Executives At Threat: Summer time 2021 – Felony Legislation

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Introduction

This edition of Executives at Risk discusses
empirical data about the impact that the pandemic has had on white
collar prosecutions, grand jury activity, and trials. Notably,
approximately one-third of all of the cases brought in 2020 by the
DOJ’s Fraud section involved fraud concerning COVID financial
relief programs. Despite the slowdown in investigations and
prosecutions, we report on some significant actions against
executives in the areas of cartel, money laundering and the Foreign
Corrupt Practices Act (FCPA), and government contracts. In
addition, we summarize developments in the ongoing auto emissions
fraud scandal and the Fédération Internationale de
Football Association (FIFA) corruption probe. Finally, we report on
a series of extraditions and noteworthy criminal sentencings
impacting corporate executives.

The Impact of the Pandemic on
White Collar Prosecutions 

Fraud Charges Declined, Though COVID-Related Fraud
Charges Spiked During the Pandemic
: In 2020, trials slowed
to a near halt and grand juries were disrupted, leading to a
downturn in investigations, indictments and trials. DOJ’s Fraud
Section recently published its Year in Review for 2020,
and the U.S. Sentencing Commission (USSC) published its Overview of Federal
Criminal Cases. Both of these reports describe a marked decline in
traditional fraud-related charges against individuals during the
early stages of the pandemic. Overall, the Fraud Section charged
326 individuals in 2020, 31 percent fewer than in 2019. The
Fraud Section secured approximately 17 percent fewer convictions in
2020 than in 2019, and the USSC reported a nearly 16 percent
drop in reported convictions compared to fiscal year 2019. The
decline is evident when you consider proceedings that require a
jury. The Fraud Section convicted just 16 individuals after a jury
trial, compared to 37 in 2019, a 57 percent drop. Cases involving
fraud, theft, or embezzlement declined 24.5 percent compared
to 2019. Nevertheless, DOJ brought numerous COVID-19-related fraud
cases. In 2020, the Fraud Section’s Market Integrity and Major
Frauds Unit charged 97 individuals in Paycheck Protection Program
(PPP)-related cases, nearly one-third of all Fraud Section charges.
Concurrently, the Health Care Fraud Unit is coordinating with a
working group of federal law enforcement and public health agencies
to combat COVID-19 health care fraud. 

The Courtroom Returns to Life: After a long ban
on jury trials and in-person proceedings, courts are beginning to
resume in person proceedings with modifications designed to provide
health and safety precautions. In March 2021, despite one jury member testing positive for
COVID-19, a bank fraud trial against two former consultants for
marijuana delivery site Eaze Technologies Inc. proceeded and
the federal jury found the defendants guilty of conspiracy
to commit federal bank fraud. As the country continues to open up,
we expect that in-person court proceedings will soon become the
norm, rather than the exception.

Significant
Criminal Investigations and Related Civil Suits Involving Corporate
Executives

Cartel 

Feds Charge Belgian Execs in Security Services
Bid-Rigging Scheme
: In June, a federal grand jury in
DC indicted a Belgian security firm, Seris
Security NV (Seris), and two of its former executives for allegedly
rigging bids for contracts with the Defense Department (DOD) to
provide security services at military bases in Belgium in
2019-2020. Former CEO, Danny Vandormael, and former Director of
Guarding & Monitoring, Peter Verpoort, allegedly fixed prices
with competitors and allocated a contract among competitors. In
addition, the grand jury indicted the former CEO of competitor
security company G4S Secure Solution NV (G4S), Jean Paul Van
Avermaet, for participating in the alleged conspiracy. G4S recently
agreed to plead guilty and pay a $15 million fine
for its involvement in the bid-rigging conspiracy. The case is
being investigated by the Procurement Collusion Strike Force
(PCSF), a multi-agency task force created by DOJ’s Antitrust
Division in November 2019 and tasked with identifying,
investigating, and prosecuting bid-rigging in the government
procurement process. The charges here represent the PCSF’s
first in a foreign-based bid-rigging conspiracy and the second
overall. As we previously reported, the PCSF brought its
first charges in a local, domestic investigation involving
bid-rigging of North Carolina state contracts in October 2020.
It remains to be seen whether the PCSF’s
heightened focus on government contracts bid-rigging will result in
an uptick of prosecutions in the coming year.

Criminal Cartel Investigation of the Poultry Industry
Widens
: In May, a federal grand jury indicted Georgia-based poultry producer
Claxton Poultry Farms (Claxton) on charges that it conspired to rig
bids and fix prices of broiler chickens sold to restaurants and
grocery stores. Claxton is the second poultry producer to be
charged as part of DOJ’s investigation into cartel conduct in the
broiler chicken industry. Poultry producer Pilgrim’s
Pride pled guilty to participating in the
scheme in February and agreed to pay a $107 million fine. In April,
Pilgrim’s Pride and its current and former chief executive
officers (CEOs), Fabio Sandri and William Lovette, respectively,
successfully defeated a class action lawsuit against them in the
District of Colorado. The judge ruled that certain of the claims violated
the five-year statute of repose for securities actions and the lead
plaintiff lacked standing to sue. In addition to the two companies
that have been charged in DOJ’s ongoing investigation, 10
individuals, including William Lovette, have been charged
criminally.

Antitrust Division Brings Localized New Wage-Fixing
Charges, Heightening Focus on Labor Market
: The DOJ’s
Antitrust Division is increasingly focusing upon state and local
anticompetitive behavior, particularly affecting the labor market,
as global conspiracy investigations continue to wane. In April, a
federal grand jury in Texas indicted John Rodgers, a director of a
therapist staffing company, and brought additional charges against
Neeraj Jindal, the company’s former owner, for allegedly
conspiring with other health care staffing companies to pay lower
wages to physical therapists in Texas. Both individuals also are
charged with obstructing a related Federal Trade Commission (FTC)
investigation. As we previously reported, Jindal initially was
indicted on wage-fixing and obstruction charges in December 2020.
Jindal has subsequently filed a motion to dismiss the indictment, arguing
that alleged wage fixing does not constitute per se,
or criminal, antitrust conduct. In March, a federal grand jury in
Nevada indicted VDA OC LLC, a health care
staffing company, and Ryan Hee, a former manager of the company,
with conspiring with competitors to fix wages for nurses and
entering into “no-poach” agreements not to recruit or
hire nurses. The recent no-poach and wage-fixing charges
demonstrate the Antitrust Divisions’ increased focus on alleged
collusion in the labor market. The theory that such conduct is a
criminal violation of the law is untested in court, and it remains
to be seen whether the charges will result in
convictions. 

Two Tuna Execs Who Pled Guilty and Cooperated with the
Government Get No Jail Time for Price-Fixing
: In April, a
federal judge sentenced two former Bumble Bee Foods
senior vice presidents, Kenneth Worsham and Walter Scott Cameron,
to three years of probation after each pled guilty to conspiring to
fix prices of canned tuna and testified against the CEO of Bumble
Bee. U.S. Judge Edward M. Chen of the Northern District of
California attributed the lenient sentences to the executives’
extraordinary cooperation, which included assisting in the
government’s investigation and testifying against former Bumble
Bee Foods CEO and president, Chris Lischewski, at his trial.
Cameron was the first cooperating witness in the government’s
investigation. Worsham met with DOJ attorneys at least 15 times and
provided a thumb drive of key documents used against Lischewski at
trial. As we previously reported, Lischewski is currently
serving a three-year-and-four-month prison sentence after a jury
convicted him of leading a three-year conspiracy to fix canned tuna
prices. The conspiracy was first uncovered when DOJ was reviewing
documents as part of a proposed acquisition of Bumble Bee by
competitor Chicken of the Sea International. 

FCPA Guilty Plea

Former CEO of Petrochemical Company Pleads Guilty to
FCPA Conspiracy Charges
: In April, José Carlos
Grubisich, former CEO of Braskem S.A. (Braskem), pled guilty to conspiracy to violate the
FCPA for his role in a bribery scheme involving Braskem and its
parent company, Odebrecht S.A. In 2016, Braskem resolved corporate FCPA enforcement
actions arising out of Operation Car Wash, the Brazilian corruption
investigation into state oil company Petróleo Brasileiro
S.A. (Petrobras). The DOJ unsealed an indictment against Grubisich in November
2019. As part of his plea, Grubisich admitted to agreeing “to
pay bribes to Brazilian government officials to ensure
Braskem’s retention of a contract for a significant
petrochemical project from [Petrobras]” and to “falsify
Braskem’s books and records by causing Braskem to falsely
record the payments to offshore shell companies controlled by
Braskem as payments for legitimate services.”

Money Laundering and Bank Fraud
Charges

Odebrecht Bankers Charged with Laundering $170 Million
for Bribery Slush Funds
: In May, Peter Weinzierl, the CEO
of an Austrian bank and an Austrian national, was arrested in the
United Kingdom for allegedly conspiring to launder hundreds of
millions of dollars in connection with the bribery scandal that has
engulfed Brazilian global construction conglomerate Odebrecht. A
court in the Eastern District of New York (EDNY) unsealed the
existing money laundering-related charges against Weinzierl and Alexander
Waldstein, also an officer of the Austrian bank and an Austrian
national. The two officers allegedly agreed to use fraudulent
transactions to move $170 million from Odebrecht correspondent
accounts in New York through the Austrian bank to offshore shell
company accounts that were secretly controlled by Odebrecht.
Weinzierl and Waldstein allegedly agreed to open accounts for the
shell companies to move funds out of Odebrecht’s official
accounts and off Odebrecht’s official books and records,
according to the indictment. The payments to shell companies were
then allegedly recorded by Odebrecht as legitimate business
expenses, but in fact were secretly used to pay bribes to foreign
officials to advance Odebrecht’s business interests. Waldstein
remains a fugitive. 

Individuals Indicted for Willfully Failing to Set Up AML
Compliance Program
: In March, two individuals were indicted for Bank Secrecy Act (BSA)
violations for allegedly providing false assurances to
unsophisticated financial institutions such as the New York State
Employees Federal Credit Union that the individuals could assist in
operating a compliant anti-money laundering (AML) program.
According to the indictment, Gyanendra Asre and Hanan Ofer
represented to the financial institutions that due to their AML
experience and training, they understood the risks associated with
high-risk financial business lines and would conduct appropriate
AML compliance. Asre and Ofer then allegedly willfully failed to
develop, implement, and maintain an effective AML program for the
financial institutions. Based on their representations to the
financial institutions, Asre and Ofer allegedly helped the
financial institution clear nearly a billion dollars in high-risk
transactions, including hundreds of millions of dollars of bulk
cash deposits and transactions hundreds of millions of dollars in
foreign transactions. Both individuals have pled not guilty on all
charges and are awaiting trial.

Cryptocurrency Promoter Charged with Securities
Fraud
: In February, cryptocurrency promoter John Demarr
was arrested and charged with securities fraud for his role in
defrauding investors out of $11.4 million. According to the criminal complaint, Demarr marketed investment
contract securities to investors in the United States, claiming
that the investor funds would be invested in digital asset mining
and trading platforms that would earn guaranteed profits. Investors
were later forced to roll over their accounts into an unregistered
“initial coin offering” for Bitcoiin2Gen (B2G), which was
described as the “next generation of Bitcoin.” According
to the complaint, investors in B2G never received any digital
tokens from the initial coin offering but instead received account
statements that falsely represented that their investments were
earning large returns. Demarr has been released on bond and no
trial date has been set. In addition, the U.S. Securities and
Exchange Commission (SEC) also filed a civil complaint against Demarr and two
other individuals – Kristijan Krstic (a/k/a Felix Logan) and Robin
Enos – for engaging in a scheme to fraudulently inducing investors
to invest in B2G and another company. The court has stayed the SEC
proceeding as to Demarr and Krstic while the criminal case
proceeds. In April, Enos entered into a consent judgment with the SEC requiring
him to pay to-be-determined disgorgement and civil penalties and
barring him from selling or purchasing certain securities for life.
   

Embezzlement,
Kickbacks, and Other Fraud  

CFO Pled Guilty to Embezzling $30 Million Over
Eight Years from Prestigious Shoe Company
: In April,
Richard Hajjar, the former chief financial officer (CFO) of Alden
Shoe Company, was charged and pled guilty to wire fraud,
unlawful monetary transactions, and filing false tax returns in
connection with a long-running $30 million embezzlement scheme.
Starting as early as 2011 and continuing through October 2019, the
CFO embezzled approximately $30 million from Alden by writing
himself checks from company bank accounts and transferring money
from company accounts to private accounts. Additionally, between
2014 and 2019, Hajjar failed to pay approximately $5 million in
taxes to the Internal Revenue Service (IRS) by failing to report
the proceeds of his embezzlement scheme. A sentencing hearing has
been scheduled for September of 2021.

Netflix Executive Convicted in Kickback Scheme:
In May, a federal jury in California convicted Michael Kail, the former Vice
President of Internet Technology at Netflix, of mail fraud, wire
fraud, honest services fraud, and money laundering in connection
with a scheme in which Kail received stock options and $500,000 in
cash from vendors in exchange for millions of dollars of
information technology contracts with Netflix. Kail signed advisory
agreements with certain vendors and set up a limited liability
company with no employees or operations to receive the payments. A
sentencing hearing has been scheduled for September of
2021. 

DOJ’s Accounting Fraud Case Against Former Brixmor
Execs Crumbles
: In a highly unusual move, federal
prosecutors in the SDNY dropped accounting fraud charges against
two former senior executives at Brixmor Property Group, Inc.,
former CEO Michael Carroll and former CFO Michael Pappagallo. In
2019, Carroll and Pappagallo were charged with inflating and
deflating net operating income for the purpose of misleading
investors about the financial stability of Brixmor. In March 2021,
the government informed Judge Colleen McMahon that it
could not prove that the accounting adjustments alleged were part
of a scheme to defraud. In addition, the government sought leave to
dismiss the indictment against two other executives, Steven Splain and Michael Mortimer, who had both already pleaded
guilty and were preparing to cooperate against Carroll and
Pappagallo. 

Government Contracts
Fraud 

CEO of Japanese Company Indicted for Scheme to Defraud
Navy
: In February, Sojiro Imahashi, CEO of Kanto Kosan Co.
Ltd., and two employees were indicted on conspiracy, major fraud, and
false claims charges for their alleged roles in a scheme to
illegally dump wastewater. Worth upwards of $120 million, the Navy
contracts at issue required the company to remove, treat, and
dispose of contaminated oily wastewater (OWW) generated by Naval
ships, in accordance with Japanese environmental regulations. The
indictment alleges that, beginning in 2007, the defendants dumped
improperly treated water into the ocean and kept a tap water
mixture on the treatment barge for environmental testing purposes.
The scheme allowed Kanto Kosan to deceive the U.S. Navy into
thinking proper treatments occurred and into paying invoices under
the contracts. 

Owner of Construction Companies Pleads Guilty to
Fraudulently Claiming Company as a Service-Disabled Veteran-Owned
Small Business
: In March, Michael Wibracht, the former
owner of several construction companies, pled guilty to one count of conspiring to
commit wire fraud and to defraud the United States for his role in
a scheme to obtain government contracts under programs administered
by the U.S. Small Business Administration (SBA). Wibracht and
others conspired with service-disabled veteran Ruben Villareal to
falsely claim that Villareal was the owner of a construction
company so that the company qualified as a Service-Disabled
Veteran-Owned Small Business (SDVOSB). From 2004 until 2017, the
company received more than $250 million worth of contracts set
aside for SDVOSB contractors. Villareal pled guilty for his role in
the scheme in November 2020 and both men are scheduled for
sentencing in September 2021. A third conspirator, Michael Angelo
Padron, was also charged in connection with the scheme in
March and has entered a not guilty plea.

Former General Counsel Pleads Guilty to $100 Million
Accounting Fraud, Agrees to Cooperate Against Company’s
CEO
: In May, Brent Whiteley, the former general counsel of
SAExploration Holdings Inc. (SAExploration), pled guilty to conspiracy, fraud, and
obstruction charges arising out his role in an alleged accounting
fraud scheme. Between 2011 to 2019, Whiteley allegedly embezzled or
funneled millions of dollars of SAExploration funds to a sham data
library company, recognized fake revenue, and signed fraudulent
certifications filed with the SEC. The Information filed against Whiteley states
that the company’s revenue for 2015 and 2016 was exaggerated by
more than $100 million. As we previously reported, the SEC also filed a
complaint against SAExploration, Whiteley, and other
co-conspirators and in June, the SEC informed the court that it had reached a
settlement with Whiteley and co-conspirator Michael Scott, who also
pled guilty to criminal charges in June. Whiteley’s plea
positions him as a cooperating witness in the case against
SAExploration’s former CEO, which is set to go to trial in
October. 

Tax  

Son of Panama Papers’ Businessman Sentenced Lightly
for Hiding Offshore Assets
: In March, Joachim Alexander
von der Goltz was sentenced to time served and three years of
supervised release after pleading guilty to conspiracy to commit
tax evasion, making false statements, and failing to file a Report
of Foreign Bank and Financial Accounts (FBAR) to the IRS. The
charges stem from the 2016 “Panama Papers” leak in which
millions of confidential client files from the Panama law firm
Mossack Fonseca were made public, exposing shell companies that the
law firm had set up to assist clients. As we previously reported, von der Goltz’s
father, German private equity manager Harold Joachim von der Goltz,
received a four-year sentence (and was ordered to pay $3.4 million
in restitution plus fines) in September 2020 after admitting to
using Mossack Fonseca to commit tax evasion and money laundering by
concealing significant assets overseas in connection with the
scheme. Harold von der Goltz was the first guilty plea resulting
from the Panama Papers; Joachim Alexander von der Goltz was the
third. 

Hedge Fund Manager Pays $105 million Fine for Tax Fraud
on New York
: In February, a billionaire fund manager,
Thomas Sandell, and his firm, Sandell Asset Management Corp.
(SAMC), paid a $105 million fine to resolve claims that
they engaged in a scheme to escape paying New York state and city
taxes on $450 million in deferred management and performance fees.
Sandell and SAMC relied on advice from tax professionals –
including a principal at a Big Four accounting firm – to eliminate
SAMC’s New York presence and operations by opening an office in
Boca Raton, Florida and holding it out as SAMC’s sole U.S.
location while continuing to conduct business in New York. Notably,
a whistleblower, Tooley LLC, triggered the investigation by filing
a 2018 lawsuit under New York’s False Claims Act. The
settlement agreement allocates $22 million of the settlement to
this whistleblower.

Other Noteworthy
Investigations 

Volkswagen Executives to Pay Company ?17.8 Million for
Role in Emissions Testing Fraud
: Since we last reported on the Volkswagen
investigation, Volkswagen’s board announced in June 2021 that it had
secured ?17.8 million (more than $21 million) in personal
compensation from former executives and board members for their
roles in the Volkswagen emissions scandal. This is in addition to
the nearly ?270 million in directors’ and officers’
liability insurance included in the settlement. As previously reported, the DOJ charged Martin
Winterkorn, the former CEO of Volkswagen AG and a German citizen
and resident, of conspiracy and wire fraud in May 2018 in
connection with his knowledge of Volkswagen’s diesel emissions
cheating. Winterkorn agreed to pay ?11.2 million (more than $13
million) to Volkswagen, while former Audi CEO Rupert Stadler – who
was arrested in June 2018 – will pay back
?4.1 million (nearly $5 million) to Volkswagen and Audi. Volkswagen
sought damages from the two individuals after an internal
investigation determined that Winterkorn and Stadler both breached
a duty of care as part of the emissions scandal. 

Two Italian Fiat Managers Charged in U.S. Emissions
Probe
: In April, a superseding federal indictment was unsealed in Michigan
charging two Italian nationals who were senior diesel managers at
Fiat Chrysler Automobiles Italy S.p.A. with conspiracy related to
falsifying emissions controls. The indictment alleges that the two
men, along with a previously charged co-conspirator, purposely
calibrated the emissions control function of a diesel engine used
in certain vehicles to produce lower nitrogen oxide emissions when
the vehicles were undergoing testing. In January 2019, Fiat
Chrysler Automobiles NV agreed to pay more than $800 million to
settle civil claims that it illegally equipped diesel vehicles with
software that enabled them to cheat emissions tests.

Police Raid Soccer Club in Spain and Arrest Four Current
and Former Executives
: In March, the Catalan
police raided the headquarters of Spanish soccer
club FC Barcelona and arrested four current and former executives,
including the club’s CEO, chief legal officer, and former
president. The Mossos d’Esquadra confirmed that its economic
crimes unit had seized evidence from FC Barcelona’s offices and
that four people had been detained. FC Barcelona stated that it is cooperating with the
investigation. The investigation reportedly stems from the so-called
“Barcagate” scandal, which revealed that FC Barcelona
secretly paid a marketing company to produce disparaging social
media content about people critical of the club, including current
and former players. The scandal led to protests, resignations of several
board members, and the arrest of the former president of the
club. 

Former Salvadorian Soccer Federation President
Extradited to U.S. to Face FIFA Bribery Charges
: In other
news related to the FIFA corruption probe, in January, former
Salvadorian soccer federation president, Reynaldo Vasquez, was
extradited to the U.S. to face bribery charges in connection with
the FIFA corruption scandal. Prosecutors allege that Vazquez took
bribes to award media and marketing rights for Salvadorian national
team games. Arrested in El Salvador in 2016, Vasquez had since
fought to prevent extradition. Vasquez pled not guilty to the
charges and is awaiting trial in the EDNY. As we previously reported, two South American soccer
officials were convicted in December 2017 and several other
executives have pled guilty as part of this long-running
investigation into corruption involving FIFA and international
soccer. 

Extradition &
Extraterritoriality 

McAfee Antivirus Founder Dead After Spanish Court Orders
Extradition to the U.S.
: In June, John McAfee, the founder
of the McAfee Associates antivirus software company, was found dead
by apparent suicide in his Spanish prison cell shortly after a
court ordered him extradited to Tennessee to
face tax evasion charges. An indictment was unsealed against McAfee in
October 2020, for failing to pay taxes on millions of dollars of
income that he earned from promoting cryptocurrencies, consulting,
speaking engagements, and selling the rights to his life story for
a documentary. McAfee was arrested at an airport in Barcelona that
same month and had been detained pending resolution of the
extradition proceeding. In March 2021, McAfee was charged in the Southern District of New
York (SDNY) with securities fraud and money laundering-related
charges for allegedly engaging in a pump-and-dump scheme with
cryptocurrencies in which he would purchase inexpensive
cryptocurrencies and then promote them on his Twitter feed before
selling. The SDNY indictment also alleged that McAfee used
his Twitter feed to promote initial coin offerings (ICO) while
concealing the fact that the ICO issuers were paying McAfee more
than $11 million to promote to products. The 75-year-old already
faced decades in prison on the Tennessee tax evasion charges.

North Korean National Extradited to Face U.S. Money
Laundering Charges
: In March, Mun Chol Myung became the first North Korean national
extradited to the U.S. after a Malaysian court granted his extradition to face criminal
charges that he engaged in a money laundering scheme to provide
luxury goods to North Korea and defrauded U.S. banks in violation
of U.S. and United Nations sanctions. The indictment further
alleges that Mun is connected to the North Korean regime’s
Reconnaissance General Bureau intelligence agency, which is subject
to U.S. sanctions. Mun had been detained in Malaysia since May
2019. He has pled not guilty to all charges and is awaiting
trial. 

Private Equity Firm Founder Ordered Extradited to U.S.
to Face Fraud-Related Charges
: In January, a London
judge held that Arif Naqvi, a Pakistani
businessman and founder of the Abraaj Group, formerly the largest
Middle East private equity firm, could be extradited to the U.S. to
face fraud, theft, bribery, and racketeering charges in the SDNY.
Naqvi allegedly collected more than $400 million from charitable
organizations, misappropriated the funds for personal use and to
manage the firm’s insolvency, and made false statements to
investors about their investments. The SEC has also filed a civil
complaint against Naqvi and the Abraaj Group. Naqvi’s
once-influential emerging market investment group collapsed in
2018, with Abraaj owing creditors over $1 billion. Judge Emma
Arbuthnot rejected Naqvi’s arguments that extradition would
violate his human rights due to the suicide risk posed by the poor
conditions of U.S. jails. Naqvi can appeal the decision paving way
for his extradition.

Ukrainians Accused of Money Laundering for
Cybercriminals Extradited to U.S.
: In March, Ukrainian
nationals Viktor Vorontsov and Zlata Hanska Muzhuk were extradited from the Czech Republic to
Texas to face money laundering conspiracy charges. Prosecutors
allege that Vorontosov and Muzhuk are members of a criminal
organization that cashed out and laundered $500,000 stolen from
victims’ bank accounts by online identity thieves and
fraudsters. Czech authorities promptly arrested Vorontosov and
Muzhuk at the DOJ’s request in February 2020 and the Czech
Ministry of Justice granted their extraditions in January 2021 and
December 2020, respectively. Both have made their initial
appearances in court, entering not guilty pleas.

Noteworthy
Sentencings 

CEO Sentenced to 15 Years for Telling Patients Death Was
Near in Order to Provide Unnecessary Hospice Care
: In
February, the CEO of Merida Health Care Group, Inc., Henry McInnis,
was sentenced to 15 years in prison for his
role in a health care fraud conspiracy. McInnis had been charged
with conspiring with others to falsely tell thousands of patients
that they had less than six months to live to induce them to enroll
them in hospice programs in order to increase revenue for his
company. Following a three-week trial after which he was found
guilty, McInnis was sentenced to 180 months and his co-conspirator
Rodney Mesquias was sentenced to 20 years in prison. Meanwhile,
Jose Garza, another co-conspirator who pled guilty, was sentenced
to just over two years in prison, a downward departure from the
approximately four to five years recommended in the federal
Sentencing Guidelines.

Financial Planner Sentenced to 17 Years in Prison for
Defrauding Clients
: In March, Anthony Diaz, a certified
financial planner, was sentenced to more than 17 years in prison
after being convicted at trial of defrauding clients of his
financial planning business. According to the indictment, Diaz sold alternative investment
products to his clients and failed to explain that these
investments lacked liquidity and resale value, causing over two
dozen victims to lose between $1.5 and $3.5 million in savings.
Diaz also falsified documents to avoid Pennsylvania regulations
designed to protect investors. The defense sought a sentence of two-and-a-half to
three years, but the government argued for 18 to 20 years, stating
that Diaz “remains unrepentant, having enjoyed the luxury of
the ill-gotten gains secured through his clients’ misplaced
trust in his integrity.”

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