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Alleged Transnational Human Smuggler Abdul Karim Conteh of Sierra Leone Indicted, Sanctioned in U.S., Arrested in Mexico; Veronica Roblero Pivaral Remains at Large

By
Fejiro Anokwuru
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0

An indictment was unsealed yesterday containing criminal charges against the alleged leader of a human smuggling organisation responsible for unlawfully bringing thousands of migrants into the United States.

Along with the organisation, the defendant, who was arrested in Mexico at the request of the United States, has also been designated for financial sanctions by the U.S. Department of the Treasury.

These developments were made possible through extensive bilateral coordination and cooperation efforts between U.S. and Mexican law enforcement authorities.

Abdul Karim Conteh, 42, a national of Sierra Leone, was arrested on July 11 in Tijuana, Mexico. The United States is pursuing Conteh’s extradition on federal charges stemming from his alleged actions in leading the human smuggling organisation. His wife, Veronica Roblero Pivaral, 25, a national of Mexico, remains at large.

“In coordination with our law enforcement partners, the Justice Department has worked relentlessly to target and disrupt the unlawful, transnational human smuggling operations that endanger migrants and threaten our national security,” said Attorney General Merrick B. Garland. “We allege Abdul Karim Conteh and his organization smuggled thousands of migrants from more than a dozen different countries through Mexico into the United States. He has been arrested for his alleged role in this prolific, exploitive smuggling operation by Mexican authorities, and the Justice Department will ensure that he is held accountable in an American courtroom.”

“Human smugglers exploit the vulnerable for profit,” said Secretary of Homeland Security Alejandro N. Mayorkas. “Along with our partners across this Administration and around the world, we are bringing the full force of the law to bear against the individuals and their organisations that perpetrate this heinous crime. We couple our unrelenting efforts with this warning to would-be migrants everywhere: do not believe the smuggler’s lies and risk your lives in their ruthless hands.”

According to the indictment, Conteh’s organisation allegedly smuggled thousands of migrants to the United States through Mexico. These smuggled migrants originated from countries around the world, including Iran, Afghanistan, Uzbekistan, Pakistan, Kazakhstan, Turkey, Somalia, Cameroon, Senegal, Mauritania, Ethiopia, Egypt, and others.

The migrants paid smuggling fees, often tens of thousands of dollars, to be transported through various countries, such as Brazil, Colombia, Ecuador, Panama, Costa Rica, Nicaragua, Honduras, and Guatemala, on the way to the U.S.-Mexico border.

“This arrest unravels a global web of coordinated human smuggling into the United States,” said U.S. Attorney Tara McGrath for the Southern District of California. “Even the most far-reaching, prolific networks cannot evade justice.”

Conteh allegedly coordinated with Roblero and co-conspirators throughout Mexico and other countries to facilitate the global transportation of migrants into and through Mexico to the U.S. border. Conteh then allegedly oversaw the migrants’ unlawful entry into the United States by various surreptitious and unlawful means, including the use of ladders and tunnels.

Conteh, Roblero, and others are charged with conspiracy to smuggle migrants into the United States, which carries a maximum penalty of 10 years in prison. Conteh is also charged with the unlawful smuggling of migrants for financial gain, which carries a mandatory minimum of three years in prison for the first two violations.

Additional violations carry a mandatory minimum of five years in prison and a maximum penalty of 15 years in prison.

Alameda County’s Steve H.S. Kim Sentenced for Selling $3.5m Counterfeit, Substandard Electronics DoD’s Defence Logistics Agency

By
Shulammite Bello
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0

A California man was sentenced yesterday to three years and six months in prison for a scheme to defraud the Department of Defense’s (DoD) Defense Logistics Agency (DLA) by selling over $3.5 million worth of fan assemblies to the DLA that were either counterfeit or that he misrepresented were new when in fact they were used or surplus.

According to court documents, Steve H.S. Kim, 63, of Alameda County, controlled Company A, which sold fan assemblies to the DLA that were either counterfeit or were used or surplus fan assemblies that Kim claimed were new.

To trick the DLA into accepting the fan assemblies, Kim created counterfeit labels—some of which used Company B’s registered trademarks—that he attached to the fan assemblies he sold to the DLA.

When the DLA questioned Kim about the origin of the fan assemblies, Kim concealed his scheme by giving the DLA fake tracing documents that he created and often signed using a false identity.

Some of these counterfeit fans were installed or intended to be installed with electrical components on a nuclear submarine, a laser system on an aircraft, and a surface-to-air missile system.

U.S. Justice Department Sues Southwest Key for Sexual Abuse, Harassment of Children in Shelters

By
Deborah Ojuade
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The Justice Department has filed a lawsuit against Southwest Key Programs Inc., a Texas-based nonprofit that provides housing to unaccompanied children who are encountered at the southern land border of the United States.

The lawsuit alleged that Southwest Key, through its employees, has engaged in a pattern or practice of sexual abuse and harassment of unaccompanied children in Southwest Key shelters in violation of the Fair Housing Act.

“Sexual harassment of children in residential shelters, where a child should be safe and secure, is abusive, dehumanising and unlawful,” said Assistant Attorney General Kristen Clarke of the Justice Department’s Civil Rights Division. “Sexual abuse of children is a crisis that we can’t ignore or turn a blind eye to. This lawsuit seeks relief for children who have been abused and harmed, and meaningful reforms to ensure no child in these shelters is ever subjected to sexual abuse again.”  

“HHS has a zero-tolerance policy for all forms of sexual abuse, sexual harassment, inappropriate sexual behavior, and discrimination,” said U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra. “The U.S. Department of Justice’s complaint against Southwest Key raises serious pattern or practice concerns. HHS will continue to work with the Justice Department and oversight agencies to hold its care-giving programs like Southwest Key accountable. And we will continue to closely evaluate our assignment of children into care-giving programs to ensure the safety and well-being of every child in HHS custody.”

“Every child has the right to feel safe and secure in their dwelling, including in shelter care,” said U.S. Attorney Jaime Esparza for the Western District of Texas. “This lawsuit seeks to provide a pathway for justice and healing for these children, who are among the most vulnerable in our society.”

“In search of the American Dream, children often endure perilous journeys on their migration north to the southern border,” said U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas. “The sexual harassment alleged in the complaint would destroy any child’s sense of safety, turning what was an American Dream into a nightmare. We look forward to working together with the Civil Rights Division and the U.S. Attorney’s Office for the Western District of Texas to provide justice for the victims who allegedly suffered harm in Southwest Key’s shelters.”

Southwest Key operates 29 shelters that provide temporary housing for unaccompanied children in Texas, Arizona and California and is the largest housing provider for unaccompanied children in the United States. Southwest Key receives grants from the HHS Office of Refugee Resettlement (ORR) to provide housing and other care for unaccompanied children at these shelters.

Unaccompanied children are minors who enter the United States without parents or other legal guardians and without lawful immigration status in the United States. The shelters are the children’s homes until they are reunited with their immediate families or placed with a relative or other vetted sponsor while their immigration cases proceed.

The lawsuit, filed yesterday in the U.S. District Court for the Western District of Texas, alleges that, from 2015 through at least 2023, multiple Southwest Key employees subjected children in their care to severe or pervasive sexual harassment that has included, among other things, sexual contact and inappropriate touching, solicitation of sex acts, solicitation of nude photos, entreaties for inappropriate relationships and sexual comments.

The complaint further alleges that Southwest Key took insufficient action to prevent sexual harassment of the children in its care, failed to consistently follow federal requirements for preventing, detecting and reporting abuse, including sexual harassment, failed to take appropriate or sufficient action to protect the children in its care and discouraged children from disclosing sexual harassment in violation of federal requirements, despite ORR having issued multiple corrective actions to Southwest Key.

The department’s lawsuit seeks monetary damages to compensate the children harmed by the alleged harassment, a civil penalty to vindicate the public interest and a court order barring future discrimination and requiring Southwest Key to take appropriate steps to prevent such harassment in the future.

Individuals who believe that they may have been victims of sexual harassment or abuse at Southwest Key shelters or who have other information that may be relevant to this case may contact the Justice Department’s housing discrimination tip line at 1-833-591-0291. For Spanish, dial “2”; then dial “2” for sexual harassment cases, and dial “3” for the Southwest Key lawsuit mailbox. For English, dial “1”; then dial “2” for sexual harassment cases, and dial “9” for the Southwest Key lawsuit mailbox.  Individuals can also email the Justice Department at southwest.key@usdoj.gov or report through our online portal at civilrights.justice.gov/link/southwestkey.

DaVita Inc. Fined $34m over Kickbacks for Referrals to DaVita Rx

By
Bola Akinloye
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0

DaVita Inc., headquartered in Denver, Colorado, has agreed to pay $34,487,390 to resolve allegations that it violated the False Claims Act by paying kickbacks to induce referrals to DaVita Rx, a former subsidiary that provided pharmacy services for dialysis patients and by paying kickbacks to nephrologists and vascular access physicians to induce the referral of patients to DaVita’s dialysis centres.

The Anti-Kickback Statute prohibits anyone from offering or paying, directly or indirectly, any remuneration — which includes money or any other thing of value — to induce referrals of patients or of items or services covered by Medicare, Medicaid and other federally funded programs.

The United States alleges that DaVita paid kickbacks to a competitor to induce referrals to DaVita Rx to serve as a “central fill pharmacy,” or prescription fulfilment provider, for that competitor’s Medicare patients’ prescriptions.

In exchange, DaVita paid to acquire certain European dialysis clinics and agreed to extend a prior commitment to purchase dialysis products from the competitor. DaVita would not have paid the price that it did for these deals without the competitor’s commitment to refer its Medicare patients’ prescriptions to DaVita Rx in return.

The United States further alleges that DaVita provided management services to vascular access centers owned by physicians in a position to refer patients to DaVita’s dialysis clinics. DaVita paid improper remuneration to these physician-owners in the form of uncollected management fees to induce referrals to DaVita’s dialysis centres.

Finally, the United States alleges that DaVita paid improper remuneration to a large nephrology practice to induce referrals to DaVita’s dialysis clinics. DaVita gave the practice a right of refusal to staff the medical director position at any new dialysis centre that opened near the nephrology practice and paid the practice $50,000 despite the practice’s decision not to staff the medical director position for those clinics.  

“Improper financial arrangements between Medicare providers can distort the healthcare marketplace,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will hold accountable healthcare providers that seek to generate business by paying unlawful remuneration.”

“Medicare patients should be able to trust their healthcare providers not to pay illegal kickbacks to induce referrals,” said Acting U.S. Attorney Matthew Kirsch for the District of Colorado. “This resolution reflects the seriousness of the government’s determination to restore integrity to the healthcare marketplace.”

“Illegal kickback payments corrupt the market for health care services and cause harm and financial loss to Medicare and other federally funded health care programs,” said Special Agent in Charge Linda Hanley of the Department of Health and Human Services Office of Inspector General (HHS-OIG).

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Dennis Kogod, a former Chief Operating Officer of DaVita Kidney Care.

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 United States ex rel. Kogod v. DaVita, Inc., et al., No. 17-cv-02611-PAB (D. Colo.). Kogod will receive $6,370,000 of the proceeds from the settlement.

GPS Manufacturer Hemisphere GNSS Fined $2.6m to Settle False Claims Act for Improper Paycheck Protection Program Loan

By
Samuel Nwite
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0

Hemisphere GNSS (USA) Inc., a satellite global positioning system manufacturer in Arizona that was purchased by CNH Industrial in 2023, has agreed to pay $2.6 million to settle allegations that it violated the False Claims Act by knowingly providing false information to apply for and receive forgiveness of a Paycheck Protection Program (PPP) loan to which the company was not entitled.

Congress created the PPP in March 2020 as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act to provide emergency financial support to millions of Americans suffering the economic effects caused by the pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other expenses.

In 2021, Congress offered a second round of forgivable PPP loans through the Economic Aid to Hard-Hit Small Businesses, Nonprofits and Venues Act. When applying for PPP loans, borrowers were required to certify the truthfulness and accuracy of all information provided in their loan applications.

In February 2021, Hemisphere applied for a second-round PPP loan and certified that it was eligible to receive the loan. Among other certifications, Hemisphere represented that no “entity created in or organized under the laws of the People’s Republic of China” owned or held 20% or more of an economic interest in Hemisphere.

The company also certified that it did not retain a person who is a resident of China as a board member. At the time of its application, however, both of these certifications were allegedly false. For this reason, Hemisphere was not eligible for the second round PPP loan it received. After receiving this PPP loan, Hemisphere sought and received forgiveness of the total loan amount.

“PPP loans were an important but finite resource available to help eligible small businesses retain employees and keep their doors open,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “When ineligible entities improperly sought PPP loans or forgiveness of those loans, they reduced the availability of this critical support for eligible businesses.”

“Legitimate PPP loans saved small businesses across America,” said U.S. Attorney Gary M. Restaino for the District of Arizona. “But not everyone used the program as intended. Our office will continue to hold accountable those business and individuals who misused the PPP program, as the settlement announced today reflects.”

“The settlement in this matter demonstrates the excellent results achieved through the combined efforts of SBA and the Department of Justice to uncover and forcefully respond to PPP misconduct,” said General Counsel Therese Meers of the Small Business Administration (SBA). “The federal government is strongly committed to identifying and aggressively pursuing any instances of fraud or misconduct within the Paycheck Protection Programme.”

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by GNGH2 Inc. 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 United States ex rel. GNGH2, Inc. v. Hemisphere GNSS (USA) Incorporated, 2:22-cv-00224 (D. Arizona). GNGH2 will receive $260,000 as its share of the settlement.

Gentiva (Kindred at Home), Avalon, Kindred, SouthernCare, SouthernCare New Beacon Fined $19.428m over False Claims

By
Bola Akinloye
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0

Gentiva, successor to Kindred at Home, has agreed to pay $19.428 million to resolve allegations that Kindred at Home and related entities (Kindred) knowingly submitted false claims and knowingly retained overpayments for hospice services provided to patients who were ineligible to receive hospice benefits under various federal health care programmes.

Gentiva’s hospice operations, headquartered in Atlanta, include entities that previously operated Kindred at Home hospice locations under the names Avalon, Kindred, SouthernCare and SouthernCare New Beacon.

“The hospice benefit under Medicare and other federal health care programmes provides critical services to some of the most vulnerable patients,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department will ensure that this important benefit is used to assist those who need it, and not as an opportunity to line the pockets of those who seek to abuse it.”

The settlement resolves allegations made by the United States and the State of Tennessee in a consolidated complaint filed in 2021 against certain Kindred related entities alleging that, from 2010 until February 2020, the defendants knowingly submitted or caused to be submitted false claims for hospice services provided to Avalon hospice patients in Tennessee who were ineligible for the Medicare or Medicaid hospice benefit because they were not terminally ill.

The settlement also resolves the complaint’s allegations that the defendants improperly concealed or avoided Avalon’s obligation to repay those hospice claims.

In addition, the settlement resolves allegations that certain Kindred, SouthernCare and SouthernCare New Beacon hospice locations knowingly submitted, or caused to be submitted, false claims for hospice services provided to patients who were ineligible for hospice benefits under Medicare and other federal health care programs because the patients were not terminally ill.

Those hospice locations were Kindred’s locations in Warwick, Rhode Island; Beaumont, Texas; and Independence, Missouri; SouthernCare New Beacon’s location in Demopolis, Alabama; and SouthernCare’s locations in Daphne, Alabama; Mobile, Alabama; South Bend, Indiana; and Youngstown, Ohio. The settlement also resolves allegations that those Kindred, SouthernCare and SouthernCare New Beacon locations knowingly and improperly concealed or avoided obligations to repay the foregoing hospice claims.

Further, the settlement resolves allegations that SouthernCare New Beacon allegedly violated the Anti-Kickback Statute by willfully paying renumeration to a consulting physician, between October 1, 2016, and Oct. 1, 2022, to induce hospice referrals of Medicare beneficiaries to its Gadsden, Alabama, location. The settlement of those allegations stems from a voluntary self-disclosure made by New Beacon Healthcare Group LLC doing business as SouthernCare New Beacon Hospice.

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded health care programs. It is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

“Hospice provides vital care and support for terminally ill patients and their families. Medicare’s and TennCare’s eligibility requirements ensure that federal and state health care money is properly used to support hospice programs,” said U.S. Attorney Henry C. Leventis for the Middle District of Tennessee. “We are committed to holding accountable health care companies and providers who prioritize profits over patient care by ignoring these requirements.”

“This office remains committed to safeguarding public monies,” said U.S. Attorney Michael A. Bennett for the Western District of Kentucky. 

“My office remains determined to ensure that federal funding for essential health care, like the hospice care at issue in this investigation, goes to the patients who need it, rather than to health care companies who seek to exploit those patients for profit,” said U.S. Attorney Zachary A. Cunha for the District of Rhode Island.

“Hospice care is special end-of-life care intended to provide comfort for terminally ill patients. The decision to provide hospice services should be prompted by a patient’s terminally ill medical diagnosis, not a hospice provider’s desire to increase profits,” said U.S. Attorney Todd Gee for the Southern District of Mississippi.

“Our office is committed to protecting federal healthcare programs like the Medicare hospice benefit from false claims” said U.S. Attorney Sean Costello for the Southern District of Alabama. “We will hold accountable any providers that abuse taxpayer dollars.”

“The integrity of hospice care is critical to the millions of patients receiving these services,” said Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG).

The Medicaid programme is funded jointly by the state and federal governments. As a result of the settlement announced Thursday, the federal government will receive $18,956,151.32, Tennessee will receive $448,800 and the State of Ohio will receive $23,618.68.

Money Launderer Maxim Marchenko Captured, Jailed 36 Months for Illegally Procuring U.S.-manufactured Dual-use, Military-grade Microelectronics for Russian Entities

By
Samuel Nwite
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0

Maxim Marchenko, 52, was sentenced today to three years in prison followed by three years of supervised release for his role in procuring dual-use, military-grade OLED micro-displays for Russian end users.

“Today’s sentence holds Mr. Marchenko accountable for his role in a procurement syndicate that funnelled U.S.-manufactured military-grade microelectronics to end users in Russia, illegally delivering controlled technologies worth hundreds of thousands of dollars,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division.

“The transshipment of military-grade microelectronics through Hong Kong to Russia helps fuel the engine of Russia’s war machine,” said Assistant Secretary of Commerce Matthew S. Axelrod for Export Enforcement. “Today’s sentencing is just the latest example of our unceasing efforts to target and disrupt illegal Russian procurement networks.”

“This office will stop at nothing to hold accountable those who seek to circumvent our laws to gain access to some of our most sensitive technologies,” said U.S. Attorney Damian Williams for the Southern District of New York. “Today’s sentence should be a reminder that no number of shell companies or obfuscation will stop this office in its pursuit of those who seek to illicitly gain access to controlled technologies.” 

“Marchenko and his co-conspirators operated an international smuggling network of sensitive microelectronics used in military gear and other weapons systems,” said Executive Assistant Director Robert Wells of the FBI National Security Branch. “Today’s sentencing demonstrates the FBI’s resolve in doing our part to protect national security and prevent American military technology from being diverted to foreign adversaries and hostile nation-states.”

According to court documents, Marchenko is a Russian national who resides in Hong Kong and operates several Hong Kong-based shell companies, including Alice Components Co. Ltd. (Alice Components), Neway Technologies Limited (Neway) and RG Solutions Limited (RG Solutions). Marchenko and two co-conspirators, who are also Russian nationals, operate an illicit procurement network in Russia, Hong Kong and elsewhere overseas.

This procurement network has fraudulently obtained from U.S. distributors large quantities of dual-use, military grade microelectronics, specifically OLED micro-displays, on behalf of Russia-based end users. To carry out this scheme, Marchenko and his co-conspirators used shell companies based in Hong Kong and other deceptive means to conceal from U.S. government agencies and U.S. distributors that the OLED micro-displays were destined for Russia.

The technology that Marchenko and his co-conspirators fraudulently procured has significant military applications, such as in rifle scopes, night vision goggles, thermal optics and other weapon systems.

To perpetrate the scheme, Marchenko and other members of the conspiracy acquired the dual-use OLED micro-displays from U.S.-based distributors using Marchenko’s Hong Kong-based shell companies, including Alice Components, Neway and RG Solutions.

Members of the conspiracy, including Marchenko, procured these sensitive microelectronics by falsely representing to the U.S. distributors (who, in turn, are required to report to U.S. agencies) that Alice Components was sending the shipments to end users located in China, Hong Kong and other countries outside of Russia for use in electron microscopes for medical research or hunting rifles. In reality, the OLED micro-displays were destined for end users in Russia.

Marchenko and other members of the conspiracy concealed the true final destination (Russia) from U.S. distributors for the purpose of causing false statements to the U.S. agencies.

To conceal the fact that these OLED micro-displays were destined for Russia, Marchenko and other members of the conspiracy worked together to transship the illicitly procured OLED micro-displays by using pass-through entities principally operated by Marchenko in third countries, such as Hong Kong. Marchenko then caused the OLED micro-displays to be shipped to the ultimate destination in Russia using, among other entities, a freight forwarder known to provide freight forwarding services to Russia.

In addition, Marchenko and other members of the conspiracy used Hong Kong-based shell companies, principally operated by Marchenko, to conceal the fact that payments for the OLED micro-displays were coming from Russia.

In total, between in or about May 2022 and in or about August 2023, Marchenko’s shell companies funnelled more than $1.6 million to the United States in support of the procurement network’s efforts to smuggle the OLED micro-displays to Russia.

Tennessee Resident Benjamin ‘Abu Hamza’ Carpenter Jailed 20 Years for Trying to Help ISIS

By
Alex
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0

Benjamin Carpenter, also known as Abu Hamza, 34, of Knoxville, Tennessee, has been sentenced to 20 years in prison followed by 20 years of supervised release for attempting to provide material support to the Islamic State of Iraq and al-Sham (ISIS) in connection with providing translation services to ISIS, a designated foreign terrorist organisation.

“For years, this defendant led a global digital media operation to distribute pro-ISIS propaganda, promoting the group’s radical message of terror and pushing it to every corner of the world,” said Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division.

“Combating terrorism and keeping our communities safe are the highest priorities of the United States Attorney’s Office,” said U.S. Attorney Francis M. Hamilton III for the Eastern District of Tennessee. “This case deals a serious blow to the expansion of ISIS and its broken message of hatred and senseless violence.” 

“With today’s sentencing, Carpenter is being held accountable for betraying his country and helping ISIS terrorists,” said Executive Assistant Director Robert Wells of the FBI’s National Security Branch. “He led a propaganda machine which called for war against U.S. and allied forces through suicide bombings and other means. The FBI and our partners will relentlessly pursue and bring to justice terrorists who devote their lives to hurting American citizens.”

According to court documents, on October 19, 2023, following an eight-day trial in U.S. District Court, a jury convicted Carpenter of attempting to provide material support to ISIS. The evidence presented at the trial demonstrated that Carpenter served as the leader of Ahlut-Tawhid Publications, an international organization of pro-ISIS “munasirin” (i.e., supporters) dedicated to translating, producing and distributing ISIS propaganda throughout the world.

For years, Carpenter, using his alias Abu Hamza, published a large body of ISIS media, including his weekly newsletter entitled From Dabiq to Rome, a periodical that celebrated the deaths of American soldiers, glorified suicide bombers and called for open war against the United States and its Western allies, among other pro-ISIS propaganda themes.

In 2020 and 2021, Carpenter contacted an individual he believed to be affiliated with ISIS’ central media bureau and provided translation services for a project intended to relaunch Al-Hayat Media Center, ISIS’ official foreign-language media arm.

Unbeknownst to him, that individual was an FBI undercover employee who had infiltrated Carpenter’s group. 

Edward Hernandez, Christopher Flagg, Daquan Lloyd, Corey Ortiz Convicted for Defrauding Global Financial Services Company of over $2m

By
Samuel Nwite
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0

Between June 4, 2024, and today, in federal court in Central Islip, four defendants, Edward Hernandez, Christopher Flagg, Daquan Lloyd and Corey Ortiz, pleaded guilty to money laundering conspiracy in connection with a scheme to steal millions of dollars from a global financial services company based in Menlo Park, California.

The proceedings were held before United States District Judge Gary R. Brown.  Each defendant faces a maximum sentence of 20 years’ imprisonment, restitution of up to $2,087,164, and forfeiture between $56,390 and $700,425.

Breon Peace, United States Attorney for the Eastern District of New York and Christie M. Curtis, Acting Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office, announced the guilty pleas.

“Each defendant was convicted of their roles in a sprawling and complex nationwide scheme organized from Long Island to steal millions of dollars that were intended for legitimate investors and launder the proceeds of their crime,” stated United States Attorney Breon Peace.  

Peace added, “Today’s guilty plea demonstrates how this Office will swiftly bring to justice those who fraudulently manipulate the financial system, no matter how complex the scheme.”

Mr. Peace thanked the Securities and Exchange Commission for their assistance with the case. 

Between December 2018 and January 2023, the defendants engaged in a scheme to defraud a global financial services company of millions of dollars of short-term cash advances called “Instant Deposits.” 

The Instant Deposits were intended to enable legitimate investors to immediately trade in their brokerage accounts without waiting for an incoming wire transfer to clear. 

To gain access to millions of dollars of Instant Deposits, typically capped at $5,000 per account, the defendants established a multi-state recruitment network through which the defendants opened hundreds of fraudulent accounts held in the names of straw account holders, or “Losing Accounts.” 

Using the Instant Deposits available to the Losing Accounts, the defendants repeatedly bought thinly traded and highly speculative stock options at above-market prices. 

Selecting these virtually worthless stock options enabled the defendants to match their bids in the Losing Accounts with offers to sell the same overpriced stock options initiated by other brokerage accounts, or “Winning Accounts,” that were also controlled by the defendants and their conspirators.  

In effect, the defendants transferred the Instant Deposits from the Losing Accounts to the Winning Accounts through fraudulent securities transactions. 

Meanwhile, the incoming wire transfers supposed to cover the Instant Deposits in the Losing Accounts had purposely been initiated by the defendants from bank accounts with little or no balance. 

These wire transfers, therefore, failed to clear, but not before the defendants drained the Instant Deposits, leaving the accounts with negative balances and worthless options. The defendants then laundered the stolen funds through multiple electronic banking platforms.  

The defendants recruited dozens of individuals to engage in their fraudulent scheme and stole more than $2 million.

Danbury Non-profit Connecticut Institute for Communities Settles Allegations Enrolled Children of Employees Who Falsely Claimed to be Homeless into Head Start Programmes

By
Bola Akinloye
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0

Vanessa Roberts Avery, United States Attorney for the District of Connecticut, today announced that Connecticut Institute for the Communities, Inc. has entered into a civil settlement agreement and has paid $85,600 to resolve allegations that two of its now-former employees falsely claimed to be homeless while enrolling their children in CIFC’s Head Start programs.

CIFC is a Danbury-based non-profit corporation that receives federal grants to operate Head Start programs in several locations in Connecticut. 

The Head Start programme supports children’s growth from birth to age five through services centred around early learning and development, health, and family well-being. 

Services are available for children from birth to age three (‘Early Head Start’) and ages three to five (‘Head Start’) in center-based, home-based, or family child care settings.

Head Start programmes are intended primarily for “children from low-income families” and “homeless children.” 

Head Start rules also permit programs to enrol children whose families are not “low income,” receiving public benefits, homeless, or in foster care, but the total number of children from such families cannot exceed 10 per cent of all program slots. 

Grantees, such as CIFC, are required to verify applicants’ program eligibility and to keep paper records of those eligibility determinations.

The government alleged that, between September 4, 2013, through August 31, 2016, CIFC enrolled into its Head Start programmes the children of two now-former CIFC employees – including the now-former manager of eligibility, recruitment, selection, enrolment, and attendance for CIFC’s Head Start programmes – which were falsely documented as homeless and for which false supporting documents were created. 

The CIFC employees were not homeless.

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