On Q Professional Investigations

More than two dozen Sewerage & Water Board employees have been using fake or unauthorized handicap tags to bilk parking meters near the utility’s main office on St. Joseph Street, according to a report drafted following an investigation by the New Orleans Office of Inspector General.

The report, sent to the city’s Department of Public Works last November, summarizes a two-day investigation probing an “allegation” that “able-bodied” utility employees had been using handicap tags to park their personal vehicles on metered spaces near the utility’s main office at 625 St. Joseph St. The handicap tags allow drivers to park up to three hours for free in downtown metered spaces, which otherwise would cost $3 per hour.

Office of Inspector General investigators ran the registrations of 40 vehicles displaying handicap tags near the St. Joseph Street main office and found 37 of those vehicles were registered to Sewerage & Water Board employees. Of those 37 employees, investigators found just 11 – less than a third – were authorized to have handicap tags, which are distributed by Louisiana State Police, according to the report.

In all, 26 Sewerage & Water Board employees parked with handicap tags that either belonged to a relative, belonged to someone else or were “invalid or unreadable.”

Additionally, investigators spotted 31 vehicles with handicap tags that also displayed parking receipts, ostensibly to cover meter fees beyond the maximum three hours of free time, but that those vehicles had receipts showing “usually a nickel” had been paid into the meter. While five cents would cover “only one minute of parking,” investigators found some of those vehicles were parked that way for entire work shifts. None were ticketed.

All together, the inspector general’s report estimated the invalid handicap tags and expired meter receipts that weren’t ticketed could cost the city around $197,000 a year in lost parking meter revenue.

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Six Howard University employees were fired last year after an internal investigation found the financial aid office had misappropriated university-based grants to some university employees, the school’s president said Wednesday.

According to a statement from Wayne Frederick, Howard University president, an outside auditor found that several university employees received grants in addition to discounts on tuition that exceeded the total cost of tuition and kept the difference.

Some students said they felt betrayed. Employees took financial aid funds as students prepare to spend years paying off their loans.

“I’m actually on the verge of transferring schools because I can’t afford to stay here because a grant was taken away from me,” one student said.

“It’s disappointing to actually come to terms with the reality of what’s going on,” senior Quencey Hickerson said.

Parent Cecily Johnson said she was disgusted.

“Someone could totally change their trajectory if they can’t pay tuition,” she said.

Frederick said he was told in December 2016 that there may have been “some misappropriation of university-provided financial aid funds,” and launched an internal investigation.

The auditor found that between 2007 and 2016, university grants were awarded to some university employees who also were receiving tuition remission. The grants and tuition remission equaled more than the total cost of attendance, which allowed the employees to receive “inappropriate refunds.”

The grants came from institutional funds that help low-income students pay tuition. Frederick said the grants came from the university and were not federal or donor funds.

Tuition remission allows eligible employees or their dependents to receive discounted tuition at the university. Full-time employees eligible to receive tuition remission can take two classes per semester for free, according to the university’s website. Tuition at Howard for the 2017-2018 school year was $12,061 per semester, not including room and board.

Frederick’s statement came after an anonymous post on Medium.com claimed financial aid employees at the university stole nearly $1 million in funds.

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From 2010 to 2015, Advanced Care Services (ACS), located in Southfield, Michigan—a suburb of Detroit—billed itself as a pain management clinic and HIV infusion center that primarily served Medicare recipients.

But as it turned out, ACS wasn’t serving anyone but itself. It was nothing more than a pill mill involved in the illegal sale and distribution of dangerous prescription medications, including opioids, into nearby communities. And if that wasn’t bad enough, ACS was also involved in a related multi-million-dollar health care fraud scheme. The lone doctor employed at the facility, Rodney Moret, personally enabled both of these conspiracies through his actions at the clinic.

Fortunately, law enforcement ultimately uncovered the actions of Moret and his four co-conspirators, and he was sentenced last month to a federal prison term on various drug and health care fraud charges after previously pleading guilty. Moret’s associates have also pleaded guilty in connection with their roles in the criminal activity and have been sentenced. All five were ordered to pay more than $2.5 million in restitution.

And ACS—a clinic that ostensibly offered medical care for a vulnerable population but instead broke its promise to the communities it served—was put out of business.

According to FBI case agent Larissa Kramer, the Bureau’s Detroit Field Office opened an investigation into ACS in December 2011 after receiving a referral from the Department of Health and Human Services’ (HHS) Office of Inspector General (OIG) concerning suspicious billings from a Dr. Rodney Moret. “Shortly after that,” Kramer explained, “an ongoing Detroit investigation into another pill mill led directly to the doorstep of Advanced Care Services, Moret’s employer. And our case, run jointly with HHS-OIG investigators, took a new direction.”

Kramer said that a variety of investigative techniques—including confidential informants, consensual recordings, analysis of financial records, and interviews with ACS employees and patients—uncovered the breadth and depth of the fraudulent activity being perpetrated by Moret and company.

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LAS VEGAS, Nev. – A pain management doctor practicing in Las Vegas was arrested today and charged with 29-counts of unlawful distribution of fentanyl and for committing health care fraud, announced Attorney General Jeff Sessions, U.S. Attorney Dayle Elieson of the District of Nevada, Assistant Special Agent in Charge Dan Neill for the DEA’s Las Vegas field office, Special Agent in Charge Aaron C. Rouse for the FBI’s Las Vegas Division, and Special Agent in Charge Christian J. Schrank for the Office of Inspector General of the U.S. Department of Health and Human Services Office Los Angeles Region.

Dr. Steven A. Holper, 66, is charged in an indictment with seven-counts of distribution of Fentanyl, a controlled substance, and 22-counts of providing a false statement relating to a health benefit program.

Fentanyl is a powerful synthetic opioid painkiller that is 100 times more potent than morphine and 40 to 60 times more potent than 100% pure heroin. Fentanyl is available in various forms, including Subsys. Subsys is only available through the Transmucosal Immediate-Release Fentanyl (TIRF) Risk Evaluation and Mitigation Strategy (REMS) Access program. The only FDA-approved indication for TIRF medicines are for use to manage breakthrough pain in adults with cancer. Dr. Holper routinely prescribed Subsys for his patients without cancer.

According to allegations contained in the indictment, which was unsealed today, from about July 19, 2015 through March 12, 2016, Holper allegedly prescribed Subsys to a patient without a legitimate medical purpose and outside the usual course of professional practice. The indictment further alleges that, from about November 21, 2013 through March 24, 2017, Holper knowingly made false statements to Medicare and private health insurance companies. Dr. Holper prescribed Subsys for patients without cancer and falsely represented 22 patients were cancer patients with breakthrough cancer pain, who were opioid tolerant and eligible for Subsys.

“Our great country has never before seen the levels of addiction and overdose deaths that we are suffering today. Sadly, some trusted medical professionals like doctors, nurses, and pharmacists have chosen to violate their oaths and exploit this crisis for cash—with devastating consequences. Our goals at the Department of Justice for 2018 are to reduce the number of opioid prescriptions, the number of overdose deaths, and violent crime—which is often drug-related. That’s why I created the Opioid Fraud and Abuse Detection Unit and sent 12 top prosecutors to opioid hotspots around the country: to help us find the medical fraudsters who are flooding our streets with drugs. These prosecutors are already issuing indictments from Pittsburgh to Las Vegas. I want to thank the DEA, FBI, the Department of Health and Human Services, and the Henderson, Nevada Police Department, and Assistant U.S. Attorney Kilby Macfadden for their hard work on this case. I am convinced that these efforts make drugs less available on the streets, send a message to criminals, and ultimately make our communities much safer,” said Attorney General Sessions.

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The victims’ stories of losing their retirement savings in a $10 million investment fraud scheme were heartbreaking: some lost their homes, some had to declare bankruptcy, and many suffered—and continue to suffer—from physical and emotional ailments upon learning they had virtually nothing left to retire with.

The fraudsters responsible for this fallout—who lined their own pockets with the hard-earned money of working people trying to save for their golden years—were Merrill Robertson and Sherman Carl Vaughn, Jr., two Virginia businessmen. After a joint federal law enforcement investigation into the pair’s Ponzi-like scheme, the two were ultimately brought to justice for their crimes against more than 60 victims in multiple states. In light of Robertson’s earlier conviction at trial and Vaughn’s previous guilty plea, Robertson was recently sentenced to 40 years in prison, and Vaughn—who testified at Robertson’s trial—received 12 years. The men were also ordered to pay nearly $9 million in restitution to their victims.

Robertson is a former University of Virginia football star who had worked for a large broker-dealer and was licensed as a broker. Vaughn had a business degree from another Virginia college but has never been licensed as a broker. Together, in 2010, the pair formed Cavalier Union Investments, LLC, which claimed to be a “leading private investment firm” catering to IRA account holders and offering investment opportunities—with fixed annual returns of 10 to 20 percent—in restaurants, real estate, and alternative energy. Cavalier purportedly had a variety of divisions, investment funds, and investment advisers.

But in reality, Cavalier did not have any divisions, investment funds, or investment advisers—it was just Robertson and Vaughn. And what a pair they were—Robertson no longer had his broker’s license, and Vaughn had filed for personal bankruptcy four times, including the two times he did it while working at Cavalier. Shortly after the company was formed, Cavalier became insolvent and relied on cash from newer investors to stay afloat and pay back older investors who asked for their money back—the perfect Ponzi scheme, at least for a while.

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With hundreds of pages of paperwork and thousands of dollars on the line, getting a mortgage can be a complex and intimidating transaction for homebuyers, who often depend on experts to get them through the process.

Unfortunately for some mortgage applicants in Western Pennsylvania, dishonest real estate professionals took advantage of that trust with fraudulent practices.

As the real estate market boomed before the 2008 crash, Pittsburgh-based Century III Home Equity was a successful brokerage, closing an estimated $100 million in loans annually. As a broker, the company acted as a middleman between the mortgage applicant and the lender, but the company’s employees manipulated both sides to enrich themselves. The owner—James Nassida, IV—and his loan officers misleadingly sold customers mortgage products that were not always appropriate for their financial situation but racked up the most fees. The brokerage also fooled lenders by lying about applicants, doing things such as inflating income, misrepresenting home values, or not disclosing that down payments were actually borrowed money.

“There was massive fraud here. They were not looking out for their borrowers; they were looking out for themselves,” said Special Agent Neal Caldwell of the FBI’s Pittsburgh Division, who investigated the case with the U.S. Secret Service as part of the Western Pennsylvania Mortgage Fraud Task Force. The task force, which came together in 2008, looked holistically at the mortgage fraud threat throughout the Pittsburgh area as part of a multi-agency team involving the U.S. Attorney’s Office, FBI, IRS Criminal Investigations, U.S. Secret Service, U.S. Postal Inspection Service, and others, including state agencies. The task force’s work over a 10-year period led to 140 convictions, ranking the Western District of Pennsylvania as one of the most successful districts in the country in prosecuting mortgage fraud.

Nassida required his employees to do whatever it took to close a loan, even if it was dishonest or illegal. In many cases, the company would sell a borrower a loan with a temporary minimum payment option, designed for those with seasonal or fluctuating income, without fully disclosing the terms. In actuality, the temporary minimum payment didn’t even cover all of the interest each month, causing the loan to “negatively amortize,” or actually increase the balance of the loan. While some customers, such as house flippers, understood these products, others found them disastrous financially when they were not fully informed of the consequences of paying the lower amount over a longer period of time. This was especially difficult for borrowers once the housing market crashed in 2008—they could no longer rely on a consistent increase in their home values to keep them from going “underwater,” or owing more than their homes were worth.

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Alternatives Living, Inc., was a non-profit organization in the New Orleans area with a stated mission of providing affordable housing to the elderly, homeless families, and individuals with mental disabilities. And through the state of Louisiana, the non-profit received funds from the U.S. Department of Housing and Urban Development (HUD) to carry out its noble work—assisting about 660 clients annually, enabling them to live successfully within their communities.

Unfortunately, the chief financial officer (CFO) of Alternatives Living—Rickey Roberson—had another purpose as well: to use some of the funds from HUD, specifically earmarked for needy individuals, for his own personal gain. And as a result, there were clients who were not able to get the services that they needed.

How did this all start? In 2010, HUD had contracted with the state of Louisiana to administer its Community Development Block Grants in order to implement affordable housing programs throughout the state. Alternatives Living was one of the organizations selected by the state to provide housing support services to qualified residents.

However, fast forward to 2015. The Louisiana Legislative Auditor, a state government entity, released a public report which concluded that executives at Alternatives Living may have used public funds for personal gain. Based on that report, the FBI’s New Orleans Field Office—after notifying its partners at HUD’s Office of Inspector General—opened a joint investigation.

And what the FBI and HUD investigators uncovered, after looking into the finances of both Alternatives Living and Roberson personally, seemed to validate the findings of the audit report.

As CFO at Alternatives Living, Roberson was entitled to use the non-profit’s credit cards, and he had signature authority on Alternatives Living bank accounts. He used both payment methods to assist clients, but the accounts were also used to pay for his kids’ cell phone bills and some school tuition as well as personal travel, satellite radio, concert tickets, sports tickets, cruise expenses, repairs to his luxury automobiles, and even medical bills for the family dog.

In June 2016, Roberson was indicted on various charges, and in September 2017, in light of the evidence uncovered during the investigation, he pleaded guilty to theft of federal grant funds and agreed to pay more than $84,000 in restitution. Last month, he was sentenced to a federal prison term.

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A Texas businesswoman and a Texas lawyer were recently sentenced to lengthy federal prison terms for their roles in an international money laundering conspiracy that defrauded dozens of victims across the U.S. Both were also ordered to pay restitution of more than $3.7 million to their victims.

Last October, Priscilla Ann Ellis—after being convicted by a federal jury—received 40 years in prison, while attorney Perry Don Cortese received 25. Ellis’ daughter, Kenietta Rayshawn Johnson—who took part in the conspiracy as well—was sentenced to 40 months. Three additional individuals were also indicted as part of the conspiracy—one pleaded guilty and two are awaiting extradition from Canada. And eight other individuals have been charged separately.

And for Ellis, as if a 40-year prison term wasn’t long enough, she—while being temporarily held at a local jail right after her conviction in the money laundering conspiracy—tried to solicit other inmates to help her hire a hit man to murder several witnesses who had just testified again her at trial (and then attempted to undertake another financial fraud scheme to pay for the hit man). She was convicted on those charges in March of last year, and on January 4 of this year, she received an additional 65 years in prison—a term that will run consecutively to the 40 years she got for the original case.

The money laundering investigation was run by Special Agent Deven Williams out of the FBI’s Tampa Field Office—one of the original subjects was operating out of the Tampa area and had opened more than 80 bank accounts there.

According Williams, the investigation began when the FBI Atlanta Field Office—with a fraud victim who had wired money to a bank account in Tampa—sent a lead to Tampa requesting an interview with the owner of the bank count. “Also,” explained Williams, “a law firm in Tampa had been targeted by fraud and it approached the Tampa Police Department, who then referred it to the FBI. From there, we were able to link the two together.”

Here’s what investigators uncovered:

From at least January 2012 to around September 2015, the conspirators defrauded dozens of victims across the United States and then laundered the funds, much of which were sent overseas.

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Federal Homeland Security agents raided 20 alleged “maternity hotels” in Southern California where pregnant Chinese women pay tens of thousands of dollars to live to ensure a “made in America” baby, reports said.

The feds raided locations in Los Angeles, Orange and San Bernardino counties on Tuesday, targeting three competing birth-tourism schemes, officials told NBC News, which was on the scene of one of the raids.

One of the properties was the ultra-deluxe Carlyle building in Irvine, California, which housed pregnant women and new moms for fees ranging between $40,000 and $80,000 to ensure their children would have American citizenship, the outlet reported.

“I am doing this for the education of the next generation,” one of the women told NBC News.

None of the moms or moms-to-be were arrested. Police treated them as material witnesses and paramedics were standing by during the raids in case any of the women went into labor.

It’s not illegal to have a child in the US while in the country with a tourist visa, but lying to obtain the visa is illegal.

“If you lie about your reasons for coming here, that’s visa fraud,” Claude Arnold, special agent in charge of Homeland Security Investigations for Los Angeles, told NBC News.

Cops focused their efforts on the ringleaders behind the scheme. Court papers allege the fraudsters pocketed hundreds of thousands of tax-free dollars to help Chinese nationals get visas and a pampered life once they arrived, up until their delivery date in an American hospital.

The organizers allegedly used a website to attract customers, drawing in expecting mothers with the attractive benefits of a child with US citizenship: 13 years of free education, low-cost college financial aid, less pollution and a path for the entire family to emigrate when the child turns 18.

The women were advised on what lies to tell to obtain a tourist visa; how to fly through Hawaii, Las Vegas or Korea to avoid the suspicions of immigration officers at Los Angeles International Airport; and how to disguise their pregnancy during their trip, court documents allege.

The women’s handlers escorted them to doctors’ visits and trips to restaurants and shops, the court papers say. One agent followed one of the suspects to Target and Babies R Us.

While birth-tourism schemes are nothing new, investigators believe the practice is growing, NBC reported. Court papers cited a study that found 40,000 children are born to women in the US on a travel visa each year.

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DALLAS -Alfredo Hinojosa ran an “empire” of nightclubs across North Texas, according to a federal indictment, raking in more than $100 million from 2014 to 2016.

At the same time, Hinojosa allowed dealers to sell cocaine in his clubs’ bathrooms to keep business booming and then helped launder money for a Mexican band’s tour bus.

Hinojosa, 57, pleaded guilty this week to charges of conspiracy to manage a drug premises and conspiracy to structure transactions to evade reporting requirements, according to court documents.

The case was initially filed in October 2016, and a new indictment was filed against Hinojosa and 10 other defendants on Tuesday.

Hinojosa has not yet been sentenced. As part of the plea deal, he agreed to forfeit $200,000, a Ferrari F355, a Land Rover Range Rover, a Hummer H2, a Mercedes-Benz and a Gillig Motorhome, the court documents said.

His attorney, Frank Perez, declined to comment on the case Wednesday.

The case also involved two former Dallas police officers, Eddie Villarreal, 48, and Craig Woods, 60, who worked security at Hinojosa’s clubs. Villarreal and Woods pleaded guilty to making a false statement to the FBI this week for lying about their involvement with Hinojosa.

Their attorneys could not be reached for comment Wednesday.

It was unclear Wednesday night which of the remaining defendants have been taken into custody.

‘Man, they got to do business’

Hinojosa owned more than 40 nightclubs across the state, including the Far West, Medusa and OK Corral clubs in Dallas and the OK Corral club in south Fort Worth, on the north side of La Gran Plaza. The clubs were still open this week, according to the U.S. attorney’s office.

At each location, Hinojosa allowed a crew of “certain selected” dealers to sell cocaine in $20 baggies in the restrooms. In a recording obtained by authorities, Hinojosa said, “we can’t really clean it [up] because then we lose business,” the indictment said.

“Man, they got to do business,” Hinojosa said in the recording. “I told them we don’t care . . . we just don’t want for everybody to see him . . . They want it [cocaine] right there. They don’t want to go looking downtown.”

The indictment named the dealers, who face drug charges in the case: Eloy Alvarado Montantes, 36, of Grand Prairie; Jose Omar Santoyo Salas, 32, of Arlington; Erick Johan Lopez Cuellar, 30, of Fort Worth; Raul Nunez, 25, of Grand Prairie; and Cesar Mendez, 27, of Dallas.

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