2011 Press Releases
October - December
19 December Jack Ray Carr Indicted
15 December Fajardo-Guevara Convicted
8 December Williams Sonya Guilty Plea
6 December Carney Sentenced
1 December CALMES Indictment
1 December Amadi Sentencing
28 November Davis Shemeka Sentencing
3 November Zinna Sentencing
27 October Smith Conviction
26 October Thomas Guilty Plea
14 October Dignam Conviction
13 October Kirt Sentencing
13 October Roman Sentencing
12 October Brown Sentencing
LOUISIANA MAN INDICTED FOR CORRUPTLY INTERFERING WITH THE IRS AND FILING FALSE TAX RETURNS
WASHINGTON – An indictment was unsealed today charging Jack Ray Carr of Baton Rouge, La., with one count of corruptly interfering with the due administration of the Internal Revenue laws, four counts of filing false income tax returns, and one count of aiding and assisting in the preparation of a false income tax return, the Justice Department, Internal Revenue Service (IRS), and Treasury Inspector General for Tax Administration (TIGTA) announced.
According to the indictment filed against him, Carr corruptly endeavored to obstruct and impede the tax laws by filing false documents and tax returns with the IRS and by attempting to intimidate IRS employees. The indictment also alleges that Carr made and subscribed to false federal income tax returns, IRS Forms 1040, for 2001, 2002, 2003, and 2005. In particular, the tax return Carr filed for 2005 falsely reported $112,142 of federal income tax withholdings based on fictitious IRS Forms 1099-OID (Original Issue Discount) attached to the Form 1040.
An indictment is merely a formal charge by the grand jury. The defendant is presumed innocent unless and until proven guilty in a U.S. District Court.
IRS-CI Special Agent in Charge Jim Lee stated, "Each of us is responsible for filing correct and accurate tax returns," said SAC Jim Lee. IRS Criminal Investigation will vigorously investigate those individuals who knowingly and willfully evade their tax obligation."
This case was investigated by IRS Criminal Investigation and TIGTA. It is being prosecuted by Trial Attorneys Matthew Mueller and Gregory Bailey of the Justice Department’s Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax/. Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation website.
JURY CONVICTS GEORGIA WOMAN ON CHARGE OF POSSESSION WITH INTENT TO DISTRIBUTE 5 KILOGRAMS OR MORE OF COCAINE
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced that a federal jury convicted PATRICIA FAJARDO-GUEVARA, age 43, of Duluth, Georgia on a charge of possession with intent to distribute 5 kilograms or more of cocaine.
According to the evidence presented at trial, FAJARDO-GUEVARA was transporting 8 kilograms of cocaine from Houston, Texas and destined for Atlanta, Georgia. Records showed that FAJARDO-GUEVARA made the same 1,600 miles round trip between Atlanta and Houston six times in a one-month period. The initial investigation began when FAJARDO-GUEVARA was stopped for a traffic violation on Interstate 12 in Baton Rouge, Louisiana. FAJARDO-GUEVARA was stopped by members of the joint federal and state High Intensity Drug Trafficking Area (“HIDTA”) Task Force on the sixth return trip to Atlanta. During the traffic stop, a canine was deployed and alerted to the presence of narcotics. Officers located 8 kilograms of cocaine concealed in a sophisticated hidden compartment fabricated underneath the backseat of FAJARDO-GUEVARA’s vehicle.
FAJARDO-GUEVARA faces a sentence of a term of imprisonment of not less than ten years and not more than life, and a maximum fine of $10,000,000. The defendant will be sentenced following the completion of a presentence investigation.
U.S. Attorney Donald J. Cazayoux, Jr., stated, “This is an excellent example of how our local and federal law enforcement partners work together through HIDTA to deter narcotics traffickers from using our highways as a means to deliver drugs destined for other parts of our country.”
Chief U.S. District Court Judge Brian A. Jackson presided over the two day jury trial. Assistant United States Attorney Jennifer M. Kleinpeter, who serves as Deputy Criminal Chief, and Assistant United States Attorney Cam Le prosecuted the case on behalf of the United States. The case was investigated by the Drug Enforcement Administration and the Baton Rouge Police Department.
GUILTY PLEAS IN BATON ROUGE, LOUISIANA, TO CHARGES OF HEALTH CARE FRAUD AND MONEY LAUNDERING
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced that SONYA LEWIS WILLIAMS, age 46, of Baton Rouge, Louisiana, pled guilty today before U.S. District Court Judge Frank J. Polozola to two counts of an indictment charging her with health care fraud and money laundering.
The indictment in this matter, filed on June 30, 2011, arose from a health care fraud scheme involving two companies known as Fusion Services, L.L.C (“Fusion”), and Grace Social Services, L.L.C. (“Grace”). Williams was the owner, manager, and operator of Fusion and Grace, which operated in Alexandria, Louisiana, and the surrounding areas. As the owner and operator of Fusion and Grace, Williams prepared false claims for purported psychotherapy services to elderly patients and submitted them to Medicare for reimbursement. Medicare paid Fusion and Grace approximately $349,715 as a result of the billings, much of the profits of which were deposited into Williams’ personal accounts.
As a result of her guilty pleas, WILLIAMS faces a maximum sentence of imprisonment of twenty years, a $500,000 fine, or both. The Court may also order WILLIAMS to pay restitution. Sentencing has not yet been set for Williams.
United States Attorney Donald J. Cazayoux, Jr. stated, “This plea is the result of another successful effort by the Medicare Fraud Strike Force to root out and prosecute health care fraud. Rest assured, we will continue to pursue these fraudsters who undermine our health care system. I commend our partners with the U.S. Department of Health and Human Services, the Federal Bureau of Investigation, the Internal Revenue Service, and AdvanceMed for their continued focus and diligence in finding and stopping fraud within our Medicare system.”
Assistant Special Agent-in-Charge William W. Root, Health and Human Services said, “We are proud of the outstanding work by the Medicare Fraud Strike Force. The guilty pleas today sends a message to other perpetrators that we will thoroughly investigate all allegations of health care fraud. Protecting the programs intended for our nation’s most vulnerable citizens is paramount to our mission.”
FBI Special Agent-in-Charge David W. Welker said, “Today’s guilty pleas are the result of the hard work of Agents and analysts from Health and Human Services, Internal Revenue Service – CID, the FBI as well as prosecutors from the United States Attorney’s Office. Gone unchecked conduct such as displayed by Ms. Williams will continue to raise the cost of healthcare for every American citizen. The FBI and its law enforcement partners will continue to aggressively seek out and investigate healthcare fraud and bring to justice those perpetrators who would abuse the system.”
Special Agent-in-Charge Jim Lee, Internal Revenue Service Criminal Investigation, stated: “We are pleased with the guilty pleas entered today by Sonya Williams. Health care fraud is a growing problem, and IRS-CI will continue to work with the FBI and the U S Attorney’s office to investigate and prosecute those people engaged in health care fraud and money laundering activities.”
The investigation of this matter is ongoing, and is being conducted by the U.S. Department of Health and Human Services’ Office of Inspector General, the Federal Bureau of Investigation, the Internal Revenue Service, and AdvanceMed, the Medicare Program Safeguard Contractor which assists with health care fraud investigations. The case is being prosecuted by Assistant United States Attorneys Catherine M. Maraist and Leetra Harris.
CARNEY SENTENCED TO 57 MONTHS
FOR POSSESSION OF COUNTERFEIT
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced that on Friday, December 2, 2011, Chief U.S. District Court Judge Brian A. Jackson sentenced PAUL A. CARNEY, 55, of Baton Rouge, Louisiana. CARNEY was sentenced to 57 months in prison and two (2) years of supervised released after CARNEY was found guilty at trial on two counts of possessing counterfeit U.S. currency.
In December 2010 and in January 2011, Baton Rouge Police officers and U.S. Secret Service agents discovered a total of $8,955 in counterfeit U.S. currency inside of CARNEY’S Olive Street home in Baton Rouge. In addition to the counterfeit currency, law enforcement officers also recovered several items used in the manufacture of counterfeit currency, including high quality paper, a paper cutter, and a color printer/copier/scanner. After tracking the serial numbers of the seized counterfeit currency, the U.S. Secret Service discovered that the counterfeit currency had been passed at least thirty times in the Baton Rouge metropolitan area, and as far away as Rochester, Minnesota.
The initial investigation was conducted by United States Secret Service Agent R. Eric Bragg. The case was prosecuted by Assistant United States Attorneys Helina S. Dayries and Leetra J. Harris.
BATON ROUGE MOTORCYCLE DEALERSHIP
AND MANAGER INDICTED
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced that a Federal Grand Jury returned an indictment on Thursday, December 1, 2011, charging KEVIN PAUL CALMES, 39, of Denham Springs, Louisiana, and CALMES MOTORSPORTS, L.L.C., with conspiracy to commit money laundering, money laundering, failure to file required reports, and structuring transactions in order to evade reporting requirements.
The Indictment alleges that from January 2000 through April 2007, CALMES MOTORSPORTS, L.L.C. and KEVIN PAUL CALMES conspired with multiple individuals to launder proceeds of narcotics trafficking and to avoid filing reports of their receipt of cash greater than $10,000. KEVIN PAUL CALMES and CALMES MOTORSPORTS, L.L.C. are also charged with two counts of money laundering, three counts of structuring transactions so as to evade reporting requirements, and one count of failure to file reports of their receipt of cash greater than $10,000.
KEVIN PAUL CALMES faces a maximum sentence of 80 years in prison, fines of $2,500,000, and forfeiture of all property involved in, or used to facilitate, the money laundering and structuring transactions. If convicted, CALMES MOTORSPORTS, L.L.C. faces fines of $3,500,000 and the forfeiture of all property involved in, or used to facilitate, the money laundering and structuring transactions.
The Indictment alleges that KEVIN PAUL CALMES and CALMES MOTORSPORTS, L.L.C. disguised the sale of motorcycles to drug dealers by falsifying invoices to reflect the receipt of less than $10,000 cash, used nominee purchasers as stand-ins for narcotics traffickers, and divided sales into multiple transactions in order to avoid filing reports of their receipt of cash amounts greater than $10,000.
The Bank Secrecy Act (“BSA”) requires that businesses, including motor vehicle dealerships which are vulnerable to money laundering, take a number of precautions against financial crime. The precautions include filing and reporting certain data about financial transactions indicative of money laundering, including cash transactions over $10,000. Over 15 million BSA reports are filed each year by more than 25,000 U.S. financial institutions and businesses. Such reports are vital weapons in law enforcement’s effort to detect and prevent money laundering and financial crimes.
U.S. Attorney Donald J. Cazayoux, Jr., stated, “This is a very serious case involving federal laws designed to prevent criminals, and those who assist them, from enjoying their illegal drug profits. We will continue to aggressively prosecute all persons who attempt to evade these important laws.”
IRS Special Agent-in-Charge Jim Lee stated, “That IRS-Criminal Investigations will continue to investigate those businesses and employees that knowingly assist drug dealers by hiding their illegal profits in financial transactions. Money laundering will not be tolerated by anyone.”
The Indictment is the result of a lengthy investigation by agents of the Internal Revenue Service-Criminal Investigations. The case is being prosecuted by Assistant United States Attorney Rene Salomon.
NOTE: An indictment is a determination by a grand jury that probable cause exists to believe that offenses have been committed by a defendant. The defendant is presumed innocent until and unless proven guilty at trial.
BATON ROUGE MAN SENTENCED TO PRISON TERM
FOR HEALTH CARE FRAUD
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced that BENJAMIN AMADI, age 55, of Baton Rouge, Louisiana, was sentenced this morning by U.S. District Court Judge James J. Brady to serve thirty (30) months in federal prison as a result of a lengthy health care fraud scheme that he perpetrated in the Baton Rouge area.
AMADI was charged in an indictment that was filed on April 28, 2010, and AMADI pled guilty to health care fraud, in violation of 18 U.S.C. § 1347, on March 3, 2011. The case arose from a fraud scheme involving a company known as Liberty Medical Services, LLC (“Liberty”), which provided power wheelchairs and other durable medical equipment to Medicare beneficiaries in the Baton Rouge area. AMADI owned, operated, and managed Liberty. Through Liberty, AMADI engaged in a scheme to defraud the Medicare program by submitting false and fraudulent claims to Medicare for equipment that had not been provided and was medically unnecessary. For instance, in January of 2008, AMADI submitted a claim to Medicare seeking $9,350, representing to Medicare that Liberty had provided a beneficiary with an extra heavy-duty power wheelchair, designed for beneficiaries weighing more than 600 pounds. In fact, Liberty had purchased and provided a much less expensive wheelchair. In connection with his guilty plea, AMADI admitted that his scheme continued for at least a year.
This morning, Judge Brady sentenced AMADI to serve a term of imprisonment of 30 months. AMADI was also ordered to pay $632,500.31 in restitution, a $7,500 fine, and a $100 special assessment. The Court also ordered AMADI to forfeit an additional $632,500.31 in proceeds from his fraud scheme. Following his release from imprisonment, AMADI will be required to serve a 2-year term of supervised release.
The investigation of this matter was conducted by the U.S. Department of Health and Human Services’ Office of Inspector General, the Federal Bureau of Investigation, and the Louisiana Attorney General’s Office. “Yet another example of the successful law enforcement and prosecutorial partnership formed by Baton Rouge’s Medicare Fraud Strike Force,” said William W. Root, Assistant Special Agent in Charge, United States Department of Health and Human Services, Office of Inspector General. “Mr. Amadi stole hundreds of thousands of dollars from our nation’s health care program - a program designed to benefit the elderly, blind, and the disabled. Now, Mr. Amadi will have 30 months in a federal penitentiary to consider his actions.” The case was prosecuted by Assistant United States Attorneys Alan A. Stevens and Leetra Harris. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Middle District of Louisiana and the Criminal Division’s Fraud Section.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
WOMAN SENTENCED FOR FRAUD AND IDENTITY THEFT
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr., announced that U.S. District Judge James Brady sentenced SHEMEKA R. DAVIS, 33, of Baton Rouge, Louisiana, to sixty (60) months in prison, to pay restitution of $83,314.41, and to three years supervised release after imprisonment.
DAVIS pled guilty on July 28, 2011, to bank fraud and aggravated identity theft. DAVIS was involved in a scheme to obtain the names and social security numbers of various individuals in order to fraudulently apply and use credit cards in these individuals’ names. The names and social security numbers were of both local residents, including Louisiana State University prospective students and staff, as well as of residents around the country. In all, DAVIS’ fraud involved approximately sixty-four (64) known individuals and twenty-two (22) financial institutions and totaled approximately $86,000 in loss.
The investigation of DAVIS was conducted by the United States Postal Inspection Service. The case was prosecuted by Assistant United States Attorneys Rene Salomon and Shubhra Shivpuri.
LAWYER SENTENCED FOR MAIL FRAUD
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr., announced that RANDY P. ZINNA, 54, of Baton Rouge, Louisiana, was sentenced by U.S. District Judge James J. Brady to serve 30 months imprisonment and pay over $1.5 million in restitution for mail fraud.
ZINNA pled guilty to mail fraud in October 2010. In pleading guilty, ZINNA agreed to the following facts. ZINNA, who was an attorney licensed to practice in Louisiana, represented the Municipal Police Employees’ Retirement System of Louisiana (MPERS), which was a retirement system established by the Louisiana Legislature to provide retirement and other benefits for employees of municipal police departments. MPERS, through a wholly owned subsidiary named Olde Oaks Development, LLC, owned, for investment purposes, a real estate development known as Olde Oaks Subdivision in Bossier City, Louisiana. ZINNA served as manager of Olde Oaks Development. From 2002 through 2009, ZINNA deposited into his law office escrow account Olde Oaks Development checks made payable to contractors of Olde Oaks Development on invoices then due and owing to the contractors, more than $850,000 in proceeds from the sale of lots in Olde Oaks Subdivision, and over $2,000,000 in MPERS funds. Although some of the monies were eventually remitted to the intended recipients, ZINNA retained some of the funds and used them for his personal benefit. In 2009, defendant ZINNA obtained three checks totaling $570,000 from an 83 year-old widow with the understanding that the funds would be invested for her benefit. Instead, defendant ZINNA used the funds for his own personal benefit, primarily to re-pay Olde Oaks Development for lot sales proceeds which had been deposited into his escrow account and used for his personal benefit.
The investigation of ZINNA was conducted by the Louisiana Inspector General’s Office, the Louisiana Attorney General’s Office, the Louisiana Legislative Auditor’s Office, and the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney M. Patricia Jones.
JURY CONVICTS CHIEF OF POLICE OF PORT ALLEN, LOUISIANA OF RACKETEERING
BATON ROUGE, LA - United States Attorney Donald J. Cazayoux, Jr., announced the results of another successful trial in Operation Blighted Officials. FREDERICK W. SMITH, age 40, of Port Allen, Louisiana, was convicted by a federal jury on all counts of an indictment charging him with violating the Racketeer Influenced and Corrupt Organizations Act (RICO), mail fraud, wire fraud, and use of an interstate facility in aid of racketeering. The convictions follow a seven-day jury trial before Chief U.S. District Judge Brian A. Jackson. SMITH is the Chief of Police for the City of Port Allen Police Department (PAPD). He will be sentenced on January 19, 2012, and has been directed by the Court to resign his position within 24 hours.
The evidence at trial established that SMITH solicited and took thousands of dollars in cash, tickets to professional sporting events, a luxury hotel stay, and expensive meals from individuals posing as businessmen in connection with an FBI undercover operation. In exchange, SMITH provided the businessmen an official PAPD Lieutenant’s Badge, an official PAPD Sergeant’s Badge, an official PAPD Commission Card, causing a Louisiana State Police ticket to be dismissed by the District Attorney’s Office for the 18th Judicial District, causing a Port Allen City Marshal ticket to be dismissed by the Port Allen City Prosecutor’s Office, providing an official letter to a Connecticut Superior Court Judge requesting leniency for a drug defendant he did not know, and provided confidential law enforcement information concerning numerous individuals.
SMITH began engaging in criminal activity before having any contact with the businessmen. Through the then-Mayor of Port Allen, SMITH unlawfully provided confidential law enforcement information to the businessmen and agreed to continue providing such information in exchange for bribes. Upon meeting the businessmen, SMITH began talking about criminal activity within 90 seconds.
In addition to those completed bribe transactions, SMITH sought many others, including his request for $3,500 in cash in exchange for official PAPD badges, police blue lights, a police bullet-proof vest, and weapons from the PAPD evidence room. SMITH also solicited a six-month lease on a condominium in New Orleans in exchange for providing confidential law enforcement information.
SMITH lied to employees of the West Baton Rouge Office of Homeland Security in connection with numerous requests for confidential law enforcement information. As an example, SMITH falsely told a dispatcher that he was seeking information on four individuals as part of a burglary investigation. In fact, SMITH was seeking the information in order to provide it to people he believed to be businessmen in exchange for bribes.
U.S. Attorney Cazayoux stated: “Juries continue to send the loud and clear message to those who engage in public corruption in this district that such conduct will not be tolerated. This case is particularly disturbing given that the defendant is a Chief of Police. His actions threaten to overshadow the honest work and dedication by the vast majority of law enforcement officers, including the many honorable and fine members of the Port Allen City Police Department. My office, together with the FBI and our other federal, state, and local partners, will continue to aggressively pursue such matters wherever the evidence and facts take us.”
FBI Special Agent-in-Charge David Welker stated: “Law enforcement officials are held to a higher standard and must comply with the laws they themselves are entrusted and empowered to enforce. Chief Smith forgot this as well as his oath to uphold the laws of the State of Louisiana. His conviction is a clear indication that the people of Louisiana have said, ‘enough corruption, and we will no longer tolerate it.’”
This ongoing investigation is being conducted by the Federal Bureau of Investigation and the U.S. Attorney’s Office for the Middle District of Louisiana, with assistance from the U.S. Department of Housing and Urban Development, Office of Inspector General. This matter was prosecuted by Assistant United States Attorneys Corey R. Amundson, M. Patricia Jones, and Michael J. Jefferson.
FLORIDA MAN PLEADS GUILTY TO WIRE FRAUD AND AGGRAVATED IDENTITY THEFT
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr. announced that ARNOLD H. THOMAS, 47, of Fernandina Beach, Florida, pled guilty today before United States District Court Chief Judge Brian A. Jackson, to one count of wire fraud and one count of aggravated identity theft. THOMAS faces a maximum sentence of not less than 2 years and not more than 22 years, and fines of up to $500,000.
According to the plea agreement filed with the Court, THOMAS devised a scheme to defraud the Louisiana Workforce Commission by submitting false quarterly wage reports in the names of fictitious companies and then filing false applications for unemployment benefits in the names of various third parties. In all, THOMAS submitted approximately 392 false applications resulting in a loss of approximately $1,254,533.
David C. Wickersham, Special Agent-in-Charge of the Dallas Region for the U.S. Department of Labor’s Office of Inspector General, Office of Labor Racketeering and Fraud Investigations stated, “Today’s guilty plea highlights the Office of Inspector General’s efforts to combat schemes that compromise the integrity of the Department of Labor’s UI program. The OIG will continue to aggressively investigate these types of crimes.”
United States Attorney Donald J. Cazayoux, Jr. stated, “The conviction of this defendant demonstrates our office’s strong commitment to aggressively prosecute anyone who defrauds our public assistance programs for their personal gain.”
The investigation of THOMAS was conducted by the United States Department of Labor – Office of Inspector General and the Social Security Administration – Office of Inspector General, with the assistance of the Louisiana Workforce Commission. The case is being prosecuted by Assistant United States Attorney Rich Bourgeois who serves as Deputy Criminal Chief.
JURY CONVICTS FORMER DIRECTOR OF THE LOUISIANA GOVERNOR’S PROGRAM ON ABSTINENCE OF MAIL FRAUD
BATON ROUGE, LA - United States Attorney Donald J. Cazayoux, Jr. announced that a federal jury has returned a guilty verdict against Gail Ray Dignam, age 64, currently of Diamondhead, Mississippi, and formerly of Baton Rouge, convicting the defendant of two counts of mail fraud. The verdict followed a three-day trial before United States District Judge James J. Brady.
The mail fraud convictions arise from a fraudulent scheme that the defendant executed in 2004 and 2005, while she served as Director of the Louisiana Governor’s Program on Abstinence (GPA).
The defendant used her position to fraudulently execute a contract between the GPA and a contractor, identified on the contract as D.P., to perform technical services for the GPA. The defendant forged D.P.’s signature on the contract, falsely represented that D.P. was living in Louisiana at the time (when, in fact, D.P. was living in Utah), and then approved the contract on behalf of the GPA.
The defendant then prepared and submitted a series of fraudulent monthly invoices and time sheets in the contractor’s name, all without the contractor’s knowledge or authority. Through these false documents and others, the defendant caused the GPA to disburse approximately $51,000, which the defendant directed to bank accounts in Louisiana and Utah that she controlled. The evidence presented at trial also showed that the defendant had previously defrauded two other not-for-profit and/or charitable organizations out of more than $330,000.
As a result of her convictions, Dignam faces up to 40 years in prison and a $500,000 fine. Dignam’s sentencing date has not yet been scheduled.
The case was investigated by the Office of Inspector General for the United States Department of Health and Human Services, the Federal Bureau of Investigation, and the Louisiana Legislative Auditor.
United States Attorney Donald J. Cazayoux, Jr., stated, “We appreciate the strong multi-agency cooperation and coordination that uncovered the defendant’s scheme and led to this conviction. We will continue to work aggressively to prosecute those who abuse their positions of trust to commit fraud.”
“I am proud to be part of the Federal team that brought Dignam to justice,” said William W. Root, Assistant Special Agent-in-Charge of the U.S. Department of Health and Human Services, Office of Inspector General. “Criminals can be assured that if they attempt to defraud federal programs they will sooner or later pay for their crimes," Root warned.
According to FBI Special Agent-in-Charge David Welker, “The public continues to speak through our juries and complainants, and they continue to say, we the citizens of Louisiana no longer tolerate corruption by our public officials. The citizens are always the victims in cases like this and most often, our most vulnerable citizens! Thank the jury for their service and our law enforcement partners for their collaboration! The FBI with our partners will continue to aggressively and relentlessly pursue allegations of corruption!”
The case was prosecuted by Assistant United States Attorney Alan A. Stevens and United States Attorney Donald J. Cazayoux, Jr.
SIXTH SENTENCED FOR SCHEME TO DEFRAUD MEDICARE
BATON ROUGE, LA – United States Attorney Donald J. Cazayoux, Jr., announced today that Chief United States District Judge Brian Jackson sentenced Ray Kirt, 45, a resident of New Iberia, Louisiana. Kirt was sentenced to serve forty-two months in prison, to pay restitution of $1,063,873 to Medicare, to forfeit the gross proceeds of his scheme to defraud Medicare, and to three years supervised release after imprisonment. Kirt had previously pled guilty to two counts of health care fraud.
Kirt is the sixth defendant convicted and sentenced in the scheme to defraud the Medicare program by submitting false and fraudulent claims for psychotherapy services that were not provided.
Previously, Judge Jackson sentenced Kirt’s co-defendant Peggy Mingo to serve 8 months in a halfway house and 3 years on probation for her part in aiding the scheme to defraud Medicare.
Earlier in March 2011, other participants in the scheme to defraud Medicare were sentenced. Judge Jackson sentenced co-defendant Alton Bates, an attorney in Baton Rouge, to thirty-four months in prison; Robert Ivory Levy, 59, to fifteen months imprisonment; and Juanita Anderson Hilton, age 42, to three years probation with a condition that she serve six months in a local halfway house. Both Levy and Anderson Hilton were licensed clinical social workers who used their professional status to assist the scheme to defraud. Levy was ordered to pay restitution of $120,946.89 to Medicare, and to three years supervised release after imprisonment. Anderson Hilton was ordered to repay $89,450 to Medicare.
Alton Bates pled guilty on July 21, 2009 to two counts of health care fraud and two counts of paying illegal kickbacks. Levy and Anderson Hilton both pled guilty to one count of health care fraud. Anderson Hilton pled guilty on July 21, 2009 and Levy pled guilty on September 21, 2009.
In total, the defendants’ participation in this scheme involved more than 7,700 false claims seeking Medicare payments totaling $3,052,838. Due to the scheme, the Medicare program paid $1,063,873 to Above and Beyond, LLC, the Baton Rouge company which the defendants operated between 2003 and 2005.
In July 2008, Judge Frank Polozola sentenced Arnita Horne, a social worker, to serve twenty months in prison for her participation in the same scheme to defraud Medicare. Horne was ordered to repay Medicare $345,804. Horne was also convicted of health care fraud.
The investigation of Above and Beyond, Bates, Levy, and Anderson Hilton was conducted by the Office of Inspector General for the United States Department of Health and Human Services, the Federal Bureau of Investigation, AdvanceMed, the Zone Program Integrity Contractor for Medicare, and the United States Attorney’s Office. The cases were prosecuted by Assistant United States Attorney Rene Salomon.
United States Attorney Donald J. Cazayoux, Jr., stated, “The Department of Justice will continue to aggressively prosecute criminals who enrich themselves at the expense of the Medicare program and the citizens who are in need of this vital health care assistance. This sentencing sends a clear message to Kirt and others like him, that these types of crimes will not go unpunished in this district.”
“I believe we have served notice that health care fraud will not be tolerated,” said William W. Root, Assistant Special Agent-in-Charge, Health and Human Services.
According to FBI Special Agent-In-Charge David Welker: “This case demonstrates the FBI and our law enforcement partners’ continuing commitment to fight health care fraud, especially when it drives the cost of health care up which affects our most vulnerable citizens!”
The investigation of similar schemes to defraud the Medicare program is ongoing.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
RESTAURANTEUR SENTENCED TO 53 MONTHS IN PRISON FOR CONSPIRACY, BRIBERY, AND FRAUD IN OPERATION ZENITH
United States Attorney Donald J. Cazayoux, Jr., announced today that Chief U.S. District Judge Brian A. Jackson sentenced JAMAL M. ROMAN, age 51, of Baton Rouge, Louisiana, to 53 months imprisonment, a term of supervised release following imprisonment of 2 years, restitution to state and local governments in the amount of $726,476, and a fine of $20,000. The sentence stems from ROMAN’s conviction on one count of conspiracy to commit mail fraud and bribery; seven counts of mail fraud; and three counts of bribery involving a federally-funded entity.
ROMAN was sentenced for his role in schemes involving sales tax fraud, bribery, and payroll tax fraud. With regard to sales tax fraud, ROMAN defrauded the State of Louisiana, East Baton Rouge Parish, and Ascension Parish out of approximately $670,000 in sales tax revenue by concealing approximately $7,000,000 in sales from May 2001 until March 2006. ROMAN did so by causing fraudulent monthly reports to be submitted concerning the sales at his restaurants, including Mis Padres Restaurant (formerly Papacito’s Restaurant) in Prairieville, Louisiana, and four restaurants in Baton Rouge, Louisiana, including Roman’s Café on Perkins Road, Roman’s Mediterranean Restaurant on Airline Highway, Roman’s Lebanese Greek Market on Government Street, and Mis Padres Restaurant (formerly Papacito’s Restaurant) on Bluebonnet Boulevard (collectively referred to as “the Roman Restaurants”).
In furtherance of the sales tax conspiracy, ROMAN funded multiple bribes to officials with the East Baton Rouge Parish Auditing Office in connection with an audit of his restaurants. The first bribe was paid in March 2004 to City-Parish Auditor Jerome Shore for the purpose of reducing the audit assessment from $100,000 to approximately $40,000. The second bribe was paid in October and November 2004 to the manager of the Auditing Office who, unbeknownst to ROMAN and the conspirators, was cooperating with law enforcement authorities. The purpose of the bribe was to further reduce the audit assessment to $15,000. The third and final bribe was intended for the manager of the Auditing Office and funded by ROMAN in November 2004. The purpose of the bribe was to eliminate the assessment entirely.
Also, from 2000 until 2006, ROMAN knowingly failed to pay payroll taxes on approximately half of the wages paid to employees at the Roman Restaurants. Such wages were paid by cash and corporate checks. As part of the scheme, the defendant caused a payroll processing company to submit, via the U.S. Mail, false quarterly reports to the Louisiana Department of Labor which significantly under represented the number of employees at the Roman Restaurants and the amount of wages paid to those employees.
This case is part of Operation Zenith, a long-running investigation into fraud and corruption in the collection and payment of sales and payroll taxes. With regard to the sales tax fraud, Operation Zenith uncovered evidence that business owners and the president of an accounting firm had been under-reporting the sales from various businesses by over ten million dollars ($10,000,000) in order to avoid remitting sales tax to the state and local governments. In an attempt to conceal this massive scheme, the business owners and the accountant paid bribes to officials within the East Baton Rouge Parish Auditor’s Office and agreed to bribe an auditor with the Louisiana Department of Revenue. In addition, the conspiracy count to which ROMAN pled guilty outlines the funneling of $700,000 to Syria as part of the conspiracy.
The status of the other Operation Zenith defendants is as follows:
• Humam S. Al-Alousi: Convicted of 1 count of mail fraud involving sales tax fraud, 1 count of bribery, and 1 count of making a false statement to the FBI. He was sentenced to sixty months imprisonment, a $100,000 fine, and $220,401 in restitution.
• Khoa Dinh Chau: Convicted of 1 count of mail fraud involving sales tax fraud and 1 count of bribery. He was sentenced to thirty-seven months imprisonment, a $30,000 fine, and $98,695 in restitution.
• Mohamed H. Ruman: Convicted of 2 counts of mail fraud involving payroll tax fraud. He was sentenced to four months imprisonment, four months in a half-way house, two years supervised release, and $56,000 in restitution.
• Rostom H. Laymon: Convicted of 1 count of mail fraud involving sales tax fraud, 1 count of mail fraud involving payroll tax fraud, and 3 counts of bribery. Awaiting sentencing.
• Hassan S. Abousoayd: Convicted of 4 counts of bribery and 1 count of using an interstate facility in aid of racketeering. He is scheduled to be sentenced at 9:30 a.m. on November 9, 2011.
• Jerome R. Shore: Convicted of 1 count of bribery. Awaiting sentencing.
Operation Zenith is the result of the combined efforts of the United States Attorney’s Office, the Federal Bureau of Investigation, and the Louisiana State Police Criminal Intelligence Unit. The investigation has also been greatly assisted by the cooperation of the East Baton Rouge Parish Auditor’s Office. Other governmental agencies and entities also provided assistance, including the U.S. Department of Homeland Security, the Louisiana State University Police Department, the Louisiana Department of Labor, the Louisiana Department of Revenue, the Ascension Parish Sales and Use Tax Authority, the Internal Revenue Service, and the Government of Lebanon.
United States Attorney Donald J. Cazayoux, Jr. stated, “Roman and his confederates conducted this scheme by bribing and attempting to bribe public officials to conceal millions of dollars in sales from his restaurants. His sentence is entirely appropriate when weighed against the magnitude of his crimes.”
According to FBI Special Agent-in-Charge David W. Welker, “The rule of law must apply to everyone doing business in the United States and the State of Louisiana. Today’s sentencing reflects the serious nature of the fraud and the need for businesses and individuals to comply with laws pertaining to the responsibilities of businessmen.”
This matter was prosecuted by Assistant United States Attorneys Corey R. Amundson, Alan A. Stevens, and Reginald Jones.
FORMER WHITE CASTLE MAYOR SENTENCED TO 10 YEARS IN OPERATION BLIGHTED OFFICIALS
BATON ROUGE, LA - United States Attorney Donald J. Cazayoux, Jr. announced that, as part of Operation Blighted Officials, Chief U.S. District Judge Brian A. Jackson sentenced Maurice B. Brown, age 46, of White Castle, Louisiana, to 120 months imprisonment, a term of supervised release after imprisonment of 2 years, and forfeiture of $5,513.
Brown’s sentence was based on his corrupt activities while serving as the Mayor of White Castle, Louisiana. In February 2011, following a seven-day jury trial, Brown was convicted of 11 counts of violating the Racketeer Influenced and Corrupt Organizations Act (RICO), engaging in mail and wire fraud, and using an interstate facility in aid of racketeering.
Brown was convicted of taking and soliciting a stream of bribes spanning an 18 month period from businessmen seeking a contract with the Town of White Castle. During that period, Brown solicited specific bribes on approximately 15 separate occasions and made non-specific solicitations on countless other occasions. The businessmen were introduced to Brown by a fellow mayor who had identified Brown as corrupt. Unbeknownst to Brown and the fellow mayor, the businessmen were working undercover for the Federal Bureau of Investigation.
In exchange for the bribes, Brown used his position as mayor to promote and obtain money for a conceptual product known as the “Cifer 5000.” The Cifer was marketed as an automated waste container cleaning system using specially designed and equipped trucks to clean and sanitize commercial and residential waste containers. The following are examples of Brown’s corrupt activities concerning the Cifer.
In the Fall of 2008, in exchange for a bribe, Brown provided the businessmen with an official letter of support for the Cifer. In the letter, Brown falsely represented that each member of the town council supported the notion of contracting for the Cifer 5000. In fact, the town council knew nothing of the Cifer 5000. Brown believed that the false letter would be used to cause private investors to provide the Cifer with an additional $2,000,000 to $3,000,000 in funding.
In the Fall of 2009, in exchange for a bribe, Brown provided the businessmen with an official letter of support for the Cifer. The letter was addressed to the head of the U.S. Environmental Protection Agency. Brown believed the businessmen would submit the letter to the EPA to secure a grant for the Cifer worth $3,000,000.
In the Spring of 2010, in exchange for a bribe, Brown agreed to use his position as mayor to secure a contract for the Cifer with his municipality and other public entities, such as the parish. Brown did so with the understanding that he would receive a 10% kickback from any such contracts.
In addition to taking bribes to assist the Cifer, Brown solicited and took bribes from the businessmen in exchange for providing confidential law enforcement information through the White Castle Police Department. Specifically, Brown used his position and his relationship with his brother (the Chief of Police) to fraudulently obtain and provide the businessmen with confidential law enforcement information originating from an FBI database in West Virginia.
U.S. Attorney Cazayoux stated: “Today’s sentence reflects the seriousness of public corruption, particularly when it involves an elected official. Such corruption greatly erodes the public’s confidence in government and public institutions. Our office, together with the FBI and other law enforcement partners, will continue to aggressively pursue corruption wherever it is found using any and all lawful and appropriate investigative techniques.”
FBI Special Agent-in-Charge David Welker stated: “We place great trust in our elected officials, trust that they will maintain and display ethical and lawful conduct and not seek to line their own pockets at the expense of the taxpayer. Maurice Brown was convicted by a jury which spoke loudly, ‘We will no longer tolerate this type of conduct by our elected officials.’ The FBI and our partners will continue to aggressively pursue allegations of corruption.”
The status of the other defendants in Operation Blighted Officials is as follows:
• Johnny Johnson: On July 23, 2010, the former City Councilman of Port Allen, Louisiana, was convicted after pleading guilty to using an interstate facility in aid of racketeering. Johnson faces up to 5 years imprisonment and a $250,000 fine. He will be sentenced by Chief U.S. District Judge Brian A. Jackson on a date to be determined.
• Thomas A. Nelson, Jr.: On June 22, 2011, the former Mayor of New Roads, Louisiana, was convicted by a federal jury following an eleven-day trial of 7 counts of violating RICO, engaging in honest services wire fraud, using an interstate facility in aid of racketeering, and making false statements to the FBI. He faces up to 65 years imprisonment and a $1,750,000 fine. He will be sentenced by Chief U.S. District Judge Brian A. Jackson on a date to be determined.
• Derek A. Lewis: On June 28, 2011, the former Mayor of Port Allen, Louisiana, was convicted after pleading guilty to violating RICO. Based on his acceptance of responsibility and cooperation, the United States has agreed to a sentence of not more than 5 years imprisonment and a $250,000 fine. He will be sentenced by Chief U.S. District Judge Brian A. Jackson on a date to be determined.
• Frederick W. Smith: The Chief of Police for Port Allen, Louisiana, has been charged by a federal grand jury with 11 counts of violating RICO, engaging in honest services wire and mail fraud, and using an interstate facility in aid of racketeering. If convicted, Smith faces up to 130 years imprisonment and a $2,750,000 fine. His trial is set to begin on October 19, 2011, before U.S. District Judge Brian A. Jackson.
• George L. Grace, Sr.: The former Mayor of St. Gabriel, Louisiana, has been charged by a federal grand jury with 11 counts of violating RICO, bribery involving a federally-funded entity, making false statements, obstruction of justice, honest services mail and wire fraud, and use of an interstate facility in aid of racketeering. If convicted, Grace faces up to 180 years imprisonment and a $2,750,000 fine. His trial is set to begin in Baton Rouge on January 23, 2012, before U.S. District Judge Maurice Hicks of the Western District of Louisiana who will be handling the matter as a visiting judge.
This matter is part of Operation Blighted Officials, an investigation conducted by the Federal Bureau of Investigation and the U.S. Attorney’s Office with assistance from the U.S. Department of Housing and Urban Development, Office of Inspector General. This matter was prosecuted by Senior Deputy Criminal Chief Corey R. Amundson and Senior Litigation Counsel M. Patricia Jones.