed to file his taxes for tax years 2016 and 2017. In July 2018, Eckerd filed for bankruptcy on the same day he allegedly transferred $1 million between two bank accounts in his control. Over the next month, it is alleged Eckerd transferred another $715,000 between accounts in his control.

Conspiracy to commit wire fraud is a federal crime punishable by up to 20 years in prison. Conspiracy to commit money laundering carries a potential maximum penalty of 20 years in prison. Conspiracy to defraud the United States and to commit tax fraud is a federal crime punishable by up to five years in prison.

Kenneth L. Parker, United States Attorney for the Southern District of Ohio; Bryant Jackson, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation; and J. William Rivers, Special Agent in Charge, Federal Bureau of Investigation (FBI), Cincinnati Division, announced the case. Assistant United States Attorneys S. Courter Shimeall, Peter K. Glenn-Applegate and David J. Twombly are representing the United States in this case.

An indictment merely contains allegations, and defendants are presumed innocent unless proven guilty in a court of law.

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Source: United States Department of Justice News

KANSAS CITY, Mo. – Four Oklahoma men were indicted by a federal grand jury today after law enforcement officers seized more than $1 million worth of cocaine from a rental truck that was stopped on Interstate 70 in Lafayette County, Mo.

Wilmer Antony Mendoza-Perez, 23, a citizen of Honduras, Luis Gerardo Nieto-Acosta, 35, a citizen of Mexico, and Miguel Angel Anguiano-Viera, 26, all of Oklahoma City, and Jose Eduardo Acosta-Bermejo, 28, a citizen of Mexico, of Bethany, Okla., were charged in a three-count indictment returned by a federal grand jury in Kansas City, Mo.

Today’s indictment replaces a federal criminal complaint that was filed against the four men on Jan. 25, 2023, with additional charges.

The federal indictment alleges that all four defendants participated in a conspiracy to distribute cocaine from Sept. 1, 2022, to Jan. 25, 2023. All four defendants are also charged with possessing cocaine with the intent to distribute.

Nieto-Acosta and Acosta-Bermejo are also charged together in one count of possessing firearms in furtherance of a drug-trafficking crime. They allegedly possessed two Taurus 9mm semi-automatic handguns, with four magazines and 9mm ammunition.

According to an affidavit filed in support of the original criminal complaint, an officer with the Missouri State Highway Patrol stopped Mendoza-Perez on Jan. 24, 2023, as he was driving a Penske rental truck eastbound on Interstate 70 in Lafayette County. A Toyota Highlander, later determined to be occupied by Nieto-Acosta and Acosta-Bermejo, attempted to prevent the officer from getting behind the Penske truck to initiate a stop.

The officer searched the truck and found two boxes that allegedly contained a total of 34 kilograms of cocaine. According to the affidavit, the current average street price in the Kansas City metropolitan area for a kilogram of cocaine is approximately $30,000, which would make 34 kilograms of cocaine worth approximately $1,020,000.

Mendoza-Perez was arrested. The Toyota Highlander was found abandoned at the Pilot truck stop a few miles away. Investigators later searched the Highlander and found the two handguns. One of the handguns was found in a suitcase behind the front passenger seat, which also contained a receipt that showed Acosta-Bermejo as the purchaser.

Investigators reviewed surveillance video at the truck stop, which showed a third vehicle, a Honda Pilot occupied by Anguiano-Viera and a juvenile female, arrived at the truck stop and picked up Nieto-Acosta and Acosta-Bermejo. A short time later, this vehicle was located, and the occupants arrested.

The charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorneys Bruce Rhoades and Robert Smith. It was investigated by the Missouri State Highway Patrol, the Lafayette County Sherriff’s Office and Drug Task Force, and the Drug Enforcement Administration.

Source: United States Department of Justice News

A federal jury convicted two men today for engaging in a scheme to defraud Medicare Advantage and Medicaid managed care plans of over $3.8 million.

According to court documents and evidence presented at trial, Ikechukwu Udeokoro, 47, of North Bergen, New Jersey, owned Meik Medical Equipment and Supply (Meik), a durable medical equipment supplier that was located in the Bronx, New York. Ayodeji Fasonu, 56, of Bridgeport, Connecticut, was Meik’s manager. Through Meik, Udeokoro and Fasonu billed Medicare Advantage and Medicaid managed care plans for hundreds of expensive patient support systems that were never provided to patients or caregivers. These support systems included large devices that were designed to assist with lifting immobile patients and patients in nursing homes. In reality, Udeokoro and Fasonu provided patients with recliner chairs that had a seat lift feature. Between December 2010 and February 2014, Udeokoro and Fasonu fraudulently billed Medicare Advantage and Medicaid managed care plans more than $3.8 million and were paid approximately $2.4 million.

Udeokoro and Fasonu were both convicted of health care fraud. They are scheduled to be sentenced on Aug. 14 and Aug. 16, respectively, and each faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Breon Peace for the Eastern District of New York; Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division; Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office; and Special Agent in Charge Scott J. Lampert of the Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Office of Investigations made the announcement.

The FBI and HHS-OIG investigated the case.

Trial Attorneys Andrew Estes and Patrick J. Campbell of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, comprised of 15 strike forces operating in 24 federal districts, has charged more than 4,200 defendants who collectively have billed the Medicare program for more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.

Source: United States Department of Justice News

Damian Williams, the United States Attorney for the Southern District of New York, AnnMarie R. Highsmith, the Executive Assistant Commissioner for U.S. Customs and Border Protection’s (“CBP”) Office of Trade, Francis J. Russo, the Director of CBP Field Operations New York, and Ivan J. Arvelo, the Special Agent in Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced that the United States has filed and settled a civil lawsuit against Samsung C&T America, Inc. (“SCTA”), a global trading and investment company that is a U.S. subsidiary of the Korean conglomerate Samsung C&T Corporation.  Among other things, SCTA imports and sells footwear manufactured overseas in partnership with other companies.  SCTA performs services in connection with the importation and sale of footwear, including financing, transportation, warehousing, and distribution.  The settlement resolves claims brought by the United States that between May 2016 and December 2018, SCTA violated the False Claims Act by misclassifying imported footwear under the Harmonized Tariff Schedule (“HTS”) and by not paying the full amount of customs duties owed. 

Under the settlement agreement approved by U.S. District Judge Paul G. Gardephe, SCTA will pay a total of $1 million to the United States.  As a part of the settlement agreement, SCTA also made admissions regarding certain conduct alleged in the Government’s Complaint.  Specifically, SCTA admitted that it misclassified certain imported footwear on entry documents filed with CBP and, in some instances, underpaid customs duties on the footwear.  SCTA further admitted that it had reason to know that certain documents provided to its customs brokers inaccurately described the construction and materials of the imported footwear and that SCTA failed to verify the accuracy of this information before providing it to its customs brokers. 

U.S. Attorney Damian Williams said: “SCTA improperly avoided paying the full customs duties owed to the United States by misclassifying certain footwear that it imported and thereby reducing the duty rate applied.  This Office is committed to combatting customs fraud by holding companies accountable when they misclassify goods and evade paying their legally required duties.”

CBP Executive Assistant Commissioner AnnMarie R. Highsmith said: “Misclassification and avoiding the payment of lawful duties on imported goods is a serious matter.  This practice allows entities to import goods without paying the U.S. Government the lawful amount of duties owed, creating an unfair advantage over law-abiding American businesses.  I am glad that we were able to work with our federal partners to reach a satisfactory settlement to recover these funds.”

CBP Director of Field Operations Francis J. Russo said: “U.S. Customs and Border Protection demonstrated its tenacity once again in preventing the circumvention of the payment of proper duties.  This was a total team effort by CBP import specialists and regulatory auditors, HSI investigators, and the U.S. Attorney’s Office for the Southern District of New York to uncover SCTA’s misclassification of goods, which shortchanged the United States government of the proper amount of customs duties owed.”

HSI Special Agent in Charge Ivan J. Arvelo said: “For two and a half years, Samsung C&T America, Inc. submitted false information to the United States Government, misclassified imported goods, and underpaid customs duties.  As this settlement proves, HSI, along with our law enforcement partners, will hold accountable organizations that engage in improper trade practices and deny our government of vital revenues.”

As alleged in the Complaint filed in Manhattan federal court:

From May 2016 through December 2018 (the “Relevant Period”), SCTA, in conjunction with a business partner, imported footwear manufactured overseas, including from manufacturers in China and Vietnam, into the United States.  The tariff classifications for footwear depend on the characteristics of the footwear, including the footwear’s materials, its construction, and its intended use.  Depending on the classification of the footwear, the duties owed vary significantly.

During the Relevant Period, SCTA, as the importer of record for certain customs entries referenced in the Government’s Complaint, violated the False Claims Act by misclassifying certain footwear under the HTS and by causing entry summary forms to be presented to CBP that SCTA knew or had reason to know contained false classifications.  SCTA provided its customs brokers with documentation and information, including invoices, that (i) misclassified the footwear under the HTS, and/or (ii) contained inaccurate information concerning the materials and construction of the footwear.  Accordingly, in many instances, the footwear was entered at a lower duty rate than would have been applicable had the footwear been properly classified.  As a result of the misclassifications, SCTA avoided paying the full amount of the customs duties owed.   

In the settlement agreement, SCTA admitted, acknowledged, and accepted responsibility for the following conduct:

• As the United States importer of record, SCTA was responsible for paying the customs duties owed on the footwear at issue and providing accurate documents to CBP to allow CBP to assess customs duties applicable to the footwear.
• SCTA and its business partner provided SCTA’s customs brokers with invoices and other documents and information that purportedly reflected the tariff classification of the footwear under the HTS, as well as the corresponding materials and construction of the footwear.  SCTA knew that its customs brokers would rely on the documents and information to prepare the entry summaries submitted to CBP, which required classifying the footwear under the HTS, determining the applicable duty rates, and calculating the amount of the customs duties owed on the footwear.
• SCTA had reason to know that certain documents provided to its customs brokers, including invoices, inaccurately stated the materials and construction of the footwear at issue.  SCTA failed to verify the accuracy of this information before providing it to its customs brokers.  As a result, SCTA materially misreported the classification of the footwear under the HTS and misrepresented the true materials and construction of the footwear.
• SCTA, through its customs brokers, misclassified the footwear at issue on the associated entry documents filed with CBP and, in many instances, underpaid customs duties on the footwear. 

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In connection with the filing of the lawsuit and settlement, the Government intervened in a whistleblower lawsuit that had been previously filed under seal pursuant to the False Claims Act.

Mr. Williams thanked CBP and HSI for their assistance and support with the case.

This case is being handled by the Office’s Civil Frauds Unit.  Assistant U.S. Attorney Samuel Dolinger is in charge of the case.

Source: United States Department of Justice News

KANSAS CITY, Mo. – A Kansas City, Mo., man who attempted to rob an Independence, Mo., restaurant with a fake gun, but was thwarted when employees fought back, was sentenced in federal court today for the robbery.

Bryan C. Byers, 23, was sentenced by U.S. District Judge Roseann Ketchmark to six years and six months in federal prison without parole.

On July 13, 2022, Byers pleaded guilty to one count of robbery.

Byers robbed Lucky Buffet, 2931 S. Noland Road in Independence, on Feb. 21, 2022. Byers, armed with what appeared to be a Glock handgun, approached two restaurant employees who were working near the sushi station in the restaurant. Investigators later learned the upper portion of the apparent handgun was an actual Glock, but the lower portion was from an airsoft pistol and was not designed to fire.

Byers pointed the apparent handgun at the two employees, who later told officers they feared for their lives, and told them they had five seconds to give him the cash from the cash register or he would kill them. The employees opened the register drawer and Byers began taking money from the register. One of the employees grabbed the apparent handgun from Byers and both employees began fighting with Byers. Byers attempted to get away but was restrained until police arrived. During the physical altercation, restaurant employees threw plates of food at Byers and repeatedly hit him with a chair to keep him from getting away.

Byers, who was on the floor of the restaurant when officers arrived, was arrested and transported to a local hospital for medical treatment. Police officers found approximately $873 scattered on the floor of the restaurant.

This case was prosecuted by Assistant U.S. Attorney David A. Barnes. It was investigated by the Independence, Mo., Police Department and the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Project Safe Neighborhoods

This case is part of Project Safe Neighborhoods (PSN), the centerpiece of the Department of Justice’s violent crime reduction efforts.  PSN is an evidence-based program proven to be effective at reducing violent crime.  Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them.  As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.