Month: March 2023

Source: United States Department of Justice News

SAN ANTONIO – A Dripping Springs woman was sentenced in a federal court in San Antonio today to 46 months in prison and ordered to pay $501,709.54 in restitution for defrauding the Department of Veterans Affairs (VA) and the Social Security Administration (SSA) of more than $500,000.

According to court documents, Josephine Casandra Perez-Gorda, 40, defrauded the VA and SSA by overstating the severity and extent of her spouse’s disability from October 2011 through August 2017.  Mr. Perez-Gorda, now deceased, was an Army veteran who participated in the fraud. The couple claimed Mr. Perez-Gorda was paralyzed from the waist down from an injury he suffered while on active duty.  The ruse included applying for and receiving a specially equipped vehicle, a specially adapted home and additional compensation based on his disability rating.

The investigation began after San Antonio news station, KENS5, aired a story titled, “Homes for Our Troops Questions Veteran’s Paralysis after Video.”  The story involved a specially adapted house in Dripping Springs that was gifted to the Perez-Gordas in December 2013 by the non-profit foundation Homes for Our Troops.  Although Mrs. Perez-Gorda claimed her husband was “paralyzed from the belly button down,” Mr. Perez-Gorda was seen walking around the neighborhood and playing basketball.  VA Office of Inspector General (OIG) agents videotaped Mr. Perez-Gorda walking around without assistance.  Mrs. Perez-Gorda furthered the scheme by completing all the VA and SSA paperwork claiming Mr. Perez-Gorda was paralyzed in both legs. 

On Sept. 27, 2022, Mrs. Perez-Gorda was found guilty of 11 counts of wire fraud; one count of mail fraud; one count of health care fraud; three counts of false statements related to a health care matter; one count of conspiracy to commit health care fraud; and one count of theft of government funds.  In addition to the imprisonment and restitution, Perez-Gorda is responsible for a $100 special assessment on each of the 18 counts and $100,000 for trial expenses.

“As the U.S. Attorney’s Office, we will pursue individuals that defraud and steal from integral benefit programs like those designed by the Veteran’s Administration and the Social Security Administration,” said U.S. Attorney Jaime Esparza of the Western District of Texas. “These programs are crucial to our disabled veterans and other disabled Americans who truly depend on their assistance, and they must be protected.”

“Fraudulently obtaining benefits from VA diverts valuable resources intended for the care of deserving veterans,” said Deputy Assistant Inspector General for Investigations Carl Scott of the Department of Veterans Affairs Office of Inspector General’s Office of Investigations.  “The VA OIG is grateful to the U.S. Attorney’s Office and the Social Security Administration OIG for their efforts in this joint investigation.”

“A jury found Josephine Perez-Gorda guilty as a co-conspirator in a scheme that defrauded the Social Security Administration and the U.S. Veterans Administration of more than $500,000 and services intended to assist persons with disabilities. This sentence now holds her accountable for her criminal actions,” said Gail S. Ennis, Inspector General for the SSA. “I appreciate the VA Office of the Inspector General for their work in this joint investigation and the U.S. Attorney’s Office for prosecuting this case.”

The VA-OIG and SSA-OIG investigated the case.

Assistant U.S. Attorney Greg Surovic and Special Assistant U.S. Attorney Tiffany Miller prosecuted the case.

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Source: United States Department of Justice News

Greenbelt, Maryland – U.S. District Judge Theodore D. Chuang today sentenced John Erasmus Frimpong, age 42, of Upper Marlboro, Maryland, to 114 months in federal prison, followed by three years of supervised release, for conspiracy to commit wire fraud, conspiracy to commit securities fraud, and securities fraud, in connection with a $28 million Ponzi scheme involving 1st Million, a purported wealth management and financial literacy company.  Judge Chuang also ordered Frimpong to pay restitution, along with his co-defendants, in the full amount of the actual, total loss, including (1) $16,664,020 for the full amount of the victims’ losses relating to the 1st Million scheme to defraud; and (2) $797,775 for the full amount of losses caused by Frimpong’s separate scheme in which he contracted directly with individual victims purporting to invest on their behalf.

The sentence was announced by United States Attorney for the District of Maryland Erek L. Barron; Special Agent in Charge Thomas J. Sobocinski of the Federal Bureau of Investigation, Baltimore Field Office; Special Agent in Charge Matthew R. Stohler of the United States Secret Service – Washington Field Office; and Postal Inspector in Charge Damon E. Wood of the U.S. Postal Inspection Service – Washington

According to his plea agreement, Frimpong and his co-conspirators operated a Ponzi scheme through a Delaware incorporated business named The Smart Partners LLC, doing business as 1st Million LLC or 1st Million Dollars (“1st Million”).  1st Million presented itself as a wealth management and financial literacy company.  Frimpong acted as 1st Million’s “Managing Partner” and “Chief Marketing Operator” and co-defendant Arley Ray Johnson acted as 1st Million’s “Chief Operating Officer” or “Director of Operations.” 

Frimpong admitted that he made false and misleading representations to potential investors as to the nature and safety of the investments in 1st Million, the rates of return, and the experience, training and licensure of 1st Million and its principals.  Specifically, Frimpong and his co-conspirators falsely claimed they would be investing victims’ money and that investors were being paid using the profits generated by the trading.  Frimpong and other conspirators also falsely promised investors that their principal would be protected in a “trust” and returned in full upon the completion of the investment, regardless of market volatility.  Frimpong and his co-conspirators further falsely promised extremely high rates of return.  Many of these false promises were repeated not only by Frimpong, but also by “agents” who were given higher rates of return for bringing in investors.  Frimpong also falsely told investors that he and 1st Million were “licensed” traders, and in compliance with all laws and U.S. Securities and Exchange Commission regulations. 

In reality, Frimpong and his co-conspirators did not use investor funds for trading, nor did they place investor principal—or any investor funds—into a trust account.  In fact, victim funds were not placed in a trust account or otherwise guaranteed.  Neither Frimpong, nor anyone else at 1st Million had a license to offer securities or trade currency.  In addition, Johnson and his co-defendants falsely claimed that 1st Million was financially healthy and earning astronomical profits, but 1st Million’s accounts were frequently overdrawn and 1st Million had substantial cash flow problems, all of which Frimpong and his co-conspirators concealed from investors. 

Frimpong and his co-conspirators used investor funds for personal gain, including cash and cryptocurrency transfers to themselves and family members.  Frimpong and the co-conspirators used some investor funds to keep the scheme afloat, including by using investor funds to make payments to existing investors, leading those investors to believe that they were receiving “returns” on their investments as they had been promised.  Frimpong and his co-defendant also used investor funds to pay office expenditures and fund lavish events at hotels in order to recruit additional investors. 

As detailed in the plea agreement, Frimpong and his co-conspirators fraudulently solicited over $28.3 million from over 1,200 victims across the United States, including in Maryland, Texas, Florida, New York and Georgia. 

By Spring 2019, 1st Million’s accounts were often overdrawn by hundreds of thousands of dollars, and some of the checks 1st Million sent to pay investors monthly returns were returned by the bank due to insufficient funds.  Nevertheless, Frimpong continued to solicit funds from existing investors, as well as new investors, and failed to tell any of these potential investors of 1st Million’s financial problems.  Ultimately, the scheme collapsed in May 2019 and hundreds of 1st Million investors collectively lost millions of dollars. 

As the scheme started to collapse in the spring of 2019, Frimpong began his own separate scheme in which he contracted directly with individuals to invest on their behalf, again falsely promising to invest the money in foreign exchange, falsely promising sky-high returns, and falsely telling his clients that he was a duly-licensed trader.  Frimpong admitted that he invested very little of these clients’ money and instead used hundreds of thousands of dollars of fraudulently obtained investment proceeds to fund his own lifestyle.  Through this separate scheme, Frimpong misappropriated at least $1,499,751 in U.S. currency from individual victim investors.

Arley Ray Johnson, age 63, of Bowie, Maryland, was sentenced in January to78 months in federal prison for his role in the fraud scheme.

Dennis Jali fled the United States in May 2019, but has since been arrested in South Africa. 

Separate civil actions filed against Frimpong and his co-defendants by the Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission remain pending.

United States Attorney Erek L. Barron commended the FBI, the U.S. Secret Service, and the U.S. Postal Inspection Service for their work in the investigation.  Mr. Barron thanked Assistant U.S. Attorneys Caitlin R. Cottingham and Jennifer L. Wine, who are prosecuting the case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-md/report-fraud.

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Source: United States Department of Justice News

KANSAS CIY, KAN. – A Kansas man who led police on a high-speed chase was sentenced to 195 months in prison for drug trafficking. 

According to court documents, in October 2022, Russell Loomis, 50, of Kansas City, Kansas, pleaded guilty to one count of possession with intent to distribute more than 50 grams of methamphetamine.

In September 2019, Loomis went to a home in Kansas City, Kansas, to deliver approximately 86 grams of methamphetamine in what was a controlled buy set up by the Drug Enforcement Administration (DEA). Loomis drove away from the residence, and a short time later the Kansas City, Missouri police attempted to pull him over. Loomis refused to stop and initiated a chase in which multiple law enforcement agencies and an aerial unit joined in the pursuit. Loomis struck two DEA vehicles, a Kansas Highway Patrol vehicle, and a Kansas Department of Transportation dump truck before eventually losing control and crashing. He was then taken into custody. Law enforcement officers found 150.6 grams of methamphetamine and guns in his vehicle.

The Drug Enforcement Administration (DEA), the Kansas City, Kansas Police Department, the Kansas Highway Patrol, and the Olathe Police Department investigated the case.

Assistant U.S. Attorneys Faiza Alhambra, Trent Krug, and Michelle McFarlane prosecuted the case.

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Source: United States Department of Justice News

A former detention officer with the McClain County Jail in Purcell, Oklahoma, pleaded guilty to being deliberately indifferent to a substantial risk of serious harm to a pretrial detainee’s physical safety, thereby violating the pretrial detainee’s constitutional civil rights.

According to court documents and admissions, on April 21, 2019, Kyle Tecumseh, 25, was involved with moving a pretrial detainee, B.B., into a jail cell with a senior United Aryan Brotherhood (UAB) gang member whom Tecumseh knew was angry at and posed a danger to B.B. Thereafter, Tecumseh allowed another detention officer to move several more UAB gang members into the cell with B.B. and the senior UAB gang member. The UAB gang members then physically attacked B.B., as Tecumseh knew was likely to occur.

“As a detention officer, this defendant had a duty to ensure that the civil rights of pretrial detainees under his care and custody were protected,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Instead, the defendant abused his power and authority by allowing a pretrial detainee to be put in a situation where he faced a substantial risk of physical harm. The defendant is now being held accountable for his actions, and the Justice Department will continue to ensure that corrections officials are held responsible when they violate the civil rights of detainees and inmates under their care, custody and control.”

“Criminal conduct by any detention staff member erodes public trust and unfairly compromises the reputation of all corrections officials who honorably serve,” said U.S. Attorney Robert J. Troester for the Western District of Oklahoma. “Today’s guilty plea demonstrates our continuing commitment to protect all Oklahomans, including those in custody. I commend the prosecutors and law enforcement officials for their efforts here.”

“There is never a reason for a detention officer to resort to violating an inmate’s civil rights. The FBI understands that working in a correctional institution is stressful and dangerous work, and the vast majority of the men and women working in these institutions do their jobs honorably on a daily basis,” said Special Agent in Charge Edward J. Gray of the FBI Oklahoma City Field Office. “When an officer violates the rights of detainees in their care, it erodes public trust in these important positions and damages the reputation of the hard-working officers who continue to serve.”

Tecumseh faces a maximum sentence of 12 months imprisonment and a $100,000 fine. In addition, according to court documents, Tecumseh agreed to never again seek employment in any law enforcement capacity and to pay the victim any owed restitution. A sentencing date will be set by the court in approximately 90 days.

The Oklahoma City FBI Field Office investigated the case.

Assistant U.S. Attorney Julia E. Barry for the Western District of Oklahoma and Trial Attorney Laura Gilson of the Civil Rights Division’s Criminal Section are prosecuting the case.

Source: United States Department of Justice News

            WASHINGTON – A jury found Richard Nduba, 39, of Alexandria, Virginia, guilty of firing multiple shots at a man in August 2022 in Northwest Washington D.C., announced U.S. Attorney Matthew M. Graves and Robert J. Contee III, Chief of the Metropolitan Police Department. The verdict was returned on Wednesday, March 22, 2023. The Honorable Erik Christian scheduled sentencing for April 21, 2023.

            Nduba, 39, was found guilty following a three-day trial in the Superior Court of the District of Columbia, of Assault with a Dangerous Weapon and Possession of a Firearm during the Commission of a Crime of Violence.

            According to the government’s evidence, on August 10, 2022, the defendant argued with the victim, a friend, outside the Walmart on 99 H Street NW around 7:00pm. After the argument, the victim, who is wheelchair bound, went to the 800 block of 1^st street NW next to the Walmart’s loading dock area to speak on the phone. The defendant circled the block in his rental SUV until he found the victim. Upon finding the victim, the defendant lowered his window, pointed a black handgun at the victim, and shot at the victim twice. The defendant stopped shooting only after the victim acted as if he had been hit and played dead in his wheelchair. Both shots, however, missed the victim. A bullet hole was later discovered in Walmart’s loading dock door, next to where the victim had been sitting at the time of the shooting.

            This case was investigated by the Metropolitan Police Department.  It was investigated, prosecuted. and tried by Assistant U.S. Attorneys Omeed Assefi and Colin Cloherty of the Major Crimes Unit of the U.S. Attorney’s Office for the District of Columbia. Valuable assistance was provided by Assistant U.S. Attorneys Kimberly Nielsen and Kathleen Kern, Paralegal Specialist Debra McPherson, and Litigation Technology Specialist Charlie Bruce.