KANSAS CITY, Mo. – United States Attorney Tammy Dickinson announced today that the Western District of Missouri collected more than $25.5 million in criminal and civil actions in Fiscal Year 2015. Of this amount, more than $8.8 million was collected in criminal actions, more than $6 million was collected in civil actions and more than $10.6 million was collected through the seizure of assets that were forfeited to the government from Oct. 1, 2014, to Sept. 30, 2015.
The Western District of Missouri also worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $4 million in cases pursued jointly with these offices, primarily in civil actions.
“The pursuit of justice involves not only prosecuting criminals, but being diligent to collect the fines levied by the court and restitution payments on behalf of the victims of crime,” Dickinson said. “I am determined that criminals will not profit from their crimes, and that those involved in civil actions pay the government what they owe.”
Attorney General Loretta E. Lynch also announced today that the Justice Department collected a total of $23.1 billion in civil and criminal actions in FY 2015. The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes more than $16.2 billion in payments made directly to the Justice Department, and more than $6.8 billion in indirect payments made to other federal agencies, states and other designated recipients.
Collections in FY 2015 represent more than seven and a half times the approximately $2.93 billion of the Justice Department’s combined appropriations for the 94 U.S. Attorneys’ offices and the main litigating divisions in that same period.
“The Department of Justice is committed to upholding the rule of law, safeguarding taxpayer resources, and protecting the American people from exploitation and abuse,” said Attorney General Loretta Lynch. “The collections we are announcing today demonstrate not only the strength of that commitment, but also the significant return on public investment that our actions deliver. I want to thank the prosecutors and trial attorneys who made this achievement possible, and to reiterate our dedication to this ongoing work.”
Contraband Cigarette Trafficking
As an example of FY 2015 collections in the Western District of Missouri, TSNE, doing business as Jan’s Smoke Shop, in Bascom, N.Y., paid a total of more than $3.5 million in fine, forfeiture and restitution.
A number of defendants were convicted in a multi-million dollar, multi-state conspiracy to transport hundreds of thousands of cartons of contraband cigarettes from the Kansas City, Mo., area to the state of New York, where they were sold primarily on Indian reservations. Conspirators purchased more than $17 million worth of contraband cigarettes from ATF agents during an undercover operation. Approximately 620,600 cartons of cigarettes – containing 10 packs per carton – were transported to New York without paying the required $4.35 per pack excise tax. The untaxed cigarettes were sold by New York retailers and smoke shops on the reservations in the state of New York. The benefit to those smoke shops was that they did not pay New York state cigarette taxes; thus, they could undercut the prices charged by off-reservation cigarette retailers by over $40 per carton. The total state excise tax lost to the state of New York was more than $8 million, which has been paid in restitution to the state by the perpetrators of the scheme.
Jan’s Smoke Shop is a gas station and convenience store recognized by the Tonawanda Seneca Nation. TSNE paid a fine of $950,000 and restitution of $1,900,080 to the state of New York. TSNE also forfeited $700,650 to the government. As a result of this investigation, Keith Donald Stoldt of Cowlesville, N.Y., who operated the Totem Smoke Shop located on the Tonawanda Seneca Indian Reservation, also forfeited $247,080 to the government in FY 2014. Craig Sheffler of Independence, Mo., owner of Cheap Tobacco Wholesale, forfeited $599,206 to the government. Gholamreza Tadaiyon of Weston, Fla., forfeited $448,189 to the government.
Mercy Health Springfield Communities
Two southwest Missouri health care providers paid $5.5 million to settle allegations that they violated the False Claims Act by engaging in improper financial relationships with referring physicians. The two providers are Mercy Health Springfield Communities (formerly known as St. John’s Health System Inc.), which owns and operates a hospital in Springfield, Mo., and its affiliate, Mercy Clinic Springfield Communities (formerly known as St. John’s Clinic), which operates health care facilities in southwest Missouri.
The settlement resolved allegations that the providers submitted false claims to the Medicare program for services rendered to patients referred by physicians who received bonuses based on a formula that improperly took into account the value of the physicians’ referrals of patients to the clinic. Federal law restricts the financial relationships that hospitals and clinics may have with doctors who refer patients to them.
Joplin Oncologist Dispenses Foreign, Misbranded Drugs
Robert L. Carter, 74, of Carthage, Mo., an oncologist who operated a clinic in Joplin, Mo., paid more than $2.1 million in restitution and asset forfeiture after being convicted of dispensing foreign, misbranded drugs to his cancer patients.
Carter, who forfeited $971,854 to the government in FY2014, previously had paid $971,854 in restitution to Medicare, Tri-Care, Missouri Medicaid, Oklahoma Medicaid and Kansas Medicaid. Carter previously had paid $228,145 of the forfeiture judgment.
Carter was the president and medical practitioner of Robert L. Carter, M.D., in Joplin, from Oct. 23, 1991, to April 2, 2012. As a medical oncologist, Carter provided care and treatment for patients with cancer and blood diseases. The practice purchased prescription drugs, including chemotherapy drugs, which were prescribed by Carter and were administered and dispensed through the practice. Reimbursement for the drugs and their administration was sought from the Medicare and Medicaid programs, Tricare as well as other private health care benefit programs. In April 2010, Carter began ordering prescription cancer drugs from Quality Specialty Products (QSP) in Winnipeg, Manitoba, Canada. QSP sold drugs – which had been obtained from foreign sources and which had not been approved by the U.S. Food and Drug Administration for distribution or use in the United States – to physicians and other health care providers in the United States.
Donna M. Preszler, 61, formerly of Chillicothe, Mo., paid $420,017 in restitution in FY 2014 to her former employer, Burdg, Dunham & Associates Construction Corp. She and her husband, Terrance W. Preszler, 64, were convicted on charges involving her embezzlement of nearly $4 million from her employer and for the couple jointly filing a false income tax return not claiming the income from the wire fraud scheme.
Donna Preszler was sentenced to five years and 10 months in federal prison without parole. Terrance Preszler was sentenced to three years in federal prison without parole, which is the statutory maximum. The court also ordered the Preszlers to pay $4,049,121 in restitution to Burdg, Dunham & Associates Construction Corp. and $1,236,690 in restitution to the Internal Revenue Service, for a total restitution amount of $5,285,811. The court also ordered the Preszlers to forfeit to the government a money judgment of $3,912,000, two residential lots, two 14kt diamond rings, eight vehicles (a 2007 Ford Taurus, a 2007 Mazda CX-7, a 2011 Nissan Versa, a 2010 Nissan 370Z, a 2010 Ford F150, a 2010 Ford Escape, a 2012 Ford Explorer and a 2012 Nissan Rogue), three 2011 Yamaha ATVs and several bank and funeral trust accounts.
Elected Prosecutor Embezzlement
Richard F. Turner, 39, a Bethany, Mo., attorney paid $193,769 in restitution after stealing more than $540,000 from an elderly client. Turner is the former elected county prosecutor of Harrison County, Mo., and was re-elected to that office a few weeks before his guilty plea.
Turner admitted that from October 12, 2004 to May 29, 2014, he fraudulently attempted to obtain at least $728,147.18, and he did obtain at least $540,803.86, from an elderly client. He spent the money on personal expenses, including paying off his home mortgage, putting in a swimming pool, and spending heavily at retail establishments and restaurants in Bethany, St. Joseph, and Kansas City, Mo., including to support his clothing store, Richard’s / TD Clothiers, in Bethany. Turner further admitted that he failed to pay taxes on the embezzled income, causing additional loss to the state and federal government of at least approximately $154,453.
Dataline Technologies, Inc., a Springfield telemarketing company that sold ink cartridges to customers across the United States over the telephone, paid $398,000 in restitution to hundreds of victims. Dataline, which was owned and operated by Richard Morsovillo, is no longer in business. Dataline pleaded guilty to defrauding its customers by inducing them to purchase ink cartridges through false representations and promises.
The Western District of Missouri collected $26,575,724 in criminal and civil actions in FY 2015. Of this amount, $14,823,396 was collected in criminal actions (such as fines and victim restitution), $6,283,214 was collected in civil actions, and $5,469,114 was collected in asset forfeiture actions.
The U.S. Attorneys’ Offices, along with the Justice Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the U.S. and criminal debts owed to federal crime victims. The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the department’s Crime Victims’ Fund, which distributes the funds to state victim compensation and victim assistance programs.
The largest civil collections were from affirmative civil enforcement cases, in which the United States recovered government money lost to fraud or other misconduct or collected fines imposed on individuals and/or corporations for violations of federal financial, health, safety, civil rights and environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.