SANTA ANA, CALIF.
Three Southern California men were indicted on federal mail fraud charges that allege they solicited homeowners on the verge of foreclosure with bogus promises of loan modifications with interest rates as low as 2 percent, according to authorities.
The three men charged – Michael Paul Paquette, 34, of San Juan Capistrano; Allan Jessie Chance, 34, of Temecula; and Dennis Edward Lake, 59, of Costa Mesa –were arrested last week were named in an eight-count indictment returned by a federal grand jury on Dec. 20.
Paquette, Chance and Lake were arraigned on the indictment yesterday afternoon in United States District Court, where they all entered not guilty pleas and were ordered to stand trial on March 6. All three defendants were released on $15,000 bonds.
According to the indictment, Paquette and Chance operated under aliases and told distressed homeowners that they worked for the Laguna Hills-based HAMP Services – which sounded similar to the Home Affordable Modification Program or HAMP, a legitimate government program which permanently reduced mortgage payments to affordable levels for qualifying buyers.
Paquette and Chance told victims that they were approved for a government-affiliated loan modification, but they needed to make three “trial payments” before the loan would be modified, according to the indictment.
They also falsely told the victims that their money would be held in a trust or escrow account.
Chance falsely claimed that he had experience in getting home loans modified because he had worked at Bank of America.
After victims began making “trial payments,” their files were referred to Lake, who ran a Newport Beach-based business called JD United.
The indictment alleges that Lake and his employees told victims that they were working on loan modifications, furthering hope that the loan modifications promised by Paquette and Chance were coming and that there was no need to contact law enforcement about the “trial payments” that had been paid.
When being pitched on the loan modification service, the victims were never told that $800 of the “trial payments” went to JD United, and that Paquette and Chance received commission payments taken directly from the accounts where the “trial payments” were deposited.
The indictment further alleges that none of the victim money went to the lenders or a government agency for a loan modification.
Investigators believe that over 500 victims nationwide paid at least $2.5 million dollars to the defendants and others in “trial payments.”
The scheme allegedly ran from the beginning of 2014 through April 2015. Paquette and others originally started soliciting victims claiming that they worked for Hope Services. After victims made many complaints about Hope Services, new victims were solicited using the name HAMP Services starting in late 2014.
Two other defendants involved in the scheme have pleaded guilty to federal charges and are pending sentencing.
Paquette, Chance, and Lake are charged with conspiracy to commit mail fraud. Additionally, Paquette is charged in three substantive mail fraud counts, Chance in four mail fraud counts, and Lake in six mail fraud counts.
If they were to be convicted, each defendant is facing up to 30 years in federal prison for each count, according to officials.
The defendants are presumed innocent unless proven guilty.
A clinic office manager plead guilty Friday for his role in a health care fraud scheme that involved the unnecessary prescription of controlled substances and that resulted in a $131 million loss to Medicare, according to officials.
Yasser Mozeb, 35, of Oakland County, Michigan, the office manager of the Tri-County Network, based in Detroit, Michigan, pleaded guilty to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the federal government and receive health care kickbacks
Sentencing has been scheduled for May 31.
“Prescribing unneeded drugs in exchange for kickbacks are not just crimes of greed, they are crimes that make Michigan’s opioid crisis even worse — and that is why our office will relentlessly pursue these cases,” said U.S. Attorney Matthew Schneider.
It is unconscionable that Mozeb and his co-conspirators would put patients’ health at risk and potentially exacerbate the opioid epidemic,” said HHS-OIG Special Agent in Charge Pugh. “We, along with our law enforcement partners, will work tirelessly to hold these criminals accountable.”
As part of his guilty plea, Mozeb admitted that he conspired with the owner of the Tri-County Network, Mashiyat Rashid, to pay illegal kickbacks and bribes to Medicare beneficiaries, co-conspirator patient recruiters and others, in order to obtain patients for the Tri-County Network.
Mozeb also admitted that he participated in a scheme with Rashid and other co-conspirators to prescribe medically unnecessary controlled substances, which allegedly included oxycodone, hydrocodone and oxymorphone, to Medicare beneficiaries, many of whom were addicted to narcotics.
He admitted that in furtherance of the conspiracy, co-conspirators also directed physicians to require Medicare beneficiaries to undergo medically unnecessary facet joint injections if the beneficiaries wished to obtain prescriptions for controlled substances.
Mozeb admitted that he and Rashid conspired with physicians in the Tri-County Network to refer Medicare beneficiaries to specific third party home health agencies, laboratories and diagnostic providers in exchange for illegal kickbacks and bribes even though those referrals were medically unnecessary.
Mozeb was part of a conspiracy that submitted or caused the submission of false and fraudulent claims to Medicare in excess of $131 million, he admitted.
Mozeb is the fifth defendant who has pleaded guilty in connection with the Tri-County investigation. Mozeb was charged along with Mashiyat Rashid, 37, of West Bloomfield, Michigan; Spilios Pappas, 61, of Monclova, Ohio; Abdul Haq, 72, of Ypsilanti, Michigan; Joseph Betro, 57, of Novi, Michigan; Tariq Omar, 61, of West Bloomfield, Michigan; and Mohammed Zahoor, 51 of Novi, Michigan, in an indictment unsealed on July 6, 2017. Rashid, Pappas, Betro, Omar and Zahoor are awaiting trial.
The defendants are presumed innocent unless proven guilty.
SANTA ANA, CALIFORNIA
A federal judge on Friday sentenced the former owner of Pacific Hospital in Long Beach to five years and four months in prison for overseeing a 15-year-long health care fraud scheme that involved more than $40 million in illegal kickbacks paid to doctors and other medical professionals in exchange for referring thousands of patients who received spinal surgeries, officials said.
The scheme operated by Michael D. Drobot led to more than $500 million in fraudulent bills being submitted during last five years of the scheme – much of which was paid by the California worker’s compensation system.
U.S. District Judge Josephine L. Staton sentenced Drobot, 73, of Corona Del Mar, and noted that Drobot “introduced greed into the doctor-patient relationship.”
Drobot pleaded guilty in 2014 to charges of conspiracy and paying illegal kickbacks, admitting that he orchestrated a wide-ranging fraud scheme in which “[t]housands of patients received surgeries at Pacific Hospital not knowing that [Drobot] bribed their physician to perform their surgery at Pacific Hospital,” prosecutors wrote in a sentencing memorandum filed with the court. Drobot “was motivated by greed and ultimately profited millions of dollars through the scheme.”
From at least 1997 through 2013, Drobot, who owned and/or operated Pacific Hospital during this time, ran a scheme in which he billed workers’ compensation insurers hundreds of millions of dollars for spinal surgeries performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks.
“The patients believed that they were receiving conflict-free medical advice when, in fact, [Drobot] illegally incentivized their physician to perform the surgery at Pacific Hospital,” prosecutors said in court documents.
The kickbacks were financed largely by money generated from Drobot’s sale of medical devices implanted into state workers’ comp patients during spinal surgeries.
Drobot set up a scheme that exploited a now-repealed California law known as the spinal “pass-through” legislation, which permitted hospitals to pass on to workers’ comp insurers the full cost of medical devices implanted in spinal surgery patients.
Drobot generated the kickback money through his own medical hardware company – the Newport Beach-based International Implants (I2) – to sell hardware used in spinal surgeries performed at Pacific Hospital. I2 submitted bills to Drobot’s Hospital and tacked on an additional $250 per device knowing that the “pass-through” law required to state to pay the full amount of the invoices.
“Through the operation of I2, [Drobot] generated substantial profits that he used to pay at least $40 million dollars in kickbacks,” prosecutors wrote in court papers. “
According to the former CFO of Pacific Hospital, his income, bonuses, and other compensation at the hospital was in excess of $20,000,000.”
As part of the health care fraud scheme, Drobot paid bribes to California State Senator Ronald Calderon in exchange for Calderon performing official acts to keep the spinal pass-through law on the books.
Calderon is currently serving a 3½-year sentence in federal prison after admitting that he took bribes from Drobot and undercover FBI agents.
Drobot typically paid a kickback of $15,000 per lumbar fusion surgery and $10,000 per cervical fusion surgery.
Some of the patients lived as much as hundreds of miles away from Pacific Hospital, and closer to other qualified medical facilities, according to officials.
Drobot and his co-conspirators concealed the kickback payments by entering into bogus contracts with the doctors, chiropractors, and others who received kickbacks.
In reality, the contracts merely provided a cover story for the kickback payments.
In addition to the prison term, which Drobot will begin serving on June 4, Judge Staton imposed a $500,000 criminal fine and issued an order directing Drobot to forfeit $10 million to the government.
As part of the forfeiture judgment, which Judge Staton signed on Wednesday, Drobot was ordered to liquidate assets that include real estate and a 1965 Aston Martin, a 1958 Porsche, and a 1971 Mercedes Benz.
Judge Staton has scheduled a restitution hearing for May 11.
In addition to Drobot, prosecutors have charged seven other defendants in relation to the kickback scheme.
The seven additional defendants – which include Drobot’s son, Michael R. Drobot – have pleaded guilty and are scheduled to be sentenced by Judge Staton over the next two months.
The FBI Washington Field Office released Friday age-progressed photographs of four alleged hijackers charged in the United States with the September 5, 1986, attack of Pan American World Airways Flight 73.
These are the alleged terrorists: Wadoud Muhammad Hafiz al-Turki, Jamal Saeed Abdul Rahim, Muhammad Abdullah Khalil Hussain ar-Rahayyal, and Muhammad Ahmed al-Munawar.
The FBI is offering a $5 million reward for information leading to the arrest or conviction of the alleged hijackers.
These images were created by the FBI Laboratory using age-progression technology and original photographs obtained by the FBI in the year 2000.
The attack on Pan Am Flight 73 in Pakistan resulted in the murder of 20 passengers and crew, including two Americans, the attempted murder of 379 passengers and crew, and the wounding of more than 100 individuals on board.
Each of these individuals is believed to have been a member of the Abu Nidal Organization (ANO), previously on the U.S. Department of State’s list of designated Foreign Terrorist Organizations.
Anyone with information regarding these terrorists is asked to contact the FBI, the nearest American Embassy or Consulate, or submit a tip on https://tips.fbi.gov, which can remain anonymous.
Individuals on the FBI’s Most Wanted Terrorists List have been indicted by sitting Federal Grand Juries in various jurisdictions in the United States for the crimes reflected on their wanted posters. The indictments currently listed on the posters allow them to be arrested and brought to justice.
Additional information regarding the FBI’s Most Wanted Terrorists program can be found at: https://www.fbi.gov/wanted/wanted_terrorists
A Connecticut man was charged Thursday in federal court with a felony computer hacking offense related to a phishing scheme that gave him illegal access to over 250 Apple iCloud accounts, officials said.
Many of which belonged to members of the entertainment industry in Los Angeles, according to authorities.
George Garofano, 26, of Northford, Connecticut, was named in a criminal information that accuses him of violating the Computer Fraud and Abuse Act.
In a plea agreement, Garofano agreed to plead guilty to one count of unauthorized access to a protected computer to obtain information.
The parties have agreed to transfer the case to the District of Connecticut for the entry of Garofano’s guilty plea and sentencing.
Once he enters the guilty plea, Garofano will face a statutory maximum sentence of five years in federal prison.
According to the plea agreement, from April 2013 through October 2014, Garofano engaged in a phishing scheme to obtain usernames and passwords for iCloud accounts.
Garofano admitted that he sent e-mails to victims that appeared to be from security accounts of Apple and encouraged the victims to send him their usernames and passwords or to enter them on a third-party website, where he would later retrieve them.
Garofano used the usernames and passwords to illegally access his victims’ iCloud accounts, which allowed him to steal personal information, including sensitive and private photographs and videos, according to his plea agreement.
In some instances, Garofano traded the usernames and passwords, as well as the materials he stole from the victims, with other individuals.
The charge against Garofano stems from an investigation into the leaks of photographs of numerous female celebrities in September 2014 known as “Celebgate.”
Although many of Garofano’s victims were members of the entertainment industry in Los Angeles, many non-celebrities who live in Connecticut were also victimized.
By illegally accessing the iCloud accounts, Garofano gained access to at least 250 accounts.
The case against Garofano is the fourth case stemming from the Celebgate investigation.
Chicago resident Emilio Herrera has pleaded guilty and is scheduled to be sentenced next month in federal court in Chicago after federal prosecutors in Los Angeles charged Herrera in a phishing scheme that gave him illegal access to more than 550 Apple iCloud and Gmail accounts.
Another Illinois man was sentenced last year to federal prison.
In the third case, a Pennsylvania man was sentenced in 2016 to 18 months in prison.
Sinaloa Cartel cell leader Damaso Lopez-Serrano aka “Mini Lic,” plead guilty in federal court Wednesday to conspiracy to distribute controlled substances for purpose of unlawful importation, according to officials.
Lopez-Serrano self-surrendered to U.S. law enforcement authorities at the Calexico West, Mexico Port of Entry on July 27, 2017.
A total of more than 125 people and has had a significant impact on the worldwide operations of the Sinaloa Cartel.
This investigation has also offered one of the most comprehensive views to date of the inner workings of one of the world’s most prolific, violent and powerful drug cartels.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Adam L. Braverman of the Southern District of California and Acting Special Agent in Charge Steve S. Woodland of the U.S. Drug Enforcement Administration (DEA) San Diego made the announcement.
Lopez-Serrano, 29, of Culiacan, Mexico, is believed to be the highest-ranking Mexican cartel leader ever to self-surrender in the United States.
Lopez-Serrano plead guilty to all charges in an indictment returned by a federal grand jury in San Diego on Aug. 19, 2016, charging him and five of his close associates with conspiracy to distribute methamphetamine, heroin, and cocaine intended for importation and conspiracy to import methamphetamine, heroin and cocaine.
Lopez-Serrano also pleaded guilty to an indictment returned Dec. 4, 2016, in Virginia to conspiracy to distribute cocaine intended for importation.
U.S. District Judge Dana M. Sabraw ruled that Lopez-Serrano accepted responsibility for his role as a leader within the Sinaloa Cartel, acknowledging that he organized the transportation and distribution of thousands of kilograms of controlled substances, including methamphetamine, cocaine and heroin, for importation from Mexico into the United States.
Lopez-Serrano also admitted to possessing firearms for the purpose of promoting the Sinaloa Cartel’s narcotics trafficking activities.
A sentencing hearing is scheduled for July 12.
“Damaso Lopez-Serrano’s conviction strikes a serious blow to the leadership of the Sinaloa Cartel and its violent drug trafficking activities,” said Acting Assistant Attorney General Cronan. “The Administration, the Department and our law enforcement partners are steadfast in our commitment to pursuing and dismantling the international drug rings that poison our communities.”
“Cartel leaders have two options – self-surrender or we will work with our counterparts to find you, arrest you and extradite you to San Diego,” said U.S. Attorney Braverman. “For Lopez-Serrano’s distribution of literally tons of methamphetamine, cocaine and heroin across the border to America, he will now face justice in a San Diego federal court.”
“The guilty plea of this defendant tells the drug traffickers what they need to know,” said Acting Special Agent in Charge Woodland. “DEA will keep picking off these violent criminals one by one until there are no more willing to get involved for fear that law enforcement will be coming for them soon. In the face of the current drug crisis we face in this country, DEA will continue to investigate and bring to justice these violent criminals.”
The Southern District of California indictment marked the conclusion of the fourth phase of a five-year investigation.
Cartel members and associates were targeted in this massive investigation involving multiple countries, numerous law enforcement agencies around the United States, a number of federal districts and over 250 court-authorized wiretaps in the Southern District of California.
This case began in late 2011 as an investigation of what was at first believed to be a small-scale drug distribution cell in National City and Chula Vista in San Diego County, California.
It became evident that the drugs were being supplied by the Sinaloa Cartel.
The case evolved into a massive multi-national, multi-state probe that resulted in scores of arrests and seizures of 1,397 kilograms of methamphetamine, 2,214 kilograms of cocaine, 17.2 tons of marijuana, 95.84 kilograms of heroin, and $27,892,706 in narcotics proceeds.
The primary indictment in this investigation was previously unsealed targeting the alleged leader of the cartel, Ismael Zambada-Garcia, known as “El Mayo,” as well as two of his four sons – Ismael Zambada-Sicairos, known as “Mayito Flaco,” and Ismael Zambada-Imperial, known as “Mayito Gordo.” Zambada-Imperial was arrested by Mexican authorities in November 2014 and is pending extradition to the Southern District of California.
Also part of that indictment is Ivan Archivaldo Guzman-Salazar, known as “Chapito,” whose father Joaquín “El Chapo” Guzmán Loera was the alleged leader of the Sinaloa Cartel along with Mayo.
As part of this investigation, U.S. authorities previously arrested and prosecuted another son of Mayo – Serafin Zambada-Ortiz, who pleaded guilty in the Southern District of California in September 2014 to drug trafficking charges.
José Rodrigo Aréchiga-Gamboa, commonly referred to by his alias “El Chino Ántrax,” was arrested in the Netherlands, extradited to the United States by Dutch authorities in July 2014 and pleaded guilty to drug trafficking charges in May 2015.
Arechiga-Gamboa is believed to have worked for the Sinaloa Cartel as the leader of a violent enforcement arm of the Sinaloa Cartel called “Los Antrax” and a key lieutenant of Mayo.
The investigation was conducted by DEA, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Customs and Border Protection (CBP)’s Office of Field Operations, U.S. Border Patrol, U.S. Marshals Service, Internal Revenue Service Criminal Investigation, FBI, the U.S. Attorney’s Office for the Eastern District of Virginia, Department of Justice’s Organized Crime Drug Enforcement Task Forces, the Criminal Division’s Office of Enforcement Operations and Office of International Affairs.
National Guard neo-Nazi Brandon Clint Russell, 22, was sentenced five years in federal prison this week for possessing an unregistered destructive device and for unlawful storage of explosive material, according to authorities.
He pleaded guilty on Sept. 27.
“I am thankful for the great collaboration and coordination among our law enforcement partners in bringing this case forward,” said U.S. Attorney Maria Chapa Lopez. “Their quick response and the in-depth investigation resulted in a successful prosecution.”
“Russell, an active and founding member of a neo-Nazi group, was sentenced today by a federal judge after he unlawfully possessed and stored dangerous explosive materials in his home,” said Acting Assistant Attorney General Dana J. Boente. “This case is but one example of the National Security Division’s resolve to identify, disrupt and prevent terrorist threats, whether domestic or international.”
According to evidence presented at the sentencing hearing, on May 19, 2017, officers from the Tampa Police Department responded to a double homicide at an apartment in the Tampa Palms area where Russell had been living with the alleged shooter, Devon Arthurs, and the two deceased victims.
According to Arthurs, the four roommates were active members of the “Atomwaffen,” a neo-Nazi group that was started and led by Russell.
Arthurs also claimed to have seen Russell participating in online neo-Nazi chat rooms, where he threatened to kill people and bomb infrastructure. Arthurs further advised law enforcement that Russell had explosive materials in the house.
During a search of the residence, law enforcement officers discovered a cooler in the garage containing the explosive HMTD (Hexamethylene Triperoxide Diamine), along with various other explosive precursors, multiple pounds of ammonium nitrate, nitro-methane, empty shell casings, fuses, and electric matches in close proximity.
In Russell’s bedroom, officers found neo-Nazi and white supremacist propaganda, including a framed picture of Timothy McVeigh on his dresser. Russell’s closet contained his own military uniform, firearms and ammunition, and camouflage military-type gear containing the name and symbols of “Atomwaffen.”
Law enforcement officers also located various books, military gear, and flags throughout the apartment that are commonly associated with white supremacist extremist organizations.
According to the Miami Herald newspaper, “Russell, who authorities do not suspect in the murders, was away on National Guard duty when Devons killed Jeremy Himmelman, 22, and Andrew Oneschuk, 18. Russell is an admitted white supremacist and founding member of the online neo-Nazi group AtomWaffen — meaning atomic weapon in German.”
Himmelman and Oneschuk were also AtomWaffen members at the time of their murders. Devons was also a white supremacist before converting to Islam, the newspaper stated.
Upon questioning, Russell admitted that he had manufactured the HMTD located in the garage and that the explosive precursors belonged to him. He also admitted to being a member of the “Atomwaffen.”
The following day, Russell was arrested on federal criminal charges in Key Largo, where he was found with two long rifles and ammunition that he had purchased after leaving the Tampa area.