Criminal Investigations

Defendant Fraudulently Obtained More Than $750,000 from Relief Programs Intended for New York City Residents Displaced by Hurricane Sandy

Earlier today, Nagwa Elsilimy pleaded guilty at the federal courthouse in Brooklyn to disaster relief fraud in connection with obtaining more than $750,000 in disaster relief from New York City’s Build It Back program and the Federal Emergency Management Agency in the aftermath of Hurricane Sandy.  Today’s proceeding took place before United States District Judge Raymond J. Dearie.

Richard P. Donoghue, United States Attorney for the Eastern District of New York; Christina Scaringi, Special Agent-in-Charge, United States Department of Housing and Urban Development, Office of Inspector General (HUD OIG); Mark Tasky, Special Agent-in-Charge, Department of Homeland Security, Office of Inspector General, Washington Field Office (DHS OIG); and Mark G. Peters, Commissioner, New York City Department of Investigation, announced the guilty plea.

According to court filings and facts presented during the guilty plea proceeding, in the days and months following Hurricane Sandy, which struck New York and New Jersey on October 29, 2012, Elsilimy obtained and attempted to obtain federal funds appropriated for Sandy disaster relief by submitting material misrepresentations in her applications for relief.  Specifically, Elsilimy misrepresented that a home in Staten Island, which her family had abandoned months before the storm, was her primary residence at the time the hurricane devastated parts of New York and New Jersey.  In fact, she had been residing at a different address since at least March 2012.  Evidence obtained in the investigation established that Elsilimy fraudulently obtained federal and city aid totaling more than $750,000.

When sentenced, Elsilimy faces up to 30 years in prison, as well as a fine of up to $1,500,000.

The government’s case is being handled by the Office’s General Crimes Section.  Assistant United States Attorney Elizabeth Losey Macchiaverna is in charge of the prosecution.

The Defendant:

NAGWA ELSILIMY

 Age:  60

 Staten Island, NY

E.D.N.Y. Docket No. 17-CR-563

U.S. Attorney Brandon J. Fremin, who also serves as the Executive Director of the National Center for Disaster Fraud, announced today that LISA ELIZABETH CORONA, 37, of Denham Springs, Louisiana, was indicted yesterday by a federal grand jury charging her with submitting false claims to the United States and theft of $30,644 in Federal Emergency Management Agency (FEMA) funds in relation to the 2016 flooding that affected numerous local areas, to include Livingston Parish.

Following the 2016 flooding that affected 12 parishes in south Louisiana, FEMA funds were available to people who had emergency needs for food, shelter, and clothing because of the flood.  In order to qualify for assistance based on home ownership, an individual must have, among other things, resided in the home at the time of the storm.

According to the indictment, CORONA is alleged to have submitted a false application for FEMA assistance for a Denham Springs residence where she did not reside at the time of the August 2016 flooding.  In her application, she is also alleged to have lied in asserting that, because of the damage to the Denham Springs residence, she had emergency needs for food, clothing, and shelter.

“Federal disaster assistance funds are designated for the aid of individuals affected by a disaster, and with the intent to return these individuals to the lives they lived before being victimized by disasters,” said U.S. Attorney Fremin.  “The theft of these funds by criminals results in losses not only to the federal government, but also to actual disaster victims.  The U.S. Attorney’s Office for the Middle District of Louisiana, together with the National Center for Disaster Fraud and our federal, state, and local law enforcement partners, will continue diligent efforts to prosecute those who seek to steal disaster assistance funds and impair the Federal Government’s ability to assist true victims of a disaster.”

Special Agent in Charge David Green, Houston Field Office, Department of Homeland Security, Office of Inspector General, stated, “Working with the U.S. Attorney’s Office, the OIG will continue our commitment to identify and aggressively investigate all allegations of fraud to protect the integrity of FEMA programs funded by the taxpayer.   Theft of funds from DHS programs intended to help those in need will not be tolerated.”

Members of the public who suspect fraud involving disaster relief efforts, or believe they have been the victim of fraud from a person or organization soliciting relief funds on behalf of disaster victims, should contact the National Disaster Fraud Hotline toll free at (866) 720-5721.  The telephone line is staffed by a live operator 24 hours a day, 7 days a week.  You can also fax information to the Center at (225) 334-4707, or email it to disaster@leo.gov (link sends e-mail).  Learn more about the Department of Justice’s National Center for Disaster Fraud at http://www.justice.gov/disaster-fraud.

This matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana and the Department of Homeland Security, Office of Inspector General.  The case is being prosecuted by Assistant U.S. Attorney Paul L. Pugliese.

St. Thomas, USVI – United States Attorney Gretchen C.F. Shappert for the District of the Virgin Islands announced today that Teron Stevens, 27, of St. Thomas, was indicted on Friday, June 8, 2018, by a federal grand jury charging him with one count of Disaster Fraud and one count of Wire Fraud, in relation to Hurricane Irma Federal Emergency Management Agency (FEMA) disaster relief funds.

According to the indictment, in September of 2017, Stevens applied to FEMA for disaster relief by falsely claiming to be a homeowner of a property damaged by Hurricane Irma. As a result, Stevens received over $27,000 in FEMA assistance to which he was not entitled. If convicted, Stevens faces a maximum sentence of not more than 30 years in prison, and a fine of up to $1,000,000.

On September 6, 2017, Hurricane Irma struck the United States Virgin Islands. In response, on September 7, 2017, President Donald J. Trump issued a major disaster declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. § 5121 et seq. (the "Stafford Act"), for the Virgin Islands. As a result of this declaration, FEMA was authorized to provide assistance to affected residents of St. Thomas and St. John through FEMA’s Individuals and Households Program.

This case is part of the United States Attorney’s Disaster Fraud Task Force, which was announced in October 2017. Members of the public who suspect fraud involving disaster relief efforts, or believe they have been the victim of fraud from a person or organization soliciting relief funds on behalf of disaster victims, should contact the National Disaster Fraud Hotline toll free at (866) 720-5721. The telephone line is staffed by a live operator 24 hours a day, 7 days a week. You can also fax information to the Center at (225) 334-4707, or email it to disaster@leo.gov. Learn more about the Department of Justice’s National Center for Disaster Fraud at http://www.justice.gov/disaster-fraud.

This case is being investigated by the United States Department of Homeland Security-Office of the Inspector General, and is being prosecuted by Assistant United States Attorneys Meredith J. Edwards and Mervin A. Bourne, Jr.

United States Attorney Shappert reminds the public that an indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless found guilty.

He stole over $178,790 between 2013 and 2016 from Teays Valley Fire Department

In Separate Embezzlement Scheme Wife Embezzles over $75,000 from the Same Fire Department

HUNTINGTON, W.Va. – A Hurricane man and former West Virginia Cabinet Secretary pled guilty today to embezzling $178,790 from the Teays Valley Volunteer Fire Department, as well as to a related tax crime, announced United States Attorney Mike Stuart.  Clifford Keith Gwinn, 64, formerly the Cabinet Secretary of the West Virginia Department of Veterans Assistance, faces up to 15 years in prison, a $500,000 fine, 3 years of supervised release and a $200 special assessment when he is sentenced on September 17, 2018.  He has agreed to pay restitution to the Fire Department in the amount of  $178,790 and to the Internal Revenue Service in the amount of $68,281.  U.S. Attorney Stuart commended the investigative efforts of the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Office of Inspector General for the U.S. Department of Homeland Security, and the West Virginia Commission on Special Investigations.

“Egregious criminal conduct,” said United States Attorney Mike Stuart. “To steal from our first responders, those that save our lives and protect our homes, for personal greed is beyond comprehension.  It’s disappointing to say the least that a former public official serving at the highest levels of West Virginia state government would steal from first responders, the very folks who would run into danger to save him.  It’s tragic.  My team stands ready to aggressively prosecute elected officials who violate the basic public trust of honest service.”

Gwinn admitted that as Vice President and fiscal officer of the Fire Department, he was in charge of the financial affairs of the Fire Department and exercised significant control over the Fire Department’s finances.  He admitted that his duties included reporting income and expenditures to the Fire Department, preparing and submitting taxes for the Fire Department, and assisting with applications and reimbursements for federal grants, among other duties.   He further admitted that he, without authorization from the Fire Department, opened a Fire Department bank account where only he had signature authority, transferred funds into that account without the knowledge or authorization from the Fire Department, ensured certain health care insurance company reimbursements were deposited into that account, and wrote himself checks and checks to cash out of that account, which he then typically cashed.  He admitted that he further instructed the Fire Department’s Treasurer to write him checks from other Fire Department bank accounts and further misrepresented the amount of bank account balances to the Fire Department officers and board members.  He also admitted that he structured withdrawals out of the Fire Department’s accounts in series of transactions below $10,000, to prevent the banks from filing Currency Transaction Reports.  While he admitted that he systematically deposited cash into Fire Department bank accounts, his overall withdrawals and payments received significantly overwhelmed the amount of any deposits.   He also admitted that he had no authorization to write himself checks or receive and cash checks from the Fire Department, and was not entitled to any compensation.

During the period from 2013 through 2016 that Gwinn embezzled $178,790 in Fire Department funds, the Teays Valley Volunteer Fire Department received grants from the Federal Emergency Management Agency (FEMA), an agency of the United States Department of Homeland Security. These grants allowed the Fire Department to pay firefighters and to purchase and maintain equipment.

Furthermore, Gwinn admitted that that while he was Vice President and fiscal officer for the Fire Department, the Fire Department withheld taxes from its employee’s paychecks, including federal income taxes, Medicare, and social security taxes, together known as payroll taxes.  He admitted that he knew that he had the corporate responsibility to collect, truthfully account for, and pay over the Fire Department’s payroll taxes.  Gwinn admitted that from October 31, 2015 through April 30, 2017, while Gwinn was a responsible person for payroll taxes, Fire Department failed to account for and pay over approximately $61,421.31 in payroll taxes.

Gwinn further admitted that when he filed his personal income tax returns with the IRS, those returns were false because they failed to account for the funds he had embezzled from the Fire Department.

In a related prosecution, but separate embezzlement scheme, Gwinn’s wife, Kathy Sue Gwinn, 52, was sentenced yesterday for embezzling over $75,000 from the Teays Valley Volunteer Fire Department.   Kathy Gwinn was ordered to jail for a weekend a month for five months, ten months home confinement, and 3 years supervised release, plus probation.

Gwinn formerly served as the Treasurer of the Teays Valley Volunteer Fire Department. As Treasurer, she generated payroll checks for firefighters and signed the payroll checks on a Fire Department bank account. Gwinn volunteered for the Fire Department, and had no authority to write herself checks, nor was she entitled to wages, salary, or compensation for her role as Treasurer. Beginning in October 2014, and continuing through March 2017, she printed and wrote herself unauthorized checks from the Fire Department’s payroll account, noting on the memo line of the checks that the checks were for payroll, overtime, or tax preparation. Gwinn moved money from one fire department bank account into the bank account primarily used for payroll, and when she transferred those funds, she inflated the amount of the transfer to include enough to cover the unauthorized checks she planned to write to herself. Over the course of her scheme, she embezzled $75,356.70.  Gwinn was ordered to pay this amount in restitution.

During the period Gwinn embezzled funds, the Teays Valley Volunteer Fire Department received grants from FEMA, an agency of the United States Department of Homeland Security. These grants allowed the fire department to pay firefighters and to purchase and maintain equipment.

Assistant United States Attorney Meredith George Thomas was in charge of the prosecutions. United States District Judge Robert C. Chambers presided over the hearings.

 

U.S. Attorney Brandon J. Fremin, who also serves as the Executive Director of the National Center for Disaster Fraud, announced today that LISA ELIZABETH CORONA, 37, of Denham Springs, Louisiana, was indicted yesterday by a federal grand jury charging her with submitting false claims to the United States and theft of $30,644 in Federal Emergency Management Agency (FEMA) funds in relation to the 2016 flooding that affected numerous local areas, to include Livingston Parish.

Following the 2016 flooding that affected 12 parishes in south Louisiana, FEMA funds were available to people who had emergency needs for food, shelter, and clothing because of the flood.  In order to qualify for assistance based on home ownership, an individual must have, among other things, resided in the home at the time of the storm.

According to the indictment, CORONA is alleged to have submitted a false application for FEMA assistance for a Denham Springs residence where she did not reside at the time of the August 2016 flooding.  In her application, she is also alleged to have lied in asserting that, because of the damage to the Denham Springs residence, she had emergency needs for food, clothing, and shelter.

“Federal disaster assistance funds are designated for the aid of individuals affected by a disaster, and with the intent to return these individuals to the lives they lived before being victimized by disasters,” said U.S. Attorney Fremin.  “The theft of these funds by criminals results in losses not only to the federal government, but also to actual disaster victims.  The U.S. Attorney’s Office for the Middle District of Louisiana, together with the National Center for Disaster Fraud and our federal, state, and local law enforcement partners, will continue diligent efforts to prosecute those who seek to steal disaster assistance funds and impair the Federal Government’s ability to assist true victims of a disaster.”

Special Agent in Charge David Green, Houston Field Office, Department of Homeland Security, Office of Inspector General, stated, “Working with the U.S. Attorney’s Office, the OIG will continue our commitment to identify and aggressively investigate all allegations of fraud to protect the integrity of FEMA programs funded by the taxpayer.   Theft of funds from DHS programs intended to help those in need will not be tolerated.”

Members of the public who suspect fraud involving disaster relief efforts, or believe they have been the victim of fraud from a person or organization soliciting relief funds on behalf of disaster victims, should contact the National Disaster Fraud Hotline toll free at (866) 720-5721.  The telephone line is staffed by a live operator 24 hours a day, 7 days a week.  You can also fax information to the Center at (225) 334-4707, or email it to disaster@leo.gov(link sends e-mail).  Learn more about the Department of Justice’s National Center for Disaster Fraud at http://www.justice.gov/disaster-fraud.

This matter is being handled by the U.S. Attorney’s Office for the Middle District of Louisiana and the Department of Homeland Security, Office of Inspector General.  The case is being prosecuted by Assistant U.S. Attorney Paul L. Pugliese.

NEWARK, N.J. – Two Customs and Border Protection (CBP) officers were indicted and another pleaded guilty for their roles in the assaults of two fellow CBP officers at Newark Liberty International Airport, U.S. Attorney Craig Carpenito announced today.

Parmenio I. Perez, 40, of Hawthorne, New Jersey, and Michael A. Papagni, 32, of Staten Island, New York, were charged by indictment today with two counts of forcibly assaulting, impeding, intimidating, and interfering with two CBP officers, identified in court documents as “Victim One” and “Victim Two,” while the victims were engaged in their duties as CBP officers. They will be arraigned at a later date.

Tito Catota, 38, of Lyndhurst, New Jersey, pleaded guilty June 4, 2018, before Senior U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with two counts of forcibly assaulting, impeding, intimidating, and interfering with Victim One and Victim Two while they were engaged in their duties as CBP officers. All three defendants were originally arrested and charged by complaint in September 2017.

According to documents filed in this case and statements made in court:

Catota, Perez, and Papagni were employed as CBP officers at Newark Liberty International Airport and were assigned to the Passenger Enforcement Rover Team (PERT). PERT was a CBP specialized unit that identified and intercepted passengers attempting to bring contraband into the United States or who might be associated with terrorist activities. PERT maintained an office on the second floor of Terminal C at Newark Liberty International Airport.

Victim One was assigned to PERT in October 2016. Within the first two weeks that Victim One worked in PERT, Papagni allegedly advised Victim One that the PERT office table was known as the “rape table” and threatened the victim that he would get him on it.

On Jan. 10, 2017, an individual identified in court documents as “CBPO 2” shut off the lights in the PERT office. Papagni, Catota, and another officer identified as “CBPO 3” grabbed Victim One’s arms and legs and threw him on top of the PERT office table. While Papagni, Catota, and CBPO 3 held him down, Perez got on top of Victim One’s mid-section and grinded his body up and down against Victim One’s genitals through the victim’s clothing in a motion simulating a sex act. Victim One unsuccessfully attempted to push Perez off his body. When Perez got off of Victim One, Papagni, Catota, and CBPO 3 released him.

On Nov. 30, 2016, Victim Two, who was assigned to the Port Director staff, went to the PERT office to speak to CBPO 1. A few minutes later, an officer identified as “CBPO 4” locked one of the doors to the office. Catota, Papagni, and Perez then grabbed Victim Two and threw him on his side on the PERT office table. Perez then allegedly simulated a sex act on Victim 2’s leg. Victim Two struggled to get free until Catota, Papagni, and Perez eventually released him.

At his plea hearing, Catota admitted that he and other CBP officers referred to the tables in the PERT office as the “rape table.” Catota also admitted helping grab Victim One and Victim Two, throwing them on the tables, and holding them down while they were attacked. In addition, Catota also admitted that he and other CBP officers discussed the assaults on the Whatsapp chat message service. For instance, on Dec. 7, 2016, Catota stated that another CBP officer had “walked out on the rape” when referring to the assault of Victim Two.

 The charges against Perez, Papagni, and Catota each carry a maximum potential penalty of eight years in prison and a $250,000 fine.

The charges and allegations against Perez and Papagni are merely accusations, and they are considered innocent unless and until proven guilty.

U.S. Attorney Carpenito credited special agents with the U.S. Department of Homeland Security, Office of Inspector General, New York Resident Office, under the direction of Special Agent in Charge Mark Tasky and U.S. Customs and Border Protection, Office of Professional Responsibility, New York Resident Office, under the direction of Special Agent in Charge Vance Kuhner, with the investigation leading to the indictment and guilty plea.

The government is represented by Senior Litigation Counsel Leslie Faye Schwartz of the U.S. Attorney’s Office’s Special Prosecutions Division, and Rahul Agarwal, Deputy Chief of the Criminal Division in Newark.

Catota: Alan Zegas Esq., Chatham, New Jersey

 Papagni: Chad Seigel Esq., New York

 Perez: Lorraine Gauli-Rufo, Verona, New Jersey

HOUSTON – The CEO of Team Work Ready (TWR) has received a significant federal sentence for conspiracy, health care fraud, wire fraud and money laundering, announced U.S. Attorney Ryan K. Patrick along with Special Agent in Charge Christopher Cave of the U.S. Postal Service - Office of Inspector General (USPS-OIG), Special Agent in Charge Steven Grell of the U.S. Department of Labor (DOL) – OIG, Assistant Special Agent in Charge Ramsey Covington of IRS-Criminal Investigation (CI), Special Agent in Charge James Werner of the Department of Veterans Affairs (VA) – OIG and Special Agent in Charge David J. Green of the Department of Homeland Security (DHS) – OIG.

A federal jury convicted Jeffrey Eugene Rose Sr., 56, along with his wife - chief financial officer (CFO) Pamela Annette Rose, 56 - and the clinic’s vice president of operations Frankie Lee Sanders, 56, following 14 hours of deliberation on Oct. 17, 2016.

Today, U.S. District Judge Ewing Werlein Jr., who presided over the trial, sentenced Rose to 233 months in federal prison and ordered him to pay $14,537548.54 in restitution to the DOL, Office of Worker’s Compensation Program (OWCP) which administered the Federal Employees Compensation Act health care benefit program known as FECA. In arriving at the sentence, Judge Werlein considered the seriousness of the offense and the $18,354,971 in fraudulent claims submitted from Rose’s 10 TWR clinics located in Texas, Louisiana, Georgia, Memphis and Alabama, including clinics in Houston, San Antonio, and McAllen. Rose will also be required to serve three years supervised release upon completion of the prison term.

“The sentence imposed today serves as a clear deterrent to those engaging in fraud against federal benefit programs,” said Cave. “USPS-OIG, along with our law enforcement partners, will continue to aggressively pursue these investigations and exhaust all efforts in uncovering these fraud schemes.”

Pamela Rose and Sanders were previously sentenced July 21, 2017, to 120 and 300 months, respectively.

During the trial, the jury heard testimony from 38 witnesses including former patients of TWR clinics, former employees of TWR clinics, various experts and special agents from USPS-OIG and IRS-CI. According to testimony, TWR submitted millions in false and fraudulent claims for physical therapy services.

“Jeffrey Rose orchestrated a fraudulent scheme to submit more than $18 million in claims for services never provided to injured federal workers to DOL-OWCP using the health care clinics he owned in multiple states,” said Grell. “We will continue to work with our law enforcement partners to protect the integrity of department programs and safeguard taxpayer money.”

“Our system of health care is founded on the trust of the public in its health care professionals and the outstanding services they provide. The health care fraud and money laundering activities committed by Jeffrey Rose and his co-conspirators harms all Americans, as we all have to pay our fair share for government services and protections that we enjoy,” said Covington. “IRS-CI agents along with our law enforcement partners remain committed to ending healthcare fraud conspiracies and seeking justice for those involved in these crimes.”

Patients testified at trial that they did not receive the one-on-one physical therapy services for which DOL-OWCP paid under FECA. Rather, they stated they exercised independently on treadmills, bicycles, elliptical machines and with the Nintendo Wii game as well as other pieces of exercise equipment. One patient described an electronic massage chair in the San Antonio clinic, while another patient testified that unlicensed staff told him to do exercises on both of his arms, although he only injured his left elbow and to use the electronic massage chair and the treadmill for his injury. Similarly, a patient from Houston testified that she was asked to do some exercises that had nothing to do with her carpal tunnel wrist injury, specifically walking on a treadmill.

Testimony from former TWR employees revealed that the Houston clinic had as many as 30 – 60 patients a day and that employees did not know what the patients were doing in the main treatment area because they were busy in the back doing massages, electrical stimulation treatments and ultrasound treatments. Patients at the New Orleans clinic were instructed to go back to the therapy room to begin doing exercises by themselves. Employees testified that they did not perform all the one-on-one services documented on patient treatment notes and admitted they frequently completed the patient treatment notes at the end of the day by following a “cheat sheet” and asking each other and the patients what activities had been done. Various individuals described the treatment as “like a gym.”

Undercover federal agents posed as patients at two of the TWR clinics. The jury watched portions of covertly made recordings that supported the employee and patient testimony about clinic activities. The jury also heard several recordings a TWR employee made demonstrating how  the defendants tried to coerce her into ordering medically unnecessary treatment so the clinics could profit.

As explained during the trial by DOL-OWCP’s chief fiscal officer, FECA does not pay for professional services performed by unlicensed aides. Under FECA rules, a chiropractor can only be paid when they treat spinal subluxation or when they personally perform physical therapy under the direction of, and as prescribed by, a medical doctor. They also cannot direct unlicensed individuals to perform skilled physical therapy services. Specifically, in relation to this case, TWR falsely and fraudulently submitted claims for skilled one-on-one physical therapy services provided by a licensed chiropractor when, in reality, the services were not provided as described.

Rose and his wife were also convicted of money laundering after another TWR employee testified about the pair moving $700,000 out of TWR accounts to hide it from the federal government in July 2013, while federal agents executed search warrants at multiple TWR locations.

Rose has been and will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

USPS - OIG, DOL - OIG, IRS - CI, Department of Veterans Affairs - OIG, and Department of Homeland Security – OIG conducted the investigation.  Assistant U.S. Attorneys (AUSA) Julie Redlinger and Daniel Rodriguez prosecuted the case. AUSA Kristine Rollinson handled the forfeiture matters.

PHILADELPHIA – Terrell Hampton who, along with his father and several other family members, defrauded the City of Philadelphia, the Commonwealth of Pennsylvania, and innocent owners and purchasers of Philadelphia real estate, was sentenced to 119 months in prison today, announced U.S. Attorney William M. McSwain.

Hampton, 37, along with his father Kenneth and other family members, stole vacant homes in Philadelphia that belonged to people who could not afford to defend their properties. Kenneth Hampton was convicted and sentenced to 200 months in prison in November.

At the direction of his father, who was in prison at the time, Terrell looked for vacant properties to target, created and filed fraudulent deeds, sought buyers for the stolen properties, and kept Kenneth apprised of scheme developments. They communicated through phone calls, emails, and letters, as well as through Kenneth’s fiancée, co-conspirator Roxanne Mason.

The participants in the scheme moved into the stolen properties under the cover of fake leases that purported to grant them the right to occupancy.  They then found ways to profit from the stolen properties, either by selling the homes to good faith purchasers, by saddling them with debt, or by taking advantage of government programs designed to aid legitimate homeowners.                                                                                    

 “This defendant stole from people who didn’t have the resources to fight back, often resulting in victim battling against victim, homeowner against good faith purchaser,” said U.S. Attorney McSwain. “He lived up to the low example set by his father, and I am proud that the talented case team has put both of them behind bars.”

The case was investigated by the United States Secret Service, Department of Homeland Security - Office of the Inspector General, Federal Bureau of Investigation, and the Office of the Inspector General, City of Philadelphia.  The case was prosecuted by Assistant United States Attorneys Paul G. Shapiro and Sarah M. Wolfe.

A former U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Special Agent pleaded guilty today to devising a wire fraud scheme that defrauded SunTrust Mortgage and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) of over $40,000, announced Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division.



Shauna Kay N. Sutherland, 37, of Corpus Christi, Texas, pleaded guilty to one count of wire fraud before U.S. District Judge Robert N. Scola Jr. of the Southern District of Florida. 



According to admissions in the plea agreement, Sutherland defrauded SunTrust Mortgage and Freddie Mac into allowing a short sale of her property in Gainesville, Georgia, to a family friend who acted as a straw purchaser.  Sutherland falsely represented that there were no hidden agreements and requested forgiveness of over $40,000 owed on the mortgage due to her purported financial hardship.  Based on those material representations, SunTrust Mortgage and Freddie Mac accepted the short sale offer, with the family friend “purchasing” the property for approximately $34,000, in exchange for SunTrust Mortgage and Freddie Mac releasing Sutherland from her outstanding debt.  Freddie Mac, which had by then purchased the mortgage, calculated a total loss of more than $42,000 as a result of this transaction. 



In reality, however, Sutherland admitted that pursuant to the secret agreement with her family friend, Sutherland herself provided the purchase money for the short sale using funds wired to her by her mother.  Sutherland remained the de facto owner of the property, collected rent from tenants and paid for maintenance.  Sutherland adopted the straw purchaser’s identity to communicate by email about the property and signed that person’s signature on relevant documents.  She also used the straw purchaser’s bank account as a conduit for financial transactions related to the property.  Sutherland, through the straw purchaser, later sold the property in 2013 and used the proceeds to buy another property in Florida.



Sutherland will be sentenced on June 29 before U.S. District Judge Robert N. Scola Jr. of the Southern District of Florida.  



ICE’s Office of Professional Responsibility, the Department of Homeland Security’s Office of Inspector General and the FBI investigated the case with assistance provided by U.S. Customs and Border Protection Office of Professional Responsibility.  Trial Attorneys Luke Cass and Simon J. Cataldo of the Criminal Division’s Public Integrity Section are prosecuting the case.

CAMDEN, N.J. – A Camden woman today admitted defrauding the Federal Emergency Management Administration (FEMA) in 2014 after Hurricane Sandy struck New Jersey in 2012, U.S. Attorney Craig Carpenito announced.

Shanyra Bennett 40, pleaded guilty before U.S. District Judge Jerome B. Simandle in Camden federal court to an information charging her with one count of Disaster Benefits Fraud.

According to documents filed in this case and statements made in court:

When a natural disaster or federal emergency occurs in the United States, federal agencies, such as FEMA, provide relief and assistance to effected individuals and entities.  FEMA provides financial assistance by, among other things, helping effected individuals repair their property.

Due to FEMA's vast size and the typically large number of victims resulting from a disaster, FEMA is frequently targeted in disaster fraud schemes by individuals or groups seeking benefits to which they are not entitled. They do this by submitting fraudulent applications to FEMA for among other things, repairs and rental assistance.

In October 2012, various counties of southern New Jersey, including Camden County, sustained significant damage due to wind, rain, and flooding from Hurricane Sandy.

On Oct. 30, 2012, then-President Obama signed a Presidential Disaster Declaration for the State of New Jersey, enabling eligible individuals to seek financial assistance from FEMA when displaced by the storms.

Bennett admitted today that she applied for FEMA benefits in November 2012, requesting rental assistance, assistance to replace personal property that was damaged and assistance for transportation, as her car was damaged and not drivable.

Bennett faxed FEMA documents claiming that she worked as a senior health aide, which required her to travel for work. She sent FEMA a fraudulent letter indicating that she had insurance through Mercury Indemnity Co. of America. At the time of the hurricane, Bennett did not have insurance with Mercury Indemnity. Bennett also submitted fraudulent invoices from a mechanic in Camden.

Based on these false representations and fraudulent documents, on Dec. 10, 2012, FEMA electronically transferred $5,162 into Bennett’s bank account to replace her 2004 Dodge Durango, which she falsely reported destroyed by the hurricane.

To support her claim for personal property assistance, Bennett faxed FEMA a letter purported to be on the letterhead of her employer, which indicated that she was a Certified Home Health Aid and that her position required a laptop to perform her job. She also faxed FEMA earning statements from a company in Camden for July 2013, August 2013, September 2013 and October 2013. At the time of the hurricane, Bennett was unemployed.

As part of the application process for rental assistance, Bennett provided a fraudulent copy of a lease agreement for a house on South 41st Street, Camden, and fraudulent copies of rental receipt payments for June 2013 through November 2013. Bennett neither rented the property nor paid rent for use of the property.

Based on Bennett’s false statements and representations, between December 2012 and September 2013, FEMA transferred $22,190 in disaster related funds through electronic fund transfers into Bennett’s bank account.

Bennett admitted that she also defrauded FEMA in 2011, when Hurricane Irene struck the area. She admitted that between September 2011 and November 2012, based on her fraudulent claims and representations, she received approximately $30,200 in FEMA disaster related funds.

The charge to which Bennett pleaded guilty carries a maximum potential penalty of 30 years in prison and a fine of $250,000. Bennett=s sentencing is scheduled for June 27, 2018.

U.S. Attorney Carpenito credited special agents of the Department of Homeland Security, Office of Inspector General, under the direction of Special Agent in Charge Mark Tasky, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jason M. Richardson of the U.S. Attorney's Office Criminal Division in Camden in the criminal case.

 TUCSON, Ariz. – Yesterday, Jesus Manuel Franco, a  former United States Border Patrol Agent, 39, of Vail, Ariz., was sentenced by U.S. District Judge Cindy K. Jorgenson, to 18 months’ imprisonment for theft of firearm parts and equipment valued at approximately $100,000 and for the unlawful possession and transfer of  two machinegun conversion devices.  Franco had been previously found guilty of these offenses after a jury trial.                 

     The evidence at trial demonstrated that in 2014, Franco accepted a temporary assignment to the Customs and Border Protection (CBP) Armory in Harper’s Ferry, W. Va.   During a two-month period, Franco unlawfully transferred 47 boxes of firearm parts and equipment from the Armory to the Wilcox, Ariz. CBP Station without authorization and for personal use.  One of the boxes transferred by Franco contained two machine gun conversion devices that qualified under federal law as machineguns.  Franco also charged the government for shipping costs.

     The investigation in this case was conducted by the Department of Homeland Security, Office of Inspector General. The prosecution was handled by Jane L. Westby and Sarah B. Houston, Assistant U.S. Attorneys, District of Arizona, Tucson.

CASE NUMBER:            CR-16-00268-TUC-CKJ

RELEASE NUMBER:    2018-19_Franco

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For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.justice.gov/usao/az/