U.S. Attorneys
Here's a look at documents from U.S. attorneys
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Two Monroe County Men Charged With Drug Trafficking And Firearms Offenses
SCRANTON, Pennsylvania, April 10 -- The office of the U.S. Attorney for the Middle District of Pennsylvania issued the following news release:
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Two Monroe County Men Charged With Drug Trafficking And Firearms Offenses
SCRANTON - The United States Attorney's Office for the Middle District of Pennsylvania announced that Eli Valentine Calero, age 43, of East Stroudsburg, Pennsylvania, and John Charles Ehrhard, Jr., age 56, of Stroudsburg, Pennsylvania, were indicted yesterday, April 8, 2025, by a federal grand jury on drug trafficking and firearms charges.
According to Acting United States
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SCRANTON, Pennsylvania, April 10 -- The office of the U.S. Attorney for the Middle District of Pennsylvania issued the following news release:
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Two Monroe County Men Charged With Drug Trafficking And Firearms Offenses
SCRANTON - The United States Attorney's Office for the Middle District of Pennsylvania announced that Eli Valentine Calero, age 43, of East Stroudsburg, Pennsylvania, and John Charles Ehrhard, Jr., age 56, of Stroudsburg, Pennsylvania, were indicted yesterday, April 8, 2025, by a federal grand jury on drug trafficking and firearms charges.
According to Acting United StatesAttorney John C. Gurganus, the superseding indictment alleges that between May 2024 and March 2025, Calero and Ehrhard, Jr. conspired to distribute and possess with the intent to distribute over 500 grams of methamphetamine, in Monroe County, Pennsylvania. The indictment alleges that during that time Ehrhard, Jr. distributed methamphetamine on multiple occasions and possessed a firearm and ammunition in furtherance of his drug trafficking, when he was prohibited from possessing a firearm due to a prior felony conviction. The indictment further alleges that on March 12, 2025, Calero possessed over 500 grams of methamphetamine and cocaine for distribution.
The case was investigated by the Federal Bureau of Investigation (FBI) and the Pennsylvania State Police. Assistant United States Attorney Jenny P. Roberts is prosecuting the case.
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 transnational criminal organizations (TCOs), and protect our communities from the perpetrators of violent crime. Operation Take Back America streamlines efforts and resources from the Department's Project Safe Neighborhood (PSN).
The maximum penalty under federal law for this offense is lifetime imprisonment, a term of supervised release following imprisonment, and a fine. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
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Original text here: https://www.justice.gov/usao-mdpa/pr/two-monroe-county-men-charged-drug-trafficking-and-firearms-offenses
Tech CEO Charged In Artificial Intelligence Investment Fraud Scheme
NEW YORK, April 10 -- The office of the U.S. Attorney for the Southern District of New York issued the following news release:
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Tech CEO Charged In Artificial Intelligence Investment Fraud Scheme
Former CEO of Nate, Inc. Charged with Making False Claims About His Company's Artificial Intelligence Technology
Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, and Christopher G. Raia, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation ("FBI"), announced today an Indictment charging ALBERT SANIGER, the
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NEW YORK, April 10 -- The office of the U.S. Attorney for the Southern District of New York issued the following news release:
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Tech CEO Charged In Artificial Intelligence Investment Fraud Scheme
Former CEO of Nate, Inc. Charged with Making False Claims About His Company's Artificial Intelligence Technology
Matthew Podolsky, the Acting United States Attorney for the Southern District of New York, and Christopher G. Raia, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation ("FBI"), announced today an Indictment charging ALBERT SANIGER, theformer Chief Executive Officer of Nate, Inc. ("nate"), with engaging in a scheme to defraud investors and prospective investors of nate by making false and misleading statements about nate's use of proprietary AI technology and its operational capabilities.
Acting U.S. Attorney Matthew Podolsky said: "As alleged, Albert Saniger misled investors by exploiting the promise and allure of AI technology to build a false narrative about innovation that never existed. This type of deception not only victimizes innocent investors, it diverts capital from legitimate startups, makes investors skeptical of real breakthroughs, and ultimately impedes the progress of AI development. This Office and our partners at the FBI will continue to pursue those who seek to harm investors by touting false innovation."
According to the allegations contained in the Indictment:[1]
In or about 2018, SANIGER founded nate, an e-commerce company that launched the nate app. SANIGER marketed the nate app as a universal shopping cart app that simplified online shopping by enabling users to "skip the checkout" on retail website by reducing the checkout process to a "single tap." For example, if a consumer found a pair of sneakers that they wanted to purchase on a particular e-commerce site, the user could buy the sneakers by opening the nate app and clicking "buy." The nate app purported to take care of the remainder of the checkout process through AI: selecting the appropriate size, entering billing and shipping information, and confirming the purchase.
Nate distinguished itself from other e-commerce companies and apps through a single defining feature: the ability to intelligently and quickly complete retail transactions across all e-commerce sites through the use of AI technology. SANIGER repeatedly told investors and the public that the company's app used proprietary AI technology to autonomously complete online purchases on behalf of users.
Based on representations about nate's use of AI, SANIGER solicited investments from venture capital firms. In pitch materials transmitted to investors, SANIGER touted the company's use of AI and represented that nate was "able to transact online without human intervention." As prospective investors conducted due diligence, SANIGER repeatedly represented that--except for certain "edge cases" in which the AI failed to complete a customer transaction--the nate app was fully automated based on AI.
In reality, nate did not use AI to autonomously navigate the checkout process of e-commerce websites and complete purchases on behalf of users. While SANIGER had acquired AI technology from a third party and hired a team of data scientists to develop it, nate's AI never achieved the ability to consistently complete e-commerce purchases. As SANIGER knew, at the time nate was claiming to use AI to automate online purchases, the app's actual automation rate was effectively zero percent. SANIGER concealed that reality from investors and most nate employees: he told employees to keep nate's automation rate secret; he restricted access to nate's "automation rate dashboard," which displayed automation metrics; and he provided false explanations for his secrecy, such as the automation data was a "trade secret."
In truth, nate relied heavily on teams of human workers--primarily located overseas--to manually process transactions in secret, mimicking what users believed was being done by automation. SANIGER used hundreds of contractors, or "purchasing assistants," in a call center located in the Philippines to manually complete purchases occurring over the nate app. In or about the fall of 2021, with the busy holiday shopping approaching, and despite his numerous prior representations that nate did not use bots (or "dumb bots", as he referred to them), SANIGER directed nate's engineering team to develop "bots" to automate some transactions on the nate app. After creating the bots, nate used bots in addition to the manual teams to complete purchases that were purportedly being completed by AI technology.
SANIGER raised more than $40 million from multiple investors based in part on his representations to investors about nate's development and deployment of AI.
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SANIGER, 35, of Barcelona, Spain, is charged with one count of securities fraud, which carries a maximum sentence of 20 years in prison, and one count of wire fraud, which also carries a maximum sentence of 20 years in prison.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Podolsky praised the outstanding investigative work of the Special Agents from the FBI. Mr. Podolsky also thanked the U.S. Securities and Exchange Commission, which has filed a parallel civil action.
The case is being handled by the Office's Securities and Commodities Fraud Task Force and the Complex Frauds and Cybercrime Unit, and Assistant U.S. Attorneys Nicholas W. Chiuchiolo, Alexandra Messiter, and Sarah Mortazavi are in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment constitute only allegations, and every fact described should be treated as an allegation.
Contact
Nicholas Biase, Shelby Wratchford
(212) 637-2600
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Original text here: https://www.justice.gov/usao-sdny/pr/tech-ceo-charged-artificial-intelligence-investment-fraud-scheme
Minnesota Couple Indicted in $15 Million Medical Billing Fraud Scheme
MINNEAPOLIS, Minnesota, April 10 -- The office of the U.S. Attorney for the District of Minnesota issued the following news release:
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Minnesota Couple Indicted in $15 Million Medical Billing Fraud Scheme
MINNEAPOLIS - An indictment was unsealed today alleging that Gabriel Langford and Elizabeth Brown, a Minnesota couple, engaged in a $15 million scheme to defraud Medicare, Medicaid, and other insurers by overbilling for neurofeedback therapy, following the couple's arrest and initial appearances in Las Vegas, Nevada, announced Acting U.S. Attorney Lisa D. Kirkpatrick.
According to court
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MINNEAPOLIS, Minnesota, April 10 -- The office of the U.S. Attorney for the District of Minnesota issued the following news release:
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Minnesota Couple Indicted in $15 Million Medical Billing Fraud Scheme
MINNEAPOLIS - An indictment was unsealed today alleging that Gabriel Langford and Elizabeth Brown, a Minnesota couple, engaged in a $15 million scheme to defraud Medicare, Medicaid, and other insurers by overbilling for neurofeedback therapy, following the couple's arrest and initial appearances in Las Vegas, Nevada, announced Acting U.S. Attorney Lisa D. Kirkpatrick.
According to courtdocuments, beginning in 2018, Gabriel Adam Alexander Luthor, a.k.a. Gabriel Adam Alexander Langford, 39, and Elizabeth Christine Brown, 42, intentionally devised and carried out a scheme to overbill Medicare, Medicaid, and other insurers for medical services provided through Golden Victory Medical, LLC (GVM). Luthor and Brown were in a relationship, and together founded GVM in 2018.
According to court documents, one of the main medical services GVM claimed to provide was neurofeedback therapy. During neurofeedback therapy, a medical provider places sensors on a patient's scalp to obtain images of the patient's brain waves, for the purpose of indicating the effects of interventions meant to treat mental-health conditions. But according to the indictment, Luthor and Brown fraudulently overbilled insurers for GVM's neurofeedback services using numerous inapplicable medical codes.
For example, GVM repeatedly submitted claims to insurers using medical codes that did not cover the neurofeedback services that GVM provided, combinations of codes that by definition could not be combined, and codes that indicated that GVM's patients received a longer duration of services than the company had actually provided. Luthor and Brown caused GVM to continue submitting false claims even after repeated warnings from insurers, an outside auditor, and the Center for Medicare and Medicaid Services.
In total, GVM submitted hundreds of thousands of false claims to insurers, many of which the insurers paid, resulting in an estimated loss of over $15 million. Millions of dollars in fraudulent proceeds were transferred from bank account to bank account and ultimately retained by Luthor and Brown. Luthor and Brown used the funds to purchase a mansion in Eden Prairie and to pay their living expenses and the living expenses of other girlfriends of Luthor's, who lived with Luthor and Brown and assisted in the fraud scheme.
"Minnesota has a fraud problem," said Acting U.S. Attorney Lisa D. Kirkpatrick. "This case is yet another example of defendants defrauding government programs out of millions. This type of widespread fraud is unacceptable and will not be tolerated."
"Defrauding critical healthcare programs like Medicaid and Medicare burden systems designed to serve patients and puts them at risk," said Special Agent in Charge Alvin M. Winston Sr. of FBI Minneapolis. "The FBI and our partners will not tolerate those who abuse the healthcare system for personal gain and will pursue justice on behalf of taxpayers and patients."
Luthor and Brown are each charged with six counts of wire fraud and one count of money laundering. They made their initial appearances in U.S. District Court in the District of Nevada earlier this week.
This case is the result of an investigation conducted by the U.S. Postal Inspection Service, the Federal Bureau of Investigation, the Eden Prairie Police Department, the U.S. Department of Health and Human Service's Office of Inspector General, and the U.S. Marshals Service.
Assistant U.S. Attorney Matthew D. Forbes is prosecuting the case.
An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Original text here: https://www.justice.gov/usao-mn/pr/minnesota-couple-indicted-15-million-medical-billing-fraud-scheme-0
Man Caught Three Times With Dealer Quantities of Fentanyl Indicted Federally
SEATTLE, Washington, April 10 -- The office of the U.S. Attorney for the Western District of Washington issued the following news release:
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Man caught three times with dealer quantities of fentanyl indicted federally
In one encounter police and medics saved the life of an infant suffering from opioid overdose
Seattle - A 37-year-old man who was living in a Des Moines, Washington, hotel, is charged federally with four counts of possession of controlled substances with intent to distribute, one count of possession of a firearm in furtherance of a drug trafficking offense, and one count of
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SEATTLE, Washington, April 10 -- The office of the U.S. Attorney for the Western District of Washington issued the following news release:
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Man caught three times with dealer quantities of fentanyl indicted federally
In one encounter police and medics saved the life of an infant suffering from opioid overdose
Seattle - A 37-year-old man who was living in a Des Moines, Washington, hotel, is charged federally with four counts of possession of controlled substances with intent to distribute, one count of possession of a firearm in furtherance of a drug trafficking offense, and one count ofmoney laundering announced Acting U.S. Attorney Teal Luthy Miller. Dennis Aguilar Huisa was placed under arrest twice last fall when he was found to have possession of fentanyl pills and/or powder, methamphetamine, cocaine and a firearm. Huisa has been in state custody since his final encounter with law enforcement on November 1, 2024.
According to the criminal complaint, Puyallup Police first contacted Huisa on the side of the road in the early hours of August 15, 2023. Huisa said his car had overheated and he and a passenger were waiting for the engine to cool down. The police officer noticed that the license plate on the car did not match the type of vehicle listed in the registration. Huisa was removed from the car while law enforcement determined whether the car or the license plates were stolen. A second officer noticed blue pills in the car. Ultimately the car was impounded. A search revealed about 1,000 fentanyl pills as well as some suspected fentanyl powder. There was also a scale with drug residue in the car.
On September 7, 2024, Puyallup Police responded to a report of a nine-month-old infant who had stopped breathing. Huisa and a woman met the officers outside a box truck the infant in their arms. Law enforcement worked to get the child to respond and breath, medics responded and continued to work on reviving the child.
The law enforcement investigation found evidence that Huisa and the child's mother has given the infant two doses of Narcan suspecting that the child had been exposed to fentanyl or other drugs. Huisa gave permission to search the box truck. Law enforcement located approximately 115 blue fentanyl pills. On Huisa they found fentanyl powder and over $16,000 in cash.
The infant was taken to Mary Bridge Children's Hospital. The child was given additional dose of Narcan, and the child's blood tested positive for fentanyl, amphetamine, and oxycodone. The child survived and was temporarily released to Child Protective Services.
Finally, on November 1, 2024, Auburn Police Department's Special Investigations Unit served a search warrant on the Des Moines motel where Huisa had been living. In the hotel room they found small packages of fentanyl powder packaged for sale in the toilet. They found additional fentanyl powder, methamphetamine, and cocaine in other places around the room. Officers once again searched the box truck Huisa had been driving and found two kilograms of fentanyl powder and a Polymer 80 'ghost gun' - a gun made without a serial number.
Huisa was charged by criminal complaint on March 12, 2025, and was brought into federal custody today. He was indicted by the grand jury on March 26, 2025, for four counts of possession of a controlled substance with intent to distribute, possession of a firearm in furtherance of a drug trafficking crime and money laundering. Huisa is making his initial appearance at 2:00 today.
Possession of controlled substances with intent to distribute is punishable by a mandatory minimum ten years in prison and up to life in prison. Possession of a firearm in furtherance of a drug trafficking crime is punishable by a mandatory minimum five years in prison and up to life in prison to run consecutive to the other sentence imposed in the case. Money laundering is punishable by up to twenty years in prison.
The charges contained in the criminal complaint and the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by the Puyallup Police Department, the Auburn Police Department and the Drug Enforcement Administration (DEA).
The case is being prosecuted by Assistant United States Attorney Casey Conzatti.
Contact
Press contact for the U.S. Attorney's Office is Communications Director Emily Langlie at (206) 553-4110 or Emily.Langlie@usdoj.gov
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Original text here: https://www.justice.gov/usao-wdwa/pr/man-caught-three-times-dealer-quantities-fentanyl-indicted-federally
Justice Department Files a Proposed Statement of Interest Supporting Equal Access to Southwest Airlines Travel Program
DALLAS, Texas, April 10 -- The office of the U.S. Attorney for the Northern District of Texas issued the following news release:
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Justice Department Files a Proposed Statement of Interest Supporting Equal Access to Southwest Airlines Travel Program
The Justice Department filed a proposed statement of interest today in the U.S. District Court for the Northern District of Texas to make clear that federal law protects the equal right of all Americans to make and enforce contracts regardless of their race.
According to the allegations in the case, the 2024 iLanzate!/Take Off! Travel Award
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DALLAS, Texas, April 10 -- The office of the U.S. Attorney for the Northern District of Texas issued the following news release:
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Justice Department Files a Proposed Statement of Interest Supporting Equal Access to Southwest Airlines Travel Program
The Justice Department filed a proposed statement of interest today in the U.S. District Court for the Northern District of Texas to make clear that federal law protects the equal right of all Americans to make and enforce contracts regardless of their race.
According to the allegations in the case, the 2024 iLanzate!/Take Off! Travel AwardProgram was an annual program in which college and graduate students could receive free Southwest Airlines flight vouchers, but only Hispanic students were eligible to apply. The American Alliance for Equal Rights sued Southwest alleging that by denying that opportunity to all other students on the basis of their race or ethnicity, Southwest's program facially discriminated against non-Hispanic students in violation of 42 U.S.C. Sec. 1981. The Department's proposed statement of interest affirms its continuing commitment to eradicating racially exclusionary practices across the government and in the private sector.
"Every person in the United States should have equal and nondiscriminatory rights to make and enforce contracts, and race should never be a consideration," said Assistant Attorney General Harmeet K. Dhillon of the Justice Department's Civil Rights Division. "The Department of Justice is working to end discrimination using all of the tools at our disposal."
"Discrimination of any kind will not be tolerated in our community," said Acting U.S. Attorney Chad Meacham for the Northern District of Texas. "Our office will continue to enforce federal anti-discrimination laws to address racial discrimination affecting our residents."
To learn more about the Civil Rights Division visit www.justice.gov/crt, and to report possible violations of federal civil rights laws go to www.civilrights.justice.gov.
Contact
USATXN.Media@usdoj.gov
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Original text here: https://www.justice.gov/usao-ndtx/pr/justice-department-files-proposed-statement-interest-supporting-equal-access-southwest
Hickman, Kentucky Felon Indicted Federally For Fentanyl Distribution Conspiracy and Illegally Possessing Firearm
LOUISVILLE, Kentucky, April 10 -- The office of the U.S. Attorney for the Western District of Kentucky issued the following news release:
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Hickman, Kentucky Felon Indicted Federally For Fentanyl Distribution Conspiracy and Illegally Possessing Firearm
Bowling Green, KY - A federal grand jury sitting in Bowling Green, Kentucky, returned an indictment today charging a Hickman, Kentucky felon with conspiracy to possess with the intent to fentanyl and illegally possessing a firearm and ammunition.
U.S. Attorney Michael A. Bennett of the Western District of Kentucky, Acting Special Agent in
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LOUISVILLE, Kentucky, April 10 -- The office of the U.S. Attorney for the Western District of Kentucky issued the following news release:
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Hickman, Kentucky Felon Indicted Federally For Fentanyl Distribution Conspiracy and Illegally Possessing Firearm
Bowling Green, KY - A federal grand jury sitting in Bowling Green, Kentucky, returned an indictment today charging a Hickman, Kentucky felon with conspiracy to possess with the intent to fentanyl and illegally possessing a firearm and ammunition.
U.S. Attorney Michael A. Bennett of the Western District of Kentucky, Acting Special Agent inCharge A.J. Gibes of the ATF Louisville Field Division, U.S. Postal Inspector in Charge Lesley Allison of the Pittsburgh Division, Special Agent in Charge Rana Saoud of Homeland Security Investigations Nashville, and Special Agent in Charge Jim Scott of the DEA Louisville Field Division made the announcement.
According to the indictment, Christopher Tyler Wilson, 31, was charged with conspiring to possess with the intent to distribute 500 grams or more of a fentanyl mixture and with being a felon in possession of a firearm and ammunition. Wilson was prohibited from possessing a firearm or ammunition because he had previously been convicted of the following felony offenses.
On April 22, 2021, in Fulton Circuit Court, Wilson was convicted of first-degree unlawful imprisonment and assault under extreme emotional disturbance.
The defendant previously made an initial appearance before a U.S. Magistrate Judge of the U.S. District Court for the Western District of Kentucky on a federal complaint and arrest warrant. The Court ordered the defendant detained pending trial. If convicted, he faces a mandatory minimum sentence of 10 years and maximum sentence of life in prison. A federal district court judge will determine any sentence after considering the sentencing guidelines and other statutory factors.
There is no parole in the federal system.
This case is being investigated by the ATF Paducah Satellite Office, the USPIS Bowling Office, the HSI Bowling Green Office, and the DEA Paducah Post of Duty, with assistance from the Kentucky State Police, the Hickman Police Department, and the Fulton County Sheriff's Office.
Assistant U.S. Attorney Leigh Ann Dycus, of the U.S. Attorney's Paducah Branch Office, is prosecuting the case.
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 transnational criminal organizations (TCOs), and protect our communities from the perpetrators of violent crime. Operation Take Back America streamlines efforts and resources from the Department's Organized Crime Drug Enforcement Task Forces (OCDETFs) and Project Safe Neighborhood (PSN).
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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Original text here: https://www.justice.gov/usao-wdky/pr/hickman-kentucky-felon-indicted-federally-fentanyl-distribution-conspiracy-and
Former Bank of O'Fallon Executive Indicted for $2 Million Fraud Scheme
FAIRVIEW HEIGHTS, Illinois, April 10 -- The office of the U.S. Attorney for the Southern District of Illinois issued the following news release:
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Former Bank of O'Fallon executive indicted for $2 million fraud scheme
EAST ST. LOUIS, Ill. - A federal grand jury in southern Illinois charged the former second-in-command of the Bank of O'Fallon for engaging in a fraud scheme to obtain more than $2 million.
Andrew P. Blassie, 69, of St. Louis, is facing one count of bank fraud and one count of interstate transportation of security or funds obtained by fraud.
"Senior bank officials must act
... Show Full Article
FAIRVIEW HEIGHTS, Illinois, April 10 -- The office of the U.S. Attorney for the Southern District of Illinois issued the following news release:
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Former Bank of O'Fallon executive indicted for $2 million fraud scheme
EAST ST. LOUIS, Ill. - A federal grand jury in southern Illinois charged the former second-in-command of the Bank of O'Fallon for engaging in a fraud scheme to obtain more than $2 million.
Andrew P. Blassie, 69, of St. Louis, is facing one count of bank fraud and one count of interstate transportation of security or funds obtained by fraud.
"Senior bank officials must actas fiduciaries, not felons--they must serve the bank, not swindle it," said U.S. Attorney Steven D. Weinhoeft. "The federal justice system leads the fight against corruption in all its forms, and the allegations in this case--a $2 million check kiting scheme and a $500,000 investor rip-off--are glaring examples of the type of financial betrayal that will not be tolerated. We commend the Bank of O'Fallon for their cooperation with the investigation, which has been vital to ensuring both that justice is served, and that the integrity of the financial system is preserved."
According to the indictment, Blassie served as the Executive Vice President for the Bank of O'Fallon and is charged with defrauding the bank out of $1,972,887.67 in a check kite scheme from September 2023 through September 2024 during his employment.
Blassie is accused of falsely inflating the balance of his personal checking account at the Bank of O'Fallon by depositing checks he knew to be backed by non-sufficient funds. He allegedly deposited checks with non-sufficient funds from four personal accounts at three other banks and one credit union into the Bank of O'Fallon account.
"Bank fraud is a serious crime that has real victims. It's worsened when someone in a position of trust violates that authority, as the defendant is alleged to have done in this case to a staggering degree," Resident Agent in Charge Michael Kurzeja, of the U.S. Secret Service Springfield Resident Office said. "The U.S. Secret Service takes very seriously its duty to protect the nation's financial infrastructure. I'm proud of our agents' work to dismantle the scheme in this case. I am thankful for the work of our Federal, state, and local partners who helped in this case."
The indictment alleges Blassie paid nearly $2.7 million for personal expenses from the falsely inflated account thus using funds belonging to the Bank of O'Fallon. As the former Executive Vice President, Blassie is accused of using his position to conceal his fraud from the Bank of O'Fallon by scrubbing his name and account number from the suspected kiting reports.
"This indictment charges a former bank executive for allegedly engaging in a check kiting scheme that fraudulently obtained funds from the Bank of O'Fallon," said Special Agent in Charge Vincent R. Zehme, of the Federal Deposit Insurance Corporation Office of Inspector General (FDIC OIG), Chicago Region. "The FDIC OIG remains committed to working with our law enforcement partners to investigate allegations of fraud by bank insiders, as we seek to preserve the integrity of our Nation's banking system and to protect depositors and financial consumers."
From August 2022 through September 2024, Blassie is also accused of persuading a couple from Lebanon, Illinois, to give him $429,000 of their retirement savings. In return for this investment, Blassie gave the couple two promissory notes. He agreed to pay the couple interest on the notes and used money he obtained through his check kite scheme to pay some of that interest. As security for his promissory notes, Blassie pledged 128 of his and his wife's shares of the holding company which owns the Bank of O'Fallon.
"This indictment sends a clear message that bank executives who engage in fraud that impacts the safety and soundness of financial institutions will be held accountable for their actions," said Jon Ellwanger, Special Agent in Charge, Western Region, Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau.
According to the indictment, Blassie later sold most of these shares and did not use those funds to repay the Lebanon couple. This left the couple with no means of recourse when Blassie later defaulted on the promissory notes.
"The Federal Housing Finance Agency, Office of Inspector General (FHFA-OIG) is committed to investigating allegations of fraud involving financial institutions, particularly the Federal Home Loan Banks," said Korey Brinkman, Special Agent in Charge of the FHFA-OIG's Central Region. "We are proud to have partnered with the U.S. Secret Service, FDIC OIG, FRB OIG, and the O'Fallon (IL) Police Department on this case."
Officials with the Bank of O'Fallon have fully cooperated with law enforcement during the investigation.
An indictment is merely a formal charge against a defendant. Under the law, a defendant is presumed to be innocent of a charge until proved guilty beyond a reasonable doubt to the satisfaction of a jury.
Blassie's first appearance is scheduled for 10 a.m. on April 23 at the federal courthouse in East St. Louis.
Convictions for bank fraud are punishable by up to 30 years' imprisonment and interstate transportation of security or funds obtained by fraud can earn up to 10 years in federal prison.
The O'Fallon Police Department, U.S. Secret Service, Federal Deposit Insurance Corporation Office of Inspector General, the Office of Inspector General for the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau, and the Federal Housing Finance Agency, Office of Inspector General made contributions to the investigation.
Assistant U.S. Attorney Scott Verseman is prosecuting the case.
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Original text here: https://www.justice.gov/usao-sdil/pr/former-bank-ofallon-executive-indicted-2-million-fraud-scheme
