Arent Fox LLP
08/23/2024 | News release | Distributed by Public on 08/23/2024 08:55
Former Congressman George Santos Pleads Guilty to Wire Fraud and Aggravated Identity Theft
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Former Congressman George Santos Pleads Guilty to Wire Fraud and Aggravated Identity Theft
On August 19, former US Representative George Santos pleaded guilty to wire fraud and aggravated identity theft. As part of the plea agreement, Santos stipulated that he engaged in four additional fraud schemes. In sum, Santos ultimately admitted that he filed fraudulent reports to the Federal Election Commission (FEC), embezzled funds from campaign donors, charged credit cards without authorization, obtained unemployment benefits through fraud, and lied in reports to the US House of Representatives.
- Fraudulent FEC Reports: During the 2022 election cycle, Santos and another individual executed a scheme to obtain money for Santos' campaign committee by submitting false reports to the FEC. In these reports, they inflated contributions supposedly (but not actually) made by 10 family members and falsely reported that Santos had loaned the campaign significant sums of money (when he had not).
- Scheme to Embezzle Funds from Campaign Donors: Santos also admitted that he defrauded donors who contributed to a limited liability company that Santos operated. While donors were told that their money would help elect Santos to the House of Representatives, their funds were instead transferred from the company's bank account to Santos' personal bank accounts and used for personal expenses such as clothing, cash withdrawals, and discharging personal debts.
- Credit Card Scheme: Santos further admitted that between July 2020 and October 2022, he executed a scheme to steal the personal identity and financial information of campaign contributors, including by charging their credit cards repeatedly and without their authorization. As a result, money was transferred to Santos' campaign, to the other candidates' campaigns, and to Santos' personal bank account.
- Unemployment Fraud Scheme: Santos further admitted that, in mid-June 2020, he applied for unemployment benefits despite being employed by a Florida-based investment firm. As part of his application, Santos falsely claimed that he had been unemployed since March 2020. From mid-June 2020 through April 2021, Santos falsely affirmed on a weekly basis that he was eligible for unemployment benefits, despite working and regularly receiving a salary.
- False Statements to the House of Representatives: Despite legal obligations to provide true, complete, and correct information in House financial disclosures, Santos filed a disclosure in September 2022 in which he overstated his income and assets.
As part of his guilty plea, Santos will pay approximately $373,750 in restitution and $205,000 in forfeiture. Sentencing is scheduled for February 7, 2025. Santos faces a mandatory minimum of two years and could face up to 22 years in prison.
Read the US Department of Justice's (DOJ) press release here.
DC Councilmember Charged With Bribery in DC Federal Court
Federal prosecutors in Washington, DC, have charged DC Councilmember Trayon White Sr. with accepting more than $150,000 in undisclosed kickbacks and cash payments to pressure government employees to extend two companies' contracts. Councilmember White represents Ward 8 in southeastern DC and chairs the City Council's Committee on Recreation, Libraries and Youth Affairs. That committee oversees several agencies, including the DC Department of Youth Rehabilitation Services. The Office of Neighborhood Safety and Engagement - another DC agency - launched the Violence Intervention Initiative to support DC residents in reducing gun-related violence in their communities. The two companies' contracts were for violence intervention services.
Much of the Federal Bureau of Investigation (FBI) agent's affidavit supporting the criminal complaint against Councilmember White was recounted by a confidential informant (Confidential Human Source 1 or CHS 1). CHS 1 operated several businesses that either contracted with or received subcontracts from other businesses that contracted with the District of Columbia. On August 9, CHS 1 pled guilty to certain charges, including bribery of a DC public official. As part of that plea agreement, CHS 1 agreed to cooperate with law enforcement, including providing information to authorities about his allegedly corrupt relationship with Councilmember White.
According to the FBI agent's affidavit supporting the criminal complaint, Councilmember White accepted cash payments from CHS 1 totaling approximately $35,000 on four occasions: June 26, July 17, July 25, and August 9 (the same day CHS 1 pled guilty). The criminal complaint includes detailed information about the conversations that allegedly took place between CHS 1 and Councilmember White on each of those occasions, including photographs of Councilmember White allegedly pocketing envelopes of cash and screenshots of WhatsApp messages.
The criminal complaint and supporting affidavit are available here.
Venezuelan National Pleads Guilty to Unlawful Exportation
On August 20, George Semerene Quintero of Venezuela pleaded guilty to conspiring to violate the International Emergency Economic Powers Act. Semerene pleaded guilty for his role in the scheme to evade US sanctions imposed on Petróleos de Venezuela S.A. (PDVSA), a Venezuelan state-owned oil company. Semerene was an employee in PDVSA's procurement department.
According to court documents, from January 2019 and December 2021, Semerene and his co-conspirators engaged in a scheme to illegally obtain aircraft parts from the United States to service PDVSA's own aircraft fleet in Venezuela. The aircraft parts included bearings, rudder parts, joint slide flexes, and actuators. As part of the scheme, Semerene and his co-conspirators concealed the true purpose and destination of the parts from US companies. In addition to lying to US parts suppliers, Semerene and his co-conspirators made false declarations on customs forms and shipping documents, fabricated supplier invoices, provided false end-user certificates, and utilized third parties in other countries to serve as purported purchasers and end users.
Sentencing is scheduled for November 5, and Semerene faces up to 20 years in prison.
Read the DOJ's press release here.
National Interventional Radiology Partners PLLC and Founder Resolve FCA Violations
On August 20, the US Attorney's Office for the Southern District of Texas announced a settlement with National Interventional Radiology Partners PLLC (NIRP) and its founder and CEO, Dr. Andrew Gomes, to resolve federal False Claims Act (FCA) and Anti-Kickback Statute violations that NIRP and Gomes illegally paid physicians for referrals to clinics.
Specifically, Gomes raised capital from physicians to establish clinics throughout Texas under the NIRP umbrella to surgically treat peripheral arterial disease. To convince these physicians to invest, Gomes told them that they could ensure high returns by referring significant numbers of patients for treatment. Gomes also told them that more patient referrals would lead to more surgeries and higher profits, and therefore, monthly dividends to the investor-physicians.
NIRP and Gomes have agreed to pay over $8.8 million to resolve the claims. The settlement resolves claims brought under the qui tam or whistleblower provisions of the FCA. The whistleblower will receive 19% of the recovery, or approximately $1.7 million.
Read the DOJ's press release here.