Former New Jersey Law Firm Employee Sentenced to 21 Months in Prison for Stealing More Than $500,000 from Law Firm

TRENTON—The former bookkeeper of a law firm based in Ocean County, New Jersey was sentenced to 21 months for defrauding her former employer by stealing more than $500,000 from the firm, U.S. Attorney Paul J. Fishman announced.
Sharon Wetter, 53, of Forked River, New Jersey, previously pleaded guilty before U.S. District Judge Mary L. Cooper to an information charging her with one count of mail fraud. Judge Cooper imposed the sentence today in Trenton federal court.
According to documents filed in this case and statements made in court:
Wetter admitted that between 2004 and October 2010, she embezzled from her former employer, referred to in court documents only as the “law firm,” by wrongfully writing checks from the bank accounts of the firm to pay her outstanding personal credit card balances and to make car payments. Wetter concealed those payments by altering the law firm’s electronic books and records to make it appear that the checks were for legitimate business expenses. Wetter, who had access to checks and bank accounts in order to perform her duties as the firm’s bookkeeper, used that access to divert more than $500,000.
In addition to the prison term, Judge Cooper sentenced Wetter to three years of supervised release and ordered Wetter to make restitution in the amount of $521,596.
U.S. Attorney Fishman credited special agents of the Red Bank Resident Agency of the FBI, under the direction of Acting Special Agent in Charge David Velazquez, for their work in the investigation of this case.
The government is represented by Assistant U.S. Attorney Harvey Bartle of the U.S. Attorney’s Trenton Office.

Massachusetts Man Sentenced to 24 Months in Federal Prison on Money Laundering, Gambling, and Tax Violations

CONCORD—John Giannelli, Sr., 66, of Danvers, Massachusetts, was sentenced to 24 months in federal prison today after pleading guilty on September 27, 2012, in the United States District Court for the District of New Hampshire to one count of money laundering, one count of operating an illegal gambling business, and five counts of impeding the administration of the Internal Revenue laws, announced United States Attorney John P. Kacavas.
Giannelli operated a computer based sports betting business while he resided in Peabody, Massachusetts, and then Kingston, New Hampshire. Giannelli controlled access, through the use of user identifications and passwords, to a gambling site and granted access to that site to dozens of agents. Approximately 300 customers making sports related wagers were able to gain access to the site through the agents, and Giannelli was able to monitor the overall betting activity. A forensic analysis of betting records obtained from computers seized at Giannelli’s residence in March 2012 established that the operation generated gross profits of approximately $188,000 over a 12-week period.
The money laundering charges arose from a scheme in which Giannelli was listed as an employee on a former sports betting customer’s business. Giannelli provided the business with cash proceeds generated by the gambling business and, in return, the business issued paychecks to Giannelli, thus making it appear that Giannelli’s income was legitimate. The business also caused to be generated false W-2 forms that Giannelli used to support tax returns filed with the IRS. Between 2003 and 2007, Giannelli laundered approximately $452,000 in proceeds through the scheme. The District Court ordered a money judgment forfeiture in the amount of $452,000.
The investigation was conducted by the Federal Bureau of Investigation and the Internal Revenue Service.

Former Grand Rapids-Area Financial Adviser Sentenced to 54 Months in Prison for Wire Fraud

GRAND RAPIDS, MI—U.S. Attorney Patrick A. Miles, Jr. announced today that Lawrence Maxwell McCoy of Bitely, Michigan, was sentenced by U.S. District Judge Janet T. Neff to 54 months in prison for wire fraud. The U.S. Attorney’s Office filed a one-count felony information on September 7, 2012, charging McCoy with a scheme to defraud. McCoy pled guilty to the charge on September 20, 2012, pursuant to a plea agreement.
McCoy sold mutual funds and insurance in and around Holland and Grand Rapids, doing business as Hallbrook Asset Management and Hallbrook Group LLC. Under these auspices, McCoy provided legitimate investment advice and services but also defrauded six of his clients, causing total losses of $708,267.37 between 1995 and 2009. To perpetrate his fraudulent scheme, McCoy fabricated an investment that he called “Marsico Private Ledger.” He represented to his clients that Marsico Private Ledger was an investment offered through Marsico Capital Management LLC, a real mutual fund provider based in Colorado. McCoy then induced many of his existing clients, who otherwise had legitimate investments managed by McCoy, to invest in Marsico Private Ledger. After McCoy received his clients’ money under these fraudulent pretenses, he diverted it to his own use. To cover up the fraudulent scheme, McCoy fabricated investment return information and published it to his clients by manually entering the phony returns on a legitimate third-party Internet reporting site dedicated to wealth management reporting. McCoy also sent e-mails to his clients to communicate the phony return information and to assure them that their investments in Marsico Private Ledger were safe. McCoy specifically targeted clients that he knew would not have an immediate need for their money. Through his scheme, McCoy stole clients’ nest eggs and money earmarked for college funds.
In handing down McCoy’s sentence, Judge Neff pointed out that McCoy’s behavior was “not aberrant” but, rather, “a thread in his history.” In 2009, McCoy was sentenced in 28th Circuit Court in Cadillac, Michigan, to five years of probation for embezzling money from investments that he managed for a family member. Judge Neff added, “When people fall prey to this type of financial misconduct, it is really devastating.”
U.S. Attorney Miles stated, “Financial fraud often is a silent crime that can go undetected for months, if not years. When that happens, the impact on a victim’s nest egg is truly devastating. The United States Attorney’s Office for the Western District of Michigan is committed to pursuing and bringing to justice financial professionals who defraud their clients.”
In addition to his 54-month prison sentence, McCoy was also sentenced to two years of supervised release and was ordered to pay restitution in the amount of $690,267.37.
The case was prosecuted by Assistant U.S. Attorney Joel Fauson and was investigated by the Federal Bureau of Investigation, Grand Rapids Resident Agency.

Joplin Woman Pleads Guilty to Making False Statements to Receive Tornado Benefits

SPRINGFIELD, MO—David M. Ketchmark, Acting United States Attorney for the Western District of Missouri, announced that a Joplin, Missouri woman pleaded guilty in federal court today to making false statements in order to obtain federal disaster benefits following the May 22, 2011 tornado.
Pamala Ann Shafer, 37, of Joplin, pleaded guilty before U.S. Magistrate Judge David P. Rush to the charges contained in an April 3, 2012 federal indictment.
Shafer admitted that she applied for federal disaster benefits by falsely claiming that her residence had been damaged by the tornado. Shafer also filed an application for temporary rental assistance. On the basis of Shafer’s representations, FEMA authorized a $938 payment. Shafer admitted today she did not reside at that address at the time of the tornado. Rather, the apartment had been owned by another individual, who did not know Shafer.
Shafer is the fifth defendant to plead guilty in cases related to fraudulently receiving federal disaster benefits following the tornado. In separate and unrelated cases, Wanda Gail McBride, Ronald Martell Irby, and Karen Marie Parks, all of Joplin, pleaded guilty and have been sentenced. Amber Nicole Peters of Joplin pleaded guilty and awaits sentencing.
Under federal statutes, Shafer is subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
Disaster Fraud Hotline
Anyone with information about disaster fraud related to the Joplin tornado should call the National Center for Disaster Fraud hotline at 866-720-5721, the Joplin Police Department at 417-623-3131, or the FBI’s Joplin Resident Agency at 417-206-5700.
This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the FBI; Homeland Security Investigations-Office of Inspector General; and the Joplin, Missouri Police Department.
This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available online at http://www.justice.gov/usao/mow/index.html.

Florida-Based American Sleep Medicine to Pay $15.3 Million for Improperly Billing Medicare and Other Federal Health Care Programs

WASHINGTON—Florida-based American Sleep Medicine LLC has agreed to pay $15,301,341 to resolve allegations that it billed Medicare, TRICARE—the health care program for Uniformed Service members, retirees, and their families worldwide—and the Railroad Retirement Medicare Program for sleep diagnostic services that were not eligible for payment, the Justice Department announced today.
American Sleep, headquartered in Jacksonville, Florida, owns and operates 19 diagnostic sleep testing centers throughout the United States, including in Alabama, California, Delaware, Florida, Illinois, Indiana, Kansas, Kentucky, Maryland, Missouri, New Jersey, Tennessee, Texas, and Virginia. The company’s primary business is to provide testing for patients suffering from sleep disorders such as obstructive sleep apnea. The test results are used by doctors to determine the most appropriate course of treatment for patients. The most common tool used to diagnose sleep disorders, particularly sleep apnea, is a procedure called polysomnographic diagnostic sleep testing. Under federal program requirements for the reimbursement of claims submitted for sleep disorder testing, initial sleep studies must be conducted by technicians who are licensed or certified by a state or national credentialing body as sleep test technicians.
The United States contend that Medicare and TRICARE claims submitted by American Sleep during this period were false because the diagnostic testing services were performed by technicians who lacked the required credentials or certifications, when it knew this violated the law. American Sleep submitted false claims to Medicare and TRICARE between January 1, 2004 and December 31, 2011, according to the United States’ allegations.
“Medicare patients and military families deserve to be treated by appropriately credentialed professionals when seeking medical care,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “When companies providing those services seek to skirt the rules, there will be a steep price to pay.”
“Pursuing health care fraud is a priority of my office and the Department of Justice. We will continue to work with the Department of Health and Human Services and the public to ensure that fraudulent claims are investigated and those responsible are required to pay,” stated David J. Hale, U.S. Attorney for the Western District of Kentucky. “Medical providers who overbill Medicare defraud the taxpayers and drive up the cost of health care for us all. Recovering taxpayer dollars lost to fraud helps keep strong those critical public health care programs so many people depend on.”
“Patients seeking care from licensed professionals deserve to receive exactly what was represented, and the taxpayer-funded Medicare program expects no less,” said Derrick Jackson, Special Agent in Charge of the U.S. Department of Health and Human Services Office of Inspector General Region IV, which includes Kentucky. “The company has agreed to federal monitoring and reporting requirements designed to avoid such problems in the future.”
The allegations covered by today’s settlement were raised in a lawsuit filed against American Sleep under the qui tam, or whistleblower, provisions of the False Claims Act. United States ex rel. Daniel Purnell v. American Sleep Medicine LLC, no. 3:07-cv-12-S (Western District of Kentucky). The act allows private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery. Relator Daniel Purnell will receive $2,601,228 as part of today’s settlement.
In addition to the $15.3 million payment, American Sleep entered into a five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The agreement requires enhanced accountability and wide-ranging monitoring activities conducted by both internal and independent external reviewers.
Principal Deputy Assistant Attorney General Delery thanked the Office of the Inspector General for the Department of Health and Human Services, the Medicare Railroad Retirement Program, the Defense Criminal Investigative Service, the FBI, the U.S. Attorney’s Office for the Western District of Kentucky, and the Commercial Litigation Branch for the collaboration that resulted in today’s settlement. The claims settled by this agreement are allegations only, and there has been no determination of liability.
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.9 billion.

Current and Former Tribal Officials Charged with Stealing from the Mashantucket Pequot Tribal Nation

David B. Fein, United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in Hartford has returned two separate indictments charging Steven Thomas, 38, and Michael Thomas, 44, each with one count of theft from an Indian tribal organization and two counts of theft from an Indian tribal government receiving federal funds. Steven Thomas is the current treasurer of the Mashantucket Pequot Tribal Council, and Michael Thomas is the former chairman of the Mashantucket Pequot Tribal Council.
The indictment against Steven Thomas alleges that, from January 2005 through June 2008, he stole Mashantucket Pequot Tribal Nation (MPTN) funds while he was the Assistant Director of MPTN’s Department of Natural Resources Protection.
The indictment against Michael Thomas alleges that, from October 2007 through April 2009, he stole MPTN funds while serving as the chairman of the Mashantucket Pequot Tribal Council.
If convicted of stealing from an Indian tribal organization, both men face a maximum term of imprisonment of five years and a fine of up to $250,000. If convicted of stealing from an Indian tribal government receiving federal funds, both men face a maximum term of imprisonment of 10 years and a fine of up to $250,000 on each count.
The indictments also include forfeiture allegations. If convicted, Steven Thomas faces forfeiture of approximately $739,743.64, and Michael Thomas faces forfeiture of $102,393.34 and two personal computers.
The defendants are scheduled to appear before United States Magistrate Judge Joan G. Margolis in New Haven on Monday, January 7, at 3:45 p.m.
U.S. Attorney Fein stressed that an indictment is not evidence of guilt. Charges are only allegations, and each defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
This case is being investigated by the Federal Bureau of Investigation and United States Department of Interior-Office of Inspector General. The case is being prosecuted by Assistant United States Attorney Christopher Mattei.

Montgomery Man Pleads Guilty to Bank Robbery

MONTGOMERY, AL—Darrin J. Bell, 32 years old, of Montgomery, Alabama, pled guilty today to one count of bank robbery and one count of using a firearm during a violent crime, announced George L. Beck, Jr., United States Attorney for the Middle District of Alabama.
On October 5, 2011, Bell walked into the Community Bank and Trust located at 9190 East Chase Parkway in Montgomery. He pulled a gun from his duffle bag and demanded money from the teller. The teller complied and gave him approximately $1,500. Bell then left the bank area on his motorcycle. Bell was indicted and pled guilty to bank robbery. Because Bell used a firearm during the bank robbery, he was also charged and pled guilty to using a firearm during a violent crime.
“Most everyone uses banks and most everyone has to visit their bank from time to time,” said U.S. Attorney Beck. “When a criminal uses a gun and endangers the innocent patrons and tellers at that bank, we will prosecute. This is a serious crime, which requires serious punishment. My office is unrelenting, and we will not let up on these criminals; we will continue to utilize all the resources possible to prosecute and bring these criminals to justice.”
“The collaboration between federal and municipal law enforcement agencies paved the way for the successes of this investigation,” stated Stephen E. Richardson, FBI Special Agent in Charge, Mobile Division.
The maximum punishment for bank robbery is 20 years in prison, a fine of no more than $250,000, and a period of supervised release not to exceed three years. The maximum punishment for using a firearm in a violent crime is a term of imprisonment of at least seven years, a fine not to exceed $250,000, and a period of supervised release of not more than three years.
The United States Attorney thanks the Federal Bureau of Investigation, the Montgomery Police Department, and the Opelika Police Department for their hard work and dedication on this case. This case is being prosecuted by Assistant United States Attorney Susan R. Redmond.