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NFL player charged in $24 mln covid-relief fraud scheme

Posted on September 10, 2020 by kmurali@biometrica.com

By a Biometrica staffer

Former New York Jets wide receiver Joshua J Bellamy was arrested in Florida and charged for his role in a scheme that involved defrauding the Paycheck Protection Program (PPP). The National Football League (NFL) player and his associates allegedly filed fraudulent loan applications seeking more than $24 million in forgivable PPP loans under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

Bellamy, 31, was charged in a federal criminal complaint with wire fraud, bank fraud, and conspiracy to commit wire fraud and bank fraud, the US Department of Justice said in a statement.

Early in the scheme, Phillip J Augustin allegedly obtained a fraudulent PPP loan for his talent management company using falsified documents. After submitting that application, Augustin then began to work with other co-conspirators, including Bellamy, on a scheme – to submit numerous fraudulent PPP loan applications for confederate loan applicants, in order to receive kickbacks for obtaining the forgivable loans for them.

Bellamy is alleged to have received a PPP loan of $1.24 million for his own company, Drip Entertainment LLC. He is said to have used that money to purchase over $104,000 in luxury goods, including purchases at Dior, Gucci, and jewelers. He allegedly spent around $62,774 at the Seminole Hard Rock Hotel and Casino, and withdrew over $302,000. Bellamy is also said to have sought PPP loans on behalf of his family members and close associates.

The complaint alleges that the scheme involved the preparation of at least 90 fraudulent applications, most of which were submitted. Many of those loan applications were approved and funded by financial institutions, paying out at least $17.4 million.

PPP & the CARES Act

Established by the CARES Act, the PPP provides small businesses with necessary funds to remain operational despite the severe economic hit from the covid-19 pandemic.

The CARES Act is designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects of the covid-19 pandemic, and was enacted as federal law on March 29. One source of relief is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP. In April, Congress authorized over $300 billion in additional PPP funding.

Through PPP, qualifying small businesses and other organizations are eligible to receive loans with a maturity of two years and an interest rate of 1%. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period, and use at least a certain percentage of the loan towards payroll expenses.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form.

Radiology firm, its partner, to pay $5 mln settlement

Posted on September 9, 2020 by kmurali@biometrica.com

By a Biometrica staffer

William M. Kelly Inc and Omega Imaging Inc, who together operate 11 radiology facilities in Southern California, have agreed to pay the US $5 million to resolve false claims allegations.

They allegedly violated the False Claims Act (FCA) by knowingly submitting claims to Medicare and the military healthcare program, TRICARE, the US Department of Justice said in a statement. The claims they submitted were for unsupervised radiology services and services provided at unaccredited facilities.

The settlement resolves allegations that the defendants submitted claims for CT scans and MRIs involving contrast injections that were not properly supervised by a physician. A physician has to be present in the office suite when a patient undergoes an examination that involves the administration of intravenous contrast material, according to applicable program rules.

But the defendants allegedly performed and billed for these procedures when no supervising physician was present. The settlement also resolves allegations that a certain number of the defendants’ facilities lacked accreditation.

Along with the settlement, William M. Kelly and Omega Imaging also entered into a three-year Integrity Agreement with the Department of Health and Human Services Office of Inspector General requiring – among other things – a risk assessment and internal review process to identify and address evolving compliance risks. The agreement requires training, auditing, and monitoring designed to address the conduct alleged in the case.

The allegations were originally brought in by a lawsuit filed under the qui tam, or whistleblower, provisions of the FCA by Syd Ackerman, who was formerly employed by the defendants. The FCA allows private parties to sue on behalf of the government for false claims, and to receive a share of any recovery. It also permits the US to intervene in such a lawsuit, as it did in part here. Ackerman will receive around $925,000 of the settlement proceeds.

“Patients rightly expect that medical providers follow the proper procedures and protocol when administering complex treatments to ensure patient safety. Working with our law enforcement partners we remain steadfast in our commitment to uphold the integrity of government health programs.”
Timothy B. DeFrancesca, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services

19-year old accused of issuing online bomb threat

Posted on September 8, 2020 by kmurali@biometrica.com

By a Biometrica staffer

A teenager was accused of issuing a bomb threat online, while interrupting a virtual lecture conducted by the University of Houston that he wasn’t supposed to have access to. The 19-year old Houston resident also allegedly proclaimed his association to ISIS while he interrupted the lecture, the US Attorney’s Office of the Southern District of Texas said, according to a CNN report.

Ibraheem Ahmed Al Bayati allegedly “Zoombombed” the lecture on September 2 saying “what does any of this have to do with the fact that UH is about to get bombed in a few days,” prosecutors said. He then repeated an Arabic phrase meaning “Islamic State will remain” before leaving the call, causing the students to gasp, prosecutors said.

The lecture was being held on video conferencing app Zoom. The term Zoombombing means a Zoom call’s meeting login information has been compromised. In Al Bayati’s case, a spokesperson from the University said while he was never enrolled as a student, the online class link was shared with him by an actual student.

Federal authorities were alerted, and Al Bayati was tracked down by the IP address he used to log into the Zoom lecture. He told the federal agent that the threat and hand gesture he made on the call was a joke between him and his friend. The gesture he made, which hasn’t been described in the report, is sometimes an indicator of radical Islamic ideology according to the criminal complaint.

“Mr. Al Bayati claimed it was a joke, but also when we look through at least a cursory review of one of the phones, there was ISIS material on there.”
The prosecutor said in court

Al Bayati was arrested on September 4 for making threats, or conveying false information to destroy by means of fire or explosives, and making a threat over interstate commerce. Federal investigators recovered three phones and a laptop from Al Bayati when he was arrested, the prosecutor said.

The agent checked Al Bayati’s phone records that showed since October 2019, he allegedly used other social media apps to find ISIS supporters, talked about helping “an individual in a certain foreign city,” and asked that individual to recite a pledge new ISIS recruits say. Al Bayati also explained to an associate “that he was ‘literally known’ as an ISIS recruiter,” according to the criminal complaint.

If convicted, Al Bayati faces a minimum of five and up to 10 years in federal prison, prosecutors said.

Eight missing children rescued in Indianapolis

Posted on September 7, 2020 by kmurali@biometrica.com

By a Biometrica staffer

Eight missing children were rescued in a five-day operation in the Indianapolis area, as part of “Operation Homecoming.” The children are between 6 and 17 years old and considered to be some of the most “at risk and challenging recovery cases in the area,” according to a report by USA TODAY.

An adult was arrested during the operation on charges that included parental kidnapping, possession of weapons and intimidation, the report said, citing a press release from the U.S. Marshals Southern District of Indiana.

The U.S. Marshals Service planned for months to help locate these children, with other organisations including the Indianapolis Metropolitan Police Department and the National Center for Missing and Exploited Children (NCMEC). It is the first missing children operation for the U.S. Marshals Southern Indiana District.

The Marshals are committed to assisting state and local agencies with locating and recovering endangered missing children to help prevent their falling victim to crimes of violence and exploitation. We will use every resource at our disposal to find [the missing children].
Dan McClain, U.S. Marshal for the Southern District of Indiana

Additional details on the rescued children and their circumstances were not released. The children were turned over to the care of the Indiana Department of Child Services.

Over 50 children were rescued in similar operations that took place recently in Georgia and Ohio. “Operation Safety Net” led to the discovery of 25 children – aged 13 to 18 – in Ohio, in less than three weeks. The operation is likely to continue into October, U.S. Marshal Peter Elliott said.

In Georgia, “Operation Not Forgotten” led to the rescue of 39 children earlier in September. Many of the recovered children were found with a parent, were kidnapped by a parent, had gone missing from child services, or had fled juvenile justice, the Marshals’ Missing Child Unit chief Darby Kirby told USA TODAY. Of the 39 children, 15 were victims of trafficking – most would be considered runaways “who fell into the human trafficking realm,” Kirby said, according to USA TODAY.

These operations are part of efforts at the local level to locate missing children, rather than a coordinated nationwide sweep. Since 2005, the marshals have helped recover 1,800 missing children.

Philadelphia men charged with child sex trafficking

Posted on September 4, 2020 by kmurali@biometrica.com

By a Biometrica staffer

Three men from Philadelphia were charged for their roles in a sex trafficking operation that exploited numerous minors from 2016 through 2017 by a federal grand jury, the US Department of Justice said in a statement.

Andre Michael Felts, aka “Dre” and “Plug,” and 60-year old Kevin Michael Francis, aka “Kev,” were each charged with one count of conspiracy to sex traffic a minor and four counts of sex trafficking a minor. Ryan Keel, 39, was charged with conspiracy to sex traffic a minor.

Felts, 32, ran a prostitution ring that recruited and enticed young girls, including minors, to engage in commercial sex acts, the indictment alleges. He harbored the victims at various residences for that purpose; transported and provided the victims to men who purchased the commercial sex acts; and collected a portion of the proceeds.

The indictment was unsealed on Friday in the Eastern District of Pennsylvania. The charges and allegations contained in an indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

This investigation was part of Project Safe Childhood. Launched in May 2006 by the DoJ, Project Safe Childhood is a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children online, as well as to identify and rescue victims.

Attorney charged for defrauding PPP of $9 mln

Posted on September 3, 2020 by kmurali@biometrica.com

By a Biometrica staffer

An attorney from New Jersey was arrested on charges of defrauding the Paycheck Protection Program (PPP) by obtaining about $9 million in loans, the US Department of Justice said in a statement.

Jae H. Choi, a licensed attorney of Cliffside Park, was charged by criminal complaint, unsealed today upon his arrest, in the District of New Jersey with three counts of bank fraud and one count of money laundering.

The complaint alleges that Choi, 48, submitted three fraudulent PPP loan applications to three different lenders on behalf of three different businesses, which supposedly provided educational services. Choi allegedly fabricated the existence of hundreds of employees, manipulated bank and tax records, and falsified a driver’s license on the applications.

He also falsely represented to the lenders that the companies controlled by him had hundreds of employees and paid over $3 million in monthly wages, the complaint adds. Based on Choi’s alleged misrepresentations, each lender funded each of the three businesses with an approximately $3 million PPP loan. In total, Choi received nearly $9 million in federal COVID-19 emergency relief funds meant for distressed small businesses.

Choi allegedly used the fraudulently-obtained PPP loan proceeds to pay for numerous personal expenses, including buying a nearly one million-dollar residential home in Cresskill, to fund roughly $30,000 in remodeling and other improvements, and to invest millions more in the stock market through an account held in the name of his spouse.

PPP & the CARES Act

Established by the Coronavirus Aid, Relief and Economic Security (CARES) Act, the PPP provides small businesses with necessary funds to remain operational despite the severe economic hit from the covid-19 pandemic.

Three former caregivers convicted for death of patient

Posted on September 2, 2020 by kmurali@biometrica.com

By a Biometrica staffer

Three former caregivers have been sentenced for their roles in the death of a special needs resident at Second Chance Homes (SCH), an organization that provided housing and care for persons with developmental challenges through a Missouri Department of Mental Health initiative.

Sherry Paulo, 55, was sentenced to over 17 years of imprisonment, while her partner Anthony Flores, 60, was sentenced to more than 15 years in prison for their roles in the death of the resident. Anthony R. K. Flores (R.K. Flores) was sentenced to three years of probation for his role in the tragic death, the US Department of Justice said in a statement.

Paulo, Flores, and R.K. Flores worked as caregivers at SCH. The victim, whom the DoJ only identified as C.D. in its statement, was significantly developmentally challenged and entirely dependent upon his caretakers. He had been a resident at SCH since 2008. Paulo was assigned to care for C.D. in the months leading up to his death.

On November 22 2019, Paulo and Flores each pleaded guilty to one count of willfully failing to provide necessary medical care to C.D. – resulting in his injury and death, in federal court in the Western District of Missouri. Paulo also pleaded guilty to one count of healthcare fraud arising from her efforts to hide C.D.’s death. On February 12 2020, R.K. Flores pleaded guilty to one count of knowingly falsifying a document with the intent to impede, obstruct, and influence a federal investigation related to the death of C.D.

“These defendants violated their legal and moral obligation to provide medical care to a person with developmentally disabilities, who was dependent upon them, then attempted to cover up their crime beneath layers of deceit and literal concrete. Besides substandard care and dismal living conditions, they refused to seek medical treatment for their victim as his health deteriorated. Today the justice system is holding them accountable for their roles in his tragic death.”
U.S. Attorney Tim Garrison of the Western District of Missouri

Flores and Paulo admitted in their guilty plea that they observed C.D.’s weight decline and his health deteriorate since the beginning of 2014. But Paulo stopped following C.D.’s prescribed health regimen and stopped taking him to his doctors’ appointments. Paulo and Flores observed C.D. become underweight and pale, struggle to eat, and appear to have less energy.

As C.D.’s health deteriorated, Paulo occasionally took him out of his designated SCH residence and put him in the basement of the home she shared with Flores. The basement was small and dark without access to sunlight or running water. Although Paulo and Flores witnessed C.D.’s health continue to decline while in her basement, they did not take him to get necessary medical treatment. They did not want Paulo to be blamed for C.D.’s malnutrition and ill health.

C.D. suffered an acute medical emergency while in the basement room of Paulo and Flores’s home, roughly around September 2016. Despite observing his physical distress and obvious medical need, Paulo and Flores chose not to seek medical care for him. C.D. died in their home while Paulo and Flores watched. Before his death in or about September 2016, C.D. last had last been taken to a doctor in December 2015.

Paulo and Flores also admitted in their pleas that after C.D.’s death, Paulo placed his body in a trashcan. Paulo and Flores put the trashcan in a wooden crate that they filled with cement. Paulo, Flores, and R.K. Flores then placed the crate in Paulo’s storage unit.

In the months that followed, Paulo took extensive measures to cover up C.D.’s death. She instructed another SCH resident to lie in C.D.’s bed to convince officials that C.D. was still present at SCH; repeatedly used C.D.’s Electronic Benefits Card; asked an SCH employee to falsely present another SCH resident as C.D. at a doctor’s appointment and get a prescription in C.D.’s name; and falsified numerous official records related to C.D.

After C.D. died, Paulo submitted, or caused to be submitted, false Medicaid claims for services purportedly rendered to C.D. when, as she knew, he was deceased. The amount wrongfully paid by Medicaid, between late 2016 and the first three months of 2017, was $106,795.

It was not until April 2017 that the defendants admitted C.D. was no longer at SCH. Paulo reported C.D. missing to the Fulton, Missouri Police Department on April 17 2017. When interviewed by the police, Paulo, Flores, and R.K. Flores falsely stated that they had seen C.D. on April 16 2017. They did not admit their wrongdoing until a week later, when the police discovered C.D.’s body.

“Our caregivers have a moral as well as legal obligation to treat those they are entrusted to care for with respect and protect them from abuse. In this free country, it is the solemn duty of government to protect all persons, including those who are most vulnerable, from criminal acts that result in the horror that occurred in this case. No one should be confined and left to die in a small, dark basement and then hidden in a trash can filled with cement. The department of Justice will ensure that those who commit acts like these and violate the civil rights of others see justice under the law.”
Assistant Attorney General Eric Dreiband of the Civil Rights Division

Man used racial epithets to threaten auto loan employee

Posted on September 1, 2020 by kmurali@biometrica.com

By a Biometrica staffer

Phillip Cline Jr. of Elkton, Maryland, used racial epithets on and threatened to physically harm an employee of an auto loan business. Cline, 39, pleaded guilty to making threatening interstate communications, the US Department of Justice said in a statement.

Cline admitted that during a recorded phone conversation with the employee, he threatened physical harm and described the employee using racial epithets.

On February 1 2019, an employee of an auto loan business contacted Cline about what the business suspected to be a delinquent auto loan, according to the plea agreement. During the call, which was recorded, Cline was clearly upset with the caller and did not want to provide information verifying his identity.

Ultimately, Cline, who was advised that the call was being recorded, used racial epithets to threaten the employee with physical harm. He told the employee his “white power friends” will “hang your ass” during the course of the telephone call, according to the publicly available plea agreement.

Cline faces a maximum sentence of five years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors. U.S. District Judge Ellen L. Hollander has scheduled sentencing for Cline on October 10 2020.

Florida man sentenced for racially-motivated crimes

Posted on August 31, 2020 by kmurali@biometrica.com

By a Biometrica staffer

Daniel McMahon, a resident of Florida, was sentenced to more than 3 years in prison for two separate racially-motivated crimes, the US Department of Justice said in a statement. The first of the two involve him threatening an African-American Charlottesville City Council candidate over his race, and the second involves cyberstalking a separate victim on Facebook messenger for countering white nationalist rallies.

On April 30, McMahon pleaded guilty to one count of racially-motivated threats to interfere with an election, and one count of cyberstalking. At the plea hearing, he admitted that he uses the online pseudonyms “Jack Corbin,” “Pale Horse,” “Restore Silent Sam,” and “Dakota Stone,” to promote white supremacy and white nationalist ideology, and to express support for racially-motivated violence.

After learning that D.G. planned to announce his candidacy for the city council, the defendant used his Jack Corbin account on social media platform Gab to threaten violence against him based on his race and the fact that he was running for office, McMahon admitted in January 2019. Although the DoJ statement only identifies the victim as “D.G.,” media reports from September 2019 – when McMahon was arrested – mention the victim’s full name.

McMahon admitted that his posts used racial slurs and invoked long-standing racial stereotypes, and that he intended for D.G. to understand his posts as threats to his safety.

“Americans have the right to run for office in this country without facing racially-bigoted threats of violence. Furthermore, no American should have to live with hateful threats of sexual violence for opposing white nationalism. The Justice Department will continue vigorously to prosecute anyone who attempts to infringe on these civil rights and thereby undermine our democracy.” Assistant Attorney General Eric Dreiband for the Civil Rights Division.

Separately, he admitted to using his “Restore Silent Sam” Facebook account to cyberstalk a person identified in court documents as Victim 2. In connection with this charge, McMahon admitted he used Facebook to send her numerous intimidating and threatening messages, which placed Victim 2 in reasonable fear of harm to her minor child, who has autism. The defendant acknowledged that Victim 2 has been active in countering white nationalist rallies in her community.

McMahon also admitted that because of Victim 2’s activism, he began an online campaign to intimidate her and to extort information from her about her fellow activists. This included sending her numerous messages over the course of 12 days in which he threatened to sexually assault her minor daughter.

At around the same time when he sent those messages, McMahon also used the internet to conduct searches relating to sexual contact with girls who have autism. His messages reasonably caused Victim 2 serious emotional distress and fear for her child’s safety.

“The FBI applauds the sentencing in this case and remains steadfast in its commitment to protecting the civil rights of all Americans. We also commend the courage of the victims who come forward to report these threats.” Special Agent in Charge David W. Archey of the FBI’s Richmond Division Following his term of incarceration, McMahon will be placed on three years of supervised release, during which time he will be prohibited from using internet-capable devices without prior court approval.

American man indicted for exploiting Laotian kids

Posted on August 28, 2020 by kmurali@biometrica.com

By a Biometrica staffer

An American man was indicted for exploiting teenage boys in Laos, where he taught English, the US Department of Justice said in a statement. Michael Sebastian, 52, was indicted on three counts of engaging in illicit sexual conduct in foreign places and three counts of sex trafficking of children.

Sebastian was charged by criminal complaint and arrested on July 7 2020 in Lynn, Massachusetts. He was, later on, released on conditions including home incarceration in Ashby following a detention hearing on July 31 2020.

According to the charging documents, Sebastian provided housing to at least three boys, aged between 13 and 18, during at least the past two years. In lieu of paying rent to live with him, Sebastian allegedly “allowed” the boys to pay off their rent by performing chores. These chores included giving Sebastian massages – which, in turn, included masturbating Sebastian, the documents showed.

Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division, U.S. Attorney Andrew E. Lelling of the District of Massachusetts, and Special Agent in Charge Joseph R. Bonavolonta of the FBI’s Boston Field Office made the announcement. This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the DoJ. Led by the U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims.