Monday, April 27, 2020

Research Scientist Sentenced for Making False Statements in Connection with NIH Grants

ALBANY, NEW YORK – Gerwin Schalk, age 48, of Albany, was sentenced today to 1 year of probation for making false statements on conflict of interest certifications he submitted in connection with National Institutes of Health (NIH) grants.

The announcement was made by United States Attorney Grant C. Jaquith; New York State Inspector General Letizia Tagliafierro; and Scott J. Lampert, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General’s New York Region (DHHS-OIG).

United States District Judge Mae A. D’Agostino also ordered Schalk to pay $70,000 in restitution and perform 50 hours of community service.

Schalk was a research scientist employed by the New York State Department of Health (DOH) in Albany, and served as deputy director of the National Center for Adaptive Neurotechnologies.

In connection with applying for and receiving federal research grants, Schalk was required to disclose any financial conflicts of interests to DOH and its affiliate, Health Research, Inc. (“HRI”), or certify that no conflicts existed.

In pleading guilty, Schalk admitted that he knowingly and repeatedly lied about, and failed to disclose, payments he was receiving from a company whose products Schalk regularly purchased and used in connection with his research.  Schalk admitted that the company paid him at least $70,000, from July 2013 to April 10, 2019, and that he signed at least 15 conflict of interest forms during that time, never once disclosing a payment from the company as he was required to do.

The company paying Schalk also billed HRI approximately $260,000 for sales of neurotechnology equipment to HRI, from 2012 through January 23, 2018, and was principally paid from federal grant money.

Schalk resigned from state employment as part of his plea agreement.

This case was investigated by the New York State Inspector General’s Office and the DHHS Office of Inspector General, and was prosecuted by Assistant U.S. Attorney Michael Barnett.

Saturday, April 25, 2020

COVID-19 Fraud Domain Seized from Seller Who Attempted to Sell It Using Bitcoin

Site Owner Advertised the Domain Name on a Hackers Forum and Sought Payment in Bitcoin

            WASHINGTON –The United States Attorney’s Office for the District of Columbia obtained a warrant today authorizing seizure of  The enforcement action against the owner of a fraudulent website follows Attorney General William Barr’s recent direction for the Department to prioritize the detection, investigation, and prosecution of illegal conduct related to the pandemic.

            The seizure warrant alleges that the owner of the domain name,, posted it for sale on a hackers forum. The post appeared the day after the President declared a national emergency due to the COVID-19 pandemic.  The seller stated on the forum that this domain would be an effective way to sell “high markup in demand products.”  The seller exponentially marked up the price of the domain. The seller asked for the payment to be made via bitcoin.

            The warrant further alleges that the seller engaged in conversations with an undercover agent from Homeland Security Investigations about the sale of the domain.  The seller stated that it was “genius” to sell “fake testing kits” using this domain.  The seller further stated that the seller “wanted to do that but I couldn’t get enough cash to bulk buy them from Alibaba [a Chinese e-commerce site].”  The seller directed the undercover agent on how to set up a new website on the domain using a foreign-based service, so as to prevent U.S. authorities from being able to shut it down in the future.

            “We will not tolerate exploitation of this national emergency for personal gain,” said U.S. Attorney Timothy J. Shea.  “This Office will not allow fraudsters to use anonymous online spaces and cryptocurrency to hide their harmful activities and prey on victims.”

            “Sadly, criminals are using the current pandemic as an opportunity to generate proceeds while so many Americans are suffering,” said William S. Walker, acting HSI Philadelphia Special Agent in Charge. “Homeland Security Investigations and our partners will continue to aggressively pursue those who attempt to illegally capitalize on this crisis through illicit money-making schemes.”

            The charges in the warrant are merely allegations, and civil forfeiture proceedings will commence in which any interested party may make a claim to ownership of the seized property.

            The investigation was handled by Homeland Security Investigations (Philadelphia).

            The case is being handled by Assistant U.S. Attorney Zia M. Faruqui, Paralegal Specialist Brian Rickers, and Legal Assistant Jessica McCormick of the U.S. Attorney’s Office for the District of Columbia.

Friday, April 24, 2020

Romanian Man Sentenced to Over Three Years in Federal Prison for Card Skimming Offense

Spent Over an Hour Withdrawing Money from an ATM

A Romanian man who used more than fifty counterfeit debit or credit cards containing “skimmed” account information at an ATM in Hiawatha, Iowa, was sentenced on April 21, 2020, to more than three years in federal prison.

Romica Martuica, age 21, from Romania, received the prison term after a November 5, 2019 guilty plea to illegal transactions with an access device and aggravated identity theft.

Information in a plea agreement and at sentencing showed that Martuica entered the United States illegally in 2016.  On February 16, 2019, Hiawatha police officers arrested him at an ATM.  At the time of his arrest, Martuica and two individuals with him had more than ninety counterfeit cards in their possession.  These cards contained account information that had been acquired by card “skimmers,” which are devices placed on ATMs or other point-of-sale machines to capture credit or debit card information.  Martuica made or attempted over seventy transactions at the ATM using these cards and successfully withdrew $8,685 before the police arrived.

Martuica was sentenced in Cedar Rapids by United States District Court Judge C.J. Williams.  Martuica was sentenced to 42 months’ imprisonment.  He was ordered to make $8,685 in restitution to victims of the offense.  He must also serve a three-year term of supervised release after the prison term.  There is no parole in the federal system.

Martuica is being held in the United States Marshal’s custody until he can be transported to a federal prison.

The case was prosecuted by Assistant United States Attorney Kyndra Lundquist and investigated by Homeland Security Investigations and the Hiawatha Police Department.