District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Two Senior Managers in Italy Charged with Conspiracy to Cheat U.S. Emissions Tests and Defraud U.S. ConsumersRead the Press Release
An indictment was unsealed today in the Eastern District of Michigan charging two Italian nationals, along with a previously charged co-conspirator, for their alleged role in a conspiracy to defraud U.S. regulators and customers by making false and misleading statements about the emissions controls and fuel efficiency of more than 100,000 diesel vehicles sold in the United States by FCA US LLC.
According to court documents, Sergio Pasini, 43, of Ferrera, Italy, and Gianluca Sabbioni, 55, of Sala Bolognese, Italy, two senior diesel managers at Fiat Chrysler Automobiles Italy S.p.A. (FCA Italy), a wholly owned subsidiary of Stellantis N.V. — along with a previously charged co-conspirator, Emanuele Palma, 42, of Bloomfield Hills, Michigan — were responsible for developing and calibrating the 3.0-liter diesel engine used in certain FCA diesel vehicles. Their responsibilities included calibrating several software features in the vehicles’ emissions control systems to meet emissions standards for nitrogen oxides (NOx), a family of poisonous gases that are formed when diesel fuels are burned at high temperatures, while also achieving best-in-class fuel efficiency targets set by FCA US LLC.
The superseding indictment alleges that Palma, Pasini, Sabbioni, and their co-conspirators, purposely calibrated the emissions control functions to produce lower NOx emissions under conditions when the subject vehicles would be undergoing testing on the federal test procedures or driving “cycles,” and higher NOx emissions under conditions when the subject vehicles would be driven in the real world. Palma, Pasini, Sabbioni, and their co-conspirators allegedly referred to the manner in which they manipulated one method of emissions control as “cycle beating.” As alleged, by calibrating the emissions control functions on the subject vehicles to produce lower NOx emissions while the vehicles were on the driving “cycle,” and higher NOx emissions when the vehicles were off the driving “cycle,” or “off cycle,” the three defendants purposely misled FCA’s regulators by making it appear that the subject vehicles were producing less NOx emissions than they were, i.e., in real world driving conditions. Palma, Pasini, and Sabbioni also allegedly made and caused others to make false and misleading representations to FCA’s regulators about the emissions control functions of the subject vehicles in order to ensure that FCA obtained regulatory approval to sell the subject vehicles in the United States.
The superseding indictment also alleges that Palma, Pasini, and Sabbioni employed “cycle beating” to achieve best-in-class fuel efficiency and make the subject vehicles more attractive to FCA’s potential customers, i.e., by increasing fuel economy and reducing the frequency of a required emissions control system service interval. The superseding indictment alleges that the co-conspirators understood their “cycle beating” calibration would harm consumers who purchased the vehicle, leading them to acknowledge that “there will always be the unlucky customer who will have the misfortune of using our loser cal[ibration].”
Pasini and Sabbioni are each charged with one count of conspiracy to defraud the United States and to violate the Clean Air Act, one count of conspiracy to commit wire fraud, and six counts of violating the Clean Air Act. If convicted, Pasini and Sabbioni each face up to five years in prison on the conspiracy count to defraud the United States and to violate the Clean Air Act, up to 20 years in prison on the conspiracy count to commit wire fraud, and up to two years in prison for each count of violating the Clean Air Act. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Palma is charged with one count of conspiracy to defraud the United States and to violate the Clean Air Act, one count of conspiracy to commit wire fraud, six counts of violating the Clean Air Act, and two counts of making false statements to representatives of the FBI and the U.S. Environmental Protection Agency’s Criminal Investigation Division (EPA-CID). If convicted, Palma faces up to five years in prison on the conspiracy count to defraud the United States and to violate the Clean Air Act, up to 20 years in prison on the conspiracy count to commit wire fraud, up to two years in prison for each count of violating the Clean Air Act, and up to five years in prison for each count of making false statements. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Principal Deputy Assistant Attorney General Kevin O. Driscoll of the Justice Department’s Criminal Division; Acting U.S. Attorney Saima S. Mohsin of the U.S Attorney’s Office for the Eastern District of Michigan; Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division (ENRD); Special Agent in Charge Timothy Waters of the FBI’s Detroit Field Office; and Special Agent in Charge Lance Ehrig of the EPA-CID’s West-Central Region made the announcement.
Principal Assistant Chief Henry P. Van Dyck and Trial Attorneys Kyle W. Maurer and Jason M. Covert of the Criminal Division’s Fraud Section, ENRD Senior Trial Attorney Todd W. Gleason, and Assistant U.S. Attorneys John K. Neal and Timothy J. Wyse for the Eastern District of Michigan are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Statement of Attorney General Merrick B. Garland on the Verdict in the Chauvin TrialRead the Press Release
U.S. Attorney General Merrick B. Garland's statement following the verdict in the state of Minnesota's trial of Derek Chauvin:
"The jury in the state trial of Derek Chauvin has fulfilled its civic duty and rendered a verdict convicting him on all counts. While the state’s prosecution was successful, I know that nothing can fill the void that the loved ones of George Floyd have felt since his death. The Justice Department has previously announced a federal civil rights investigation into the death of George Floyd. This investigation is ongoing."
Virginia Return Preparer Pleads Guilty to Evading Her Own TaxesRead the Press Release
A Richmond, Virginia, tax return preparer pleaded guilty today to tax evasion.
According to court documents and statements made in court, Willette J. Holland owned Tax Professionals, a return preparation firm located in Richmond, Virginia. In August 2014, the IRS contacted Holland because she did not file personal tax returns for the years 2010 through 2013. Holland then presented false returns to an IRS Revenue Agent for those years, which substantially underreported her gross receipts and taxes due. Holland additionally attempted to evade taxes for 2014 by depositing income into a bank account held in the name of a nominee, thereby concealing her earnings from the IRS. In 2015 and 2016, Holland again did not file tax returns despite being required to do so by law.
Holland is scheduled to be sentenced on July 15 and faces a maximum penalty of five years in prison. She also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Raj Parekh for the Eastern District of Virginia made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorney Francine Davis and Assistant Chief Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Kaitlin Cooke for the Eastern District of Virginia are prosecuting the case.
Stone Canyon Required to Divest US Salt to Acquire Morton SaltRead the Press Release
The Department of Justice announced today that Stone Canyon Industry Holdings LLC (Stone Canyon) and its portfolio company SCIH Salt Holdings Inc. (SCIH), which was previously named Kissner Group Holdings LP, will divest their entire evaporated salt business in order to proceed with their proposed acquisition of Morton Salt Inc. (Morton), among other assets. The department said that without the divestiture, the proposed acquisition would substantially lessen competition in the sale of several types of evaporated salt, including round-can table salt, pharmaceutical-grade salt, and bulk evaporated salt.
The Justice Department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the complaint.
“Americans use and depend on evaporated salt products every day for nutritional, medical and cleaning purposes,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department’s Antitrust Division. “Without the divestiture, this merger likely would have led to higher prices and lower quality for consumers throughout the United States. Today’s settlement will ensure that consumers, patients, and businesses continue to benefit from competition for these critical products.”
According to the complaint, Morton and SCIH’s wholly-owned subsidiary, US Salt LLC (US Salt), are two of only three producers that manufacture and distribute round-can table salt in the United States. Morton is the largest branded supplier of this pantry staple in the United States, and US Salt is the largest supplier of private-label round-can table salt in the United States. The complaint also alleges that Morton and US Salt are the only firms producing pharmaceutical-grade salt in the United States and Canada. Pharmaceutical-grade salt is a critical ingredient for dialysis treatment, intravenous saline solution, and other medical products that must meet stringent purity standards.
The complaint further alleges that Morton and US Salt are two of only three major suppliers that manufacture and distribute bulk evaporated salt in the northeastern United States. Bulk evaporated salt is used in various industries including food processing and chemical manufacturing to produce essential everyday items such as processed foods, disinfectants, soap, and bleach. The complaint alleges that the merger would eliminate competition between Morton and US Salt for all of these evaporated salt products, likely leading to higher prices, reduced supply availability, lower quality products, and longer delivery times.
To eliminate the potential for competitive harm threatened by this acquisition, Stone Canyon and SCIH have agreed to divest their US Salt subsidiary, including their refinery in Watkins Glen, New York, as well as other all other assets used in the production of its evaporated salt products. US Salt has been in operation for over 100 years and is operated as a largely independent entity within Stone Canyon and SCIH. The proposed settlement will fully preserve the competitive landscape that exists in these evaporated salt markets today, as US Salt constitutes Stone Canyon’s and SCIH’s entire business that competes in the sale of evaporated salt products, including round-can table salt, pharmaceutical-grade salt, and bulk evaporated salt.
Stone Canyon is an industrial holding company incorporated in Delaware and headquartered in Los Angeles, California. Stone Canyon acquired Kissner Group Holdings LP, which it later renamed SCIH, in April 2020.
SCIH is a Delaware corporation headquartered in Overland Park, Kansas, and had 2020 revenues of approximately $1 billion. US Salt is a subsidiary of SCIH with approximately $95 million in revenues in 2020.
K+S Aktiengesellschaft (K+S AG) is a chemical company headquartered in Kassel, Germany. In 2020, K+S AG reported revenues of approximately €3.7 billion. K+S AG’s Operating Unit Salt Americas, is a bundle of several subsidiaries that includes Morton, K+S Windsor Salt, and Sociedad Punta de Lobos.
Morton is a K+S AG subsidiary and a Delaware corporation headquartered in Chicago, Illinois. Morton generated approximately $1 billion in revenue in 2020.
As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Katrina Rouse, Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the final judgment upon a finding that it serves the public interest.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
Second Individual Charged with Fixing Wages for Health Care Workers and Obstructing FTC InvestigationRead the Press Release
A federal grand jury in the Eastern District of Texas returned a superseding indictment charging two Texas men with conspiring to fix prices by lowering rates paid to certain health care workers and then conspiring and endeavoring to obstruct a Federal Trade Commission (FTC) investigation of their conduct.
According to court documents, Neeraj Jindal and John Rodgers violated the Sherman Act by agreeing with co-conspirators in 2017 to pay lower rates to certain physical therapists and physical therapist assistants in north Texas, including the Dallas-Fort Worth metropolitan area. At the time, Jindal was the owner and Rodgers was a clinical director of a Texas-based therapist staffing company providing in-home physical therapy services. The superseding indictment alleges their company paid lower rates for several months after entering into the agreement.
Additionally, Jindal and Rodgers are charged with conspiring to obstruct and make false statements in proceedings before the FTC and endeavoring to obstruct those proceedings. According to the superseding indictment, Jindal and Rodgers conspired and then made false and misleading statements and withheld and concealed information during the FTC’s investigation to determine whether their company or other therapist staffing companies violated the Federal Trade Commission Act. The superseding indictment follows an indictment against Jindal returned in December 2020.
“The charges announced today underscore the Antitrust Division’s ongoing commitment to enforcing antitrust laws, particularly when the victims are American workers who deserve the benefits of competitive wages, mobility, and competition among employers for their services,” said Acting Assistant Attorney General Richard A. Powers of the Justice Department's Antitrust Division. “This prosecution also demonstrates how seriously we take our obligation to protect the integrity of investigations into anticompetitive conduct, whether those investigations are conducted by the Department of Justice or another agency.”
“Wage-fixing agreements are, at their core, an attempt to artificially rig the labor market to depress wages and deprive workers of competitive salaries and benefits,” said Acting U.S. Attorney Nicholas J. Ganjei for the Eastern District of Texas. “The present charges demonstrate that the Department of Justice and its partner agencies will not stand by and allow the exploitation of American workers and the manipulation of the market.”
“Today’s charges should serve as a warning to those who choose to engage in corrupt practices at the expense of hard-working Americans,” said Assistant Director Calvin Shivers of the FBI's Criminal Investigative Division. “The FBI is committed to working closely with our law enforcement partners to uncover corruption and bring the individuals responsible to justice.”
A violation of the Sherman Act carries a statutory maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $1 million. The charged obstruction offenses carry a statutory maximum penalty of five years imprisonment and a $250,000 fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Antitrust Division’s Washington Criminal I Section is prosecuting the case, which was investigated with the assistance of the Antitrust Division’s Washington Criminal II Section and the FBI’s International Corruption Unit.
The charges in this case were brought in connection with the Antitrust Division’s ongoing commitment to prosecute anticompetitive conduct affecting American labor markets. Anyone with information on market allocation or price fixing by employers should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Reaches Settlement with Arizona School District to Protect English Learner StudentsRead the Press Release
Today the Justice Department announced a settlement agreement with the Coolidge Unified School District to resolve the department’s investigation into the school district’s programs for its English learner students. The department’s investigation of the district found system-wide failures to provide the instruction, resources and teacher training that students need to master English, leaving them to struggle academically year after year. The department conducted its investigation under the Equal Educational Opportunities Act of 1974.
“Every child deserves an equal opportunity to excel in school. Where there are language barriers, schools have an obligation to do more to put students on an equal footing,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division. “The Justice Department will continue to enforce the law to make sure students who are learning English get the help they need to truly thrive in the classroom. We commend the district for entering into this agreement and look forward to working together so that the district’s English learner students can realize their full potential.”
Under the settlement agreement, the district will increase language instruction for English learner students so they can become fluent in English and understand the coursework in all of their academic subjects. The agreement also requires the district to provide robust teacher training, obtain the special materials and curricula that English learner students need to succeed academically, and actively evaluate students’ progress. The Justice Department will monitor the district’s implementation of the settlement for three full school years.
The enforcement of the Equal Educational Opportunities Act of 1974 is a top priority of the Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt, and additional information about the work of the Educational Opportunities Section is available at https://www.justice.gov/crt/educational-opportunities-section. Members of the public may report possible civil rights violations at https://civilrights.justice.gov/report/.
El Departamento de Justicia llega a un acuerdo con un distrito escolar de Arizona para proteger a los estudiantes que están aprendiendo inglésRead the Press Release
WASHINGTON, D.C. – El Departamento de Justicia anunció hoy que ha llegado a un acuerdo conciliatorio con el Distrito Escolar Unificado de Coolidge, el cual resuelve la investigación del Departamento de los programas del distrito escolar para sus estudiantes que están aprendiendo inglés. La investigación que el Departamento realizó del distrito halló fracasos por todo el sistema a la hora de proporcionar la enseñanza, los recursos y la capacitación de maestros que los estudiantes necesitan para dominar el inglés, lo que les dejó en dificultades académicas un año tras otro. El Departamento llevó a cabo su investigación en virtud de la Ley de Igualdad de Oportunidades Educativas («EEOA», por sus siglas en inglés) de 1974.
«Cada niño se merece la igualdad de oportunidades para tener éxito en la escuela. Cuando existen barreras lingüísticas, las escuelas tienen la obligación de esforzarse más por fomentar la igualdad de condiciones para los estudiantes», dijo Pamela S. Karlan, la Fiscal General Auxiliar Adjunta Principal de la División de Derechos Civiles del Departamento de Justicia. «El Departamento de Justicia seguirá haciendo cumplir la ley para garantizar que los estudiantes que están aprendiendo inglés consigan la ayuda que necesitan para poder florecer en el aula. Felicitamos al distrito por haber firmado este acuerdo y esperamos colaborar con ellos para que los estudiantes del distrito que están aprendiendo inglés puedan realizar su potencial completo».
Conforme el acuerdo conciliatorio, el distrito expandirá la enseñanza lingüística para estudiantes que están aprendiendo inglés para que puedan dominar el inglés y comprender las tareas escolares en cada una de sus asignaturas académicas. Asimismo, el acuerdo requiere que el distrito capacite plenamente a sus maestros, que obtenga los materiales y currículos especiales que estudiantes que están aprendiendo inglés necesitan para su éxito académico y que evalúe activamente el progreso de los estudiantes. Por otra parte, el Departamento de Justicia supervisará la implementación del acuerdo por parte del distrito durante tres años escolares.
La aplicación de la EEOA es una de las prioridades principales de la División de Derechos Civiles del Departamento de Justicia. Para más información sobre la División de Derechos Civiles, puede visitar su sitio web en www.justice.gov/crt. Para más información sobre la labor de la Sección de Oportunidades Educativas, vaya a https://www.justice.gov/crt/educational-opportunities-section. Miembros del público también pueden informar de posibles vulneraciones de derechos civiles en https://civilrights.justice.gov/report/.
Tax Attorney Indicted for Facilitating Tax FraudRead the Press Release
A federal grand jury in San Francisco returned an indictment today charging a Houston-based tax attorney of conspiring with the Chairman and Chief Executive Officer of a private equity firm to defraud the IRS. The grand jury further charged him with three counts of aiding and assisting in the preparation of the CEO’s false tax returns for the 2012 to 2014 tax years.
According to the indictment, from 1999 to 2014, Carlos E. Kepke helped Robert F. Smith create and maintain offshore entities that were used to conceal from the IRS approximately $225,000,000 of capital gains income that Smith had earned. In approximately March 2000, Kepke allegedly created a Nevisian limited liability company (Flash Holdings) and a Belizean trust (Excelsior Trust) to serve as the tax evasion vehicles. When Smith earned capital gains income from his private equity funds, a portion was allegedly deposited into Flash’s bank accounts in the British Virgin Islands and Switzerland. As alleged, Smith was able to hide this income because Excelsior, and not Smith, was the nominal owner of Flash. Smith then allegedly failed to timely and fully report his income to the IRS. Kepke allegedly assisted in the preparation of Smith’s false 2012 to 2014 returns.
For his services, Smith has allegedly paid Kepke nearly $1,000,000 since 2007. These fees, as charged, included an annual payment for Kepke to purge or “securitize” his records related to Smith, Excelsior, and Flash.
Kepke is scheduled for his initial court appearance on April 22 before U.S. Magistrate Judge Corley of the U.S. District Court for the Northern District of California. If convicted, Kepke faces up to five years in prison on the conspiracy count and three years in prison for each count of assisting in the preparation of a false return. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division; Acting U.S. Attorney Stephanie M. Hinds of the U.S. Attorney’s Office in the Northern District of California; and Jim Lee, Chief of the IRS Criminal Investigations (IRS-CI), made the announcement.
IRS-CI are investigating the case.
Senior Litigation Counsel Corey Smith, Assistant U.S. Attorney Michael G. Pitman, and Trial Attorneys Lee Langston and Christopher Magnani are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Maine Man Charged with Hate Crime Offenses for Arson of Predominantly Black ChurchRead the Press Release
A Maine man was charged today in federal court in Springfield, Massachusetts, in connection with setting the Dec. 28, 2020, fire that destroyed the Martin Luther King Jr. Community Presbyterian Church in Springfield.
Dushko Vulchev, 44, of Houlton, was charged by criminal complaint with four counts of damage to religious property involving fire and one count of use of fire to commit a federal felony. Vulchev is currently in state custody and will make an initial appearance in federal court in Springfield at a later date.
The Martin Luther King Jr. Community Presbyterian Church in Springfield has a primarily Black congregation, and the church is named in honor of civil rights leader Dr. Martin Luther King Jr. According to court documents, an intentionally set fire caused extensive damage to the church in the early morning hours of Dec. 28, 2020. In court documents, the government alleges that Vulchev set the Dec. 28 fire. The government also alleges that Vulchev is also responsible for several other fires set on church property and for a series of tire slashings on church property and in the surrounding area. The additional fires alleged include a fire at the backdoor of the church on Dec. 13, 2020, and two additional fires near the rear door of the church on Dec. 15, 2020. The investigation, including the review of security videos and location data from Vulchev’s mobile telephone, showed Vulchev at or near the scene of many of the alleged crimes, including the Dec. 28, 2020, fire that severely damaged the church.
In addition, according to charging documents, a subsequent search of Vulchev’s vehicle and electronic devices revealed messages from Vulchev demonstrating Vulchev’s hatred of Black people, including recent messages from Vulchev in December 2020 calling to “eliminate all N****s.” In addition, the devices contained images demonstrating Vulchev’s racial animus toward Black people.
The charge of damage to religious property involving fire provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of up to $250,000. The charge of use of fire to commit a federal felony provides for a sentence of at least 10 years in prison, in addition to any sentence received for the other charged crimes. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division; Acting U.S Attorney Nathaniel R. Mendell of the District of Massachusetts; Special Agent in Charge Joseph R. Bonavolonta of the FBI Boston Field Division; Special Agent in Charge Kelly Brady of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF)'s Boston Field Division; and Massachusetts State Police Fire Marshal Peter Ostroskey made the announcement.
Assistance was provided by Hampden District Attorney’s Office; Berkshire District Attorney’s Office; Springfield Police Department; Springfield Fire Department; Pittsfield Police Department; American International College Police Department; Houlton (Maine) Police Department; and Newington (Conn.) Police Department.
The case is being prosecuted by Assistant U.S. Attorney Deepika Bains Shukla, Chief of Mendell’s Springfield Branch Office, and Trial Attorneys Timothy Visser and Kyle Boynton of the Justice Department’s Civil Rights Division.
The details contained in the criminal complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Justice Department and FTC Announce Action to Stop Deceptive Marketing of Purported COVID-19 TreatmentsRead the Press Release
The Department of Justice, together with the Federal Trade Commission (FTC), today announced a civil complaint against defendants Eric Anthony Nepute and Quickwork LLC, doing business as Wellness Warrior, in the first enforcement action alleging violations of the COVID-19 Consumer Protection Act.
According to a complaint filed in the U.S. District Court for the Eastern District of Missouri, the defendants advertised that their vitamin D and zinc nutritional supplements could prevent or treat COVID-19 without competent or reliable scientific evidence to support their claims. Further, the defendants allegedly advertised without scientific support that their supplements were equally or more effective therapies for COVID-19 than the currently available vaccines. The complaint seeks civil penalties and injunctive relief to stop the defendants from continuing to make deceptive advertising claims.
The COVID-19 Consumer Protection Act, passed by Congress in December 2020, prohibits deceptive acts or practices associated with the treatment, cure, prevention, mitigation or diagnosis of COVID-19. Persons who violate the COVID-19 Consumer Protection Act may be subject to civil penalties, injunctive relief and other remedies available under the FTC Act. The complaint also alleges violations of the FTC Act, which prohibit unfair and deceptive conduct, and false advertising, respectively.
“The Justice Department is committed to preventing the unlawful marketing of unproven COVID-19 treatments,” said Acting Assistant Attorney General Brian M. Boynton of the Department of Justice’s Civil Division. “Deceptive marketing of unproven products discourages consumers from following health and safety guidelines provided by public health officials. The unlawful spreading of COVID-19 misinformation to sell a product will not be tolerated.”
“The defendants’ claims that their products can stand in for approved COVID-19 vaccines are particularly troubling: we need to be doing everything we can to stop bogus health claims that endanger consumers,” said Acting Chairwoman Rebecca Kelly Slaughter of the FTC. “With this case, the Commission has quickly put to use its new authority to stop false marketing claims related to the pandemic.”
This matter is being handled by Trial Attorneys Benjamin Cornfeld and Brandon Robers of the Civil Division’s Consumer Protection Branch, and Assistant U.S. Attorney Suzanne Moore from the U.S. Attorney’s Office for the Eastern District of Missouri. Kristin M. Williams, Mary L. Johnson and Brady C. Williams represent the FTC.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.
Justice Department Reaches Agreement with the City of West Monroe, Louisiana Under the Voting Rights ActRead the Press Release
The Justice Department announced today that it has entered into a proposed consent decree to settle a voting rights lawsuit with the City of West Monroe, Louisiana.
The Justice Department’s lawsuit, brought under Section 2 of the Voting Rights Act, challenges the current at-large method of electing the West Monroe Board of Aldermen. Under this agreement, the City of West Monroe will change its method of electing its Board of Aldermen to ensure compliance with the protections of the Voting Rights Act.
The proposed consent decree was filed in federal court in conjunction with a lawsuit brought by the Justice Department. The department’s complaint alleges that the current method of electing the West Monroe Board of Aldermen results in Black citizens in West Monroe having less opportunity than white citizens to participate in the political process and to elect candidates of their choice, in violation of Section 2 of the Voting Rights Act. Although Black residents comprise nearly 30% of the electorate, no Black candidate has ever been elected to the West Monroe Board of Aldermen. The complaint does not allege that the current method of election was adopted or maintained with discriminatory intent.
“The Voting Rights Act remains a vital tool to ensure that underrepresented citizens have a fair chance to choose their representatives,” said Principal Deputy Assistant Attorney General Pamela S, Karlan for the Justice Department’s Civil Rights Division. “We appreciate that the City of West Monroe has worked diligently and cooperatively with the department to adopt a solution that provides all the City’s citizens with an equal opportunity to participate in the political process and elect aldermen of their choice.”
“We join the Civil Rights Division in bringing this important lawsuit under the Voting Rights Act and appreciate that the City of West Monroe has worked with the Justice Department to adopt a solution that brings about fair representation,” said Acting U.S. Attorney Alexander C. Van Hook of the Western District of Louisiana.
The department gave notice to the City of West Monroe of its intent to bring suit under the Voting Rights Act on March 4, and the parties worked collaboratively to achieve this agreement. Under the parties’ consent decree — and subject to approval by the federal district court in Louisiana — West Monroe will discontinue use of its current at-large method of electing the five members of its Board of Aldermen. Beginning with the next municipal election, currently scheduled for March 26, 2022, three members of the Board of Aldermen will be elected from single-member districts and two members will be elected at-large. The agreement also provides West Monroe will publicize the new method of election.
More information about the Voting Rights Act and other federal voting rights laws is available on the Justice Department website at https:www.justice.gov/crt/voting-section.
Tax Preparer Charged with Filing False ReturnsRead the Press Release
A federal grand jury in Philadelphia returned a superseding indictment charging a Pennsylvania man with sixteen counts of assisting in the preparation of federal tax returns.
According to the superseding indictment, Jean Coq of Philadelphia prepared tax returns for clients for tax years 2013 and 2014 that claimed inflated itemized deductions, including unreimbursed employee expenses and gifts to charity. As a result of these false items, Coq’s clients sought tax refunds to which they were not entitled.
If convicted, Coq faces a maximum penalty of three years in prison on each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Jennifer Arbittier Williams for the Eastern District of Pennsylvania made the announcement.
The IRS-Criminal Investigations is investigating the case.
Trial Attorney Ann M. Cherry of the Justice Department’s Tax Division and Assistant U.S. Attorney David Ignall of the U.S. Attorney’s Office for the Eastern District of Pennsylvania are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Readout of Attorney General Merrick B. Garland’s Call with the Minister of Justice and Attorney General of CanadaRead the Press Release
Attorney General Merrick B. Garland spoke yesterday with David Lametti, the Minister of Justice and Attorney General of Canada. In their inaugural conversation, the Attorneys General discussed a number of transborder law enforcement issues, including cybercrime, as well as violence against women, minorities, Indigenous peoples and other historically disadvantaged persons. The Attorneys General discussed their shared commitment to combatting systemic racism and discrimination and to further enhancing bilateral cooperation on law enforcement matters, including through the reinstitution of the U.S./Canada Cross-Border Crime Forum.
New Hampshire Man Sentenced to Prison for Facilitating Employment Tax FraudRead the Press Release
A New Hampshire man was sentenced today to 18 months in prison for employment tax fraud.
According to court documents, Walter Rodriguez, of Manchester, aided and abetted several drywall companies that were evading the payment of employment taxes from 2011 to 2013. Rodriguez found workers for the companies for construction jobs. The companies then issued checks in the names of fictitious or fraudulent identities and provided those checks to Rodriguez, who converted the checks to cash at local check-cashing businesses and paid the workers off-the-books. In total, Rodriguez enabled the payment of $1.7 million in unreported wages, causing a tax loss of $416,000.
In addition to the term of imprisonment, U.S. District Judge Steven J. McAuliffe ordered Rodriguez to serve one year of supervised release and to pay approximately $416,163 in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney John J. Farley for the District of New Hampshire made the announcement.
IRS-Criminal Investigation investigated the case.
Trial Attorney Brittney Campbell of the Justice Department’s Tax Division and Assistant U.S. Attorney Seth Aframe of the District of New Hampshire prosecuted the case.
Muncie Police Officers Indicted on Additional Charges of Excessive Force and ObstructionRead the Press Release
A federal grand jury in Indianapolis, Indiana, returned a 17-count superseding indictment charging three officers and one sergeant of the Muncie Police Department with excessive force and obstruction.
According to court documents, Officers Joseph Chase Winkle, 34, Jeremy Gibson, 30, Corey Posey, 28, and Sergeant Joseph Krejsa, 50, were indicted for their roles in using excessive force against arrestees and attempting to cover up the misconduct.
The superseding indictment charges Winkle with 11 felony offenses, Gibson with three felony offenses, Krejsa with two felony offenses, and Posey with one felony offense.
Winkle is charged with five counts of depriving five different arrestees of their rights to be free from excessive force, and six counts writing false reports about his uses of force against those arrestees, as well as two other arrestees. According to the superseding indictment, Winkle’s actions included kicking, punching, knee-striking, and using a taser on arrestees without justification, and resulted in bodily injury to the arrestees.
Gibson is charged with two counts of depriving two arrestees of their rights to be free from excessive force, and one count of writing a false report about his use of force against one of those arrestees. According to the superseding indictment, Gibson’s actions included punching, stomping on, and knee-striking arrestees without justification, and resulted in bodily injury to both arrestees.
Krejsa is charged with two counts of writing false reports related to two of Winkle’s excessive force incidents. According to the superseding indictment, on one occasion, Krejsa minimized the level of force used by Winkle during one arrest, and, on another occasion, falsely represented that a different Muncie Police Department sergeant cleared Winkle of his use of force when it was actually Krejsa who conducted that review.
Posey is charged with one count of writing a false report related to one of Winkle’s excessive force incidents. According to the superseding indictment, Posey’s use of force report misrepresented the arrestee’s behavior, and mischaracterized and omitted Winkle’s unlawful use of force during the incident.
Winkle, Gibson, and Krejsa were previously charged in a 12-count indictment with civil rights and obstruction offenses arising from five of the six incidents charged in the superseding indictment. The superseding indictment adds additional excessive force and false report charges against Winkle and Gibson related to a sixth incident, and charges Posey (who was not included in the previous indictment) with obstruction.
The maximum penalty for the deprivation-of-rights offenses is 10 years of imprisonment and the maximum penalty for false report offenses is 20 years of imprisonment.
The FBI conducted the investigation. Trial Attorneys Mary J. Hahn and Katherine G. DeVar of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Nicholas J. Linder of the Southern District of Indiana are prosecuting the case.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
Maryland Tax Preparer Pleads Guilty to Preparing False ReturnsRead the Press Release
A Maryland tax preparer pleaded guilty today to conspiring to defraud the United States and to assisting in the preparation of a false tax return.
According to court documents and statements made in court, Veronica Fortune and two co-conspirators provided return preparation services from an office in Temple Hills. Fortune operated under several business names, including Fortune’s Professional Services LLC. Beginning in 2015, Fortune began preparing false returns for clients and permitted her co-conspirators to file false returns using Fortune’s IRS e-filing credentials. The IRS later expelled Fortune from its e-filing program, but she continued to prepare fraudulent returns through the 2018 tax year. In total, Fortune and her co-conspirators caused a tax loss to the IRS of $189,748.
Fortune is scheduled to be sentenced on Aug. 20, 2021. She faces a maximum penalty of five years on the conspiracy charge, and three years on the preparing a false tax return offense. A period of supervised release, restitution and monetary penalties also may be imposed. A federal district court judge will determine Fortune’s sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Jonathan Lenzner for the District of Maryland made the announcement.
The IRS-Criminal Investigation is investigating the case.
Trial Attorney Kathryn Sparks of the Justice Department’s Tax Division and Assistant U.S. Attorney Leah Grossi of the U.S. Attorney’s Office for the District of Maryland are prosecuting the case.
Canadian Company Sentenced for Violating Clean Water ActRead the Press Release
The Algoma Central Corporation (Algoma), headquartered in St. Catharines, Ontario, was fined $500,000 after pleading guilty to dumping wastewater into Lake Ontario.
Algoma operated a fleet of dry and liquid bulk carriers on the Great Lakes. One of the vessels in the defendant’s fleet was the M/V Algoma Strongfield (Strongfield). Built in China, the Strongfield was delivered to Canada on May 30, 2017, by a crew from Redwise Maritime Services, B.V. (Redwise), a vessel transport company based in the Netherlands.
“The Great Lakes are our nation’s largest source of fresh water, and this prosecution shows the Administration’s commitment to preserving a natural resource that will be crucial for generations to come,” said Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division (ENRD).
“The very purpose of the Clean Water Act is to protect our natural resources, including one of our nation’s greatest natural treasures, the Great Lakes, from harm,” said U.S. Attorney James P. Kennedy for the Western District of New York. “This conviction and the fine imposed sends a strong message that those who violate the Clean Water Act will be held accountable for their actions. This penalty also ensures that this defendant will be monitored in the future and will be strictly obligated to comply with those environmental laws and regulations that protect our waters, our fisheries, our wildlife, and each of us.”
During the Strongfield’s delivery voyage, while manned by a Redwise crew, the oily water separator and oil content monitor malfunctioned or failed on multiple occasions, which resulted in an accumulation of unprocessed oily bilge water. On May 5, 2017, an Algoma employee directed Redwise to transfer and store the unprocessed oily bilge water in the Strongfield’s used wash water tank to avoid an overboard discharge of unprocessed bilge water into the Pacific Ocean. The wash water tank was intended to store deck and cargo hold wash water and is not listed on the Strongfield’s International Oil Pollution Prevention certificate. Between May 5, 2017, and the Strongfield’s arrival in Canada, the Redwise crew made several additional transfers of unprocessed oily bilge waste into the wash water tank to avoid overboard discharges of untreated bilge water.
On May 19, 2017, as the Strongfield was transiting the Panama Canal, an Algoma employee boarded the vessel and remained onboard until the vessel’s arrival in Canada, where he assumed the duties of Chief Engineer. On May 30, 2017, the Strongfield arrived in Sept-Iles, Quebec, Canada, where the Redwise crew handed over operation of the vessel to an Algoma crew. Although some of the Algoma crew were advised that the wash water tank contained unprocessed oily bilge water, Algoma acted negligently in failing to inform all onboarding Algoma crewmembers and the inspectors of the contents of the wash water tank.
On June 6, 2017, the Stongfield was transiting Lake Ontario. While in the waters of the United States within the Western District of New York, the 3rd officer on board the Strongfield requested permission to empty the contents of the wash water tank into Lake Ontario, and the captain approved the discharge. Because Algoma had negligently failed to inform the 3rd officer and the captain what the wash water tank contained, approximately 11,887 gallons of unprocessed oily bilge water were released into Lake Ontario. The discharge was stopped when another Algoma employee learned of the discharge and informed the 3rd officer and captain that the wash water tank contained unprocessed oily bilge water and instructed them to stop the discharge immediately. After the incident, Algoma contacted Canadian and U.S. authorities to report the discharge.
In addition to the fine, Algoma was put on probation for a period of three years during which it must implement an environmental compliance plan.
The sentencing is the result of an investigation by the U.S. Coast Guard Investigative Service, under the direction of Resident Agent in Charge Cindy C. Buckley, Buffalo, New York, and Resident Agent in Charge Edward L. Songer, Detroit, Michigan.
Trial Attorney Patrick M. Duggan of ENRD’s Environmental Crimes Section and Assistant U.S. Attorney Aaron J. Mango of the Western District of New York are prosecuting the case.
Businessman Charged with Failure to Pay Employment Taxes and Attempt to Obstruct the IRSRead the Press Release
A federal grand jury in Atlanta, Georgia, returned an indictment yesterday charging a Georgia man with failing to pay employment taxes and with obstructing the collection efforts of the IRS.
According to the indictment, from 2009 through 2018, Douglas Mittleider, of Adairsville, was in charge of several long-term care facilities located throughout the United States, and was responsible for withholding and paying employment taxes on behalf of his employees. Notwithstanding his obligations, Mittleider allegedly did not fully pay over these withholdings, resulting in an outstanding balance of more than $10,000,000 being owed to the IRS. From approximately November 2011 to the present, Mittleider allegedly attempted to obstruct IRS efforts to collect employment taxes that were due by filing false employment tax returns and directing payment of corporate funds to his family members instead of to the IRS.
The defendant’s initial court appearance will be scheduled at a later date in the U.S. District Court for the Northern District of Georgia. If convicted, he faces a maximum penalty of three years in prison on the obstruction charge and five years in prison on each of the other charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Kurt R. Erskine for the Northern District of Georgia made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorneys William Guappone and Mitchell Galloway of the Justice Department’s Tax Division and Assistant U.S. Attorney Alana Black of the Northern District of Georgia are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
U.S. Government and State of Illinois Announce Agreement with ExxonMobil’s Joliet Refinery to Reduce Air PollutionRead the Press Release
The Justice Department, U.S. Environmental Protection Agency (EPA) and the State of Illinois have announced an amendment to the 2005 Clean Air Act (CAA) consent decree signed with ExxonMobil Oil Corporation to resolve violations at its petroleum refinery in Joliet.
“This new agreement requires ExxonMobil to clean up its act and pay penalties for its past violations,” said Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division (ENRD). “EPA and our Illinois state partner deserve credit for policing ExxonMobil’s compliance with the Clean Air Act and our prior settlement with the company.”
“I’m pleased that the agreement announced today with ExxonMobil will reduce air emissions from their Joliet refinery,” said Acting Assistant Administrator for Enforcement and Compliance Assurance Larry Starfield of the EPA. “The result will be cleaner air for communities in Illinois and lower environmental impacts.”
The consent decree amendment will reduce air pollution through upgrades and improvements and address violations of the 2005 consent decree and the CAA. ExxonMobil will make physical and operational changes to its sulfur recovery plant that will reduce emissions of hydrogen sulfide and sulfur dioxide and will meet a lower sulfur dioxide emission limit at its north sulfur recovery unit. ExxonMobil will also make physical and operational changes to the emission controls for its fluidized catalytic cracking unit, also referred to as the FCCU, and it will meet lower emission limits for sulfur dioxide and nitrogen oxides at the FCCU.
To address leak detection and repair violations, ExxonMobil will update its program to include procedures for properly monitoring valves that are covered in insulation or that are located inside fireboxes. ExxonMobil will also use an optical gas imaging camera to monitor its open-ended lines for leaks. To address continuous emissions monitoring system violations, ExxonMobil will develop a comprehensive plan to ensure implementation and compliance with regulatory requirements.
Under the consent decree amendment, ExxonMobil will pay $1,515,463 in penalties, $1,086,640 to the federal government and $428,823 to the State of Illinois. The amendment also includes an estimated $10 million of improvements to reduce air emissions from the facility.
Today’s settlement, lodged with the U.S. District Court for the Northern District of Illinois, will be subject to a 30-day public comment period after notice of the settlement is published in the Federal Register. To view the consent decree amendment or to submit a comment, visit the Justice Department’s website: www.justice.gov/enrd/Consent_Decrees.html.
For more information about the 2005 consent decree and the consent decree amendment with ExxonMobil: https://www.epa.gov/enforcement/exxonmobil-refinery-settlement.
Texas Tax Preparer Charged with Filing False ReturnsRead the Press Release
A federal grand jury in Waco, Texas, returned an indictment today charging a Texas tax preparer with 11 counts of assisting in the preparation of false tax returns.
According to the indictment, Rossalynn Thomas operated TaxPros, a tax return preparation business in Temple. Between November 2014 through January 2017, Thomas allegedly falsified clients’ tax returns by claiming, among other things, false business income and education credits in order to generate tax refunds. The indictment further alleges that one of Thomas’s clients was an IRS agent acting in an undercover capacity. Thomas allegedly prepared a tax return for the IRS agent that falsely claimed charitable contributions and unreimbursed business expenses.
If convicted, Thomas faces a maximum sentence of three years in prison for each count. She also faces a period of supervised release and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorneys Robert A. Kemins and Matthew C. Hicks of the Justice Department’s Tax Division are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Announces Court-Authorized Effort to Disrupt Exploitation of Microsoft Exchange Server VulnerabilitiesRead the Press Release
Note: A full copy of the unsealed court documents can be viewed here.
WASHINGTON – The Justice Department today announced a court-authorized operation to copy and remove malicious web shells from hundreds of vulnerable computers in the United States running on-premises versions of Microsoft Exchange Server software used to provide enterprise-level e-mail service.
Through January and February 2021, certain hacking groups exploited zero-day vulnerabilities in Microsoft Exchange Server software to access e-mail accounts and place web shells (which are pieces of code or scripts that enable remote administration) for continued access. Other hacking groups followed suit starting in early March after the vulnerability and patch were publicized. Although many infected system owners successfully removed the web shells from thousands of computers, others appeared unable to do so, and hundreds of such web shells persisted unmitigated. Today’s operation removed one early hacking group’s remaining web shells, which could have been used to maintain and escalate persistent, unauthorized access to U.S. networks. The FBI conducted the removal by issuing a command through the web shell to the server, which was designed to cause the server to delete only the web shell (identified by its unique file path). This is unrelated to Microsoft’s 13 April announcement.
“Today’s court-authorized removal of the malicious web shells demonstrates the Department’s commitment to disrupt hacking activity using all of our legal tools, not just prosecutions,” said Assistant Attorney General John C. Demers for the Justice Department’s National Security Division. “Combined with the private sector’s and other government agencies’ efforts to date, including the release of detection tools and patches, we are together showing the strength that public-private partnership brings to our country’s cybersecurity. There’s no doubt that more work remains to be done, but let there also be no doubt that the Department is committed to playing its integral and necessary role in such efforts.”
“Combatting cyber threats requires partnerships with private sector and government colleagues,” said Acting U.S. Attorney Jennifer B. Lowery of the Southern District of Texas. “This court-authorized operation to copy and remove malicious web shells from hundreds of vulnerable computers shows our commitment to use any viable resource to fight cyber criminals. We will continue to do so in coordination with our partners and with the court to combat the threat until it is alleviated, and we can further protect our citizens from these malicious cyber breaches.”
“This operation is an example of the FBI’s commitment to combatting cyber threats through our enduring federal and private sector partnerships,” said Acting Assistant Director Tonya Ugoretz of the FBI’s Cyber Division. “Our successful action should serve as a reminder to malicious cyber actors that we will impose risk and consequences for cyber intrusions that threaten the national security and public safety of the American people and our international partners. The FBI will continue to use all tools available to us as the lead domestic law enforcement and intelligence agency to hold malicious cyber actors accountable for their actions.”
On March 2, 2021, Microsoft announced that a hacking group used multiple zero-day vulnerabilities to target computers running Microsoft Exchange Server software. Various other hacking groups also have used these vulnerabilities to install web shells on thousands of victim computers, including those located the United States. Because the web shells the FBI removed today each had a unique file path and name, they may have been more challenging for individual server owners to detect and eliminate than other web shells.
Throughout March 2021, Microsoft and other industry partners released detection tools, patches, and other information to assist victim entities in identifying and mitigating this cyber incident. Additionally, the FBI and the Cybersecurity and Infrastructure Security Agency released a Joint Advisory on Compromise of Microsoft Exchange Server on March 10, 2021. Despite these efforts, by the end of March, hundreds of web shells remained on certain U.S.-based computers running Microsoft Exchange Server software.
Although today’s operation was successful in copying and removing those web shells, it did not patch any Microsoft Exchange Server zero-day vulnerabilities or search for or remove any additional malware or hacking tools that hacking groups may have placed on victim networks by exploiting the web shells. The Department strongly encourages network defenders to review Microsoft’s remediation guidance and the March 10, 2021 Joint Advisory for further guidance on detection and patching.
The FBI is attempting to provide notice of the court-authorized operation to all owners or operators of the computers from which it removed the hacking group’s web shells. For those victims with publicly available contact information, the FBI will send an e-mail message from an official FBI e-mail account (@FBI.gov) notifying the victim of the search. For those victims whose contact information is not publicly available, the FBI will send an e-mail message from the same FBI e-mail account to providers (such as a victim’s ISP) who are believed to have that contact information and ask them to provide notice to the victim.
If you believe you have a compromised computer running Microsoft Exchange Server, please contact your local FBI Field Office for assistance. The FBI continues to conduct a thorough and methodical investigation into this cyber incident.
Justice Department Announces $2.2 Million Settlement of Sex Discrimination Lawsuit Against the Commonwealth of Pennsylvania and the Pennsylvania State PoliceRead the Press Release
The Justice Department announced today that it has reached a settlement, through a court-supervised settlement agreement, with the Commonwealth of Pennsylvania and the Pennsylvania State Police (PSP) resolving the United States’ claims that PSP’s use of physical tests as part of the entry-level hiring process for state troopers resulted in a pattern or practice of employment discrimination against women, in violation of Title VII of the Civil Rights Act of 1964.
Title VII is a federal law that prohibits discrimination in employment on the basis of race, color, religion, sex, and national origin. The suit alleged that PSP violated Title VII beginning as early as May 14, 2003, by administering physical tests that assessed physical skills not required to perform the job and that disproportionately excluded female applicants.
“Employers cannot impose selection criteria that unfairly screen out qualified female applicants,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division. “When the Pennsylvania State Police use a physical fitness test as part of the process for choosing state troopers, they must ensure that the test complies with federal law. This settlement agreement reflects the Civil Rights Division’s continued commitment to removing artificial barriers that prevent women from becoming law enforcement officers.”
Under the terms of the settlement agreement, subject to court approval, PSP will pay $2,200,000 million into a settlement fund that will be used to compensate those women who were harmed by the employment practices challenged by the United States. The agreement also requires PSP to offer priority hiring relief, with retroactive seniority, for up to 65 women for entry-level state trooper jobs. All priority hiring candidates must meet the employer’s lawful selection criteria, including the successful passing of any physical fitness test that meets the requirements of Title VII.
In a joint filing today in the U.S. District Court for the Middle District of Pennsylvania, the parties moved for a court order provisionally approving the terms of the settlement agreement. The motion also asks the court to schedule a fairness hearing to provide an opportunity for individuals potentially affected by the proposed agreement to provide comments on the terms of the settlement. The proposed settlement, once approved by the District Court, will resolve the United States’ complaint filed on July 29, 2014.
The case was brought by the Civil Rights Division’s Employment Litigation Section, which makes the full and fair enforcement of Title VII a top priority. Additional information about the Civil Rights Division and the jurisdiction of the Employment Litigation Section is available on its websites at www.justice.gov/crt/ and https://www.justice.gov/crt/employment-litigation-section.
Justice Department Files Sexual Harassment Lawsuit Against Owners and Managers of Rental Properties in PennsylvaniaRead the Press Release
The Justice Department announced today that it has filed a lawsuit against Allen and Heidi Woodcock, owners and managers of rental properties in Oil City, alleging sexual harassment and retaliation in violation of the Fair Housing Act.
The lawsuit, filed in the U.S. District Court for the Western District of Pennsylvania, alleges that Allen Woodcock sexually harassed a female tenant in April 2019 after he entered her home to perform maintenance. According to the complaint, Allen Woodcock touched the tenant’s body without her consent and forcibly tried to kiss her, and the Woodcocks evicted the tenant after she reported the harassment to Heidi Woodcock.
“People should never have to endure sexual harassment in their home, where they should feel safe and secure,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division. “The Justice Department will vigorously enforce the Fair Housing Act against landlords who engage in this kind of abusive and illegal behavior.”
“Combatting sexual harassment in housing is a high priority at the Department of Housing and Urban Development (HUD),” said Acting Assistant Secretary for Fair Housing Jeanine Worden. “This is an example of how HUD and the Justice Department work together to enforce the Fair Housing Act.”
“Sexual harassment in housing is illegal,” said Acting U.S. Attorney Stephen R. Kaufman for the Western District of Pennsylvania. “Landlords, property managers or anyone else with control over housing should recognize by the filing of this lawsuit that we take action to combat such despicable conduct.”
The lawsuit arose from a complaint that the former tenant filed with the Department of Housing and Urban Development (HUD). After HUD investigated the complaint, it issued a charge of discrimination and the matter was referred to the Justice Department.
Today’s lawsuit seeks monetary damages to compensate the victim and a court order barring future discrimination. The complaint contains allegations of unlawful conduct; the allegations must be proven in court.
The Justice Department’s Sexual Harassment in Housing Initiative is led by the Civil Rights Division, in coordination with U.S. Attorney’s Offices across the country. The goal of the initiative is to address and raise awareness about sexual harassment by landlords, property managers, maintenance workers, loan officers or other people who have control over housing. Since launching the Initiative in October 2017, the Justice Department has filed 21 lawsuits alleging sexual harassment in housing.
The Justice Department’s Civil Rights Division enforces the Fair Housing Act, which prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt.
Individuals who believe that they may have been victims of sexual harassment or other types of housing discrimination at rental dwellings owned or managed by Allen and Heidi Woodcock, or who have other information that may be relevant to this case, should call the Justice Department’s Housing Discrimination Tip Line at 1-800-896-7743, email the Justice Department at [email protected], or submit a report online.
Individuals can also report sexual harassment and other forms of housing discrimination by contacting HUD at 1-800-669-9777 or by filing a HUD complaint online.
Three Men Indicted for $30 Million Foreign Exchange Fraud SchemeRead the Press Release
A federal grand jury in the Southern District of Florida returned an indictment Thursday charging two U.S. citizens and a Dutch national with conducting a foreign exchange trading scheme to steal $30 million from their investor victims.
According to court documents, Patrick Gallagher, 44, of Middleborough, Massachusetts, Michael Dion, 49, of Orlando, Florida, and Emade Echadi, 41, a resident of the Netherlands, allegedly devised a scheme in which Dion and Gallagher would solicit victims to invest in their foreign exchange company, Global Forex Management, by promising them large returns based on fabricated prior trading results. The defendants allegedly told the victims that their funds would be traded using an online trading platform provided by Echadi’s company, IB Capital. However, according to the indictment, Gallagher, Dion, and Echadi instead were working together to steal the victim investors’ money. In May 2012, they allegedly executed their scheme by intentionally creating losing trades for the investors and stole $30 million from their victims. After fabricating the massive trading loss, the defendants allegedly concealed the scheme from victims by creating fraudulent trading records and then routed the stolen money through shell companies they had set up all over the world.
The defendants are charged with conspiracy to commit securities fraud, securities fraud, conspiracy to commit wire fraud, and conspiracy to commit money laundering. If convicted, the defendants face a maximum penalty of five years in prison for conspiracy to commit securities fraud and 20 years in prison for each of the other charges. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division, and Inspector in Charge Delany E. De Leon-Colón of the U.S. Postal Inspection Service made the announcement.
Trial Attorneys Brittain Shaw and Vasanth Sridharan of the Criminal Division’s Fraud Section are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Statement by Attorney General Merrick B. Garland on the President’s FY22 Discretionary Funding RequestRead the Press Release
The Biden-Harris Administration today submitted to Congress the President’s priorities for fiscal year 2022 discretionary spending. The funding request invests in the core foundations of our country’s strength and advances key Justice Department priorities, including increasing funding for federal civil rights enforcement, addressing the rise of domestic terrorism, combatting gun violence and reforming criminal justice systems.
“The President’s proposed funding request prioritizes resources the Justice Department needs to advance its mission of ensuring equal justice under law,” said U.S. Attorney General Merrick B. Garland. “This proposal makes critical investments in a wide range of departmental priorities, including strengthening civil rights enforcement and defending against domestic and international terrorism.”
The President’s 2022 discretionary request:
- Reinvigorates Federal Civil Rights Enforcement. In order to protect marginalized communities, the discretionary request invests $209 million, an increase of $33 million, in the department’s Civil Rights Division, Community Relations Service, and other programs. These funds would support: police reform; the prosecution of hate crimes across the nation, and especially in communities uniquely impacted by bias, xenophobia, and driven by the COVID-19 pandemic crisis, such as Asian-American communities; the enforcement of voting rights in the Civil Rights Division; mediation and conciliation services for community conflicts arising from discriminatory practices; and other activities.
- Addresses Domestic Terrorism. The discretionary request provides an additional $101 million to address the rising threat of domestic terrorism while respecting civil rights and civil liberties. This increase includes $45 million for the Federal Bureau of Investigation (FBI) for domestic terrorism investigations, $40 million for the U.S. Attorneys to manage increasing domestic terrorism caseloads, $12 million for additional response capabilities at the U.S. Marshals Service, and $4 million to the National Institute of Justice (NIJ) to support research on domestic terrorism threats. These investments complement funding provided for the Department of Homeland Security (DHS).
- Combats the Gun Violence Public Health Epidemic. The discretionary request includes $2.1 billion, an increase of $232 million above the 2021 enacted level, for DOJ to address the gun violence public health crisis plaguing communities across the nation. Investments include $401 million in state and local grants, an increase of $162 million or 68 percent above the 2021 enacted level.
- Invests in Community Policing, Police Reform, and Other Efforts to Address Systemic Inequities. Policies that create strong, positive ties between law enforcement and the communities they serve are critical to making the nation’s communities safer and to rooting out systemic inequities in the justice system. The discretionary request provides $1.2 billion, an increase of $304 million, to support a range of programs supporting police-community relationships, including the Community Oriented Policing Services (COPS) hiring program and programs that support community-oriented policing policies and practices, such as racial sensitivity and implicit bias training and additional support for hate crime training and police innovation programs.
- Invests in Efforts to End Gender-Based Violence. The discretionary request proposes a historic investment of $1 billion to support Violence Against Women Act (VAWA) programs at DOJ, a $487 million or 95-percent increase over the 2021 enacted level. This funding supports substantial increases for longstanding VAWA programs, in addition to funding for new programs to expand restorative justice efforts, protect transgender victims, and support women at Historically Black Colleges and Universities (HBCUs), Hispanic-Serving Institutions (HSIs), and Tribal Colleges.
These discretionary investments reflect only one element of the President’s broader agenda. In the coming months, the Administration will release the President’s Budget, which will present a unified, comprehensive plan to address the overlapping crises we face in a fiscally and economically responsible way.
For more information on the President’s FY22 discretionary funding request, please visit: https://www.whitehouse.gov/omb/FY-2022-Discretionary-Request/.
California Man Convicted with Federal Hate Crime for Attempting to Stab Black ManRead the Press Release
A federal jury convicted a California man today of a federal hate crime for attacking a Black man with a knife on a street in Santa Cruz.
Ole Hougen, 44, of Santa Cruz, was convicted of willfully attempting to cause bodily injury by using a dangerous weapon because of a person’s actual or perceived race and color.
According to evidence presented at trial, Hougen confronted a 29-year-old Black man who was crossing a street in Santa Cruz. Hougen took out a nine-inch knife and swiped multiple times at the man’s head, chest, and stomach, while yelling racial slurs at him. At the time of the attack, Hougen was on probation after pleading no contest to state charges that he committed a racially motivated assault on a different Black man in 2018.
“The Justice Department will continue to vigorously prosecute bias-motivated crimes like this one in an effort to secure justice for victims of these crimes and the communities they are meant to target and intimidate,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division.
“Strict enforcement of laws prohibiting the targeting of vulnerable groups is essential to the proper functioning of our democratic society,” said Acting U.S. Attorney Stephanie Hinds for the Northern District of California. “This office is one of the four U.S. Attorney’s offices throughout the country chosen by the Attorney General to work with other Justice Department components to review our structure of anti-hate law enforcement and make recommendations to improve the system. This is just another indication that this office is committed to ensuring the thoughtful deployment of resources to address hate crimes and unlawful discrimination.”
“The FBI worked closely with the Santa Cruz Police Department to bring justice for this shocking, horrific attack,” said Special Agent in Charge Craig Fair of the FBI San Francisco Field Office. “The FBI will use all authority granted to us by federal law to investigate hate crimes meant to threaten and intimidate an entire community. Acts of hate and racism have no place here and will not be tolerated. I urge members of our community to report any hate incidents to local or federal law enforcement so we can bring offenders to justice.”
Hougen is scheduled to be sentenced on July 26 and faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant U.S. Attorney Marissa Harris and Trial Attorney Michael J. Songer of the Civil Rights Division are prosecuting the case on behalf of the government. The FBI San Francisco Field Office conducted the investigation with the assistance of the Santa Cruz Police Department.
The verdict comes on the heels of a decision by U.S. Attorney General Merrick Garland to conduct a 30-day review of the department’s enforcement efforts to address hate-based violence and discrimination. The working group was assembled to make recommendations for improving hate crime and unlawful discrimination investigations and prosecutions. Additional information regarding the Attorney General’s working group can be obtained here.
For more information and resources on the department’s efforts to combat hate crimes, visit www.justice.gov/hatecrimes. If you believe you have been a victim of a civil rights violation, please visit: https://civilrights.justice.gov/ to file a report.
Navajo man sentenced to 12 years in prison for manslaughter in Indian CountryRead the Press Release
ALBUQUERQUE, N.M. – Joshua Gutierrez, 22, an enrolled member of the Navajo Nation, was sentenced April 7 in federal court to 12 years in prison for voluntary manslaughter involving the use of a firearm in Indian Country.
Gutierrez pleaded guilty Oct. 15, 2020. According to the plea agreement and other court documents, on March 29, 2020, while visiting the home of his girlfriend and her father, Gutierrez was awakened by an argument. He armed himself with a handgun, walked toward the room where the argument was taking place, and passed one of the men involved in the argument. As they passed each other, the man swung at Gutierrez, and Gutierrez shot the man in the chest, killing him. Gutierrez then pointed the gun at two other people and threatened to shoot them if they did not leave. The incident took place in To’hajiilee, New Mexico, on the Navajo Nation. In his plea, Gutierrez waived any claim of self-defense.
Upon his release from prison, Gutierrez will be subject to three years of supervised release.
The FBI investigated this case with assistance from Navajo Nation Police Department and the Navajo Nation Department of Criminal Investigation. Assistant U.S. Attorney Allison Jaros prosecuted the case.
Justice Department Tax Enforcement Already in GearRead the Press Release
As tax filing season continues, the Department of Justice's Tax Division reminds taxpayers to pay careful attention to their reporting and filing obligations and to timely pay all taxes due. Willfully filing false tax returns or deliberately evading paying taxes are serious criminal offenses.
“Our criminal prosecutors are prepared for tax filing season too,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Tax Division. “Honest, law abiding taxpayers should know that the Tax Division is aggressively using its resources and expertise to identify, investigate, and prosecute those attempting to defraud and obstruct the IRS.”
Throughout the past year, the Tax Division, in collaboration with U.S. Attorney’s Offices, other Justice Department litigating offices and the IRS, has investigated and prosecuted a broad array of tax offenses from businesses and white-collar professionals underreporting income to employment tax fraud to identity theft. Enforcement efforts are continually ongoing. Here are a few recent examples:
Prosecution of Business Owners
- On Dec. 1, 2020, a New York City restaurateur was sentenced to 24 months in prison for tax evasion. Adel Kellel, the owner of Raffles Bistro, diverted business income for personal expenses, including rent for a high-end Manhattan apartment, college tuition payments for his children, and purchases from luxury retailers. As part of his sentence, Kellel was ordered to pay $613,478 to the IRS.
- On Oct. 20, 2020, two biofuel company owners were sentenced to prison for conspiracy to defraud the IRS and preparing a false tax claim, among other offenses. Ben Wootton, 55 of Savannah, Georgia, was sentenced to 70 months and Race Miner, 51, of Marco Island, Florida, was sentenced to 66 months, after a jury convicted both defendants and their company, Keystone Biofuels Inc., in April 2019.
Prosecution of White-Collar Professionals & Individuals
- On Dec. 21, 2020, two Atlanta-area tax professionals pleaded guilty to promoting a syndicated conservation easement tax scheme involving more than $1.2 billion in fraudulent charitable deductions. Stein Agee of Canton, Georgia, and Corey Agee of Atlanta, Georgia, are currently awaiting sentencing for their role in the scheme.
- On Nov. 2, 2020, a New Jersey man was sentenced to 78 months in prison for conspiring to defraud the United States, filing false claims, and obstructing the internal revenue laws, following his conviction at trial. According to evidence presented at trial, between 2015 and 2016, Kenneth Crawford Jr. and his co-conspirators promoted and sold a “mortgage recovery” tax fraud scheme in which they obtained fraudulent refunds from the IRS for their clients. As a result of Crawford’s scheme, more than $2.5 million in fraudulent refunds were sought from the IRS.
- On Aug. 21, 2020, a North Carolina risk consultant pleaded guilty to filing a false tax return and illegally possessing a firearm. From 2011 through 2017, Charles Atkins underreported income from several risk consulting businesses, causing a tax loss of more than $800,000 to the IRS. Atkins is currently awaiting sentencing.
Employment Tax Prosecutions
- On April 7, 2021, the manager of the San Diego Home Cooking restaurant chain was sentenced to 30 months in prison for employment tax fraud. According to court records, from the last quarter of 2014 through 2017, Aleksandar Sreckovic did not file employment tax returns nor pay employment taxes for San Diego Home Cooking, causing a tax loss of over $1.5 million. Instead of paying employment taxes, Sreckovic paid other creditors and his own personal expenses.
- On March 24, 2021, A Montana businessman pleaded guilty today to employment tax fraud. According to court documents, Thomas O’Connell owned and operated three plumbing businesses, Quality Plumbing and Heating, Orbit Plumbing and Heating, and Orbit PHC, each based in Great Falls. From at least 2005 through 2016, O’Connell did not pay employment taxes for several quarters, despite being obligated to ensure such taxes were paid to the IRS. Instead, he directed payments to other creditors and to his own personal expenses. The total tax loss to the IRS from O’Connell’s conduct is more than $550,000.
Identity Theft Prosecutions
- On Oct. 7, 2020, a Las Vegas, Nevada, man was sentenced to 70 months in prison for mail and wire fraud conspiracy, following his jury trial convictions. The trial evidence proved that from January 2009 through April 2011, Terry Williamson and his co-conspirators filed false tax returns with the IRS to fraudulently obtain tax refunds. To facilitate the fraud, they used the names and social security numbers of deceased taxpayers. More than 480 fraudulent tax refund checks totaling almost $2 million were deposited into Williamson’s account.
More information about the Tax Division’s enforcement efforts in these and other areas can be found on the division’s website.
Justice Department Moves to Intervene in Disability Discrimination Suit Against City of Chicago Regarding Pedestrians with Visual DisabilitiesRead the Press Release
The Justice Department today moved to intervene in a disability discrimination lawsuit that private plaintiffs with visual disabilities brought against the City of Chicago under the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act (Section 504). The department’s proposed complaint alleges that the city fails to provide people who are blind, have low vision, or are deaf-blind with equal access to pedestrian signal information at intersections. Pedestrian signal information, such as a flashing “Walk/Don’t Walk” signal, indicates when it is safe to cross the street.
Accessible pedestrian signals (APSs) are devices that provide pedestrians with safe-crossing information in a non-visual format, such as through audible tones, speech messages, and vibrotactile surfaces. Since at least 2006, Chicago has recognized the need to install APSs for pedestrians with visual disabilities. Yet, while Chicago currently provides sighted pedestrians visual crossing signals at nearly 2,700 intersections, it has installed APSs at only 15 of those intersections. The proposed suit alleges that the lack of APSs at over 99% of Chicago’s signalized intersections subjects people who are blind, have low vision, or are deaf-blind to added risks and burdens not faced by sighted pedestrians, including fear of injury or death.
“The ADA and Section 504 require that individuals with disabilities have equal access to public services, including access to pedestrian crossing information that is critical for safety and for full participation in community life,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division. “Chicago has determined that safe-crossing information is necessary for sighted pedestrians to navigate throughout the city, and this suit seeks to ensure that the city provides the same benefit to people with visual disabilities.”
“The U.S. Attorney’s Office is taking this action to ensure that Chicagoans with disabilities are provided equal access to city services, particularly those services whose purpose is public safety,” said U.S. Attorney John R. Lausch Jr. for the Northern District of Illinois. “We are concerned about the serious lack of accessibility to safe intersection crossings for Chicagoans who are blind, have low vision, or are deaf-blind, and we are confident that our involvement in this important case will ultimately bring a meaningful resolution to the city and its millions of residents, daily commuters, and visitors.”
The motion and complaint seeking intervention were jointly filed by the Disability Rights Section of the department’s Civil Rights Division and the U.S. Attorney’s Office for the Northern District of Illinois. The case is being handled by Assistant U.S. Attorneys Patrick Johnson and Sarah J. North, and Trial Attorney Matthew Faiella. To read the motion to intervene, please click here: https://www.ada.gov/acbmc/acbmc_motion.html.
For more information on the Civil Rights Division, please visit www.justice.gov/crt. For more information on the ADA, please call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov. Members of the public may report possible civil rights violations at https://civilrights.justice.gov/report.
Colorado Physician Charged for Misappropriating Thousands from Three Different COVID Relief ProgramsRead the Press Release
An indictment was unsealed Wednesday in Denver charging a Colorado man with stealing nearly $300,000 in government funds from three different COVID relief programs and with making false statements in connection with bankruptcy proceedings.
According to court documents, Francis F. Joseph, 56, of Highlands Ranch, allegedly transferred approximately $118,000 in COVID relief funding from a medical clinic’s account into his personal bank account, after which he spent the money on, among other things, travel and home improvements. The stolen funds came from two programs that were designed to aid medical providers during the COVID-19 pandemic — the Accelerated and Advance Payment Program and the Provider Relief Fund.
The Accelerated and Advance Payment Program provides necessary funds in national emergencies in order to accelerate cash flow to impacted Medicare providers. The Provider Relief Fund, through which $50 billion was allocated to providers for the coronavirus response, was part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a federal law enacted March 29, 2020 and designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.
Today’s indictment constitutes the nation’s second set of criminal charges related to the misuse of Provider Relief Fund moneys and the first time that charges have been brought in connection with fraud on the Accelerated and Advance Payment Program.
The indictment further alleges that following his termination from the clinic, Joseph applied for a $179,999 loan under the Paycheck Protection Program (PPP) on behalf of the medical practice, which he then directed into his personal bank account. Finally, the indictment alleges that Joseph filed for bankruptcy on behalf of (but unbeknownst to) the clinic following his termination and submitted documents containing materially false statements regarding his misappropriation of funds from the clinic in connection with that proceeding.
In April 2020, Congress authorized over $300 billion in additional PPP funding through the CARES Act. The PPP allows qualifying small business and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent, and utilities. The PPP allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.
Joseph is charged with theft in connection with health care, theft of government property, wire fraud, and making a false statement in connection with a bankruptcy proceeding. Joseph is scheduled to make his initial court appearance on May 25 before U.S. Magistrate Judge S. Kato Crews of the U.S. District Court for the District of Colorado. If convicted, he faces maximum penalties of 10 years in prison for each theft count, 20 years for wire fraud, and five years for the bankruptcy proceeding false statement. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Special Agent in Charge Curt Muller of the U.S. Department of Health and Human Services’ Office of Inspector General’s (HHS-OIG) Kansas City Region; and Special Agent in Charge Weston King of the U.S. Small Business Administration’s Office of Inspector General’s (SBA-OIG) Western Region made the announcement.
Trial Attorney Emily Gurskis of the Justice Department’s Fraud Section is prosecuting the case.
This case was brought in coordination with the Health Care Fraud Unit’s COVID-19 Interagency Working Group, which organizes efforts to address illegal activity involving health care programs during the pandemic. The Department of Justice also thanks the U.S. Attorney’s Office for the District of Colorado and the Colorado State Medicaid Fraud Control Unit for assistance they provided.
Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Abatement Company Owner Pleads Guilty to Illegally Removing AsbestosRead the Press Release
A New York woman pleaded guilty today to illegally removing and disposing of asbestos.
According to court documents, between 2015 and 2016, Stephanie Laskin, 45, of Newburgh, along with several others, conspired to illegally remove asbestos from a former IBM site in Kingston, now known as TechCity. The facility in question contained over 400,000 square feet of regulated asbestos-containing material (RACM), as well as an additional 6,000 linear feet of RACM pipe wrap.
Laskin, the owner of A2 Environmental Services (A2ES), who had special asbestos abatement training, hired numerous workers and supervisors to conduct the asbestos removal. She and her co-conspirators pressured these workers to expedite the removal of asbestos at the site to meet contract deadlines. In doing so, she led them to cut corners, violate their remediation training, and handle RACM in dangerous and illegal ways.
At times, she and other A2ES supervisors, including Gunay Yakup who pleaded guilty in March, instructed workers to remove RACM dry. Wetting is required by law and helps to prevent airborne asbestos fibers. When the workers questioned her, Laskin gave them the choice of following her directions or losing their jobs. This resulted in numerous violations of the Clean Air Act’s “work practice standards,” which address how asbestos can be stripped, bagged, removed, and disposed of with relative safety. Laskin is scheduled to be sentenced on July 27 and faces a maximum penalty of five years in prison.
“Defendant Laskin went into this project with her eyes open, planning to do it on the cheap,” said Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division (ENRD). “But, that meant doing this project in knowing violation of the law and her supervisor training, placing others at risk of inhaling asbestos fibers. This criminal prosecution holds her accountable.”
Laskin admitted that she and her supervisors, workers, and other co-conspirators removed substantial amounts of RACM from the site in violation of the work-practice standards and were issued numerous notices of violation (NOVs) associated with dry removal, storing bulk quantities of RACM waste on-site in open containers, failing to properly contain work areas to avoid discharges of RACM to the outside air, sweeping dry RACM in ways that produced visible emissions, and conducting work outside containment and other dry removal abatement techniques. In light of the repeated violations, New York State Department of Labor (NYSDOL) inspectors issued “red tags” for the site on Aug.1, 2016, which stopped all work and ended Laskin’s company’s illegal abatement efforts.
The site was later deemed to be contaminated by the Environmental Protection Agency (EPA) and municipal authorities. Cleanup costs associated with asbestos contamination at the site are estimated to be in the millions. Asbestos has been determined to cause lung cancer, asbestosis, and mesothelioma, an invariably fatal disease. The EPA has determined that there is no safe level of exposure to asbestos.
Special agents of the EPA and individuals from the New York Departments of Labor and Environmental Conservation investigated the case. Todd W. Gleason and Gary N. Donner of ENRD’s Environmental Crimes Section prosecuted the case with the assistance of paralegal Chloe Harris.
Restaurant Chain Manager Sentenced to 30 Months in Prison for Employment Tax FraudRead the Press Release
A California restaurant chain manager was sentenced today to 30 months in prison for employment tax fraud.
According to court documents, Aleksandar Sreckovic, of San Diego, was a manager for San Diego Home Cooking, a restaurant group with over 110 employees and five restaurants in the San Diego area: Café 56 & Bar and Mission Valley Café & Bar in San Diego, Lake Murray Café in La Mesa, Lakeside Café in Lakeside, and Centre City Café in Escondido. Sreckovic had significant control over the finances of San Diego Home Cooking and had a duty to account for and pay employment taxes on behalf of the company’s employees to the IRS.
In November 2014, Sreckovic directed an outside payroll company to stop making employment tax payments to the IRS. From the last quarter of 2014 through the last quarter of 2017, Sreckovic did not file employment tax returns, nor did he pay employment taxes for San Diego Home Cooking. Instead, Sreckovic paid other creditors and his own personal expenses. In total, Sreckovic caused a tax loss of over $1.5 million.
In addition to the term of imprisonment, U.S. District Judge Cathy Ann Bencivengo ordered Sreckovic to serve one year of supervised release and to pay approximately $2.3 million in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Randy Grossman for the Southern District of California made the announcement.
IRS-Criminal Investigation investigated the case.
Trial Attorney Matthew Hoffman of the Justice Department’s Tax Division and Assistant U.S. Attorney Andrew Galvin of the Southern District of California prosecuted the case.
Maryland Return Preparer Pleads Guilty to Tax FraudRead the Press Release
A Maryland return preparer pleaded guilty today to conspiring to defraud the United States and to assisting in the preparation of a false tax return.
According to court documents and statements made in court, Lenore Worthy provided tax return preparation services in Temple Hills under several business names, including United Tax Services LLC. For the tax years 2012 through 2018, Worthy and her co-conspirators fraudulently inflated client refunds by adding false deductions and business losses. The IRS later expelled Worthy and United Tax Services from the IRS e-file program after Worthy prepared a false return for an undercover IRS agent. Worthy then began using another co-conspirator’s e-filing credentials in order to continue preparing clients’ returns. In total, Worthy caused a tax loss to the IRS of $189,748.
Worthy is scheduled to be sentenced on Aug. 20, 2021, and faces a maximum penalty of eight years in prison. Worthy also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Jonathan F. Lenzner for the District of Maryland made the announcement.
The IRS-Criminal Investigation is investigating the case.
Trial Attorney Kathryn Sparks of the Justice Department’s Tax Division and Assistant U.S. Attorney Leah Grossi of the U.S. Attorney’s Office for the District of Maryland are prosecuting the case.
Leader of Neo-Nazi Group Pleads Guilty to Hate Crime and Conspiracy Charges for Threatening Journalists and AdvocatesRead the Press Release
A Washington state man pleaded guilty today to federal hate crime and conspiracy charges in the U.S. District Court for the Western District of Washington.
Cameron Shea, 25, a leader of the neo-Nazi group Atomwaffen Division, pled guilty to federal conspiracy and hate crime charges for threatening journalists and advocates who worked to expose anti-Semitism.
Shea pleaded guilty to one count of conspiring to commit three offenses against the United States: interference with federally-protected activities because of religion; mailing threatening communications; and cyberstalking. He also pleaded guilty to one count of interfering with a federally protected activity because of religion.
Shea and three co-defendants were charged with conspiring via an encrypted online chat group to identify journalists and advocates they wanted to threaten in retaliation for the victims’ work exposing anti-Semitism. The group focused primarily on those who are Jewish or journalists of color. The group created posters, which featured Nazi symbols, masked figures with guns and Molotov cocktails, and threatening messages, to deliver or mail to the journalists or advocates the group targeted. Shea messaged the group that he wanted Atomwaffen members in different locations to place posters on their victims’ homes on the same night to catch journalists off guard and accomplish a “show of force.” The posters were delivered to victims in Tampa, Seattle, and Phoenix. Shea mailed posters to several victims, including a poster sent to an official at the Anti-Defamation League (ADL) that depicted a Grim Reaper-like figure wearing a skeleton mask holding a Molotov cocktail outside a residence, with the text “Our Patience Has Its Limits . . . You have been visited by your local Nazis.” Two of Shea’s co-defendants, Ashley Parker-Dipeppe and Johnny Roman Garza, previously pled guilty to the conspiracy charge and were sentenced. The fourth co-defendant, Kaleb Cole, pled not guilty and is awaiting trial.
Shea will be sentenced on June 28. He faces a maximum penalty of 10 years in prison for the hate crime charge and five years for the conspiracy charge.
The case is being investigated by the FBI’s Joint Terrorism Task Forces in Tampa, Seattle, Houston, and Phoenix with assistance from National Security Division Counterterrorism Section Trial Attorney David Smith and the Seattle Police Department.
The case is being prosecuted by Trial Attorney Michael J. Songer of the Justice Department’s Civil Rights Division and by Assistant U.S. Attorney Thomas Woods of the Western District of Washington with assistance from the U.S. Attorneys’ Offices in the Middle District of Florida, Southern District of Texas, District of Arizona, and Central District of California.
As U.S. Attorney General Merrick Garland recently stated: “[The Justice Department] will persist in our efforts to investigate and appropriately prosecute those who attack members of our communities, set fire to places of worship, or use the Internet to threaten bodily injury to other persons because of their real or perceived protected characteristics.”
For more information on the department’s commitment to serving the cause of justice and protecting the safety of all of our communities, please see: . For more information and resources on the department’s efforts to combat hate crimes, visit www.justice.gov/hatecrimes. If you believe you have been a victim of a civil rights violation, please visit https://civilrights.justice.gov/ to file a report.
Jury finds pair guilty on drug trafficking chargesRead the Press Release
ST. LOUIS – On Wednesday, a jury convicted Oscar Dillon, 47, of St. Charles County, Missouri, guilty of drug conspiracy, attempted obstruction of justice and money laundering.
The same jury also convicted Michael Grady, 65, of St. Louis, Missouri, guilty of drug conspiracy, attempted obstruction of justice and money laundering. The jury found Grady not guilty on an additional charge of witness tampering.
United States District Judge Henry E. Autrey presided over the trial, which lasted more than two weeks.
The evidence at trial proved that Dillon and Grady provided long-term assistance to some of the area’s most prolific and violent drug traffickers in an effort to allow the drug trafficking to continue unimpeded by federal investigators. Among other things, Dillon and Grady routinely attempted to gain information about on-going federal investigations and prosecutions and the identities of cooperating witnesses so these organizations could continue their high-level drug distribution which generated significant proceeds and maintained prowess by violence. More specifically to the charged crimes, Dillon and Grady assisted in the flight of a known drug trafficker to Texas following federal indictment and concealed the source and ownership of drug proceeds.
“We are grateful the jury carefully considered the complex evidence presented in this case and arrived at the verdicts justice demanded,” said U.S. Attorney Sayler A. Fleming. “As was demonstrated throughout the trial, Defendants Dillon and Grady have each long provided vital assistance to the continued successful operation of violent drug distribution rings and have attempted to thwart federal prosecutions at every turn.”
The Court has scheduled sentencing for both Dillon and Grady on July 13, 2021.
The Drug Enforcement Administration, Federal Bureau of Investigation and the St. Louis Metropolitan Police Department Intelligence Section investigated the case. Assistant United States Attorneys Michael Reilly and Donald Boyce handled the case.
California CEO Pleads Guilty in Employment Tax SchemeRead the Press Release
A California man pleaded guilty yesterday to employment tax fraud.
According to court documents, Michael Todd Lucas, CEO of i3 Brands Inc., controlled a number of inventory software development businesses from 2008 through 2017, including i3 Brands Inc., Trademotion Inc. (formerly known as Trademotion LLC), Intelligentz Automotive Corporation, and Intelligentz Corporation. Lucas had significant control over the finances of these companies and had a legal duty to account for and pay employment taxes to the IRS. Lucas caused these entities to withhold taxes from employees’ paychecks, but he did not fully pay the withheld taxes to the IRS. Rather, Lucas caused the businesses to spend thousands of dollars for his personal benefit. In total, from 2008 to 2017, Lucas’ entities failed to pay over more than $4.9 million in payroll taxes, penalties, and interest.
Lucas pleaded guilty to failing to account for and pay over employment taxes. He is scheduled to be sentenced on Oct. 4, 2021, and faces a maximum penalty of five years in prison. The defendant also faces a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and Acting U.S. Attorney Randy S. Grossman for the Southern District of California made the announcement.
IRS-Criminal Investigation is investigating the case.
Trial Attorney Charles A. O’Reilly and Assistant U.S. Attorney Stephen K. Moulton, now of the Middle District of Alabama, prosecuted the case.
Bidder Pleads Guilty to Rigging Bids at Online Auctions for Surplus Government EquipmentRead the Press Release
A Missouri man pleaded guilty today to rigging online bids submitted to the General Services Administration (GSA).
According to court documents, Alan Gaines pleaded guilty to the one-count indictment filed in the U.S. District Court in Minneapolis on Jan. 30, 2020. According to the indictment, Gaines conspired with others to rig bids at online public auctions of surplus government equipment conducted by the GSA from about July 2012 until as late as May 2018. Gaines is the third individual charged and the third individual to plead guilty in the investigation.
“For years, the defendant’s self-serving scheme stole from the government and robbed American taxpayers,” said Acting Assistant Attorney General Richard A. Powers of the Department of Justice Antitrust Division. “I commend the team of GSA Office of Inspector General (OIG) agents and Antitrust Division prosecutors and paralegals for their dedication to safeguarding online auctions from collusion.”
“Competition is a fundamental component of any fair auction,” said Inspector General Carol F. Ochoa of the GSA. “GSA OIG will continue to investigate allegations of collusive activities that undermine the integrity of GSA Auctions and short-change the taxpayer.”
The GSA operates GSA Auctions, which offers the general public the opportunity to bid electronically on a wide variety of federal assets, including computer equipment that is no longer needed by government agencies. GSA Auctions sells that equipment via its online auctions, and the proceeds of the auctions are distributed to the government agencies or the U.S. Treasury general fund.
According to the indictment, the primary purpose of the conspiracy was to suppress and eliminate competition. The indictment further alleges that Gaines and his co-conspirators obtained the equipment by agreeing which co-conspirators would submit bids for particular lots offered for sale by GSA Auctions and which co-conspirator would be designated to win a particular lot.
Gaines pleaded guilty to a violation of the Sherman Act. He faces a maximum of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The GSA Office of Inspector General Great Lakes Regional Investigations Office in Chicago is investigating the case.
The Antitrust Division’s Chicago Office is prosecuting the case.
Anyone with information concerning bid rigging or fraud related to GSA auctions should contact the Chicago Office of the Antitrust Division at 312-984-7200, the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit www.justice.gov/atr/contact/newcase.html or email the GSA Office of Inspector General at [email protected].
Arkansas Businessman Sentenced to Prison for Income Tax EvasionRead the Press Release
An Arkansas man was sentenced today to three years in prison for income tax evasion.
According to court documents, James Brassart of Bentonville filed a 2006 individual income tax return that reported adjusted gross income of $1,502,749 and taxes due to the IRS of $486,438. Brassart failed to pay all of the taxes owed and was assessed penalties and interest. To evade his tax liabilities, Brassart took extensive steps to conceal his income and assets. He used three nominee corporations, Eagle Creek Construction and Development Inc., Mono Pro LLC, and Sierra Madre Contracting LLC, to conduct business and purchase assets.
Moreover, between 2010 and 2016, Brassart filed four false bankruptcy petitions to discharge his tax debt. In those bankruptcies, Brassart made false statements and filed fraudulent documents in which he concealed his ownership interests in the nominee corporations. Through his actions, Brassart caused a total tax loss of approximately $1,360,682 to the IRS.
In addition to the term of imprisonment, U.S. District Judge Timothy L. Brooks ordered Brassart to serve three years of supervised release and to pay approximately of $1,360,682.29 in restitution to the United States.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS-Criminal Investigation investigated the case.
Trial Attorney Robert Kemins of the Tax Division prosecuted the case. Acting Deputy Assistant Attorney General Goldberg also thanked the U.S. Attorney’s Office for the Western District of Arkansas (Fayetteville Division) for their substantial assistance.
Statement by the Principal Deputy Assistant Attorney General for Civil Rights Leading a Coordinated Civil Rights Response to Coronavirus (COVID-19)Read the Press Release
Principal Deputy Assistant Attorney General for Civil Rights Pamela S. Karlan issued the following statement and attached resource guide to assist Federal agencies, state and local governments, and recipients of Federal financial assistance in addressing ongoing civil rights challenges related to the COVID-19 pandemic:
The COVID-19 pandemic has stressed our Nation’s commitment to an open, equal, and inclusive society. We have seen hateful and xenophobic rhetoric and violence aimed at Asian American and Pacific Islander (AAPI) communities and businesses. We have also seen Black, Indigenous, Latino, and Pacific Islander communities, as well as people with disabilities, suffer disproportionately high rates of death and greater risk of infection and hospitalization. COVID-19 has magnified social, economic, and environmental inequalities that we cannot ignore.
As a Nation, we cannot adequately respond to, and recover from, COVID-19 if we do not protect all of our neighbors. That requires us to pursue justice on behalf of those targeted because of their race, color, religion, national origin, sex (including sexual orientation and gender identity), disability, or citizenship.
The Department of Justice will vigorously enforce Federal civil rights as we continue the process of national reckoning, recovery, and healing. Civil rights protections and responsibilities still apply, even during emergencies. They cannot be waived. Federal agencies, state and local governments, and recipients of Federal financial assistance are an integral part of our shared effort to uphold civil rights.
The following principles should assist in meeting these nondiscrimination obligations:
1. Combat hate crimes, harassment, and other discrimination against the AAPI community. There has been a disturbing rise in violence, harassment, and discrimination directed at the AAPI community. Laws prohibiting such conduct must be vigorously enforced by the Federal government, acting with its state and local partners. We must support and provide services to victims of hate crimes, harassment, or unlawful discrimination and ensure the safety of schools, workplaces, and communities through prompt and thorough investigation of complaints. The attached guide includes resources to support prevention and reporting of hate crimes in communities. It also explains how to report discrimination, harassment, or hate incidents in housing, education, employment or other civil rights violations. The Civil Rights Division is prepared to work with sister Federal agencies to support state and local efforts aimed at preventing pandemic-related harassment and discrimination targeting AAPI communities. For more information on preventing hate crimes in your community, visit the Department of Justice’s hate crimes resource page: https://www.justice.gov/hatecrimes.2. Ensure equal access for people with disabilities and avoid disability discrimination. COVID-19 has had a devastating and disproportionate impact on people with disabilities. Governments, health care providers, and long-term care facilities must comply with the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act (Section 504). This includes when making decisions about who will receive medical care, including vaccines and hospital beds. It also includes crafting and implementing policies such as crisis standards of care, visitation rules, and vaccine distribution plans. People living in nursing homes and other long-term care facilities have been placed at particular risk of COVID-19 infection and death. Some reports show that more than one-third of all deaths from COVID-19 in the U.S.—over 172,000 people—are linked to nursing homes and other long-term care facilities. Providing services in home- and community- based settings instead of in long-term care facilities can satisfy the ADA integration mandate by preventing unnecessary institutionalization. It can also reduce COVID-19 risk. As governments, employers, and businesses lift pandemic-related restrictions and reopen, they must comply with the ADA and Section 504. This includes providing reasonable accommodations and modifications, physical access, and effective communication. For information about rights and responsibilities under these statutes, please contact the ADA Information Line at 800-514-0301 (voice) or 800- 514-0383 (TTY) or visit https://www.ada.gov/. Additional relevant information can be found on the U.S. Department of Health and Human Services’ Office for Civil Rights’ website at https://www.hhs.gov/civil-rights/for-providers/civil-rights-covid19/.
3. Reduce further learning loss for vulnerable students. Education inequalities have worsened as COVID-19 continues to disrupt learning for millions of students. Students of color are experiencing disproportionate failure rates, a growing digital divide disadvantages students who cannot access the internet and miss school as a result, and students with limited English proficiency and/or a disability are suffering serious educational consequences. Students who are homeless or in juvenile justice facilities are particularly at risk of learning disruptions. Schools contribute to these challenges when they fail to communicate with limited English proficient families in a language they understand about how to access online learning and other important information about school activities. Whether schools begin to reopen or continue to teach virtually, they must do so in compliance with Titles IV and VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, the Equal Educational Opportunities Act of 1974, the ADA, and Section 504. COVID-19 resources for schools, students, and families can be found at https://www.ed.gov/coronavirus?src=feature.
4. Protect correctional staff, incarcerated and detained people, and their families. Studies have shown that compared to the general population, a disproportionate number of COVID-19 outbreaks and deaths occur in jails, prisons, and detention facilities across the country. Certain communities of color, including Black, Indigenous, and Latino people, as well as people with disabilities, are more likely to have comorbidities, and suffer serious and even fatal COVID-19 infections, both in the general population and in jails, prisons, and detention centers. Individuals with limited English proficiency and those with disabilities can face increased isolation and lack meaningful access to essential information during COVID-19. This can limit their ability to obtain treatment and timely escalation of care when needed. State and local jails, prisons, and detention centers that receive Federal financial assistance must not discriminate on the basis of race, color, and national origin under Title VI of the Civil Rights Act of 1964 and other statutes. They must also comply with the ADA’s and Section 504’s disability nondiscrimination mandate. In addition to the statutory prohibitions on discrimination, these facilities may not deprive prisoners of their rights guaranteed by the Eighth and Fourteenth Amendments. Federal prisons and detention facilities are subject to Executive Order 13166 and other authorities that protect the civil rights of Federal detainees and inmates. For further guidance on managing pandemic response and recovery in correction and detention facilities, see https://nicic.gov/coronavirus and https://www.cdc.gov/coronavirus/2019-ncov/community/correction-detention/guidance-correctional-detention.html.
5. Protect vulnerable populations facing housing instability. COVID-19 has exacerbated existing racial and economic disparities in access to safe and affordable housing. Despite these challenges, individuals retain their fundamental right to obtain housing free from discrimination. Direct providers of housing must still comply with the Fair Housing Act. Our country already faced a severe shortage in affordable housing before the economic impacts of COVID-19 caused significant increases in housing instability. With studies showing that certain communities of color are more likely to be at risk of eviction, we must ensure that discrimination is not an additional barrier. Information on where to find housing assistance during the pandemic can be found here: https://www.benefits.gov/news/article/402. The Department of Housing and Urban Development also maintains a list of resources, found at https://www.hud.gov/coronavirus.
6. Provide information in languages other than English. Large numbers of people in the United States do not read or understand English well. Yet all people need to understand the symptoms, when to stay home, and how to protect themselves and their families to prevent the spread of the virus. Federal, state, and local public messaging on pandemic safety measures and recovery efforts should be provided in the wide array of languages spoken by people with limited English proficiency. Likewise, it is important that we ensure language accessibility in law enforcement, courts, and victim services so that victims of hate crimes and discrimination can vindicate their rights. Title VI requires recipients of Federal financial assistance to provide meaningful access to Federally-funded programs and activities to people with limited English proficiency. More information about ensuring language access and the concentration of, and languages spoken by, persons with limited English proficiency in a particular community can be found at https://www.lep.gov/ and https://www.lep.gov/maps/.
7. Collect data to monitor, track, and ensure equitable outcomes. COVID-19 requires accountability and action to address longstanding disparities for Black, Indigenous, Latino, AAPI, and other people of color, as well as people with disabilities. Complete, consistent, and accurate data collection and reporting on race, ethnicity, disability, and limited English proficient status are essential to our ability to recognize and address disparities and inequality. Federal civil rights offices are authorized to use qualitative (studies, news reports, and other sources of information) and quantitative data to conduct outreach, technical assistance, and enforcement to ensure compliance with Title VI of the Civil Rights Act of 1964. The Civil Rights Division is available to consult with Federal agencies on approaches to data collection and assessments to determine whether policies or practices may have a discriminatory impact. For more information on identifying discrimination under Title VI and on data collection, see https://www.justice.gov/crt/fcs/T6Manual7#Z; see also Executive Order 13985 (addressing the need for race, ethnicity, and disability data collection).
The Civil Rights Division will do its part to facilitate a coordinated federal response to these issues. Under Executive Order 12250, the Department of Justice is responsible for ensuring the consistent and effective implementation of Federal civil rights laws “prohibiting discriminatory practices in Federal programs and programs receiving federal financial assistance.” Accordingly, I have directed the Civil Rights Division’s Federal Coordination and Compliance Section and the Disability Rights Section to ensure that Federal agencies use their authority to pursue a comprehensive approach to advance equity and redress inequities in pandemic response and recovery. Finally, the Civil Rights Division will continue to convene meetings of Federal civil rights offices to:
1) exchange information and resources for agencies to take action on COVID-19-related harassment and discrimination;
2) monitor and address civil rights issues related to COVID-19 and recipients of Federal financial assistance;
3) identify strategies to ensure Federal, state and local efforts achieve equitable outcomes in current and future emergency planning and response;
4) work with the Federal agencies to develop and identify data sources or indices that will assist recipients of Federal financial assistance to collect data from communities of color and other underserved populations. The Civil Rights Division, together with other agencies throughout the Federal government, will continue to monitor civil rights issues related to COVID-19 and vigorously enforce civil rights laws. To file a complaint with the Civil Rights Division, please fill out our online form at https://civilrights.justice.gov.
Michigan Hotel Manager Indicted for Tax Fraud and ObstructionRead the Press Release
Two defendants indicted on tax fraud and obstruction charges made their first appearances in the U.S. District Court for the Eastern District of Michigan today.
According to the indictment returned on March 3, 2021, Harold Walls, of Clare, Michigan, managed the day-to-day operations of the Days Inn Clare, a hotel owned by his father, Karl Walls. Rather than pay himself regular wages through the hotel’s payroll system, Harold Walls allegedly caused himself to be paid by other means, including by paying personal expenses from the hotel’s operating account. Harold Walls then allegedly filed individual income tax returns for 2013 through 2017 that did not report any income from the hotel. Rather, Harold Walls allegedly only reported wages from his employment as a professor of hospitality management and income from the rental of farmland.
The indictment further charges that Karl Walls reported income and expenses for the Days Inn Clare on Schedules C attached to his individual tax returns. From 2012 through 2017, Harold Walls allegedly provided and caused his father to provide false and incomplete information to Karl Walls’ return preparer, which resulted in the preparation of Schedules C for the hotel that understated its gross receipts and overstated its expenses. In particular, the information allegedly provided to the tax return preparer did not include revenue for 11 “off book” rooms that were not tracked in the hotel’s reservation system and, as a result, the revenue for these rooms was not reported on the Schedules C. The information allegedly provided to the tax return preparer also included inflated expense figures for the hotel’s property taxes for 2013, 2014, and 2017.
Finally, the indictment charges that both Harold Walls and Karl Walls attempted to obstruct the criminal investigation of Harold Walls. In January 2017, after IRS-Criminal Investigation (IRS-CI) special agents notified Harold Walls that he was the subject of a criminal tax investigation, Harold Walls allegedly made false statements to the special agents about his work at the hotel and attempted to cause a hotel employee to make similar false statements. In October 2018, Karl Walls also allegedly attempted to corruptly persuade two witnesses to provide false testimony to the grand jury regarding his son’s employment at the hotel.
Harold Walls is charged with filing false tax returns, aiding in the preparation of false tax returns, and endeavoring to obstruct the IRS. If convicted, Harold Walls faces a maximum term of imprisonment of three years on each of the tax and obstruction charges. Karl Walls is charged with two counts of witness tampering. Karl Walls faces a maximum term of imprisonment of 20 years on each count of witness tampering. Both defendants also face a period of supervised release and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS-CI is investigating the case.
Trial Attorneys Melissa S. Siskind and Samuel B. Bean of the Justice Department’s Tax Division are prosecuting the case.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Attorney General Merrick B. Garland Issues Statement on Death and Injury of Capitol Police OfficersRead the Press Release
U.S. Attorney General Merrick B. Garland today issued the following statement:
“The entire Department of Justice mourns with the U.S. Capitol Police and the family of Officer William Evans. Our thoughts are also with the other brave officer injured in the attack.
“As the members of the U.S. Capitol Police have demonstrated this year, they will give their all to defend the seat of our democracy. The Washington Field Office of the FBI is assisting the Metropolitan Police Department with their investigation of this tragic attack.”
Reptile Dealer Arrested on Lacey Act and Firearms ChargesRead the Press Release
A South Carolina man was arrested on March 30 on Lacey Act and firearms charges. A federal judge in the Middle District of Georgia, unsealed the indictment today.
Ashtyn Michael Rance, 35, of Dalzell, was charged by a federal grand jury in the Middle District of Georgia on March 9 for trafficking vipers and turtles, as well as illegally possessing two firearms. U.S. Fish and Wildlife Service (USFWS) agents arrested Rance in Dalzell on a warrant to face the charges in the Middle District of Georgia.
The indictment alleges that in February 2018, Rance sold 16 spotted turtles and three eastern box turtles to a buyer in Florida. He shipped the reptiles from Valdosta in a package falsely labeled as containing tropical fish and lizards. The indictment also alleges that in May 2018, Rance sent a second package to Florida with a label stating that it contained harmless reptiles and ball pythons. In reality, Rance had shipped 15 Gaboon vipers, which are venomous snakes. Finally, the indictment alleges that on May 11, 2018, law enforcement authorities executed a search warrant at Rance’s Valdosta home, where they recovered a Bushmaster Carbine .223 caliber rifle and a Mossberg 12-gauge shotgun. It is a violation of federal law for a convicted felon to possess a firearm, and Rance has a prior felony conviction.
“Rance’s reckless shipment of venomous snakes and illegal possession of firearms demonstrate the dangers of wildlife trafficking,” said Acting Assistant Attorney General Jean E. Williams of the Justice Department’s Environment and Natural Resources Division (ENRD). “I applaud our federal and state law enforcement partners for keeping the public and delivery couriers safe.”
“Illegal wildlife trafficking can have devastating effects, and our office will prosecute individuals found in violation of the Lacey Act and other environmental protection laws,” said Acting U.S. Attorney Peter D. Leary of the U.S. Attorney’s Office for the Middle District of Georgia. “I want to thank the U.S. Fish and Wildlife Service, ATF and Georgia DNR for their work investigating this case.”
“Wildlife trafficking is a serious crime that impacts species at home and abroad,”said Special Agent in Charge Stephen Clark for the USFWS Office of Law Enforcement. “I would like to thank the Justice Department, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the Georgia and South Carolina Departments of Natural Resources for their assistance with this case. Together, we have stopped highly venomous snakes, and our nation’s own wildlife, from being smuggled.”
Rance possessed and sold the reptiles in violation of Georgia laws. The federal Lacey Act is the nation’s oldest wildlife trafficking statute and prohibits, among other things, transporting wildlife in interstate commerce if the wildlife was possessed illegally under state laws. It also is a Lacey Act violation to falsely label a package containing wildlife.
The spotted turtle (Clemmys guttata) is a semi-aquatic turtle native to the eastern United States and Great Lakes region. The eastern box turtle (Terrapene carolina carolina) is endemic to forested regions of the East Coast and Midwest. Collectors prize both species in the domestic and foreign pet trade market. The Gaboon viper (Bitis gabonica) is native to central Sub-Saharan Africa. Its venom can cause shock, loss of consciousness or death in humans.
The maximum sentence under the Lacey Act and firearms charges are five and 10 years’ imprisonment, respectively, and a $250,000 fine for each charge.
The USFWS Office of Law Enforcement in Vero Beach, Florida; the Bureau of Alcohol, Tobacco, Firearms, and Explosives; and the Georgia Department of Natural Resources conducted the investigation as part of Operation Middleman. The operation focused on the trafficking of reptiles from the United States to China.
Trial Attorney Ryan Connors of ENRD’s Environmental Crimes Section and Assistant U.S. Attorney Sonja Profit for the Middle District of Georgia are prosecuting the case.
An indictment is only an accusation, and the defendant is presumed innocent until proven otherwise before a jury at trial.
Federal Court Enjoins Dallas Area Tax Preparer from Preparing Tax ReturnsRead the Press Release
A federal court in the Northern District of Texas, Dallas Division, has permanently enjoined a Dallas-area tax return preparer from preparing federal income tax returns for others pursuant to a stipulated permanent injunction.
The civil complaint filed in the case alleged that Keysha Briseño continually and repeatedly included false business losses and fabricated business expenses on some of her clients’ returns. According to the complaint, she and her spouse allegedly own and operate a tax preparation business known under the names Tax Genius LLC; Tax Genie; and K&J Tax Service. The complaint alleged that Briseño controls Tax Genius and has prepared over 4,200 tax returns between 2017 through 2019, more than 25% of which contained fabricated business losses. The complaint further alleged that after the IRS revoked her federal return preparer identification in 2012, Briseño continued to prepare tax returns using her sister’s preparer identification. According to the complaint, Briseño’s fraudulent return preparation activities have caused significant harm to her customers and resulted in millions of dollars in tax losses to the United States.
Briseño consented to the entry of the injunction, which permanently bars her from acting as a federal tax preparer either as herself or doing business as Tax Genius, Tax Genie, or K&J Tax Service. The injunction further bars her from assisting or advising anyone in connection with any tax matter and from having an ownership interest or working for any other entity that prepares tax returns or represents clients before the IRS.
Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division made the announcement.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. (More information can also be found here.) The IRS has information on its website for choosing a tax preparer, has launched a free directory of federal tax preparers, and offers information on how to avoid “ghost” tax preparers, whose refusal to sign a return should be a red flag to taxpayers. The IRS also has a list of important reminders for taxpayers who are about to file their 2020 tax returns, including how to prepare for a smooth filing process.
In addition, IRS Free File, a public-private partnership, offers free online tax preparation and filing options on IRS partner websites for individuals whose adjusted gross income is under $72,000. For individuals whose income is over that threshold, IRS Free File offers electronical federal tax forms that can be filled out and filed online for free.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Court Authorizes Service of John Doe Summons Seeking Identities of U.S. Taxpayers Who Have Used CryptocurrencyRead the Press Release
A federal court in the District of Massachusetts entered an order today authorizing the IRS to serve a John Doe summons on Circle Internet Financial Inc., or its predecessors, subsidiaries, divisions, and affiliates, including Poloniex LLC (collectively “Circle”), seeking information about U.S. taxpayers who conducted at least the equivalent of $20,000 in transactions in cryptocurrency during the years 2016 to 2020. The IRS is seeking the records of Americans who engaged in business with or through Circle, a digital currency exchanger headquartered in Boston.
“Those who transact with cryptocurrency must meet their tax obligations like any other taxpayer,” said Acting Assistant Attorney General David A. Hubbert of the Justice Department’s Tax Division. “The Department of Justice will continue to work with the IRS to ensure that cryptocurrency owners are paying their fair share of taxes.”
“Tools like the John Doe summons authorized today send the clear message to U.S. taxpayers that the IRS is working to ensure that they are fully compliant in their use of virtual currency,” said IRS Commissioner Chuck Rettig. “The John Doe summons is a step to enable the IRS to uncover those who are failing to properly report their virtual currency transactions. We will enforce the law where we find systemic noncompliance or fraud.”
Cryptocurrency, as generally defined, is a digital representation of value. Because transactions in cryptocurrencies can be difficult to trace and have an inherently pseudo-anonymous aspect, taxpayers may be using them to hide taxable income from the IRS. In the court’s order, U.S. Judge Richard G. Stearns found that there is a reasonable basis for believing that cryptocurrency users may have failed to comply with federal tax laws.
The court’s order grants the IRS permission to serve what is known as a “John Doe” summons on Circle. The United States’ petition does not allege that Circle has engaged in any wrongdoing in connection with its digital currency exchange business. Rather, according to the court’s order, the summons seeks information related to the IRS’s “investigation of an ascertainable group or class of persons” that the IRS has reasonable basis to believe “may have failed to comply with any provision of any internal revenue laws[.]” According to the copy of the summons filed with the petition, the IRS is requesting that Circle produce records identifying the U.S. taxpayers described above, along with other documents relating to their cryptocurrency transactions.
The IRS issued guidance regarding the tax treatment of virtual currencies in IRS Notice 2014-21, which provides that virtual currencies that can be converted into traditional currency are property for tax purposes. The guidance explains that receipt of virtual currency as payment for goods or services is treated as income and that a taxpayer can have a gain or loss on the sale or exchange of a virtual currency, depending on the taxpayer’s cost to purchase the virtual currency (that is, the taxpayer’s tax basis).
Acting U.S. Attorney Leif Johnson, the Confederated Salish and Kootenai Tribes and FBI Announce Completion of Tribal Community Response Plan to Address Missing and Murdered Indigenous PersonsRead the Press Release
PABLO — The U.S. Attorney’s Office for the District of Montana, the Confederated Salish and Kootenai Tribes (CSKT) of the Flathead Indian Reservation and the FBI today announced the completion of the nation’s first Tribal Community Response Plan (TCRP) as part of a pilot project to address cases of Missing and Murdered Indigenous Persons.
Acting U.S. Attorney Leif Johnson, CSKT Chairwoman Shelly R. Fyant and FBI Executive Assistant Director Terry Wade presented the TCRP to tribal representatives during a meeting today at tribal headquarters in Pablo.
The U.S. Attorney’s Office in Montana and CSKT on Dec. 1 launched the pilot project in accordance with the U.S. Department of Justice’s Missing and Murdered Indigenous Persons (MMIP) Initiative, and the President’s Operation Lady Justice Task Force, and in furtherance of the goals in Savanna’s Act.
CSKT, with participation from federal, tribal, state and local law enforcement representatives and community organizations, developed guidelines for the TCRP through a series of working group meetings.
“CSKT’s development of a community response plan is a historic milestone in addressing this serious national issue. CSKT’s initiative to join in this pilot project will help other tribes across the country as they develop their own TCRPs. I want to thank our office’s Missing and Murdered Indigenous Persons Coordinator, Ernie Weyand, CSKT Chairwoman Fyant, Council member and secretary, Ellie Bundy, CSKT policy analyst, Jami Pluff, and all of the partners and stakeholders who participated in this process,” Acting U.S. Attorney Johnson said.
“I’m honored to say that a lot of hard work went into reaching this milestone,” said CSKT Chairwoman Fyant. “By coming together in this effort, we have shown how true partnerships work, that by collaborating we can achieve incredible goals. We are not slowing down now. We will continue to bring light to this crisis as long as it is necessary and provide the essential law and order, victim services, media/public communications and community outreach work with all available resources. Thanks to everyone for their dedication and commitment to supporting the CSKT Community Response Plan.”
FBI Executive Assistant Director (EAD) Terry Wade, who oversees the Criminal, Cyber, Response, and Services Branch (CCRSB), stated: “The FBI has been dedicated to the Missing and Murdered Indigenous Persons (MMIP) Initiative since its inception and remains committed to the initiative. Working directly with forward leaning partners like the Confederated Salish & Kootenai Tribes (CSKT) is critical to improving the safety and security of our communities. The development of the Tribal Community Response Plan (TCRP) is yet another step in the right direction and will facilitate a coordinated response in these time sensitive investigations.”
After pilot projects are completed, Savanna’s Act directs the U.S. Attorney’s Office to continue working with other tribal governments to ensure guidelines are developed across Montana.
CSKT was selected for the pilot project in Montana because it had expressed an interest in participating, has worked on the MMIP issue, including establishing a tribal task force, and has significant community impact related to cases involving tribal members. In addition, CSKT was able to meet despite COVID-19 restrictions.
The working group meetings included representatives from the U.S. Attorney’s Office, CSKT, federal, state, tribal and local law enforcement (including the Flathead Tribal Police Department, Lake County Sheriff’s Office, Missoula County Sheriff’s Office, Flathead County Sheriff’s Office, Sanders County Sheriff’s Office, Polson Police Department, Ronan Police Department, FBI, U.S. Marshals Service, and the Montana Department of Justice) and community organizations.
Washington Man Pleads Guilty to $244 Million Ghost-Cattle ScamRead the Press Release
A Washington man pleaded guilty today to defrauding Tyson Foods Inc. (Tyson) and another company (Company 1) out of more than $244 million by charging them under various agreements for the purported costs of purchasing and feeding hundreds of thousands of cattle that did not actually exist.
According to court documents, Cody Allen Easterday, 49, of Mesa, used his company, Easterday Ranches Inc., to enter into a series of agreements with Tyson and Company 1 under which Easterday Ranches agreed to purchase and feed cattle on behalf of Tyson and Company 1. Per the agreements, Tyson and Company 1 would advance Easterday Ranches the costs of buying and raising the cattle. Once the cattle were slaughtered and sold at market price, Easterday Ranches would repay the costs advanced (plus interest and certain other costs), retaining as profit the amount by which the sale price exceeded the sum repaid to Tyson and Company 1.
Beginning in approximately 2016 and continuing through November 2020, Easterday submitted and caused others to submit false and fraudulent invoices and other information to Tyson and Company 1. These false and fraudulent invoices sought and obtained reimbursement from the victim companies for the purported costs of purchasing and growing hundreds of thousands of cattle that neither Easterday nor Easterday Ranches ever purchased, and that did not actually exist. As a result of the scheme, Tyson and Company 1 paid Easterday Ranches over $244 million for the purported costs of purchasing and feeding these ghost cattle.
Easterday used the fraud proceeds for his personal use and benefit, and for the benefit of Easterday Ranches, including to cover approximately $200 million in commodity futures contracts trading losses that Easterday had incurred on behalf of Easterday Ranches. In connection with his commodity futures trading, Easterday also defrauded the CME Group Inc. (CME), which operates the world’s largest financial derivatives exchange. On two separate occasions, Easterday submitted falsified paperwork to the CME that resulted in the CME exempting Easterday Ranches from otherwise-applicable position limits in live cattle futures contracts.
“For years, Cody Easterday perpetrated a fraud scheme on a massive scale, increasing the cost of producing food for American families,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “The Criminal Division’s prosecutors are committed to swiftly and thoroughly prosecuting frauds affecting our nation’s agricultural and other commodities markets, whether in the heartland or on Wall Street.”
“I commend the agents with the Federal Deposit Insurance Company Office of the Inspector General and the U.S. Postal Inspection Service for their dedication to investigating this case and tenacity in ferreting out the fraudulent activity to which the defendant has pleaded guilty,” said Acting U.S. Attorney Joseph H. Harrington for the Eastern District of Washington.
“Today’s guilty plea holds the defendant responsible for his extensive and coordinated fraud over many years, resulting in more than $240 million of illicit gains,” said Inspector General Jay N. Lerner of the Federal Deposit Insurance Corporation – Office of Inspector General (FDIC-OIG). “The defendant submitted false and fraudulent documentation, and then brazenly used the proceeds to cover his losses and for his personal benefit. This scheme was unraveled through rigorous and diligent investigative work with our law enforcement partners, and the FDIC-OIG remains committed to helping preserve the integrity of the banking sector.”
“Producing and providing false invoices and information on goods and services never delivered, were the fundamental key in defrauding an American multinational company out of hundreds of millions of dollars,” said Inspector in Charge Delany De León-Colón of the U.S. Postal Inspection Service Criminal Investigations Group. “This case highlights the collaborative investigative work undertaken by the U.S. Postal Inspection Service and its law enforcement partners to protect consumers and businesses from duplicitous practices. Anyone who engages in these fraudulent and deceptive activities will be brought to justice.”
Easterday pleaded guilty to one count of wire fraud and agreed to repay $244,031,132 in restitution. He is scheduled to be sentenced on August 4 and faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
The Federal Deposit Insurance Corporation Office of Inspector General and the U.S. Postal Inspection Service are investigating the case.
Acting Principal Assistant Chief Avi Perry and Trial Attorney John “Fritz” Scanlon of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Russell E. Smoot of the Eastern District of Washington are prosecuting the case.
The Fraud Section plays a pivotal role in the Justice Department’s fight against white collar crime around the country and is the national leader in prosecuting fraud and manipulation in the U.S. commodity markets.
Justice Department Warns About Fake Post-Vaccine Survey ScamsRead the Press Release
The Department of Justice has received reports that fraudsters are creating fraudulent COVID-19 vaccine surveys for consumers to fill out with the promise of a prize or cash at the conclusion of the survey. In reality, the surveys are used to steal money from consumers and unlawfully capture consumers’ personal information.
Consumers receive the surveys via email and text message, and are told that, as a gift for filling out the survey, they can choose from various free prizes, such as an iPad Pro. The messages claim that the consumers need only pay shipping and handling fees to receive their prize. Victims provide their credit card information and are charged for shipping and handling fees, but never receive the promised prize. Victims also are exposing their personally identifiable information (PII) to scammers, thereby increasing the probability of identity theft.
Unless from a known and verified source, consumers should never click on links in text messages or emails claiming to be a vaccine survey.
Schemes that use links embedded in unsolicited text messages and emails in attempts to obtain personally identifiable information are commonly referred to as phishing schemes. Phishing messages may look like they come from government agencies, financial intuitions, shipping companies, and social media companies, among many others. Carefully examine any message purporting to be from a company and do not click on a link in an unsolicited email or text message. Remember that companies generally do not contact you to ask for your username or password. When in doubt, contact the entity purportedly sending you the message, but do not rely on any contact information in the potentially fraudulent message.
If you receive a text message or email claiming to be a COVID-19 vaccine survey and containing a link or other contact information, please report the communication to the National Center for Disaster Fraud (NCDF) by calling 866-720-5721 or via the NCDF Web Complaint Form at: www.justice.gov/disaster-fraud. Intellectual property crimes such as these also may be reported to federal law enforcement at the National Intellectual Property Rights Coordination Center (IPR Center) at http://www.IPRCenter.gov.
If you believe you may have entered information into a fraudulent website, you can find resources on how to protect your information at: www.identitytheft.gov.
To learn more about identifying and protecting yourself from phishing attempts, visit https://www.consumer.ftc.gov/articles/how-recognize-and-avoid-phishing-scams or https://www.fbi.gov/scams-and-safety/common-scams-and-crimes/spoofing-and-phishing.
Further information about major scams targeting American consumers can be found at the Justice Department’s Transnational Elder Fraud Strike Force website: https://www.justice.gov/civil/consumer-protection-branch/transnational-elder-fraud-strike-force.
This alert is provided by the IPR Center and the Consumer Protection Branch of the department’s Civil Division.
For more information about the Consumer Protection Branch, visit http://www.justice.gov/civil/consumer-protection-branch.
Justice Department Settles with Moving and Storage Company to Resolve Immigration-Related Discrimination ClaimsRead the Press Release
The Justice Department today announced that it has reached a settlement agreement with Spike Inc., a moving and storage company doing business as Olympia Moving and Storage.
The settlement resolves the department’s claims that Spike violated the anti-discrimination provision of the Immigration and Nationality Act (INA) by failing to consider four U.S. workers for employment opportunities that it instead filled with H-2B visa workers at two of its locations in the Philadelphia, PA and Washington, DC metropolitan areas.
“Employers should hire workers based on their qualifications, not their citizenship or immigration status,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division. “The Civil Rights Division is committed to protecting workers from this type of discrimination.”
The department’s investigation determined that from at least Feb. 1, 2019, to March 11, 2019, Spike discriminated against four U.S. workers by failing to consider them for temporary mover positions. Despite receiving applications from these available workers, Spike filled the positions with H-2B visa workers, claiming that it could not find qualified and available U.S. workers. The INA prohibits employers from refusing to recruit or hire U.S. workers – i.e., U.S. citizens and nationals, asylees, refugees, and recent lawful permanent residents – because of their citizenship or immigration status.
Under the settlement, Spike will pay $12,000 in civil penalties to the United States, pay up to an amount of $70,000 in back pay to the affected U.S. workers, and conduct enhanced U.S. worker recruitment and advertising for future positions. The settlement also requires Spike to train employees on the requirements of the INA’s anti-discrimination provision and be subject to departmental monitoring and reporting requirements.
The Civil Rights Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits discrimination based on citizenship status and national origin in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation.
Learn more about IER’s work and how to get assistance through this brief video. More information on how employers can avoid citizenship status discrimination is available here. Applicants or employees who believe they were discriminated against based on their citizenship, immigration status, or national origin in hiring, firing, recruitment, or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, may file a charge. The public can also call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); email [email protected]; sign up for a free webinar; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER.
Justice Department Settles Immigration-Related Discrimination Claim Against Security Services CompanyRead the Press Release
The Justice Department today announced that it reached a settlement agreement with G4S Secure Solutions, Inc. (G4S), a private security services company based in Jupiter, Florida. The settlement resolves a claim that the company discriminated against a worker by requiring him to provide unnecessary documentation to prove his immigration status because the worker was not a U.S. citizen, in violation of the anti-discrimination provision of the Immigration and Nationality Act (INA).
“Employers are not allowed to ask workers for additional, unnecessary documents because of their citizenship or immigration status,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department’s Civil Rights Division. “The Justice Department looks forward to working with G4S to ensure its compliance with the INA’s anti-discrimination requirements in the future.”
The department initiated its investigation after a lawful permanent resident filed a charge alleging that G4S required him to provide additional employment eligibility documentation before assigning him to a worksite, even though he had already presented sufficient documents to prove his identity and legal right to work in the United States, which is all that workers are required to demonstrate. The investigation determined that a G4S Human Resources manager declined to place the newly hired security guard at a worksite because he had presented a Permanent Resident Card along with a notice showing that the card had been extended for one year past the expiration date listed on the card, and because the guard did not yet have his new Permanent Resident Card. Lawful permanent residents are authorized to work permanently.
In addition to showing his extended Permanent Resident Card, the investigation also revealed that the security guard had already provided G4S his unrestricted Social Security card, which alone is sufficient to establish indefinite employment authorization. The INA’s anti-discrimination provision generally prohibits employers from asking workers for more or different documents than are required by law for the employment eligibility verification process based on a worker’s citizenship status or national origin.
Under the terms of the settlement agreement, G4S will, among other things, pay more than $13,000 in back pay to the former employee and $1,400 to the U.S. Treasury; train its workers; and be subject to departmental monitoring for a two-year period.
The Civil Rights Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation. Learn more about how to avoid discrimination in verifying employment eligibility here.
Learn more about IER’s work and how to get assistance through this brief video. Applicants or employees who believe they were discriminated against based on their citizenship, immigration status, or national origin in hiring, firing, recruitment, or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, may file a charge. The public also may contact IER’s worker hotline at 1-800-255-7688; call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); email [email protected]; sign up for a free webinar; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER.
Justice Department Settles Discrimination Claim Against Virginia Recruitment FirmRead the Press Release
The Justice Department today announced that it reached a settlement with Adaequare Inc. (Adaequare), a company that recruits workers for other companies. The settlement resolves the department’s claim that Adaequare only considered applicants who were U.S. citizens and lawful permanent residents when filling a job for a client. Based on its investigation, the department concluded that by only considering applicants who are U.S. citizens and permanent residents, Adaequare discriminated against refugees, asylees, and non-citizen nationals, based on their citizenship or immigration status.
“Recruiters cannot illegally exclude applicants based on their citizenship or immigration status,” said Principal Deputy Assistant Attorney General Pamela S. Karlan of the Justice Department's Civil Rights Division. “We applaud Adaequare for immediately taking steps to ensure that this discrimination does not happen again.”
The department’s investigation determined that when a client asked Adaequare to only recruit U.S. citizens or lawful permanent residents for a job, the company did not first check to make sure that the client was legally allowed to limit jobs to those statuses. Instead, the Civil Rights Division’s Immigrant and Employee Rights Section (IER) determined, the company unlawfully screened out applicants based on their citizenship or immigration status.
The Immigration and Nationality Act (INA) protects U.S. citizens, non-citizen nationals, refugees, asylees, and recent lawful permanent residents from this type of discrimination. The law has an exception if an employer or recruiter is required to limit jobs due to a law, regulation, executive order, or government contract. The department’s investigation determined that Adaequare did not have a legal justification for screening out these workers based on their citizenship or immigration status. To help prevent future discrimination, Adaequare now asks clients for a legal justification if a client requests the company to limit candidates for a job to certain citizenship or immigration statuses.
Today’s settlement agreement requires Adaequare to take several steps to ensure it follows the law in the future, including training its employees who recruit to fill positions. The company also must pay a civil penalty. As with its other settlements, IER will also monitor Adaequare to make sure the company is complying with the agreement.
IER is responsible for enforcing discrimination protections under the INA. The law prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation. Learn more about citizenship status discrimination under the INA here.
Learn more about IER’s work and how to get assistance through this brief video. Applicants or employees who believe they were discriminated against based on their citizenship, immigration status, or national origin in hiring, firing, recruitment, or during the employment eligibility verification process (Form I-9 and E-Verify); or subjected to retaliation, may file a charge. The public also may contact IER’s worker hotline at 1-800-255-7688; call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); email [email protected]; sign up for a free webinar; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER.