District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
District Court Enters Permanent Injunction Shutting Down Technical-Support Fraud SchemeRead the Press Release
A federal court entered an order of permanent injunction against an individual and five companies in a case against a large-scale technical-support fraud scheme alleged to have defrauded hundreds of elderly and vulnerable U.S. victims, the Department of Justice announced today.
The order bars Michael Brian Cotter, 59, of Glendale, California, and four companies — Singapore registered Global Digital Concierge Pte. Ltd., formerly known as Tech Live Connect Pte. Ltd., Nevada registered companies Sensei Ventures Incorporated and NE Labs Inc., New York registered KeviSoft LLC — from selling technical-support services or software via telemarketing or websites.
“The department is committed to protecting vulnerable Americans, particularly America’s seniors, from those who seek to steal their hard earned savings,” said Acting Assistant Attorney General Jeffrey Bossert Clark for the Civil Division. “The department is grateful for the cooperation of foreign law enforcement, including India’s Central Bureau of Investigation, in investigating, disrupting, and prosecuting technical-support fraud schemes and other schemes originating abroad and directed at the American public.”
“The Postal Inspection Service is committed to investigating all types of elder fraud,” said Damon Wood, Inspector in Charge of the Philadelphia Division of the U.S. Postal Inspection Service. “Fraudsters who scam the elderly and others online use fear and pressure tactics to prey on our most vulnerable Americans from the safety of a computer screen. The Inspection Service is proud of our domestic and international partners who extended the reach of our investigative efforts, shutting this scam down once and for all, and protecting American citizens.”
The complaint filed in October 2020 alleged that Cotter worked with co-conspirators in India from at least 2011 to 2020 to operate a technical-support fraud scheme. The scheme allegedly contacted U.S. consumers via internet pop-up messages that falsely appeared to be security alerts from Microsoft or another well-known company. The pop-up messages fraudulently claimed that the consumer’s computer was infected by a virus, purported to run a scan of the consumer’s computer, falsely confirmed the presence of a virus and malware, and then provided a toll-free number to call for assistance. When victims called the toll-free number, they were connected to India-based call centers participating in the fraud scheme. Call center workers asked victims to give them remote access to their computers and told victims that they detected viruses or other malware on their computers. Eventually, the call center workers would falsely diagnose non-existent problems and ask victims to pay hundreds of dollars for unnecessary services and software.
The complaint asserted that Cotter worked with co-conspirators in India to operate the scheme, including registering website domains, setting up shell companies, and entering into relationships with banks and payment processors to facilitate the collection of funds from victims of the scheme. Individual victims payed hundreds to thousands of dollars to the scheme for unwanted and unnecessary technical-support services.
Under the terms of the consent decree of permanent injunction entered today, the defendants agreed to be permanently barred from, among other things, offering for sale via telemarketing or website any technical-support service or software and advertising via computer pop-up messages. The consent decree also transfers ownership of 19 domain names alleged to have been used as part of the technical-support scheme to the United States, so that those domains can no longer be used as part of the fraud scheme.
The widespread fraud allegedly committed in this case was brought to the attention of the Transnational Elder Fraud Strike Force by Microsoft, which often is impersonated by those engaged in technical-support fraud schemes.
Acting Assistant Attorney General Clark thanked the Postal Inspection Service for its investigation of the case, and the FBI’s Economic Crimes Unit and Legal Attaché’s Office in Delhi, India, for their substantial coordination efforts. He also expressed appreciation to Microsoft for apprising the Strike Force of the alleged offenses. The U.S. case is being handled by Trial Attorney Ann Entwistle of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney James Weinkle of the U.S. Attorney’s Office in the Southern District of Florida.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In January 2020, the department designated “Preventing and Disrupting Transnational Elder Fraud” as an Agency Priority Goal, one of its top four priorities. Later, in March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep. The department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the act.
The department’s extensive and broad-based efforts to combat elder fraud seek to halt the billions of dollars senior lose to fraud schemes, including those perpetrated by transnational criminal organizations. The best method for prevention, however, is by sharing information about the various types of elder fraud schemes with relatives, friends, neighbors, and other seniors who can use that information to protect themselves.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed 7 days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.
Justice Department Files Statement of Interest Urging Transparency in the Compensation of Asbestos ClaimsRead the Press Release
The Department of Justice today filed a Statement of Interest in In re Bestwall LLC in the U.S. Bankruptcy Court for the Western District of North Carolina. In this bankruptcy case, the debtor Bestwall LLC seeks to establish a trust to resolve its asbestos liabilities pursuant to 11 U.S.C. § 524(g), a provision in the Bankruptcy Code that provides the framework for responding to the unique issues associated with asbestos liability.
As part of the bankruptcy, the court will evaluate the submitted asbestos claims and estimate the amount of the debtor’s asbestos liabilities. In order to ensure the accuracy of the estimation, the debtor has asked the court to require asbestos claimants to fill out a questionnaire providing basic information about their claims and to authorize discovery from other asbestos trusts to which claimants have submitted claims. The department’s Statement of Interest supports these proposed procedures on the ground that they will further transparency in the evaluation of the submitted asbestos claims and ensure the reliability of the estimation of the debtor’s asbestos liabilities.
“It has become increasingly common for claimants’ counsel to seek duplicative recoveries from multiple sources by misrepresenting the asbestos products to which claimants were exposed,” said Deputy Assistant Attorney General Douglas Smith of the Justice Department's Civil Division. “Such duplicative claiming depletes resources that would otherwise be available to compensate deserving claimants filing claims in the future. Today’s Statement of Interest is one of many actions the department has taken over the last several years to encourage greater transparency in asbestos bankruptcy proceedings and prevent fraud.”
“In recent years, numerous courts and commentators have recognized that many asbestos claims are based on inaccurate or even fraudulent information,” said U.S. Attorney R. Andrew Murray for the Western District of North Carolina. “That lack of transparency in the compensation of asbestos claims has been a significant problem,”
Congress enacted 11 U.S.C. § 524(g) to create a comprehensive mechanism for addressing injuries caused by asbestos. Under section 524(g), asbestos-related claims may be channeled to a special trust created under the bankruptcy plan of reorganization, which then assumes responsibility for both the defense and payment of those claims. The trusts are managed by trustees, who often must secure support for major decisions from a “trust advisory committee,” whose members are often the same attorneys who represented asbestos claimants during the bankruptcy. Since 1994, more than 60 such trusts have been established by chapter 11 debtors with asbestos-related liabilities. According to the Government Accountability Office, asbestos bankruptcy trusts paid $17.5 billion from 1988 through 2011, and more recent studies estimate higher amounts.
Both courts and commentators have expressed growing concerns that claims submitted in these bankruptcies may be fraudulent. In 2014, the same bankruptcy court in which the United States today filed its Statement of Interest found a substantial pattern of misrepresentation in another case, In re Garlock Sealing Technologies LLC, 504 B.R. 71 (Bankr. W.D.N.C. 2014). The court found that, in a sample of asbestos claims submitted before the bankruptcy, in each and every case key evidence about asbestos exposure had been misrepresented or withheld. In several instances, plaintiffs made claims against defendants to whose products they had previously represented they had never been exposed. Similarly, several studies have demonstrated problems with claims submitted to asbestos trusts. One study found that, in the study period, people without malignant asbestos injury accounted for 86 percent of all claims made to the trusts and 37 percent of all trust payments. Another found that many of the claim forms submitted by the same claimants and law firms to different trusts contradicted each other. The secrecy with which asbestos claims are processed by asbestos trusts has facilitated the payment of claims that do not deserve compensation and has made it difficult to detect when plaintiffs are seeking a recovery based on inaccurate or fraudulent representations. Recognizing this problem, 16 states have already passed legislation requiring disclosure of basic information regarding other sources of asbestos compensation as well as the asbestos products to which claimants were exposed.
The United States’ Statement of Interest argues that there should be transparency in the estimation of asbestos claims in bankruptcy proceedings in order to prevent fraud and abuse. As the statement explains, courts presiding over asbestos bankruptcy cases increasingly are putting in place procedures requiring claimants to provide basic information documenting their allegations regarding product identification (and other elements of their claims) as well as any prior claims they have filed in the courts or with other asbestos trusts. Courts increasingly recognize that such transparency is critical to the fair and efficient resolution of asbestos claims.
Today’s filing is part of broader efforts by the department to look for opportunities to increase the transparency of asbestos bankruptcy proceedings and asbestos trusts in order to protect the interests of legitimate claimants and the United States. This includes objecting to bankruptcy plans that lack critical provisions to ensure transparency and accountability and to prevent fraudulent claims and mismanagement of asbestos trust funds, including provisions: that require compliance with the Medicare Secondary Payer Statute that notify claimants of their potential obligation to reimburse Medicare; that prevent excessive administrative costs and attorney contingency fees; that avoid conflicts of interest among members of the trust advisory committee; and that prevent payments to those who cannot demonstrate exposure to the defendants’ products or who have made inconsistent claims in other asbestos proceedings.
This matter is being handled by the Justice Department’s Civil Division with assistance from the U.S. Trustee Program and the U.S. Attorney’s Office for the Western District of North Carolina.
Justice Department Applauds Passage of the Criminal Antitrust Anti-Retaliation ActRead the Press Release
On Dec. 23, 2020, President Donald J. Trump signed into law the Criminal Antitrust Anti-Retaliation Act (the “Act”), which prohibits employers from retaliating against certain individuals who report criminal antitrust violations. The Act was sponsored by Senator Chuck Grassley, passed the Senate on Oct. 17, 2019, and passed the House of Representatives on Dec. 8, 2020.
“We thank the President, the Senate, and the House of Representatives for their bipartisan commitment to criminal antitrust enforcement,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “By incentivizing disclosures of anticompetitive conduct, the Act will strengthen the Antitrust Division’s criminal enforcement program, a cornerstone of our mission to protect the American consumer.”
The Act supplements a range of recent initiatives designed to support the detection, investigation, and prosecution of criminal antitrust violations. Last month, the Antitrust Division celebrated the one-year anniversary of the Procurement Collusion Strike Force with the addition of 11 new national partners. The Procurement Collusion Strike Force is a coordinated national response to combat antitrust and related schemes in government procurement, grant, and program funding at all levels of government. In October 2020, the division applauded President Trump’s authorization of the Antitrust Criminal Penalty Enhancement and Reform Permanent Extension Act, which had been supported by the department. In July 2019, the division announced a new policy designed to incentivize corporate compliance with the antitrust laws.
From Fiscal Year 2010 to 2019, the Antitrust Division’s criminal prosecutions have resulted in over $9 billion in criminal fines and penalties, along with jail terms for more than 250 individuals. Since the fall of 2019 alone, courts have imposed four criminal fines and penalties at or above the Sherman Act’s $100 million statutory maximum, and the division has prosecuted antitrust violations affecting generic drugs, cancer patients, grocery store staples, and financial markets.
U.S. Government and the State of Illinois Reach Agreement with Peoria and the Greater Peoria Sanitary District to Reduce Water Pollution from Sewer SystemRead the Press Release
The U.S. Environmental Protection Agency (EPA), the U.S. Department of Justice, and the state of Illinois today announced an agreement with the city of Peoria and the Greater Peoria Sanitary District (GPSD) that will yield significant reductions of sewage discharges from Peoria’s wastewater systems into the Illinois River and Peoria Lake.
The settlement resolves Clean Water Act violations by the city of Peoria and GPSD related to combined sewer overflows (CSOs) and National Pollutant Discharge Elimination System (NPDES) permit exceedances.
Under the proposed consent decree Peoria will implement a remedial measures program that will significantly reduce CSO discharges to the Illinois River and Peoria Lake. Peoria’s combined sewer system is currently overwhelmed by stormwater runoff during heavy rain or snow, causing CSO discharges to the Illinois River and Peoria Lake. These discharges consist of untreated human waste mixed with stormwater and contain high concentrations of bacteria, sediment, and other pollutants that impair water quality in the Illinois River and Peoria Lake.
The proposed consent decree provides Peoria flexibility to choose and build projects at periodic intervals as necessary to meet performance standards, reducing the number and volume of CSO discharges over time as projects are implemented. Peoria plans to use a high proportion of green infrastructure (e.g., permeable pavement, rain gardens, and bioswales) to achieve its performance criteria. Peoria’s overall CSO controls are estimated to cost approximately $129 million and will be completed by Jan. 1, 2040, with four interim milestones to ensure progress.
“This consent decree resolves years of violations by Peoria and GPSD of the Clean Water Act’s requirements relating to municipal sewer systems,” said Principal Deputy Assistant Attorney General Jonathan D. Brightbill of the Justice Department’s Environment and Natural Resources Division. “The agreement will dramatically reduce the volume of pollutants discharged to the Illinois River and Peoria Lake and represents a successful collaboration between the United States and state of Illinois to reach a promising solution.”
“This settlement will provide a model for other communities that want the opportunity to demonstrate the effectiveness of green infrastructure and the flexibility to take advantage of improvements in green infrastructure technology over time,” said Susan Bodine, EPA Assistant Administrator for the Office of Enforcement and Compliance Assurance. “I want to thank the state of Illinois and the city for working with EPA to develop a creative solution that will benefit city residents and surrounding communities through better water quality and enhanced recreational opportunities.”
“This consent decree strengthens protections of our state waterways by reducing pollution in the Illinois River and Lake Peoria,” said Illinois Attorney General Kwame Raoul. “Both bodies of water provide recreational opportunities for area residents. Under the consent decree, the city of Peoria will take important steps, such as utilizing green remedies, to improve water quality.”
The settlement also requires GPSD to implement improvements to maximize the flow of combined sewage from Peoria to its Wastewater Treatment Plant (WWTP), including cleaning its portion of the combined sewer system. GPSD will also eliminate the discharges from two remote treatment units within its sanitary sewer system by July 1, 2028. GPSD’s work will cost approximately $25 million and will be fully completed by 2032.
After the implementation of both Peoria and GPSD’s CSO controls, the average annual CSO discharges will be reduced by approximately 92 percent. In addition, approximately 696,000 pounds of pollutants will be prevented from being discharged to the Illinois River and Peoria Lake each year. The CSO reductions will improve water quality in the Illinois River and Peoria Lake and will allow for enhanced recreational opportunities.
The proposed consent decree also requires Peoria to develop a public participation plan that will involve Peoria’s residents in the implementation of the CSO remedial measures program and an enhanced CSO notification system to alert the public when a CSO occurs through a personal email address, if provided, or Peoria’s publicly available website. Finally, the settlement requires Peoria to pay a $100,000 civil penalty and perform a state supplemental environmental project. For the civil penalty, Peoria will pay the United States $75,000 and pay Illinois $25,000. The supplemental environmental project requires Peoria to perform stream and gulley restoration for Turkey Creek in the Springdale Cemetery area. In addition, GPSD will pay a $150,000 civil penalty, split evenly between the United States and Illinois.
The proposed consent decree is subject to a 30-day public comment period and final court approval after it is published in the Federal Register.
To view the consent decree or to submit a comment, visit the Department of Justice website at: www.justice.gov/enrd/Consent_Decrees.html.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
North Carolina Man Sentenced to 36 Months in Federal Prison for Preparing False Tax ReturnsRead the Press Release
Gene Hersholt Williamson II, was sentenced yesterday to 36 months in prison for aiding and assisting in the preparation of a false tax return and ordered to pay $637,000 in restitution, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents and statements made in court, Gene Hersholt Williamson II, 54, operated a tax return preparation business out of Jacksonville, North Carolina, between 2012 and 2018. Williamson fraudulently inflated his clients’ claimed refunds by reporting fictitious Schedule C businesses on his clients’ returns. If clients had minimal income, Williamson created a fraudulent Schedule C business for them, reporting additional income in order to maximize the claimed earned income tax credit. If, however, clients had substantial wage income, Williamson created fraudulent businesses with significant expenses to reduce their income, qualifying them to receive the earned income tax credit. Williamson received ten percent of the refunds for his services. To conceal his involvement in the scheme, Williamson did not list himself as the paid return preparer on the returns he prepared.
In addition to preparing false tax returns for clients, Williamson filed false tax returns for himself from 2012 through 2017. In all, Williamson’s misconduct resulted in a tax loss to the IRS of over $550,000.
U.S. Attorney Robert J. Higdon Jr. for the Eastern District of North Carolina and Principal Deputy Assistant Attorney General Zuckerman made the announcement after sentencing by U.S. District Judge James C. Dever III. The IRS-Criminal Investigations investigated the case and Assistant U.S. Attorney Susan B. Menzer and Tax Division Trial Attorney William Guappone prosecuted the case.
The case number is No. 7:20-CR-00133-D.
Attorney General William P. Barr Announces Results of Operation LegendRead the Press Release
Earlier today, Attorney General William P. Barr announced the results of Operation Legend, which was first launched in Kansas City, Missouri, on July 8, 2020, and then expanded to Chicago and Albuquerque, New Mexico, on July 22, 2020; to Cleveland, Ohio, Detroit, Michigan, and Milwaukee, Wisconsin, on July 29, 2020; to St. Louis, Missouri, and Memphis, Tennessee, on August 6, 2020; and to Indianapolis, Indiana, on August 14, 2020.
“Operation Legend removed violent criminals, domestic abusers, carjackers and drug traffickers from nine cities which were experiencing stubbornly high crime and took illegal firearms, illegal narcotics and illicit monies off the streets. By most standards, many would consider these results as a resounding success—amid a global pandemic, the results are extraordinary. I commend our federal law enforcement and prosecutors for seamlessly executing this operation in partnership with state and local law enforcement,” said Attorney General Barr. “When we launched Operation Legend, our goal was to disrupt and reduce violent crime, hold violent offenders accountable and give these communities the safety they deserve in memory of LeGend Taliferro, whose young life was claimed by violent crime, undoubtedly, we achieved it.”
Since Operation Legend’s launch on July 8, 2020, over 6,000 arrests – including approximately 467 for homicide – were made; more than 2600 firearms were seized; and more than 32 kilos of heroin, more than 17 kilos of fentanyl, more than 300 kilos of methamphetamine, more than 135 kilos of cocaine, and more than $11 million in drug and other illicit proceeds were seized.
Of the more than 6,000 individuals arrested, approximately 1,500 have been charged with federal offenses. Approximately 815 of those defendants have been charged with firearms offenses, while approximately 566 have been charged with drug-related crimes. The remaining defendants have been charged with various offenses.
The Attorney General launched the operation as a sustained, systematic and coordinated law enforcement initiative in which federal law enforcement agencies work in conjunction with state and local law enforcement officials to fight violent crime. Operation Legend is named in honor of four-year-old LeGend Taliferro, who was shot and killed while he slept early in the morning of June 29 in Kansas City.
The Office of Community Oriented Policing Services (COPS Office) provided a total of $60 million to fund 290 officers as part of Operation Legend and related efforts. Additionally, the Office of Justice Programs (OJP) awarded nearly $9 million in grant funding to support Operation Legend.
Breakdown of Operation Legend charges:
Kansas City, MO.
196 defendants have been charged with federal crimes outlined below.
- 75 defendants have been charged with narcotics-related offenses;
- 107 defendants have been charged with firearms-related offenses; and
- 14 defendants have been charged with other violent crimes.
Chicago, Ill.
176 defendants have been charged with federal crimes outlined below.
- 40 defendants have been charged with narcotics-related offenses;
- 130 defendants have been charged with firearms-related offenses; and
- Six defendants have been charged with other violent crimes.
Albuquerque, NM.
167 defendants have been charged with federal crimes outlined below.
- 60 defendants have been charged with narcotics-related offenses;
- 85 defendants have been charged with firearms-related offenses; and
- 22 defendants have been charged with other violent crimes.
Cleveland, OH.
119 defendants have been charged with federal crimes outlined below.
- 60 defendants have been charged with narcotics-related offenses;
- 55 defendants have been charged with firearms-related offenses; and
- Four defendants have been charged with other violent crimes.
Detroit, MI.
100 defendants have been charged with federal offenses outlined below.
- 33 defendants have been charged with narcotics-related offenses;
- 64 defendants have been charged with firearms-related offenses; and
- Three defendants have been charged with other violent crimes.
Milwaukee, WI.
74 defendants have been charged with federal crimes, broken down as follows:
- 34 defendants have been charged with firearm related offenses;
- 32 defendants have been charged with narcotic related offenses;
- Eight defendants have been charged with other violent crimes.
St. Louis, MO.
450 defendants have been charged with federal crimes.
- 193 defendants have been charged with narcotics-related offenses;
- 231 defendants have been charged with firearms-related offenses; and
- 26 defendants have been charged with other violent crimes.
Memphis, Tenn.
124 defendants have been charged with federal offenses outlined below:
- 53 defendants have been charged with narcotics-related offenses;
- 47 defendants have been charged with firearms-related offenses; and
- 24 defendants have been charged with other violent crimes.
Indianapolis, IN.
94 defendants have been charged with federal crimes outlined below.
- 18 defendants have been charged with narcotics-related offenses;
- 64 defendants have been charged with firearms-related offenses; and
- 12 defendants have been charged with other violent crimes.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Texas Sport Supplement Company Owner Pleads Guilty to Unlawful Distribution of Steroid-Like DrugsRead the Press Release
A former Texas resident and his sport supplement company pleaded guilty today to a felony charge relating to the introduction of unapproved new drugs into interstate commerce, the Department of Justice announced.
Brett David Becker, 32, currently of Concord, Michigan, and Accelerated Genetix LLC, a sport supplement company based in Argyle, Texas, pleaded guilty in the U.S. District Court for the Western District of Virginia to one count of distributing unapproved new drugs with the intent to mislead and defraud the FDA and consumers. Becker admitted that, from approximately January 2016 to March 2019, he and his company unlawfully distributed Selective Androgen Receptor Modulators (SARMs) and other substances that the FDA has not approved, including Ostarine and Ligandrol. SARMs are synthetic chemicals designed to mimic the effects of testosterone and other anabolic steroids. The FDA has long warned against the use of SARMs like those found in Accelerated Genetix products, including stating in a 2017 warning letter to another firm that SARMs have been linked to life-threatening reactions including liver toxicity, and have the potential to increase the risk of heart attack and stroke.
“Drugs masquerading as dietary supplements sidestep the FDA approval process and put consumers at risk,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division. “The Department of Justice will continue to work with FDA to ensure a safe and effective drug supply.”
In connection with his plea, Becker agreed to forfeit approximately $3.5 million, which reflects the proceeds related to Accelerated Genetix products sold across the United States through retail outlets and over the internet.
“Becker and his company put their customers’ health at risk by unlawfully distributing drugs without FDA approval,” said Acting U.S. Attorney Bubar of the Western District of Virginia. “This case is particularly troubling, given the FDA’s explicit and repeated warnings about the dangers of SARMs. FDA regulations are integral to safeguarding consumers, and I am proud of our federal team that took on this investigation to ensure the processes and the public are protected.”
“The FDA’s laws are designed to protect the public health by ensuring, among other things, that drugs are safe and effective for their intended uses,” said FDA Assistant Commissioner for Criminal Investigations Catherine A. Hermsen. “Those who manufacture drugs disguised as supplements outside the FDA’s oversight endanger consumers. We remain committed to bringing to justice companies and individuals who attempt to subvert the regulatory functions of the FDA by distributing unapproved, and potentially dangerous, drugs.”
In pleading guilty, Becker also admitted that he intended to mislead and defraud the FDA and consumers by importing these ingredients even after learning they were mislabeled by the distributor when they were shipped from China to the United States; misrepresenting Accelerated Genetix products as “dietary supplements” to create the impression that they were safe and legal to use; and manufacturing a custom order of a SARMs product despite knowing it was illegal to introduce the unapproved new drug into interstate commerce.
U.S. District Judge Jones took the defendants’ guilty pleas in federal court in Abingdon, Virginia, and set sentencing for March 15, 2021.
Assistant U.S. Attorney Randy Ramseyer of the U.S. Attorney’s Office for the Western District of Virginia and Trial Attorney Speare Hodges of the Department of Justice Civil Division’s Consumer Protection Branch are prosecuting the case. This matter was investigated by the Food and Drug Administration’s Office of Criminal Investigations.
Presidential Commission on Law Enforcement and the Administration of Justice Releases Final ReportRead the Press Release
Today, following months of virtual meetings, testimony and study, U.S. Attorney General William P. Barr submitted the final report of the President’s Commission on Law Enforcement and the Administration of Justice to the White House. This report represents the first comprehensive study of law enforcement in more than 55 years.
On Oct. 28, 2019, President Donald J. Trump signed Executive Order No. 13896, which directed the Department of Justice to establish the “Commission on Law Enforcement and the Administration of Justice.” The purpose of the Commission was to conduct a modern study of the state of American policing and determine specific measures to reduce crime and promote the rule of law. At the conclusion of this study, the Commission was to issue a report.
“This report is the result of significant effort and commitment by hundreds of working group members, dozens of staff, nearly 200 individual testimonies, and of course the 18 distinguished commissioners, who, as I’ve said before, truly reflect the best there is in law enforcement,” said Attorney General Barr. “We could not have foreseen the challenges 2020 would present when we set out to accomplish our goal of researching important current issues facing law enforcement and the criminal justice system. Yet despite these challenges, the Commission produced a thoughtful and comprehensive report.”
At a ceremony in January 2020, Attorney General Barr announced the establishment of the Commission and the individuals who would serve as commissioners. From January through July, the Commission met formally more than 50 times – adjusting to the challenges brought on by the COVID-19 pandemic – with the goal of making improvements to American law enforcement for years to come. Throughout that time, the Commission assembled a report that reviewed a variety of important issues affecting law enforcement and their capacity to safeguard American communities.
The full report can be found here: https://www.justice.gov/file/1347866/download.
Justice Department Commends ASCAP and BMI's Launch of SONGVIEWRead the Press Release
On Dec. 21, 2020, The American Society of Composers (ASCAP) and Broadcast Music, Inc. (BMI), the two largest performance rights organizations (PROs) in the United States, announced the launch of SONGVIEW, a “comprehensive data platform that provides music users with an authoritative view of public performance copyright ownership and administration shares for the vast majority of music licensed in the United States.”[1]
According to the press release on ASCAP’s website, SONGVIEW is free to the public and allows ASCAP and BMI to display detailed, aggregated and reconciled ownership data for performing rights for more than 20 million musical works in their combined repertoires, including a breakdown of shares by ASCAP and BMI.
“The Antitrust Division commends ASCAP and BMI’s innovative collaboration in creating and releasing SONGVIEW,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “While more work needs to be done to improve the transparency of copyright ownership in musical works, the creation of this free platform is a positive step towards doing so and, importantly, may help to promote competition in the music licensing industry to the benefit of music licensees, artists, and American consumers.”
The promotion of competition in music licensing has been an important goal of the Antitrust Division. The division opened its ongoing review of its consent decrees with ASCAP and BMI to determine whether the decrees continue to serve American consumers and should be maintained in their current form, or whether they should be modified, or terminated. As part of its review, the division invited public comments from songwriters, publishers, licensees, and other industry stakeholders. The division received more than 800 public comments, which have been posted to the division’s Antitrust Consent Decree Review Public Comments 2019 page. On July 28th and 29th, 2020, the division also hosted a virtual public workshop on competition in the licensing of public performance rights in the music industry, which was attended by executive PROs, songwriters, music publishers, music licensees, legal and economic experts, and other industry stakeholders.
[1] See www.ascap.com/press/2020/12/12-21-Songview.
Justice Department Alleges Conditions at Iowa Institution for Individuals with Disabilities Violate the ConstitutionRead the Press Release
The Justice Department today concluded an investigation into conditions at the Glenwood Resource Center (Glenwood), an institution for individuals with intellectual disabilities operated by the State of Iowa in Glenwood, Iowa.
The Justice Department determined that there is reasonable cause to believe the conditions at Glenwood violate the Fourteenth Amendment of the U.S. Constitution and that these violations are pursuant to a pattern or practice of resistance to the full enjoyment of rights protected by the Fourteenth Amendment.
“Individuals with disabilities are not human guinea pigs, and like all persons, they should never be subject to bizarre and deviant pseudo-medical ‘experiments’ that injure them. Human experimentation is the hallmark of sick totalitarian states and has no place in the United States of America. The U.S. Constitution protects the right of all persons in this free country who are in the care of the state to be reasonably free from harm or the risk of harm,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “We intend to work with the state to ensure that reforms are instituted at Glenwood so that these vulnerable individuals, who depend upon the state for their care, receive the care, support, and treatment that they deserve and to which they are entitled.”
The department found reasonable cause to believe that Iowa subjects Glenwood residents to unreasonable harm and risk of harm by subjecting residents to uncontrolled and unsupervised experimentation, inadequate physical and behavioral healthcare, and inadequate protection from harm, including deficient safety and oversight mechanisms. Specifically, the department concluded that the state violated Glenwood residents’ constitutional rights by conducting experiments on them without their consent. The department found that one experiment, which involved overhydrating residents, caused physical harm. In addition, the department concluded that Glenwood residents receive constitutionally inadequate physical health care. The department found that residents fail to receive timely or clinically appropriate medical assessments or treatment, at times resulting in severe physical harm. The department also concluded that Glenwood’s behavioral health care, including its use of restraints, violates residents’ due process rights. The department found that, from 2017 to 2019, Glenwood’s use of restraints increased by more than 300 percent. Finally, the department found severe deficiencies in the oversight and quality management at both Glenwood and the Iowa Department of Human Services and that these deficiencies fostered an environment in which the constitutional violations could and did routinely occur.
As required by the Civil Rights of Institutionalized Persons Act (CRIPA), the Department provided the State of Iowa with written notice of the supporting facts for these alleged conditions and the minimum remedial measures necessary to address them.
The Department of Justice’s comprehensive investigation involved review and analysis of documents, including policies and procedures, health care records, investigations, and oversight reports. The department also conducted tours of Glenwood and conducted interviews of current and former staff and management at Glenwood, Iowa’s Department of Human Services, and other stakeholders.
The department initiated the investigation in November 2019 under CRIPA, which authorizes the department to act to address a pattern or practice of deprivation of constitutional rights of individuals confined to state or local government-run residential institutions. The department is continuing to investigate whether the state violates the rights of residents of Glenwood and Woodward Resource Centers under Title II of the Americans with Disabilities Act to receive services in the most integrated setting appropriate.
This investigation was conducted by attorneys with the Special Litigation Section of the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Southern District of Iowa. Individuals with relevant information are encouraged to contact the department by email at [email protected].
Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
Canadian Man Extradited from Spain to Face Charges for Massive Psychic Mail Fraud SchemeRead the Press Release
A Canadian citizen accused of operating a decades-long psychic mail fraud scheme was extradited to the United States and made his initial appearance today in federal court in Central Islip, New York, the Department of Justice and the U.S. Postal Inspection Service announced.
On Oct. 25, 2018, a grand jury in the Eastern District of New York indicted Patrice Runner, 54, on charges of mail and wire fraud, conspiracy to commit mail and wire fraud, and conspiracy to commit money laundering. Runner was arrested in Ibiza, Spain, by officers of the Spanish National Police in December 2018, based on the U.S. indictment. Following extradition proceedings, the Spanish government released Runner to the custody of U.S. Postal Inspectors on Dec. 21, 2020.
“The Department of Justice’s Consumer Protection Branch is committed to investigating and prosecuting transnational criminal schemes that target elderly and vulnerable Americans,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division. “As this case demonstrates, we will work with our law enforcement partners in the United States and around the world to bring to justice criminals who target Americans through mail fraud and other schemes. We thank the Spanish National Police for their efforts to apprehend Runner and ensure that he sees justice in U.S. courts.”
According to the charges, from 1994 through November 2014, Runner’s mail fraud scheme defrauded over one million victims in the United States of over $180 million. The scheme allegedly involved sending millions of U.S. consumers, many elderly and vulnerable, letters purporting to be from two well-known French psychics, promising that the recipient had the opportunity to achieve great wealth and happiness with the psychic’s assistance in exchange for payment of a fee. The letters also frequently stated that a psychic had seen a personalized vision regarding the recipient of the letter, when in fact the scheme sent nearly identical letters to tens of thousands of victims each week.
Runner and his co-conspirators obtained the names of elderly and vulnerable victims by renting and trading mailing lists with other mail fraud schemes. When a victim responded to one letter, Runner and his co-conspirators sent dozens of additional letters to the victim. Each of these additional letters also appeared to be a personalized letter from a psychic and requested additional money from the victim. In reality, the psychics had no role in sending the letters, did not receive responses from the victims, and did not send the additional letters after victims paid money.
“Fraud scams have exploited the mail to victimize vulnerable Americans for over a century,” said Inspector-in-Charge Damon Wood of the U.S. Postal Inspection Service Philadelphia Division. “As these crimes become global, so do Postal Inspectors. If you are exploiting Americans, we are coming for you, no matter where you are in the world.”
Two of Runner’s co-conspirators, Canadian citizens Maria Thanos and Philip Lett, pleaded guilty in the Eastern District of New York in June 2018 to conspiracy to commit mail fraud. Runner used a series of shell companies to hide his involvement in the scheme while living in multiple foreign countries, including Switzerland, France, the Netherlands, Costa Rica, and Spain.
The case is being prosecuted by Assistant Director John W. Burke and Trial Attorney Ann Entwistle of the Department of Justice’s Consumer Protection Branch with assistance from the U.S. Attorney’s Office for the Eastern District of New York. The Justice Department’s Office of International Affairs provided critical assistance in securing Runner’s extradition. The Spanish National Police also provided assistance in securing Runner’s arrest.
An indictment is a formal charge that a defendant has committed a violation of criminal law and is not evidence of guilt. Every defendant is presumed innocent unless and until proven guilty.
Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors. In January 2020, the department designated “Preventing and Disrupting Transnational Elder Fraud” as an Agency Priority Goal, one of its top four priorities. Later, in March 2020, the department announced the largest elder fraud enforcement action in American history, charging more than 400 defendants in a nationwide elder fraud sweep. The department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.
The department’s extensive and broad-based efforts to combat elder fraud seek to halt the billions of dollars seniors lose to fraud schemes, including those perpetrated by transnational criminal organizations. The best method for prevention, however, is by sharing information about the various types of elder fraud schemes with relatives, friends, neighbors, and other seniors who can use that information to protect themselves.
If you or someone you know is age 60 or older and has been a victim of financial fraud, help is standing by at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311). This U.S. Department of Justice hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim, and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies, and provide resources and referrals, on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. eastern time. English, Spanish and other languages are available.
For more information about the Consumer Protection Branch, visit its website at https://www.justice.gov/civil/consumer-protection-branch.
U.S. Trustee Program Announces Streamlined Forms for Completing Chapter 11 Financial ReportsRead the Press Release
The Department of Justice’s U.S. Trustee Program (USTP) announced today the publication of a final rule in the Federal Register that streamlines the financial reports required under the Bankruptcy Code to be filed with the bankruptcy court by the vast majority of business and individual debtors in chapter 11 bankruptcy, including in the largest reorganization cases. The rule, entitled “Procedures for Completing Uniform Periodic Reports in Non-Small Business Cases Filed Under Chapter 11 of Title 11,” replaces approximately 150 existing variations of these reports with two uniform forms to be used nationally: a monthly operating report filed before plan confirmation and, after plan confirmation, a quarterly post-confirmation report to show compliance with the plan. The rule does not apply to debtors who are small businesses or who, in accordance with the CARES Act, have elected relief under subchapter V of chapter 11.
“This new rule is largely deregulatory and greatly simplifies financial reporting for chapter 11 debtors that do not qualify as small businesses while maintaining clarity and transparency for the public,” said USTP Director Cliff White. “This good-government reform, which received extensive public input, strikes an appropriate balance between reporting requirements and transparency.”
The rule is posted at https://www.justice.gov/ust/rules-and-federal-register-notices.
The New Reports Reflect Input from Stakeholders
To solicit feedback from the public, the USTP published the proposed rule for two public comment periods and held a public meeting with interested stakeholders. The feedback from commenters was constructive and wide ranging. The final rule balances the divergent views in accomplishing the goals set by Congress of simplifying the reporting process while providing transparency and improved uniformity across the reports. Although the two new forms simplify the financial information that chapter 11 debtors must provide, additional supplemental information also may be requested by the U.S. Trustee if there is a particularized need.
Implementation and the Effective Date
The rule provides for a 180-day implementation period, so the new forms will become effective and apply to all reports filed on or after June 21, 2021. Implementation will include training by the USTP for members of the bankruptcy community as well as coordination with the courts and other stakeholders. In addition, the USTP will provide, at no cost, PDF fillable versions of the reports on its website and will provide bankruptcy software vendors with the underlying technical specifications for the reports so they will have the ability to offer software to report filers in the future.
To facilitate outreach on the new requirements, the USTP has established a resource page on its website where interested stakeholders can access the rule, the report forms, and all related instructions. The resource page also will be used to keep the public informed of relevant implementation updates.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The Program has 21 regions and 90 field office locations. Learn more about the Program at https://www.justice.gov/ust.
Government Contractor Admits Scheme to Inflate Costs on Federal Projects and Pays $11 Million to Resolve Criminal and Civil ProbesRead the Press Release
Schneider Electric Buildings Americas Inc. (Schneider Electric), a nationwide provider of electricity solutions for buildings and data centers with its principal place of business in Carrollton, Texas, will pay $11 million to resolve criminal and civil investigations relating to kickbacks and overcharges on eight federally-funded energy savings performance contracts (ESPCs), the Department of Justice announced today. Under the contracts, Schneider Electric was to install a variety of energy savings upgrades, such as solar panels, LED lighting, and insulation, in federal buildings.
As part of the criminal resolution with the U.S. Attorney’s Office for the District of Vermont (USAOVT), Schneider Electric admitted that it fraudulently charged the government nearly $1.7 million in design costs incurred on three ESPCs funded by the Department of the Navy (DON), General Services Administration (GSA), and Department of Agriculture (USDA) by disguising those costs and spreading them across un-related pricing components. Schneider Electric employees described this process as “burying” or “hiding” the costs. Schneider Electric specifically spread costs across various line items in these federal projects so that the agencies would pay the amounts without knowing they were design costs that Schneider Electric was prohibited from charging the government. Schneider Electric admitted that its conduct constituted wire fraud in violation of 18 U.S.C. § 1343. Schneider Electric executed a non-prosecution agreement related to this conduct and agreed to pay nearly $1.7 million in criminal forfeiture.
Schneider Electric further admitted that former convicted Senior Project Manager Bhaskar Patel solicited and received over $2.5 million in kickbacks from various subcontractors who worked on ESPCs issued by the DON, Coast Guard, GSA, USDA, and Department of Veterans Affairs (VA). Schneider Electric admitted that this conduct violated the Anti-Kickback Act, 41 U.S.C. § 8707.
Schneider Electric is required by its agreement with the USAOVT to cooperate fully in any and all matters relating to relevant conduct for a period of three years, to report to the USAOVT any evidence or allegation of a violation of U.S. fraud, anti-corruption, procurement integrity, or anti-kickback laws, to implement and comply with an updated corporate compliance program, and to report annually to the USAOVT on its remediation and implementation of its required compliance enhancements.
In the separate civil settlement announced today, Schneider Electric agreed to pay $9.3 million to resolve False Claims Act and Anti-Kickback Act liability for Patel’s kickback scheme and for including inflated estimates and improper costs in proposals, and overcharging federal agencies, under the eight ESPCs.
“ESPC projects can only be successful where contractors are forthright and honest with federal agencies,” said Acting Attorney General Jeffrey Bossert Clark of the Justice Department’s Civil Division. “We will not tolerate attempts by contractors to mislead the government and line their own pockets at the expense of the very energy savings the government seeks to achieve.”
“These cases are complex and challenging, and I commend the dogged work of our Assistant U.S. Attorneys and their law enforcement agency partners to ensure that Schneider Electric’s conduct was brought to light and it was held to account,” said U.S. Attorney Christina E. Nolan. “I am proud that our small office not only successfully convicted Bhaskar Patel but went further and unraveled Schneider Electric’s broader criminal scheme of fraudulently inflating costs to boost its profits and steal from taxpayers. In reaching this resolution, we considered that Schneider Electric terminated two employees involved in the schemes and overhauled its compliance program. We also considered the shortcomings of Schneider Electric’s cooperation and its failure to timely accept responsibility.”
“Fraud is not a victimless crime,” said Michael Wiest, Special Agent in Charge of the Northeast Field Office of the Naval Criminal Investigative Service (NCIS). “It steals money from American taxpayers, damages the integrity of the Department of the Navy procurement process, degrades the readiness of the warfighter by compromising the quality of goods and services used to protect the nation, and squanders more money in the funding of criminal investigations which could have been avoided simply by individuals doing the right thing. NCIS will continue to work with our partner agencies to aggressively pursue those who perpetrate financial crimes.”
“Participation in Government contracts should not involve contractors and their employees seeking financial gain to the detriment of the U.S. Government,” said USDA Office of Inspector General (OIG) Special Agent-in-Charge Bethanne M. Dinkins. “Thanks to the hard work and tireless efforts of the investigative team, the interests and integrity of the United States and the procurement process throughout the government have been protected. The USDA Office of Inspector General appreciates the commitment of the Department of Justice and the cooperative efforts of our law enforcement partners. Our resources are well utilized when we work together to investigate those who unlawfully solicit and accept bribes and kickbacks and overcharge the U.S. Government. This resolution demonstrates that we are committed to holding contractors accountable when they choose to abuse the integrity of vital government programs designed to significantly reduce energy and operating costs and make progress toward meeting federal sustainability goals.”
“The GSA Office of Inspector General is committed to protecting the integrity of the GSA’s procurement process and programs,” said Joseph Dattoria, GSA-OIG Special Agent in Charge. “This resolution is a testament to that commitment and should serve as a warning to other contractors who may consider engaging in similar conduct. We appreciate the collaborative efforts of the DOJ and our other law enforcement partners.”
“VA OIG is committed to protecting the integrity of energy savings performance contracts awarded by VA and other federal agencies,” said VA OIG Special Agent in Charge Christopher Algieri, Northeast Field Office. “We appreciate the tireless efforts of the United States Attorney’s Office, the Civil Division, and our other law enforcement partners in rooting out this and other procurement fraud.”
The United States Attorney’s Office for the District of Vermont handled the criminal investigation and resolution. The civil investigation was jointly handled by the District of Vermont and the Civil Division’s Commercial Litigation Branch (Fraud Section). The investigation was supported by the Offices of Inspector General for the VA, USDA and GSA, and the NCIS.
Except for the conduct admitted in connection with the criminal resolution, the civil claims resolved by the settlement are allegations only, and there has been no determination of liability as to such civil claims.
Atlanta Tax Professionals Plead Guilty to Promoting Syndicated Conservation Easement Tax Scheme Involving More Than $1.2 Billion in Fraudulent Charitable DeductionsRead the Press Release
Stein Agee of Canton, Georgia, and Corey Agee of Atlanta, Georgia, appeared before U.S. Magistrate Judge W. Carleton Metcalf and pleaded guilty for their roles in a wide-ranging abusive tax scheme to defraud the IRS, the Department of Justice announced today.
According to court documents, from at least 2013 through 2019, S. Agee and C. Agee, then partners at an Atlanta accounting firm, marketed, promoted, and sold together with co-conspirators, investments in fraudulent syndicated conservation easement (SCE) tax shelters. The SCE tax shelters were designed to produce tax deductions for high-income taxpayers through partnerships that purported to make “real estate investments.” In truth, the partnerships were a sham, lacking economic substance and serving no legitimate business purpose. The placement of conservation easements over the real estate was a foregone conclusion, which fraudulently enabled the investors to shelter their income from the IRS with no economic risk and to claim substantial tax deductions to which they were not entitled. S. Agee, C. Agee, and their co-conspirators marketed the SCE tax shelters by promising investors that for every $1 invested in the partnership, the investor would receive more than $4 in charitable tax deductions.
“The defendants’ and their co-conspirators' criminal conduct enabled their clients to claim more than $1.2 billion in fraudulent tax deductions and generated hundreds of millions of dollars of tax loss to the United States,” said Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department's Tax Division. “Their convictions signal just the beginning of the department’s prosecutive efforts. Taxpayers engaging in such schemes, and the lawyers, accountants, appraisers and other professionals that enable them, should understand that they will be held fully to account for their fraudulent conduct.”
“Each year, millions of law-abiding Americans painstakingly file accurate tax returns and pay timely their tax obligations, which support important government services our communities rely on,” said U.S. Attorney R. Andrew Murray for the Western District of North Carolina. “As the defendants admitted in court today, their tax shelter scheme helped wealthy clients skirt their tax responsibilities and avoid paying their fair share. Such actions not only increase the tax burden on honest taxpayers; they are a violation of our federal tax laws. Today’s guilty pleas send a strong message that tax professionals who promote, and benefit from, illegal tax shelters will be investigated and prosecuted accordingly.”
“Two defendants pleaded guilty today in the first-ever criminal case by IRS-CI involving conservation easements,” said Commissioner Charles Rettig of the IRS. “It should be considered the next step in the IRS’ battle against abusive SCEs. The defendants and their co-conspirators used conservation easement donations to personally enrich themselves and allow wealthy tax clients to evade their tax obligations. The charges and guilty pleas demonstrate that participation in abusive SCEs will not be tolerated. Once again, the IRS recommends that anyone who participated in an abusive SCE consult independent counsel about coming into compliance.”
Conservation easements were created by Congress to be a key tool used for protecting environmentally and historically important land. The donated conservation easement typically restricts the use or development of land in order to protect its conservation value. When legitimately created and used in compliance with the Internal Revenue Code, the conservation easement can both protect the environment and provide tax incentives. By contrast, abusive SCEs are designed to game the system and generate inflated and unwarranted tax deductions, often by using inflated appraisals of undeveloped land and partnerships devoid of legitimate business purpose.
According to court documents, S. Agee and C. Agee additionally solicited investors after the end of the tax year and advised them to backdate payments and documents to make it appear that the “investments” were timely made before the end of the tax year. S. Agee and C. Agee also prepared and assisted in the preparation of false tax returns for clients who agreed to invest in the SCE shelters. In exchange for their promotion of the abusive SCE tax shelters, between 2013 and 2019, S. Agee and C. Agee each received more than $1.7 million in commissions.
S. Agee and C. Agee both pleaded guilty to one count of conspiracy to defraud the United States which carries a maximum penalty of five years in prison. They also face a period of supervised release, restitution, and monetary penalties.
U.S. Attorney Murray, Principal Deputy Assistant Attorney General Zuckerman, and IRS Commissioner Rettig, thanked special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who are conducting the investigation, as well as Assistant U.S. Attorneys Daniel Bradley and Caryn Finley, and Tax Division Trial Attorneys Brittney Campbell and Grace Albinson, who are prosecuting the case.
Texas Heart Hospital and Wholly-Owned Subsidiary THHBP Management Company LLC to Pay $48 Million to Settle False Claims Act Allegations Related to Alleged KickbacksRead the Press Release
Texas Heart Hospital of the Southwest LLP, a partially physician-owned hospital in Plano, Texas, and its wholly owned subsidiary, THHBP Management Company, LLC (collectively, the “Heart Hospital”) have agreed to pay the United States $48 million to resolve claims that the Heart Hospital violated the False Claims Act by knowingly submitting claims to the Medicare program that resulted from violations of the Physician Self-Referral Law and the Anti‑Kickback Statute, the Justice Department announced today.
The Physician Self‑Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. The Anti‑Kickback Statute prohibits offering or paying remuneration to induce the referral of items or services covered by Medicare, Medicaid, and other federally funded programs. Both the Stark Law and the Anti-Kickback Statute are intended to ensure that medical judgments are not compromised by improper financial inducements.
“Inappropriate financial relationships between health care providers and their referral sources can distort physician decision-making and drive up health care costs for everybody,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division. “The department remains committed to ensuring that physicians act in the best interests of their patients rather than their pocketbooks.”
“Although the business of healthcare continues to evolve, our mission remains the same—to ensure that medical decision making is based on patient care and free of influence by financial consideration,” said Stephen J. Cox, United States Attorney for the Eastern District of Texas. “We commend the whistleblowers and their counsel for uncovering this arrangement and pursuing the case to a point where Defendants and the United States were able to reach a resolution that both protects the taxpayer and ensures patient care, free from financial influence.”
The settlement announced today resolves allegations that the Heart Hospital violated the Stark Law and the Anti-Kickback Statute by requiring physician owners to satisfy the Heart Hospital’s yearly 48 patient-contact requirement in order to maintain ownership in the hospital.
This settlement arises from a lawsuit filed by former Heart Hospital physician owners Mitchell Magee, M.D. and Todd Dewey, M.D. pursuant to the whistleblower or qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the government and to share in the proceeds. Under the Act, the United States may intervene in such an action or permit the whistleblower to pursue it. Although the Unites States declined to intervene in this case, it played a primary role in the discussions that led to the settlement. Dr. Dewey and Dr. Magee will collectively receive $13,920,000 as their share of the recovery.
This matter was handled on behalf of the government by the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Texas, and the Department of Health and Human Services Office of the Inspector General.
The case is captioned United States ex rel. Mitchell J. Magee and Todd M. Dewey v. Texas Heart Hospital of the Southwest, L.L.P., et al., Case No. 4:16-CV-00717-ALM (E.D. Tex.). The claims resolved by this settlement are allegations only and there has been no determination of liability.
CEO of Medical Device Company Charged in COVID-19 Related Securities Fraud SchemeRead the Press Release
The chief executive officer (CEO) of a California-based medical device company was indicted by a federal grand jury in connection with an alleged scheme to defraud investors by making false and misleading statements about the purported development of a new COVID-19 test, leading to millions of dollars in investor losses.
Keith Berman, 67, the CEO of Decision Diagnostics Inc. (DECN), was charged by indictment, unsealed today, with one count of securities fraud and one count of making false statements. The indictment alleges that, from February through December 2020, Berman engaged in a scheme to defraud investors by falsely claiming DECN had developed a 15-second test to detect COVID-19 in a finger prick sample of blood. In truth, Berman knew his test was merely an idea and not a validated method of accurately detecting COVID-19, much less an actual product ready for manufacture and sale. According to the indictment, Berman and DECN were in precarious financial condition in the lead up to the pandemic, and Berman wrote in internal emails that he needed a “new story” to “raise millions.”
The indictment further alleges that Berman falsely told investors that the Food and Drug Administration (FDA) was on the verge of approving DECN’s request for emergency use authorization of its new COVID-19 test. In truth, Berman knew that the company lacked the financial resources and insurance necessary to conduct the clinical testing required by the FDA to complete the application process, but concealed these material facts from and misled investors. In an effort to exert political pressure on the FDA and obtain approval of the DECN COVID-19 test without conducting the necessary clinical testing, Berman hired a political consultant to lobby Members of Congress, telling Members of Congress in talking points that the FDA had “moth-balled” the company’s submission and that it remained “stuck in limbo” at or around the same time that Berman was telling investors that the test was on the verge of approval. Between early March and April 23, 2020, DECN’s stock price rose by over 1,500 percent.
The indictment further alleges that, as part of the alleged scheme, Berman used an alias, “plutoniumimplosion,” to repeat false and misleading statements to investors on Internet message boards, and lull suspecting investors into inaction by refuting allegations of fraud and threatening potential whistleblowers with civil or criminal sanctions. Berman, using his alias, also projected that demand for the DECN test would be “close to 3 billion [test] kits” and claimed that DECN “is in the forefront no matter how loud the naysayers are . . . But then again the 5-6 message board posters [claiming the DECN test was fraudulent] may be right and Mr. Berman will find himself in prison.” The indictment charges that Berman, in sworn testimony to the SEC, made false statements in which he denied ever posting on the message board.
An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
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 uses the Victim Notification System (VNS) to provide victims with case information and updates related to this case. Victims with questions may contact the Fraud Section’s Victim Assistance Unit by calling the Victim Assistance phone line at 1-888-549-3945 or by emailing [email protected]. To learn more about victims’ rights, please visit: https://www.justice.gov/criminal-vns/victim-rights-derechos-de-las-v-ctimas. If you believe you are a victim who has invested in Decision Diagnostics, please visit: https://www.justice.gov/criminal-vns/case/decision-diagnostics
The U.S. Postal Inspection Service and FBI investigated the case. Trial Attorney Christopher Fenton and Assistant Chiefs Jacob Foster and Justin Weitz of the Criminal Division’s Fraud Section are prosecuting the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn mode about the history of our agency at www.Justice.gov/Celebrating150Years.
Activity in the United States Attorney's OfficeRead the Press Release
Federal District Court Judge Nancy D. Freudenthal sentenced MICHAEL BRYAN DELUCA, 39, of Philadelphia, Pennsylvania on December 15, 2020 for being a felon in possession of a firearm. Deluca was arrested in Cheyenne, Wyoming. He received one hundred twenty months of imprisonment, to be followed by thirty months of supervised release, and ordered to pay a $100.00 special assessment. The Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated this case.
Chief Federal District Court Judge Scott W. Skavdahl sentenced MARQUES ALAN CHARGING CROW, 35, of Fort Washakie, Wyoming on December 15, 2020 for three counts of aggravated sexual abuse and one count of abusive sexual contact. He received four hundred fifty-six months of imprisonment, to be followed by one hundred twenty months of supervised release and ordered to pay restitution in the amount of $8,478.85 and a $400.00 special assessment. The Federal Bureau of Investigation investigated this case.
Chief Federal District Court Judge Scott W. Skavdahl sentenced BRANDON MICHAEL JAYMES WHITEMAN, 25, of Fort Washakie, Wyoming on December 17, 2020 for sexual abuse of a minor. He received one hundred eighty months of imprisonment, to be followed by one hundred twenty months of supervised release and ordered to pay restitution in the amount of $36,736.32 and a $100.00 special assessment. The Federal Bureau of Investigation investigated this case.
Three Additional States Ask Court to Join Justice Department Antitrust Suit Against GoogleRead the Press Release
Today, the Attorneys General of Michigan and Wisconsin filed for permission to join the antitrust lawsuit filed by the United States and eleven other state Attorneys General against monopolist Google. This follows a similar recent motion by the California Attorney General to join the lawsuit on December 11, 2020.
“We welcome the efforts by the States of Michigan, Wisconsin, and California to join the Justice Department’s complaint,” said Deputy Attorney General Jeffrey A. Rosen. “Their proposed joinder, along with the separate complaint filed today by a coalition of state Attorneys General, underscores the broad and bipartisan consensus that Google’s practices in search and search advertising need antitrust redress. These antitrust actions aim to open the door to the next wave of innovation in digital markets.”
“We look forward to litigating alongside our state partners for the benefit of American consumers,” said Deputy Assistant Attorney General Alexander Okuliar of the Antitrust Division.
In addition, today, a coalition of State Attorneys General filed an antitrust lawsuit against Google in the District of Columbia also alleging that Google unlawfully maintained monopolies in search and search advertising. These States have asked the court to consolidate the proceedings in their lawsuit with the United States’ pending antitrust case against Google.
The motions for joinder and for consolidation submitted by the States are currently pending.
Home Depot to Pay $20,750,000 Penalty for Nationwide Failure to Follow Rules for Conducting Renovations Involving Lead PaintRead the Press Release
The U.S. Environmental Protection Agency (EPA) and the Department of Justice today announced a proposed nationwide settlement with Home Depot U.S.A. Inc. resolving alleged violations of the EPA’s Lead Renovation, Repair and Painting (RRP) Rule at home renovations performed by Home Depot’s contractors across the country. The States of Utah, Massachusetts, and Rhode Island, which have EPA-authorized RRP programs, are joining the United States in this action.
The settlement, in a consent decree lodged with the District Court for the Northern District of Georgia, requires Home Depot to implement a comprehensive, corporate-wide program to ensure that the firms and contractors it hires to perform work are certified and trained to use lead-safe work practices to avoid spreading lead dust and paint chips during home renovation activities. Home Depot will also pay a $20.75 million penalty, the highest civil penalty obtained to date for a settlement under the Toxic Substances Control Act. Of the $20.75 million penalty, $750,000 will be paid to Utah, $732,000 to Massachusetts, and $50,000 to Rhode Island.
“These were serious violations. The stiff penalty Home Depot will pay reflects the importance of using certified firms and contractors in older home renovations,” said Principal Deputy Assistant Attorney General Jonathan D. Brightbill of the Justice Department’s Environment and Natural Resources Division. “Contractors hired for most work in homes built prior to 1978, when lead based paint was in widespread use, must be certified. These contractors have the training to recognize and prevent the hazards that can be created when lead paint is disturbed.”
“Today’s settlement will significantly reduce children’s exposure to lead paint hazards,” said Susan Bodine, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “Home Depot will implement system-wide changes to ensure that contractors who perform work in homes constructed before 1978 are EPA-certified and follow lead-safe practices. EPA expects all renovation companies to ensure their contractors follow these critical laws that protect public health.”
EPA discovered the alleged violations when investigating five customer complaints about Home Depot renovations (in Illinois, Maine, Michigan, Minnesota and Wisconsin), which showed Home Depot subcontracted work to firms that in some cases did not use lead-safe work practices, perform required post-renovation cleaning, provide the EPA-required lead-based paint pamphlets to occupants, or maintain records of compliance with the law.
EPA then conducted a comprehensive review of Home Depot’s records of renovations performed throughout the United States and identified hundreds of instances in which Home Depot sent uncertified firms to perform renovations that required certified and trained firms. In addition, EPA identified instances in which Home Depot failed to establish, retain, or provide compliance documentation showing that specific contractors had been certified by EPA, had been properly trained, and had used lead-safe work practices in projects performed in homes.
For the most serious violations addressed by the settlement, Home Depot offered its customers inspections using certified professionals and, if dust lead hazards were found, it performed specialized cleaning and verification.
Under the settlement, Home Depot will implement a company-wide program to ensure that the contractors it hires to perform work for its customers comply with the RRP Rule during renovations of homes built before 1978. To do this, Home Depot is implementing an electronic compliance system to verify that the contractors it hires are properly certified. Home Depot will also require its contractors to use a detailed checklist to document compliance and provide the completed checklist to the customer. The checklist will lead the contactors through the steps required for RRP Rule compliance. Home Depot will also conduct thousands of on-site inspections of work performed by its contractors to ensure they comply with lead-safe work practices. Home Depot must also investigate and respond to customer complaints. In instances where the contractor did not comply with Lead Safe Work practices Home Depot will perform an inspection for dust lead hazards and, if they are found, provide a specialized cleaning. EPA will monitor Home Depot’s responses to customer complaints.
In addition to the requirements related to its renovations, Home Depot will provide important information about following lead-safe work practices to its professional and do-it-yourself customers in its stores, on its website, on YouTube, and in workshops. The RRP Rule does not apply to do-it-yourself projects in your own home. However, the EPA recommends using the rule’s lead-safe work practices in your own home projects, so this important information will help families learn how to safely perform home improvement projects to protect themselves, and their children.
Residential lead-based paint use was banned in 1978 but still remains in many older homes and apartments across the country. Lead dust hazards can occur when lead paint deteriorates or is disrupted during home renovation and remodeling activities. Lead exposure can cause a range of health problems, from behavioral disorders and learning disabilities to seizures and death, putting young children at the greatest risk because their nervous systems are still developing. A blood lead test is the only way to determine if a child has a high lead level. Parents who think their child has been in contact with lead dust should contact their child's health care provider.
The consent decree is subject to a 30-day public comment period and final court approval. To view a copy of the consent decree and for information on how to submit a comment, visit www.justice.gov/enrd/Consent_Decrees.html.
Further information about the settlement is available on EPA’s website at: https://www.epa.gov/enforcement/home-depot-settlement-information-sheet. To make a complaint about lead safe work practice violations, see EPA’s website link at:
https://www.epa.gov/lead/report-lead-based-paint-complaints-tips-and-violations.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Former Medical Director of Suboxone Manufacturer Indivior Sentenced in Connection with Drug Safety ClaimsRead the Press Release
Timothy Baxter, the former medical director of Indivior PLC, was sentenced today in federal court in Abingdon, Virginia, to six months of home detention and 100 hours of community service in connection with the company’s marketing of an opioid drug.
Baxter pleaded guilty in August 2020 to a one-count misdemeanor Information related to Indivior’s false and misleading representations to the Massachusetts Medicaid program (MassHealth) regarding Suboxone, a drug approved for recovering opioid addicts to avoid or reduce withdrawal symptoms. In connection with his guilty plea to causing the introduction into interstate commerce of misbranded drugs under the Federal Food, Drug, and Cosmetic Act, Baxter admitted that he failed to prevent Indivior from sending false and misleading information to MassHealth related to the relative safety of Suboxone Film, a version of Suboxone, around children.
“In this administration, the Department of Justice has augmented its important and ongoing drug enforcement efforts with a series of new initiatives targeted at illegal conduct involving prescription opioid drugs,” said Deputy Attorney General Jeffrey A. Rosen. “The Department’s multi-pronged prosecution of Indivior’s unlawful promotion of Suboxone is a prime example of how to combat this crisis through diverse strategies. The net effect of the Department’s Indivior-related cases will bolster ongoing efforts to punish criminal conduct in the opioid space, deter further criminal conduct among opioid manufacturers and their top executives, and contribute significantly to the Department’s objective to stem the tide of this epidemic.”
“When Timothy Baxter failed to ensure Indivior provided honest and accurate information to a state Medicaid program about Suboxone, it resulted in overstated safety claims and criminal conduct,” said Acting U.S. Attorney Daniel P. Bubar. “Baxter’s failure was especially egregious, given his role in the company as global medical director. Today’s sentence ought to be a deterrent to other pharmaceutical executives against providing anything less than truthful information about their products. We could not have done this case without the hard work of and cooperation with the Virginia Attorney General’s Office and our federal partners, for which we are incredibly grateful.”
“The Opioid crisis continues to be a critical public health issue with the toll of addiction—in lost lives and broken families—affecting every community in America. Addressing this crisis is one of the FDA’s highest priorities,” said FDA Commissioner Stephen M. Hahn, M.D. “Medication-assisted treatments incorporating drugs like Indivior’s Suboxone, in combination with counseling and behavioral therapy, are an important tool in combating opioid use disorder but can quickly become part of the problem if not used responsibly. When companies and their leadership provide misleading information about relative product benefits, they can ultimately risk more misuse, abuse, diversion, and accidental exposure to opioid drugs as well as make treatment more difficult to obtain for those suffering from this crisis. We will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.”
According to court documents, Baxter helped oversee Indivior’s efforts in 2012 to secure formulary coverage for Suboxone Film from MassHealth. Indivior employees devised a strategy to win preferred drug status for Suboxone Film and counteract a non-opioid competitor MassHealth was considering for opioid-addiction treatment. A certain Indivior employee subsequently shared false and misleading safety information with MassHealth officials about Suboxone Film’s risk of accidental pediatric exposure. Baxter failed to prevent this course of conduct carried out by an employee under his supervision. Two months after receiving that false and misleading information, MassHealth announced it would provide access to Suboxone Film for Medicaid patients with children under the age of six.
Indivior’s former CEO, Shaun Thaxter, was sentenced in October 2020 to six months in prison and a $600,000 criminal fine and forfeiture after he pleaded guilty to the same charge. U.S. District Court Judge James P. Jones of the Western District of Virginia handed down the sentences for both Baxter and Thaxter. The cases follow corporate criminal and civil resolutions announced by the Department earlier this year. In total, payments made by Indivior Solutions and its parent companies, Indivior Inc. and Indivior plc, along with payments made under a 2019 resolution with Indivior’s former parent, Reckitt Benckiser Group plc, will exceed $2 billion. That amount represents the second-largest monetary resolution obtained by the Department of Justice in a case involving an opioid drug.
The criminal case against Indivior was prosecuted by the U.S. Attorney’s Office for the Western District of Virginia; the Department of Justice Civil Division’s Commercial Litigation Branch; the Department of Justice Civil Division’s Consumer Protection Branch; the Virginia Medicaid Fraud Control Unit of the Office of the Virginia Attorney General; and the Federal Trade Commission. This matter was investigated by the Virginia Attorney General’s Medicaid Fraud Control Unit; FDA’s Office of Criminal Investigation; the United States Postal Service Office of Inspector General; and the Department of Health and Human Services Office of Inspector General.
The joint effort advances the goals of the Department’s Prescription Interdiction & Litigation (PIL) Task Force to deploy all available criminal, civil, and regulatory tools to hold opioid manufacturers accountable for unlawful practices and to ensure that prescription opioid products are marketed truthfully.
For more information about the U.S. Attorney’s Office for the Western District of Virginia, visit its website at https://www.justice.gov/usao-wdva. Additional information about the Consumer Protection Branch and the Civil Fraud Section and their enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch and http://www.justice.gov/civil/fraud-section. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
Eighth Circuit Reverses Tax Court in Case Involving Statute of Limitations and Bona Fide ResidencyRead the Press Release
The Eighth Circuit Court of Appeals issued a published opinion on Tuesday, Dec. 15, 2020, holding for the government in a case involving the statute of limitations on assessment in the context of bona fide residency in the U.S. Virgin Islands (USVI), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
In Coffey v. Commissioner, No. 18-3256, the Eighth Circuit Court of Appeals reversed the decision of the U.S. Tax Court that the IRS’s determinations were barred by the statute of limitations on assessment. Taxpayers owned a profitable publishing enterprise that ostensibly relocated to the USVI, and Judith Coffey claimed to be a USVI resident thereafter. The couple filed joint tax returns with the Virgin Islands Bureau of Internal Revenue (VIBIR), but not with the IRS. The VIBIR sent the first two pages of the Coffeys’ returns to the IRS as part of its normal process to claim “cover over” funds (i.e., tax revenue) from the U.S. Treasury. Disputing taxpayers’ assertion that they were bona fide residents of the USVI, the IRS conducted an audit and sent them notices of deficiency determining over $2 million in taxes and penalties. In an opinion with a concurring and dissenting set of judges, the Tax Court held that the deficiency notices were time-barred because the pages that the VIBIR sent to the IRS constituted filed “returns” that started the limitations period. The Eighth Circuit reversed the Tax Court and confirmed the long-standing principle that the statute of limitations begins only when a return is filed. Because the taxpayers did not comply with the requirements to file returns with the IRS, the statute of limitations never began to run.
Although the Eighth Circuit’s opinion is focused on the statute of limitations issue, the Tax Division and the IRS will use all available legal processes to challenge improper attempts to avoid or evade U.S. income tax by unlawfully misrepresenting a taxpayer’s residence, regardless of where such residence is claimed. See e.g., IRS Notice 2004-45.
Principal Deputy Assistant Attorney General Zuckerman thanked Tax Division attorneys Judith Hagley and Francesca Ugolini and former Tax Division attorneys Gilbert Rothenberg and Richard Caldarone, who handled the case on appeal for the government, as well as IRS attorneys Michael Berwind, James Hartford, and Randel Eager Jr., who litigated the case in the Tax Court.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
D.C. Tax Return Preparer Sentenced to Prison for Preparing False Tax ReturnRead the Press Release
A D.C. tax return preparer was sentenced to 24 months in prison today following her guilty plea in February 2020 for aiding and assisting in the preparation of a false tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents and statements made in court, Renita Jenifer of District Heights, Maryland, operated a tax return preparation business in D.C. between 2013 and 2016 under the name RAJen Business Tax Service (RAJen). Through RAJen, Jenifer prepared false tax returns for clients claiming fraudulent and inflated itemized deductions, including charitable contributions and unreimbursed employee expenses. Jenifer also prepared returns that reported fraudulent and inflated business expenses. By including these false items, Jenifer’s clients received tax refunds from the IRS in excess of what they were entitled to receive.
In 2016, after IRS-Criminal Investigation executed a search warrant at RAJen’s office in D.C. and revoked Jenifer’s Electronic Filing Identification Number (EFIN), expelling her from the IRS’s e-file program, Jenifer operated a new business in Maryland called DS Professional Tax Service LLC (DS Pro). Jenifer used the name of a different individual to obtain an EFIN for DS Pro, and she listed this individual’s name on tax returns she prepared instead of her own name. As she had done at RAJen, Jenifer prepared false tax returns for clients of DS Pro. In 2018, Jenifer moved this new business to D.C. and continued to prepare false tax returns for clients.
In addition to filing false tax returns for clients of RAJen and DS Pro, Jenifer filed false income tax returns for herself for the years 2013 and 2014, on which she failed to report all of the income generated by her business. Jenifer also did not file income tax returns for herself for the years 2017 and 2018, despite earning income from her operation of DSPro. Jenifer’s conduct caused a loss to the government of $373,090.
In addition to the term of imprisonment, U.S. District Judge Ketanji Brown Jackson ordered Jenifer to serve one year of supervised release and to pay $357,819 in restitution to the IRS.
Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS-Criminal Investigation and the D.C. Office of Tax and Revenue, who conducted the investigation, and Trial Attorneys Melissa Siskind and William Guappone of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Biogen Agrees to Pay $22 Million to Resolve Alleged False Claims Act Liability for Paying KickbacksRead the Press Release
Pharmaceutical company Biogen, Inc. (Biogen), based in Cambridge, Massachusetts, has agreed to pay $22 million to resolve claims that it violated the False Claims Act by illegally using foundations as a conduit to pay the copays of Medicare patients taking Biogen’s multiple sclerosis drugs, Avonex and Tysabri, the Justice Department announced today.
When a Medicare beneficiary obtains a prescription drug covered by Medicare, the beneficiary may be required to make a partial payment, which may take the form of a copayment, coinsurance, or a deductible (collectively “copays”). Congress included copay requirements in the Medicare program, in part, to serve as a check on health care costs, including the prices that pharmaceutical manufacturers can demand for their drugs.
“The resolution announced today, like prior settlements concerning similar misconduct, demonstrates the government’s commitment to hold accountable companies that pay kickbacks to undermine important constraints on rising drug costs,” said Acting Assistant Attorney Jeffrey Bossert Clark of the Department of Justice’s Civil Division. “Drug companies that illegally manipulate charitable patient assistance programs to subsidize copays for their own products will be held accountable.”
“Biogen coordinated with ACS to game the foundation system by timing its payments to two foundations with its transfer of financially needy free drug patients, all so that Biogen could obtain significant financial rewards,” said First Assistant United States Attorney Nathaniel R. Mendell. “By treating the foundations simply as conduits to pay the co-pays of its own patients, Biogen violated the anti-kickback statute and undermined Medicare’s co-pay structure, which Congress intended as a safeguard against inflated drug prices. We commend ACS for resolving this matter expeditiously and Biogen for resolving this matter on a cooperative basis.”
“Kickback schemes can undermine our healthcare system and lead to higher costs for the Medicare program,” said Phillip Coyne, Special Agent in Charge, Office of the Inspector General of the Department of Health and Human Service’s Boston Regional Office. “We will continue to hold pharmaceutical companies and specialty pharmacies accountable if they work together to subvert the charitable donation process and violate the prohibition on the payment of kickbacks.”
Under the Anti-Kickback Statute, a pharmaceutical company is prohibited from offering or paying, directly or indirectly, any remuneration—which includes money or any other thing of value— to induce Medicare patients to purchase the company’s drugs. This prohibition extends to the payment of patients’ copay obligations.
Biogen sells Avonex and Tysabri, which are approved for treatment of multiple sclerosis. The government alleged that Biogen engaged in a prohibited kickback scheme by using two foundations, which claim 501(c)(3) status for tax purposes, as conduits to pay the copay obligations of Medicare patients to induce those patients to purchase Medicare-reimbursed Avonex and Tysabri prescriptions. As part of the scheme, Biogen identified for its vendor, Advanced Care Scripts (ACS), certain patients in Biogen’s Avonex or Tysabri free drug program. Biogen then worked with ACS to transfer these patients to the foundations, which received contemporaneous payments from Biogen and then covered the costs of Medicare copays for most or all of these patients. Medicare paid the remaining portion of the patients’ Avonex or Tysabri claims. The government alleged that Biogen engaged in this conduct in the first quarter of 2011 for certain Avonex patients, and in the second and third quarters of 2012 and 2013 for certain Tysabri patients.
The allegations resolved by the settlement were originally raised in a case filed under the whistleblower, or qui tam, provision of the False Claims Act. The act permits private parties to sue for fraud on behalf of the United States and to share in any recovery. The act also permits the government to intervene in such actions, as the government did in this action. The whistleblower will receive approximately $3,960,000 of the settlement.
In a separate settlement announced today, ACS has agreed to pay $1.4 million to resolve its role in the above-referenced conduct.
The government’s resolution of this matter illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The investigation was conducted by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Massachusetts, in conjunction with the Department of Health and Human Services, Office of Inspector General and the Federal Bureau of Investigation. The lawsuit is captioned United States ex rel. Nee vs. Biogen et. al., Case No. 17-CV-10192-MLW (D. Mass.).
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Michigan Based Wire Fraud Conspiracy and Tax Offenses ChargedRead the Press Release
A federal grand jury in Detroit, Michigan, returned an indictment today charging Michigan businessmen John Angelo from Royal Oak, Cory Justin Mann from West Bloomfield, Michael Daneshvar from Bingham Farms, Glenn Franklin from Harrison Township, and Brent Sitto, from Bloomfield Township with one count each of conspiracy to commit wire fraud and further charging John Angelo and bookkeeper Rosina Angelo, also known as Rosina Caruvana, from Mountainside, New Jersey, with one count of conspiracy to defraud the IRS. John Angelo and Rosina Angelo were also each charged with three counts of aiding in the preparation of a false tax return and Cory Mann was charged with two additional counts of aiding in the preparation of a false tax return.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
According to the indictment, from at least January 2014 through October 2019, John Angelo, Mann, Daneshvar, Franklin, and Sitto, along with others, conspired to fraudulently use a Detroit Police Department (DPD) password to unlawfully obtain State of Michigan Traffic Crash Reports from a third-party private vendor, when many of the reports were not then publicly available and bore the watermark “Unapproved Report.” They allegedly used these reports to solicit crash victims and direct them to the personal injury law firm operated by Franklin and Sitto, a chiropractic business operated by Daneshvar, and Magnetic Resonance Imaging (MRI) businesses owned and operated by Angelo, Mann, and other conspirators. The indictment further alleges that from approximately August 2014 through February 2017, Franklin and Sitto delivered weekly payments to John Angelo for providing access to the fraudulently obtained crash reports and managing the solicitation of automobile crash victims.
From at least September 2010 through November 2016, John Angelo and Rosina Angelo also allegedly conspired to defraud the IRS’s efforts to assess taxes and to collect approximately $1.3 million in taxes and penalties due from John Angelo, by directing fees earned by John Angelo to a nominee entity. The indictment further alleges that John Angelo and Rosina Angelo assisted in the preparation of John Angelo’s false 2015, 2016, and 2018 individual income tax returns. Finally, the indictment alleges Mann assisted in the preparation of his own false 2018 individual tax return and a false 2018 entity tax return.
If convicted, the conspirators face a maximum sentence of twenty years for the conspiracy to commit wire fraud count. John Angelo and Rosina Angelo face a maximum sentence of five years in prison for conspiracy to defraud the IRS. John Angelo, Rosina Angelo, and Mann face a maximum sentence of three years in prison for each count of aiding or assisting in the preparation of a false return. Each defendant also faces a period of supervised release, restitution, and monetary penalties.
An indictment merely alleges that crimes have been committed. The defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Deputy Assistant Attorney General Stuart M. Goldberg commended special agents of IRS-Criminal Investigation and the FBI, who conducted the investigation, and Trial Attorneys Mark McDonald, Eric Schmale, and Christopher O’Donnell of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Justice Department Defends Health Care Workers from Being Forced to Perform Abortions with Vermont LawsuitRead the Press Release
The Justice Department’s Civil Rights Division today filed a civil lawsuit in Vermont federal court against the University of Vermont Medical Center (UVMMC) for violating the federal anti-discrimination statute known as the “Church Amendments.” That statute prohibits health care entities like UVMMC from discriminating against health care workers who follow their conscience and refuse to perform or assist with abortions.
“No institution or person should force any health care provider to perform an abortion if doing so would violate the provider’s religious beliefs or moral convictions. This kind of indecent coercion violates everything this country stands for,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “Federal law protects health care providers from having to choose between their job and participation in what they sincerely believe is the taking of an innocent human life. Coercing people to perform abortions violates the law, and the U.S. Department of Justice will not stand for this shocking and outrageous attack against the right of all people in this free country to follow their conscience.”
The United States’ complaint alleges that UVMMC violated the Church Amendments when it chose intentionally and willfully to discriminate against a nurse who plainly made her objection to participating in abortions based on her religious beliefs or moral convictions known to UVMMC. Despite knowing of her objection, UVMMC deliberately scheduled this nurse to assist with an elective abortion while deceptively misleading her to believe the procedure did not involve abortion. Once the deceived nurse entered the procedure room she learned the true nature of the procedure. After she reiterated her objection, UVMMC refused to find a non-objecting nurse to take over, effectively forcing the nurse to continue assisting in the abortion (or abandon the patient) despite her well-known religious objection. This example makes up just part of UVMMC’s ongoing pattern, practice, and policy of discriminating against health care providers who believe that the performance, or the assistance in the performance, of abortions is contrary to their religious beliefs or moral convictions.
In response to the Supreme Court’s Roe v. Wade decision in 1973, Congress nearly unanimously enacted the Church Amendments, named for Senator Frank Church of Idaho. The Church Amendments prohibit grantees of the U.S. Department of Health and Human Services (HHS) from discriminating against health care personnel who “refuse[ ] to perform or assist in the performance of [an] abortion on the grounds that his performance or assistance in the performance of the procedure or abortion would be contrary to his religious beliefs or moral convictions.” 42 U.S.C. § 300a-7(c)(1). HHS has provided such grant funding to UVMMC since 1998, including over 1.6 million dollars in FY2018-FY2020.
The case originated from an investigation by HHS. HHS’s investigation found UVMMC in violation of the Church Amendments, and referred the violation to the U.S. Department of Justice for enforcement after UVMMC refused to voluntarily correct its illegal actions.
Florida Escort Pleads Guilty to Underreporting IncomeRead the Press Release
WASHINGTON – A Fort Lauderdale, Florida, escort pleaded guilty today to filing a false corporate tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney for the Southern District of Florida, Ariana Fajardo Orshan.
According to court documents, Jami Kopacz worked as a paid escort for clients across the United States. Kopacz received payments directly from his escort clients, and also from a private business for whom he worked as an independent contractor. From 2015 to 2018, Kopacz used his corporation, JK Training, LLC, to receive income, and then filed false corporate tax returns (Forms 1120S) that substantially underreported the company’s gross receipts and total income. The understatement on JK Training’s corporate tax return was consequently passed through to Kopacz’s individual tax returns, which were also false as they underreported his total income. Kopacz caused a total tax loss of $278,325.
Magistrate Judge Patrick M. Hunt accepted Kopacz’s plea today. Sentencing is schedule before U.S. District Judge Roy K. Altman on March 5, 2021. Kopacz faces a statutory maximum sentence of three years in prison, as well as a period of supervised release, monetary penalties, and restitution.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Fajardo Orshan commended special agents of IRS-Criminal Investigation, who investigated the case, and Assistant United States Attorney Christopher Browne and Trial Attorney Grace Albinson of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Federal Court Orders North Carolina Pharmacy, Pharmacy Owner, and Pharmacist-in-Charge to Pay More Than $1 Million and Stop Dispensing OpioidsRead the Press Release
A federal court in the Eastern District of North Carolina entered a consent judgment and injunction requiring a North Carolina pharmacy, Seashore Drugs Inc., its owner, John D. Waggett, and its pharmacist-in-charge, Billy W. King II, to pay $1,050,000.00 in civil penalties and to cease dispensing opioids or other controlled substances, the Department of Justice announced.
The consent order resolves a complaint filed by the United States alleging that Seashore Drugs, Waggett, and King repeatedly filled prescriptions for opioids and other controlled substances in violation of the Controlled Substances Act. The United States alleged that, for years, defendants ignored well-known “red flags” of drug diversion and drug-seeking behavior when filling prescriptions for controlled substances. These prescriptions often involved well-known, highly addictive, and highly abused painkillers such as oxycodone, hydrocodone, and methadone, along with other “potentiator” drugs — drugs that heighten the euphoric effects of opioids, like carisoprodol (i.e., Soma) and alprazolam (i.e., Xanax).
“The Department of Justice continues to use all tools at its disposal to combat the opioid crisis,” said Acting Assistant Attorney General Jeffrey Bossert Clark of the Department of Justice’s Civil Division. “Reports indicate that COVID-19 has exacerbated many of the opioid crisis’s underlying causes. As a result, the Civil Division, DEA, and other law enforcement partners have redoubled efforts to ensure that pharmacies that fail to uphold their obligation to dispense controlled substances lawfully are held accountable.”
“Opioid addiction and abuse have devastated communities across our nation, and eastern North Carolina is no exception,” said Robert J. Higdon, Jr., U.S. Attorney for the Eastern District of North Carolina. “As the last line of defense between these dangerously addictive substances and our communities, pharmacists and pharmacies play a critical role in stemming the tide of the opioid epidemic. Seashore, Waggett, and King ignored that responsibility and, instead, made matters worse. Today’s order demonstrates our office’s continued, unwavering commitment to hold responsible all who had a role to play in this crisis — from distributors, to prescribers, to the pharmacies who ultimately put the pills in patients’ hands.”
“These pharmacists abandoned their code of ethics,” said Robert J. Murphy, Special Agent in Charge of the DEA. “If diversion of controlled substances is suspected, pharmacists must investigate and resolve any red flags before filling a prescription. These steps are necessary to comply with the law and to protect patient health. We will not hesitate to use all federal resources necessary to ensure that members of the health care industry follow the law.”
As alleged in the complaint, which included several patient examples, many prescriptions raised multiple red flags, but Seashore Drugs, Waggett, and King failed to take the required steps to resolve those red flags and ensure the prescriptions’ legitimacy before filling them. The red flags allegedly ignored by Seashore Drugs, Waggett, and King were numerous and included, among others:
- Combinations of controlled substances that were highly unlikely to serve a legitimate medical purpose and/or were known “cocktails” favored by drug abusers, including numerous “cocktails” written by a physician whose prescribing privileges ultimately were suspended by the North Carolina Medical Board for improper opioid prescribing;
- Extremely high doses of opioids dispensed for years on end, including high-dose opioid prescriptions written by a prescriber located in another state hundreds of miles away and written for members of the same family; and
- Repeated early fills of prescriptions allowing individuals, over time, to receive many extra doses of opioids and other controlled substances.
As set forth in the complaint, this conduct led Seashore to develop a reputation in the local pharmacy community as a place that filled prescriptions other pharmacies refused. And within the pharmacy, it is alleged that King often filled prescriptions for customers his own pharmacists, no longer on shift, previously refused to fill. Seashore staff even reported to King that individuals were exchanging recently dispensed drugs on the bench outside the pharmacy, but King took no action. Multiple customers who filled opioid prescriptions at Seashore died from prescription-drug overdoses within days after Seashore dispensed their pills.
The defendants have not admitted the allegations in the complaint, but the parties agreed to resolve the case without further litigation. The court adopted the parties’ agreement and entered a consent order that, among other things:
- Permanently prohibits Waggett from dispensing opioids or other controlled substances;
- Prohibits King from dispensing Schedule II controlled substances, including most opioids, for 180 days and then requires King to submit to further DEA monitoring for 3 years; and
- Permanently prohibits Waggett and King from serving as a manager, owner, operator, or pharmacist-in-charge of any entity, including a pharmacy, that administers, dispenses, or distributes controlled substances.
Trial Attorney James W. Harlow of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorneys C. Michael Anderson and John E. Harris of the U.S. Attorney’s Office for the Eastern District of North Carolina represented the United States. The Greensboro Resident Office of the Drug Enforcement Administration investigated the case. Additional investigatory assistance was provided by the U.S. Department of Health and Human Services’ Office of Inspector General and the North Carolina Board of Pharmacy.
For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
Statement from Assistant Attorney General Eric S. Dreiband on Supreme Court's Order in Favor of Colorado Church that Challenged COVID RestrictionsRead the Press Release
Assistant Attorney General for the Civil Rights Division, Eric S. Dreiband, issued the following statement:
“Today’s decision by the U.S. Supreme Court in High Plains Harvest Church v. Polis and other recent decisions make abundantly clear that religious liberty is not a second-class right. There is no pandemic exception to the United States Constitution and its Bill of Rights. This should be obvious to public officials because the First and Fourteenth Amendments to the Constitution make it illegal for any government in this country to make any law that prohibits the free exercise of religion. Colorado’s decision to treat religion and houses of worship less favorably than marijuana dispensaries, laundromats, and other nonreligious activities is illegal and suggests a lack of respect or understanding about our Constitution. When states ease COVID-19 restrictions for other fundamental rights or economic activities, they must extend at least the same treatment to places of worship. The Constitution demands no less.”
Background
The United States filed a Statement of Interest supporting the church in the case, High Plains Harvest Church v. Polis, on May 29, 2020. The federal District Court for Colorado had denied an injunction on Aug. 10, 2020 to the church, High Plains Harvest Church, and the federal Court of Appeals for the Tenth Circuit had upheld that ruling. The U.S. Supreme Court decision nullified those decisions and called on the Court of Appeals to reconsider the case in light of the Supreme Court’s decision on November 25 in Diocese of Brooklyn v. Cuomo, which held that New York’s restrictions of places of worship to 10 or 25 people depending on the zone violated the Free Exercise Clause of the Constitution.
The department’s press release on its previous statement of interest in this case can be found here: https://www.justice.gov/opa/pr/department-justice-files-statement-interest-support-freedom-religion-colorado-church
The United Sates’ Statement of Interest was part of Attorney General William P. Barr's April 27, 2020 initiative directing Assistant Attorney General for Civil Rights, Eric Dreiband, and the U.S. Attorney for the Eastern District of Michigan, Matthew Schneider, to review state and local policies to ensure that civil liberties are protected during the COVID-19 pandemic.
Justice Department Files Race Discrimination Lawsuit Against Housing Authority in OklahomaRead the Press Release
The Justice Department announced today that it has filed a lawsuit alleging that the Housing Authority of the Town of Lone Wolf, Oklahoma, along with its former employees, David Haynes and Myrna Hess, violated the Fair Housing Act and Title VI of the Civil Rights Act of 1964 when they denied housing to an African-American applicant and her young child because of their race.
The lawsuit, filed in the U.S. District Court for the Western District of Oklahoma, stems from the experience of an African-American mother and her then-five-year-old daughter who, in 2015, were living in a shelter and, with the help of the Legal Aid Services of Oklahoma Inc., were seeking affordable housing.
“Denying people housing opportunities because of their race or color is an egregious violation of the Fair Housing Act,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “Discrimination by those who receive federal taxpayer dollars to provide housing to lower-income applicants is particularly odious. The Justice Department will not tolerate illegal housing discrimination in any form and we will continue to fight to protect the rights of all Americans to rent and own their homes without regard to their race or color.”
“Families have a tough enough time finding decent affordable housing without having their options limited because of their race,” said Anna María Farías, Department of Housing and Urban Development (HUD) Assistant Secretary for Fair Housing and Equal Opportunity. “HUD applauds today’s action and will continue working with the Justice Department to take appropriate action when the nation’s fair housing laws are violated.”
The complaint alleges that when a Legal Aid employee first contacted the Housing Authority on behalf of the woman, the Housing Authority told the employee that units were available and invited the woman to apply. But when the Housing Authority learned from her application that she and her child are black, the Housing Authority denied the application and falsely told the applicant that no apartments were available. Legal Aid then conducted testing confirming that the Housing Authority was discriminating against African-American applicants. As the complaint alleges, defendants told the white tester that there were multiple apartments available to her and her daughter and showed her three vacant apartments. By contrast, the next day, defendants told the African-American tester that no apartments were available for her and her granddaughter and did not show her an apartment. The Housing Authority receives funds from HUD and manages 25 apartments.
The applicant and Legal Aid subsequently filed a complaint with HUD. After an investigation, HUD determined that the defendants had violated the Fair Housing Act and Title VI and referred the matter to the Department of Justice for litigation.
The lawsuit seeks monetary damages for the complainants and a court order barring future discrimination.
Individuals who believe they have been victims of housing discrimination at the Housing Authority of the Town of Lone Wolf should contact the Department of Justice toll-free at 1-833-591-0291 or by email at [email protected]. Individuals who have information about this or another matter involving alleged discrimination may submit a report online at civilrights.justice.gov.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. Title VI of the Civil Rights Act of 1964 prohibits discrimination on the ground of race, color, or national origin in programs or activities that receive federal funds. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
The complaint contains allegations of unlawful conduct. The allegations in the complaint must be proven in court.
15 Named in $26 Million International Trade Fraud SchemeRead the Press Release
A federal grand jury in Houston, Texas, has returned a criminal indictment against eight individuals, while a related civil complaint has charged 14 individuals and one company relating to international trade fraud violations stemming from a decade-long scheme involving tires from China.
Law enforcement arrested Zheng “Miranda” Zhou, 53, of Missouri City, and Kun “Bruce” Liu, 40, of Sugar Land, yesterday. They made their initial appearances in Houston federal court today, at which time the criminal indictment was unsealed.
Also charged in the indictment are Qinghua “Shirley” Song, 44, of Jurupa Valley, California; and Chinese residents Yue “Joanna” Peng, 42, Li “Cathy” Chen, 38, Xin “Devin” Zhang, age unknown, Shaohui “Jasper” Jia, 40, and Deng “David” Yongqiang, 36. They are all considered fugitives and warrants remain outstanding for their arrests.
The Department of Justice’s Civil Division also filed a civil complaint Dec. 11 alleging trade fraud in the U.S. Court of International Trade. The complaint names the eight criminal defendants and six other individuals - Xiaozhen “Jenny” Zhang, 34, Di “Terry” Wang, 34, Liang “Leon” Yu, 49, Lin “Leo” Zhang, 37, Jinbing “David” Wang, 36, and Minglian “Bill” Li, 28, as well as Houston area company Winland International Inc., dba Super Tire Inc. David Wang is a resident of New Jersey, while the remaining civil defendants reside in China.
“The Civil Division, through the Department of Justice’s Trade Fraud Task Force (TFTF), will continue to partner with U.S. law enforcement agencies and U.S. Attorneys’ Offices to aggressively investigate and pursue individuals and companies who attempt to evade U.S. customs laws and target the U.S. manufacturing base with unfair trade practices,” said Acting Assistant Attorney General Jeffery Bossert Clark. “We recognize the importance of ensuring that U.S. manufacturers are competing on a level playing field.”
“China and its industries want to rob, replicate and replace American made good and technology,” said U.S. Attorney Ryan K. Patrick for the Southern District of Texas. “Illegally importing and dumping these goods is one way to systemically weaken American competitors. Whether direct espionage by the Chinese government or trade fraud like in this case, we will continue to investigate and prosecute every case we can.”
The indictment and complaint allege the defendants conspired to avoid anti-dumping duties associated with off-the-road (OTR) and light vehicle and truck (LVT) tires from China. Working through and with Winland, individuals allegedly imported OTR and LVT tires from companies that were subject to anti-dumping duties associated with Chinese tire manufacturers who had engaged in unfair trade practices in the United States.
The complaint further alleges U.S.-based defendants conspired with defendants in China to obtain falsified invoices and entry records of Chinese tire companies that were subject to a lower duty rate than the actual manufacturers of these tires. Defendants submitted these falsified records to U.S. Customs officials when importing tires into the United States, so that Winland could avoid paying the higher duty rates, according to the allegations. The indictment and complaint also allege they used these falsified records to understate the value of these tires, further lowering the amount Winland owed in duties.
The value of these tires allegedly exceeded $20.9 million and resulted in the deprivation to the United States of more than $6.5 million in import duties.
“For more than a decade, Zhou and her co-conspirators are alleged to have sought to gain an unfair competitive advantage at the expense of U.S. companies and consumers through a series of schemes in violation of fair trade practices and U.S. import regulations,” said Special Agent in Charge Mark B. Dawson of Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) - Houston. “Working closely with our U.S. and foreign law enforcement partners, and in coordination with the National Intellectual Property Rights Coordination Center, we were able to uncover these alleged deceptive practices leading to the criminal indictment and imposition of almost $21 million in civil penalties.”
“Customs and Border Protection (CBP) takes its trade mission of protecting the U.S. economy very seriously as we strive to maintain fair trade and preserve American jobs from predatory practices,” said CBP’s Director of Detroit Field Operations Christopher Perry. “These civil penalties and criminal indictments should serve as a warning to those who attempt to defraud our government and do harm to our economy and American businesses.”
The Houston Trade/Revenue Interdiction and Enforcement Team conducted the collaborative investigation along with CBP’s Automotive and Aerospace Center of Excellence and Expertise with the assistance of U.S. Citizenship and Immigration Services.
William Kanellis of TFTF is handling the civil matter. TFTF is an inter-agency law enforcement task force with the primary mission of identifying, interdicting and prosecuting international trade fraud. Assistant U.S. Attorneys Suzanne Emilady and Craig Feazel of the Southern District of Texas are prosecuting the criminal case.
An indictment or complaint is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
Justice Department Requires Divestiture of Tufts Health Freedom Plan in Order for Harvard Pilgrim and Health Plan Holdings to Proceed with MergerRead the Press Release
The Department of Justice announced today that it would require Harvard Pilgrim Health Care (Harvard Pilgrim) and Health Plan Holdings (fka Tufts Health Plan) to divest Tufts Health Freedom Plan Inc. (Tufts Freedom), in order to proceed with their merger. Tufts Freedom is Health Plan Holdings’ commercial health insurance business in New Hampshire.
The department has approved UnitedHealth Group Inc. (United), as the buyer. Health insurance is an integral part of the American healthcare system, and the proposed settlement will maintain competition for the sale of commercial health insurance to private employers in New Hampshire with fewer than 100 employees.
“Americans spend trillions of dollars on healthcare each year, and competition between health insurers is vital to providing consumers with access to quality care at affordable rates. This merger, as originally structured, likely would have led to higher prices, poorer quality, and reduced choice for many consumers throughout the state,” said Assistant Attorney General Makan Delrahim of the Antitrust Division. “Today’s settlement with its divestiture will ensure that small groups and CRC groups continue to benefit from the competition that has enabled them to purchase the health insurance plans for their employees at competitive prices in the state.”
“This case will play an important role in maintaining competition in New Hampshire’s health insurance industry,” said Scott W. Murray, U.S. Attorney for the District of New Hampshire. “By bringing this antitrust action, the Department of Justice is working to ensure that consumers in the Granite State have adequate and affordable health insurance options.”
“New Hampshire’s healthcare costs are among the highest in the country. It is an essential duty of the New Hampshire Attorney General to protect consumers of this State. Such protection requires ongoing and vigorous antitrust enforcement efforts,” said New Hampshire Attorney General Gordon J. MacDonald. “In this case, New Hampshire collaborated with our federal partner, the Antitrust Division of the United States Department of Justice, to protect consumers from an anticompetitive health insurance transaction that likely would have led to higher premiums and costs for consumers in the State. We believe the proposed settlement and remedy will restore any lessening of competition resulting from the proposed merger. We remain committed to using all available tools to protect New Hampshire consumers from higher healthcare costs.”
The Justice Department’s Antitrust Division, along with the New Hampshire Office of Attorney General, filed a civil antitrust lawsuit today in the U.S. District Court for the District of New Hampshire to block the proposed merger. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in its complaint.
According to the department’s complaint, Harvard Pilgrim and Tufts Freedom are two of the three top commercial group health insurers that offer plans to two types of private employers in New Hampshire: (1) employers with between one and 50 employees (small groups) and (2) employers with between 51 and 99 employees (CRC groups). The department’s complaint alleges that since Tufts Freedom’s inception in 2016, competition between it and Harvard Pilgrim has resulted in lower premiums, richer plan benefits, and better service for small groups and CRC groups in New Hampshire.
Under the terms of the proposed settlement, Harvard Pilgrim and Health Plan Holdings must divest Tufts Freedom to United or to an alternative purchaser approved by the United States, and allow United the opportunity to hire key employees who operate Tufts Freedom. Harvard Pilgrim and Health Plan Holdings must also provide transition services and use best efforts to maintain Tufts Freedom’s contracts with healthcare providers during the transition to United.
The department has also closed its investigation into the merger’s potential effects in Massachusetts after concluding that the merger was unlikely to substantially lessen competition there.
Harvard Pilgrim is a regional health insurer based in Wellesley, Massachusetts. Its annual revenue in 2019 was approximately $3 billion, with the vast majority coming from commercial insurance products.
Health Plan Holdings is a regional insurer based in Watertown, Massachusetts. Its annual revenue in 2019 was over $5.5 billion, with roughly one-third coming from commercial insurance products. Health Plan Holdings sells commercial group health insurance plans to small and large employer groups in New Hampshire through Tufts Freedom.
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 Eric Welsh, Chief, Healthcare and Consumer Products Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street NW, Suite 4100, Washington, DC 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of New Hampshire may enter the final judgment upon finding it is in the public interest.
Justice Department Reaches Major Olmstead Settlement Agreement with North DakotaRead the Press Release
The Justice Department today announced a settlement agreement with the State of North Dakota under the Americans with Disabilities Act (ADA). The agreement resolves complaints alleging that North Dakota unnecessarily institutionalizes individuals with disabilities in nursing facilities, instead of providing them the services they need to live in the community.
“Today’s settlement is a great victory for the people of North Dakota and its government. The settlement agreement will ensure that individuals with disabilities are no longer unnecessarily institutionalized in nursing facilities. Instead, these individuals will be able to choose to remain in their own home, near family and friends,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “We commend the State of North Dakota for making changes to its long-term care service system in a manner that will benefit both people with physical disabilities and their families, friends, and communities throughout the Peace Garden State. The settlement agreement is an important step towards inclusion, not just for the State, but as a model nationwide.”
“The settlement we reached ensures that thousands of North Dakotans with disabilities, including seniors, will have a meaningful choice for where they wish to live, including in their own private home,” said U.S. Attorney Drew Wrigley for the District of North Dakota. “That is the sacred promise of the Americans with Disabilities Act, and I commend our state partners who joined my office and the Department of Justice in securing for North Dakotans the right to age in place for today and all the years to come.”
Under the agreement, North Dakota will expand services to individuals with physical disabilities in, or at risk of entering, a nursing facility to allow them to live in their homes. The state will provide these services to more than 2,500 people with disabilities, helping them to assess their options, decide where they would like to live, and arrange for community-based services. These services include assistance in finding accessible housing and home health aides to help with daily activities such as bathing and dressing. As part of the agreement, North Dakota will also increase access to community-service providers.
Enabling people in nursing facilities, who choose and are appropriate for community-based care, to transition to the community is especially urgent during the COVID-19 pandemic, given the high risk of virus transmission in congregate settings.
July 26, 2020, marked the 30th Anniversary of the ADA. The Justice Department plays a central role in advancing the nation’s goal of equal opportunity, full participation, independent living, and economic self-sufficiency for people with disabilities. Please visit the department’s ADA Anniversary webpage to learn more about the ADA’s history and impact.
People interested in finding out more about the ADA or this settlement agreement can call the toll-free ADA Information Line at 800-514-0301 or 800-514-0383 (TDD), or access the ADA website at http://www.ada.gov.
Department of Justice Announces Joint Final Rule Regarding Equal Treatment of Faith-Based Organizations in Department-Supported Social Service ProgramsRead the Press Release
The Department of Justice announced a joint final rule with eight other Agencies — the Agency for International Development and the Departments of Agriculture, Education, Health and Human Services, Homeland Security, Housing and Urban Development, Labor, and Veterans Affairs — to implement President Trump’s Executive Order No. 13831, on the Establishment of a White House Faith and Opportunity Initiative (May 3, 2018). This rule ensures that religious and non-religious organizations are treated equally in DOJ-supported programs, and it clarifies that religious organizations do not lose their legal protections and rights just because they participate in federal programs and activities.
“The freedom to exercise religious beliefs is a cornerstone of our Constitution and the federal government must uphold this right for all Americans. The Constitution and Federal statutes require all agencies of government to treat religious groups fairly,” said Attorney General William P. Barr. “This joint final rule is another in a long line of steps this Administration has taken to restore and protect religious liberty and ensure equal treatment for people of faith.”
This final rule ensures equal treatment for faith-based organizations, consistent with the Constitution and other federal law. It removes requirements in prior regulations that placed unequal burdens on religious organizations, cast unwarranted suspicion on them, and were in tension with their religious liberty rights. This final rule also clarifies that religious organizations do not lose various legal protections because they participate in federal programs and activities, such as the rights to accommodations and conscience protections under the First Amendment, Religious Freedom Restoration Act, and other federal laws.
This final rule preserves most of the existing regulations governing participation of religious organizations in DOJ’s financial assistance programs, including provisions barring providers from discriminating against beneficiaries based on religion and requiring that any religious activities by the organization be separated in time or location from any services directly funded with federal money.
The final rule was drafted in response to Executive Order 13831, issued in May 2018. The nine Agencies worked collaboratively to draft notices of proposed rulemaking that were published or delivered to Congress in January 2020. These Agencies then received over 95,000 public comments from a range of interested parties, including Members of Congress; state and local governments, agencies, and officials; faith-based services providers and umbrella organizations; advocacy organizations; and individuals. The Agencies considered those comments, modified their regulations to address concerns raised in the comments, and drafted responses included in the final rule.
Alabama Man Sentenced to Prison for Tax EvasionRead the Press Release
WASHINGTON – An Alabama man was sentenced to serve 12 months in prison for tax evasion, Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Prim Escalona for the Northern District of Alabama announced today.
According to court documents and statements made in court, John P. Cooney of Jefferson County, Alabama, disclosed to the IRS in December 2011, through late-filed tax returns, that he owed approximately $780,000 to the IRS for the 2008 to 2010 tax years. Despite acknowledging he owed these taxes, Cooney never paid them. Instead, Cooney sought to conceal income he was earning by setting up a nominee corporation, GVA Advisors LLC (GVA), and arranging for payments to be made to GVA, rather than directly to him. From 2013 through 2016, Cooney deposited more than $435,000 into the GVA account, concealing the income from the IRS and evading payment of his outstanding tax liabilities. As a result of his actions, Cooney currently owes more than $1.3 million in outstanding balances, penalties, and interest to the IRS.
Cooney previously pleaded guilty to one count of tax evasion on Feb. 18, 2020.
In addition to the term of prison imposed, Cooney was ordered to serve three years of supervised release and to pay $1,311,904.70 in restitution to the IRS.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Escalona commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Kathryn Sparks and Alexander Effendi of the Tax Division and Assistant U.S. Attorney Catherine Crosby, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
USNCB Alerts U.S. Partners to Potential COVID FraudRead the Press Release
Image Courtesy INTERPOL.INTERPOL Washington, the U.S. National Central Bureau (USNCB), is working closely with the International Criminal Police Organization (INTERPOL) to ensure that our U.S. law enforcement partners receive critical COVID-19 pandemic-related alerts in a timely manner. Recently, INTERPOL issued a world-wide alert warning of criminal activity associated with the pandemic. Distributed as an “Orange Notice” to law enforcement agencies in its 194 member countries, this alert identifies new criminal activity related to falsifying, stealing, and illegally advertising COVID-19 and seasonal flu vaccines. INTERPOL issues Orange Notices to warn of an event, a person, an object or a process representing a serious and imminent threat to public safety.
The USNCB ensures that our state and local law enforcement partners have access to the most current alerts and warnings from INTERPOL that could impact U.S. citizens. The USNCB’s active and continuous dissemination of information on threats identified by other INTERPOL member countries to these and other relevant U.S. Government agencies such as the Department of Health and Human Services, reinforces the value, reach, and efficiency of the USNCB’s outreach framework across all jurisdictional levels.
“The potential for counterfeit vaccines as well as fraudulent and unsafe personal protective equipment (PPE) to be distributed within the United States poses significant risks to first responders, law enforcement officers, vulnerable populations, and the general public. The USNCB has a longstanding commitment to providing state, local, federal and tribal authorities with direct access to INTERPOL data related to emerging threats to public safety. That commitment has been reaffirmed and strengthened during the worldwide pandemic,” said USNCB Director Uttam Dhillon.
The USNCB is also emphasizing INTERPOL’s advice to the general public to be cautious when seeking to purchase medical equipment or medicines, especially when those products are pandemic-related. “Criminal networks will also be targeting unsuspecting members of the public via fake websites and false cures, which could pose a significant risk to their health, even their lives,” warned INTERPOL General Secretary Jürgen Stock in an INTERPOL news release.
A component of the U.S. Department of Justice, the USNCB is the designated United States representative to INTERPOL on behalf of the Attorney General. It serves as the national point of contact for all INTERPOL matters, coordinating international investigative efforts among member countries and the more than 18,000 local, state, federal, and tribal law enforcement agencies in the United States.
Statement by Attorney General William P. Barr on Senate ResolutionRead the Press Release
Online child sexual exploitation is a global crime that demands a continued global response. And yet an expansion of the “ePrivacy Directive” slated to take effect in the European Union this month may prohibit tech companies from using some of the most powerful tools available to detect child sexual abuse material and grooming by predators, making it easier for children to be exploited without detection. We commend Senators Cotton, Loeffler, and Boozman for introducing a resolution that encourages the EU to preserve companies’ ability to detect and prevent child exploitation, consistent with the Voluntary Principles to Counter Online Child Sexual Exploitation and Abuse.
Statement by Attorney General William P. Barr on Mexico's Proposed LegislationRead the Press Release
Attorney General William P. Barr gave the following statement in response to Mexico's proposed legislation.
"The Department of Justice is committed to working with the Government of Mexico to fight the transnational criminals who threaten both our nations. As always, our cooperation takes place within the longstanding framework designed to address jointly our shared challenges: that is why, for example, the United States recently returned former Secretary Cienfuegos to Mexico, in order to allow him to be investigated there. Thus, we are troubled by legislation currently before the Mexican Congress, which would have the effect of making cooperation between our countries more difficult. This would make the citizens of Mexico and the United States less safe. The passage of this legislation can only benefit the violent transnational criminal organizations and other criminals that we are jointly fighting."
Justice Department Files Statement of Interest in Michigan Religious Schools' Challenge to COVID-19 Closing OrderRead the Press Release
The Justice Department today filed a statement of interest in federal district court in Kalamazoo, Michigan, arguing that the Free Exercise Clause of the Constitution requires the state of Michigan to justify why it cannot provide exemptions to its school closing order for in-person instruction at religious high schools when it provides exemptions for trade and technical instruction in person, college sports teams, and other educational activities.
The plaintiff religious schools have implemented rigorous protocols to reduce the risk of COVID-19 transmission, including requiring masks and distancing, schedule changes to reduce movement, an outdoor tent cafeteria at one school, thermal screening kiosks, and others.
“The education of children is a matter of faith to many people, and the Free Exercise Clause of First Amendment to the United States Constitution protects religious education. The Free Exercise Clause does not protect nonreligious activities such as trade and technical classes and college sports,” said Eric Dreiband, Assistant Attorney General for the Civil Rights Division. “For more than two centuries, Americans have fought and died for the right of our people to worship and pray according to their conscience and faith. These noble patriots did not fight and die to protect the nonexistent authority of government to discriminate against the exercise of religion by people of faith. Discrimination against the right of the people to practice their religion violates everything this country stands for.”
The case was filed on Dec. 7, 2020, by three Catholic high schools, parents of students, and a Michigan association of religious schools challenging an order issued the same day by the Michigan Department of Health and Human Services ordering public and nonpublic high schools throughout the state closed. The plaintiffs allege that the schools have a sincerely held religious belief that the diverse religious aspects of a Catholic education must be conducted in person, including daily Mass, Eucharistic adoration, communal prayer throughout the school day, and spiritual formation with their teachers, among others. The Michigan order, however, requires all high schools to close, including religious high schools, while granting exceptions for trade and technical education, boarding schools, English Language Learner instruction, special education, and even college sports.
The United States’ brief explains that Michigan’s order “exempts a range of educational activities that the state deems important enough to be held in person notwithstanding the health risks, but has failed to exempt religious educational activities which the plaintiffs likewise sincerely believe must be held in person.” Such differential treatment of religious reasons for in‑person learning and various secular reasons for in-person learning and activities must be justified by a compelling government interest carried out through the least restrictive means. This, the brief maintains, the state has failed to do here.
Since Attorney General William P. Barr announced an initiative on April 27, 2020 to review state and local policies to ensure that civil liberties are protected during the COVID-19 pandemic, the Civil Rights Division has filed numerous briefs and statements of interest concerning protections under the Constitution and the Bill of Rights.
Justice Department Files Lawsuit Alleging Disability-Based Discrimination by Architect and Owners of 15 Complexes in Four StatesRead the Press Release
The Justice Department announced the filing today of a lawsuit against J. Randolph Parry Architects, P.C. and eight owners of multifamily properties designed by the architectural firm.
The lawsuit alleges that the defendants violated the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA) by failing to design and construct housing units and related facilities to make them accessible to people with disabilities.
“The Fair Housing Act and the Americans with Disabilities Act have been the law for more than a quarter century, and there is no excuse for owners and architects to continue developing properties that fail to comply with the accessibility requirements of these statutes,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “This flagrant disregard of federal law must stop, and stop now. We will hold accountable those who ignore their legal obligations to design and construct multifamily housing to be accessible to people with disabilities.”
The lawsuit, which was filed in the United States District Court for the Eastern District of Pennsylvania, alleges that at least 15 multifamily senior living properties have significant accessibility barriers, including inaccessible pedestrian routes to building entrances, inaccessible pedestrian routes from apartment units to amenities, inaccessible parking, door openings that are too narrow for a person using a wheelchair, environmental controls that are too high or too low for a person using a wheelchair to reach, and inaccessible bathrooms and kitchens.
The lawsuit seeks an order (1) requiring the defendants to bring the properties into compliance with the FHA and ADA, (2) requiring the defendants to pay monetary damages to persons harmed by the lack of accessibility and civil penalties to the United States to vindicate the public interest, and (3) prohibiting the defendants from designing or constructing multifamily properties in a manner that discriminates against people with disabilities.
The 15 properties, all designed by J. Randolph Parry Architects, that are alleged to violate the FHA and ADA are:
- Traditions of Hanover, Bethlehem, Pennsylvania;
- Traditions of Hershey, Palmyra, Pennsylvania;
- Chestnut Knoll, Boyertown, Pennsylvania;
- Arbour Square, Harleysville, Pennsylvania;
- Cedar Views Apartments, Philadelphia, Pennsylvania;
- The Birches, Newtown, Pennsylvania;
- The Lifequest Nursing Center Addition, Quakertown, Pennsylvania;
- Keystone Villa, Douglasville, Pennsylvania;
- Alcoeur Gardens, Brick Township, New Jersey;
- Alcoeur Gardens, Toms River, New Jersey;
- Church Hill Village, Newtown, Connecticut;
- Heritage Green, Mechanicsville, Virginia;
- Homestead, Hamilton Township, New Jersey;
- The Villa Rafaella Addition, Pleasantville, New Jersey; and
- Woodbury Mews Colonial House, Woodbury, New Jersey.
Anyone with information about the inaccessible conditions at these properties should call the Department of Justice at 1-833-591-0291, and select option numbers (1 4 1): select one for English, four for housing accessibility and one for US v. J. Randolph Parry Architects to leave a message or send an email to [email protected]. Individuals who have information about this or another matter involving alleged discrimination may submit a report online at https://civilrights.justice.gov/.
The FHA prohibits discrimination in housing based on disability, race, color, religion, national origin, sex, and familial status. Among other things, the FHA requires all multifamily housing constructed after March 13, 1991, to have basic accessibility features, including accessible routes to all units in buildings with elevators. Enacted in 1990, the ADA requires, among other things, that places of public accommodation, such as rental offices at multifamily complexes designed and constructed for first occupancy after Jan. 26, 1993, be accessible to persons with disabilities. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt.
The complaint contains allegations of unlawful conduct; the allegations must be proven in court.
Assistant Attorney General Beth A. Williams Announces Departure from the Office of Legal PolicyRead the Press Release
Assistant Attorney General Beth A. Williams of the Justice Department’s Office of Legal Policy (OLP) announced her departure from the department, effective today.
“Beth has served the Department of Justice with distinction,” said Attorney General William P. Barr. “Beth led the judicial nomination process for the department, resulting in the confirmation of hundreds of principled jurists who have demonstrated an unwavering commitment to the Constitution and the rule of law. Beth also helped shape the terms of national debate on a range of legal policy questions of significant priority to the department and the administration, including advocating against unlawful nationwide injunctions, protecting religious liberty, improving our regulatory process, and combating human trafficking. I am deeply appreciative of Beth’s service to the department and our country.”
“It has been the honor of my career to serve as Assistant Attorney General of the Office of Legal Policy,” said Assistant Attorney General Williams. “For three and a half years, I have had the privilege of working to make our country safer and more secure, and to preserve and protect our most fundamental freedoms. I have been grateful to work alongside the talented public servants at the department who dedicate their careers to this mission.”
Since 2017, OLP has assisted President Trump in appointing 229 Article III judges to the bench — more than any president has appointed in a single term since 1980. The president’s nominees to date include three Supreme Court justices, 53 Circuit Court judges, 170 District Court judges, three Court of International Trade judges, and numerous judges to other federal courts.
Under Assistant Attorney General Williams’s leadership, OLP has also led the department in taking significant steps to make the regulatory process more lawful, accountable, and transparent. The department recently issued two new regulations establishing a process for the responsible review, clearance, and issuance of guidance documents. The rules officially prohibit the use of guidance documents as an end-run to lawful regulation. OLP also played an instrumental role in the department’s landmark report to Congress issuing a formal recommendation that Congress modernize the 74-year-old Administrative Procedure Act.
Assistant Attorney General Williams also spearheaded departmental efforts to protect religious liberty. As part of this effort and consistent with recent Supreme Court holdings, OLP worked closely with the Office of Justice Programs and other department components to issue guidance making clear that recipients of Department of Justice grant funding would not be discriminated against on the basis of their faith. The guidance is an important affirmation of the department’s commitment to ensure that individuals and organizations driven by faith to serve their communities are not subject to unequal treatment by virtue of their religious identity.
In response to the challenges created by the COVID-19 pandemic, Assistant Attorney General Williams has focused on policy initiatives geared at protecting our most vulnerable members of society. OLP has worked with department components to prioritize the protection of children from online exploitation, to seek justice for victims of human trafficking, to ensure responsible policing, and to combat elder fraud and abuse.
During Ms. Williams’s tenure as Assistant Attorney General, OLP played a lead role in the department’s cyber policies, including coordinating the development of a recent white paper on cryptocurrency as part of the Cyber-Digital Task Force, and undertaking a comprehensive assessment of the department’s work in the cyber area to identify how federal law enforcement can even more effectively accomplish its mission.
OLP and the entire Department of Justice thank Assistant Attorney General Williams for her service and leadership.
The Departments of Justice and Homeland Security Publish Final Rule on Procedures for Asylum and Withholding of RemovalRead the Press Release
Update: This rule was enjoined in its entirety on January 8, 2021. See Pangea Legal Servs., et al., v. U.S. Dep’t of Homeland Sec., et al., No. 3:20-cv-09253 (N.D. Cal.) (“Pangea II”) and Immigration Equality, et al. v. U.S. Dep't of Homeland Sec., et al., No. 3:20-cv-09258 (N.D. Cal.)
Today, the Department of Justice and the Department of Homeland Security (collectively, the Departments) announced the forthcoming publication of a Final Rule that will streamline and enhance procedures for the adjudication of claims for asylum, withholding of removal, and protection under the Convention Against Torture (CAT) regulations.
The Final Rule, consistent with the Immigration and Nationality Act (INA), will enable the Departments to more effectively separate baseless claims from meritorious ones. This will better ensure groundless claims do not delay or divert resources from deserving claims, and in particular, will better ensure the security of our nation’s borders by facilitating the efficient review of claims in a manner consistent with the law and the integrity of our immigration system.
The Final Rule addresses public comment received following publication of a Notice of Proposed Rulemaking, and codifies amendments to multiple provisions of the Departments’ regulations. The rule takes effect 30 days after publication in the Federal Register, which is scheduled to occur on Friday, Dec. 11, 2020.
The Final Rule makes the following changes to the Departments’ regulations:
- Amend the regulations governing credible fear determinations so that individuals found to have such a fear will have their claims for asylum, withholding of removal, or protection under the CAT adjudicated by an immigration judge in streamlined proceedings, rather than in immigration court proceedings conducted under section 240 of the INA;
- Permit immigration judges to pretermit asylum applications without a hearing if the application does not demonstrate prima facie eligibility for relief;
- Clarify when an application is “frivolous”;
- Clarify standards for the adjudication of asylum and withholding claims including amendments to the definitions of the terms “particular social group,” “political opinion,” “persecution,” and “firm resettlement”;
- Outline factors, including an exemption for children under 18 for the factor regarding unlawful entry or attempted unlawful entry, for adjudicators to consider when making discretionary determinations;
- Clarify the standard for determining the acquiescence of a public official or other person acting in an official capacity under the CAT regulations;
- Raise the burden of proof for the threshold screening of withholding and CAT protection claims from “significant possibility” to a “reasonable possibility” standard;
- Apply bars to asylum and withholding when making credible fear determinations; and
- Clarify the requirement to protect certain information contained in asylum applications, applications for withholding of removal under the INA, applications for protection under the regulations implementing the CAT, and applications for refugee admissions.
Presidential Task Force on Missing and Murdered American Indians and Alaska Natives Releases Status ReportRead the Press Release
The Presidential Task Force on Missing and Murdered American Indians and Alaska Natives (AI/AN) today released a status report detailing accomplishments during its first year and outlining its strategy for the next 12 months. The President’s Executive Order (E.O.) 13898, set forth a range of tasks to be completed over the two-year life of the Task Force, with required reports at the end of each year. Attorney General William P. Barr and Secretary of the Interior David L. Bernhardt transmitted the status report to President Trump, and notably characterized these accomplishments as, “a productive first year of Task Force operations.”
In its first year, the Task Force, also known as Operation Lady Justice (OLJ), held more than 15 in-person and remote meetings with tribes, individuals and stakeholder groups, and established and convened 10 working groups to address specific mandates of the executive order, including developing protocols, solving cold cases and expanding outreach and awareness. Readouts of the sessions can be found on the Operation Lady Justice website.
“American Indians and Alaska Natives experience some of the highest rates of violence in the country, a situation that is all the more tragic in light of the generations of trauma already suffered by indigenous people,” said Attorney General Barr. “Despite the COVID-19 pandemic and the unprecedented challenges it posed, the Task Force continued to progress with appropriate urgency to diagnose the symptoms of this intractable problem. They sought the help and input from tribal leaders and tribal communities to develop sustainable protocols that will lead to long-term resolutions tribal communities need and deserve.”
“The Trump Administration has taken numerous actions to support Tribal communities with a particular focus on addressing the crisis of missing and murdered Native Americans and Alaska Natives,” said Secretary of the Interior David L. Bernhardt. “The new cold case offices that we stood up around the country are already providing much needed support in a critical effort to resolve missing and murdered cases and provide justice for victims and their families.”
“It has been a true honor to represent the U.S. Department of Health and Human Services on the Operation Lady Justice Task Force and serve Native American communities and populations,” said Commissioner Jeannie Hovland of the Administration for Native Americans. “Tribal leaders and community advocates have been on the forefront of this issue for years. At their request, I have elevated the critical role prevention must play in reducing the number of Native Americans who tragically go missing or are murdered. With their partnership and guidance, HHS is taking unprecedented action on this issue using a public health approach. This means addressing the root causes of this issue. I believe that together we can, and will, end the crisis of Missing and Murdered Native Americans.”
“President Trump was the first President to formally recognize the long-overlooked issue of missing and murdered Native Americans, but more importantly he demanded action,” said Doug Hoelscher, Assistant to the President and Director of White House Intergovernmental Affairs. “The work of the Operation Lady Justice Task Force, created by President Trump’s executive order, is laying a solid foundation for long-sought progress by improving data coordination, enhancing collaboration among various law enforcement entities, creating several cold case offices, and elevating support for victims and their families. Thanks to President Trump’s leadership and the hard work of the Task Force members, tribal partners, and advocates, missing and murdered Native Americans are forgotten no more!”
President Trump signed E.O. 13898 on November 26, 2019, establishing the Operation Lady Justice Task Force, to “address the legitimate concerns of American Indian and Alaska Native communities regarding missing and murdered people.” The order requires the Task Force to submit a status report in November 2020 and a final report in November 2021. Attorney General Barr and Secretary Bernhardt are co-chairs, with Office of Justice Programs Principal Deputy Assistant Attorney General Katharine T. Sullivan and Assistant Secretary for Indian Affairs Tara Katuk Mac Lean Sweeney serving as their designees. Marcia Good, from the Justice Department’s Office of Tribal Justice, is executive director.
As noted in the report, the Task Force will continue to consult with tribal leaders and solicit stakeholder feedback as it develops strategies for strengthening investigations, raising public awareness, and improving data collection and information sharing. Submission of the report caps National Native American Heritage Month. A list of Task Force members follows:
- Katherine (Katie) Sullivan, Principal Deputy Assistant Attorney General Office of Justice Programs U.S. Department of Justice Designee for Attorney General
- Tara Sweeney, Assistant Secretary for Indian Affairs U.S. Department of the Interior Designee for the Secretary of the Interior
- Charles (Charlie) Addington, Deputy Bureau Director Bureau of Indian Affairs, Office of Justice Services U.S. Department of the Interior
- Jean (Jeannie) Hovland, Deputy Assistant Secretary for Native American Affairs and Commissioner, Administration for Native Americans U.S. Department of Health and Human Services
- Laura Rogers, Principal Deputy Director Office on Violence Against Women U.S. Department of Justice
- Trent Shores, United States Attorney for the Northern District of Oklahoma and Chair of the Native American Issues Subcommittee of the Attorney General's Advisory Committee
- Terry Wade, Executive Assistant Director Criminal, Cyber, Response and Services Branch Federal Bureau of Investigation
Kelvin John Mata Tedtaotao Sentenced for Conspiracy to Distribute over 50 Grams of MethamphetamineRead the Press Release
Hagatña, Guam – SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant Kelvin John Mata Tedtaotao, age 37, from Merizo, Guam, was sentenced in the United States District Court of Guam to 30 months imprisonment for Conspiracy to Distribute Over 50 Grams of Methamphetamine Hydrochloride, in violation of 21 U.S.C. § 846. The Court also ordered three years of supervised release following imprisonment and $1,692 in restitution to the U.S. Postal Inspection Service and Homeland Security Investigations. The defendant must also perform 100 hours of community service and pay a mandatory $100 special assessment fee. In addition, defendants convicted of a federal drug offense may no longer qualify for certain federal benefits.
On February 14, 2018, Tedtaotao received two packages that had been mailed to Guam via the United States Postal Service (USPS) by another individual. Prior to USPS delivery, law enforcement removed the methamphetamine from both packages and replaced it with a sham substance. Tedtaotao believed the packages contained methamphetamine, which he intended to distribute to others. The combined weight of the methamphetamine was approximately 223 grams, with a purity of 98%, as determined by the United States Postal Drug Laboratory.
U.S. Attorney Anderson stated, “This case sends an important message to drug traffickers who use our mail system to facilitate their illegal activity. Anyone involved with the shipment of drugs in the mail can become the target of an investigation and face substantial time in a federal prison. I applaud the efforts of these federal agencies in their continuing enforcement operations.”
This case was a result of a joint investigation by the U.S. Postal Inspection Service, Homeland Security Investigations, and the Drug Enforcement Administration. The case was prosecuted by Stephen F. Leon Guerrero, Assistant United States Attorney in the District of Guam.
Former Owner of Health Care Staffing Company Indicted for Wage FixingRead the Press Release
Note: The defendant in this case, Neeraj Jindal, was acquitted by a jury of the charges alleged in the indictment described in the press release below.
A federal grand jury returned an indictment charging Neeraj Jindal, the former owner of a therapist staffing company, for participating in a conspiracy to fix prices by lowering the rates paid to physical therapists and physical therapist assistants in north Texas, including the Dallas-Fort Worth metropolitan area, the Department of Justice announced today. The indictment also charges Jindal with obstruction of the Federal Trade Commission’s separate investigation into this conduct.
According to the two-count indictment filed in the U.S. District Court in Sherman, Texas, Jindal and his co-conspirators agreed to pay lower rates to certain physical therapists and physical therapist assistants, and Jindal’s company paid lower rates, from in or about March 2017 and continuing through in or about August 2017. Jindal is charged with participating in the conspiracy when he was the owner of a Texas-based therapist staffing company that provided in-home physical therapy services. Jindal is also charged with obstruction of proceedings before the Federal Trade Commission. According to the indictment, Jindal made false and misleading statements and withheld and concealed information during the Federal Trade Commission’s investigation to determine whether Jindal’s company or other therapist staffing companies violated Section 5 of the Federal Trade Commission Act.
“The charges announced today are an important step in rooting out and deterring employer collusion that cheats American workers — especially health care workers — of free market opportunities and compensation,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “Employers who conspire to fix the wages of workers or restrict their mobility by allocating labor markets will be prosecuted to the fullest extent of the law. The division will also continue to prosecute those who undermine the integrity of federal investigations, including proceedings before other federal agencies.”
“The integrity of the market is the foundation of our free-enterprise system,” said U.S. Attorney Stephen J. Cox for the Eastern District of Texas. “Wage-fixing agreements exploit workers by pushing down wages and eliminating competition. The Eastern District of Texas is proud to partner with the Antitrust Division in protecting the marketplace and the opportunities for American workers.”
“The FBI is committed to rooting out anti-competitive activity and corruption in our markets,” said Assistant Director Calvin Shivers of the Criminal Investigative Division. “In this case, Neeraj Jindal attempted to cheat the system and, in doing so, hurt hard-working Americans providing medical care and relief. Our International Corruption team worked creatively and diligently to investigate this crime. We are prepared to take our findings and work with our partners at the Department of Justice to ensure justice is served.”
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
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 offense carries a statutory maximum penalty of five years imprisonment and a $250,000 fine.
Today’s announcement is the result of a federal investigation being conducted by the Antitrust Division’s Washington Criminal I and II Sections and the International Corruption Unit of the FBI.
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.
Florida Tire Importer Pleads Guilty in Tax ConspiracyRead the Press Release
A Miami, Florida, tire importer pleaded guilty today to conspiracy to defraud the government, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Department of Justice’s Tax Division and U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida.
According to court documents and statements made in court, Marco Parra operated Road Tire Plus Corp. (Road Tire), a tire importer located in Miami, Florida. From 2013 through 2016, Parra conspired with others in the tire industry to evade paying federal excise taxes on truck tires marked for highway use. Tire importers are responsible for excise taxes when their truck tires are sold to tire retailers, who then resell the tires domestically. Tire importers typically pass on the cost of the excise tax to tire retailers and collect the excise taxes from them. But, if the tires are later exported rather than sold domestically, the law provides for a credit for the excise taxes paid.
For some retailers, Parra sold truck tires subject to excise taxes. He collected the excise taxes that were due, but did not remit those taxes to the IRS and did not file tax returns reporting the tire sales as he was required. For others, Parra never collected the federal excise taxes due on the tire sales. Instead, Parra obtained false bills of lading claiming that the tires were exported, so that Parra could obtain an excise tax credit even though he knew the tires were not exported. As a result of Parra’s failure to timely file excise tax returns for 2014, 2015, and 2016, he caused an excise tax loss of approximately $887,112. Parra has since paid over $700,000 to the IRS.
U.S. District Judge Kathleen M. Williams scheduled sentencing for Feb. 18, 2021. Parra faces a statutory maximum of five years, as well as a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Orshan commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney Francesca Bartolomey and Assistant Chief Gregory Tortella, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Chinese Man Extradited for Financing Turtle-Trafficking RingRead the Press Release
A Chinese citizen was extradited from Malaysia to the United States today to face charges for money laundering.
Kang Juntao, 24, of Hangzhou City, China, was charged in February 2019 with financing a nationwide ring of individuals who smuggled at least 1,500 protected turtles out of the United States valued at $2,250,000.
“The Department of Justice is committed to prosecuting criminals who abuse the U.S. financial system to fund their illegal enterprises,” said Principal Deputy Assistant Attorney General Jonathan D. Brightbill of the Justice Department’s Environment and Natural Resources Division. “I thank the U.S. Fish and Wildlife Service for their extraordinary efforts in this case to support the Environment and Natural Resources Division’s mission to protect America’s wildlife.”
“Wildlife trafficking is a serious crime that impacts imperiled species at home and abroad,” said Aurelia Skipwith, Director of the U.S. Fish and Wildlife Service (USFWS). “The Trump Administration is committed to the conservation of wildlife. I would like to thank the U.S. Department of Justice and our various law enforcement partners for their assistance with this case. By working together, we can protect our nation's wildlife for future generations.”
According to the indictment, from June 12, 2017, through Dec. 3, 2018, Kang allegedly purchased turtles in the United States and arranged for them to be smuggled to associates in Hong Kong. He sent money through U.S. banks, including one in New Jersey, to pay for the turtles and their illegal shipments. The turtles would then be sold on the Asian pet trade black market for thousands of dollars each, depending on their sex, coloring, and age.
The United States, Malaysia, China, and approximately 181 other countries are signatories to the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). CITES is an international treaty that restricts trade in species that may be threatened with extinction.
Kang allegedly trafficked in five turtle species protected by the treaty. The eastern box turtle (Terrapene carolina carolina), the Florida box turtle (Terrapene carolina bauri), and the Gulf Coast box turtle (Terrapene carolina major) are subspecies of the common box turtle (Terrapene carolina) and have been listed in CITES since 1995. The spotted turtle (Clemmys guttata) is a semi-aquatic turtle listed in CITES as of 2013. The wood turtle (Glyptemys insculpta) has been protected under CITES since 1992.
The indictment further alleges that Kang sent money via PayPal to the United States to purchase turtles from sellers advertising on social media or reptile trade websites. These suppliers then shipped the turtles to middlemen across five different states. The middlemen were typically Chinese citizens who entered the country on student visas. Kang paid and instructed these intermediaries to repackage the turtles in boxes with false labels for clandestine shipment to Hong Kong. The turtles were inhumanely bound with duct tape and placed in socks so as not to alert customs authorities. Neither Kang nor his associates declared the turtles to U.S. or Chinese customs or obtained the required CITES permits.
The Royal Malaysia Police arrested Kang on Jan. 23, 2019, at Kuala Lumpur International Airport on a request submitted by the United States for his provisional arrest with a view to extradition. An extradition request was subsequently submitted on March 5, 2019, pursuant to the Extradition Treaty between the Government of the United States of America and the Government of Malaysia. Kang’s extradition was finalized in September 2020 and he was surrendered to the United States Wednesday as provided by the extradition treaty. The United States is grateful to the Minister of Home Affairs of Malaysia, the Attorney General of Malaysia and the Transnational Crimes Unit, Prosecution Division, Attorney General’s Chambers for their steadfast cooperation and support in the litigation of the extradition request. We also thank the U.S. Justice Department’s Office of International Affairs, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Malaysia Attaché, the Regional Security Office, Bureau of Diplomatic Security, U.S. Department of State, and the Consular Section of the U.S. Embassy in Kuala Lumpur for providing invaluable assistance in supporting the extradition and coordinating the return of Kang to the United States.
An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The USFWS conducted the investigation and escorted Kang to the United States. The government is represented by Trial Attorneys Ryan Connors and Lauren Steele of the Environment and Natural Resources Division’s Environmental Crimes Section.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Civil Rights Division Opens Investigation into Potential Discrimination in Public ContractingRead the Press Release
The Department of Justice Civil Rights Division has opened an investigation into whether the public contracting and procurement practices of Kansas City, Missouri, comply with the U.S. Constitution and the Civil Rights Act of 1964.
“No person anywhere in the United States should be subjected to unlawful discrimination on the ground of race, color or national origin, and the Civil Rights Act makes Kansas City, Missouri’s receipt of federal funding contingent on keeping that commitment,” said Eric Dreiband, Assistant Attorney General for Civil Rights. “All government in this free country must treat all persons with equal dignity and respect and without dividing people into racial and ethnic blocs for the purpose of labelling certain people winners and others losers because of their race. The Department of Justice today opened an investigation to determine whether Kansas City, Missouri’s contracting program complies with the United States Constitution and the Civil Rights Act.”
According to publicly available information, for at least 24 years, Kansas City has used quota-based “set asides” in nearly 30 percent of all public contract dollars to favor certain people because of their race and sex and disfavor others.
The department is opening an investigation into Kansas City’s public contracting and procurement programs to determine whether those programs violate Title VI, which prohibits race discrimination by entities receiving federal funds
Title VI incorporates the anti-discrimination protections of the Equal Protection Clause of the U.S. Constitution’s Fourteenth Amendment. Discrimination on the ground of race in public contracting in the form of quota-based set asides may violate the Equal Protection Clause, which provides that “[n]o state shall . . . deny to any person within its jurisdiction the equal protection of the laws.”
“Classifications based on race carry a danger of stigmatic harm. Unless they are strictly reserved for remedial settings, they may in fact promote notions of racial inferiority and lead to a politics of racial hostility.” See City of Richmond v. J.A. Croson Co., 488 U.S. 469, 493 (1989) (plurality opinion). Quota-based set asides may violate both the Equal Protection Clause and Title VI. In City of Richmond, the Supreme Court determined that a 30 percent minority set-aside by the City of Richmond, Virginia violated the Constitution.
The notice of investigation is not a finding of fault or wrongdoing by the city or any other individual or entity, and the department has not reached any conclusions about these matters.
Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
Justice Department Settles Claim Against Texas IT Company for Using Job Advertisements that Discriminated Against and Deterred U.S. Workers in Favor of Temporary Visa HoldersRead the Press Release
The Department of Justice today announced that it signed a settlement agreement with Ikon Systems, LLC (Ikon), an IT staffing and recruiting company based in Texas. This is the eleventh settlement by the Civil Rights Division under its 2017 Protecting U.S. Workers Initiative, which is aimed at targeting, investigating, and taking enforcement actions against companies that discriminate against U.S. workers in favor of temporary visa workers. Today’s settlement resolves claims that Ikon routinely discriminated against U.S. workers by posting job advertisements specifying a preference for applicants with temporary work visas, and that Ikon failed to consider at least one U.S. citizen applicant who applied to a discriminatory advertisement.
“Employers, no matter their size and no matter their industry, cannot limit employment opportunities only to temporary visa holders. When employers post job advertisements that discriminate against U.S. workers, they violate the Immigration and Nationality Act’s citizenship-status discrimination provision,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “Our message is clear: if employers discriminate in advertising, recruiting, or hiring against U.S. workers by illegally preferring temporary visa holders, the Justice Department’s Civil Rights Division will act to protect them under the Immigration and Nationality Act.”
The Department’s investigation began after a U.S. citizen filed a discrimination complaint with the Civil Rights Division against Ikon. Based on its investigation, the Department concluded that from May 8, 2019, to September 21, 2019, Ikon posted at least eight facially discriminatory job advertisements targeting non-U.S. citizens with immigration statuses associated with employment-based visas. For instance, the investigation revealed that one of Ikon’s advertisements stated, “Looking for OPT, CPT, H4 EAD, and H-1B transfer.” The Department also determined that Ikon failed to properly consider a U.S. citizen’s application to one of the job postings due to his citizenship status.
Under the Immigration and Nationality Act (INA), employers are not allowed to discriminate in recruitment or hiring based on citizenship status. The INA protects U.S. citizens, U.S. nationals, refugees, asylees, and recent lawful permanent residents from citizenship status discrimination in hiring, firing, and recruitment or referral for a fee. Workers who fall outside of these categories are not protected from citizenship status discrimination under the INA.
Under the terms of the settlement agreement, Ikon will pay $27,000 in civil penalties to the United States, revise its policies and procedures, and train relevant employees and agents on the INA’s anti-discrimination provision. Separately, Ikon will pay $15,000 to the affected U.S. citizen.
The Civil Rights Division’s Immigrant and Employee Rights Section (IER) has reached 11 settlements under the Protecting U.S. Workers Initiative, and employers have agreed to pay or have distributed a combined total of more than $1.2 million in back pay to affected U.S. workers and civil penalties to the United States. These settlements involve employers that discriminated in their use of the H-1B, H-2A, H-2B and F-1 visa programs. In addition, the Department is currently litigating a U.S. Workers Initiative case, which involves a December 3, 2020 lawsuit filed against a major technology company for allegedly refusing to recruit, consider, or hire qualified and available U.S. workers in favor of temporary visa holders, including in the H‑1B visa program.
The Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits discrimination based on citizenship status and national origin in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; retaliation and intimidation.
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 can 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.
The Civil Rights Division wants to hear about civil rights violations. Members of the public can report possible civil rights violations through the Civil Rights Division’s reporting portal.
Vince K. Leon Guerrero and Evelyn C. Tydingco Sentenced to 10 Years in Federal Prison for Drug TraffickingRead the Press Release
SAIPAN, MP - SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendants VINCE KOKI LEON GUERRERO, age 28, and EVELYN CHON TYDINGCO, age 28, were each sentenced in the United States District Court for the Northern Mariana Islands to 120-month terms of imprisonment for Conspiracy to Possess Over Fifty Grams of Methamphetamine Hydrochloride with the Intent to Distribute, in violation of 21 U.S.C. § 841(a)(1). The Court also ordered five years of supervised release following imprisonment, and a mandatory $100 special assessment fee. In addition, defendants convicted of a federal drug offense may no longer qualify for certain federal benefits.
On February 21, 2018, law enforcement conducted a controlled delivery of a package containing suspected methamphetamine at a United States Post Office on Saipan. Approximately 118 grams of methamphetamine was previously removed from the package and replaced with a sham substance. Leon Guerrero and Tydingco, along with co-defendant Elaine Francisco Demei, received the package, which had been sent from California. The defendants were arrested shortly after leaving the scene.
At sentencing, Chief U.S. District Judge Ramona V. Manglona found that Leon Guerrero and Tydingco obstructed justice in their attempts to obtain a reduced sentencing recommendation from the government. The Court also found that the defendants had not accepted responsibility for their conduct. The defendants were therefore sentenced to the mandatory minimum term of 120 months imprisonment under federal law.
United States Attorney Shawn N. Anderson stated, “The quantity of methamphetamine seized during this investigation is shocking, particularly given the size of the community. As this case shows, multi-agency efforts are effective in combating drug trafficking in the CNMI. I applaud the hard work of our law enforcement partners in keeping our communities safe.”
This was a joint investigation by the Drug Enforcement Administration and United States Postal Inspection Service, with the assistance of the CNMI Division of Customs and Guam Customs and Quarantine. The case was prosecuted by Garth R. Backe, Assistant United States Attorney for the District of the Northern Mariana Islands.
U.S. Trustee Program Reaches Agreements with Three Mortgage Servicers Providing More than $74 Million in Remediation to Homeowners in BankruptcyRead the Press Release
Correction (12/7/2020): Per the Memorandum of Understanding it was U.S. Bank’s policy to perform annual escrow analyses for borrowers in bankruptcy.
The Department of Justice’s U.S. Trustee Program (USTP announced today that it has entered into national agreements with three mortgage servicers to address past mortgage servicing deficiencies impacting homeowners in bankruptcy. The agreements with Nationstar Mortgage, LLC (Nationstar), U.S. Bank National Association (U.S. Bank), and PNC Bank, NA (PNC) address noncompliance with the Bankruptcy Code and Federal Rules of Bankruptcy Procedure that impacted over 60,000 accounts of borrowers in bankruptcy dating back to 2011 and resulted in payment application errors; inaccurate, missing, and untimely bankruptcy filings; and/or delayed escrow statements.
“Homeowners in bankruptcy are entitled to receive proper and timely notices and to have their payments properly accounted for, consistent with the Bankruptcy Code and Rules,” said USTP Director Cliff White. “The failure of mortgage servicers to comply with those requirements compromises the integrity of the bankruptcy system and the ability of homeowners to receive a fresh start.”
Collectively, the USTP’s agreements with Nationstar and U.S. Bank, and the letter of acknowledgement with PNC, provide over $74 million to remediate over 76,000 historical servicing errors impacting borrowers in bankruptcy. The agreements also require the servicers to implement improvements in their bankruptcy operations to ensure that the errors do not recur. Most of the remediation and corrective actions have already been taken by the servicers.
Historical Servicing Deficiencies
Nationstar and PNC at times failed to run annual escrow analyses for borrowers in bankruptcy. Further, Nationstar, U.S. Bank, and PNC failed to (1) file timely and accurate notices of changes to bankruptcy borrowers’ ongoing mortgage payments, (2) file timely and accurate notices of fees assessed during borrowers’ bankruptcy cases, and (3) provide an accurate final accounting of the payments made by the borrower during the bankruptcy case as required under the Bankruptcy Code and Rules.
In addition to these deficient servicing practices, U.S. Bank and PNC failed to accurately apply borrower payments in bankruptcy cases. And U.S. Bank failed to file timely and accurate proofs of claim in bankruptcy cases.
Monetary Remediation and Changes to Internal Procedures
The servicers have or will provide account credits and refunds to impacted bankruptcy borrowers. Nationstar has provided more than $40 million in credits and refunds. U.S. Bank has, or will, provide at least $29 million in credits and refunds, and has waived approximately $43 million in fees and charges across its mortgage servicing portfolio, including for borrowers in bankruptcy. PNC provided close to $5 million in credits and refunds, as well as additional remediation in the form of lien releases and debt forgiveness.
In addition to monetary and other remediation, Nationstar, U.S. Bank, and PNC each made changes to their internal procedures to prevent the recurrence of the deficient bankruptcy servicing practices. These changes included enhancements to computer platforms, improvements to vendor and employee training and oversight, and implementation of quality control processes to ensure the accuracy and timeliness of filings in bankruptcy cases and escrow analyses for borrowers in bankruptcy.
No Effect on Non-Parties
These agreements do not affect the rights of any homeowner or other third party, including other governmental agencies. Bankruptcy borrowers with questions may contact the servicers at:
Nationstar Mortgage LLC at 833-981-2112,
PNC Bank at 855-245-3814, and
U.S. Bank at 888-724-7362.
The agreements are posted at https://www.justice.gov/ust/national-mortgage-settlements.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The Program has 21 regions and 90 field office locations. Learn more about the Program at: https://www.justice.gov/ust.