Author: MIL-OSI Publisher

Source: United States Department of Justice Criminal Division

A complaint filed in the District of New Jersey was unsealed today charging Thalha Jubair, a United Kingdom national, with conspiracies to commit computer fraud, wire fraud, and money laundering, in relation to at least 120 computer network intrusions and extortion involving 47 U.S. entities. The complaint alleges victims paid at least $115,000,000 in ransom payments.

“Jubair is alleged to have participated in a sweeping cyber extortion scheme carried out by a group known as Scattered Spider, which committed at least 120 attacks worldwide and resulted in over $115 million in ransom payments from victims,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “These malicious attacks caused widespread disruption to U.S. businesses and organizations, including critical infrastructure and the federal court system, highlighting the significant and growing threat posed by brazen cybercriminals. These charges underscore the Department’s unwavering commitment to keeping pace with technologically savvy bad actors and holding accountable those who seek to profit from ransomware.”

“The charges against Jubair announced today are the result of a lengthy investigation into particular cyber threat actors, often referred to as Scattered Spider, who have victimized at least 47 U.S.-based entities, including in New Jersey,” said Alina Habba, Acting U.S. Attorney and Special Attorney for the District of New Jersey. “As alleged by the complaint, Jubair went to great and sophisticated lengths to keep himself anonymous while he and his criminal associates continued to attack these victims and extort tens of millions of dollars in ransom payments. But thanks to the relentless investigation of this Office and our FBI and CCIPS partners, Jubair could not remain anonymous and avoid justice indefinitely. Today’s charges demonstrate my Office’s determination to identify cybercriminals and bring them to justice, wherever they are in the world.”

“Today’s charges make it clear that no cybercriminal is beyond our reach,” said Assistant Director Brett Leatherman of the FBI’s Cyber Division. “If you attack American companies or citizens, we will find you, we will expose you, and we will seek justice. The FBI continues to deploy every investigative and technical resource available to dismantle criminal cyber networks and hold their members accountable. This means working with trusted international partners like the UK’s National Crime Agency, the West Midlands Police, and the City of London Police, as well as utilizing the capabilities of our state and local partners, who are valued members of FBI’s Cyber Task Forces.”

“The arrest of Thalha Jubair underscores an undeniable truth: no matter how elusive or destructive these cyber-criminal syndicates are, we will continue to pursue those who allegedly extort our businesses and ensure they are held accountable,” said Special Agent in Charge Stefanie Roddy for the FBI. Today’s charges in both the U.S. and U.K. reflect extraordinary coordination with our foreign and industry partners and mark a decisive victory against cybercriminal gangs who thought they could cripple American industries, inflict hundreds of millions in losses, and hide behind a screen without consequence. The FBI remains relentless in protecting Americans and American businesses — detecting, deterring and diminishing the impact of cyber-criminal gangs.”

According to the complaint, Thalha Jubair, also known as “EarthtoStar,”  “Brad,” “Austin,” and “@autistic,” 19, of London, England, conspired with others to use social engineering techniques to gain unauthorized access into the computer networks of U.S. companies, steal and encrypt information, and demand ransom payments from victims in exchange for  regaining control and preventing the dissemination of the exfiltrated data. Jubair also conspired with others to launder the funds obtained through this scheme. In October 2024 and January 2025, Jubair participated in a scheme to gain unauthorized access to the networks of a U.S.-based critical infrastructure company and the U.S. Courts.

From as early as May 2022 to as recently as September 2025, Jubair and his associates were involved in approximately 120 network intrusions, including accessing the computer networks of at least 47 U.S.-based victims. Collectively, victims paid more than $115 million to Jubair and his associates in efforts to recover their data and prevent its disclosure. Portions of the ransom payments from at least five victims were sent to wallets on a server controlled by Jubair. In July 2024, while law enforcement was seizing that server — including successfully seizing cryptocurrency worth approximately $36 million at the time of the seizure — Jubair transferred a portion of cryptocurrency that originated from one of the victims, worth approximately $8.4 million at the time, to another wallet.

The charges arise out of an investigation into a cyber threat group that has been referred to as “Scattered Spider,” “Octo Tempest,” “UNC3944,” and/or “0ktapus.” Scattered Spider has targeted victims throughout the United States, including in New Jersey.

Jubair is charged with computer fraud conspiracy, two counts of computer fraud, wire fraud conspiracy, two counts of wire fraud, and money laundering conspiracy. If convicted, he faces a maximum penalty of 95 years in prison.

On Tuesday, Sept. 16, U.K. authorities arrested Jubair and a second individual in connection with a separate U.K. investigation related to a computer intrusion that targeted U.K. critical infrastructure.

The FBI’s Newark Field Office is investigating the case. The United Kingdom’s National Crime Agency and the City of London Police, the United Kingdom’s West Midlands Police, the National Police of the Netherlands, the Dutch Prosecutor’s Office, the Romanian Directorate for Investigating Organized Crime and Terrorism, Brigade for Combating Organized Crime Targu Mures, Romanian National Police, Directorate for Combating Organized Crime, the Royal Canadian Mounted Police, and the Australian Federal Police have provided significant assistance.

Assistant Deputy Chief Adrienne L. Rose and Trial Attorney George S. Brown of the Justice Department’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Andrew Kogan for the District of New Jersey’s Cybercrime Unit are prosecuting the case. The Justice Department’s Office of International Affairs provided significant assistance.

CCIPS investigates and prosecutes cybercrime in coordination with domestic and international law enforcement agencies, often with assistance from the private sector. Since 2020, CCIPS has secured the conviction of over 180 cybercriminals, and court orders for the return of over $350 million in victim funds.

A complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice Criminal Division

Remarks as Prepared for Delivery, “Winning the Race in Artificial Intelligence Through Real Competition”

Thank you for the kind introduction. Thanks to the organizers and to those who have traveled from near and far to exchange ideas at this conference. It’s always a pleasure to see the depth of expertise and the breadth of interest in competition policy gathered in one place, and I am looking forward to hearing the debate. Of course, much like debate in general, debate about competition policy takes courage. As my grandmother liked to say, debate requires us to take a step back and recognize that God gave us two ears and one mouth for a reason. I wish us all the courage to listen to one another, because as C.S. Lewis wrote in the Screwtape Letters, “Courage is not simply one of the virtues, but the first of every virtue at the testing point.”

Introduction

We find ourselves in the midst of a transformative time. Artificial intelligence is the new technological frontier. Its power promises to usher in a new era of technological, industrial, and informational change. Generative AI will revolutionize every sector of the economy and change how every business operates.

The tremendous potential of AI calls upon us to seize this moment with courage. President Trump and Vice President Vance have made it a priority to maintain AI dominance as part of the economic dynamism that is core to our success.[1]  The success of the American economy is a testament to the fact that our free-market system works. Prioritizing innovation, supporting new technologies and startups, keeping the markets open for competition — these have long been the secret sauce of Silicon Valley and the cornerstones of American economic success. And these same core principles are what will help America lead the global race for AI.

The Trump-Vance Administration issued America’s AI Action Plan at the White House in July, outlining the three pillars of our administration strategy: innovation, infrastructure, and international diplomacy and security.[2] Today, I’d like to focus on the first pillar, accelerating AI innovation. The antitrust laws have a lot to offer the innovation pillar, which is a core element of competition. Wherever there is a need for innovation, there is a need for competition, and this is where antitrust finds a home.

The good news is that the Antitrust Division is already fighting to keep AI markets competitive, and we are winning key battles in that arena. Earlier this month, the U.S. District Court for the District of Columbia issued its remedies decision in the Google Search case.[3] For more than a decade, Google illegally monopolized search markets, shutting out competitors, reducing innovation, and taking away choice from American consumers. In other words, the free market was frozen in place and innovation was therefore stymied. In the remedies decision, the district court held that “Google cannot use the same anticompetitive playbook” for GenAI as it did for search.[4] The judge ordered Google to share competitively critical data with qualified competitors, a group that the court made clear includes AI companies.[5] These data remedies, along with requirements that Google syndicate its search results to these competitors, are already setting the foundation for a more innovative and competitive AI industry.

Promoting AI Innovation Through Antitrust

As the Google Search example demonstrates, antitrust enforcement can help pave the way for innovation, dynamic competition, and development in AI. Let me explain how this works:

First, antitrust is, of course, the law of competition. A competitive environment is a prerequisite for innovation. As the AI Action Plan recognizes, it is critical that we “create the conditions where private-sector-led innovation can flourish.”[6] Those conditions are those that incentivize and reward innovators and entrepreneurs. The story of American economic success is the story of innovative, disruptive Little Tech that grows up to become tomorrow’s Big Tech.[7] Tomorrow’s AI advances will be seeded by today’s innovators.

Vice President Vance — who I had the pleasure of working for when he was Senator — put it best in Paris earlier this year: “This administration will not be the one to snuff out the start-ups and the grad students producing some of the most groundbreaking applications of artificial intelligence. Instead, our laws will keep Big Tech, Little Tech, and all other developers on a level playing field.”[8] The antitrust laws are there to do just that.

Antitrust enforcement focuses on creating a level playing field for businesses big and small and ensuring that market incumbents do not unfairly hinder newcomers and startups. This is always important, but it is crucial where the technology is still developing rapidly. As the D.C. Circuit said in Microsoft — the last great monopolization case before the Google Search and Google Ad Tech cases — “[I]t would be inimical to the purpose of the Sherman Act to allow monopolists free reign to squash nascent, albeit unproven, competitors at will — particularly in industries marked by rapid technological advance and frequent paradigm shifts.”[9] Antitrust has a framework that is uniquely equipped to help protect nascent competitors.[10]

Second, competition is also the key for opening up choices for consumers. Generative AI (GenAI) will have a profound impact on how we gather information, how we engage with media, and how our children learn. As Justice Thomas observed in 2021, today’s digital platforms exert “unprecedented . . . concentrated control of so much speech in the hands of a few private parties.”[11]  The concentration of control created by AI may well surpass that. How AI is built — particularly at the foundation model level — can have the effect of imposing broad, implicit preferences over a wide swath of GenAI products. As the AI Action Plan correctly notes, this creates a significant risk of top-down ideological bias.[12]

How do we counter this risk of bias? The best way is to make sure that there is competition. Economic competition and viewpoint competition in the marketplace of ideas are closely intertwined. In a recent statement of interest, the Antitrust Division rejected the view that the antitrust laws play no part in protecting viewpoint competition in news markets.[13] Instead, antitrust can account for behavior that shuts out alternative, competing viewpoints. So too with AI. Ensuring that the AI markets are open to competition means that rivals with different approaches can compete on the merits. The availability of different AI systems and products can ensure that consumers have choices to pick from, safeguarding the free flow of information in our democracy. Different viewpoints can rise to the top in the marketplace of ideas.

Third, antitrust enforcement is a targeted tool suited for emerging fields like AI. In this regard, I like to compare the sledgehammer of regulation to the scalpel of antitrust. Premature regulation can be particularly harmful in incipient industries at the early stages of development because it imposes broad, ex ante rules, and these rules have the effect of limiting the direction of innovation across the entire industry.[14]  From a competition standpoint, regulations can further entrench incumbent players, because only those incumbents can afford to pay the costs of compliance.[15] In fact, many powerful monopolists and incumbents lobby for regulations that raise barriers to entry and that ultimately harm market entrants and small businesses.[16]

By contrast, antitrust is law enforcement. It only intervenes ex post, in response to where illegal conduct has taken place, and it targets only specific conduct by specific bad actors on a case-by-case basis, rather than applying a one-size-fits-all approach to an entire industry. Such targeted enforcement strikes the right balance in emerging fields by finetuning the competitive conditions to make sure that the incentives are aligned for innovation to flourish. And if done correctly, timely, limited antitrust intervention can stave off the need for broad regulatory interference by letting the free market do what it does best.[17]

Ensuring the Competitiveness of AI Markets

So how does antitrust ensure that AI markets are competitive? To promote innovation, antitrust enforcement must focus on preventing exclusionary conduct over the resources that are needed to build competitive AI systems and products.

Building competitive models requires resources at every layer, from the infrastructure layer, to the foundation models, to the deployment of user-facing applications. The competitive dynamics at each layer of the AI stack and how they interrelate, with a particular eye toward exclusionary behavior that forecloses access to key inputs and distribution channels, are legitimate areas of antitrust inquiry.

Innovation is supported by the availability of key inputs, and so one important question is whether foundation models are open or closed. As our AI Action Plan rightly recognizes, open-source and open-weight AI models that are made available to developers “have unique value for innovation because startups can use them flexibly without being dependent on a closed model provider.”[18] Of course, a truly open-source model must be one that is not unilaterally maintained by a single vendor that exerts unwarranted influence and impose restrictions. If done correctly, a truly open model can promote competition by making available a key piece of input into AI products. The ability to build on open foundation models to develop products removes a significant barrier to entry for startups and Little Tech.[19] 

At another layer, an enormously consequential input for AI innovation is data. There is no question that AI intensifies the need for data as a critical input into progress in AI development. Enormous troves of quality data are needed to train, develop, and improve GenAI and LLMs. LLMs are pre-trained on large amounts of text, creating a base, or foundation model. The LLM’s ability to predict the next item in a sequence depends on both the quality and the quantity of the data that it is trained on.

The centrality of data is not a new phenomenon in itself. Over the years, we have seen data grow in importance in the digital industries. Search is a good example of this. In finding Google liable, the district court noted that greater query volume yielded valuable user data that enabled Google to attain economies of scale and improve the quality of its search product.[20] Such a data advantage creates a flywheel effect: greater exposure to consumers leads to more data, which enables the product to be even better, which attracts more users, and so on. Companies that can amass and harness the power of big data gain an enormous advantage, while companies who lose out on data are shut out of the market.

These effects are not easy to overcome. That’s why the Department of Justice and the plaintiff States asked for robust data sharing and syndication remedies in the Google Search case. And the district court agreed. The court recognized that “[s]earch index quality is critically important not only for traditional search engines, but also for emerging GenAI products,”[21] and that Google’s data gave it a key competitive advantage over AI companies like ChatGPT.[22] And so the court imposed data remedies that require Google to provide qualified competitors access to its data and syndication of its search results, so that Google cannot continue to singularly exploit the data advantage it gained from years of illegal conduct. The data that is shared will give competitors — including emerging AI companies — a leg up to overcome the data gap and compete on a more even playing ground. The court was forward-looking, and it made it clear that “Google cannot be permitted to leverage its dominance in general search to the GenAI product space.”[23]

While the scale advantages of data are not new, there is every indication that these dynamics will play out in a much bigger way with AI. The prospect of GenAI expands the competitive utility of data across every industry. Think about data on crop yields and local weather enabling more effective agriculture, or health data enabling more effective approaches in insurance. Now every industry is a data industry. As many have observed, data is the new oil. It fuels the engine of progress in every sector of the economy.

The finite amount of publicly available data also means that there will be more and more of a premium on developing proprietary sources of data. Access to high-volume, high-quality, proprietary data is a significant competitive advantage that could prove extremely difficult for competitors to surmount. Strong demands for data may drive the forces of consolidation. For example, vertical integration may become more attractive, especially in industries where downstream businesses may have access to valuable and sensitive data like healthcare data. We may also increasingly see the desire to acquire data, or to deprive rivals of data, play a role in driving transactions.[24]

Finally, I would be remiss not to say a few words about consumer data privacy. Having spent a large chunk of my career at the Federal Trade Commission and at various tech organizations, I am well versed in privacy issues and the intersection between competition and consumer protection. Data privacy is of course an important consideration, especially when data functions as an input into technology. But monopolists may also use privacy concerns as a pretext for gatekeeping data and refusing interoperability. We must closely scrutinize such claims.[25] Innovation around AI will likely be greater the more that AI products and services and their inputs are able to interoperate with each other.

Conclusion

In sum, there is a great deal that antitrust law can do to deliver the competition and innovation that will usher in the next golden era of AI. Races are won, and records are broken, through rivals pushing each other to do better—in other words, real competition. We will continue to fight for the competitive conditions needed to support American innovation and dominance in AI. And we will continue to support and play a role as needed in our Administration’s AI Action Plan.

Thank you. 

Source: United States Department of Justice

It is great to speak with you today at ACAMS’ Assembly.

The Assembly brings together the largest group of anti-financial crime and anti-money laundering professionals to learn about critical issues facing the U.S. and global financial systems. Today, I’d like to share our perspective on the key threats to the United States that are most relevant to you all, and how all of us – at the Department of Justice and in the business community – can work to mitigate these threats.

Our work has led us to identify myriad threats to our nation. Most relevant to the financial services industry, these include cartels and transnational criminal organizations, particularly those operating in Mexico and the Western Hemisphere; Chinese money laundering organizations; and rogue nation-states like North Korea and Iran.

What is the Department doing to counter these threats?

Since February, the Department has taken custody of more than 50 cartel bosses and high-level targets who will, at long last, have to account for their crimes in U.S. courts. Collectively, this constitutes one of the greatest takedowns in law enforcement history. We have brought material support for terrorism and other charges against cartel leaders. And we are holding these criminals to account – as one noteworthy example, the co-founder of the Sinaloa Cartel, Ismael Zambada Garcia, also known as “El Mayo,” recently pleaded guilty to charges that carry a mandatory minimum life sentence.

While we will continue our relentless pursuit of cartel members, we have to tackle this threat from all angles. The cartels cannot survive without the networks of financial facilitators that move their illicit proceeds, and we are committed to dismantling these networks too.

For instance, Chinese money laundering organizations, or CMLOs, are critical to cartel profitability. CMLOs facilitate the cartels’ repatriation of funds back into Mexico and other Latin American countries and the purchase of precursor chemicals from China. They do so at a low cost using every money laundering technique in the book, including cash pickups, shell accounts, and trade-based money laundering.

This year, my division alone has charged or convicted thirty individuals for laundering money for drug trafficking organizations, including foreign officials, third-party money launderers, and corrupt bankers. Across all of these drug trafficking-related money laundering schemes, we see money laundered through financial institutions that are right here in this room.

We have in particular targeted CMLOs, arresting their members across the United States and overseas. As one example, in May, three members of a prolific CMLO that laundered over $92 million in illicit funds pleaded guilty to money laundering charges. One of the defendants traveled throughout the United States to collect drug trafficking proceeds and deposited those illicit funds, using both real and fake identities, into shell company bank accounts.

Beyond these illicit organizations, we are also holding companies accountable when they enable laundering of illicit narcotics proceeds. Last year, the Criminal Division’s Money Laundering and Asset Recovery Section and the District of New Jersey brought the ground-breaking prosecution of TD Bank for facilitating money laundering for drug traffickers. We continue to prosecute individuals for their involvement in this scheme. And this work – prosecuting companies, including financial institutions, and individuals that knowingly facilitate criminal conduct such as narcotics trafficking – remains a core part of our practice.

We are also targeting the money laundering networks that enable other criminals, such as fraudsters, sanctions evaders, and hackers too. A key component of our work is taking the profit out of crime and recovering victims’ funds. Earlier this year, with our partners in the U.S. Attorney’s Office for the District of Columbia, we filed a forfeiture complaint against over $225 million in cryptocurrency connected to cryptocurrency investment scams that targeted everyday Americans. And we are continuing to target overseas scam centers, and their money laundering networks, that prey on victims.

Sanctions evasion committed by, or on behalf of, our foreign adversaries poses a critical threat to our national security. In June, with our partners in the U.S. Attorney’s Office for the District of Columbia and the National Security Division, we filed an action to forfeit over $7.74 million worth of cryptocurrency being laundered on behalf of the North Korean government in connection with North Korean IT worker schemes. Such schemes, in which North Koreans misrepresent their identities to obtain jobs with U.S. companies and other organizations, have been used to fund North Korea’s weapons development program.

That brings me to an ever-present threat: Iran. Iran’s continued support for terrorism has endangered the United States for far too long. Iran carries out its terror campaign in myriad ways, from terror attacks to developing its nuclear program to human rights abuses. To finance and facilitate these criminal acts, Iran seeks access to the U.S. financial system.

With the partnership of U.S. financial institutions, we have driven Iran out of the traditional financial sector, but Iran and its proxies still seek to exploit the U.S. dollar and abuse our economy, using shadow banking, front companies, layered transactions, and complex financial networks. We are attuned to these developments and are actively working to stop this conduct and hold bad actors accountable.

I am proud that the Criminal Division continues to support these efforts across the Department. Not only by bringing our own prosecutions and seizure actions, but by offering our expertise in support of the Department’s priorities. 

These threat actors exploit the U.S. financial system for one reason: we have the safest and most dynamic financial system in the world, and criminals are determined to access our financial networks to further their crimes.

Having reviewed the threats and some of what the Department is doing to combat them, let me take a minute to discuss how we view the private sector’s role.

So, first and foremost, we want you to work cooperatively with us.

Many of you in this room are the first line of defense. You see the suspicious transactions, you know when red flags are raised. When that happens, I encourage your institutions to contact us. The faster we can move, the faster we can stop the flow of funds and choke off the funding that allows these illicit networks to prosper.

In May, I revised the Criminal Division’s Corporate Enforcement Policy to provide a clear path to companies and institutions that timely self-report potential misconduct, cooperate, and remediate. When companies self-report, they will receive the most favorable resolution we can offer. They will have to disgorge illicit proceeds, but companies can avoid charges, avoid a monitor, and avoid additional penalties. Self-reporting also allows us to focus our resources on the individuals that commit crimes, holding them accountable and dismantling the schemes they facilitate.

This is about even-handed justice. It is about putting the right incentive structures in place. We do this to encourage entities to identify wrongdoing, work cooperatively with the government to prevent crime, and ensure that we can hold individuals accountable. 

And, if you work at a company that is not interested in cooperating with the government to counter these threats, we still want to hear from you. We have expanded our whistleblower program and are focused on reports relating to our priorities, many of which I covered here today.

Since I announced the expansion of the program in May, we have received credible whistleblower tips across the spectrum of white-collar violations. In those four months, we have received 313 whistleblower tips and found 120 of them to warrant further investigation, including a number of tips relating to our priority areas – procurement fraud, trade fraud, and sanctions evasion. The program is working.

Our hope is that this is another incentive for companies to address the problems identified by their compliance personnel. Make no mistake, though. Where companies do not come forward, do not cooperate, or do not remediate, they will face consequences. White-collar enforcement remains a priority for the Criminal Division, and I have directed our prosecutors to aggressively investigate and prosecute bad actors.

The best case for all Americans is to avoid these issues or address them before they ripen. You all are here to put compliance first and stop threats before they become problems for your institution. You are here to safeguard our economy and the American people. We share those goals and look forward to working with you. 

Thank you. 

*These remarks were delivered on Tuesday, Sept. 16.

Source: United States Department of Justice Criminal Division

An indictment unsealed today in the Middle District of Louisiana charges a Guatemalan national residing illegally in the United States with fraud related to the submission of an application to sponsor an unaccompanied alien child (UAC).

“As alleged, this defendant made fraudulent misstatements to the U.S. government to try to sponsor an unaccompanied child in the United States,” said Acting Assistant Attorney General Matthew R. Galeotti, of the Justice Department’s Criminal Division. “Defendants who lie to secure the care and custody of an unaccompanied child threaten the government’s ability to ensure that the child is placed in a safe environment with a proper caregiver. The Criminal Division is fully committed to protecting vulnerable children and delivering justice to those who violate the law.”  

“I would like to thank our prosecutor and our partners for their tireless work on this matter,” said U.S. Attorney Ellison C. Travis for the Middle District of Louisiana. “We are committed to eliminating the exploitation of minors and their families by unscrupulous traffickers, and appreciate the resources which were brought to bear by federal authorities to bring this defendant to justice.”

“Deliberately attempting to defraud a government program designed to safeguard vulnerable children is a reprehensible act that demands accountability,” said Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “In close coordination with our law enforcement partners, we will continue to rigorously pursue those who attempt to exploit the Unaccompanied Alien Children’s program and ensure they are held fully accountable under the law.”

According to court documents, Felix Coc Choc, 29, of Rogers, Arkansas submitted an application to the Department of Health and Human Services’ Office of Refugee Resettlement (ORR) under penalty of perjury to sponsor and obtain custody of a UAC after the UAC entered the United States illegally.

As alleged in the indictment, after a 16-year-old Guatemalan UAC entered the United States illegally in January 2023, Coc Choc submitted an application to sponsor the UAC. Coc Choc allegedly falsely claimed to be the UAC’s brother and asserted that his own name was J.C.J. as listed on a Guatemala national identification card that he submitted in support of the sponsorship application. After initially denying that he was using another individual’s identity, Coc Choc admitted to the misrepresentation. Coc Choc then filed a sponsorship application in his true name. ORR denied this application as a result of the alleged fraud.

Coc Choc is charged with one count of making a false, fictitious, or fraudulent statement, and one count of aggravated identity theft. If convicted, he faces a maximum penalty of five years in prison on the false statement count, and a mandatory consecutive penalty of two years in prison on the aggravated identity theft count.

These charges are the result of the coordinated efforts of Joint Task Force Alpha (JTFA). JTFA, a partnership with the Department of Homeland Security (DHS), has been elevated and expanded by the Attorney General with a mandate to target cartels and other transnational criminal organizations to eliminate human smuggling and trafficking networks operating in the Americas, including Canada, Mexico, Guatemala, El Salvador, Honduras, Panama, Colombia, and the Caribbean that impact public safety and the security of our borders. JTFA currently comprises detailees from U.S. Attorneys’ Offices along the southwest border, the Northern District of New York, the District of Vermont, and the Southern District of Florida. Dedicated support is provided by numerous components of the Justice Department’s Criminal Division, led by the Human Rights and Special Prosecutions Section (HRSP) and supported by the Money Laundering and Asset Recovery Section (MLARS), the Office of Enforcement Operations (OEO), and the Office of International Affairs (OIA), among others. JTFA also relies on substantial law enforcement investment from DHS, FBI, DEA, and other partners. To date, JTFA’s work has resulted in more than 415 domestic and international arrests of leaders, organizers, and significant facilitators of alien smuggling; more than 355 U.S. convictions; more than 305 significant jail sentences imposed; and forfeitures of substantial assets.

HHS-OIG is investigating the case. Homeland Security Investigations’ (HSI) Legal Attaché team in Guatemala, HSI’s Center for Countering Human Trafficking in Washington, D.C., and ORR provided valuable assistance.

JTFA Trial Attorneys Aaron Jennen and Nicole Lockhart, and Assistant U.S. Attorney Kristen Craig for the Middle District of Louisiana are prosecuting the case, with substantial assistance from Samantha Usher of the Justice Department’s Health Care Fraud Unit. Valuable assistance was also provided by the Justice Department’s Office of International Affairs.

This case is part of Operation Take Back America, a nationwide initiative that marshals the full resources of the Department of Justice to repel the invasion of illegal immigration, achieve the total elimination of cartels and other transnational criminal organizations, and protect our communities from the perpetrators of violent crime. Operation Take Back America streamlines efforts and resources from the Department’s Project Safe Neighborhoods.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice Criminal Division

An indictment was unsealed Friday charging two Florida men for their roles in a scheme to submit approximately $34.8 million in false and fraudulent claims to Medicare for medically unnecessary products. As part of the scheme, the defendants and their co-conspirators targeted thousands of Medicare beneficiaries and, through deceptive telemarketing, persuaded them to accept medical equipment that they did not need, such as orthotic braces and continuous glucose monitors.

“The defendants are alleged to have perpetuated a scheme that involved the submission of $34.8 million in fraudulent claims to Medicare for medically unnecessary medical equipment,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “That money, which came from American taxpayers, was intended to benefit Americans in need of medical care. Friday’s arrests send a clear message to those who would defraud our healthcare system: the public fisc is not your private purse, and we will aggressively prosecute those that steal from benefit programs.”

“Greed-fueled fraud schemes, like billing for medically unnecessary medical equipment, are a threat to both taxpayer-funded health care programs and patients alike,” stated Deputy Inspector General for Investigations Christian J. Schrank of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Working shoulder to shoulder with our law enforcement partners, we will continue to aggressively investigate such allegations to hold fraudsters fully accountable.”

“The harm done by these actors cannot be overstated,” said Assistant Director Jose A. Perez of the FBI Criminal Investigative Division, “The FBI will continue to pursue those who seek to damage our healthcare system and defraud everyday Americans seeking aid.”

According to court documents, Kenneth Charles Kessler III, 42, of Miami-Dade County, Florida, and Michael Andrew Gomez, 42, of Broward County, Florida, are charged in connection with their ownership and operation of seven durable medical equipment (DME) supply companies based in Florida. Kessler and Gomez are accused of paying illegal kickbacks and bribes to purported marketing companies that targeted thousands of Medicare beneficiaries with deceptive and aggressive telemarketing campaigns. The indictment alleges that these marketing companies obtained the beneficiaries’ personally identifiable information and arranged for purported telemedicine companies to generate doctors’ orders for unnecessary medical equipment. Kessler and Gomez allegedly used these doctors’ orders to submit false and fraudulent claims to Medicare through their network of DME companies.

Kessler and Gomez are both charged with conspiracy to commit health care and wire fraud, two counts of health care fraud, conspiracy to defraud the United States and to offer and pay health care kickbacks, and two counts of offering and paying kickbacks in connection with a federal health care program. If convicted, Kessler and Gomez each face up to 65 years in prison. A federal judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The U.S. Department of Health and Human Services, Office of Inspector General and the FBI are investigating the case.

Trial Attorneys Aisha Schafer-Hylton and Owen Dunn of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,800 defendants who collectively have billed federal health care programs and private insurers more than $30 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Source: United States Department of Justice Criminal Division

The United States has filed a complaint under the False Claims Act in a lawsuit against Local Initiative Health Authority for Inland Empire Health Plan doing business as Inland Empire Health Plan (IEHP), a California Local Initiative Health Plan based in Rancho Cucamonga, California. IEHP contracted with California’s Department of Health Care Services (DHCS) to arrange for the provision of health care services to Riverside County and San Bernardino County residents under Medi-Cal, California’s Medicaid program. The government’s complaint alleges that IEHP violated the False Claims Act by making false statements to Medi-Cal and knowingly retaining overpayments.

“The Medicaid program provides critical health care services,” said Deputy Assistant Attorney General Brenna Jenny of the Justice Department’s Civil Division. “Today’s complaint demonstrates our continued commitment to protect the integrity of the Medicaid program, and the taxpayer dollars that support it, from health insurers that knowingly seek to divert program funds for their own financial benefit.”

“Today’s lawsuit against IEHP shows our steadfast commitment to hold accountable insurers that brazenly compromise the Medicaid system,” said Acting U.S. Attorney Bill Essayli for the Central District of California. “We will take every measure to restore integrity and accountability to the Medicaid system and ensure that patient care – not financial gain – is the primary focus of our health care system.”

Beginning in January 2014, Medi-Cal was expanded to cover the previously uninsured “Medi-Cal Expansion” population: adults between the ages of 19 and 64 without dependent children with annual incomes up to 133% of the federal poverty level. The federal government fully funded the expansion coverage for the first three years of the program. Under its contractual arrangement with DHCS, IEHP received funding to serve the Medi-Cal Expansion population. If IEHP did not spend at least 85% of those funds on “allowed medical expenses,” IEHP was required to pay back to the state the difference between 85% and what it actually spent. California, in turn, was required to return that amount to the federal government.

The United States’ complaint alleges that IEHP developed schemes to misuse surplus Medi-Cal Expansion funding, falling into two broad categories: (1) sham incentive programs and (2) an extra-contractual retroactive rate increase. Through these schemes, IEHP misspent Medi-Cal Expansion funding for impermissible purposes, including spending on administrative expenses, other patient populations, and simply giving away federal funding in exchange for no value in return. The complaint further alleges that IEHP was motivated by a desire to conserve its other funding, thus enriching itself.

The complaint alleges that, to make the spending appear legitimate, IEHP deceived the state by making false statements — which it knew would be relayed to the federal government — about the nature, timing, and purpose of its payments to providers. For example, IEHP internally admitted it was giving providers “free money” but asserted to DHCS that the payments were part of a metric-based incentive program rewarding providers with good performance. IEHP also disguised payments for consultants and technology services as incentive payments by funneling those payments through providers and backdated spending to fall during earlier time periods. According to the United States’ complaint, those payments allegedly were not “allowed medical expenses” permissible under the contract between DHCS and IEHP.

The United States’ pursuit of this lawsuit illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477). 

This case is being handled by the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Central District of California, in coordination with the California Department of Justice and with valuable assistance from HHS-OIG and DHCS.  

The United States is represented in this matter by Fraud Section Trial Attorney Mary Beth Hickcox-Howard and Assistant U.S. Attorneys S. Desmond Jui and Jack D. Ross for the Central District of California.

The claims asserted in the complaint are allegations only and there has been no determination of liability.