South Florida Criminal Attorneys Blog

Five Arrested in South Florida Health Care Conspiracy Scheme

September 6, 2015 | Michael B. Cohen, P.A.

A South Florida woman is the alleged leader in a healthcare fraud conspiracy that’s cost the state’s Medicaid program more than $2.7 million, according to federal prosecutors.

Irma Davidian, of Boca Raton, through her husband David’s company American Advisory Associates has been accused of being the key player in a scam that involved payments to employees of the Department of Children and Families as well as the Social Security Administration in exchange for submitting fraudulent applications on behalf of her client base which she attained by advertising in newspapers.

According to court documents, Davidian ran ads in local publications claiming she could acquire government benefits such as food stamp and Medicaid benefits no matter what an individual’s circumstances were. Her fee for this service varied from $2,000 to $5,000.

Her main contact at the Florida Department of Children and Families (DCF) was Gladys Roman, who worked as an as an interview clerk for the agency. Roman was paid by Davidian to submit falsified documentation that would give Davidian’s clients a much greater chance for their applications to be approved. She entered the data from her home computer, as well as from a local library. After the information was inputted she would inform another employee, George Lopez, which of the applications needed to be approved. Since cases were assigned at random, if Lopez found applications assigned to other case workers he easily overrode the assignment of the case and reassigned the applications to his oversight by accessing a department computer within the DCF system. Both suspects are residents of Pompano Beach.

According to the U.S. Attorney’s Office over a period of about two years, Davidian paid both Roman and Lopez approximately $1,000 a month for their role in the fraud.

Similarly, Davidian had two connections that worked as claims representatives for the Social Security Administration. In the same type of setup, Maria Sanchez of Pembroke Pines and Alejandro Lomoso of Southwest Ranches both employees’ of the SSA accepted payments from Davidian of $15,000 and $9,500 respectively for processing modified applications over approximately the same period of time.

All in all, Davidian is charged with conspiracy to commit bribery in programs receiving federal funds, commit health care fraud, and conspiracy to give a gratuity to a public official. Roman, Lopez, Sanchez and Lomoso are all charged with conspiracy to commit bribery in programs receiving federal funds and commit health care fraud.

Davidian faces a 10-year prison sentence and a fine of up to $500,000. Her subordinates all face a five-year prison sentence and a fine of up to $250,000 each.

Many of her clients from Dade, Broward and Palm Beach Counties have also been arrested and charged with Medicaid Fraud. Thirteen of her clients were arrested in July. Among them is former NHL hockey player Sergei Berezin and wife Lyudmila Ustakova who are currently residing in Boca Raton. According to authorities, the pair deceptively billed Medicaid more than $67,000 between 2010 and 2013, with falsified documents acquired through Davidian’s scheme and were arrested on two counts of fraud. Four other Russian immigrants were also arrested in the sting.

Berezin owns a house valued at close to $1 million. He told a confidential informant during the undercover investigation that his income was approximately $100,000 annually from rental properties and fees paid to him for training hockey players.

Berezin played for numerous International, American and Canadian hockey teams between 1990 and 2004. He also played in International championship games including the 1994 Olympics for Russia. His most notable moment on the ice was when he scored the 10,000th home ice goal for the Montreal Canadiens in 2002.

To read an article about the charges against Berezin and his wife, written on palmbeachpost.com that was originally posted as a blurb on my Google+ page, click here and scroll down to the 7/29/15 entry.

After being found Not Guilty on State Sexual Abuse Charges, the Feds Take Over

August 16, 2015 | Michael B. Cohen, P.A.

As is explained on my Website, under a section titled “How do you know if the crime you are charged with is federal?” the government can take interest in cases that do not usually appear to apply under federal jurisdiction just because they become absorbed in a case being pursued by the state. One cause where this may also occur involves crimes against children.

Jeffery London, a so-called trusted member of the Broward County community was first arrested after sexual molestation charges came to light from one young man who was twenty years old at the time the complaint was alleged in 2012. In total, London was facing 27 counts of abuse.

London was a youth counselor with the Boys & Girls Club in Broward County in the 1990s as well as being a youth pastor at Bible Church of God in Fort Lauderdale. At one time, he was also a dean of students at Eagle Charter Academy in Lauderdale Lakes.

The unnamed young man accused London of sexually abusing him over a ten-year period when he moved in with London during a time when his natural mother was undergoing financial difficulties. The minor was between five and six years old at the time when he took up residence with the pastor.
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After the first of these allegations was charged, nine more victims came forward accusing London of raping them when they were under his care.

At his first trial in March, 2014, the prosecution spoke in detail of the instances of many cases of sexual abuse that the youths encountered, and expressed to the jury what was believed to be overwhelming evidence of incriminating text messages. Several accusers took the witness stand with what appeared to be damning testimony. When taking the stand, Clive Lowe, who used to live with the defendant, told the jury that London asked him how long he thought most people kept their text message history.

One of his accusers was asked by the prosecution what he received in exchange for the “sexual favors”. He testified that London gave him gifts such as candy, money, sometimes entertainment games, and clothes. When the prosecutor pressed the witness about how much money was exchanged he replied “the most like $300 to $400.”

When London took the stand, he repeatedly denied all charges. His attorney mentioned all his accusers by name, asking London if he molested them, each time receiving the same emphatic answer of no. London continued his testimony by implying that his confronters “were upset at being evicted from the home he provided for them;” an unlicensed foster home nicknamed London’s Hotel, when they refused to follow his rules which included not smoking, attending school and following a curfew.

During deliberations, what may have been a turning point in the jury”s ultimate decision was when they questioned the judge about the definition of “reasonable doubt.” In answer, the judge told the jury that they should go back and re-read the jury instruction. When they completed deliberations, just after 2:00 that afternoon, they returned a verdict of not guilty for all twenty seven counts.

Despite the riveting testimony from four of the now grown men who testified that London molested them as children, the jury apparently wasn”t convinced, and may have believed that reasonable doubt indeed existed. London”s defense attorney was quoted as saying “I think it came down to no physical evidence.”

Although found not guilty by the Broward Circuit Court jury, London was not released from jail as he will have to face a separate trial charging him with the same allegations by four other men that claim he sexually abused them when they were minors.

But in December of last year the federal government took an interest in the case.

The government first asked the state to delay the case and then had the state drop the remaining charges against London in an agreement to indict him in a new federal case. The sole federal charge in the new proceeding would be using a cell phone to entice a teenage boy into sexual activity with him. The boy is London”s distant relative.

The new trial began in a Fort Lauderdale federal courtroom in mid-June.

The new federal charge is not considered violative of the Double Jeopardy clause of the Federal constitution because the elements of the lone federal count are different then the elements of the previous 27 State charges and was being prosecuted by the federal government as a dual and independent sovereign according to legal experts.

U.S. District Judge William Dimitrouleas heard opening arguments from the government and the defense immediately upon the conclusion of jury selection. The alleged victim spoke for nearly an hour. When asked how the abuse began, he said “One day, it just got weird… I didn’t say nothing [sic]. I didn’t know how to react. I didn’t know what to do.”

He went on to say that what began as disciplinary visits transformed into belt “whoopings,” then moved on to forced oral sex and then a one-time anal-sex encounter that he got paid for. He also said that he was given video games, movies, his first cellphone, and new clothes in exchange, or as a reward. He also said that he remembered the first time it happened when he was about seven years old. London invited him to sleep in his bed, putting his arms around him and then began licking his ear and neck. He went on to say that London then pulled his pants down, hugged him forcefully, and pushed down the top of his head showing him how to perform oral sex.

The prosecuter for the government stated that “under the guise of providing a safe haven for children in need, the defendant, Jeffery London, preyed upon the very children that he convinced everybody that he was helping.” She continued by saying that he did so by the use of “lies, trickery, deceit, coercion and instilling the fear of God in his victims.”

The Assistant Federal Public Defender argued that London was an “extraordinary youth minister who acted as a role model for troubled boys… He wanted to do something about the lack of father figures in young men’s lives… He taught them how to be responsible, he made sure they got an education and he taught them how to be men … and he’s repaid by these accusations.”

The defense attorney also introduced evidence of London’s alleged victims pending civil lawsuit at the time of the federal trial indicating the alleged former victims in the State’s unsuccessful prosecution were expecting a big payday in the pending civil lawsuit.

The text messages will also be introduced as evidence as the case continues. Check back here for further updates.

Principal Defendant’s Wife in Grand Theft Fraud sentenced to nearly 5 years

July 13, 2015 | Michael B. Cohen, P.A.

In a scheme that bilked an elderly man out of over a quarter million dollars, a Broward jury found Matthew Stevens not guilty of the crime after deliberating for only a little more than five hours. This was Stevens’ second trial for the crime, the first one resulting in a hung jury.

But here’s the rub. Gina Stevens, the defendant’s common law wife under their shared Gypsy culture tradition who had three children with the defendant did not fare as well as her husband, once he was acquitted of the crime. They were both charged with grand theft but Mrs. Steven’s had no deal in place for testifying against her husband.

Broward Circuit Judge Barbara McCarthy sentenced Gina Stevens to 56 months in prison with 627 days credit for time served. She also ordered her to pay restitution of the $270,000 that was fleeced from the elderly victim.

The jury concluded that the victim, Charles Haas, a 91 year old World War II veteran from Hollywood was conned into giving the money to Mrs. Stevens under false pretenses. However, they apparently didn’t believe that her husband was the mastermind of the plot.

According to the prosecution as well as Mrs. Stevens’ testimony, her husband was the architect of the scam.

Gina befriended Haas in 2012, telling him she was a single mother of three who was recently widowed when her husband was killed in a car accident in Michigan. She claimed her name was Tiffany Williams. She told him she owned property in Chicago which was under government liens. Haas agreed to give her the money to pay off the holds on the property and testified in court that he expected to have the money returned to him after she sold the real estate.

Haas also testified that he previously helped secure an apartment for “Tiffany” in 2013 because she led him to believe that her landlord was increasing her rent by one hundred percent. He also bought her clothing and jewelry. It was around that time that he was introduced to Matthew Stevens who she deceptively told him was her cousin, also convincing him that he was gay.

As it turned out, the property in Chicago never existed; as was emphasized by the prosecution in their closing arguments, also declaring that Mrs. Stevens separated Haas from his entire life savings in the amount of approximately $280,000. The entire time period that all these events transpired was under four months.

But Mr. Steven’s defense lawyer told the jury that the facts showed that the prosecution had failed to prove a crime was even committed. He pointed out that Haas was of sound mind and body when he “lent” the money to his client’s wife, pointing out that he had no history of diminished mental capacity or dementia, and furnished the money eagerly, believing his generosity was advancing a romance with a younger woman. It was summed up by the defense as “a loan that didn’t work out”. He also went on to say that even if the jury concluded a crime was committed there was no proof that Mr. Stevens was aware of his wife’s actions and that the proceeds were given to Mrs. Steven’s mother and sister and not Mr. Stevens, according to his defense attorney.

The prosecutor responded to the defense attorney’s assertion by proclaiming to the jury “If you believe that, I’ve got a bridge to sell you in Brooklyn… or a property in Chicago.”

In the end, the jury did believe a crime was perpetrated but could not connect the dots to convict Mr. Stevens of any wrongdoing for the second time. During the first trial he testified that he didn’t even know how much money his wife received from the victim.

But Mrs. Steven’s testimony/confession sealed her fate.

The money hasn’t been recovered and Haas doesn’t expect he’ll ever see the restitution ordered by the judge. When he took the stand he told the court that Gina Stevens ruined him financially and is bitter that Mr. Steven’s was not convicted the first time. His final beseeching words after the hearing were “I’m broke. I’m living in poverty… So how do I get welfare?” Haas’ daughter Mona was quoted as saying “People have to be vigilant… They can’t be so trusting.”

Judge Affirms 6-3 Vote for Death Sentence of Miami Handyman for 2005 Murder

June 8, 2015 | Michael B. Cohen, P.A.

In November of last year, a jury found Rafael Andres guilty of the first-degree murder of Ivette Fariñas, a waitress who worked at Miami International Airport. He was also found guilty of first-degree arson for the fire he set in her home in his attempt to destroy the evidence of the crime he committed, as well as robbery with a weapon, and burglary with battery.

The evidence against the handyman was damning to say the least. Moments before the victim’s home went up in flames a neighbor identified him fleeing from the premises with a gas can in his possession. Secondly, a washcloth, covered with blood that contained DNA that matched his was found in close proximity to the body, not destroyed by the fire. It was also discovered that after the time of Fariña’s death, Andres used her debit card to make cash withdrawals from an ATM, make purchases at a Home Depot, fill up his car with gasoline, and book a room at the Miccosukee Resort and Casino.

This also was not the first time that Andres was found guilty for a homicide charge.

Almost thirty years ago he was convicted for the fatal beating and stabbing death of Linda Azcarreta who was an apparent friend of his at the time of the homicide. Azcarreta’s son Rene, who was seven years old at the time of the crime, found his mother’s body in their Miami home. Now, thirty-five years old he was present at the sentencing for Andres’ current crime and broke down when the details of his mother’s murder were discussed during trial. He was comforted by Luisa Moya, the 63 year old mother of Andres’ latest victim.

However, Andres who agreed to a plea agreement of nine years for the first homicide only served eighteen months in prison for that crime based on good behavior as well as the then-overcrowded prison system.

After hearing all the evidence against Andres in the primary trial for the killing of Fariñas, it took the jury approximately nine hours of deliberations to return a verdict of guilty of all charges listed in the criminal complaint against him.

A month later, during the penalty phase, the jury recommended that Andres be put to death by a vote of 9-3. Florida is the only state in the nation where only a simple majority is required for a sentence of death to be instituted. Early last month, Miami-Dade Circuit Court Judge Dava Tunis affirmed a resounding confirmation by formally sentencing Andres to death fulfilling the wishes of the majority of jurors.

She spoke directly to Andres as she handed down his sentence stating “As you tightened the cord around her neck, she was alive. She was losing her ability to breath. Duct tape was tightened around her nostrils while you deliberately, atrociously and cruelly tightened that cord around her neck.”

This story was first reported on my Google+ page on May 6, 2015. To read my post along with the corresponding newspaper article associated to it click here and scroll down to the matching date.

Although Andres will be jailed directly, it will likely take many years before he faces the ultimate legal penalty. The last person to be executed in Florida for a capital crime was Johnny Shane Kormondy, who was convicted as the leader of a home invasion robbery where a banker from the Florida panhandle was murdered and his wife was raped in July, 1993. He was sentenced eleven months later. From the commencement of his incarceration he filed numerous appeals through his attorneys’ including a last minute appeal that delayed his execution by nearly two hours but was ultimately denied by the Supreme Court. He was executed on January 15, 2015, more than twenty years after his sentence was imposed.

At the time of the writing of this blog post, twenty two persons have been executed in the State of Florida during the twenty-first century. The next person in line for execution is Jerry William Correll. Correll was sentenced to death nearly thirty years ago for the murders of his ex-wife, her mother and sister, as well as his daughter in a brutal stabbing frenzy. However, in this case, the execution has been stayed pending a US Supreme Court decision which will hear a case involving lethal injection protocol due to a botched execution in Oklahoma. The Florida Supreme Court said it “must err on the side of extreme caution” and decided to stay the execution until the opinion of the highest court is decided since Florida uses the same method.

To read further about capital crimes, visit this page on my Website. The definition as well as an explanation of the two-phase process can be found along with my personal experience and the history of capital punishment accessible by the link at the bottom of the page.

Miami Resident Arrested in $100 million Venezuelan Money Laundering Scheme

May 18, 2015 | Michael B. Cohen, P.A.

Venezuela has recently been experiencing a shortage of all foreign currencies due to a substantial drop in oil prices, the country’s central source of US dollars. It has gone through an economic contraction of close to three percent and is fighting a very high rate of inflation which is currently more than sixty percent.

Because of these financial difficulties, the government-determined exchange rate of the Bolivar, (Venezuela’s currency) has skyrocketed from approximately 4.25 Bolivar for 1 US dollar in 2013, to the current 6.29-1 legal rate of exchange (Source: Bloomberg 5/15/2015).

But the rate of exchange on Venezuela’s black market dwarfs the legal rate as US dollars become more precious to purchase items considered to be “essential goods” such as food and medicine that are not manufactured in Venezuela. These items make up around seventy percent of all imported products. The difference between the official exchange rate and the black-market rate can be up to as much as an exorbitant one-thousand percent. Recently, one U.S. dollar could be exchanged for close to three hundred Bolivars.

Due to this unique situation in the country, drug cartels have found a way to amass huge profits by carrying away loads of these essential products such as gasoline, imported medicines and foodstuffs to Colombia where they are traded for drugs, and dollars which are then brought back and sold in Venezuela making mammoth profits. These highly lucrative smuggled goods have bankrolled the rise of paramilitary groups, which now control significant strips of territory between the Venezuelan and Colombian border.

Allegedly, cashing in on the action, under the ruse of running a enterprise that would lend money to Venezuelan businesses so they could trade with companies in the United States, Martin Lustgarden Acherman, a Venezuelan-Austrian residing in Miami-Dade County perpetrated a scheme where he would fly drug profits out of Columbia; route them through his bank accounts in South Florida as well as other locations, and then exchange the funds for the local currency in Venezuela after flying the laundered currency back to that country.

The recent violence in Venezuela’s Capital of Caracas and other major cities, hand-in-hand with a collapsed economy has left store shelves sparsely filled. American cash is king on the black market, which in many cases has become the lifeline for local businesses so they are able to conduct commerce outside the country.

Earlier this month, federal authorities arrested Acherman, charging that he used his bank accounts here in South Florida to take advantage of the economic crisis in Venezuela to the benefit drug cartels, not businesses. He was arrested in Miami with Salomon Bendayan and Rama Krishna Kuchibhotla according to The Venezuelan Daily Brief.

Specifically, the federal government has charged that Acherman used his three Bank of America accounts located in Doral as conduits to launder $100 million in drug profits originating in Colombian back into Venezuela where he allegedly exchanged the proceeds for local currency at excessive black market prices.

Earlier this week federal prosecutors stated in court that Acherman “quarterbacked an international scheme to move U.S. dollars around on behalf of drug cartels and paramilitary organizations in Colombia… He takes advantage of the unique situation in Venezuela… has made a business of gathering U.S. dollars and making them available in places they are hard to come by such as Venezuela.”

Acherman has been charged with money laundering, conspiracy and obstruction and is being held pending further action. His lawyer commented that some of the government’s charges were “fantasy”, but did not provide further comment.

Charges dropped in 14-year old Lakeland Girl’s Cyberbullying Suicide

April 15, 2015 | Michael B. Cohen, P.A.

Modern technology in its union with computers and the Internet is responsible for many changes in existing laws, both federal and local. A prime example of this is the crime of wire fraud which was previously defined as criminalities which were committed crossing state lines, mostly associated by telephone, telegraph, radio, and television. But in our current day environment, many types of crimes have been expanded to include new devices associated with computers as well as cell phones which didn’t exist when these laws were first placed on the books.

In addition to laws being lengthened to cover the new devices; which in many cases are used to commit crimes, innovative and new types of crimes have been devised through the use of these devices in the new digital world where we all can be affected.

Phishing scams, online sales scams and cyberbullying are just a few new crimes that didn’t exist before computers became popular and were ultimately coupled to the Internet.

An example of one of these modern crimes leads to the story of the suicide of a young girl who lived in Lakeland, Florida.

From all outward appearances, Rebecca Sedwick was an average 12-year-old, with all the challenges that young girls of that pre-teen age group face every day. But the investigation into her suicide revealed a troubling collection of tactics by her peers that by all appearances caused her to choose to end her life.

The story became a case of National prominence when two of Rebecca’s schoolmates from Crystal Lake Middle School were charged with a crime related to cyberbullying and intimidation by means of cellphone texts, social media and in-person verbal assaults.

Guadalupe Shaw and Katelyn Roman, were ages 14 and 12 respectively at the time they were charged with aggravated stalking in the death of Rebecca. The crime is a third-degree felony in the State of Florida. Both girls were eventually released into the custody of their parents although Shaw was first processed and spent a short time at a juvenile detention facility.

The findings of the investigation suggested that the older girl was the main culprit in the events that led up to the suicide. The investigation was launched soon after the suicide but the bullying began in 2012 and it was discovered that Rebecca was allegedly tormented by as many as fifteen girls, instigated by Shaw who was dating a boy that was previously Rebecca’s boyfriend. It may have been this element that caused Shaw to start turning classmates against her.

When the younger Katelyn Roman was interviewed by investigators, she told them that when the in-person taunting began at school, she was still friends with Rebecca. But Shaw “had so many people on her side.” She went on to tell investigators that around that time, she told Rebecca she didn’t think it was a good idea for them to remain friends. Rebecca didn’t take that news well and replied “it didn’t matter, because I (she) wasn’t a good friend anyway.” Roman continued by saying that “everyone was telling me she was a liar. I’d hear it all around school… Every day, I’d hear stuff about her… I didn’t want to believe what everyone was saying, but I didn’t know what to do.”

Shortly after the taunting began Katelyn and Rebecca got into a physical altercation between classes at school which was broken up by a teacher.

But it was the online taunting and bullying followed by a seemingly never-ending horde of text messages that caused the Polk County Sheriff to bring formal charges against the two girls despite their ages.

The hateful texts started in 2012 via cellphone and messaging applications including ask.fm, an anonymous question and answer platform website, Kik, an instant messaging application for mobile devices, and Voxer, a “Walkie Talkie app” and voice messaging system for smartphones.

Some of the texts that were discovered through the investigation said “You’re ugly”, “Why are you still alive?”, and “Can u die please?”

It was around that time that Rebecca started cutting herself with razor blades. Some of the images which were posted by Rebecca herself, on some of the aforementioned messaging sites as well as Facebook showed her cutting herself in the upper thigh, displaying her arms and body covered in cuts, showing a razor placed on the inside of her arm, as well as a picture showing her lying with her head on railroad tracks.

In early 2013, Tricia Norman, Sedwick’s mother, filed a complaint with the Polk County Sheriff’s office reporting that her daughter was the target of physical threats, also stating that she had an “ongoing feud” with another student. The student, who was unnamed in the report but implied to be Shaw, claimed that she never touched Sedwick when questioned by police. When Norman realized the abuse her daughter was facing she closed her daughter’s Facebook page, took away her cell phone, and ultimately had her transferred to a new school in August 2013 after first attempting to home school her beforehand in January of that year.

After weeks of investigation and scrutiny of thousands of Facebook messages the charges were ultimately dropped by the Polk County state attorney’s office. It was decided that there wasn’t enough concrete evidence to succeed with a prosecution against the girls even though an apparent admission by Shaw was plainly damaging, and the main reason that the Sheriff decided to pursue charges in the first place. Below is the Facebook post made by Shaw after the Sedwick suicide:
“Yes ik [I know] I bullied Rebecca nd [and] she killed her self [sic] but IDGAF [I don’t give a F…]

Presently, there are no federal laws that address the issue of cyberbullying but Tricia Norman, along with her attorney are aggressively pressing for a federal anti-bullying law. And in the State of Florida, Norman is fighting for the legislation of “Rebecca’s Law”, which would define statutory penalties for in-person bullying as well as this type of intimidation via the Internet and by use of other communication devices.

To find out more about Cyberbullying, its penalties in the State of Florida, and other crimes related to it, follow this link found on my Website.

Broward County Resident Accepts 70 Month Prison Sentence for Identity Theft

March 30, 2015 | Michael B. Cohen, P.A.

With less than a week to go, many are looking forward to opening of the 2015 baseball season. And only ten days after that event begins the deadline for filing your tax return reaches its deadline. Spring always brings about the beginning of one and cutoff date of the other season.

And just as the first pitch is being thrown in all major baseball stadiums across the country, cases of tax fraud and identity theft will be highlighted in the headlines.

Many of us use tax preparers to fill out and submit our returns with a belief that these professionals are doing so to our benefit, more qualified to take the information we give them and bring us back the highest monetary return or lowest tax liability possible.

In Broward County, Julio Lugo was the proprietor of multiple agencies of this type, including #1 Tax Specialist LLC, the Number One Tax Specialist LLC, and Number Two Tax Specialist Inc., all based in Miramar. He also had control over Light House Refund of Miami from which he obtained an EFIN (Electronic Filing Identification Number) from the Internal Revenue Service which allowed him to electronically file customer’s income tax returns, supposedly on their behalf.

Lugo and his associate Jamar James who registered Light House Refund both faced charges relating to improperly filing returns on their customer’s behalf for their own personal gain. Lugo was also listed as the registrant of Facerick Entertainment LLC, Chairman/CEO of Top Line Music Group, LLC and the Managing Member of Auto by Vision, LLC.

But for all his business interests, Lugo was apprehended by federal law enforcement for a scheme that found that he was using the EFIN acquired by Light House Refund to file close to fifty false tax returns using stolen identities. According to the Indictment he was paid several hundreds of thousands of dollars for the fraudulent tax refunds provided by the IRS during the timeframe of Oct. 2010 through Sept. 2012.

In a deal with the government, Lugo pleaded guilty to one count of conspiracy to defraud in relation to aggravated identity theft. He accepted a sentence of close to six years in a federal prison and more than a quarter million dollars in restitution. Upon his release, Lugo will complete his sentence with three years of probation.

His codefendant Jamar James received a sentence of two years of probation for his role in the scheme. His probationary sentence was for accepting a guilty plea for one count of making a false statement to a federal agency.

The press release for the case was announced by Wifredo A. Ferrer, the United States Attorney for the Southern District of Florida, along with Kelly R. Jackson, the Special Agent in Charge for IRS Criminal Investigations (IRS-CI).
George L. Piro, Special Agent in Charge for the FBI’s Miami Field Office was also named in the press release.

Florida Connection to Silk Road Case, Bitcoin, Money Laundering and More

March 3, 2015 | Michael B. Cohen, P.A.

In late January, a U.S. District Judge sentenced a Cape Coral, Florida man to four years in federal prison and the forfeiture of almost $1 million after he pleaded guilty to the charge of tax evasion.

Robert Faiella accepted the plea which was the lesser of the allegations charged against him for his role in a case that has direct ties to the headline grabbing “Silk Road” case that came to a conclusion in early February. Faiella’s codefendant, Charlie Shrem was sentenced to two years behind bars for the same crime just one month before this latest plea deal was accepted.

Faiella, a/k/a “BTCKing” was originally arrested and charged last year with operating the unlicensed money transferring business and conspiracy to commit money laundering. He was well-known as a Bitcoin entrepreneur who allowed those who used the Silk Road Website unfettered access to his monetary exchange. Bitcoin is digital currency that has been in use since 2009 for purchasing all types of items on or through the Internet. It cuts out banks as middle men avoiding transaction fees such as percentages charged by credit cards and can be utilized without giving a person’s actual name. Faiella operated his Bitcoin exchange and purchased the digital currency through “BitInstant” within the Silk Road’s confines on the “Dark Web”.

It was suspected that buyers and sellers who used Faiella’s services were able to exchange cash for Bitcoins anonymously which made it possible for them to buy illegal drugs as well as other illegal articles on the Dark Net market site. Shrem and Faiella made profits on the transactions through a handling fee. Allegations of the sale of illegal firearms and even murder for hire were also raised as prospects of the Silk Road’s merchant’s commodities.

The Indictment, unsealed in late January, alleged that Shrem and Faiella colluded to launder in excess of $1 million of Bitcoin transactions that poured over the Silk Road between the years of 2011 through 2013. Shrem was named the CEO and chief compliance officer while Faiella was charged as being the owner/operator mastermind of the monetary exchange.

The Silk Road case itself came to a conclusion early last month when its alleged mastermind Ross Ulbricht was found guilty on all counts charged against him. The feds seized the site in Oct. 2013 and arrested him in San Francisco. Ulbricht’s pseudonym was “Dread Pirate Roberts” and was convicted by a federal jury after a few short hours of deliberations. He was charged with drug trafficking and money laundering among the seven counts brought against him. He faces a minimum of twenty years in prison which can be upped to life in prison upon sentencing. His legal team plans to appeal the verdict.

Almost one year ago to the day, another Florida man was charged with selling Bitcoins for the purpose of money laundering to undercover federal agents. Michell Abner Espinoza was charged with one count of operating an unlicensed money service business, laundering up to twenty thousand dollars, and laundering currency valued at more than twenty thousand dollars. His co-defendant Pascal Reid, a citizen of Canada was also charged as co-defendant in the case. Both men were arrested in Miramar, Florida.

A journalist and security researcher who first broke that story said that the “arrests may be the first state prosecutions involving the use of Bitcoins in money laundering operations,” according to Miami-Dade State Attorney Katherine Fernandez Rundle’s office.

In March, 2013 Florida Regulators issued a warning relating to Bitcoin that can be read at this link.

Eight Arrested in Offshore Gambling Ring with Connection to Organized Crime

February 16, 2015 | Michael B. Cohen, P.A.

After an investigation that went on for over half a year, eight South Florida men were taken into custody as the result of a sting that covered territory along the East Coast in an offshore online sports gambling ring that was operated out of the suspect’s homes as well as local businesses. The online bookmaking ring took bets on professional and college sports including football, baseball, and basketball.

Related suspects were also arrested in New York City, Upstate New York’s Rockland County as well as Bergen County, New Jersey, with a grand total of over $4 million seized by federal agents between all locations. More than sixty search warrants were executed by multi-state agencies made up of the Organized crime unit in Florida as well as the FBI’s criminal division in the New York Metropolitan area and the Rockland County District Attorney’s Organized Crime Unit with assistance from the New York State Police Special Investigative Unit, Queens District Attorney’s Organized Crime Division, the NYPD Asset Forfeiture Unit, the Clarkstown and Ramapo police, the Bergen County, New Jersey Prosecutor’s Office, and the Department of Homeland Security.

In New York, the biggest catch found in the net was Daniel Pagano, now 61, the son of former Genovese crime family boss Joseph Luco Pagano. The younger Pagano is alleged to be a Captain in the continuing criminal enterprise.

Also picked up in the operation and accused of being linked to the infamous crime family was Pasquale Capolongo who was taken into custody in West Palm Beach, Florida. Capolongo had moved from White Plains, NY to West Palm Beach. He has a history of convictions for illegal gambling charges during the time he lived in Rockland County which has apparently followed him to South Florida.

The South Florida portion of the booty amounted to over $1.2 million and was snatched from the suspect’s homes, safety deposit boxes and personal bank accounts. According to papers released by the Broward County Sheriff’s Office, in this new age of digital crime; in addition to conducting their illicit business from their homes it is also alleged that they worked out of local casinos and a dog track, an Italian market in Coral Springs, a scrap metal business in Pompano, and even a Whole Foods market and CVS Pharmacy.

Arrests were initiated last year in Rockland County in early December with the conclusion of their own separate investigation which separately went on for over a year. At the time, District Attorney Thomas Zugibe said that they were “taking in millions of dollars a month” and continued by saying that “the investigation uncovered evidence that the enterprise had links to organized crime.”

In the South Florida connection all the men are charged with racketeering, conspiracy to commit racketeering, money laundering, conspiracy to commit money laundering, varying counts of bookmaking, conspiracy to commit bookmaking, and the unlawful use of two-way communication devices to facilitate a felony. All have been saddled with bond in excess of one hundred thousand dollars with Capolongo’s topping off at $1 million. Coming in second in the high-bond lottery was Michael Dangelo of Pompano Beach who had additional charges of drug trafficking and possession of cocaine and oxycodone which raised the amount of his bond to $777,000.

The Broward Sherriff’s Office said that the operation was foiled by texts and phone wiretaps, surveillance, along with cooperating witnesses and defendants as well as videotaped recordings of live transactions, and the hard work of their undercover deputies.

Sheriff’s spokesperson Gina Carter mentioned that “this is an ongoing investigation and we anticipate several more key players will be arrested in coming weeks.”

Four of the men who were arrested in Palm Beach County including Capolongo had hearings before a Broward Circuit Court Judge to account for the sources of their bond funds which must have been obtained from legitimate sources. The other three men were Devon Alexander Shalmi, 30, Joseph Petrolino, 47, and Thomas Cuce, 32. But for now the four remain in custody. All the men arrested live in the immediate neighborhoods of West Palm Beach, Boca Raton, Parkland, Margate and Coral Springs in Broward and Palm Beach Counties. The others arrested were Allan Klein, and his son Darren, Michael Dangelo, and Erik Bishop.

Broward County Sheriff Scott Israel commented on the workings of the criminal enterprise by saying “Criminal networks like these may not seem dangerous to the public… but it is activity such as this that leads to violence and fuels organized crime throughout the country.”

South Florida Ex-Convict Faces Federal Weapons Charges

January 24, 2015 | Michael B. Cohen, P.A.

Michael Paul Watkins of Inverness had successfully escaped from custody previously on two separate occasions after being convicted for the crime of fondling and handling a minor under the age of sixteen years in Florida State Court. He was arrested in October 2011 on a charge of domestic battery. Details of that arrest record are exempt from public information as per Florida statute.

Late last year, the Citrus County Sheriff’s Office received information from local Wal-Mart employees that an individual who was later identified as an employee of Cool Aid Heating and Air Conditioning was purchasing a questionably large amount of firearms from the outlet during the course of a short period of time. The air conditioning company was one of two businesses owned by Watkins. The purchases included various types of guns including AR-15 rifles. The law enforcement agency also received an anonymous tip that Watkins was obtaining and stockpiling firearms, grenades (explosive devices), and ammunition from a third party. As a convicted felon, Watkins is prohibited from manufacturing, possessing, or purchasing any type of weapons under the National Firearms Act.

The Sheriff’s Office contacted the Bureau of Alcohol, Tobacco and Firearms (ATF), a federal law enforcement agency and together they executed three warrants based on probable cause, searching Watkins home and the two businesses he owned.

Through their search efforts at Watkins home, close to 150 firearms as well as 17 explosive devices were uncovered. The investigators’ assigned to the search the premises commented that Watkins house was “built like a bunker”. There was a concrete gated wall surrounding the home entrance as well as rolling steel shutters guarding the front door and all windows.

In addition to the air conditioning and heating company, Watkins is also the owner of Ridin’ Dirty Motor Sports, a retailer of ATV’s, go carts and motorcycles. He was arrested at that location and charged with illegal possession of a firearm by a convicted felon as well as illegal possession of a destructive device. If convicted, each of the crimes carries a maximum sentence of 10 years in a federal prison.

When Watkins’ employee was questioned by federal investigators he told them that the acquisition of the firearms began in September 2013 in gun shops where they were legally sold, including Wal-Mart stores in Inverness, Inglis, and Ocala, Florida. The money was provided by his employer and on some occasions he waited in the store’s parking lot for the transaction to be completed. He also bought conversion kits for Watson by way of the Internet, using a pre-paid card provided by his boss. These supplies are specifically used in the conversion of semi-automatic weapons into automatic firearms.

He also admitted to investigators that he assisted his boss construct and set off pipe bombs which were made from PVC pipes that contained explosive substances on a vacant lot which Watkins owned in Dunnellon, FL. The Citrus County Property Appraiser confirmed that the property was owned by Watkins’s company (Watkins Inc.).

In further response to investigator’s questions regarding why his employer had accumulated the equivalence of a small armory, he told them that Watkins feared the foreseeable collapse of the United States economy and planned to eventually become a supplier for the firearms industry. Telephone records and text messages corresponding to the purchase dates between Watkins and his worker were also accumulated by investigating agents.

Although Watkins was convicted of his prior crimes in the state criminal justice system, these new charges will be tried in federal court. The employee continues to work and cooperate with federal authorities.