NEW YORK — Miami Heat guard Terry Rozier ’s lawyers are asking a judge to throw out sports gambling charges that have kept him off the court this season, arguing that the government overreached by turning a private dispute over bettors’ use of non-public information into a federal case.
In a motion to dismiss made public on Tuesday, Rozier’s lawyers argued that the government’s theory of the case — that he prevented sportsbooks from making informed decisions about accepting certain bets — runs afoul of a recent U.S. Supreme Court ruling that narrowed the federal wire fraud statute.
Rozier, 31, is accused of helped gamblers cash in by tipping off a friend that he would leave a March 2023 game early because of a supposed injury. The friend, Deniro “Niro” Laster, who is also charged, shared or sold the information to others, who placed more than $250,000 in prop bets, prosecutors said.
“The government has billed this case as involving ‘insider betting’ and ‘rigging’ professional basketball games,” Rozier’s lawyers, James M. Trusty and A. Jeff Ifrah, wrote in the motion. “But the indictment alleges something less headline-worthy: that some bettors broke certain sportsbooks’ terms of use against wagering based on non-public information and ‘straw betting.’”
Rozier was on the Charlotte Hornets at the time and the information about his early exit was not listed on the team’s injury report, nor was it shared with the public or the sportsbooks that accept wagers on NBA games and player performances, prosecutors said.
Rozier pleaded not guilty in federal court in Brooklyn on Dec. 8 to wire fraud conspiracy and money laundering conspiracy charges. He was released on $3 million bond and is due back in court for a hearing before U.S. District Judge LaShann DeArcy Hall on March 3.
His charges were part of a sweep of more than 30 other people in a takedown of two sprawling gambling operations: one that authorities said leaked inside information about NBA athletes and another involving rigged, Mafia-backed poker games.
The charges have raised questions about the integrity of NBA games in an era of legalized betting and myriad prop bets, prompting the league to tweak its injury reporting requirements.
A message seeking comment on Rozier’s motion to dismiss the case was left for federal prosecutors.
In the motion, Rozier’s lawyers wrote that under the Supreme Court’s 2023 ruling in United States v. Ciminelli, prosecutors can’t make a wire fraud case out of allegations that defendants conspired to deprive a person — or, in this case, sportsbooks — of the right to information needed to make discretionary economic decisions.
They also questioned whether federal prosecutors have the authority to bring such a case, since sportsbooks are regulated at the state level, not the federal level.
“This is not to say that sports betting platforms are without recourse when their terms of use are violated — they can void bets, pursue civil remedies, or seek state prosecutor involvement,” Trusty and Ifrah wrote in the motion, which was dated Dec. 12 but only posted to the case docket on Tuesday. “But Ciminelli puts to rest the notion that federal prosecutors are here to enforce contractual agreements between bettors and platforms.”
Rozier has earned about $160 million over a 10-year NBA career. He was a first-round pick for the Boston Celtics in 2015 after starring at the University of Louisville. Charlotte traded him to the Heat last year.
In the game in question, Rozier played the first nine minutes and 36 seconds against the New Orleans Pelicans before leaving, citing a foot issue. He did not play again that season.
Rozier’s lawyers noted that the indictment does not allege that he ever placed a bet on any NBA game, nor does it allege that he knew Laster intended to sell his tip to others or that using it to place wagers would violate the sportsbooks’ terms of service. And, they said, he really was injured.
“The government’s cynicism as to whether Mr. Rozier was injured is belied by a variety of witnesses and medical professionals who were aware of Rozier’s injury, in many cases before the Pelicans game,” Trusty and Ifrah wrote.
This week, editors Peter Suderman, Katherine Mangu-Ward, and Matt Welch are joined by Reason reporter Eric Boehm to discuss Turning Point USA’s AmericaFest and the GOP coalescing around Vice President J.D. Vance as President Donald Trump’s successor. They analyze Sen. Rand Paul’s (R–Ky.) opposition to endorsing Vance as the party’s next standard-bearer, and whether this signals he will challenge Vance for the nomination in 2028. Katherine also shares what it was like attending the conference, plus her debate over marijuana legalization as the Trump administration moves to reclassify marijuana from Schedule I to Schedule III.
The editors then turn to the bipartisan backlash over the latest Jeffrey Epstein file release, in which more than 500 pages were completely redacted, prompting Reps. Thomas Massie (R–Ky.) and Ro Khanna (D–Calif.) to threaten charges of “inherent contempt” against Attorney General Pam Bondi. The panel also discusses the Trump administration’s seizure of additional Venezuelan oil tankers, plus the announcement of new military strikes in Syria. They dig into Minnesota’s widening welfare fraud scandal, and whether conservative media is using it to scapegoat Somali immigrants. A listener asks whether Christmas expands our “socialist bubble” of family and community and what that says about capitalism, socialism, and human nature.
0:00—Debating marijuana at Turning Point USA
4:10—J.D. Vance is the MAGA heir apparent
14:47—Massie and Khanna react to Epstein file release
25:14—U.S. foreign policy in Venezuela and Syria
38:09—Listener question on socialism and Christmas
Federal prosecutors said the total fraud in Minnesota’s Medicaid programs could be as much as $9 billion, but DFL Gov. Tim Walz and other state officials disputed the amount of taxpayer money stolen is that high.
First Assistant U.S. Attorney Joe Thompson on Thursday, during a news conference about new federal charges, noted that 14 programs deemed “high-risk” had billed $18 billion collectively since 2018 and suggested a “significant” amount could be fraudulent.
“I don’t make these generalizations in a hasty way,” Thompson said. “When I say a significant amount, I’m talking on the order of half or more,” he said without providing more specifics. “But we’ll see. When I look at the claims data and the providers, I see more red flags than I see legitimate providers.”
At an unrelated press event on Friday, Walz was asked if he had seen evidence of that claim and said no. He praised the work of federal prosecutors and the criminal charges they’ve filed against accused fraudsters, but called Thompson’s statement “sensationalism” and that it doesn’t “help” the state tackle the problem that he vowed to fix.
“You should be equally outraged about $1 or whatever that number is, but they’re using that number without the proof behind it,” Walz said.
Department of Human Services officials agreed that they had not seen data showing that the fraud reached multiple billions. What they have seen is tens of millions in fraud at this point, said John Connolly, deputy commissioner of DHS and state Medicaid director.
“We don’t have evidence in hand to suggest that we have $9 billion in fraud in these benefits over the last seven years. And if there is evidence, we need it so that we can stop paying. That’s a very alarming number,” Connolly explained.
James Clark, the inspector general at DHS, said the agency is more aggressively stopping payments to providers at the first signs of fraud. He told reporters he has sent letters to the U.S. Attorney’s Office to more closely collaborate.
“That’s how this system should work. We investigate. We suspend payments. We refer cases to law enforcement. And to the extent there is information about massive fraud in our programs, billions or nine billions worth of fraud, I desperately want to see that evidence,” Clark said.
Among the individuals charged by the U.S. Attorney’s Office on Thursday are two men from Philadelphia who Thompson said have no ties to Minnesota, but started companies here because of what he called “fraud tourism.”
He added that what makes the state’s fraud problem unique compared to other states is that many providers are shell companies —entirely fraudulent entities providing zero services.
“What we see in Minnesota is not a handful of bad actors committing crimes. It’s a staggering industrial-scale fraud,” Thompson said. “It’s swamping Minnesota and calling into question everything we know about our state.”
Federal prosecutors said the total fraud in Minnesota’s Medicaid programs could be as much as $9 billion, but DFL Gov. Tim Walz and other state officials disputed the amount of taxpayer money stolen is that high.
First Assistant U.S. Attorney Joe Thompson on Thursday, during a news conference about new federal charges, noted that 14 programs deemed “high-risk” had billed $18 billion collectively since 2018 and suggested a “significant” amount could be fraudulent.
“I don’t make these generalizations in a hasty way,” Thompson said. “When I say a significant amount, I’m talking on the order of half or more,” he said without providing more specifics. “But we’ll see. When I look at the claims data and the providers, I see more red flags than I see legitimate providers.”
At an unrelated press event on Friday, Walz was asked if he had seen evidence of that claim and said no. He praised the work of federal prosecutors and the criminal charges they’ve filed against accused fraudsters, but called Thompson’s statement “sensationalism” and that it doesn’t “help” the state tackle the problem that he vowed to fix.
“You should be equally outraged about $1 or whatever that number is, but they’re using that number without the proof behind it,” Walz said.
Department of Human Services officials agreed that they had not seen data showing that the fraud reached multiple billions. What they have seen is tens of millions in fraud at this point, said John Connolly, deputy commissioner of DHS and state Medicaid director.
“We don’t have evidence in hand to suggest that we have $9 billion in fraud in these benefits over the last seven years. And if there is evidence, we need it so that we can stop paying. That’s a very alarming number,” Connolly explained.
James Clark, the inspector general at DHS, said the agency is more aggressively stopping payments to providers at the first signs of fraud. He told reporters he has sent letters to the U.S. Attorney’s Office to more closely collaborate.
“That’s how this system should work. We investigate. We suspend payments. We refer cases to law enforcement. And to the extent there is information about massive fraud in our programs, billions or nine billions worth of fraud, I desperately want to see that evidence,” Clark said.
Among the individuals charged by the U.S. Attorney’s Office on Thursday are two men from Philadelphia who Thompson said have no ties to Minnesota, but started companies here because of what he called “fraud tourism.”
He added that what makes the state’s fraud problem unique compared to other states is that many providers are shell companies —entirely fraudulent entities providing zero services.
“What we see in Minnesota is not a handful of bad actors committing crimes. It’s a staggering industrial-scale fraud,” Thompson said. “It’s swamping Minnesota and calling into question everything we know about our state.”
Federal prosecutors announced new indictments Thursday in the widening Minnesota fraud scandal, this time involving two Philadelphia-based men accused of traveling to Minneapolis after a friend told them the taxpayer-funded programs there presented “a good opportunity to make money.”
“Minnesota has become a magnet for fraud, so much so that we have developed a fraud tourism industry – people coming to our state purely to exploit and defraud its programs,” said First Assistant U.S. Attorney Joseph Thompson, who brought the new charges. “This is a deeply unsettling reality that all Minnesotans should understand.”
The two men, Anthony Waddel Jefferson and Lester Brown, were accused of siphoning millions from federally funded programs administered by Minnesota officials that were meant to help the disabled and those suffering from addiction, according to court filings.
Unlike previous individuals caught up in the sprawling fraud dragnet, they don’t appear to be tied to Minnesota’s large Somali-American community.
Court filings allege the men submitted up to $3.5 million in “fake and inflated bills” for Medicaid reimbursements after they set up a company intended to provide housing and other services to individuals who qualified for the program.
They allegedly fleeced the housing program in Minnesota despite “living on the other side of the country and having no network in or connections to Minnesota or its communities,” the filings stated.
Thursday’s indictments alleged that one man registered a company to help channel state resources to the families of children with autism. But the man, Abdinajib Hassan Yussuf, allegedly spent some of the $6 million he took from the program on the purchase of a Freightliner semi-truck.
CBS News reached out to an attorney representing Yussuf, who declined to comment. Attorneys for the other defendants have not yet responded to requests for comment.
Federal prosecutors have been looking into large-scale fraud in several Minnesota programs ever since dozens were indicted and convicted starting in 2022 in the Feeding Our Future scandal, which saw the theft of $250 million in taxpayer funds meant to feed children in need.
The number of convictions is now up to 62 after one defendant pleaded guilty on Thursday morning. The three new indictments now bring the total number charged in fraud to 90.
On Thursday, a top prosecutor suggested that the total amount of fraud in Minnesota could be $9 billion or more.
Below is an overview of three of the state’s other high-profile fraud controversies.
The nonprofit partnered with the state’s Department of Education and the U.S. Department of Agriculture to distribute meals, but federal prosecutors say the group submitted fake meal count sheets and invoices claiming they helped feed thousands, making millions of dollars in administrative fees and taking kickbacks from meal distribution sites, according to court documents.
“What we can say from that enormous volume of evidence is that the predominant motive of all of these individuals was their self-enrichment and their self-indulgence,” said U.S. Attorney Daniel N. Rosen. “And that’s where they spent the money overwhelmingly.”
The majority of those charged and convicted in the Feeding Our Future scheme are of Somali descent. The nonprofit’s founder, Aimee Bock, is White. Bock was convicted for her role back in March.
In recent weeks, President Trump, other Republican politicians and conservative media outlets have alleged Minnesota’s Democratic establishment — with Gov. Tim Walz as the prime focus — was bullied into inaction by the nonprofit, which contracted within the state’s Somali community. Critics claim Bock successfully shut down early scrutiny by dubbing it as racially motivated.
Mr. Trump has claimed Somali migrants “ripped off” Minnesota and has referred to the state as a “hellhole.” He has called people from Somalia “garbage” who “contribute nothing” and said: “I don’t want them in our country, I’ll be honest with you.” The U.S. Department of the Treasury says it is also investigating whether money was funneled to the Somali terror group al-Shabaab.
Earlier this month, Immigration and Customs Enforcement ramped up its presence in the Twin Cities in what is dubbed Operation Metro Surge. The Twin Cities are home to the majority of Minnesota’s 100,000-plus Somali population, according to census data. The state has the nation’s largest Somali population.
Housing Stabilization Services
Federal prosecutors have also charged nearly a dozen more people in cases involving other alleged COVID-related fraud in the state involving housing assistance and behavioral health services.
Housing Stabilization Services is a Medicaid program started in 2020 that aimed to help people with disabilities and addictions find and maintain housing. The program was under the umbrella of the Minnesota Department of Human Services and has previously been accused of being the target of widespread fraud.
In July, the state paused payments to 50 housing stabilization providers connected to the program. Eight people have been charged so far with allegedly taking millions of dollars.
On Thursday, federal agents raided a Bloomington business claiming it was helping vulnerable people live at home, but wasn’t.
“I didn’t even know what was going on,” a Bloomington woman, who wanted to remain anonymous, said. “I saw a whole group of people who had never been there before. That business is so quiet. Nothing happens there.”
She said she was shocked when she saw federal agents carrying boxes and computer equipment out of a quiet Bloomington strip mall.
“This morning we also executed a search warrant to another medicaid program here in Minnesota,” Thompson said. “It was designed to help people with disabilities live more independently in the community with assistance.”
Thompson says the company, called Ultimate Home Health Services, billed a lot but provided very little of that assistance.
New court documents reveal one of the people under its supposed “constant” care died, and no one noticed for days. The program is called Integrated Community Supports, also known as ICS.
A new search warrant says a St. Paul man with “severe mental illness” needed that help. Rick C. was one of its clients, but his mother says she “rarely saw anyone at the apartment to assist” him. He died less than a year after moving into his apartment and he “appeared to have been deceased for some period of time before police found him.”
Ultimate Home Health Services claimed to be providing 12 hours of services a day for him.
Last week, Walz unveiled a new statewide fraud prevention program led by Tim O’Malley, a former FBI agent who previously led the Minnesota Bureau of Criminal Apprehension and was chief judge on the state’s Court of Administrative Hearings.
About half or more of the roughly $18 billion in claims paid out by Medicaid to Minnesota-run programs may have been fraudulent, and at least 14 programs were likely exploited, a federal prosecutor said Thursday.
First Assistant U.S. Attorney Joe Thompson said it’s unclear just how much of that money is fraudulent, but said it’s “far too much” and “an order of half or more, but we’ll see.”
Minnesota Department of Human Services Inspector General James Clark released a statement, saying speculation of the amount of fraud occurring is “shocking.”
“If there is evidence of Medicaid fraud, the state should be given the information so DHS can slam the door shut on payments to those individuals and businesses,” Clark said. “We have been moving more aggressively than ever to suspend payments where we see evidence of fraud and refer criminals to law enforcement for prosecution. I’ve previously sent letters to the U.S. Attorney’s Office asking them to share evidence of fraud and I’m requesting a meeting immediately to discuss how we can partner to stop criminals now.”
Thompson said the scale of fraud in Minnesota outpaces that of other states and puts services at risk for people who really need them.
While prosecutors typically see fraud manifest as providers overbilling, Thompson said during a news conference in Minneapolis that companies have been created to provide zero services while pocketing federal funds for international travel, luxury vehicles and lavish lifestyles.
“The magnitude cannot be overstated,” Thompson said. “What we see in Minnesota is not a handful of bad actors committing crimes. It’s staggering, industrial-scale fraud.”
The investigators’ new findings may bolster President Trump in his claims that Minnesota is a “hub of fraudulent money laundering activity” under Gov. Tim Walz, who was the Democrats’ vice presidential nominee in last year’s presidential election.
Trump has capitalized on the fraud cases to target the Somali diaspora in Minnesota, calling them “garbage” and saying he doesn’t want immigrants from the East African country in the U.S.
More than 90% of the people charged in the major fraud cases announced before today were of Somali descent, according to the U.S. Attorney’s Office for Minnesota.
Walz has denounced Trump’s comments, saying an audit due for completion by late January should give a better picture on the extent of the fraud. He said his administration is taking aggressive action to prevent fraud in the future. A spokesperson for Walz did not immediately respond to an email seeking comment Thursday.
Five new defendants have been charged in connection with a Minnesota housing services fraud, Thompson said. Two of them pocketed $750,000 instead of helping Medicaid recipients find stable housing, he said. Prosecutors allege they used the proceeds to travel to international destinations, including London, Istanbul and Dubai.
One defendant submitted $1.4 million in fraudulent claims, using some of the funds to purchase cryptocurrency, Thompson said. Federal officials say he fled the country after receiving a subpoena.
“Minnesota has become a magnet for fraud, so much so that we have developed a fraud tourism industry – people coming to our state purely to exploit and defraud its programs,” Thompson said. “This is a deeply unsettling reality that all Minnesotans should understand.”
The two men, Anthony Waddel Jefferson and Lester Brown, were accused of siphoning millions from federally funded programs administered by Minnesota officials that were meant to help the disabled and those suffering from addiction, according to court filings.
They allegedly fleeced the housing program in Minnesota despite “living on the other side of the country and having no network in or connections to Minnesota or its communities,” the filings stated.
Prosecutors also named a new defendant accused of defrauding another state-run, federally funded program that provides services for children with autism, alleging he submitted millions of dollars worth of claims for Medicaid reimbursement. One woman previously charged for exploiting that program pleaded guilty Thursday morning, officials said.
Asked who is to blame, Thompson said the state “has not done a good job of mining these programs.”
Danh C. Vo, the founder of the former VBit Technologies Corp., is accused of defrauding thousands of investors in the bitcoin mining company in a scheme that promised them profits, the U.S. Securities and Exchange Commission says.
Federal prosecutors announced new indictments Thursday in the widening Minnesota fraud scandal, this time involving two Philadelphia-based men accused of traveling to Minneapolis after a friend told them the taxpayer-funded programs there presented “a good opportunity to make money.”
Anthony Waddel Jefferson and Lester Brown are accused of siphoning millions from federally funded programs administered by Minnesota officials that were meant to help people with disabilities and those suffering from addiction.
Unlike many of the individuals previously caught up in the state’s sprawling fraud scandal, they don’t appear to have ties to Minnesota’s large Somali-American community. Prosecutors say they don’t appear to have ties to Minnesota at all.
“Minnesota has become a magnet for fraud, so much so that we have developed a fraud tourism industry — people coming to our state purely to exploit and defraud its programs,” said Assistant U.S. Attorney Joseph Thompson, who brought the new charges. “This is a deeply unsettling reality that all Minnesotans should understand.”
Court filings allege the men submitted up to $3.5 million in “fake and inflated bills” for Medicaid reimbursements after they set up a company intended to provide housing and other services to individuals who qualified for the program. They allegedly fleeced the housing program in Minnesota despite “living on the other side of the country and having no network in or connections to Minnesota or its communities.”
Jefferson and Brown were among six people indicted for fraud on Thursday.
Abdinajib Hassan allegedly registered a company to help channel state resources to the families of children with autism, spending some of the $6 million he took from the program on the purchase of a Freightliner semi-truck.
Hassan Ahmed Hussein and Ahmed Abdirashid Mohamed are accused of pocketing $750,000 intended to help Medicaid recipients find housing, then using the money on international travel.
Kaamil Omar Sallah allegedly submitted $1.4 million in fraudulent claims as part of a housing stabilization services fraud scheme. He spent $150,000 of it on crypto and fled to Amsterdam after he was subpoenaed, officials say.
Asha Farhan Hassan, who was previously charged in multiple fraud schemes, pleaded guilty Thursday to one count of wire fraud.
Prosecutors said Thursday that they are investigating roughly $18 billion spent on social programs in Minnesota since 2018. CBS News asked how much they believe was fraud, and they said they’ve “seen more red flags than legitimate providers.”
That revelation came as the Trump administration and its allies have stepped up attacks on Minnesota’s leadership, including Gov. Tim Walz, who was the Democratic Party’s nominee for vice president in the 2024 elections.
Walz has acknowledged his state fell short in its fraud fighting efforts and listed a series of steps he has taken to implement more safeguards for taxpayer-funded social services.
In recent weeks, the Trump-appointed heads of at least three cabinet agencies have signaled fresh investigations into the state’s handling of federal funds — actions that a spokesperson for Walz called “politically motivated” in a statement on Wednesday.
“While the governor has been fighting fraud, the Trump administration has spent the past month sending dozens of letters, statements and social media posts filled with threats to withhold funding and investigate the state,” the spokesperson said.
Minnesota is not the only state to be hit by such crimes. Yesterday, federal prosecutors indicted two men in Massachusetts for stealing hundreds of thousands of dollars in federal Supplemental Nutrition Assistance Program (SNAP) money meant for needy children.
But Thursday’s indictments in Minnesota were the latest development in a string of multimillion-dollar fraud schemes that have plagued that state. So far, federal prosecutors have convicted 62 people in connection to the scandal, which tops the list of the nation’s most costly COVID-era fraud sprees. Federal prosecutors estimate taxpayer losses exceed $1 billion.
The initial scheme involved a nonprofit organization that tricked state and federal officials into paying them to serve food to thousands of hungry children but never provided the meals. That group, Feeding Our Future, allegedly raked in $250 million.
Additional fraud cases have since come into focus. This year, in August, state officials shut down a housing program designed to help seniors and people with disabilities, citing “large-scale fraud.” In September, prosecutors charged eight people with defrauding the program by enrolling as providers and submitting millions in “fake and inflated bills.”
Also in September, a person was charged with defrauding another state program that provides services to kids with autism. Her company was accused of hiring unqualified “behavioral technicians” and submitting false claims to the state that indicated the staff had worked with children enrolled in the program. She also allegedly paid kickbacks to parents who agreed to enroll their children in the program.
The Treasury Department announced it would investigate whether any of the alleged fraudsters, many of whom are of Somali descent, funnelled money to al Qaeda affiliate al Shabaab, which is based in Somalia. Multiple federal investigators told CBS News there is no evidence taxpayer dollars ever went to al Shabaab, and prosecutors have yet to present evidence linking any of the fraudsters to terrorism.
“The vast majority of the money that these folks made went to spending on luxury items for themselves,” said Andy Luger, the former U.S. Attorney who prosecuted these frauds from 2022 until January.
CBS News obtained dozens of files and photos that reveal how some Minnesota fraudsters blew through millions in taxpayer dollars, spending it on cars, property, jewelry and luxury travel. Videos show them popping champagne at an opulent Maldives resort. In a text message, one defendant boasts: “You are gonna be the richest 25 year old InshaAllah [God willing].”
NEW YORK — The founder of Tricolor Holdings and other executives of the subprime auto lender were charged Wednesday with what federal authorities say was a massive fraud that led the company into bankruptcy.
Daniel Chu, the company’s founder and chief executive, was charged in an indictment unsealed in Manhattan federal court with directing multiple executives since 2018 to defraud investors and lending institutions through multiple fraudulent schemes.
A defense lawyer did not immediately return a message seeking comment.
According to the indictment, the scope of the fraud was revealed in late August when lenders confronted Chu and other executives about Tricolor’s collateral.
Chu and others accused of carrying out the fraud initially tried to conceal it, saying the collateral issues were due to an administrative error, the indictment said.
After those efforts failed, Chu extracted over $6 million from the company, the indictment said.
On Sept. 10, Tricolor filed for Chapter 7 bankruptcy because it owed over $900 million to the company’s largest lenders, the indictment said.
More information was expected to be released at a morning news conference.
Yergan Jones, CEO of American Sound Design and AEE Productions, was sentenced Monday, Dec. 15, 2025, in Miami federal court to one year and nine months in prison for his role in the fraud scheme of former Jackson Health Foundation executive.
Facebook
READ MORE
Betrayal of Trust
Former Jackson Health Foundation COO Charmaine Gatlin pled guilty to bilking millions in charity funds. A look at the investigation.
Expand All
An Atlanta businessman who paid millions in bribes to an executive for the charity arm of Miami-Dade County’s public hospital system was sentenced Monday to one year and nine months in prison — thanks to his cooperation with federal authorities early on in the fraud investigation.
Yergan Jones, 63, president of an audiovisual company, pleaded guilty in August in Miami federal court to conspiring to commit fraud with Jackson Health Foundation’s former chief operating officer, Charmaine Gatlin. She approved 53 wire payments totaling $2.1 million to Jones, even though he provided no services to the Foundation between 2019 and 2024.
In return, Jones kicked back 74 payments via wires and checks totaling about $1.1 million to Gatlin, 52, who used the money to buy luxury Italian and French handbags, vacations in the Caribbean and a membership at an upscale golf club near her home in Weston.
During the sentencing hearing, U.S. District Judge Jacqueline Becerra chastised the out-of-towner for conspiring with Gatlin to steal millions of dollars from the nonprofit charity benefitting the county-subsidized Jackson Health System, as she stressed the importance of its healthcare services, especially for Miami-Dade low-income patients.
Where did the money go?
“In terms of fraud, this is as serious as it gets,” Becerra told Jones. “This is absolute rank, gross, disgusting greed.”
At one point, the judge asked Jones’ defense attorney what the defendant did with the $1 million he kept in the billing scheme directed by Gatlin. “Where is that money?” Becerra asked.
“Some of it went into his business,” attorney Hector Flores told her. “Some of it went into everyday life,” including a leased Porsche.
In addition to prison time, the judge ordered Jones to pay about $2.1 million in restitution to Jackson Health System, along with imposing a $1.1 million forfeiture judgment that represents his portion of the ill-gotten funds stolen from the Foundation.
According to court records, Jones plans to make a payment this month of $783,000 — funds that will go toward repaying the Foundation that raises money for Jackson Health System. Jones said he plans to sell his Atlanta business and other assets to pay back more of the stolen money.
“I will continue to work until every dollar is repaid,” Jones told the judge, as he apologized for his crime. “I stand before you today fully accountable.”
Becerra reluctantly allowed Jones to surrender on Feb. 21 to prison authorities in Atlanta, mainly because the judge said she wanted him to sell his audiovisual business and repay as much money as possible to the Foundation and Jackson. She almost made him surrender at the end of January, but allowed him a few extra weeks of freedom after he said that his daughter will be getting married in mid-February.
The judge reached her decision on Jones’ prison term after federal prosecutor Elizabeth Young recommended that he receive a one-third reduction on his originally recommended sentence of 2-1/2 years because of his early assistance to the FBI and U.S. Attorney’s Office in Miami.
While Young called his crime “an obviously egregious fraud scheme” because the Foundation and Jackson received no services for his theft, she noted that Jones is at least trying to back the stolen funds.
She also pointed out that his co-conspirator, Gatlin, the leader of the billing scheme, committed a far worse crime, including stealing $55,000 in charity funds meant for burn victims at Jackson.
Stealing funds meant for Jackson patients
At Monday’s sentencing nearing, the Foundation’s chief executive officer, Flavia Llizo, said Gatlin and Jones “didn’t just steal money. They stole hope.”
“They chose to steal from people they never met — patients fighting for their lives, families in crisis, neighbors who depend on Jackson for hope and healing,” Llizo told the judge.
By comparison, last Wednesday, Gatlin was given a harsher sentence of six years and eight months by U.S. District Judge Beth Bloom. She pleaded guilty in September to a wire-fraud conspiracy charge accusing her of stealing about $7 million from her employer, involving Jones and several other vendors.
An unidentified man, left, escorts Arthur Gatlin and his wife Charmaine Gatlin, right, the former chief operating officer of the Jackson Health Foundation, for sentencing at Wilkie D. Ferguson Jr. Courthouse on Wednesday, Dec. 10, 2025, in Miami, Florida. Carl Juste cjuste@miamiherald.com
Gatlin, who was immediately sent to prison, must repay that sum to the Foundation — though she was only able to pledge $30,000 borrowed from a family member. She also faces a $1 million forfeiture judgment that accounts for the illicit funds Jones kicked back to her.
Gatlin came to know Jones when they worked on charitable projects for a mentorship organization in Atlanta, where she had worked before she was hired by the Foundation in 2014.
Before Jackson officials learned of her theft of the Foundation’s funds in the fall of 2024, Gatlin was making about $300,000 as the Foundation’s chief operating officer and was being considered for its top job as chief executive officer.
Terminated in November
But in late October, she was put on paid administrative leave while an internal investigation “related to potential misconduct” got underway. In early November, she was “terminated for cause” by the Foundation’s chairman. Her termination letter, obtained by the Miami Herald, did not elaborate.
Jackson officials alerted the FBI and federal prosecutors.
In May, Gatlin was arrested on charges of fleecing $3.6 million from her former employer, fabricating fake invoices from vendors — including Jones — and receiving kickbacks from them. Her defrauding of the Foundation, however, surpassed that figure as FBI agents dug deeper into her theft. Her billing scheme also extended well beyond Miami, according to an indictment and other court records.
In his plea, Jones admitted that he submitted dozens of invoices to Gatlin through his company, American Sound Design, that were for “audiovisual services that did not occur” at Jackson Health System or the Foundation.
Instead, those services were provided by his company to a civic organization in Atlanta, according to court records. The Herald confirmed that the organization is 100 Black Men of America, with chapters nationwide including South Florida. While at the Foundation, Gatlin continued to work with them as a part-time volunteer while Jones was a contractor for the organization.
“At times, Charmaine Gatlin instructed [Jones] how to falsify invoices to the Foundation for services ASD did not provide,” according to a factual statement filed with his plea agreement signed by him, defense lawyer Hector Flores and the prosecutor, Young.
For example, on Jan. 7, 2024, Jones emailed Gatlin’s personal email with a draft invoice extending audiovisual equipment at the Jackson “Holiday Parties” for two “additional days” for a total of $50,172.50, the statement says. The following day, Gatlin responded: “Get [the bill] to $58,477. When you email it over ask for the status of the payment.”
On Jan. 16, Gatlin wired that same amount to the bank account of Jones’ company, ASD, which did not provide the invoiced audiovisual services at Jackson or the Foundation, according to the statement. Two days later, Jones wired a kickback of about $25,000 to Gatilin’s personal bank account — then, Jones made a $20,000 payment on his American Express card using the Jackson funds.
In other instances, “to conceal the kickbacks, Charmaine Gatlin sent [Jones] false invoices making it appear as though she was consulting for” his company, American Sound Design, the statement says.
On Jan. 31, 2021, for example, Gatlin emailed Jones the following false invoices: Jackson Rehab Ribbon Cutting ($29,625); MTI 50th Anniversary/Jungle Island ($21,625); Virtual Conference Jackson Residents ($26,215), and Jackson Covid Media Village ($43,562.50).
“These payments were kickbacks to Charmaine Gatlin for paying [American Sound Design] via the Foundation,” the statement says.
At Jones’ sentencing on Monday, Becerra zeroed on how long he collaborated with Gatlin in her billing scheme over six years. She discounted the words of a few of his supporters who appeared in court, including a pastor from his church in Atlanta.
“It went to line your pockets so you could live a life better than the life you were living,” Becerra told Jones. “I cannot understand how you ended up doing this except for greed.”
This story was originally published December 15, 2025 at 6:45 PM.
What we do know, however, is the type of fraud reported most often in Canada: identity fraud. To pull this off, criminals use phishing scams and other ruses to trick Canadians into revealing personal and financial information. Depending on what they find out, scammers could impersonate you, charge purchases to your credit card, apply for a loan and/or mortgage in your name, drain your bank accounts, and more.
It’s also becoming harder to identify scams. Some fraudsters now use artificial intelligence (AI) technology to create highly convincing audio and video “deepfakes” using Canadians’ voices and faces. AI tools are also helping criminals target exponentially more people at once, making scams harder to avoid.
How to protect your identity
To help you protect yourself against ID theft and fraud, we created a series of how-to articles with practical tips on prevention and what to do if you think your identity may have been stolen.
We’ve also launched a column dedicated to helping you protect specific things and people in your life. Check back monthly for new installments.
Videos about fraud and scams
How fraud and scams affect Canadians
Learn more about the various types of scams targeting Canadians today, and what you can do to protect yourself and recover from ID fraud.
Article Continues Below Advertisement
sponsored
Equifax Complete Protection
Go to site
Equifax Complete Protection is a credit and cybersecurity protection service designed to help Canadians spot the signs of identity fraud faster.
Provides daily credit monitoring and alerts
Scans for your personal data on the dark web
Social media monitoring by industry leader ZeroFox
Subscription price: $34.95 per month
Go to site
Get free MoneySense financial tips, news & advice in your inbox.
This article is presented by an advertising partner.
This is an editorially driven article or content package, presented with financial support from an advertiser. The advertiser has no influence on the creation of the content.
MoneySense editors and journalists work closely with leading personal finance experts in Canada. Since 1999, our award-winning magazine has helped Canadians navigate money matters.
Democratic Minnesota Gov. Tim Walz on Friday unveiled a new statewide fraud prevention program in the state’s latest effort to crack down in the wake of the Feeding Our Future scandal — a scheme that siphoned away $250 million in taxpayer funds meant for hungry children.
Walz, the one-time Democratic running mate to former Vice President Kamala Harris, named Tim O’Malley as the new director of program integrity in a news conference on Friday morning.
O’Malley is former FBI agent who previously led the Minnesota Bureau of Criminal Apprehension, appointed by Republican Gov. Tim Pawlenty. He had also served as a chief judge on the state’s Court of Administrative Hearings, appointed by Walz, and has worked with the Archdiocese of Saint Paul and Minneapolis in an integrity-related capacity.
“[O’Malley] will work across state government to strengthen fraud protection and protect taxpayer dollars,” Walz said. “Tim made this clear yesterday as we were talking: he does not work for me, he works for the people of Minnesota as all of us do, and in fact he was so clear about that is he wanted to make sure that he rewrote the press release that went out to make sure that it reflects not a reality that we may craft, but the one that’s truly there.”
O’Malley said the governor privately assured him he’d have “the freedom and autonomy to act to do whatever is necessary to solve this.”
“I’m not here to serve any individual, and I’m not here to serve a political party. I’m here to serve Minnesotans,” O’Malley said.
Walz said the fraud prevention program was built with help from an outside forensics company called WayPoint, led by forensic accountant and attorney Josiah Lamb.
“In our current capacity, we are working with the BCA to build out this anti-fraud toolkit, which will include policies and procedures specifically designed to address fraud risks, that can be utilized enterprise-wide to help prevent fraud in the future,” Lamb said.
The governor said the state’s contract with the company is valued “up to $200,000” and “will be spread across all the state agencies.”
Walz says he takes “responsibility” for fraud
The Feeding Our Future scandal, the nation’s largest COVID fraud scheme, has garnered renewed focus from the Trump administration, prompting a surge of federal immigration enforcement activity in Minnesota and fueling the talking points of his Republican gubernatorial challengers.
In response to Walz’s announcement on Friday, candidate and current GOP state Rep. Kristen Robbins said the governor’s fraud prevention program “should be his resignation.”
Republican State Sen. Jordan Rasmusson said, in response to the announced program, a “statewide director of program integrity isn’t something you need when your commissioners are doing their jobs well in the first place.” Resmusson added that Minnesotans “expect their government to provide vigorous oversight of our welfare programs.”
On Friday, Walz said Minnesota’s “generosity” was “taken advantage of by an organized group of fraudsters and criminals,” and he’ll “take responsibility” for the failures that led to the massive COVID relief funding theft, admitting his office “should have been keeping Minnesotans more up to speed on what was happening.”
“We have and have just like in COVID, just like in every other situation, I take full responsibility for it. I think, and I will acknowledge certainly to Minnesotans and to the press here, I don’t think we’ve done a good enough job of communicating the hard work has been done,” Walz said.
He also said the “guardrails were taken off” by the federal government during the pandemic and “the guidance was to move the money.”
“Our goal was to make sure we were moving that money so that people ate, that they were housed, that they had vaccines, but it also opened up the door to relax the guardrails and to have fraud be committed,” he said.
While taking blame for the fraud scandal, Walz also said his attempt in 2021 to freeze funding for a Feeding Our Future-related organization was thwarted by the courts.
“I said, ‘Don’t pay them,’ and they said, ‘You can’t do that, you don’t have that authority.’ I said, ‘Do not pay them, let them sue me.’ They did and they won, and we paid them, and then they got caught and went to jail after the fact,” Walz said.
Walz also defended his COVID policies that critics branded as draconian, leading to multiple — and ultimately unsuccessful — lawsuits, including over mask mandates.
“I will not apologize for making Minnesota one of the safest states during COVID,” he said.
Walz recently announced new audits on up to 14 social programs in Minnesota that officials consider “high risk” for fraud. An official at the state Department of Human Services told WCCO the inspector general’s office is currently reviewing more than 1,300 reported cases of fraud in those programs, and has recovered some $50 million.
Walz: Trump’s targeting of Somalis is “racially motivated”
There are now upwards of 80 defendants in the case, many of whom are of Somali descent, though the group’s founder and alleged mastermind, Aimee Bock, is White. So far, 61 people have been convicted, with more investigations underway.
U.S. Census Bureau data show more than 107,000 people identified as Somali across Minnesota, with more than 80,000 living in the Twin Cities.
And in recent weeks, the Department of Homeland Security has sent dozens of federal agents to Minnesota, specifically the Twin Cities, as part of “Operation Metro Surge.” Mr. Trump also previously ordered all green card holders from Somalia and more than a dozen other countries be reexamined, adding that he would end the temporary protected status for Somalis in Minnesota.
On Friday, Walz said the president’s actions do “nothing to either address immigration” or “fraud.”
“The absolute recklessness of doing some of this and the targeting of a specific community, unconscionable,” Walz said. “It is very specifically aimed and very racially motivated towards a Somali community that matters greatly here.”
Walz also applauded comments made by GOP state Sen. Jim Abeler, who recently wrote a letter to Mr. Trump rebuking his statements about Minnesota’s Somali community.
“I’d like to acknowledge that just the basic decency, not a surprise to everybody in here has been, but Sen. Jim Abeler’s willingness to stand up, and note that it should be the simplest thing in the world,” Walz said. “When the president of the United States calls an entire group of people garbage and our state garbage and a hellhole, to just disavow that, you can still be very conservative.”
Newly released evidence also gives the clearest look yet at how the Feeding Our Future fraudsters blew through hundreds of millions of dollars meant to feed Minnesota children during the pandemic.
CBS News obtained dozens of trial exhibits, and they reveal luxury vacations, high-end cars and overseas transfers, all funded by taxpayer dollars meant to feed kids in need.
Photos and documents show fraudsters booking over-water villas in the Maldives, buying gold jewelry in Dubai and sending stacks of cash overseas.
Some defendants purchased lakefront property in Minnesota, first-class airline tickets and luxury cars.
U.S. Attorney Daniel N. Rosen said it’s more evidence that the main driver for the fraud was greed.
“Massive. Order of magnitude larger than just about any fraud that’s ever been prosecuted in the United States,” he said. “What we can say from that enormous volume of evidence is that the predominant motive of all of these individuals was their self-enrichment and their self-indulgence. And that’s where they spent the money overwhelmingly.”
There is also evidence of money going overseas, including to China.
Democratic Minnesota Gov. Tim Walz on Friday unveiled a new statewide fraud prevention program in the state’s latest effort to crack down in the wake of the Feeding Our Future scandal — a scheme that siphoned away $250 million in taxpayer funds meant for hungry children.
Walz, the one-time Democratic running mate to former Vice President Kamala Harris, named Tim O’Malley as the new director of program integrity in a news conference on Friday morning.
O’Malley is former FBI agent who previously led the Minnesota Bureau of Criminal Apprehension, appointed by Republican Gov. Tim Pawlenty. He had also served as a chief judge on the state’s Court of Administrative Hearings, appointed by Walz, and has worked with the Archdiocese of Saint Paul and Minneapolis in an integrity-related capacity.
“[O’Malley] will work across state government to strengthen fraud protection and protect taxpayer dollars,” Walz said. “Tim made this clear yesterday as we were talking: he does not work for me, he works for the people of Minnesota as all of us do, and in fact he was so clear about that is he wanted to make sure that he rewrote the press release that went out to make sure that it reflects not a reality that we may craft, but the one that’s truly there.”
O’Malley said the governor privately assured him he’d have “the freedom and autonomy to act to do whatever is necessary to solve this.”
“I’m not here to serve any individual, and I’m not here to serve a political party. I’m here to serve Minnesotans,” O’Malley said.
Walz said the fraud prevention program was built with help from an outside forensics company called WayPoint, led by forensic accountant and attorney Josiah Lamb.
“In our current capacity, we are working with the BCA to build out this anti-fraud toolkit, which will include policies and procedures specifically designed to address fraud risks, that can be utilized enterprise-wide to help prevent fraud in the future,” Lamb said.
The governor said the state’s contract with the company is valued “up to $200,000” and “will be spread across all the state agencies.”
Walz says he takes “responsibility” for fraud
The Feeding Our Future scandal, the nation’s largest COVID fraud scheme, has garnered renewed focus from the Trump administration, prompting a surge of federal immigration enforcement activity in Minnesota and fueling the talking points of his Republican gubernatorial challengers.
In response to Walz’s announcement on Friday, candidate and current GOP state Rep. Kristen Robbins said the governor’s fraud prevention program “should be his resignation.”
Republican State Sen. Jordan Rasmusson said, in response to the announced program, a “statewide director of program integrity isn’t something you need when your commissioners are doing their jobs well in the first place.” Resmusson added that Minnesotans “expect their government to provide vigorous oversight of our welfare programs.”
On Friday, Walz said Minnesota’s “generosity” was “taken advantage of by an organized group of fraudsters and criminals,” and he’ll “take responsibility” for the failures that led to the massive COVID relief funding theft, admitting his office “should have been keeping Minnesotans more up to speed on what was happening.”
“We have and have just like in COVID, just like in every other situation, I take full responsibility for it. I think, and I will acknowledge certainly to Minnesotans and to the press here, I don’t think we’ve done a good enough job of communicating the hard work has been done,” Walz said.
He also said the “guardrails were taken off” by the federal government during the pandemic and “the guidance was to move the money.”
“Our goal was to make sure we were moving that money so that people ate, that they were housed, that they had vaccines, but it also opened up the door to relax the guardrails and to have fraud be committed,” he said.
While taking blame for the fraud scandal, Walz also said his attempt in 2021 to freeze funding for a Feeding Our Future-related organization was thwarted by the courts.
“I said, ‘Don’t pay them,’ and they said, ‘You can’t do that, you don’t have that authority.’ I said, ‘Do not pay them, let them sue me.’ They did and they won, and we paid them, and then they got caught and went to jail after the fact,” Walz said.
Walz also defended his COVID policies that critics branded as draconian, leading to multiple — and ultimately unsuccessful — lawsuits, including over mask mandates.
“I will not apologize for making Minnesota one of the safest states during COVID,” he said.
Walz recently announced new audits on up to 14 social programs in Minnesota that officials consider “high risk” for fraud. An official at the state Department of Human Services told WCCO the inspector general’s office is currently reviewing more than 1,300 reported cases of fraud in those programs, and has recovered some $50 million.
Walz: Trump’s targeting of Somalis is “racially motivated”
There are now upwards of 80 defendants in the case, many of whom are of Somali descent, though the group’s founder and alleged mastermind, Aimee Bock, is White. So far, 61 people have been convicted, with more investigations underway.
U.S. Census Bureau data show more than 107,000 people identified as Somali across Minnesota, with more than 80,000 living in the Twin Cities.
And in recent weeks, the Department of Homeland Security has sent dozens of federal agents to Minnesota, specifically the Twin Cities, as part of “Operation Metro Surge.” Mr. Trump also previously ordered all green card holders from Somalia and more than a dozen other countries be reexamined, adding that he would end the temporary protected status for Somalis in Minnesota.
On Friday, Walz said the president’s actions do “nothing to either address immigration” or “fraud.”
“The absolute recklessness of doing some of this and the targeting of a specific community, unconscionable,” Walz said. “It is very specifically aimed and very racially motivated towards a Somali community that matters greatly here.”
Walz also applauded comments made by GOP state Sen. Jim Abeler, who recently wrote a letter to Mr. Trump rebuking his statements about Minnesota’s Somali community.
“I’d like to acknowledge that just the basic decency, not a surprise to everybody in here has been, but Sen. Jim Abeler’s willingness to stand up, and note that it should be the simplest thing in the world,” Walz said. “When the president of the United States calls an entire group of people garbage and our state garbage and a hellhole, to just disavow that, you can still be very conservative.”
Newly released evidence also gives the clearest look yet at how the Feeding Our Future fraudsters blew through hundreds of millions of dollars meant to feed Minnesota children during the pandemic.
CBS News obtained dozens of trial exhibits, and they reveal luxury vacations, high-end cars and overseas transfers, all funded by taxpayer dollars meant to feed kids in need.
Photos and documents show fraudsters booking over-water villas in the Maldives, buying gold jewelry in Dubai and sending stacks of cash overseas.
Some defendants purchased lakefront property in Minnesota, first-class airline tickets and luxury cars.
U.S. Attorney Daniel N. Rosen said it’s more evidence that the main driver for the fraud was greed.
“Massive. Order of magnitude larger than just about any fraud that’s ever been prosecuted in the United States,” he said. “What we can say from that enormous volume of evidence is that the predominant motive of all of these individuals was their self-enrichment and their self-indulgence. And that’s where they spent the money overwhelmingly.”
There is also evidence of money going overseas, including to China.
A Wayne County woman pleaded guilty to stealing more than $100,000 in SNAP benefits while working as a state department case worker, according to the U.S. Attorney’s Office of Eastern District of North Carolina.
Shermeca McCrary, 46, faces a maximum of 10 years in prison and a $250,000 fine when she’s to be sentenced for theft of government property. She will also be ordered to pay a forfeiture money judgment of $102,000, the press release stated.
According to documents presented in court, between Jan. 2021 and Jan. 2024, McCrary used her position and privileges as a N.C. Department of Social Services case worker to access SNAP (Supplemental Nutrition Assistant Program) accounts of qualified people and converted $102,000 in those government funds for her own personal use.
“Safeguarding taxpayer-funded assistance programs is one of our office’s core responsibilities,” said U.S. Attorney Ellis Boyle. “When a government employee abuses her position of trust to steal benefits intended to help families in need, we will act to hold her accountable.”
47 Ronin director Carl Erik Rinsch has been found guilty of defrauding Netflix out of $11 million for a show that never materialized, while he used the money for lavish purchases, including a Ferrari, several Rolls-Royces and luxury bedding, the U.S. attorney’s office in Manhattan said.
He was also found guilty of five counts of engaging in monetary transactions in property derived from specified unlawful activity, each of which carries a maximum sentence of 10 years in prison.
The director began filming White Horse around 2017, which follows a scientist who creates a human-like species that turns against its creators, according to the indictment.
Story continues below advertisement
Prosecutors said Netflix had initially paid Rinsch about $44 million between 2018 and 2019 for an unfinished sci-fi series, and then sent another $11 million around March 6, 2020, after he said he needed additional funding to wrap up the production.
Instead of putting the money toward the show, Rinsch transferred the cash into a “number of different bank accounts before consolidating them in a personal brokerage account,” according to prosecutors.
Get breaking National news
For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen.
Rinsch then used those funds to make a number of personal and speculative purchases. He made a series of failed investments, losing around half of the $11 million in a couple of months, prosecutors said.
Netflix to buy Warner Bros. film & streaming business for US$72B
He then put the remaining funds into the cryptocurrency market and “on personal expenses and luxury items, including at least $1.7 million on credit card bills; at least $3.3 million on furniture, antiques, and mattresses; at least $387,000 on a Swiss watch; and at least $2.4 million on five Rolls Royces and a red Ferrari,” according to prosecutors.
Story continues below advertisement
“Carl Erik Rinsch took $11 million meant for a TV show and gambled it on speculative stock options and crypto transactions,” said U.S. Attorney Jay Clayton. “Today’s conviction shows that when someone steals from investors, we will follow the money and hold them accountable.”
“I fear that this could set a dangerous precedent for artists who become embroiled in contractual and creative disputes with their benefactors, in this case, one of the largest media companies in the world, finding themselves indicted by the federal government for fraud,” Zeman said.
Netflix said they had no comment when contacted by Global News about Rinsch’s conviction.
Rinsch was charged in March “for engaging in a scheme to defraud a subscription video on-demand streaming service” after failing to complete the production of White Horse.
“Carl Erik Rinsch orchestrated a scheme to steal millions by soliciting a large investment from a video streaming service, claiming that money would be used to finance a television show that he was creating. But that was fiction. Rinsch instead allegedly used the funds on personal expenses and investments, including highly speculative options and cryptocurrency trading,” acting U.S. Attorney Matthew Podolsky said in March.
Story continues below advertisement
“Rinsch’s arrest is a reminder that this Office and our partners at the FBI remain vigilant in the fight against fraud and will bring those who cheat and steal to justice,” Podolsky added.
A sentencing hearing for Rinsch has been set for April 17, 2026.
NEW YORK (AP) — Onetime cryptocurrency mogul Do Kwon was sentenced Thursday to 15 years in prison after a $40 billion crash revealed his crypto ecosystem to be a fraud. Victims said the 34-year-old financial technology whiz weaponized their trust to convince them that the investment — secretly propped up by cash infusions — was safe.
Kwon, a Stanford graduate known by some as “the cryptocurrency king,” apologized after listening as victims — one in court and others by telephone — described the scam’s toll: wiping out nest eggs, depleting charities and wrecking lives. One told the judge in a letter that he contemplated suicide after his father lost his retirement money in the scheme.
Judge Paul A. Engelmayer said at a daylong sentencing hearing in Manhattan federal court that the government’s recommendation of 12 years in prison was “unreasonably lenient” and that the defense’s request for five years was “utterly unthinkable and wildly unreasonable.” Kwon faced a maximum sentence of 25 years in prison.
“Your offense caused real people to lose $40 billion in real money, not some paper loss,” Engelmayer told Kwon, who sat at the defense table in a yellow jail suit. The judge called it “a fraud on an epic, generational scale” and said Kwon had an “almost mystical hold” on investors and caused incalculable “human wreckage.”
Stay up to date with the news and the best of AP by following our WhatsApp channel.
More than the combined losses in FTX and OneCoin cases
Kwon pleaded guilty in August to fraud charges stemming from the collapse of Terraform Labs, the Singapore-based firm he co-founded in 2018. The loss exceeded the combined losses from FTX founder Sam Bankman-Fried and OneCoin co-founder Karl Sebastian Greenwood’s frauds, prosecutors said. Engelmayer estimated there may have been a million victims.
Terraform Labs had touted its TerraUSD as a reliable “stablecoin” — a kind of currency typically pegged to stable assets to prevent drastic fluctuations in prices. But prosecutors say it was an illusion backed by outside cash infusions that came crumbling down after it plunged far below its $1 peg. The crash devastated investors in TerraUSD and its floating sister currency, Luna, triggering “a cascade of crises that swept through cryptocurrency markets.”
Kwon tried to rebuild Terraform Labs in Singapore before fleeing to the Balkans on a false passport, prosecutors said. He’s been locked up since his March 2023 arrest in Montenegro. He was credited for 17 months he spent in jail there before being extradited to the U.S.
Kwon agreed to forfeit over $19 million as part of his plea deal. His lawyers argued his conduct stemmed not from greed, but hubris and desperation. Engelmayer rejected his request to serve his sentence in his native South Korea, where he also faces prosecution and where his wife and 4-year-old daughter live.
“I have spent almost every waking moment of the last few years thinking of what I could have done different and what I can do now to make things right,” Kwon told Engelmayer. Hearing from victims, he said, was “harrowing and reminded me again of the great losses that I have caused.”
Victims say losses ruined their lives, harmed charities
One victim, speaking by telephone, said his wife divorced him, his sons had to skip college, and he had to move back to Croatia to live with his parents after TerraUSD’s crash evaporated his family’s life savings. Another said he has to “live with the guilt” of persuading his in-laws and hundreds of nonprofit organizations to invest.
Stanislav Trofimchuk said his family’s investment plummeted from $190,000 to $13,000 — “17 years of our life, gone” during what he described as “two weeks of sheer terror.”
Chauncey St. John, speaking in court, said some nonprofits he worked with lost more than $2 million and a church group lost about $900,000. He and his wife are saddled with debt and his in-laws have been forced to work well past their planned retirement, he said.
Nevertheless, St. John said, he forgives Kwon and “I pray to God to have mercy on his soul.”
A prosecutor read excerpts from some of more than 300 letters submitted by victims, including a person identified only by initials who lost nearly $11,400 while juggling bills and trying to complete college. Kwon had made Terra seem like a safe place to stash savings, the person said.
“To some that is just a number on a page, but to me it was years of effort,” the person wrote. “Watching it evaporate, literally overnight, was one of the most terrifying experiences of my life.”
“What happened was not an accident. It was not a market event. It was deception,” the person added, imploring the judge to “consider the human cost of this tragedy.”
Kwon created an “illusion of resilience while covering up systemic failure,” Assistant U.S. Attorney Sarah Mortazavi told Engelmayer. “This was fraud executed with arrogance, manipulation and total disregard for people.”
___
Associated Press reporter Anthony Izaguirre contributed to this report.
Luxury cars, private villas and overseas wire transfers: CBS News obtained dozens of files and photos that reveal how Minnesota fraudsters blew through hundreds of millions in taxpayer dollars as part of one of the biggest COVID-era fraud schemes.
The files document a spending spree in which defendants, many of Somali descent, took taxpayer money meant to feed hungry children and used it to buy cars, property and jewelry. Videos show them popping champagne at an opulent Maldives resort. In a text message, one defendant boasts: “You are gonna be the richest 25 year old InshaAllah [God willing].”
The documents feature exhibits from a recent federal trial, many of which are being made public by CBS News for the first time. The exhibits include:
A confirmation email for a stay in an overwater villa with a private pool at Radisson Blu Resort Maldives
Lakefront property in Minnesota
Receipts showing wire transfers to China and East Africa
First class tickets to Istanbul and Amsterdam
A 2021 Porsche Macan
Stacks of cash, texted between defendants
A lakefront home presented as evidence in a Minnesota fraud trial.
Court exhibit
At the sentencing of a defendant who used taxpayer funds for cars and the Maldives vacation, 24-year-old Abdimajid Mohamed Nur, U.S. District Judge Nancy E. Brasel admonished him, saying: “Where others saw a crisis and rushed to help, you saw money and rushed to steal.” He was sentenced to 10 years in prison and ordered to pay nearly $48 million in restitution for his role in the fraud scheme.
Nur is one of dozens who siphoned hundreds of millions in stolen taxpayer funds — with questions still swirling about where all the money went. The crime has drawn renewed attention in recent weeks: House Republicans last week launched a probe into Minnesota Democratic Gov. Tim Walz’s handling of the cases, and the Treasury Department said it will investigate whether money made its way to al Qaeda affiliate al Shabaab, which is based in Somalia.
“A lot of money has been transferred from the individuals who committed this fraud,” Treasury Secretary Scott Bessent said Sunday on “Face the Nation with Margaret Brennan.” Much of that money “has gone overseas, and we are tracking that both to the Middle East and to Somalia to see what the uses of that have been.” Multiple federal investigators told CBS News there is no evidence taxpayer dollars were funneled to al Shabaab, and prosecutors have yet to present any evidence linking any of the fraudsters to terrorism.
“The vast majority of the money that these folks made went to spending on luxury items for themselves,” said Andy Luger, the former U.S. Attorney who led the office which prosecuted Nur and other related frauds from 2022 until January. “There was never any evidence that this money went to fund terrorism nor was there any evidence that was the intent of the 70 people we indicted.”
One of the luxury cars presented as government evidence in a Minnesota fraud trial.
Court exhibit
A CBS News review of the files shows that defendants wired millions in stolen funds overseas, including to banks and companies in China. Officials said finding the ultimate recipients of money routed through China will be challenging because it can be an investigative black hole.
The defendants also transferred nearly $3 million to accounts in Kenya.
Abdiaziz Shafii Farah, 36, who was sentenced to 28 years in prison last month for his role in the scheme, made six separate wire transfers worth more than $1 million to banks in China between February and July 2021, according to records reviewed by CBS News.
This photo of a text exchange, presented in court, shows a box stuffed with cash and a message saying “$270,000 dollars.”
Court exhibit
In one text, Farah instructed someone to “please send $1000 to Mogadishu bakara,” an apparent reference to a one-time al Shabaab stronghold that was the site of the infamous 1993 “Black Hawk Down” incident in which 18 American servicemembers died.
Farah owned and operated Empire Cuisine and Market, a Minnesota restaurant that contracted with the nonprofit Feeding Our Future to cook and provide meals to children. Prosecutors say he and his co-defendants billed the state for $47 million, claiming to have served 18 million meals at more than 30 locations — but they didn’t distribute a single meal.
Hundreds of documents related to Farah’s case detail how he spent money on luxury cars, investment properties at home and overseas, plus first-class travel to exotic destinations, including Istanbul and the Emirates. The defendants used sea planes to travel to resorts in the Maldives, where in one video, Farah is seen popping champagne at a private pool villa in July 2021.
Screenshots of videos from a Maldives vacation, presented as government evidence in a Minnesota fraud trial.
Court exhibit
At Farah’s sentencing, a judge said his crimes were motivated by “pure, unmitigated greed.” Farah’s attorneys did not respond to CBS News’ request for comment, including to a question about whether any of the fraud proceeds were diverted to Al Shabaab.
Democratic Rep. Ilhan Omar said Sunday on “Face The Nation with Margaret Brennan”that any link between allegations of fraud by members of the Somali community and terrorism would be a “failure of the FBI.”
“If there was a linkage in the money that they have stolen going to terrorism, then that is a failure of the FBI and our court system in not figuring that out,” Omar said.
So far, federal prosecutors have convicted 61 people in the widening Minnesota fraud scandal. More investigations are ongoing.
Michelle Mildred is the proud entrepreneur behind the company Coloring Your Own. She’s not the owner of a company called “Flolyed Shop,” which is just one of the many sites posting fake ads using her face and voice.
The single mother says the ads are promoting products that look like hers, and sending customers to scam sites overseas.
“I oscillate between like, ‘I can hang on until this ends,’ and then, ‘I don’t know how much more I can take,’” Mildred said.
She says some customers are getting counterfeit products when ordered from scam sites, and some aren’t. If they are, they’re much lower quality.
“You can see the print is really glitchy,” she said while showing WCCO a knockoff one of her customers unknowingly purchased.
“Within 36 hours there were fraudulent videos on Amazon, and then Walmart, Temu,” she said.
Mildred individually reported the sponsored ads on TikTok, Facebook and Instagram.
“I did hire an intellectual property firm. They’ve taken down 175 listings, but I’ve reported over 750 and it takes them a while to get up and running,” she said.
It’s an effort costing her nearly $2,000 a month out-of-pocket, and endless back-and-forth conversations.
“I have to bring this to Facebook and be like, ‘Hey, turn off this revenue stream for you because it’s causing damage to my small business,’” she said.
Mildred is now taking steps to watermark her videos, website and urging you to watch out, too.
“I didn’t pay myself for four years,” she said. “I don’t know what the future looks like.”
Mildred says these are ways you can best protect yourself:
If you see something advertised on social media, click on the page itself to see who’s running the ad and their reviews.
Go to the website and see what other items are offered, and if they look AI-generated.
Search the website in Google and write “scam or fraud” and look at the products on Trust Pilot.
WCCO has reached out to Meta and TikTok for comment.
OKLAHOMA CITY — A federal grand jury indicted the leader of the Black Lives Matter movement in Oklahoma City over allegations that millions of dollars in grant funds were improperly spent on international trips, groceries and personal real estate, prosecutors announced Thursday.
Tashella Sheri Amore Dickerson, 52, was indicted earlier this month on 20 counts of wire fraud and five counts of money laundering, court records show.
Court records do not indicate the name of Dickerson’s attorney, and messages left Thursday at her mobile number and by email were not immediately returned.
According to the indictment, Dickerson served since at least 2016 as the executive director of Black Lives Matter OKC, which accepted charitable donations through its affiliation with the Arizona-based Alliance for Global Justice.
In total, BLM OKC raised more than $5.6 million dating back to 2020, largely from online donors and national bail funds that were supposed to be used to post bail for individuals arrested in connection with racial justice protests after the killing of George Floyd by a Minnesota police officer in 2020, the indictment alleges.
When those bail funds were returned to BLM OKC, the indictment alleges, Dickerson embezzled at least $3.15 million into her personal accounts and then used the money to pay for trips to Jamaica and the Dominican Republic, retail shopping, at least $50,000 in food and grocery deliveries for herself and her children, a personal vehicle, and six properties in Oklahoma City deeded to her or to a company she controlled.
The indictment also alleges she submitted false annual reports to the alliance stating that the funds were used only for tax-exempt purposes.
If convicted, Dickerson faces up to 20 years in federal prison and a fine of up to $250,000 for each count of wire fraud and 10 years in prison and fines for each count of money laundering.
In a live video posted on her Facebook page Thursday afternoon, Dickerson said she was not in custody and was “fine.”
“I cannot make an official comment about what transpired today,” she said. “I am home. I am safe. I have confidence in our team.”
“A lot of times when people come at you with these types of things … it’s evidence that you are doing the work,” she continued. “That is what I’m standing on.”
The Black Lives Matter movement first emerged in 2013 after the acquittal of George Zimmerman, the neighborhood watch volunteer who killed 17-year-old Trayvon Martin in Florida. But it was the 2014 death of Michael Brown at the hands of police in Ferguson, Missouri, that made the slogan “Black lives matter” a rallying cry for progressives and a favorite target of derision for conservatives.
The Associated Press reported in October that the Justice Department was investigating whether leaders in the Black Lives Matter movement defrauded donors who contributed tens of millions of dollars during racial justice protests in 2020. There was no immediate indication that Dickerson’s indictment is connected to that probe.
OKLAHOMA CITY (AP) — A federal grand jury indicted the leader of the Black Lives Matter movement in Oklahoma City over allegations that millions of dollars in grant funds were improperly spent on international trips, groceries and personal real estate, prosecutors announced Thursday.
Tashella Sheri Amore Dickerson, 52, was indicted earlier this month on 20 counts of wire fraud and five counts of money laundering, court records show.
Court records do not indicate the name of Dickerson’s attorney, and messages left Thursday at her mobile number and by email were not immediately returned.
According to the indictment, Dickerson served since at least 2016 as the executive director of Black Lives Matter OKC, which accepted charitable donations through its affiliation with the Arizona-based Alliance for Global Justice.
In total, BLM OKC raised more than $5.6 million dating back to 2020, largely from online donors and national bail funds that were supposed to be used to post bail for individuals arrested in connection with racial justice protests after the killing of George Floyd by a Minnesota police officer in 2020, the indictment alleges.
When those bail funds were returned to BLM OKC, the indictment alleges, Dickerson embezzled at least $3.15 million into her personal accounts and then used the money to pay for trips to Jamaica and the Dominican Republic, retail shopping, at least $50,000 in food and grocery deliveries for herself and her children, a personal vehicle, and six properties in Oklahoma City deeded to her or to a company she controlled.
The indictment also alleges she submitted false annual reports to the alliance stating that the funds were used only for tax-exempt purposes.
If convicted, Dickerson faces up to 20 years in federal prison and a fine of up to $250,000 for each count of wire fraud and 10 years in prison and fines for each count of money laundering.
In a live video posted on her Facebook page Thursday afternoon, Dickerson said she was not in custody and was “fine.”
“I cannot make an official comment about what transpired today,” she said. “I am home. I am safe. I have confidence in our team.”
“A lot of times when people come at you with these types of things … it’s evidence that you are doing the work,” she continued. “That is what I’m standing on.”
The Black Lives Matter movement first emerged in 2013 after the acquittal of George Zimmerman, the neighborhood watch volunteer who killed 17-year-old Trayvon Martin in Florida. But it was the 2014 death of Michael Brown at the hands of police in Ferguson, Missouri, that made the slogan “Black lives matter” a rallying cry for progressives and a favorite target of derision for conservatives.
The Associated Press reported in October that the Justice Department was investigating whether leaders in the Black Lives Matter movement defrauded donors who contributed tens of millions of dollars during racial justice protests in 2020. There was no immediate indication that Dickerson’s indictment is connected to that probe.
Copyright 2025 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
