$$ from Chinese fraudsters, Newport defense firm, Winooski pornster, Rutland embezzler goes to victims 

By Mike Donoghue, Vermont News First

BURLINGTON — The U.S. Attorney’s Office in Vermont collected nearly $4.5 million in criminal and civil actions during the last Fiscal Year.

First Assistant U.S. Attorney Jonathan A. Ophardt said Monday that out of the $4,437,008 collected, $2,714,296 came from civil actions undertaken by the office.

Another $1,722,712 was collected through criminal enforcements, he said.

Federal officials in Vermont worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $73,705 in criminal cases pursued jointly by these offices, Ophardt said.

The U.S. Attorneys’ Offices, along with the Department’s litigating divisions, are responsible for enforcing and collecting civil and criminal debts owed to the country and criminal debts owed to federal crime victims.

The law requires defendants to pay restitution to victims of certain federal crimes who have suffered a physical injury or financial loss. While restitution is paid to the victim, criminal fines and felony assessments are paid to the Department’s Crime Victims Fund, which distributes the funds collected to federal and state victim compensation and victim assistance programs.

U.S. Attorneys’ Offices also use civil and criminal forfeiture tools to seize and forfeit monies and property that were proceeds of or facilitated serious criminal conduct. The U.S. Attorney’s Office for Vermont, working with partner agencies and divisions, collected $7,720,856 in asset forfeiture actions in FY 2025. Forfeited assets are deposited into the Department of Justice Assets Forfeiture Fund and used to restore funds to crime victims and for a variety of law enforcement purposes.

Among the notable Vermont forfeitures and collections was over $6.9 million of funds and property that were the proceeds of a cryptocurrency confidence scam impacting over 100 victims across the United States.

In that fraud case, the FBI in Vermont and the U.S. Attorney’s Office in Burlington received over $8.1 million of forfeited funds and property related to the scam in 2024 and 2025.  The FBI and the Vermont U.S. Attorney’s Office worked to identify assets purchased with victim money, ultimately forfeiting a residence in Frisco, Texas and $6.9 million of cryptocurrency, Ophardt said.

A federal grand jury in Vermont indicted Feng Chen, 36, and Tianqiong Xu, 36, recently of Frisco, Texas, on June 27, 2024 on six felony charges, including four counts of wire fraud, records show.  They are considered international federal fugitives from the United States, Ophardt said. They also are wanted for money laundering and creating a fraud, records show.

It appears Chen, Xu and their two children received new Chinese passports on Jan. 8, 2024 from the Chinese Consulate in Houston, TX, according to FBI Special Agent Justin Woodford in Vermont.  That same day, Chen purchased tickets for his family to travel to China and they all are believed to have left the United States on Jan. 11, 2024, Woodford said.

Ophardt said the Vermont U.S. Attorney’s Office is currently working to return the seized funds to the victims of the scheme.

The Vermont office also collected almost $2.5 million dealing with the sale of false military or protective gear.

There was  $1,994,000 collected from Galvion, Ltd., in Newport in connection with its 2024 settlement of False Claims Act allegations for the knowing sale of non-conforming parts to the U.S. Department of Defense.   The company, which had three facilities in Vermont, was formerly known as Revision Military.

Another $426,186 was collected from Revision Military, Ltd., in connection with its 2024 settlement of False Claims Act allegations for selling eyewear products that it falsely represented were wholly sourced in the United States.

Other significant collections included:

• $226,409.95 of restitution, fines, and assessments were collected from Matthew Ernest, 51, of Winooski in 2025.
Ernest was convicted of possessing child sexual abuse materials in 2024.  Federal Judge Mary Kay Lanthier in Rutland ordered Ernest on Jan. 16, 2025 to serve 8 months in prison, pay $104,000.00 of restitution to 14 victims of his offense, a $100,000.00 fine plus interest, and $22,100.00 of special assessments.

• $82,500.00 was collected from Madison Carrig in 2025 for embezzling from three Rutland area car dealerships that employed her. In 2024, Carrig was convicted of access device fraud. During Carrig’s sentencing, Judge Christina Reiss ordered her to pay $141,000 in restitution, serve four months in prison, followed by 3 years of supervised release.

• $321,718.00 of restitution and fines were collected from James Mailhiot Jr., 56, of Rutland.  The roofing contractor was convicted of federal income tax evasion in 2024 stemming from him understating the income he earned from his roofing business. He paid the $296,718 of understated back taxes for 2022 and a $25,000 fine in 2025.

• $201,400.00 was collected on behalf of the Department of Housing and Urban Development to resolve debts owed to the government.

Ophardt praised the U.S. Attorney’s Office’s Financial Litigation Unit and Asset Forfeiture personnel for diligent work on behalf of crime victims and the public.