Six men were charged in an indictment unsealed on Wednesday for their alleged participation in a nation-wide scheme to defraud dozens of businesses across the United States of luxury goods and services announced Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Andrew Lelling of the District of Massachusetts.
Antonio Strong, 28, Herbert Wright, 24, Joseph Williams, 28, Steven Hayes Jr., 27, Demario Sorrells, 34, and Terrence Bender, 28, all from the greater Chicago, Illinois area, were charged with one count of conspiracy to commit wire fraud. In addition, Strong was charged with nine counts of aggravated identity theft and four counts of wire fraud; Williams was charged with three counts of aggravated identity theft; Wright, Bender, and Hayes were each charged with two counts of aggravated identity theft; and Sorrells was charged with one count of aggravated identity theft.
On Sept. 14, 2020, Strong was arrested and detained by a federal judge in the Northern District of Illinois; on Nov. 24, 2020, Williams self-surrendered in the Northern District of Illinois and was released on bond; on Nov. 19, 2020, Sorrells and Hayes were arrested in the Northern District of Illinois and released on bond; on Dec. 2, 2020, Bender self-surrendered in the Northern District of Georgia and was released on bond; and Wright self-surrendered today in the Central District of California. The defendants will make an initial appearance before U.S. Magistrate Judge Katherine A. Robertson in the District of Massachusetts on Dec. 7, 2020.
The indictment alleges that the defendants, often presenting themselves as musicians and promoters, engaged in a nation-wide scheme to defraud businesses and individuals across the United States of goods and services by using fraudulently obtained credit card account information. These goods and services included trips on private jets, private yacht charters, private chef and security guard services, designer puppies, limousine and chauffer services, and commercial airlines flights, among other things. The defendants allegedly used pseudonyms, including the names of other real persons, and purported to be from real and fictitious businesses to perpetuate the scheme and for the conspiracy to avoid detection from law enforcement.
The indictment further alleges that, because the defendants provided authentic credit card information, the defrauded businesses and individuals processed the transactions and provided the goods and services. When the actual payment cardholders challenged the transactions as fraudulent, the individuals and businesses who provided the goods and services consequently suffered losses.
An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Secret Service Boston Field Office. Trial Attorneys Michelle Pascucci and Andrew Tyler of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Steve Breslow of the District of Massachusetts are prosecuting the case. The Justice Department also acknowledges and thanks the FBI’s Chicago Field Office and the Chicago Police Department for their assistance with this matter.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
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- Small Business Administration: COVID-19 Loans Lack Controls and Are Susceptible to FraudBy Sam NewsOctober 1, 2020In April 2020, the Small Business Administration (SBA) moved quickly to implement the Paycheck Protection Program (PPP), which provides loans that are forgivable under certain circumstances to small businesses affected by COVID-19. Given the immediate need for these loans, SBA worked to streamline the program so that lenders could begin distributing these funds as soon as possible. For example, lenders were permitted to rely on borrowers' self-certifications for eligibility and use of loan proceeds. As a result, there may be significant risk that some fraudulent or inflated applications were approved. Since May 2020, the Department of Justice has publicly announced charges in more than 50 fraud-related cases associated with PPP funds. In April 2020, SBA announced it would review all loans of more than $2 million to confirm borrower eligibility, and SBA officials subsequently stated that they would review selected loans of less than $2 million to determine, for example, whether the borrower is entitled to loan forgiveness. However, SBA did not provide details on how it would conduct either of these reviews. As of September 2020, SBA reported it was working with the Department of the Treasury and contractors to finalize the plans for the reviews. Because SBA had limited time to implement safeguards up front for loan approval, GAO believes that planning and oversight by SBA to address risks in the PPP program is crucial moving forward. SBA's efforts to expedite processing of Economic Injury Disaster Loans (EIDL)—such as the reliance on self-certification—may have contributed to increased fraud risk in that program as well. In July 2020, SBA's Office of Inspector General (OIG) reported indicators of widespread potential fraud—including thousands of fraud complaints—and found deficiencies with SBA's internal controls. In response, SBA maintained that its internal controls for EIDL were robust, including checks to identify duplicate applications and verify account information, and that it had provided banks with additional antifraud guidance. The Department of Justice, in conjunction with other federal agencies, also has taken actions to address potential fraud. Since May 2020, the department has announced fraud investigations related to the EIDL program and charges against recipients related to EIDL fraud. SBA has made or guaranteed more than 14.5 million loans and grants through PPP and EIDL, providing about $729 billion to help small businesses adversely affected by COVID-19. However, the speed with which SBA implemented the programs may have increased their susceptibility to fraud. This testimony discusses fraud risks associated with SBA's PPP and EIDL programs. It is based largely on GAO's reports in June 2020 (GAO-20-625) and September 2020 (GAO-20-701) that addressed the federal response, including by SBA, to the economic downturn caused by COVID-19. For those reports, GAO reviewed SBA documentation and interviewed officials from SBA, the Department of the Treasury, and associations that represent lenders and small businesses. GAO also met with officials from the SBA OIG and reviewed OIG reports. In its June 2020 report, GAO recommended that SBA develop and implement plans to identify and respond to risks in PPP to ensure program integrity, achieve program effectiveness, and address potential fraud. SBA neither agreed nor disagreed, but GAO believes implementation of this recommendation is essential. For more information, contact William B. Shear at (202) 512-4325 or firstname.lastname@example.org.[Read More…]
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- Pennsylvania Marketer Pleads Guilty to Filing False Tax ReturnsBy Sam NewsDecember 3, 2020A Bryn Mawr resident pleaded guilty today to filing false tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney William M. McSwain for the Eastern District of Pennsylvania.[Read More…]
- Health Care Funding: Federal Obligations to and Funds Received by Certain Organizations Involved in Health-Related Services, 2016 through 2018By Sam NewsJanuary 21, 2021GAO reviewed federal funding provided to various organizations that offer health-related services, such as voluntary family planning and activities related to the treatment and prevention of HIV/AIDs. In total, the organizations in our review received almost $16 billion through grants or cooperative agreements from the Department of Health and Human Services or U.S. Agency for International Development from 2016 through 2018; nearly all of this funding was received by federally qualified health centers. (See table.) Reported Amounts of Funds Received through Federal Grants or Cooperative Agreements by Organizations in GAO’s Review, 2016-2018 Dollars in millions Federal agency 2016 2017 2018 Total Department of Health and Human Services (HHS) Federally qualified health centers (FQHC) 4,891.03 5,251.93 5,291.81 15,434.77 Planned Parenthood Federation of America (PPFA) 94.86 106.12 103.51 304.49 International Planned Parenthood Federation (IPPF) 2.30 2.05 1.20 5.55 Marie Stopes International (MSI) 0.00 0.00 0.00 0.00 Total HHS 4,988.19 5,360.10 5,396.52 15,744.81 U.S. Agency for International Development (USAID) FQHC 0.00 0.00 0.00 0.00 PPFA 0.00 0.00 0.00 0.00 IPPF 2.13 5.48 7.80 15.41 MSI 36.64 34.20 15.62 86.46 Total USAID 38.77 39.68 23.42 101.87 Total (HHS and USAID) 5,026.96 5,399.78 5,419.94 15,846.68 Source: GAO analysis of HHS, PPFA and USAID, data. | GAO-21-188R We provided a draft of this report to the Secretary of Health and Human Services and the USAID Administrator for comment. HHS did not have any comments. USAID provided technical comments, which we incorporated as appropriate. GAO is not making any recommendations. In order to achieve their programmatic goals, federal agencies provide funding to various organizations that, in turn, use those funds to implement programs and activities aligned with those goals. For example, federal agencies may award funding through grants or cooperative agreements for programs. The organizations that are awarded the funding receive and spend the funds over a period of time. GAO was asked to report on federal funding for certain organizations that provide health-related services. This report describes the extent of federal funding through grants and cooperative agreements for federally qualified health centers, Planned Parenthood Federation of America, International Planned Parenthood Federation, and Marie Stopes International from 2016 through 2018. GAO obtained and reviewed information on federal funding from the Department of Health and Human Services and the U.S. Agency for International Development—the primary sources of federal funds to the organizations in our review. GAO also obtained available information from each of the organizations. For more information, contact James Cosgrove at 202-512-7114 or email@example.com.[Read More…]
- Brazilian Partnership to Begin Producing NASA-Designed COVID-19 VentilatorBy Sam NewsSeptember 26, 2020The Brazilian Health [Read More…]
- United States Files False Claims Act Complaint Against Drug Maker Teva Pharmaceuticals Alleging Illegal KickbacksBy Sam NewsAugust 18, 2020The United States has filed a False Claims Act complaint against Teva Pharmaceuticals USA Inc. and Teva Neuroscience Inc. (Teva), alleging that they illegally paid the Medicare co-pays for their multiple sclerosis (MS) product, Copaxone, through purportedly independent foundations that the companies used as conduits in violation of the Anti-Kickback Statute, the Department of Justice announced today.[Read More…]