ALEXANDRIA, Va. - United States Attorney G. Zachary Terwilliger joined Attorney General William P. Barr, FBI Director Christopher A. Wray, and Chief Postal Inspector Gary R. Barksdale today in announcing the largest coordinated sweep of elder fraud cases in history.
This year, prosecutors across the Department of Justice charged more than 400 defendants, far surpassing the 260 defendants charged in cases as part of last year’s sweep. In each case, offenders allegedly engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused alleged losses of over $1 billion.
“Americans are fed up with the constant barrage of scams that maliciously target the elderly and other vulnerable citizens," said Barr. “I want to thank the men and women of the Department’s Consumer Protection Branch, which coordinated this effort, and all those in the U.S. Attorneys’ Offices and Criminal Division who worked tirelessly to bring these cases. The Department is committed to stopping the full range of criminal activities that exploit America’s seniors."
“The Eastern District of Virginia is on the frontlines of combatting elder abuse and financial fraud through both criminal prosecutions and community outreach," said Terwilliger. “With federal, state, local, and community partners, we are educating our elders to empower them to avoid the devastating financial and emotional harms that flow from these pernicious crimes. For those who have been exploited, we continue to work tirelessly to ensure that justice is done."
This interactive map provides information on the elder fraud cases highlighted by today’s sweep announcement.
EDVA ranked fourth nationally in the number of criminal cases charged during the sweep, while also participating in important community outreach events at Alfred Street Baptist Church in Alexandria, and at St. Martin’s Episcopal Church in Williamsburg, as well as supporting local task forces in Fairfax County, Hampton Roads, and Richmond.
Here in EDVA, Elder Justice efforts are led by Assistant U.S. Attorney Kaitlin G. Cooke, who serves as the District’s Elder Justice Coordinator.
Below are case summaries of several noteworthy elder abuse cases recently prosecuted in EDVA. For more information on a particular case, please click the link for the full press release on our website.
* U.S. v. Anikkhan Yusufkhan Pathan - Pathan served as a money mule for Indian call centers that affected hundreds of elderly Americans. These call centers contacted victims by phone and, through various schemes, induced them to send money by wire transfers to various aliases. The schemes include variants of loan fraud, through which conspirators promised new loans and/or loan consolidation. Once victims provided their bank information, conspirators deposited worthless checks and directed victims to immediately withdraw the credited funds and wire them to a separate account. Conspirators also contacted victims through mass mailings and, posing as the victims' true mortgage lenders, directed victims to begin making their mortgage payments to accounts controlled by conspirators. Finally, conspirators contacted victims by phone and, posing as employees of Microsoft, advised victims that their computers contained fatal viruses that would cause irreparable harm if victims did not immediately remit payment for repair. Although the conspiracy affected hundreds of victims, Pathan is responsible for losses caused to approximately 10 victims totaling approximately $150,000. Pathan pleaded guilty in February, and is scheduled to be sentenced on May 29.
* U.S. v. Gregory J. Ziglar - Ziglar ran an extensive home improvement loan scheme from approximately 2014 through 2018 through which he victimized approximately 24 victims/households, with the vast majority of victims being in their 60s and 70s. Ziglar claimed he could facilitate obtaining home improvement loans for promised renovations and, after fraudulently obtaining loan proceeds, diverted portions of the funds and failed to complete the promised work. Ziglar fraudulently made use of the identities of various contractors in obtaining the loans, which resulted in the loss of over $521,000.
* United States v. John Michael Gatchell - Gatchell pleaded guilty on April 18 to exploiting an elderly man’s diminished mental capacity to defraud him of nearly $157,000. Gatchell facilitated a marriage between the elderly man and a woman with whom Gatchell had a long-term relationship in order to gain access to the elderly man’s money and property. Gatchell induced the elderly man to make a down payment on a Jaguar that Gatchell and a family member drove for about 10 months before it was repossessed by the lender when the loan went into default. Gatchell also induced the elderly man to obtain two mortgage loans and then diverted most of the proceeds to the benefit of himself and others. He subsequently induced the elderly man to sell the property that secured the loans and again diverted most of the proceeds to himself and others. Gatchell used these fraudulently diverted monies to purchase concert series tickets, pay delinquent bills, and make a security deposit and advance rent payments for a house he leased, among other things. Gatchell was sentenced to six years in prison in September 2019.
* United States v. Nena Kerny Kochuga - Kochuga executed a Jamaican lottery scheme that targeted elderly victims, who she and conspirators would contact by phone. Kochuga told victims that they had won the lottery and were required to pay purported taxes and fees to claim the winnings. She directed victims to mail and wire money to her residential and post office box addresses in Virginia. Kochuga then sent money to conspirators in Jamaica and Ghana via Western Union wire transfers, keeping a portion for herself. Through this conduct, Kochuga and her conspirators defrauded numerous victims of at least $50,000. According to local media coverage, Kochuga has targeted elderly victims with similar lottery scams for most of the past decade. In September 2019, Kochuga was sentenced to over two years in prison and ordered to pay over $64,000 in restitution to her victims.
* U.S. v. Sandra Payne - Payne pleaded guilty to aggravated identity theft based on her theft of over $22,000 from an elderly victim. Payne was employed by the victim to provide home health care to the victim’s spouse. Over a five-month period, Payne used the victim’s credit and debit cards to make unauthorized purchases of personal goods at various retailers. Payne was sentenced in June 2019 two years in prison.
* U.S. v. Alberto Cortes Gomez - From at least April 2011 through June 2018, Cortes was the leader of a conspiracy that stole financial information from at least 360 victims and caused losses of nearly $2 million. Cortes and his co-conspirators would steal credit cards and other identifying information from customers at retail stores across the country, then use that information to purchase electronics and other items that were then shipped for subsequent resale. Cortes would travel in rental vehicles to locations with high volumes of retail activity, often in interstate corridors such as I-95 through North Carolina and Virginia. The conspirators would then distract shoppers, mostly elderly women, steal their wallets, and then alter means of identification to then pose as those shoppers when purchasing electronics and other expensive items. In January, Cortes was sentenced to over seven years in prison and ordered to pay over $1.9 million in restitution to his victims.
* U.S. v. Leonard Cipolla - Cipolla was the founder, owner, and operator of Tate Street Trading, Inc. in Richmond. Between 2009 and 2019, Cipolla solicited more than $7 million in investment funds from more than 30 individuals located in Virginia, New York, and Washington, D.C. Cipolla convinced these individuals to provide him with their savings by assuring the investors that he was a highly experienced, highly successful trader in commodity futures and options. Cipolla promised his investors that he could guarantee them significant fixed rates of return on their investments, and that Cipolla’s management fee would be drawn only from the profits that Cipolla made over and above each investor’s promised rate of return. He also assured investors that Cipolla was qualified to manage tax-deferred retirement accounts, and that he would roll the investor’s existing Individual Retirement Account (IRA) into a Tate Street-managed, tax-deferred IRA. As time passed, Cipolla provided many of his investors with account statements that purported to show the investor’s principal was safely intact, and growing at the promised rate of return. In reality, Cipolla pooled his investors’ savings as soon as those individuals’ personal checks, IRA roll-overs, and wires were deposited into his bank accounts. Cipolla used only a fraction of those pooled investment funds to trade in the futures market, and he ultimately lost nearly the entire amount of investor funds that he actually invested. Cipolla further dissipated the remainder of his investors’ savings on unauthorized expenses, to include making payments to earlier investors, and paying his own personal expenses. Cipolla faces a maximum penalty of 20 years in prison when sentenced on April 29.
* U.S. v. William Onyebuchi Ogbonna - Between October 2016 and March 2019, Ogbonna allegedly participated in a conspiracy to defraud between 80 and 100 U.S. victims, the majority of whom were 60 years of age and older. To facilitate this scheme, conspirators contacted victims and falsely claimed that the victims were due a large inheritance or had won a foreign lottery. Conspirators told victims they would receive large sums in return for up-front payments of the associated taxes and fees. Conspirators also perpetrated business email compromise scams by compromising business emails and then contacting business clients and employees and requesting a transfer of funds. In all cases, conspirators directed victims to wire money to various bank accounts, including accounts opened by Ogbonna. After receiving these proceeds, Ogbonna transferred a portion of those proceeds via cashier’s checks and wires to conspirators in China and Nigeria.
Elder Fraud Hotline
Attorney General Barr also announced the launch of a National Elder Fraud Hotline, which will provide services to seniors who may be victims of financial fraud. The Hotline will be staffed by experienced case managers who can provide personalized support to callers. Case managers will assist callers with reporting the suspected fraud to relevant agencies and by providing resources and referrals to other appropriate services as needed. When applicable, case managers will complete a complaint form with the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) for Internet-facilitated crimes and submit a consumer complaint to the Federal Trade Commission on behalf of the caller. The Hotline’s toll free number is 833-FRAUD-11 (833-372-8311).
For the second year, the Department of Justice and its law enforcement partners also took comprehensive action against the money mule network that facilitates foreign-based elder fraud. Generally, perpetrators use a “money mule" to transfer fraud proceeds from a victim to ringleaders of fraud schemes who often reside in other countries. Some of these money mules act unwittingly, and intervention can effectively end their involvement in the fraud. The FBI and the Postal Inspection Service took action against over 600 alleged money mules nationwide by conducting interviews, issuing warning letters, and bringing civil and criminal cases. Agents and prosecutors in more than 85 federal district participated in this effort to halt the money flow from victim to fraudster. These actions against money mules were in addition to the criminal and civil cases announced as part of this year’s elder fraud sweep.
These outreach efforts have helped to prevent seniors from falling prey to scams and have frustrated offenders’ efforts to obtain even more money from vulnerable elders.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER.
Source: U.S. Department of Justice, Office of the United States Attorneys
