Last Updated Friday, August 27, 2021, at 2:25 PM
Every Friday, The Criminal Lawyer Group publishes a digest of the latest federal prosecutions nationally. Our goal is to keep the public informed as to recent events in federal courts around the country.
Unless otherwise disclosed, none of the defendants mentioned in these summaries are clients of our firm.
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FRIDAY, August 27, 2021
I. Arizona Couple Arrested for Medicaid and COVID-19 Loan Fraud
Earlier this month, Dale Henson, 53, and his wife Zoila Henson, 53, both of Chandler, Arizona, were charged by a federal grand jury in a 58-count indictment and arrested on charges including fraudulently billing the Arizona Healthcare Cost Containment System, or Medicaid) and for fraud involving receipt of COVID-19 Economic Injury Disaster Loan funds.
According to the indictment, it is alleged that the couple used their medical billing company to bill AHCCCS for services they never actually rendered. AHCCCS is funded primarily via the federal Medicaid plan, and it is intended to provide healthcare programs for Arizona’s low-income residents.
The couple is alleged to have submitted $1.2 million in fraudulent bills to AHCCCS over nine months during 2019-2020, and then allegedly used some of the proceeds to purchase a $1.3 residence in Gilbert, Arizona.
The indictment also alleges the couple lied in their applications for COVID-19 pandemic-related loans and used the proceeds of the loan funds for personal expenses, such as the purchase of a residence in Mexico, where Zoila Henson is a citizen.
II. Seven Indicted In Meth Conspiracy Cases
On August 11, 2021, a federal grand jury in Bowling Green, Kentucky, returned two Indictments charging seven with conspiring to traffic in large amounts of methamphetamine in the Daviess County, Kentucky area during a span of several months in 2020 and 2021.
An indictment unsealed late last week in U.S. District Court charges Darrell Murphy, 46, of Madisonville, Kentucky, Terry Cook, 43, of Owensboro, Noah Boswell, 39, of Owensboro, William Darmell Murphy, 58, of Owensboro, and Elizabeth Breanne Harris, 39, of Owensboro, with conspiring with each other, and others, to possess with the intent to distribute over 500 grams of methamphetamine in the Daviess County area between May 27, 2020, and January 27, 2021.
The indictment charges Jamarquius D. Trice, 32, of Louisville, Kentucky, and Jermaine Lee, Sr., 48, of Owensboro, with having conspired with each other, and others, to possess with the intent to distribute over 500 grams of meth in the Daviess County area between August 24, 2020, and February 1, 2021. Zif they are convicted, each defendant will face a sentence of at least 10 years and up to life in prison.
III. Massachusetts and NH Men Arrested for Fraud Involving SBA Disaster Funds
Two men, Edwin Acevedo, 35, of Acton, Massachusetts, and Hector Garcia, 49, of Manchester, New Hampshire, were arrested on Thursday, August 19, 2021, in connection with a conspiracy to use stolen identities to fraudulently obtain disaster loans from the Small Business Administration (SBA) and to launder the funds. Each man was charged with one count of conspiracy to commit wire fraud, but Garcia was also charged with one count of aggravated identity theft.
According to charging documents, the defendants conspired with others to use stolen identity information of United States citizens to apply for SBA Economic Injury Disaster Loans. It is alleged that Garcia used stolen identity information of a United States citizen to open a fraudulent bank account, which was then linked to other fraudulent bank accounts set up to receive the SBA funds.
Acevedo allegedly coordinated co-conspirators’ receiving some of the debit cards associated with fraudulent bank accounts into which SBA funds were deposited, and assisted in laundering those funds by using the debit cards to purchase iPhones for re-sale. It is also alleged that Garcia and other co-conspirators wired a portion of the funds to the Dominican Republic.
IV. Connecticut Man Arrested in New Hampshire Pleads Guilty to Firearm and Drug Charges
On August 23, 2021, the Acting U.S. Attorney for the District of Connecticut, Leonard C Boyle, announced that Hilary Anthony Browne, 31, of New Britain, CT, pleaded guilty today to firearm possession and drug distribution offenses. Pursuant to the CARES Act, the court proceeding before U.S. Magistrate Judge Robert A. Richardson via videoconference.
According to court documents and statements made in court, in late 2019, the Manchester Police Department, East Central Narcotics Task Force and the DEA’s Hartford Task Force conducted an investigation of Browne for selling cocaine. Browne was arrested in Manchester on December 20, 2019. At the time of his arrest, he possessed a small quantity of cocaine.
After Browne informed an officer that he possessed a firearm, ballistic vest, and a quantity of cocaine at his New Britain apartment, a consent search of the apartment revealed a loaded semi-automatic Pieper, Model 1908/Basculant, 6.35mm pistol; a bullet proof vest; and a pill bottle containing 4.7 grams of cocaine.
Since Browne’s criminal history includes state convictions for robbery in the first degree with the threat of a firearm, burglary, and failure to appear, he was legally prohibited from possessing or owning either firearms or ammunition.
V. East Chicago Woman Charged with COVID-19-Related Wire Fraud
On August 24, 2021, the Acting U.S. Attorney for the Northern District of Indiana, Tina L. Nommay, announced that Natasha Weeks, 29, of East Chicago, Indiana, has been indicted and charged with wire fraud.
According to the indictment, it is alleged that Ms. Weeks fraudulently obtained disaster-related benefits in the form of a SBA Economic Injury Disaster Loan (SBI-EIDL) by falsely claiming to be an Illinois business owner of a hair salon allegedly located in Chicago Heights, Illinois. It is alleged the business was called Weeks Hair Braiding/Weeks Hair Shop while no such business was found to have existed at the address identified on her application.
The loan was applied for from an IP address in East Chicago, Indiana, and that the application relied on false statements and misrepresentations that the hair salon existed since 2017 and that Weeks owned the business since May 2020, employed 20 people and that her cost of goods sold was $150,000. On July 7, 2020, Weeks received a $10,000 SBA EIDL loan because of her application.
Weeks is also charged with fraudulently seeking Arizona unemployment benefits despite never having lived or worked in that State.
VI. Massachusetts Family Charged with Lottery Scam, Tax Fraud
On August 23, 2021., a father and his two sons were charged in connection with a “ten-percenting” scheme in which the two allegedly cashed winning Massachusetts state lottery tickets on behalf of the ticket holders to avoid taxes on the winnings. They were the top lottery ticket cashers, claiming more than $20 million in Massachusetts lottery winnings.
Unfortunately, they apparently did so based on fraud. Ali Jaafar, 62, and Yousef Jaafar, 28, both of Watertown, and Mohamed Jaafar, 30, of Watertown and Waltham, were each indicted on one count of conspiracy to defraud the IRS, one count of conspiracy to commit money laundering and multiple counts of filing false tax returns.
According to the indictment, the defendants conspired with others to purchase winning lottery tickets from the actual winners for cash, at a discount that was typically between 10-20 percent of each ticket’s value, thereby allowing the ticket holders to avoid reporting the winnings on their tax returns – a scheme commonly known as “ten-percenting.”
The defendants and co-conspirators then allegedly presented the winning tickets to the Massachusetts Lottery Commission as their own and collected the full value of the tickets. It is also alleged that the defendants reported the ticket winnings as their own on their income tax returns and improperly offset the claimed winnings with purported gambling losses, thereby avoiding federal income taxes.
VII. Family Dentistry Office Managers Charged in Superseding Indictment
On August 24, 2021, Acting U.S. Attorney for the Northern District of Indiana, Tina L. Nommay. Announced that Justyn Arch, 34, and Trystan Arch, 31, both of Valparaiso, Indiana, had been charged in a 29-count Superseding Indictment alleging various violations of federal law.
According to the Superseding indictment, Arch Complete Family Dentistry, with offices located in Chesterton, Crown Point, and briefly in Knox, Indiana, was an authorized Indiana Medicaid provider of dental procedures. In October 2017, Justyn Arch, Vice President of Arch Complete Family Dentistry, also managed the Crown Point office, while Trystan Arch managed the Chesterton office.
The indictment alleges that Justyn and Trystan Arch executed a scheme to defraud Indiana Medicaid by causing false and fictitious entries in patient files, and using the names and information related to these patients, to reflect that the Arch dentists performed dental surgery when in fact no surgery had been performed. The claims totaled more than $350,000 in false and fictitious claims to Indiana Medicaid.
The superseding indictment also alleges that Justyn Arch committed tax evasion and money laundering related to the funds obtained from this fraud and that Trystan Arch committed false tax filings, bankruptcy fraud and bankruptcy obstruction, related to the funds obtained from this fraud. Both are also charged with multiple instances of aggravated identity theft.
VIII. Postal Worker Charged with Theft of Mail
On August 24, 2021, the U.S. Attorney for the Eastern District of Louisiana, Duane A. Evans, announced that Harold Saintes, Jr., 52, of Franklin, Louisiana had been charged the day before in a one count Bill of Information with Theft of Mail.
According to court documents, the Office of Inspector General for the U.S. Postal Service initiated an investigation into Saintes and determined that he was stealing packages from the Loranger Post Office betweenn September 1, 2019 and October 19, 2019. If hhe is convicted, Saintes faces up to five years in prison, followed by up to three years of supervised release, up to a $250,000 fine, and a mandatory $100.00 special assessment fee.
IX. Eight Indicted in Nationwide “Grandparent Fraud” Scam
On August 25, 2021, eight were charged in a federal grand jury indictment, for their alleged a participation in a criminal enterprise that has stolen millions of dollars from elderly victims in San Diego County and nationwide. According to statements made by prosecutors, the defendants swindled more than $2 million from 70-plus elderly victims across the nation, with at least 10 in San Diego County.
The scheme was pulled off, by feeding them phony stories that their grandchildren were in terrible trouble and needed money fast. As of Aug. 25, six of eight defendants have been arrested and charged with violating RICO, the federal law designed to combat organized crime. This is believed to be the first time the RICO statute has been used in an elder fraud case. The indictment alleges that this organization was involved in extortion, fraud and money laundering – all hallmarks of organized crime.
According to the indictment, scammers contacted elderly victims, usually by telephone, and impersonated a grandchild or someone else close to the victim. The scammer pretended to be in dire legal trouble because of an accident or arrest. He or she claimed to need money for bail, medical expenses, or legal fees. The scheme involved multiple “actors” who played varying roles using a well-rehearsed script.
One would play the beloved relative; another would pretend to be a lawyer; and still others would pose as bail agents or medical professionals. They provided victims with false case numbers, and they instructed the victims to lie to family, friends, and bank representatives about the reasons for the withdrawal or money transfer.
X. Former Wisconsin Teacher Charged with Producing Child Pornography
On August 26, 2021, the Acting U.S. Attorney for the Western District of Wisconsin, Timothy M. O’Shea, announced that a complaint had been filed that day in U.S. District Court in Madison charging McKenzie W. Johnson, 34, of Ladysmith, Wisconsin, with producing child pornography.
According to the complaint, it is alleged that Johnson produced the child pornography on January 13, 2021. At the time, Johnson was a teacher at the Ladysmith High School. The offense alleged in the complaint does not involve a victim from Wisconsin. Johnson was arrested on August 24 and is currently in the Rusk County Jail. His initial appearance in federal court in Madison has not yet been scheduled.
If he is convicted, Johnson faces at least 15 years and up to 30 years in federal prison and is subject to supervised release for life.
