Archive
Richard Chichakli Arrested and Facing IEEPA Charges for Alleged Association with ‘Merchant of Death’
Last Thursday, the Southern District of New York announced the arrest of Richard Ammar Chichakli in Australia. Chichakli has been charged with violations under the International Emergency Economic Powers Act (IEEPA), money laundering, wire fraud, and conspiracy.
It is alleged that Chichakli is an associate of Viktor Bout, dubbed the “Merchant of Death” by law enforcement authorities and the press for his dealings in international arms trafficking. Bout allegedly established an international network to facilitate arms trafficking, and furnished arms to the former regime of Charles Taylor in Liberia. Bout was convicted in November 2011 in the Southern District of New York for allegedly selling weapons to the Fuerzas Armadas Revolucionarias de Colombia, FARC, and is currently serving his 25-year sentence.
Chichakli’s indictment focuses mainly on his alleged connections to Bout’s network of arms trafficking. The U.S. Government believes that Chichakli assisted in the management and operations of several of Bout’s airline companies that facilitated the transportation of illegal weaponry. The U.S. followed the lead of the United Nations, in that once the U.N. Security Council designated Chichakli in 2004, the U.S. followed thereafter. On April 26, 2005, Chichakli was placed on the Specially Designated Nationals List (SDN List) by the Office of Foreign Assets Control (OFAC) under the Liberia sanctions program.
The indictment alleges that in order to evade U.S. sanctions, Chichakli pursued airline operations under the guise of the names of others, and used the airline, named Samar Airlines, to engage in the transportation of illegal arms. It is further alleged that Chichakli attempted to purchase two airplanes from a U.S. aviation company. The indictment also cites money laundering, wire fraud, and conspiracy for the transfer funds in the amount of $1.7 million related to arms trafficking that passed through the U.S. financial system.
The U.S. has pursued Chichakli for years, and finally arrested him with the help of Australian authorities. Chichakli could have benefited from attempting to contact the U.S. Government first and contesting his designation through a formal administrative process. Pursuing a request for reconsideration through OFAC allows a designated person or entity to contest the designation and also provide reasons and evidence in support of the wrongful designation.
At this point, Chichakli is facing multiple federal charges that are rooted in IEEPA violations. The national security implications alone are difficult to overcome. If Chichakli argues that he did not engage in the overt acts willfully, and attacks the circumstantial evidence against him, it might work in his favor. The other course of action, which may be his best option, is to begin plea negotiations. If he can provide substantial assistance to the U.S. Government, his ultimate sentence may be reduced.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrariassociatespc.com.
New York Man Accused of Illegally Exporting Defense Articles
Mark Henry, a United States citizen and a resident of Queens, New York, was arrested on December 6, 2012, in connection with an alleged scheme to illegally export defense articles and goods with military applications from the U.S. to Taiwan and China.
From April 2009 through September 2012, Henry allegedly operated an export company based in New York City, Duhua Electronics Corporations. According to the indictment, Henry shipped goods from suppliers located in the U.S. to customers in Asia, specifically China and Taiwan. Henry allegedly shipped military-grade materials that can be used as a protective coating for rocket nozzles, which are designated as defense articles on the U.S. Munitions List, to customers in Taiwan. He also allegedly attempted to ship microwave amplifiers, which have both commercial and military uses and are listed on the Commerce Control List (CCL), to China. The indictment states that Henry did not apply for or receive the requisite licenses for these shipments.
Henry has been charged with conspiracy to violate the Arms Export Control Act (AECA), willfully violating the Arms Export Control Act and the International Traffic in Arms Regulations (ITAR), and attempting to violate the International Emergency Economic Powers Act (IEEPA).
The Government has the burden to prove that Henry willfully and knowingly violated AECA, ITAR, and IEEPA. Henry may have a good defense if he can argue that he did not know his duty under the law regarding the requirement to obtain export licenses and/or approval for the items. The materials that were allegedly exported to Taiwan, which can be used for protective coating in rocket nozzles, clearly require a license under the CCL. However, the items that Henry allegedly attempted to export to China, microwave amplifiers, were dual-use items and may have been safe to export under the Export Administration Regulations (EAR). Dual-use items are those that may be used either for military purposes or for commercial purposes, and depending on their intended use, may be safe to export with a license.
The fact that Henry may have been exporting both kinds of items, those that definitely require a license and those that may not, seems to indicate the Henry might have simply been unaware of the law and his obligation to seek an exporting license or approval to export dual-use items. This argument may be useful when raising defenses against the Government’s accusations that he willfully violated the law.
Henry is also facing a conspiracy charge. The indictment contains unindicted co-conspirators. The Government typically does this when it believes that foreign co-conspirators are involved, but since they are located elsewhere and are not U.S. persons, the Government will have trouble pursuing a case against them. The indictment also cites to U.S. companies that supplied the goods to Henry. As inferred from the indictment, the U.S. companies are most likely cooperating with the Government in the case against Henry in order to alleviate their own liability. To prove conspiracy, the Government does not have to prove willfulness, which gives them a fallback in case Henry as a strong argument on other charges discussed above.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrariassociatespc.com.
Iranian Company, Subsidiaries, and Officers Accused of Illegal Exporting to Iran; U.S. Persons Face the Fallout
An Iranian corporation, its subsidiaries, and several of its officers and business partners have been charged in Alexandria, Virginia, accused of allegedly exporting more than $30 million in computer goods from U.S. companies to Iran, in violation of the Iranian sanctions program administered by the Department of Treasury’s Office of Foreign Asset Control (OFAC).
The case was originally filed under seal in July 2012, but was made public in December after two alleged conspirators were arrested in Los Angeles, California. The two U.S. persons arrested were Alireza Beshcari and Mikaeil Ghahramani.
Business Machinery World Wide (BMWW aka Jahan Goster, Co.) is an Iranian company that imports computer and related equipment and redistributes such equipment to persons and entities in Iran. BMWW has three subsidiary companies located in Dubai, United Arab Emirates. BMWW, its subsidiaries, and nine officers and individuals have been charged with conspiracy to defraud the United States and conspiracy to violate the International Emergency Economic Powers Act (IEEPA).
According to an affidavit filed in support of the criminal complaint, several U.S. persons are allegedly included in the conspiracy. In addition to the two individuals identified above, Amir Mazlomian is also included in the indictment as a U.S. person. Other U.S. entities cited to in the indictment include Photo Craft, Inc., located in Burke, Virginia, and Compudirect3000, located in Irvine, California. Photo Craft and Compudirect3000 have not been indicted nor charged in the criminal complaint.
The Government claims that it has direct evidence of involvement by U.S. persons in the form of emails, shipping forms, and other communications with BMWW and its subsidiaries. The Government is going to use such evidence to prove that the U.S. defendants had knowledge of the Iran sanctions and were willfully violating them by conspiring with others to exporting computer related goods to Iran via Dubai.
Because Beshcari, Ghahramani, and Mazlomian have been charged with conspiracy, the Government only has to prove that they entered into an agreement to export computer related goods ultimately destined for Iran. Further, they must prove that they engaged in acts in furtherance of the conspiracy. From a defense perspective, trying to argue against a conspiracy charge can be extremely difficult, particularly because the Government does not have to prove that the defendants acted willfully.
The criminal case is still in its early stages. Although two U.S. persons have been arrested, the case has not set a trial date as of today. This may give the U.S. persons a chance to cooperate with the Government in an effort to receive a reduced sentence. Plea negotiations are not always the best course, but the evidence in this case is mostly in the form of written communications, which tend to easily sway jurors.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrariassociatespc.com.
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Texas Man Accused of Falsely Billing Medicare and Medicaid is Arrested
Lawrence T. Taylor, the Defendant, has been indicted on charges of health care fraud and conspiracy to commit health care fraud. The indictment, returned on Wednesday December 12, 2012 in the Southern District of Texas, formally charged the Defendant with the following nine counts:
Count (1) – 18 U.S.C. 371 – Conspiracy to commit health care fraud in violation of 18 U.S.C. 1347; and Conspiracy to violate the Anti-Kickback statute in violation of 42 U.S.C. 1320a-7b(b)(2)(A); and
Counts (2)-(9) – 18 U.S.C. 1347 – Health care fraud.
Like in most federal indictments, the Defendant is charged with a combination of substantive offenses (8 counts of actual health care fraud) and the inchoate offense of conspiracy (for entering into an agreement to commit health care fraud and violate the Anti-Kickback statute).
By charging the Defendant with conspiracy the Government is able to thoroughly describe the background story leading up to the substantive fraud offenses. This is because the “overt acts” of a conspiracy can be as benign as incorporating a business or leasing office space, if those acts were indeed undertaken to further the criminal goal of the conspiracy. In this case the Government lists the Defendant’s formation of 1866ICPAYDAY.COM LLC, his leasing of office space, and his registration of a d/b/a all as overt acts in furtherance of the conspiracy, effectively casting the Defendant’s otherwise normal business activities as criminal acts.
Additionally, by charging the defendant with conspiracy, the Government can also significantly increase the loss amount of the alleged fraud. Unlike specific instances of fraud, a conspiracy can last for many years and encompass all of the acts of a defendant, criminal or otherwise. In essence, it gives the Government broad discretion to use as many of the Defendant’s own actions against him. As such, the Government is able to increase the loss amount to $1,238,823.85 when the 8 specific counts of fraud in the indictment only add up to $24,065.60.
If the Defendant is eventually convicted of an offense, defense counsel should argue for a lesser loss amount at sentencing, especially if some of the Defendant’s claims to Medicare and Medicaid were in fact legitimate. Pushing back against the Government’s asserted loss amount is critically important at sentencing because an increased loss amount correlates directly with an increased sentence according to the U.S. Sentencing Commission’s Guidelines Manual.
Depending on how much of the Defendant’s business activities are eventually proven to be fraudulent, defense counsel may also have the opportunity to argue against the “willfulness” element of the fraud counts. Isolated instances of medically unnecessary claims to Medicare or Medicaid can be cast as legitimate mistakes, instead of criminal acts. To determine whether the Government’s allegations are broader than what is reflected in reality requires defense counsel to thoroughly review the Defendant’s business and patient records. Upon this review, defense counsel will be able to effectively compare the Defendant’s version of the facts against the Government’s allegations.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrariassociatespc.com.
Former Navy Sailor Accused of Attempted Espionage
Robert Patrick Hoffman II, 39, of Virginia Beach, Va., has been indicted by a federal grand jury for allegedly attempting to provide classified information to individuals who he believed to be representatives of the Russian Federation.
According to the indictment, Hoffman is a U.S. citizen born in Buffalo, N.Y., who served for 20 years in the U.S. Navy until his retirement in November 2011. While serving in the Navy, Hoffman was a Cryptologic Technician, which required him to maintain Top Security clearance. Hoffman also had access to sensitive information and special programs.
The indictment and other court documents reveal that Hoffman allegedly supplied “drops” of classified information in September and October 2012 to individuals he believed to be part of the Russian Federation. Hoffman was, in fact, engaging in communications with undercover FBI agents. However, Hoffman was solicited by the FBI agents following his return from a trip to Eastern Europe. Apparently, a letter was mailed to Hoffman “from Moscow” that inquired into his interest in assisting the Russian Federation and requested an immediate response.
Although Hoffman responded to the letter, he never came into actual contact with any Russian nationals, hence the attempt charge under 18 U.S.C. § 794(a). Further, Hoffman argued at his detention hearing that he provided some information as a means to gain the interest and trust of the Russian Federation before reporting the communications to the FBI. Hoffman eventually reported the interactions to the FBI, but since they were behind the whole operation, it obviously provided no benefit to him. With the weight of the evidence against him, the judge ordered that Hoffman be detained until trial.
18 U.S.C. § 794(a) is an espionage statute, and carries with it the potential for up to life in prison, and even death under certain circumstances. To sustain a conviction, the government must be able to prove that the defendant acted intentionally or with reason to believe that the disclosed information will be used to cause injury to the United States. Further, the information must be communicated, delivered, or transmitted, or the defendant must attempt to do so. Lastly, the information must be related to the national defense of the United States.
From a defense perspective, particularly at this early stage in the proceedings, an in-depth review of the evidence is critical. The evidence must be reviewed to determine the defendant’s mental state and whether he/she acted with the specific intent to cause injury to the U.S., whether the defendant attempted to transmit information, and whether such information is so sensitive as to qualify as related to national defense. The evidence must also be evaluated to determine the viability for any justifiable defenses.
Hoffman’s mental state is a major component in this case. If he was acting with the intent to gain the trust of the Russian Federation in order to ultimately benefit the FBI, then the argument that he intended to cause injury to the U.S. fails. Further, court documents indicate that the information that was allegedly communicated or transmitted to the undercover FBI agents pertained to methods of tracking U.S. submarines, including technology and procedures. The issue of whether Hoffman transmitted information does not appear to be in dispute; thus, the relevancy turns to the type and classification of the information, and whether it relates to national defense.
In addition to the two key issues above, another defense that appears to jump out immediately is entrapment by the FBI agents, due to their solicitation of Hoffman. However, an entrapment defense can be a difficult argument to make, particularly because the defendant must prove that he was induced to commit the crime by solicitation plus some overreaching or improper conduct on the part of the government, and that he was not otherwise predisposed to commit the crime. Solicitation by the government, is not in and of itself entrapment.
The defense’s strategy going forward should focus on the strength of the evidence as to Hoffman’s mental state, specifically whether he formed the intent necessary to commit attempted espionage, and whether the information that was communicated to undercover FBI agents did, in fact, relate to national security. Such details may mitigate the ultimate result of the outcome of the case and will effect the defense’s next steps and viability of potential defenses.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrariassociatespc.com.
Former Background Investigator Sentenced to Prison Term for Making a False Statement
Bryan M. Marchand, 39, a former background investigator who did work under contract for the U.S. Office of Personnel Management (OPM), was sentenced yesterday to three months in jail on a charge stemming from the alleged falsification of work on background investigations of federal employees and contractors.
Marchand pled guilty in April 2012 in the United States District Court for the District of Columbia. Upon completion of his prison term, Marchand will be placed on three years of supervised release, 12 months of which will be on home detention. As part of the guilty plea, Marchand agreed to pay $192,071 in restitution to the federal government.
Marchand was employed with United States Investigations Services (USIS) as an investigator under contract to conduct background investigations on behalf of OPM’s Federal Investigative Services. For certain federal employment positions and other various circumstances, federal background investigations are required. For example, in order to obtain a security clearance, a background investigation must be conducted into the individual’s personal life and previous work experiences. The investigation results are then compiled into a comprehensive report and used as a basis to grant or deny the security clearance.
According to prosecutors, between May 2007 and May 2008, in more than four dozen reports of investigations on background investigations, Marchand represented that he had interviewed a source or reviewed a record regarding the subject of the background investigation although he had not conducted the interview or obtained the record.
These types of reports are utilized and relied upon by the agencies requesting the background investigations to determine whether the candidates are suitable for positions having access to classified information, for positions impacting national security, or for receiving or retaining security clearances. If a background investigator has not actually conducted the investigation according to all requirements, but states as such, then the federal government apparently views the claim as a false statement under federal criminal law.
In the past three years, the U.S. Attorney’s Office in D.C. has prosecuted 11 other background investigators and two record checkers for similar charges. The press release indicates that prosecutors are usually tipped off after being informed of inaccuracies that are found during internal compliance procedures taken by the federal contractor providing the service, which in this case would be USIS. Albeit a violation of employment practices to falsify information in the report of investigation, the fact that federal criminal charges can be imposed for false statements should put the employees of USIS, and similar government contractors, on notice of what they are facing if the company or federal government believes such falsifying is taking place.
In addition to the prison term and supervised release, Marchand’s sentence requires him to pay $192,071 in restitution to the U.S. government for the reopening and reworking of background investigations, as claimed by OPM’s Federal Investigative Services.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Check Cashers in Brooklyn, Philadelphia, and Los Angeles Charged for Allegedly Evading Anti-Money Laundering Laws
On June 14, 2012 seven individuals and four check cashing businesses were charged in the Eastern District of New York and the Central District of California for their alleged roles in separate schemes to violate the Bank Secrecy Act (“BSA”). The defendants allegedly failed to follow reporting and anti-money laundering requirements for transactions totalling more than $50 million. A total of four indictments were filed.
Two of the indictments were returned in Los Angeles and named three individuals and two check cashing businesses. The other two indictments were returned in Brooklyn and named four individuals and two check cashing businesses. All seven individual defendants were arrested or surrendered to authorities. Those named in the indictments include Belair Payroll Services, Bargain Island, G&A Check Cashing, and AAA Cash Advance, all check cashing businesses. The individuals names in the indictments include Craig Panzera, Lasha Goletiani, Zhan Petrosyants, George Gonchar, Karen Gasparian, Humberto Sanchez, and Diana Brigitt.
The four indictments charge the defendants with failure to file currency transaction reports (“CTRs”) or falsely filing CTRs, as well as failure to have an effective anti-money laundering program, all violations under the BSA.
The BSA is a set of laws and regulations enacted by Congress to address an increase in criminal money laundering through financial institutions, which include check cashing businesses. Check cashers enable people to cash checks without having to go to a bank account or maintain a bank account. A check casher will typically charge a fee for this service.
Under the BSA, financial institutions, including check cashers, are required to file a CTR with the Department of Treasury for any transaction involving more than $10,000 in currency. As part of the CTR, the check casher is required to verify and accurately record the name and address of the individual who conducted the currency transaction, the individual on whose behalf the transaction was conducted, as well as the amount and date of the transaction. CTRs are important law enforcement tools for uncovering criminal activity.
The BSA also requires financial institutions, including check cashing businesses, to maintain an effective anti-money laundering (AML) program. The purpose of an AML program is to effectively detect and prevent attempts to facilitate money laundering. Check-cashing businesses are therefore required to have written policies and procedures regarding CTR filings, records maintenance and responses to law enforcement.
According to the indictments, despite these regulations, check-cashing businesses are a common venue for individuals who want to anonymously cash large numbers of checks to facilitate fraud and money laundering schemes. According to the indictments, the use of check cashers to launder money is particularly prevalent in the area of health care fraud, where fraudulent health care businesses commonly convert the proceeds of their fraud into cash by presenting checks to check cashers who they know will not ask for proof of the payee’s identity and will either not file CTRs or file false CTRs.
The BSA is intended to assist both the private sector and the government in its detection and prevention of criminal money laundering. By implementing these regulations, financial institutions provide law enforcement agencies from around the world with valuable insight into the banking and financial activities of people from all walks of life. Although the specific conduct of those named in the indictments may not in any way be connected to the criminal activity they’re designed to detect, the allegations of noncompliance with CTRs and anti-money laundering programs are in and of themselves considered criminal conduct.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Richmond Marketing Company Owner Sentenced for Health Care Kickback Scheme
Lorie Monroe, 51, of Richmond, Virginia, was sentenced yesterday to 37 months in prison, followed by 3 years of supervised release, for conspiracy to receive health care kickbacks, in violation of Title 18, United States Code, Section 371. In addition, Monroe was ordered to pay $545,410.00 in restitution to the Virginia Department of Medical Assistance Services.
The sentence was imposed by United States District Judge Henry E. Hudson. On January 24, 2012, Monroe waived indictment and pled guilty to a one-count information alleging conspiracy to receive health care kickbacks.
The underlying criminal statute that Monroe has been accused of conspiring to commit is 42 U.S.C. § 1320a-7b(b)(1)(A). The statute makes it illegal for a person to solicit or receive kickbacks and other remunerations in return for referring an individual to a person for furnishing or arranging services under a Federal health care program.
According to court documents, Monroe was the owner and operator of Creed Xtreme Marketing Concepts, a.k.a Creed Extreme Marketing (“Creed”), a company located in Glen Allen, Virginia. Sometime prior to December 2008, Monroe and “Individual A” agreed that Creed would serve as a marketing company for “Company 1.” It is not clear who initiated the alleged agreement, but Monroe’s plea indicates that she did not solicit kickbacks but was merely the recipient.
Individual A is the CEO of Company 1. Company 1 was an IIH provider located in the Eastern District of Virginia, which was under contract with Medicaid to provide Intensive In-Home Therapy (IIH) services. IIH services are designed to assist those youth and adolescents who are at risk of being removed from their homes, or are being returned to their homes after removal, because of a significant mental health, behavioral, or emotional issues. Allegedly, Monroe and Individual A verbally agreed that Monroe would receive approximately half of the Medicaid payments for each child Monroe referred to Company 1 for IIH services.
On or about December 2008, Monroe allegedly hired two employees to canvass low income areas, specifically Section 8 housing and subsidized housing projects, in the greater Richmond and Petersburg, Virginia, areas, to find children who were Medicaid beneficiaries to refer to Company 1. Court documents further allege that Company 1 contacted the individuals recruited by Creed, then enrolled many of these Medicaid-eligible children in its IIH program and billed Medicaid for IIH services rendered. Between December 2008 and January 2010, Company 1 allegedly paid Monroe a total of $545,410.00 in kickbacks for recruiting beneficiaries for IIH services.
The court documents do not identify Individual A or Company 1 by name. There may be several reasons for this, but most likely, the government is still building their case against the two and has not issued an indictment as of yet. Monroe’s plea agreement further supports this theory, as part of the plea discusses Monroe’s continued cooperation in the form of potential grand jury testimony, participation in government debriefings, producing documents related to criminal activity, and the inclusion of the possibility of a 5K1.1 and Rule 35(b) downward departure during sentencing.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Former Virginia Man Sentenced for Bank Fraud and Identity Theft Scheme Targeting Young Navy Sailors
On June 6, 2012 the U.S. Attorney for the Eastern District of Virginia announced that Lionel Jason Haynes was sentenced to seven years and three months in prison for bank fraud (18 U.S.C. 1344) and aggravated identity theft (18 U.S.C. 1028A(c)). He was also ordered to pay $181,960 in restitution.
According to court documents and proceedings, Haynes, a former Navy sailor, executed a scheme to defraud Navy Federal Credit Union (NFCU) by victimizing young, impressionable sailors. Posing as a Chief Petty Officer, Navy SEAL or as a representative of the Navy’s Fleet and Family Services Center, Haynes would approach a sailor on Navy Base Norfolk and offer assistance to help him purchase a car.
He would ask for their personal identifying information and bank account information under the pretense of needing it to determine pre-approval for an auto loan. Once he received this information, he accessed their NFCU bank account, requested an auto loan, and changed the mailing address to an address to which he had access. He received the check, wrote down the fraudulent vehicle information, forged their name, and had an associate (the purported seller) cash the check. He victimized 14 different sailors in this manner.
In its sentencing memorandum the government requested 60 months’ imprisonment for bank fraud, plus 24 months for identity related fraud. Although the defense moved for a downward departure, it is apparent that no such departure was granted by the sentencing judge. Mr. Haynes was sentenced to exactly what was requested by the government and prescribed in the U.S. Sentencing Guidelines. Unfortunately for Mr. Haynes his request to have his identity theft conviction run concurrently was denied, probably because the statute specifically prescribes the sentence to run consecutively. As such, instead of serving 5 years and 3 months in prison, he will serve 7 years and three months.
Not all was lost however. According to sentencing documents the judge did grant Mr. Hayne’s request to be placed in a prison near his family in New York and ordered him to continue his education while in prison. Court documents made it clear that Mr. Haynes was in college during the sentencing phase of the case.
This case was investigated by the Navy Criminal Investigative Service (NCIS) and prosecuted by the U.S. Attorney’s Office of the Eastern District of Virginia.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Virginia Family Arrested for Alleged Distribution of Prescription Pills
Three members of a family living together in Fauquier County, Virginia, were arrested and made their initial appearances last week for allegedly conspiring to distribute prescription pain medication from their home since at least 2009. Vernon Scott Carter, 55, his wife, Helen R. Carter, 50, and their son, Jason Vernon Carter, 29, allegedly conspired since 2009 to obtain Oxycodone and Oxymorphone prescribed to them from a local physician and sell them for a profit. The family is facing the charges in the U.S. District Court for the Eastern District of Virginia.
Law enforcement began investigating the Carter family with the assistance of two confidential informants (CI). The CIs allegedly made purchases from the Carters under the surveillance of government agents. The affidavit that was submitted to establish probable cause for the search tends to imply that the confidential informants revealed information about their relationship with the Carters in order to deflect attention from themselves as purchasers and users of prescription pills. Specifically, a substantial amount of the evidence against the Carter family stems from information given to the government by one of the informants prior to surveillance being conducted. The information subsequently led to the surveillance and search and arrest warrants.
During the execution of a search warrant on their Bealeton, Virginia, residence at the time of arrest, agents allegedly recovered more than a quarter pound of marijuana, as well as many and varied prescription pills stashed in kitchen drawers and other places around the house.
The doctor who allegedly prescribed the medication to Vernon and Helen Carter is not identified in the court documents, and it is unclear whether a separation investigation is being pursued against him.
This case is part of an Organized Crime and Drug Enforcement Task Force (OCDETF) investigation nicknamed Operation Cotton Candy, which has been focusing on the illegal distribution by numerous doctors, pharmacists, nurses, and patients of pain medication. Operation Cotton Candy, headed by the FBI, is primarily concerned with the Northern Virginia area, and has secured more than 200 drug-trafficking convictions and guilty pleas since its inception in 2002.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
