Category: US Department of Justice

Source: United States Department of Justice News

            WASHINGTON – The former Executive Director and the Director of Operations and Finance, of the now-defunct non-profit organization DC Children and Youth Investment Trust Corporation (“DC Trust”), were sentenced today for a felony charge relating to their personal use of the non-profit’s funds, announced U.S. Attorney Matthew M. Graves, Inspector General Daniel W. Lucas, District of Columbia’s Office of the Inspector General, Special Agent in Charge Wayne A. Jacobs of FBI Washington Field Office’s Criminal and Cyber Division, and Special Agent in Charge Terry Harris, of the US Department of Education Office of Inspector General for the Eastern Region.

            Edward Davies, 52, of Owings Mills, Maryland, was sentenced to 60 days in prison, followed by three years of supervised release; Earl Hamilton, 53, of Riviera Beach, Florida, was sentenced to 30 days in prison, followed by three years of supervised release. Both defendants pleaded guilty, on November 30, 2022, to a charge of credit card fraud for using the non-profit’s monies, intended for youth scholarship programs, for personal expenses. In addition to the prison term, U.S. District Court Judge Reggie B. Walton ordered Davies to pay $111,332.46 in restitution and ordered Hamilton to pay $44,049.79 in restitution.

            According to court documents, Davies, the former executive director, and Hamilton, the former director of operations and finance, used DC Trust credit cards and a check card to make hundreds of personal purchases for expenses such as: meals, automobile repairs, exercise equipment, and personal travel for themselves, their family members, and their friends. In total, Davies stole at least $111,000 and Hamilton stole at least $44,000.

            The DC Trust was a non-profit organization, created in 1999, to serve as an intermediary to connect philanthropists, government leaders, youth advocates, and representatives from the business community in order to support programs to benefit the children of the District of Columbia.  The organization was dissolved in late 2016, reportedly to cover debts from exorbitant spending on and by staff, including the misuse of organization credit cards. The trust’s funding came from the U.S. Department of Education and consisted of federal grant funding under the U.S. Department of Education Opportunity Scholarship Program (“OSP”), which was designed to provide low-income parents, residing in Washington, D.C., with expanded options for the education of their children. 

            In announcing the sentence, U.S. Attorney Graves, Inspector General Lucas, Special Agent in Charge Jacobs, and Special Agent in Charge Harris, commended the work of those who investigated the case from the D.C. Office of the Inspector General, the FBI’s Washington Field Office, and the U.S. Department of Education Office of the Inspector General.  They also expressed appreciation for the work of those who handled the case from the U.S. Attorney’s Office for the District of Columbia in the Fraud, Public Corruption, and Civil Rights Section, including Assistant U.S. Attorneys Kathryn Rakoczy and Diane Lucas have been litigating the case, with assistance from Paralegal Specialists Amanda Rohde and Lisa Abbe.          

Source: United States Department of Justice Criminal Division

A federal jury convicted a Missouri man yesterday for running four websites dedicated to sharing images of child sexual abuse.

According to court documents and evidence presented at trial, Clint Robert Schram, 54, of Kansas City, hosted, managed, and maintained four different websites from his home. Each of these websites operated over the “dark web,” and each was devoted to advertising, distributing, and exchanging images and videos depicting the sexual abuse of children. One of the websites allowed members to post images of children as young as 2 years old, and another had no restrictions on the types of child sexual abuse images that could be shared. Schram advertised and distributed child sexual abuse images over these websites, and he recruited, managed, and directed different tiers of “staff” members who helped run the websites. 

Schram was convicted of one count of engaging in a child exploitation enterprise and four counts each of advertisement of child pornography and conspiracy to advertise child pornography. He is scheduled to be sentenced on Oct. 12 and faces a mandatory minimum sentence of 20 years in prison and a maximum sentence of life 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 Teresa A. Moore for the Western District of Missouri, Assistant Director Luis Quesada of the FBI’s Criminal Investigative Division, and Special Agent in Charge Charles A. Dayoub of the FBI Kansas City Field Office made the announcement.

The FBI’s Child Exploitation Operational Unit and Kansas City Field Office investigated the case.

Trial Attorney Kyle P. Reynolds of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorneys Alison D. Dunning and David Luna for the Western District of Missouri are prosecuting the case.

This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing 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.

Source: United States Department of Justice News

A former Assistant Inspector General for the Department of Housing and Urban Development (HUD) was sentenced today to one year and one day in prison for engaging in a scheme to conceal his financial indebtedness to a government contractor and personal friend to whom he steered tens of millions of dollars in government business.

According to court documents, Eghbal “Eddie” Saffarinia, 63, of Front Royal, Virginia, engaged in a scheme to conceal material facts, including the nature and extent of his financial relationship with a personal friend who was the owner and chief executive officer of an information technology company. During a period in which Saffarinia received payments and loans from his friend totaling $80,000, Saffarinia disclosed confidential internal government information to his friend and steered government contracts and provided competitive advantages and preferential treatment to his friend’s company. Saffarinia also failed to disclose this financial relationship and another large promissory note on his public financial disclosure forms.

In September 2022, Saffarinia was convicted after trial of one count of concealing material facts, three counts of making false statements, and three counts of falsifying a record or document.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, Assistant Director in Charge David Sundberg of the FBI Washington Field Office, and Inspector General Thomas A. Monheim of the Intelligence Community made the announcement.

The FBI Washington Field Office and the Office of the Inspector General of the Intelligence Community investigated the case.

Senior Litigation Counsel Edward P. Sullivan and Trial Attorneys Rosaleen T. O’Gara and John P. Taddei of the Criminal Division’s Public Integrity Section prosecuted the case.

Source: United States Department of Justice News

GCI Communications Corp. (GCI), located in Anchorage, Alaska, has agreed to pay $40,242,546 to resolve allegations that it violated the False Claims Act by knowingly inflating its prices and violating Federal Communications Commission (FCC) competitive bidding regulations in connection with GCI’s participation in the FCC’s Rural Health Care Program. The program provides more than $570 million each year to assist rural health care providers with their telecommunications needs.

Under the Rural Health Care Program, the FCC pays a subsidy equal to the difference between the more expensive cost for a telecommunication service in a rural area and the less expensive cost for the same service in an urban area in the same state. FCC regulations also require contracts for these subsidized services be awarded through a competitive bidding process. The United States alleged that, between 2013 and 2020, GCI failed to comply with FCC regulations that governed how telecommunications companies must calculate their prices for purposes of claiming subsidy payments, and as a result GCI received greater subsidy payments than it was entitled to. The United States further alleged that GCI caused Eastern Aleutian Tribes Inc., a rural health care provider in Alaska, to agree to inflated prices after the relevant contract was competitively bid. As a result, GCI knowingly received higher payments under the program, from 2015 through 2018, in connection with its contract with Eastern Aleutian Tribes, Inc.

“Telecommunications providers that seek to participate in important FCC programs like the Rural Health Care Program must comply with applicable rules, including those governing how they competitively bid on contracts and set their prices,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates our continuing commitment to preventing the misuse of taxpayer funds.”

“Providing health care services in rural areas, especially to Indigenous people in remote areas of Alaska, is vital and must be protected,” said U.S. Attorney Nick Brown for the Western District of Washington. “This $40 million settlement should deter other companies from attempting to improperly enrich themselves by overcharging the government for important healthcare-related telecommunications services.”

“Compliance with the Universal Service Fund’s Rural Health Care Program rules is a critical component in making sure that medical providers have access to the types of communications equipment and services needed to enhance medical options and care in rural communities,” said FCC Enforcement Bureau Chief Loyaan Egal. “This global settlement reflects our strong partnership with the Department of Justice in protecting the USF, and we thank them for their efforts in this particular case.”

Contemporaneous with the civil settlement, GCI has agreed to enter into a corporate compliance agreement with the FCC. GCI will also resolve an FCC administrative investigation and an FCC proceeding arising from GCI’s participation in the Rural Health Care Program.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Robert Taylor, GCI’s former Director of Business Administration. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Taylor v. GCI Liberty, et al., Case No. 19-cv-2029 (W.D. Wash.). The whistleblower will receive $6.4 million as his share of the recovery.

The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the United States Attorney’s Office for the Western District of Washington, with assistance from the FCC’s Office of the Inspector General and the FCC’s Enforcement Bureau.

The matter was handled by Trial Attorney David M. Sobotkin and Assistant U.S. Attorney Kayla Stahman for the Western District of Washington.

The claims resolved by the settlement are allegations only and there has been no determination of liability.

Source: United States Department of Justice News

            WASHINGTON – Melchiades Amin, 45, of Glenn Dale, Maryland, was sentenced today, May 11, 2023, to serve 36 months of incarceration, suspended, and five years of probation.  Additionally, the Honorable Andrea Hertzfeld ordered Amin to pay $178,150.24 in restitution to the D.C. Medicaid program.  The sentence was announced by U.S. Attorney Matthew M. Graves and Daniel W. Lucas, Inspector General for the District of Columbia.

            Amin was indicted on October 26, 2022, and he was arrested on November 2, 2022.  On March 10, 2023, Amin pleaded guilty in D.C. Superior Court to one count of First-Degree Felony Fraud and two counts of First-Degree Felony theft.

            According to the government’s evidence, between May 2018 and on or about October 2021, Amin was employed by two District Mental Health Rehabilitation Service (MHRS) providers as a community support worker (CSW).  MHRS provides for diagnostic and assessment services, counseling, medication, intensive day treatment, and crisis or emergency services.  A CSW provides community support services by helping consumers learn and improve basic life skills, such as medication management, increasing social skills, and learning how to use public transportation to travel when necessary.

            While employed by the two District MHRS providers, Amin engaged in a scheme to defraud the District’s Medicaid program. Employment records and records maintained by the District of Columbia’s Department of Behavioral Health show that Amin billed for overlapping encounter visits with MHRS patients, submitted patient notes indicating community support services had been provided in person while he was traveling out of state, submitted encounter notes for community support services while a patient was admitted in a hospital, and submitted encounter notes indicating community support services were provided at consumers’ homes while Amin may not have been at those physical locations. Through these schemes, Amin caused the D.C. Medicaid program to pay over $178,000 for CSW services that were not provided, of which he personally received more than $54,000.

            This prosecution is indicative of the continued collaboration between the U.S. Attorney’s Office and the D.C. Office of the Inspector General to investigate and prosecute cases of this kind.  The government urges the public to provide tips and assistance to stop health care fraud.  If you have information about individuals committing health care fraud, please call the D.C. Office of the Inspector General at (800) 724-TIPS [(800) 274-8477].

            In announcing the sentence, U.S. Attorney Graves and Inspector General Lucas commended the work of those who investigated and prosecuted the case from the Major Crimes Section of the U.S. Attorney’s Office for the District of Columbia and the Office of the Inspector General’s (OIG) Medicaid Fraud Control Unit (MFCU).  They commended the work of Special Assistant United States Attorney Emmanuela Charles, on detail from the Office of the Inspector General, who prosecuted the case, and also acknowledged the efforts of the OIG MFCU of those who investigated the case, including Auditor Pednika White, Special Agent Eduardo Torre, and Supervisory Investigator Robert Bornstein.