District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Justice Department and FTC Announce Workshops on Draft Vertical Merger Guidelines, Extend Comment PeriodRead the Press Release
The Department of Justice and Federal Trade Commission today announced two public workshops, on March 11, 2020 and March 18, 2020, to solicit public dialogue on the draft vertical merger guidelines released on Jan. 10, 2020. The two half-day workshops will allow for a dynamic discussion about the proposed guidelines to complement any written public comments about the draft guidelines that are submitted to the agencies. The agencies will select panelists for the workshops from those that file public comments and indicate their interest and availability to participate.
The agencies also announced today that they will extend the deadline for submitting public comments regarding the draft vertical merger guidelines. The new final deadline for submitting comments is Feb. 26, 2020.
“The Antitrust Division has benefitted greatly from public engagement in preparing the draft guidelines, and I expect that will continue through the comment and workshop process,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “Afterwards, we look forward to finalizing the first update to our vertical merger guidelines in more than three decades.”
The draft guidelines describe how the federal antitrust agencies review vertical mergers to evaluate whether they violate antitrust law. Vertical mergers combine two or more companies that operate at different levels of the supply chain. The draft guidelines outline the agencies’ principal analytical techniques, practices, and enforcement policy for vertical mergers. The agencies will consider both public comments and workshop discussions before issuing final Vertical Merger Guidelines.
The Department of Justice encourages comments from the public on the draft vertical merger guidelines. Interested parties may submit public comments online now through Feb. 26, 2020, by emailing [email protected] and [email protected]. Commenters should indicate in the email if they are interested in participating in either workshop as a panelist and the date(s) they are available.
Both workshops are free and open to the public. The March 11, 2020 workshop will take place at the Robert F. Kennedy Department of Justice Building, 950 Pennsylvania Avenue, NW, Washington, D.C., from 1 p.m. Eastern Time to 5 p.m. Eastern Time and the March 18, 2020 workshop will take place at the Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, D.C., from 1 p.m. Eastern time to 5 p.m. Eastern Time. A recording of the workshop will be available on the Division’s website. Registration information, an agenda, directions to the event, and a list of speakers will be available prior to each workshop on the event webpage. Attendees are encouraged, but not required, to register in advance for the workshop. Registration for the March 11 workshop may be completed on Eventbrite. Members of the press should also copy [email protected] on their registration email. Seating will be on a first-come, first-served basis. Attendees should bring a valid government-issued photo ID (government badge, license, passport, etc.) and arrive in time to go through security.
Reasonable accommodations for people with disabilities are available upon request. If you need such an accommodation, please contact the Antitrust Division at [email protected]. Such requests should include a detailed description of the accommodations needed and a way to contact you if we need more information.
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.
Attorney General Barr Names Bobak Talebian Director of the Office of Information PolicyRead the Press Release
Attorney General William P. Barr today appointed Bobak (Bobby) Talebian as Director of the Office of Information Policy (OIP). He has served as Acting Director since October 2019, and replaces Melanie Ann Pustay as Director.
Mr. Talebian will be responsible for managing the Department’s responsibilities related to the Freedom of Information Act (FOIA), including responding to initial requests made to the Department’s senior leadership offices, adjudicating all appeals from denials by any Department component under the FOIA, developing FOIA policy guidance for all Executive Branch agencies, providing legal counsel and training to agency personnel on the procedural and substantive aspects of the Act, and for overseeing agency compliance with the law.
“Bobby brings a wealth of experience and knowledge to this position,” said Attorney General Barr. “OIP and the Department of Justice will continue to benefit from his insight, expertise and dedication to public service.”
Before becoming Acting Director, Mr. Talebian served as Acting Chief of Staff from August 2019 to October 2019, where he supervised and managed the day-to-day operations of the office. Earlier, from May 2013 to August 2019, he was the Chief of OIP’s FOIA Compliance Staff, where his team executed OIP’s responsibilities to oversee and encourage government-wide compliance with the FOIA.
Mr. Talebian graduated from the University of Tennessee College of Law where he served on Law Review.
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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.
C-Block Gang Leader Convicted of Drug and Firearms OffensesRead the Press Release
DES MOINES, Iowa – On January 30, 2020, following a four-day trial, a jury found Daeron Johnson Merrett guilty of conspiracy to distribute 500 grams or more of cocaine, 8 counts of distribution of a controlled substance, one count of possession with intent to distribute cocaine, and one count of possessing a firearm as a felon. The case was presided over by United States District Court Judge Rebecca Goodgame Ebinger. Sentencing is scheduled for May 29, 2020, at 9:00 a.m.
Merrett was arrested on March 27, 2019, during the coordinated execution of search and arrest warrants in Des Moines. Merrett was identified from the criminal complaint affidavit as a leader of C-Block, a criminal street gang based in Des Moines. In December 2018, law enforcement obtained authorization to intercept Merrett’s telephone communications, which led to the identification of Merrett’s cocaine trafficking network.
During trial, the government presented evidence that Merrett began traveling to Chicago, Illinois in January 2019 to obtain cocaine for distribution in Des Moines. Over the course of a one-month period, Merrett made four separate trips to Chicago to obtain cocaine, totaling over 500 grams. The evidence also showed that Merrett developed a Texas-based cocaine source of supply, from which he arranged to receive a kilogram of cocaine. Merrett had numerous cocaine customers and co-conspirators in Des Moines, many of whom were charged in the same Indictment and have entered guilty pleas.
On March 27, 2019, during a search warrant executed at Merrett’s Des Moines residence, law enforcement located cocaine, numerous digital scales, packaging materials, a loaded firearm, and various rounds of ammunition.
Merrett has a prior conviction for a serious drug felony, that is, a 2011 conviction in the Iowa District Court for Polk County for delivery of a controlled substance.
Conspiracy to distribute more than 500 grams of cocaine following a conviction for a serious drug felony carries a mandatory minimum term of imprisonment of ten years and a
maximum term of imprisonment of life.The case was investigated by the Federal Bureau of Investigation’s Central Iowa Gang Task Force, Des Moines Police Department, Bureau of Alcohol, Tobacco, Firearms, and Explosives, Drug Enforcement Administration, Dallas County Sheriff’s Office, Polk County Sheriff’s Office, Story County Sheriff’s Office, and the Altoona Police Department. The case was prosecuted by Assistant United States Attorneys Mikaela J. Shotwell and Adam J. Kerndt.
Attorney General William P. Barr Names U.S. Attorney Erin Nealy Cox as Chair of Attorney General’s Advisory CommitteeRead the Press Release
Attorney General William P. Barr today announced that Erin Nealy Cox, U.S. Attorney for the Northern District of Texas, has been elevated from Vice Chair to Chair of the Attorney General’s Advisory Committee (AGAC).
Attorney General Barr also announced Justin Herdman, U.S. Attorney for the Northern District of Ohio, will become the new Vice Chair.
“Erin Nealy Cox has shown herself to be a leader in the U.S. Attorney community, a fierce advocate for the rule of law who has spearheaded prosecution efforts targeting domestic abusers and other violent criminals,” said Attorney General Barr. “Justin Herdman has also been a leader at the forefront of the department’s fight against the deadly trade in fentanyl and other dangerous drugs. I am pleased to have them leading my AGAC team.”
U.S. Attorney Nealy Cox replaced former Chair, Jessie Liu who resigned this week as U.S. Attorney for the District of Columbia.
In addition, Attorney General Barr appointed U.S. Attorney John Bash to the Attorney General’s Advisory Committee.
The AGAC represents the voice of the U.S. Attorneys and provides advice and counsel to the Attorney General on policy, management and operational issues impacting the Offices of the U.S. Attorneys.
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.
Department of Justice to Hold Workshop on Section 230 of the Communications Decency ActRead the Press Release
The Department of Justice will hold a public workshop in Washington, D.C. on Feb. 19, 2020, titled “Section 230 – Nurturing Innovation or Fostering Unaccountability?,” to discuss Section 230 of the Communications Decency Act of 1996, its expansive interpretation by the courts, its impact on the American people and business community, and whether improvements to the law should be made.
Drafted nearly 25 years ago in the early years of the internet to protect online businesses in their incipiency, Section 230 limited certain liabilities for interactive computer service providers for third-party content on their platforms. Courts have interpreted the scope of Section 230 broadly, leaving a wide array of online activity immune from lawsuits. Now that the industry has matured, valid questions have been raised regarding the broad scope of Section 230 and whether the immunity is still required in its current form.
Proponents claim that Section 230 immunity led to the flourishing of the internet and the creation of the online ecosystem we see today. Opponents, on the other hand, believe that the broad interpretation of Section 230 has prevented solutions to a variety of problems that continue to proliferate to the detriment of victims, law enforcement, and civil discourse. The Justice Department intends to examine these issues and identify and discuss potential solutions.
The workshop is free and open to the public, and will be held in the FBI Auditorium, 935 Pennsylvania Ave NW, Washington, D.C. 20535, from 9 a.m. Eastern Time to 12:45 p.m. Eastern Time. If you are interested in attending, please register at https://www.justice.gov/ag/webform/section-230-workshop-registration by Feb. 9, 2020. As seating is limited, invitations to attend will be sent to registered participants on a first-come, first-served basis. Members of the press should also email [email protected].
Following the public workshop, the Justice Department will invite stakeholders with diverse perspectives for private listening sessions and roundtables to seek additional input and discuss the problems, benefits, and potential improvements to Section 230. The department will publish readouts on the various perspectives and debate from those meetings.
Reasonable accommodations for people with disabilities are available upon request. If you need such an accommodation, please contact the department by sending an email to [email protected]. Such requests should include a detailed description of the accommodations needed and a way to contact you if we need more information.
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.
Trump Administration Launches Presidential Task Force on Missing and Murdered American Indians and Alaska NativesRead the Press Release
The Department of Justice, the Department of the Interior and the Department of Health and Human Services today held the first meeting of a White House task force to address the incidence of missing and murdered American Indians and Alaska Natives. The task force, co-chaired by Attorney General Barr and Secretary of the Interior Bernhardt, is composed of federal officials charged with enhancing the criminal justice response, consulting with tribal governments on potential solutions, and empowering native communities with information.
“The disappearance and death of American Indian and Alaska Native people, particularly women and girls, is an especially tragic chapter in a long story of marginalization and trauma suffered by native people,” said Attorney General William P. Barr. “We are committed to addressing this challenge, to reducing the violence and protecting the vulnerable from exploitation and abuse. The task force is eager to get to work to address the issues that underlie this terrible problem, and work with our tribal partners to find solutions, raise awareness, and bring answers and justice to the grieving.”
“President Trump is committed to addressing systemic challenges in Indian Country, and this task force will develop and implement an aggressive, government-wide strategy to combat the crisis of missing and murdered American Indians and Alaska Natives,” said Secretary of the Interior David Bernhardt. “By working together and listening to impacted citizens and tribal communities, we intend to tackle these complex issues.”
“I am grateful that President Trump has made it a priority to tackle the tragic issue of missing and murdered American Indians and Alaska Natives,” said Health and Human Services Secretary Alex Azar. “Native Americans deserve safety and security in their communities, and HHS has a vital role in helping by providing culturally appropriate prevention and trauma informed services to victims and their families. I am committed to working in partnership with President Trump, Attorney General Barr, Secretary Bernhardt, and tribal leaders and members to make a positive impact on this important challenge.”
American Indians and Alaska Natives experience disproportionately high rates of violence. President Trump has called the crisis of missing and murdered Native Americans “sobering and heartbreaking.” The task force, designated Operation Lady Justice, has been empowered to review Indian Country cold cases, to strengthen law enforcement protocols, and work with tribes to improve investigations, information sharing and a more seamless response to missing persons investigations. Specifically, it will:
- Consult with tribal governments on the scope and nature of the problem; the task force will hold regional consultations and listening sessions at several locations around the country the task force will also host a listening session at the National Congress of American Indians’ Executive Council Winter Session in Washington, D.C. on Feb. 12.
- Develop model protocols and procedures for addressing both new and unsolved cases of missing and murdered persons in tribal communities;
- Establish a multi-disciplinary, multi-jurisdictional team, which will include tribal law enforcement, to review cold cases;
- Address issues related to roles, authorities and jurisdiction among tribal, local, state and federal agencies; and
- Develop and execute a public awareness, education and outreach campaign for affected communities.
The members of the task force are:
- Katharine Sullivan, Principal Deputy Assistant Attorney General, Office of Justice Programs, designee for the Attorney General;
- Tara Sweeney, Assistant Secretary for Indian Affairs, designee for the Secretary of the Interior;
- Terry Wade, Executive Assistant Director, Criminal, Cyber, Response and Services Branch, Federal Bureau of Investigation;
- Laura Rogers, Acting Director, Office on Violence Against Women;
- Charles Addington, Deputy Bureau Director, Bureau of Indian Affairs, Office of Justice Services;
- Trent Shores, U.S. Attorney for the Northern District of Oklahoma and Chair of the Native American Issues Subcommittee of the Attorney General’s Advisory Committee; and
- Jean Hovland, Deputy Assistant Secretary for Native American Affairs and Commissioner, Administration for Native Americans, Department of Health and Human Services.
In accordance with the President’s Executive Order, Attorney General Barr designated Marcia Good of the Department of Justice, to serve as Executive Director of the task force, which will present a progress report to the President by Nov. 26, 2020, and a final report detailing its activities and accomplishments by Nov. 26, 2021.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of the Department of Justice at www.Justice.gov/Celebrating150Years. 2020 also marks 171st anniversary of the Department of the Interior. Learn more about the history of DOI at www.doi.gov/history/.
Justice Department Settles Lawsuit Against the South Dakota Department of Social Services Alleging Intentional Race Discrimination Against Native American Job Applicants at the Pine Ridge ReservationRead the Press Release
The Justice Department announced today that it has reached a settlement with the South Dakota Department of Social Services (Department of Social Services or DSS), a state agency that assists South Dakotans seeking public benefits, resolving allegations that DSS intentionally discriminated against Native American job applicants at its Pine Ridge Indian Reservation Office. Under the terms of the settlement agreement, subject to court approval, the Department of Social Services will pay $350,000 in back pay and other monetary relief to approximately 60 Native American job applicants. The Department of Social Services also must comply with reporting requirements regarding its hiring of Specialists at the Pine Ridge Office.
“The Civil Rights Division is committed to enforcing the nation’s anti-discrimination laws on behalf of all Americans, including Native Americans, to make sure they are—as the Reverend Dr. Martin Luther King challenged 56 years ago—judged by the ‘content of their character’ and not the ‘color of their skin,’” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “This settlement helps move our nation towards Dr. King’s dream of making opportunity available to all unfettered by unlawful discrimination. It provides monetary relief for Native American applicants, ensures equal opportunity to compete for jobs, and establishes a reporting and oversight process to guard against racial discrimination in the future.”
The amended complaint, filed in November 2016 in the U.S. District Court for the District of South Dakota, alleged that in failing to select qualified Native American applicants for several positions at DSS’s Pine Ridge Office, DSS engaged in a pattern or practice of discrimination that violated Title VII of the Civil Rights Act of 1964, as amended. Title VII is a federal statute that prohibits employment discrimination on the basis of race, sex, color, national origin, and religion.
According to the amended complaint, in October 2010, Cedric Goodman, a Native American job candidate, applied for a Specialist position at DSS’s Pine Ridge Office. DSS determined that Goodman was qualified for the position and offered him an interview. After interviewing Goodman and other qualified Native American candidates, DSS removed the job posting and hired no one. The next business day, however, DSS re-posted the position and ultimately selected a white applicant with qualifications inferior to Goodman’s. In addition to the intentional discrimination claim involving Goodman, the United States also alleged that denying Goodman’s application was part of an intentional pattern or practice of race discrimination by DSS, where the Pine Ridge Office repeatedly removed job postings and used subjective, arbitrary hiring practices to disfavor qualified Native American applicants for Specialist positions.
Goodman originally filed a charge of race discrimination with the Equal Employment Opportunity Commission (EEOC). The EEOC’s Minneapolis Area Office, in its Chicago District, investigated the matter and found reasonable cause to believe that DSS discriminated against Goodman and a class of similarly situated Native American applicants. After unsuccessful conciliation efforts, the EEOC referred the matter to Department of Justice’s Civil Rights Division.
The Civil Rights Division brought this lawsuit as part of a joint effort to enhance collaboration between the Justice Department and the EEOC in the vigorous enforcement of Title VII. Additional information about the Division, including copies of the amended complaint and the settlement agreement can be found online on its website at www.usdoj.gov/crt.
This lawsuit was handled by Trial Attorneys Jeff Morrison, Alisa Philo, Jen Swedish, and Shayna Bloom in the Employment Litigation Section of the Department of Justice’s Civil Rights Division.
Court Enters Judgment That Significantly Modifies and Extends Consent Decree with Live Nation/TicketmasterRead the Press Release
The Department of Justice’s Antitrust Division announced on Dec. 19, 2019, that it would file a petition asking the court to clarify and extend by five and a half years the Final Judgment entered by the court in United States v. Ticketmaster Entertainment, Inc., et al., Case No. 1:10-cv-00139-RMC (July 30, 2010). Today, the court entered the Amended Final Judgment. The court also set the procedure for naming of the Independent Monitoring Trustee. The Independent Monitoring Trustee is just one term within the Amended Final Judgment that will make enforcement of the decree for the extended time period more efficient.
“Live Nation broke the promises they made to the court and the American people when they merged with Ticketmaster in 2010; today, we are holding them accountable,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “The amended decree reimburses the American people millions of dollars and makes it easier for the Antitrust Division and state enforcers to identify and prosecute future transgressions.”
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.
Antitrust Division Names Alexander Okuliar Deputy Assistant Attorney GeneralRead the Press Release
Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division today announced the appointment of Alexander Okuliar to serve as a Deputy Assistant Attorney General. He will be responsible for civil merger and conduct investigations and litigation.
“Alex has distinguished himself throughout his career in the government and in private practice,” said Assistant Attorney General Delrahim. “We are excited to welcome Alex back to the Division, where his elite antitrust experience will bolster the Front Office’s impressive ranks and help us fulfill our mission to protect American consumers.”
Alex’s 20-year career has taken him through tours at both federal antitrust agencies and the private sector. Most recently, Alex was a partner in the antitrust group of an international law firm where he represented clients in transactions and litigation, with an emphasis on matters involving technology, data, media, and finance. From 2012-2015, he was Attorney Advisor to Commissioner Maureen Ohlhausen of the Federal Trade Commission, where he advised the Commissioner on merger reviews, conduct investigations, and administrative litigation before the agency, as well as key privacy and competition policy developments around the world. Earlier, from 2010-2012, he was a Trial Attorney in the Technology and Financial Services Section (then-Networks & Technology Enforcement Section) of the Antitrust Division, where he led numerous investigations, including of the proposed (and subsequently abandoned) merger between the New York Stock Exchange and Deutsche Börse.
Alex is a frequent writer and speaker on competition policy issues associated with technology, data, digital markets and innovation, as well as the intersection of intellectual property and antitrust. He is an active member of the antitrust bar and has served in leadership roles at both the ABA Antitrust Law Section and Federalist Society. Alex received his J.D. from Vanderbilt University Law School and his B.S. in Economics and B.A. in History from the Wharton School and the College of Arts & Sciences of the University of Pennsylvania.
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.
U.S. Supreme Court Justice Sotomayor Addresses Latin American Judges at Justice Department’s Judicial Studies InstituteRead the Press Release
Today at the Judicial Studies Institute (JSI) in San Juan, Puerto Rico, U.S. Supreme Court Justice Sonia Sotomayor addressed 24 judges from El Salvador, Mexico, and Panama as part of a Department of Justice (DOJ) training program for the judiciaries of the Western Hemisphere. Justice Sotomayor stressed the importance of their contribution to rule of law in the hemisphere and lauded them for their role in the transformation of Latin American justice.
With the support of Justice Sotomayor, and in partnership with the Department of State’s Bureau of International Narcotics and Law Enforcement Affairs, the Justice Department’s Office of Prosecutorial Development, Assistance and Training (OPDAT) launched JSI in 2012 as a response to the wave of justice sector reforms in Latin America that saw many countries transition from an inquisitorial to an adversarial system of justice. Through Spanish instruction, practical exercises, and observations of courtroom proceedings, participating judges learned about evidentiary guidelines, the role of judges, and courtroom management in an adversarial justice system.
This capacity building is critical to the region as there are significant differences between the two systems. For example, in an inquisitorial system, judges investigate charges and determine guilt through written deliberations behind closed doors. In an adversarial system, the judge acts as an impartial referee responsible for weighing evidence and guaranteeing the rights of both the victim and the accused in an open courtroom setting.
Since establishing JSI in 2012, OPDAT and its partners at the University of Puerto Rico and Inter-American University law schools have trained over 800 Latin American judges.
Please visit https://www.supremecourt.gov/ for more information about the U.S. Supreme Court and https://www.justice.gov/criminal-opdat for more information about OPDAT’s capacity building efforts around the world.
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.
Statement from Deputy Attorney General Jeffrey A. Rosen Calling Upon the House of Representatives to Vote to Extend Scheduling of Fentanyl-Related SubstancesRead the Press Release
Deputy Attorney General Jeffrey A. Rosen issued the following statement:
“Sadly, in 2017, more than 1,000 Americans died every two weeks from fentanyl and fentanyl-related substances. In an effort to combat this deadly drug epidemic, DOJ’s Drug Enforcement Administration (DEA) in February 2018 issued a temporary emergency two-year order that made illegal all fentanyl-related substances. Our country has seen a marked supply impact from DEA’s temporary scheduling of fentanyl-related substances during the past two years, with a 50 percent decrease in fentanyl-related substances encountered across the United States. However, DEA’s emergency authority expires at midnight on February 6, 2020, unless Congress acts to extend it.
“On January 16, 2020, the Senate unanimously passed a commonsense, bipartisan 15-month extension of DEA’s temporary scheduling of fentanyl-related substances (S.3201). It is essential that House leadership now schedule a vote to do the same.
“If the House fails to act by midnight on February 6, traffickers of deadly opioids will again have the upper hand. This cannot be allowed to happen. The House of Representatives needs to act to help save Americans from more overdoses and deaths.”
See relevant op-eds on the fentanyl topic:
Attorney General William P. Barr op-ed.
U.S. Attorney Robert M. Duncan op-ed.
U.S. Attorney Justin Herdman op-ed.
U.S. Attorney John R. Lausch op-ed.
U.S. Attorneys for each New England District op-ed.
Readout of U.S. Attorney General William P. Barr’s Meeting with Guatemala Attorney General Maria Consuelo Porras ArguetaRead the Press Release
Earlier today, U.S. Attorney General William P. Barr met with the Attorney General of Guatemala Maria Consuelo Porras Argueta in Washington, DC. They discussed ways to strengthen efforts to combat transnational organized crime and reduce illegal migration to the United States through increased cooperation and capacity building of law enforcement partners. They discussed their shared commitment to protecting the security and safety of the citizens of both the United States and Guatemala from transnational criminal organizations (TCOs) and gangs. Today’s meeting was a follow-up dialogue to the May 2019 Third Ministerial of the Northern Triangle Attorneys General in El Salvador.
Attorney General of Guatemala Maria Consuelo Porras Argueta and U.S. Attorney General William P. BarrThey discussed the continued progress of the Justice Department’s Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT) capacity-building efforts in the Guatemalan judicial sector and key role in bringing together the Attorneys General from Guatemala, Honduras, and El Salvador to form the Regional Shield operations targeting MS-13 and other gangs. Additionally, they discussed ongoing accomplishments in combating violence in the region from transnational gangs, particularly MS-13 and 18th Street gangs. Regional Shield anti-gang efforts led to the arrest of more than 1,000 gang members in the past year. Also during that time, eleven smuggling/trafficking structures were dismantled in Guatemala.
Both Attorneys General agreed to continue working closely together through greater operational collaboration and intelligence sharing, including increased law enforcement coordination to fight corruption and impunity and strengthen the rule of law for the benefit of all Guatemalans and further criminal investigations in drug and human trafficking, emerging organized criminal groups, cyber and intellectual property crimes.
Attorney General Barr thanked the Government of Guatemala for extraditing fugitives to the United States and said that extradition sends a strong message to criminal organizations that our countries remain committed to the rule of law and are not safe havens for criminals. Additionally, Attorney General Barr applauded Guatemala’s efforts to fight corruption and criminal organizations engaged in human trafficking and its continual efforts to root out organizations involved in human smuggling.
The Attorneys General agreed that transnational crime affects both countries and that with continual cooperation we can dismantle these organizations, reduce violent crime, and generate stability and prosperity.
Continued bilateral law enforcement collaboration and successful law enforcement programs between the United States and Guatemala remain a priority for the U.S. Government.
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.
Federal Court Permanently Shuts Down Georgia Tax Return PreparersRead the Press Release
A federal court in Columbus, Georgia, permanently barred Stacy Lee and Heather Lee from preparing tax returns for others and from owning, operating, or franchising a tax return preparation business, the Justice Department announced today. The court also ordered Stacy Lee and Heather Lee to close their tax return preparation stores. Stacy Lee and Heather Lee consented to the relief.
According to the complaint, Stacy Lee operated two tax return preparation stores under the names Fast Track Tax Service in Talbotton, Georgia, and TimeLee Tax Service in Columbus, Georgia. Stacy Lee’s daughter, Heather Lee, allegedly prepared tax returns at the two stores as well. From 2013 to 2018, Stacy Lee prepared 3,728 tax returns and Heather Lee prepared 1,116 tax returns, the complaint alleges.
The government further claimed that Stacy and Heather Lee prepared false federal income tax returns, understated federal income tax liabilities, and improperly claimed tax credits in order to obtain inflated tax refunds for customers. In particular, according to the complaint, the defendants fabricated deductions for charitable contributions, unreimbursed employee business expenses, and medical expenses; reported profits and losses for fictitious businesses; and claimed false education credits, energy credits, and childcare credits.
“The Tax Division will work with its IRS partners to shut down return preparers who claim improper or illegal deductions and credits for their clients,” said Principal Deputy Assistant Attorney General Zuckerman. “Taxpayers should be vigilant so they do not file tax returns claiming false deductions.”
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams. The IRS has information on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Statement from United States Attorney Jay E. Town on the Shooting of Birmingham Police Department Detective John FinkeRead the Press Release
BIRMINGHAM, Ala. – “This tragedy is a heartbreaking reminder of the dangers all law enforcement face. While they keep us safe. While they do the job. Our thoughts and prayers are with Detective Finke, his family, and all of Birmingham PD. We should never forget that the line of duty is endowed by sacrifice, selflessness, and courage.”
Sixth and Final Defendant Sentenced to Prison for Sophisticated International Cellphone Fraud SchemeRead the Press Release
A citizen and resident of the Dominican Republic was sentenced today in Miami, Florida, to 65 months in prison for multiple criminal charges in connection with a sophisticated global cellphone fraud scheme that involved compromising cellphone customers’ accounts in the United States and “cloning” their phones to make fraudulent international calls.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.
Edgar Estarlin Peralta Lopez, 42, pleaded guilty earlier to one count of conspiracy to commit wire fraud, access device fraud, the use, production or possession of modified telecommunications instruments and the use or possession of hardware or software configured to obtain telecommunications services; one count of wire fraud and one count of aggravated identity theft. He was sentenced by U.S. District Judge Beth Bloom of the Southern District of Florida.
According to the plea agreement, Peralta and his co-conspirators participated in a scheme to steal access to existing cellphone accounts, and fraudulently open new cellphone accounts, using the personal information of individuals around the United States.
Peralta admitted that he played at least two roles in the conspiracy. First, he was a telecommunications trafficker. Specifically, Peralta would contract with telecommunication companies to transmit international calls for them for payment and then route those calls through cellphones reprogrammed with stolen or compromised telecommunications identifying information located at “call sites” in the United States. Peralta and other co-conspirators transmitted thousands of calls to Cuba, Jamaica, the Dominican Republic and other countries with high calling rates. The calls were later billed to United States customers’ compromised accounts. Second, Peralta was a “line” supplier, providing his co-conspirators with stolen or compromised telecommunications identifying information that they then used to reprogram the cellphones they controlled at call sites.
In addition, Peralta admitted to trafficking in approximately 3,158 combinations of stolen or compromised telecommunications identifying information, which were found in around over 1,390 emails he exchanged with co-conspirators. Verizon Wireless reported that fraudulent use of just three of these combinations resulted in a loss of over $33,000. Peralta admitted to a loss amount of at least $315,800.
Peralta is a citizen of the Dominican Republic. He was arrested in the Dominican Republic at the request of the United States and then, in August 2019, extradited to Miami where he is currently in custody.
Peralta is the sixth and last defendant to be sentenced in the case. Previously, defendants Edwin Fana, Farintong Calderon, Jose Santana, Ramon Batista and Braulio de la Cruz pleaded guilty to similar charges and have already been sentenced to prison terms ranging from 36 months to 75 months.
The FBI Miami’s Cyber Task Force investigated the case, dubbed Operation Toll Free, which is part of the FBI’s ongoing effort to combat large-scale telecommunications fraud. The Criminal Division’s Office of International Affairs handled the extradition in this matter, with assistance from the U.S. Marshals Service. Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section is prosecuting the case.
Washington Parish Man Sentenced to Eleven Years for Gun and Heroin OffensesRead the Press Release
NEW ORLEANS, La. – U.S. Attorney Peter G. Strasser announced that ALEX MILLER, age 37, from Washington Parish, Louisiana, was sentenced to 130 months in prison in connection with his convictions for heroin and gun charges.
On July 23, 2019, MILLER pled guilty to conspiring to distribute 100 grams or more of heroin, two counts of possessing a firearm despite being a felon, and one count of possessing a firearm in furtherance of drug trafficking.
For the heroin conspiracy charge and the two felon-in-possession charges, Judge Wendy B. Vitter sentenced MILLER to (5) five years (60 months) in prison. For the charge of possessing a firearm in furtherance of drug trafficking, Judge Vitter sentenced MILLER to 70 months in prison, consecutive to his sentences for the other counts. This resulted in a total sentence of 130 months in prison. MILLER’s term of imprisonment will be followed by (4) four years of supervised release.
MILLER’s codefendant, LARRY DAVIS, pled guilty on August 6, 2019 to the same heroin conspiracy charge and a single count of possessing a firearm as a felon. Judge Wendy B. Vitter set sentencing for DAVIS for March 10, 2020.
U.S. Attorney Strasser praised the work of the Drug Enforcement Administration, the Louisiana State Police, the Washington Parish Sheriff’s Office Drug Task Force, and the Bogalusa Police Department. Assistant United States Attorneys Nicholas D. Moses and André Jones are in charge of the prosecution.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
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New York Pharmacist Charged with Narcotics and Tax Fraud OffensesRead the Press Release
A 12-count indictment was unsealed today in federal court in Brooklyn charging Daniel E. Russo, a pharmacist, with conspiracy to distribute and possess with intent to distribute oxycodone, distribution and possession of oxycodone, distribution of oxycodone by a pharmacist without legitimate prescription and filing false tax returns. Russo was arrested this morning by federal agents and arraigned this afternoon before United States Magistrate Judge Cheryl L. Pollak. The defendant was released on a $1.5 million bond.
Richard E. Zuckerman, Principal Deputy Assistant Attorney General of the Justice Department’s Tax Division, Richard P. Donoghue, United States Attorney for the Eastern District of New York, Ray Donovan, Special Agent-in-Charge, Drug Enforcement Administration (DEA), and Jonathan D. Larsen, Special Agent-in-Charge, Internal Revenue Service Criminal Investigation (IRS-CI), announced the charges.
According to the indictment, Russo owned and operated Russo’s Pharmacy Inc., a drug store located in Far Rockaway, New York. From March 2011 through June 2014, Russo allegedly conspired with others including medical professionals and employees of a physician, to fill fraudulent prescriptions for oxycodone and dispense thousands of oxycodone pills in return for hundreds of thousands of dollars in cash. The indictment also alleges that for the years 2013 through 2016, Russo filed with the Internal Revenue Service (IRS) false tax returns on behalf of Russo’s Pharmacy that omitted cash received from the illegal oxycodone distribution scheme. The indictment further charges that during those years, Russo underreported income on his own personal returns. In total, Russo is charged with failing to report over $1 million in cash, most of it generated from his oxycodone distribution scheme.
More than a dozen physicians for whom Russo filled prescriptions have since been convicted of crimes related to the distribution of oxycodone.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Russo faces a statutory maximum sentence of 20 years in prison for each of the conspiracy and possession with intent to distribute counts, and three years in prison for each count of filing a false tax return. The defendant also faces a period of supervised release, restitution and monetary penalties, as well as forfeiture.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Donoghue commended special agents of the Drug Enforcement Administration and IRS-Criminal Investigation, who are investigating the case, and Assistant U.S. Attorney Nomi D. Berenson and Trial Attorney Michael C. Vasiliadis of the Tax Division, who are prosecuting the case.
Miami-Based Businessman Pleads Guilty to FCPA and Money Laundering Violations in Scheme Involving PetroEcuador OfficialsRead the Press Release
An Ecuadorian businessman living in Miami, Florida, pleaded guilty today in connection with a $4.4 million bribery and money laundering scheme that funneled bribes to public officials of Empresa Pública de Hidrocarburos del Ecuador (PetroEcuador), the state-owned and state-controlled oil company of Ecuador, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office.
Armengol Alfonso Cevallos Diaz (Cevallos), 57, pleaded guilty before U.S. District Judge Rodney Smith of the Southern District of Florida to one count of conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and one count of conspiracy to commit money laundering. Sentencing is scheduled for April 2, 2020.
Cevallos admitted at the plea hearing that, from 2012 through 2015, he conspired with others to pay bribes of $4.4 million to PetroEcuador officials by using the mails and means and instrumentalities of interstate commerce, including U.S.-based companies and U.S.-based bank accounts, in order to obtain and retain business. Cevallos also admitted that he conspired with others to conceal and promote the bribe scheme by laundering funds through Miami-based shell companies and bank accounts and by purchasing properties in the Miami area for the benefit of certain PetroEcuador officials. Specifically, as alleged in the indictment, Cevallos admitted that he solicited and intermediated bribe payments from an oil services company for the benefit of PetroEcuador officials, and that he helped launder those bribes and others he had paid to PetroEcuador officials on behalf of Ecuadorian contractors and his own companies.
Today’s plea follows 12 public charges and guilty pleas against other individuals in the department’s ongoing investigation into bribery and money laundering involving PetroEcuador. The individuals who have been charged to date for their roles in the bribery and money laundering schemes include former PetroEcuador officials who received and concealed the bribe payments, businessmen and contractors who paid the bribes to obtain lucrative oil services contracts from PetroEcuador, and financial advisors and other intermediaries who enabled and facilitated the bribery through the use of U.S. and offshore companies and bank accounts.
The FBI’s International Corruption Squad in Miami is investigating the case. Assistant Chiefs David Fuhr and Lorinda Laryea and Trial Attorneys Jonathan Robell and Katherine Raut of the Criminal Division’s Fraud Section and Trial Attorneys Mary Ann McCarthy and Randall Warden of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) are prosecuting the case.
IRS-Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Marshals Service and the Criminal Division’s Office of International Affairs have provided significant assistance in this case, as have public authorities in, among other countries, Ecuador and Panama.
MLARS’s Bank Integrity Unit investigates and prosecutes banks and other financial institutions, including their officers, managers, and employees, whose actions threaten the integrity of the individual institution or the wider financial system.
The Fraud Section is responsible for investigating and prosecuting all FCPA matters. Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
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.
Justice Department Requires ZF and WABCO to Divest WABCO's Steering Components Business to Proceed with MergerRead the Press Release
The Department of Justice announced today that it is requiring ZF Friedrichshafen AG (ZF) and WABCO Holdings Inc. (WABCO) to divest WABCO’s North American steering components business, R.H. Sheppard Co. Inc., as well as other related WABCO assets, in order for ZF to proceed with its proposed acquisition of WABCO. Without the divestiture, the proposed acquisition would eliminate competition between the only two suppliers of steering gears used on large commercial vehicles in North America, the department’s lawsuit alleges.
The Justice Department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed merger. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit.
“The merger, as originally structured, would have given ZF a monopoly over an essential steering systems component used in trucks and buses that move products and people across the United States,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “Today’s settlement, which requires the divestiture of WABCO’s entire U.S. steering systems business, will ensure that commercial vehicle manufacturers continue to benefit from competition as they design and build the trucks and buses of today and tomorrow.”
According to the Justice Department’s complaint, ZF and WABCO are the only North American suppliers of the steering gears that are an essential steering system component used in large commercial vehicles. These steering gears direct the front wheels of trucks and buses, and are also a key component of advanced driver assistance system (ADAS) steering features. ADAS steering features, such as lane-keeping assist, are already being implemented today, and are expected to be an area of continued importance as companies develop autonomous vehicle operations. The department’s complaint alleges that competition between ZF and WABCO has resulted in lower prices, higher quality, better service, and more favorable contractual terms, and has fostered innovation that has led to the development of features that are integral to the current and future development of ADAS technologies. According to the complaint, the combination of ZF and WABCO would leave manufacturers of large commercial vehicles in North America without a sufficient competitive alternative for this critical input and likely result in higher prices, less favorable contract terms, and reduced research and development efforts.
Under the terms of the proposed settlement, ZF and WABCO must divest the entirety of WABCO’s R.H. Sheppard steering systems subsidiary, including its manufacturing facilities in Hanover, Pennsylvania, and Wytheville, Virginia, as well as other WABCO assets related to steering gears.
ZF is a German company headquartered in Friedrichshafen, Germany. It has 149,000 employees in 40 countries, and had annual sales of $36.9 billion in 2018, $9.6 billion of which were in the United States.
WABCO is a Delaware corporation with a North American headquarters in Auburn Hills, Michigan, and a global headquarters in Bern, Switzerland. It has 16,000 employees in 40 countries, and had annual sales in 2018 of $3.8 billion, $850 million of which were in the United States.
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 John Read, Acting Chief, Defense, Industrials, and Aerospace Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the final judgment upon finding it is in the public interest.
Extradited Former Air Cargo Executive Pleads Guilty for Participating in a Worldwide Price-Fixing ConspiracyRead the Press Release
Maria Christina “Meta” Ullings, the former senior vice president of cargo sales and marketing for Martinair N.V. (Martinair Cargo) and a Dutch national, pleaded guilty for her role in a long-running air cargo price-fixing conspiracy, the Department of Justice announced.
Ullings’ extradition is the second extradition on an antitrust charge. A fugitive for almost 10 years, Ullings was apprehended by Italian authorities in July 2019 while visiting Sicily. Ullings initially contested extradition in the Italian courts, but after the Court of Appeals of Palermo ruled that she be extradited, she waived her appeal. She arrived in Atlanta on Jan. 10, 2020, and made her initial appearance on Jan. 13 in the U.S. District Court for the Northern District of Georgia. Ullings was sentenced to 14 months in prison with credit for the time she was held in the custody of the Italian government pending her extradition. She has also been sentenced to pay a $20,000 criminal fine.
“Today’s guilty plea demonstrates the Antitrust Division’s commitment to bringing those who violate the antitrust laws – wherever located – to justice,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “The Antitrust Division and its partners are committed to rooting out international price-fixing cartels that cheat American consumers and producers.”
“The ultimate loser in price fixing schemes is the American consumer,” said Special Agent in Charge Chris Hacker of the FBI’s Atlanta Field Office. “Individuals and companies that feel like they don’t need to follow the rules should understand the FBI and our federal law enforcement partners will pursue anyone who threatens our economy and our citizens. We are committed to exposing these cases of corruption in the United States and around the world.”
Ullings pleaded guilty to conspiring with others to suppress and eliminate competition by fixing and coordinating certain surcharges, including fuel surcharges, charged to customers located in the United States and elsewhere for air cargo shipments. These air cargo shipments included heavy equipment, perishable commodities, and consumer goods destined for American consumers and shipped by American producers. Ullings participated in the conspiracy from at least as early as January 2001 until at least February 2006.
Including Ullings, a total of 22 airlines and 21 executives have been charged in the Justice Department’s investigation into price fixing in the air transportation industry. To date, more than $1.8 billion in criminal fines have been imposed and eight executives have been sentenced to serve prison time.
The investigation into the air transportation industry has been conducted by the Antitrust Division, the FBI, the Department of Transportation’s Office of the Inspector General, and the U.S. Postal Service’s Office of the Inspector General. Assistance with the extradition was provided by the Department of Justice Criminal Division’s Office of International Affairs and the U.S. Marshals Service. Anyone with information concerning price fixing or other anticompetitive conduct is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.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.
Chicago-Area Resident Indicted for Scheme to File False Claims for Tax RefundsRead the Press Release
A Chicago-area resident was arrested today on a federal grand jury indictment charging him with mail fraud, submitting false claims to the United States for tax refunds, and aggravated identity theft, announced Principle Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. The Jan. 16, 2020, indictment was unsealed following today’s arrest.
According to the indictment, Wilmer Alexander Garcia Meza allegedly used personal identifying information of third parties—including their names, dates of birth, and identification documents such as foreign passports—to fraudulently obtain Individual Taxpayer Identification Numbers (ITINs) from the Internal Revenue Service (IRS). An ITIN is a tax processing number issued by the IRS to individuals who do not have, and are not eligible to obtain, a social security number. The indictment further alleges that from 2013 through 2017, Garcia used these ITINs to file fraudulent tax returns in the names of the third parties to claim thousands in fraudulent refunds. Garcia also allegedly used the identification documents to cash the fraudulently obtained refund checks.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Garcia faces a maximum sentence of 20 years in prison for each mail fraud count, five years in prison for each false claim count, and a mandatory minimum sentence of two years in prison for aggravated identity theft. He also faces a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS-Criminal Investigation, Homeland Security Investigations, and the U.S. Postal Inspection Service, who are investigating the case, and Trial Attorneys Thomas Flynn and Michael Landman of the Tax Division, who are prosecuting this case.
Department of Justice Joins Federal Law Enforcement Training Centers for Human Trafficking RoundtableRead the Press Release
The Department of Justice today joined the Federal Law Enforcement Training Centers (FLETC) and federal and local law enforcement officials at a roundtable to discuss the challenges posed by human traffickers. The meeting was held following the launch of FLETC’s Human Trafficking Awareness Training last week.
Bill Woolf, Senior Advisor for Human Trafficking in the Department of Justice’s Office of Justice Programs (OJP), participated in the event along with Tania Groover, Assistant U.S. Attorney and Human Trafficking Coordinator for the Southern District of Georgia, and Kai Munshi, FLETC’s Chief of Security and Professional Responsibility.
“Human trafficking is a sophisticated and obscenely profitable global enterprise, and combating it demands the full coordination of law enforcement agencies at all levels,” said OJP’s Woolf. “The Department of Justice is very pleased and proud to lend its support to the brave men and women here in southeastern Georgia — and throughout the country — who pursue trafficking perpetrators and bring aid to trafficking victims.”
The roundtable convened law enforcement leaders from Glynn County and the City of Brunswick, as well as officials from the enforcement units of the Department of Justice and the Department of Homeland Security. They and their counterparts from across the nation are among the first to take part in FLETC’s human trafficking training program. The training was piloted in May and is now part of the permanent training catalog.
“Human trafficking is modern-day slavery, subjecting individuals to involuntary servitude for the profit of others,” said U.S. Attorney Bobby L. Christine of the Southern District of Georgia. “Building awareness of these fast-growing criminal enterprises will help in the fight to eradicate human trafficking, and our office will vigorously prosecute those who would illegally exploit victims of this despicable trade.”
“Educating our first responders about human trafficking is a shared responsibility, and FLETC is committed to doing its part,” said FLETC Director Thomas J. Walters.
Woolf and Munshi also took part in an event organized by the Georgia Human Trafficking Initiative titled “Prisoners of Darkness.” The program brought together about 400 advocates and concerned citizens from the Golden Isles region to raise awareness of human trafficking. Prosecutions led by the Southern District of Georgia’s Human Trafficking Task Force, spearheaded by the U.S. Attorney’s Office, have freed at least 39 human trafficking victims.
In November 2019, Department of Justice officials, including Principal Deputy Associate Attorney General Claire Murray and OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan, joined Georgia First Lady Marty Kemp in announcing $4.3 million in grants to help officials in Georgia investigate and prosecute human traffickers and serve trafficking survivors. The Department of Justice, through OJP, awarded more than $100 million in fiscal year 2019 grants to agencies and organizations across the United States to combat human trafficking and provide vital services to victims. More funding is available this year, including up to $13.5 million to provide housing for human trafficking survivors.
About the Office of Justice Programs:
The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training, technical assistance and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.
About the Federal Law Enforcement Training Centers:
FLETC trains the majority of federal law enforcement officers and agents in the United States. In addition to providing training for over 90 federal partner organizations, FLETC provides training to state, local, tribal and international police in advanced programs. FLETC graduates approximately 70,000 students annually and is the largest law enforcement training organization in the country. To learn more about FLETC, visit www.fletc.gov.
Attorney General William P. Barr Announces the Establishment of the Presidential Commission on Law Enforcement and the Administration of JusticeRead the Press Release
Today, Attorney General William P. Barr announced the establishment of the Presidential Commission on Law Enforcement and the Administration of Justice. On Oct. 28, 2019, President Donald J. Trump signed Executive Order No. 13896, authorizing and designating the Attorney General to create such a Commission that would explore modern issues affecting law enforcement that most impact the ability of American policing to reduce crime.
“There is no more noble and important profession than law enforcement. A free and safe society requires a trusted and capable police force to safeguard our rights to life and liberty,” said Attorney General William P. Barr. “But as criminal threats and social conditions have changed the responsibilities and roles of police officers, there is a need for a modern study of how law enforcement can best protect and serve American communities. This is why the President instructed me to establish this critical Commission, whose members truly reflect the best there is in law enforcement. Together, we will examine, discuss, and debate how justice is administered in the United States and uncover opportunities for progress, improvement, and innovation.”
The Executive Order instructs the Commission to conduct its study by focusing on the law enforcement officers who are tasked with reducing crime on a daily basis. It also directs the Commission to research “important current issues facing law enforcement and the criminal justice system,” and recommends a variety of subjects for study, such as, but not limited to:
- The challenges to law enforcement associated with mental illness, homelessness, substance abuse, and other social factors that influence crime and strain criminal justice resources;
- The recruitment, hiring, training, and retention of law enforcement officers, including in rural and tribal communities;
- Refusals by State and local prosecutors to enforce laws or prosecute categories of crimes;
- The need to promote public confidence and respect for the law and law enforcement officers; and
- The effects of technological innovations on law enforcement and the criminal justice system, including the challenges and opportunities presented by such innovations.
The Commission will principally conduct its study through a series of hearings, panel presentations, field visits, and other public meetings. At these events, the Commission will hear from subject matter experts, public officials, private citizens, and other relevant stakeholders and institutions who can provide valuable insight into these issues.
The Commissioners, appointed by the Attorney General and announced today, are urban police chiefs, state prosecutors, county sheriffs, members of rural law enforcement, federal agents, U.S. Attorneys, and a state attorney general. In addition to their diverse experiences and backgrounds, each member brings to the Commission an expertise in formulating and shaping law enforcement policy and leading police departments and law enforcement organizations.
Commissioners on the Presidential Commission on Law Enforcement and the Administration of Justice include:
- Chair: Phil Keith, Director, Community Oriented Policing Services
- Vice-Chair: Katharine Sullivan, Principal Deputy Assistant Attorney General, Office of Justice Programs
- David Bowdich, Deputy Director, Federal Bureau of Investigation
- Donald Washington, Director, United States Marshals Services
- Regina Lombardo, Acting Director, Bureau of Alcohol, Tobacco, Firearms & Explosives
- Erica Macdonald, United States Attorney, District Of Minnesota
- D. Christopher Evans, Chief of Operations, Drug Enforcement Administration
- James Clemmons, Sheriff, Richmond County, North Carolina
- Frederick Frazier, City Council, McKinney, Texas/ Police Officer, Dallas Police Department
- Robert Gualtieri, Sheriff, Pinellas County, Florida
- Gina Hawkins, Chief of Police, Fayetteville, North Carolina
- Ashley Moody, Florida Attorney General
- Nancy Parr, Commonwealth’s Attorney, Chesapeake, Virginia
- Craig Price, South Dakota Secretary of Public Safety
- Gordon Ramsay, Chief of Police, Wichita, Kansas
- David B. Rausch, Director, Tennessee Bureau of Investigation
- John Samaniego, Sheriff, Shelby County, Alabama
- James Smallwood, Police Officer, Nashville Metropolitan Police Department
The Commission will meet monthly for the next year and then report its findings to the Attorney General, who will submit a final report to the President.
Propex Derivatives Pty Ltd Agrees to Pay $1 Million in Connection with Spoofing SchemeRead the Press Release
Propex Derivatives Pty Ltd (Propex), a Sydney, Australia-based proprietary trading firm, has entered into a resolution with the Department of Justice to resolve criminal charges related to a spoofing scheme involving thousands of instances of unlawful trading activity in U.S. commodities markets by a former Propex trader, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Special Agent in Charge Emmerson Buie Jr. of the FBI’s Chicago Field Office.
Propex entered into a deferred prosecution agreement (DPA) in connection with a criminal information filed today in the Northern District of Illinois charging the company with one count of spoofing. Spoofing is the illegal practice of bidding or offering (i.e., placing an order to buy or sell) with the intent to cancel the bid or offer before execution. Under the terms of the DPA, Propex agreed to pay $1 million that is comprised of a criminal monetary penalty ($462,271), criminal disgorgement ($73,429), and victim compensation ($464,300) with the criminal monetary penalty credited for any payments made to the Commodity Futures Trading Commission (CFTC).
Propex also agreed to, among other things, conduct appropriate reviews of its internal controls, policies and procedures, and to modify its compliance program, where necessary and appropriate, to ensure it is designed to effectively detect and deter violations of the Commodity Exchange Act and commodities fraud statute.
Propex admitted as part of the DPA, that from approximately July 2012 until March 2016, a former Propex trader, Jiongsheng (Jim) Zhao, engaged in a trading strategy that involved placing thousands of large-volume orders to buy and sell E-mini S&P 500 futures contracts on the Chicago Mercantile Exchange (CME) that Zhao intended to cancel before execution (the Spoof Orders). On Dec. 26, 2018, Zhao pleaded guilty to one count of spoofing. As part of his plea, Zhao admitted that his trading strategy was intended to inject materially false and misleading liquidity and price information into the E-mini S&P 500 futures contracts market by placing the Spoof Orders in order to deceive other market participants about the existence of supply and demand. The Spoof Orders were designed to artificially move the price of E-mini S&P 500 futures contracts in a direction that was favorable to Zhao, and to the detriment of other market participants. Zhao’s sentencing is scheduled for Feb. 4, 2020, before U.S. District Judge John J. Tharp Jr. of the Northern District of Illinois.
A number of relevant considerations contributed to the department’s criminal resolution with Propex, including the company’s cooperation with the United States and Propex’s remedial efforts. In addition, the department considered the fact that in May 2014 Zhao’s trading was flagged for Propex senior management, yet he continued placing Spoof Orders through March 2016. Further, Zhao made false and misleading statements to the CME during its investigation into Zhao’s trading activity. In March 2018, Propex undertook a significant enhancement of its compliance program and internal controls after engaging an independent compliance consulting firm to conduct an assessment of the adequacy and effectiveness of Propex’s compliance program. As part of that enhancement, Propex increased the resources dedicated to compliance and contracted with a third-party vendor to provide automated trade surveillance, including surveillance for manipulative and deceptive trading such as spoofing. The department determined that the criminal monetary penalty of $462,271 imposed as part of the DPA is appropriate given the facts and circumstances of this case and given Propex’s inability to pay an amount within the range calculated under the sentencing guidelines because it would threaten the continued viability of Propex and impair its ability to make restitution to victims. As part of the agreement, the department has filed an unopposed motion, which is subject to approval by the Court, to defer for the term of the DPA any prosecution and trial of the criminal information filed against Propex.
The CFTC announced today a separate settlement with Propex in connection with a related, parallel proceeding. Under the terms of that resolution with the CFTC, Propex agreed to pay $1 million, which includes a civil monetary penalty of $462,271, as well as restitution and disgorgement that will be credited for any such payments made to the department. In addition, the CFTC order imposes upon Propex other remedial and cooperation obligations in connection with any CFTC investigation pertaining to the underlying conduct.
The FBI’s Chicago Field Office investigated this case. Trial Attorney Matthew F. Sullivan and Assistant Chief Justin Weitz of the Criminal Division’s Fraud Section prosecuted the case, which is part of the Fraud Section’s commodities enforcement program. The Australian Government's Attorney-General’s Department, the Australian Federal Police and the Criminal Division’s Office of International Affairs provided significant assistance in connection with the arrest and extradition of Zhao. The CFTC’s Division of Enforcement and the Australian Securities and Investments Commission also provided substantial assistance in this case.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website at https://www.justice.gov/criminal-vns/case/propex-derivatives-dpa or call (888) 549-3945.
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.
Minnesota Couple Sentenced to Prison for Long-Running Fraud SchemeRead the Press Release
Detloff Marketing and Asset Management Inc. (Detloff Marketing), a real estate company based in Hopkins, Minnesota; its owner, Jeffrey J. Detloff; and its accountant, Lori K. Detloff, were sentenced today in the U.S. District Court in St. Paul, Minnesota, for their participation in a long-running fraudulent bidding and kickback scheme in connection with foreclosed properties, the Department of Justice announced.
Jeffrey Detloff was sentenced to 16 months’ imprisonment and two years of supervised release. Lori Detloff was sentenced to seven months’ imprisonment and one year of supervised release. Detloff Marketing was sentenced to a pay a $593,000 criminal fine. The defendants were also sentenced to pay full restitution to the victims of the scheme.
“Today’s sentences reflect the significant harm caused by the defendants’ years long scheme that lined their pockets by defrauding lenders and undermining competition,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “The Antitrust Division and its partners are committed to rooting out anticompetitive conduct, whatever its form, and holding companies and executives accountable.”
“The defendants created a scheme to squeeze as much money as they could from these properties with no regard for the victim,” said FBI Special Agent in Charge Jill Sanborn of the Minneapolis Division. “These scams victimize a large number of people and the FBI along with our law enforcement partners will continue to work these schemes and hold accountable those responsible for defrauding the system.”
According to court documents, from September 2007 and continuing until June 2015, Jeffrey Detloff, of Minnetonka, Minnesota, conspired to defraud mortgage lenders and guarantors who had hired Detloff, a realtor, to oversee maintenance and repairs on foreclosed homes in the Minneapolis-St. Paul area. Jeffrey Detloff steered maintenance and repair contracts to contractors who would pay a kickback to Detloff Marketing. Unbeknownst to his customers, Jeffrey Detloff and Detloff Marketing included the kickbacks within bids and invoices sent to the lender or guarantor for reimbursement on maintenance and repairs. Lori Detloff, also of Minnetonka, Minnesota, was an accountant responsible for ensuring the kickbacks were paid by contractors to Detloff Marketing. In all, Detloff Marketing received over $291,505 in kickbacks.
Detloff Marketing and Jeffery Detloff pleaded guilty to Count 1 of the Indictment, which charged a conspiracy to commit mail and wire fraud affecting a financial institution. Lori Detloff pleaded guilty to aiding and abetting the principal offense described in Count 4 of the indictment, mail fraud affecting a financial institution. As part of their plea agreements, the Antitrust Division agreed to move to dismiss the remaining counts against Detloff Marketing, Jeffery Detloff, and Lori Detloff upon sentencing.
The underlying investigation of housing repair contracts in the Minneapolis area is being conducted by the Antitrust Division’s Chicago Office and the FBI’s Minneapolis Division. Anyone with information on customer allocation, bid rigging, price fixing, or other anticompetitive conduct related to the real estate industry in Minnesota should contact the Antitrust Division’s Chicago Office at 312-984-7200 or visit www.justice.gov/atr/contact/newcase.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.
Justice Department, EPA and State of Colorado Announce Settlement with K.P. Kauffman Co. to Reduce Emissions from Oil and Gas Operations by More Than 500 Tons per YearRead the Press Release
The Justice Department, the U.S. Environmental Protection Agency (EPA) and the state of Colorado today announced a settlement with Denver-based K.P. Kauffman Company Inc. (KPK) resolving alleged violations of the federal Clean Air Act and Colorado air quality regulations. The settlement, set forth in a consent decree lodged with the U.S. District Court for the District of Colorado, requires KPK to implement pollution control measures at 67 well production facilities – for a total estimated expenditure of $2.5 million. The company will also pay a $1 million civil penalty.
Today’s settlement resolves allegations made in an Oct. 5, 2018, complaint that KPK violated requirements to minimize volatile organic compound (VOC) emissions from its oil and natural gas production operations in the Denver-Julesburg Basin. VOCs are a key component in the formation of ground-level ozone, a pollutant that irritates the lungs, exacerbates diseases such as asthma, and can increase susceptibility to respiratory illnesses, such as pneumonia and bronchitis.
The well production facilities covered by this settlement are in an area that does not meet National Ambient Air Quality Standards established under the Clean Air Act for ground-level ozone: the Denver Metro/Northern Front Range ozone nonattainment area. Today’s action will contribute to the improvement of air quality in communities across the Front Range by reducing the emissions of VOCs that lead to the formation of ground-level ozone.
“Oil and gas production fuels our economy, but it must be done responsibly,” said Jeffrey Bossert Clark, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. “We will continue to take action where operators fail to comply with our nation’s clean air laws.”
“This is the fourth joint settlement EPA has completed with the State of Colorado to secure compliance and reduce emissions from storage tanks at oil and gas operations,” said EPA Regional Administrator Gregory Sopkin. “The EPA continues to enforce the Clean Air Act, and our partnership with the State continues to deliver cleaner, healthier air for Colorado’s communities.”
This settlement covers 67 KPK oil and gas production facilities in Colorado’s Denver-Julesburg Basin. As part of the agreement, KPK will implement measures to improve operation and maintenance practices and ensure the vapor control systems on its storage tanks are adequately designed and sized. These improvements, including monthly or quarterly inspections using infrared cameras and the installation of pressure monitors to detect and respond to excess emissions, are expected to reduce VOC emissions from KPK’s operations by approximately 424 tons per year.
KPK will also implement three environmental mitigation projects to further reduce VOC emissions. First, KPK will install rod lifts at 12 oil and gas wells to reduce or eliminate the need to unload the well – a procedure used to increase well production during which emissions are vented to the atmosphere. Second, KPK will use a Boreal Laser to scan for methane emissions at all well production facilities covered by the consent decree, and if necessary, will follow up with corrective actions to address the emissions. Third, KPK will implement operation and maintenance requirements, including increased inspections, at four production facilities not covered by air pollution regulations due to their small size. KPK estimates that these mitigation projects will reduce VOC emissions by an additional 131 tons per year.
The settlement also requires KPK to pay the United States and the state of Colorado a $1 million civil penalty, split evenly between the governments.
Today’s action is based on inspections of KPK operations conducted from 2013 to 2018 by EPA and the Colorado Department of Public Health and Environment, which found VOC emissions from many of KPK’s storage tanks. Through these inspections and information requests, EPA and the state of Colorado identified alleged violations of Colorado’s Regulation Number 7, including undersized vapor control systems and inadequate operation and maintenance practices. These alleged violations include federally enforceable requirements of Colorado’s State Implementation Plan to improve air quality in the Denver Metro/Northern Front Range non-attainment area.
This settlement represents the latest in a series of EPA and state actions to secure compliance and reduce emissions from oil and gas sources in the nonattainment area, including recent settlements with Noble Energy Inc. (2015), PDC Energy Inc. (2017), and HighPoint Operating Co. (2019). With today’s action, a total of 3,141 well production facilities in the area are now subject to compliance requirements mandated by joint federal/state consent decrees. In addition, when combined with state-issued compliance orders, 93 percent of production facilities with condensate storage tanks in the Denver ozone nonattainment area are currently subject to enhanced design or maintenance requirements, or both.
The consent decree, lodged in the U.S. District Court for the District of Colorado, is subject to a 30-day public comment period and final court approval. The consent decree will be available for viewing at: https://www.justice.gov/enrd/consent-decrees.
For more information about the settlement, visit https://www.epa.gov/enforcement/kp-kauffman-company-settlement.
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.
Statement from Attorney General William P. Barr on Martin Luther King Jr. DayRead the Press Release
Attorney General William P. Barr issued the following statement:
Today, we honor the life and legacy of Dr. Martin Luther King, Jr. “Injustice anywhere is a threat to justice everywhere,” Dr. King wrote in his famous letter while confined to a narrow cell in the Birmingham city jail. In the face of grave intolerance, Dr. King exemplified great moral and physical courage, playing a seminal role in the fight for civil rights and leading our nation to a better destiny. As the Department of Justice celebrates its sesquicentennial year, let us be motivated by the example of Dr. King, always seeking and striving for the fair and impartial administration of justice for all Americans.
Readout of U.S. Attorney General William P. Barr’s Visit to Mexico: January 15-17Read the Press Release
Today, U.S. Attorney General William P. Barr concluded his second trip to Mexico City. The Attorney General participated in high-level meetings regarding joint counter-narcotic efforts as well as efforts to combat transnational criminal organizations (TCOs) and the trafficking of arms and drugs.
The Attorney General reiterated the United States’ commitment to protecting U.S. and Mexican citizens and leaders from both countries reaffirmed their commitment to bilateral law enforcement cooperation.
To that end, leaders from both countries agreed to a joint meeting in February between key U.S. Attorneys' offices and their Mexican counterparts.
Together with U.S. Ambassador Christopher Landau, the Attorney General met with Mexico’s Attorney General Alejandro Gertz, Mexico’s Secretary of Foreign Relations, Marcelo Ebrard Casaubon, Secretary of Public Security and Citizen Protection, Alfonso Durazo Montaño, Defense Secretary General Luis Crescencio Sandoval, Navy Secretary Admiral José Rafael Ojeda Duran, and Security Undersecretrary Ricardo Mejía Berdeja.
Justice Department Settles Sexual Harassment Lawsuit Against Owners and Manager of Kansas Rental PropertiesRead the Press Release
The Department of Justice announced today that Thong Cao and his wife, Mai Cao, will be obligated to pay $160,000 in damages and civil penalties to resolve a Fair Housing Act lawsuit alleging that Thong Cao sexually harassed numerous female tenants since at least 2009 at residential properties he owned or operated in Wichita, Kansas. Mai Cao is named as a defendant in this lawsuit because she owned or co-owned certain rental properties at which harassment took place.
Under the consent order in United States of America v. Thong Cao, et al., which was entered today by the U.S. District Court for the District of Kansas, defendants are required to pay a total of $160,000, which includes $155,000 in monetary damages to eleven former tenants who were harmed as a result of the sexual harassment, and a $5,000 civil penalty. The consent order also bars the defendants from participating in the rental or management of residential properties in the future.
“Sexual harassment of women in their homes is indecent, destructive, and illegal,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “The Fair Housing Act protects the right of women and their families to live in peace and security and without the fear that deviant people will intimidate and bully them for sexual favors. This department will continue tirelessly to pursue landlords and others who abuse their authority by preying upon vulnerable women.”
“Access to fair housing is every person’s right,” said U.S. Attorney Stephen R. McAllister for the District of Kansas. “Landlords, property managers and their employees are legally prohibited from making sexual favors a condition of obtaining or maintaining a place to live.”
The department’s lawsuit, filed in 2017, arose from two complaints that former tenants filed with the U.S. Department of Housing and Urban Development (HUD). The lawsuit alleged that Thong Cao sexually harassed multiple female residents at the rental properties from at least 2009 to 2014. According to the complaint, Thong Cao engaged in harassment that included, among other things, making unwelcome sexual advances and comments, engaging in unwanted sexual touching, and terminating the tenancies of women who refused to engage in sexual conduct with him.
In October 2017, the Justice Department launched a new initiative to combat sexual harassment in housing. In April 2018, the Department of Justice announced the nationwide rollout, including three major components: an outreach toolkit to leverage the department’s nationwide network of U.S. Attorney’s Offices, a public awareness campaign, including the launch of a national Public Service Announcement, and a new joint Task Force with HUD to combat sexual harassment in housing.
Since launching the initiative, the Department of Justice has filed 13 new lawsuits alleging a pattern or practice of sexual harassment in housing. The Justice Department has filed or settled 18 sexual harassment cases since January 2017, and has recovered over $2.7 million for victims of sexual harassment in housing.
The Justice Department’s Civil Rights Division enforces the Fair Housing Act, which prohibits discrimination in housing. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals who believe that they may have been victims of sexual harassment or other types of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777 or through its website at https://www.hud.gov/program_offices/fair_housing_equal_opp/online-complaint.
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 Commander of Naval Station Guantanamo Bay Convicted of Obstructing Justice in Connection with Civilian DeathRead the Press Release
A former Commander of Naval Station Guantanamo Bay (GTMO) was convicted by a federal jury today of obstructing justice and making false statements, among other charges, in connection with the death of a civilian at the naval base.
John Nettleton, 54, of Jacksonville, Florida, was convicted of obstructing justice, concealing information, falsifying records and making false statements, all related to his actions during the Navy’s investigation of the death of Christopher M. Tur, the Loss Prevention Safety Manager at GTMO’s Naval Exchange. A sentencing date has not been scheduled.
“Captain Nettleton dishonored his oath and impeded the investigation into a civilian's tragic death, preventing much needed closure for the family and friends of the deceased," said Assistant Attorney General Brian A. Benczkowski of the Justice Department's Criminal Division. “Today's verdict demonstrates the department's steadfast commitment to holding accountable those who abuse their positions of public trust and obstruct justice.”
“By deliberately misleading NCIS during the investigation into the tragic death of Mr. Tur, Captain Nettleton delayed justice and wasted valuable Department of the Navy resources,” said Special Agent in Charge Matthew Lascell of the Naval Criminal Investigative Service’s (NCIS) Southeast Field Office. “NCIS is dedicated to holding those who unlawfully impede investigations accountable for their actions.”
Tur, 42, was found drowned in the waters of Guantanamo Bay on Jan. 11, 2015. An autopsy revealed that Tur had suffered injuries prior to his drowning. At the time of Tur’s death, Nettleton was the Commanding Officer of GTMO. Nettleton was indicted in January 2019.
According to the evidence at trial, Tur confronted Nettleton at a party at the GTMO Officers’ Club on Jan. 9, 2015, with allegations that Nettleton and Tur’s spouse had engaged in an extramarital affair. Later that same evening, Tur went to Nettleton’s residence and a physical altercation ensued that left Tur injured. Tur was reported missing on Jan. 10, 2015, by other residents of GTMO. Nettleton also did not report that Tur had accused him of the extramarital affair, that Nettleton and Tur had engaged in a physical altercation at Nettleton’s residence, or that Tur had been injured. Nettleton persisted in concealment and false statements as the search for Tur continued and then during the investigation into the circumstances of his death.
The Naval Criminal Investigative Service investigated the case. Deputy Chief Todd Gee and Trial Attorney Peter M. Nothstein of the Criminal Division’s Public Integrity Section prosecuted the case. Former Public Integrity Section Trial Attorney Mark Cipolletti also assisted in the investigation.
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.
Washington, D.C. Resident Sentenced for Violating the Toxic Substances Control ActRead the Press Release
A Washington, D.C. man was sentenced yesterday to 60 days’ incarceration, two years of supervised release, a $50,000 fine and 300 hours of community service for violating the Toxic Substances Control Act in the course of renovating a Washington, D.C., property without following lead-safe work practices and lead disclosure requirements.
Mohammad Sikder, 60, had previously pled guilty to these offenses on June 20, 2019, before the Honorable Amy Berman Jackson. Sikder’s solely held company, District Properties LLC, also pled guilty to making false statements, at Sikder’s direction, in 25 building permit applications to the District of Columbia Department of Consumer and Regulatory Affairs (DCRA). These applications understated the age of the homes being renovated, with the intent to avoid regulatory scrutiny of inadequate lead-based paint safety measures at those properties. Judge Jackson sentenced District Properties LLC to a $150,000 fine and two years’ probation with special condition of funding 3 lead-paint awareness seminars for real estate developers and contractors.
“Skirting laws that govern the use of toxic substances puts the public’s health at risk, and doing so will get you investigated and prosecuted,” said Jeffrey Bossert Clark, Assistant Attorney General for the Environment and Natural Resources Division. “Lead-safe work practices and disclosure requirements provide essential protections from lead exposure, and this case shows that business owners and individuals who violate them will get jail time and pay a substantial penalty.”
“The defendant is being held accountable for providing false information on the permit application concerning the age of the building and using untrained workers to remove lead paint from the property,” said Jennifer Lynn, Special Agent in Charge of EPA’s criminal enforcement program in the District of Columbia. “Today’s sentencing sends a clear signal that EPA and its law enforcement partners are committed to enforcing environmental laws that protect the health and safety of our communities.”
In 2018, the U.S. Environmental Protection Agency (EPA), Housing and Urban Development (HUD), and U.S. Health and Human Services (HHS) launched the Trump Administration’s Federal Lead Action Plan to Reduce Childhood Lead Exposures and Associated Health Impacts. EPA and the Justice Department are working together to investigate and prosecute those who violate lead-safe work practices and lead disclosure requirements under TSCA.
Lead poisoning continues to be a major environmental health problem in the United States, although it is completely preventable. The most common source of childhood lead poisoning is lead-based paint in older homes, and the primary exposure pathway is ingestion of lead-contaminated dust. Lead is a toxic substance that can cause permanent damage, and is regulated under the Toxic Substances Control Act. Under the Renovation, Repair and Painting Rule (RRP Rule), contractors performing renovation, repair and painting projects that disturb lead-based paint in homes, childcare facilities, and schools built before 1978 must be certified and must follow specific work practices to prevent lead contamination.
According to a statement of offense filed along with the plea agreements, Sikder and District Properties LLC purchased and renovated a property in Washington, D.C., without following the requirements of the RRP Rule. In 2014, the company submitted a building permit application to DCRA for addition, alteration, and repair of the property. At Sikder’s instruction, the employee submitting the permit application, under the section of the application titled “Lead Abatement,” falsely indicated that the property was built after 1978. During the summer and fall of 2014, a contractor conducted demolition at the property without following RRP Rule safe work practices. The demolition work included removing windows, removing interior and exterior painted surfaces, and removing floor and ceiling joists.
A Sept. 24, 2015, Occupational Safety and Health Administration inspection revealed multiple hazards, including employees performing manual demolition on a wall surface that had paint containing lead; the lack of an employee exposure assessment to determine actual employee exposure; the lack of lead training to employees; and proper sanitation practices not being followed. Sampling analysis showed lead present on the dump truck and employees’ hands. When the property was properly remediated and sold, Sikder and District Properties LLC did not provide the purchasers with this information and with a report documenting the prior existence of lead-based paint at the property.
Between 2011 and 2017, District Properties LLC submitted 25 renovation permit applications for properties in Washington, D.C., on which the company falsely represented that the properties had been built after 1978, thereby circumventing additional permitting requirements and avoiding EPA oversight with respect to RRP Rule compliance, which would be triggered by an accurate permit application.
The investigation was handled by the EPA-Criminal Investigations Division, in partnership with the Metropolitan Police Department Environmental Crimes Unit. Trial Attorney Cassandra J. Barnum of the Environmental Crimes Section is prosecuting the case.
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.
Pennsylvania Anesthesiologist Sentenced to Prison for Tax FraudRead the Press Release
A Pennsylvania anesthesiologist was sentenced to 30 months in prison today for filing a false income tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
From 2010 through 2018, James G. Allen Jr., 54, filed and caused the filing with the Internal Revenue Service (IRS) of sixteen false tax returns for himself and his wife. On these tax returns, Allen did not report more than $3 million in income that the pair earned as anesthesiologists. In addition to filing false tax returns, Allen took steps to conceal the couple’s assets and income from the IRS, including depositing money in an offshore bank account held in the Bailiwick of Jersey, wiring money to Columbia to purchase a house, purchasing cryptocurrency and gold, and registering a vehicle in the name of a purported church. In total, Allen caused a tax loss of more than $900,000 to the United States.
In addition to the term of imprisonment, U.S. District Judge Arthur J. Schwab ordered Allen to serve a one year term of supervised release and pay restitution to the IRS in the amount of $ 1,084,658.52.
Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Melissa S. Siskind and Carl F. Brooker, IV 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 at www.justice.gov/tax.
Owner of D.C. Area Tax Preparation Business Indicted for Tax FraudRead the Press Release
A federal grand jury in Washington, D.C. returned an indictment today charging an Indianapolis, Indiana, resident with conspiracy to file false claims, wire fraud, aggravated identity theft, aiding and assisting the preparation of false tax returns, and tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to the indictment, Awett Tedla was the owner and operator of Speedy Tax Services LLC, a tax preparation business in Washington, D.C. and District Heights, Maryland. From 2012 through 2016, Tedla and her coconspirators allegedly obtained and used third party identities to file fraudulent tax returns with the Internal Revenue Service (IRS) claiming tax refunds. The indictment also charges that from 2013 through 2016, Tedla falsified her own personal returns by omitting business receipts.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
If convicted, Tedla faces a statutory maximum sentence of 20 years in prison for each count of wire fraud, 10 years in prison for conspiring to file false claims for refunds, five years in prison for each count of tax evasion, and a mandatory sentence of two years in prison for aggravated identity theft. Tedla also faces a term of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman thanked agents of IRS-Criminal Investigation and Treasury Inspector General for Tax Administration (TIGTA), who conducted the investigation, and Trial Attorneys Mark McDonald and Sean Green of the Tax Division, who are prosecuting the case.
Department of Justice Announces Proposed Rule Regarding Equal Treatment of Faith-Based Organizations and Guidance on School PrayerRead the Press Release
The Department of Justice announced a proposed rule today that would implement President Trump’s Executive Order No. 13831 (May 3, 2018), remove regulatory burdens on religious organizations, and ensure that religious and non-religious organizations are treated equally in DOJ-supported programs. The proposed rule ensures that DOJ-supported social service programs are implemented in a manner consistent with the Constitution and other applicable federal law.
The department also announced, in conjunction with the Department of Education, guidance on school prayer. The updated guidance provides information on legal protections for prayer and other religious expression in public schools.
“Since our nation’s founding, there has always been a strong consensus about the centrality of religious liberty in the United States and the freedom of religious expression,” said Attorney General William P. Barr. “The Framers of the Constitution believed that both were indispensable to sustaining our free system of government. The actions taken by the administration today will hopefully help secure religious freedom in our country for decades to come.”
Background on Equal Treatment of Faith-Based Organizations
Under current regulations that govern DOJ-supported programs, religious providers of social services — but not other providers of social services — must make referrals under certain circumstances and must post notices regarding this referral procedure. These regulatory burdens had been required by then-President Obama’s Executive Order No. 13559 (Nov. 17, 2010). Consistent with President Trump’s Executive Order No. 13831 (May 3, 2018), the DOJ’s proposed rule would eliminate them from DOJ regulations. As the DOJ’s proposed rule observes, these burdens were not required by any applicable law, and because they were imposed only on religious social service providers, they are in tension with recent Supreme Court precedent regarding nondiscrimination against religious organizations. The proposed rule also will foreclose other unequal treatment of religious organizations by ensuring that they are not required to provide assurances or notices that are not required of secular organizations.
In addition, the proposed rule will clarify that religious organizations may apply for awards on the same basis as any other organization and that when DOJ selects award recipients, DOJ will not discriminate based on an organization’s religious character. The proposed rule also clarifies that religious organizations participating in DOJ-supported programs retain their independence from the government and may continue to carry out their missions consistent with religious freedom protections in federal law, including the Free Speech and Free Exercise Clauses of the First Amendment.
The proposed rule incorporates the Attorney General’s 2017 Memorandum for All Executive Departments and Agencies, Federal Law Protections for Religious Liberty. That memorandum was issued pursuant to President Trump’s Executive Order No. 13798 (May 4, 2017), and it guides all federal administrative agencies and executive departments in complying with federal law.
Background on School Prayer Guidance
Section 8524(a) of the Elementary and Secondary Education Act of 1965 (ESEA), as amended by the Every Student Succeeds Act and codified at 20 U.S.C. § 7904(a), requires the Secretary of Education to issue guidance to State educational agencies (SEAs), local educational agencies (LEAs), and the public on constitutionally protected prayer in public elementary and secondary schools. It requires the Department of Justice’s Office of Legal Counsel to review the guidance prior to distribution to ensure that it represents the current state of the law. In addition, section 8524(b) requires that, as a condition of receiving ESEA funds, an LEA must certify in writing to its SEA that it has no policy that prevents, or otherwise denies participation in, constitutionally protected prayer in public schools as detailed in this updated guidance.
The purpose of this updated guidance is to provide information on the current state of the law concerning religious expression in public schools. Part I is an introduction. Part II clarifies the extent to which prayer in public schools is legally protected. LEAs and SEAs are responsible, under section 8524(b) of the ESEA, to certify their compliance with the standards set forth in Part II.
Part III of this updated guidance generally addresses principles of religious liberty that relate to religious expression more broadly, including prayer, in accordance with Executive Order 13798 (May 4, 2017), 82 Fed. Reg. 21675 (May 9, 2017), and the Attorney General’s Memorandum on Federal Law Protections for Religious Liberty of October 7, 2017, 82 Fed. Reg. 49668 (Oct. 26, 2017) (AG Memo). It is meant to advise SEAs and LEAs on how to comply with governing constitutional and statutory law, but it is not a part of the required certification under section 8524(b) of the ESEA. Part IV discusses the Equal Access Act, which provides statutory protection for religious expression in public schools. These broader principles were drawn substantially from a 1995 presidential memorandum, Memorandum on Religious Expression in Public Schools, 2 Pub. Papers 1083 (July 12, 1995), and a 1998 Department of Education memorandum, Richard W. Riley, U.S. Secretary of Education, Religious Expression in Public Schools: A Statement of Principles (June 1998).
The Office of Legal Counsel in the Department of Justice and the Office of General Counsel in the Department of Education have jointly approved this updated guidance as reflecting the current state of the law. This updated guidance will be made available on the Department of Education’s website (www.ed.gov) and the Department of Justice’s website (www.justice.gov).
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.
Two Peruvians Plead Guilty to Overseeing Call Centers that Threatened and Defrauded Spanish-Speaking U.S. ConsumersRead the Press Release
Two Peruvian men pleaded guilty today to conspiracy to commit mail fraud and wire fraud for operating a large fraud and extortion scheme, the Department of Justice announced.
Johnny Enso Hidalgo Marchan, 40, and Rodolfo Hermoza, 44, oversaw call centers in Peru that used government impersonation, lies, and threats to steal money from thousands of U.S. Spanish-speaking victims. Both men were extradited from Peru in December 2019.
As part of their guilty pleas, Hidalgo and Hermoza admitted that they falsely posed as attorneys affiliated with U.S. courts and government agencies in threatening victims with detention, confiscation of property, credit ramifications, deportation, and community-service requirements to obtain payments from the victims. U.S. consumers lost over $1 million to the defendants’ fraud scheme.
“The Department of Justice’s Consumer Protection Branch will pursue and prosecute transnational criminals who defraud U.S. consumers, wherever they are,” said Assistant Attorney General Jody Hunt of the Justice Department’s Civil Division. “Disrupting transnational telemarketing fraud schemes — especially those that target vulnerable populations — is a priority for the Department of Justice. Criminals responsible for those schemes will not escape justice by placing their calls from abroad.”
Hidalgo and Hermoza managed and operated Peruvian call centers based in Lima and Cajamarca, Peru, that worked in partnership with another entity in Miami, Florida. Hidalgo, Hermoza, and their employees in Peru used Internet-based telephone calls to lie to and threaten Spanish-speaking victims in the United States. The callers often falsely accused the victims of having failed to accept delivery of certain products and claimed that the victims owed thousands of dollars in fines and that court proceedings would be brought against them. In reality, the victims — many of whom were elderly — had never ordered or received the products.
The defendants and other call center employees claimed that the consumers could resolve the supposed debts and avoid threatened consequences if they immediately paid a “settlement fee.” Consumers who contested the settlement fees were told that failure to pay could lead to harmed credit, arrest, deportation, or seizure of property.
“Individuals who defraud American consumers will be brought to justice, no matter where they are located,” said U.S. Attorney Fajardo Orshan of the Southern District of Florida. “Protecting the elderly and vulnerable members of our community from schemes, such as this one, is a top priority of this Office and the Department of Justice.”
“The U.S. Postal Inspection Service will not allow overseas criminal enterprises to illegally enrich themselves by using the mail to defraud consumers in the United States,” said Miami Division Postal Inspector in Charge Antonio J. Gomez. “With the continued cooperation of foreign governments these criminals will be aggressively pursued and brought to justice.”
A 37-count federal indictment was filed against the defendants in the U.S. District Court for the Southern District of Florida in June 2015 and was unsealed upon the defendants’ Dec. 18, 2019 extradition to the United States. A third defendant was also charged with conspiracy, mail fraud, wire fraud, and attempted extortion charges and is currently pending trial.
An indictment merely alleges that crimes have been committed. All defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Two individuals previously were brought to justice in connection with this scheme. In 2014, charges were brought against Angeluz and Maria Luzula of Miami and Juan Alejandro Rodriguez Cuya of Lima, Peru. Luzula pleaded guilty to all counts against her midway through trial and was sentenced to serve 165 months in prison. Rodriguez Cuya was convicted following a two-week trial. U.S. District Court Judge Patricia A. Seitz sentenced Rodriguez Cuya to serve 210 months in prison.
The case is being prosecuted by Trial Attorney Phil Toomajian of the Department of Justice’s Consumer Protection Branch. The U.S. Postal Inspection Service investigated the case. The Criminal Division’s Office of International Affairs, the U.S. Attorney’s Office of the Southern District of Florida, the Department of State Diplomatic Security Service, and the Peruvian National Police provided critical assistance.
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 particular, this past March the Department announced the largest elder fraud enforcement action in American history, charging more than 260 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.
More information about the Department’s efforts to help American seniors is available at its Elder Justice Initiative webpage. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office for Victims of Crime, which can be reached at https://www.ovc.gov.
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.
Jury Finds Texas Attorney and Client Guilty of Conspiring to Defraud the Internal Revenue ServiceRead the Press Release
A federal jury convicted a Texas attorney John O. Green and his client Thomas Selgas today for conspiring to defraud the United States, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division. The jury also convicted Selgas of tax evasion. Selgas’s wife, Michelle Selgas, was acquitted of conspiring to defraud the United States and tax evasion.
According to the evidence presented at trial, Selgas conspired with Green, an attorney licensed to practice in Texas, to defraud the United States by obstructing the Internal Revenue Service (IRS) from assessing and collecting Selgas’s taxes. Selgas and his wife owed approximately $1.1 million in outstanding taxes that Selgas refused to pay. When the IRS made efforts to collect the outstanding taxes, Selgas concealed funds by using Green’s Interest on Lawyers Trust Account
(IOLTA) rather than using accounts in his own name. An IOLTA is a bank account used by a lawyer to hold money in trust for clients. From 2007 to 2017, Selgas deposited proceeds from the sale of gold coins and other income into Green’s IOLTA and Green would then pay the Selgases personal expenses, including their credit card bills, from that account. Selgas and Green also filed a false tax return on behalf of MyMail, Ltd., an intellectual property development and licensing partnership Selgas co-founded, omitting a substantial portion of the partnership’s income.
U.S. District Judge Karen Gren Scholer will set sentencing at a later date. Selgas faces a statutory maximum sentence of five years in prison for each of the conspiracy and tax evasion counts.
Green faces a maximum sentence of five years in prison for the conspiracy count. They also face a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman thanked agents of the IRS - Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Robert A. Kemins and Mara Strier, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Department of Justice Issues Business Review Letter to the American Optometric Association for Its Proposed Expansion of Its Group Purchasing ActivitiesRead the Press Release
The Department of Justice announced today that it will not challenge a proposal by the American Optometric Association (the Association) to expand its group purchasing organization’s (GPO) activities to include the purchase of optometric products for resale to consumers, namely corrective eyeglass lenses, eyeglass frames, and contact lenses. The department said that the proposed expansion is unlikely to produce anticompetitive effects. Moreover, the expansion could produce discounts for the Association’s members and ultimately lead to lower prices for optometric products for consumers. The department’s position was stated in a business review letter to counsel for the Association and the GPO from Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.
Many joint purchasing arrangements among healthcare providers do not raise antitrust concerns where these arrangements can produce efficiencies that benefit consumers, including reducing transaction costs. A healthcare joint purchasing arrangement, however, can raise antitrust concerns if the arrangement drives down the price of a product or service being purchased below competitive levels or if the arrangement facilitates price fixing or other anticompetitive conduct. Certain safeguards, however, can reduce the risk of a joint purchasing arrangement facilitating price fixing or other anticompetitive conduct.
According to representations made by the Association and the GPO, the Association will follow the three safeguards discussed in Statement 7 of the Statements of Antitrust Enforcement Policy in Health Care to reduce the risk of facilitating price fixing. Those safeguards are that (1) GPO participants will not be required to make any of their optometric-product purchases through the GPO, (2) a third party will negotiate prices with the GPO’s suppliers, and (3) communications between the GPO and each individual participant regarding prices will be kept confidential from other GPO participants. In addition, no optometric product manufacturer maintains any financial stake, makes any financial contributions, or holds any ownership or board positions in the Association or the GPO.
Based on the information submitted and representations made by the Association and the GPO, the department has no present intention to challenge the expansion of the Association’s GPO to include the purchase of optometric products for resale to consumers.
Under the department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the Division currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves the right to challenge the proposed action under the antitrust laws if the actual operation of the proposed conduct proves to be anticompetitive in purpose or effect.
Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure. Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at [email protected].
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.
Department of Justice Announces Enhancements to the Risk Assessment System and Updates on First Step Act ImplementationRead the Press Release
The Department of Justice announced several significant developments in the implementation of the First Step Act (FSA) in a report published today.
“Today is another milestone in implementing the First Step Act,” said Attorney General William P. Barr. “Beginning today, inmates will have even greater incentive to participate in evidence-based programs that prepare them for productive lives after incarceration. This is what Congress intended with this bipartisan bill. The First Step Act is an important reform to our criminal justice system, and the Department of Justice is committed to implementing the Act fully and fairly.”
Some of the key developments are described here:
- In accordance with the First Step Act and due on Jan. 15, 2020, all inmates in the Bureau of Prisons (BOP) system have received an initial assessment using the Justice Department’s risk and needs assessment tool known as the Prisoner Assessment Tool Targeting Estimated Risk and Need (PATTERN). Initially released last July, the tool is designed to measure risk of recidivism of inmates.
- As of Jan. 15, 2020, inmates will be assigned to participate in evidence-based recidivism reduction programs and productive activities based on an initial needs assessment conducted by BOP. Participation and completion of those assigned programs and activities can lead to placement in pre-release custody or a 12-month sentence reduction under the First Step Act. A list of these programs will be published on the BOP’s website.
- In response to the public comments received and in coordination with the Independent Review Committee (IRC), the Justice Department has made changes to PATTERN that enhance its effectiveness, fairness and transparency. These changes had only a slight effect on PATTERN’s high-level of predictability and include:
- Adding a dynamic measure of offender’s “infraction free” period during his or her current term of incarceration;
- Modifying programming measures by adding psychology treatment programs (Bureau Rehabilitation and Values Enhancement Program (BRAVE), Challenge, Skills Program, Sex Offender Treatment (both residential and non-residential), Steps Toward Awareness, Growth, and Emotional Strength Program (STAGES), and Step Down programs), the faith-based Life Connections Program (LCP), and the BOP’s Drug Education program, to the “Number of programs completed (any)” measure and combine technical/vocational and Federal Prison Industries (UNICOR) into a new work programming measure; and
- Removing Age of first arrest/conviction and voluntary surrender.
- The department will also begin a pilot program to publish recidivism data and other First Step Act updates on a quarterly basis.
The efficient and effective implementation of the First Step Act continues to be a priority for the Department of Justice and for the Trump Administration. In this follow-up report, the Justice Department highlights changes made to PATTERN as a direct result of public input received during the 45-day public comment period that followed its publication in July 2019. National Institute of Justice (NIJ) held special listening sessions in early September 2019. During the sessions, NIJ and its partners engaged with stakeholders to ensure BOP can implement the most equitable, effective, and predictive tool possible, and to meet the goals of the FSA.
The BOP is working to incorporate these recommended changes to the risk assessment tool and will conduct a review to determine which inmates may have their risk score and level adjusted. In the interim, inmates will continue to be assigned to programs and activities based on their risk and needs and if eligible, will receive credit upon completion. The department believes that any updates to an inmate's risk score based on these changes will be minimal.
The department continues to work with the IRC and our experts to identify ways to improve PATTERN, while maintaining its high level of predictability, in addition to the feedback received from a range of stakeholders. This input has been invaluable as we strive to ensure the equity and effectiveness of PATTERN.
In addition, the Justice Department will soon release a funding opportunity to support continued implementation of the FSA. In the coming weeks, the NIJ will solicit proposals for a five-year project to review and revalidate PATTERN. For more information visit the NIJ webpage .
Implementation Progress, New and Expanded BOP Programs Under FSA.
The FSA provides for eligible inmates to earn time credits if they participate and complete assigned evidence-based recidivism reduction programs or productive activities. It also provides for the expansion of existing programs that allow for compassionate release and home confinement.
Releases for Good Conduct Time. In July 2019, over 3,100 federal prison inmates were released from the Bureau of Prisons’ custody as a result of the increase in good conduct time under the Act.
Retroactive Resentencing. The Act’s retroactive application of the Fair Sentencing Act of 2010 (reducing the disparity between crack cocaine and powder cocaine threshold amounts triggering mandatory minimum sentences) has resulted in 2,471 orders for sentence reductions.
Compassionate Release. The BOP updated its policies to reflect the new procedures for inmates to obtain “compassionate release” sentence reductions under 18 U.S.C. Section 3582 and 4205(g). Since the Act was signed into law, 124 requests have been approved, as compared to 34 total in 2018.
Expanded Use of Home Confinement. The FSA authorizes BOP to maximize the use of home confinement for low risk offenders. Currently, there are approximately 2,000 inmates on Home Confinement. The legislation also expands a pilot program for eligible elderly and terminally ill offenders to be transitioned to Home Confinement as part of a pilot program. Since enactment of the law, 379 inmates have been approved for participation under the pilot program.
Drug Treatment. The BOP has always had a robust drug treatment strategy. Offenders with an identified need are provided an individualized treatment plan to address their need. In FY 2019, approximately 14,800 offenders enrolled in Residential Drug Abuse Program (RDAP), almost 21,000 offenders enrolled in Non-residential drug treatment, and almost 23,000 offenders participated in Drug Education.
Medication Assisted Treatment (MAT). The FSA requires BOP to assess the availability of and the capacity to treat heroin and opioid abuse through evidence-based programs, including medication-assisted treatment. In the wake of the opioid crisis, this initiative is important to improve reentry outcomes. Every inmate within 15 months of release who might qualify for MAT has been screened.
Effective Re-Entry Programming. FSA implementation includes helping offenders successfully reintegrate into the community – a critical factor in preventing recidivism and, in turn, reducing the number of crime victims. Finding gainful employment is an important part of that process. In furtherance of this goal, the BOP launched a “Ready to Work” initiative to connect private employers with inmates nearing release under the FSA.
Other BOP programs directed towards the full implementation of the FSA include the operation of twenty pilot dog programs, the development of a youth mentoring program, the identification of a dyslexia screening tool, and issuance of a new policy for its employees to carry and store personal weapons on BOP institution property. BOP has also updated existing guidance and training concerning the use of restraints on pregnant inmates, as well as verified that existing policies and contracts comply with the FSA requirement to provide sanitary products to female offenders free of charge. BOP also offers de-escalation training to its employees and officers in accordance with the Act. Finally, BOP has updated its mental health awareness training regarding inmates with psychiatric disorders, and more than 33,700 BOP employees have already received the updated training.
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.
District Court Orders Michigan Seafood and Salad Processor to Comply with Food Safety RequirementsRead the Press Release
A federal court in eastern Michigan permanently enjoined a Hamtramck, Michigan, firm from processing or distributing ready-to-eat seafood salads as well as non-seafood salads, pierogis, and dips processed under insanitary conditions, the Department of Justice announced today.
In a complaint filed on Jan. 13, 2020, at the request of the U.S. Food and Drug Administration (FDA), the United States alleged that defendants Home Style Foods Inc., the company’s president, Michael J. Kowalski, and the company’s quality manager, Juan Valesquez, violated the Food, Drug and Cosmetic Act by processing and distributing fish products and other food, including salads, pierogis, and dips, in a facility where government inspectors previously found evidence of listeria contamination. The complaint also alleged violations of seafood safety regulations designed to mitigate hazards associated with the processing of fish and fishery products. According to the complaint, FDA issued a warning letter to Home Style Foods in April 2016.
“The Department of Justice is committed to safeguarding consumer health by rigorously enforcing America’s food safety laws,” said Assistant Attorney General Jody Hunt for the Justice Department’s Civil Division. “We will continue to work with FDA to ensure that companies take food sanitation and safety laws seriously.”
“Michigan’s food supply should always be safe, and that is why the Justice Department takes this case so seriously,” said U.S. Attorney Matthew Schneider for the Eastern District of Michigan. “There simply is no excuse for serving contaminated food products.”
“After repeated food safety violations, the FDA worked with DOJ to obtain this injunction in order to prevent potentially contaminated food from reaching consumers. The company failed to take the appropriate corrective actions resulting in this action,” said FDA Chief Counsel Stacy Cline Amin, J.D. “When a company fails to follow the law, the government will take action to protect the food supply.”
The defendants agreed to be bound by a consent decree filed with the complaint in U.S. District Court for the Eastern District of Michigan. The order entered by the Court permanently enjoins the defendants from violating the Food, Drug, and Cosmetic Act and requires Home Style Foods to stop processing and distributing its products unless it complies with specific remedial measures set forth in the injunction.
Trial Attorney Danielle Serbin of the Civil Division’s Consumer Protection Branch represented the United States with the assistance of Noah T. Katzen, Associate Chief Counsel, U.S. Department of Health and Human Services, Office of the General Counsel, Food and Drug Division, and the U.S. Attorney’s Office for the Eastern District of Michigan.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of Michigan, visit its website at www.justice.gov/usao-edmi.
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.
Department of Justice Antitrust Division to Co-Host Workshop on Venture Capital Investment and Antitrust Law with Stanford UniversityRead the Press Release
The Department of Justice and Stanford University will hold a public workshop on Feb. 12, 2020, to explore the intersection between venture capital and antitrust law. The full-day workshop will discuss trends in venture capital investment from the 1990s through present, with a focus on what antitrust enforcers can learn from investors about how to identify nascent competitors in markets dominated by technology platforms. The workshop will also address proposed solutions to concerns that competitive alternatives to the market-leading platforms are not attractive investment opportunities.
The Justice Department’s Antitrust Division and the Stanford Graduate School of Business will co-host the workshop, which will bring together venture capitalists, academics from both law and business, and other tech industry stakeholders. The Antitrust Division and Stanford intend to explore the practical considerations that early stage investors face when calculating the risks of investing in a startup and exit strategies.
“The Antitrust Division is excited to partner with Stanford University on this workshop to learn from participants in the venture capital industry, who must predict the future of technology markets on a daily basis,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “Private investment plays a critical role in the dynamic competition that characterizes many technology markets, and it is fundamental to our mission at the Antitrust Division that we understand how market conditions today affect incentives for that investment.”
Assistant Attorney General Delrahim will open the workshop, followed by a fireside chat with Michael Moritz of Sequoia Capital regarding trends in venture capital investment. Next, Stanford Law Professor Doug Melamed will introduce the basic legal framework for venture capitalists to think about antitrust principles, and then a series of panels will examine: (1) kill zones; (2) monetizing data; and (3) investing in platform-dominated markets. Dean Jonathan Levin of the Stanford Graduate School of Business will open the workshop’s afternoon session, which will conclude with a roundtable discussion recapping the competitive concerns raised throughout the day and evaluating proposed solutions to those concerns.
The Department of Justice invites comments from the public on the topics covered by this workshop. Interested parties may submit public comments online now through March 14, 2020, at [email protected].
The workshop is free and open to the public and will take place at Paul Brest Hall, 555 Salvatierra Walk, Stanford University, from 9 a.m. Pacific Time to 5 p.m. Pacific Time. A recording of the workshop will be available on the Division’s website. Registration information, an agenda, directions to the event, and a list of speakers will be available in the near future on the event webpage. Please register in advance for the workshop at https://law.stanford.edu/event/public-workshop-on-venture-capital-and-antitrust/. Members of the press also should copy [email protected] on their registration email. Seating will be on a first-come, first-served basis.
Reasonable accommodations for people with disabilities are available upon request. If you need such an accommodation, please contact the Antitrust Division at [email protected]. Such requests should include a detailed description of the accommodations needed and a way to contact you if we need more information.
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.
Chicago Man Charged with Stalking Federal Probation OfficerRead the Press Release
CHICAGO — A Chicago man who was recently released from federal prison has been arrested for allegedly stalking and harassing his probation officer.
ISAAC MYLES, 50, was arrested Friday on a federal complaint charging him with cyberstalking. A detention hearing is scheduled for today before U.S. Magistrate Judge Jeffrey Cole in Chicago.
The charge was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; Jason R. Wojdylo, acting Chief Deputy U.S. Marshal for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI. The government is represented by Assistant U.S. Attorney Michael J. Kelly.
Myles has been on supervised release since July 2018 after completing a federal prison sentence. An officer from the U.S. Probation Department was assigned to meet with Myles at his home or workplace and monitor his compliance with court-ordered conditions of release.
According to the complaint, Myles partially exposed his genitals to the officer during an official visit to Myles’s home in September 2018. The Probation Department then reassigned supervision of Myles to a different probation officer. More recently, Myles repeatedly called the initial officer, leaving sexually explicit voicemails on her phone and referring to the officer in obscene and degrading terms, the complaint states. From Dec. 1, 2019, to Jan. 2, 2020, approximately 29 calls were placed from Myles’s phone to the officer’s phone, according to the complaint.
The public is reminded that a complaint is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt. Cyberstalking is punishable by up to five years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
Kenner Psychiatrist Sentenced in Scheme to Defraud Medicare by Soliciting and Receiving Kickback Payments for Medically Unnecessary Home Health ReferralsRead the Press Release
NEW ORLEANS - U.S. Attorney Peter G. Strasser announced that PADMINI NAGARAJ, age 62, a resident of Kenner, Louisiana was sentenced on January 9, 2020 by U.S. District Judge Barry W. Ashe to four years’ probation, which includes 250 hours of community service, in connection with her guilty plea to conspiracy to commit health care fraud. In addition, NAGARAJ was fined $10,000 and agreed to pay restitution to the Medicare program.
According to court records, NAGARAJ admitted that, between September 2012 and July 2014, in return for accepting illegal health care kickbacks, she referred beneficiaries who she treated at a Louisiana-based psychiatric facility for medically unnecessary home health services and further fraudulently certified that the beneficiaries were eligible to receive such services. NAGARAJ admitted that she accepted $1,500 a month from four different home health agencies, which were disguised kickbacks. NAGARAJ also admitted that she moved her patients to the different home health agencies based on whichever agency agreed to pay her a kickback. The home health agencies then submitted the fraudulent claims to Medicare and were reimbursed for the medically unnecessary home health services.
U.S. Attorney Strasser praised the work of the Federal Bureau of Investigation and the Department of Health and Human Services for their work investigating the case. The prosecution of the case is being handled by Jared Hasten, Katherine Payerle, and Claire Yan of the Criminal Division’s Fraud Section.
Former Air Cargo Executive Extradited from Italy for Price-FixingRead the Press Release
Maria Christina “Meta” Ullings, the former senior vice president of cargo sales and marketing for Martinair N.V. (Martinair Cargo) and a Dutch national, was extradited from Italy, the Department of Justice announced today.
On Sept. 21, 2010, in the U.S. District Court for the Northern District of Georgia in Atlanta, Ullings was indicted for participating in a long-running worldwide conspiracy to fix prices of air cargo. A fugitive for almost 10 years, Ullings was apprehended by Italian authorities in July 2019 while visiting Sicily. Ullings initially contested extradition in the Italian courts, but after the Court of Appeals of Palermo ruled that she be extradited, she waived her appeal. She arrived in Atlanta on Jan. 10 and made her initial appearance today in the U.S. District Court for the Northern District of Georgia.
“This extradition ruling by the Italian courts – the seventh country to extradite a defendant in an Antitrust Division case in recent years, and the second to do so based solely on an antitrust charge – demonstrates that those who violate U.S. antitrust laws and seek to evade justice will find no place to hide,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “The Division appreciates the cooperation of the Italian authorities in this matter. With the assistance of our law enforcement colleagues at home and around the world, the Division will aggressively pursue every avenue available in bringing price fixers to justice.”
According to the indictment, Ullings conspired with others to suppress and eliminate competition by fixing and coordinating certain surcharges, including fuel surcharges, charged to customers located in the United States and elsewhere for air cargo shipments. These air cargo shipments included heavy equipment, perishable commodities, and consumer goods destined for American consumers and shipped by American producers. Ullings is alleged to have participated in the conspiracy from at least as early as January 2001 until at least February 2006.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Including Ullings, a total of 22 airlines and 21 executives have been charged in the Justice Department’s investigation into price fixing in the air transportation industry. To date, more than $1.8 billion in criminal fines have been imposed and seven executives have been sentenced to serve prison time.
Ullings is charged with violating the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The Antitrust Division and the FBI led the United States’ extradition effort. Assistance with the extradition was provided by the Department of Justice Criminal Division’s Office of International Affairs and the U.S. Marshals Service. The investigation into the air transportation industry has been conducted by the Antitrust Division, the FBI, the Department of Transportation’s Office of the Inspector General, and the U.S. Postal Service’s Office of the Inspector General.
Anyone with information concerning price fixing or other anticompetitive conduct is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.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.
DOJ and FTC Announce Draft Vertical Merger Guidelines for Public CommentRead the Press Release
The Department of Justice today withdrew the 1984 DOJ Non-Horizontal Merger Guidelines, and, together with the Federal Trade Commission (FTC), released new draft 2020 Vertical Merger Guidelines (draft guidelines) and seeks public comment. The draft guidelines, open to comment for 30 days, describe how the federal antitrust agencies review vertical mergers to evaluate whether the mergers violate antitrust law. Vertical mergers combine two or more companies that operate at different levels in the same supply chain. The draft guidelines outline the agencies’ principal analytical techniques, practices, and enforcement policy for vertical mergers.
The agencies will review and consider the public comments before issuing final Vertical Merger Guidelines. The agencies cooperated closely in preparing the draft guidelines, which reflect the agencies’ significant experience in analyzing vertical mergers. The guidelines are intended to assist the business community and antitrust practitioners by providing transparency about the agencies’ antitrust enforcement policy with respect to vertical mergers.
“I appreciate the Antitrust Division working to update this decades-old statement regarding the practices and policies of the federal enforcement agencies in this critical area, in coordination with the Federal Trade Commission,” said Deputy Attorney General Jeffrey A. Rosen. “As this effort demonstrates, the Department of Justice is committed to principled and transparent antitrust enforcement, which promotes free enterprise, market competition, and ultimately the welfare of American consumers. We look forward to public input and finalizing this important work, along with the FTC.”
“While many vertical mergers are competitively beneficial or neutral, both the Department and the Federal Trade Commission have recognized for over 25 years that some vertical transactions can raise serious concern,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “The revised draft guidelines are based on new economic understandings and the agencies’ experience over the past several decades and better reflect the agencies’ actual practice in evaluating proposed vertical mergers. Once finalized, the Vertical Merger Guidelines will provide more clarity and transparency on how we review vertical transactions. I look forward to receiving comments on these draft guidelines and working with the Federal Trade Commission in finalizing them.”
“Challenging anticompetitive vertical mergers is essential to vigorous enforcement. The agencies’ vertical merger policy has evolved substantially since the issuance of the 1984 Non-Horizontal Merger Guidelines, and our guidelines should reflect the current enforcement approach. Greater transparency about the complex issues surrounding vertical mergers will benefit the business community, practitioners, and the courts,” said FTC Chairman Joseph J. Simons. “We invite comments from all stakeholders to help ensure that the guidelines clearly and accurately convey the agencies’ antitrust enforcement policy with respect to vertical mergers.”
The draft guidelines adopt the principles and analytical frameworks in the agencies’ Horizontal Merger Guidelines, including market definition, the analytic framework for evaluating entry considerations, the treatment of the acquisition of a failing firm or its assets, and the acquisition of a partial ownership interest. The draft guidelines describe the analytical and enforcement considerations that are specific to vertical mergers.
The draft guidelines:
- describe potential anticompetitive effects resulting from vertical mergers, which may include both unilateral and coordinated effects;
- identify foreclosure and raising rivals’ costs and access to competitively sensitive information as potential elements of antitrust harm under unilateral effects;
- describe an analytic framework for analyzing potential anticompetitive effects of foreclosure and raising rivals’ costs;
- discuss how the elimination of double marginalization may mitigate or completely neutralize the potential anticompetitive effects of vertical mergers;
- discuss cognizable merger efficiencies that are specific to vertical mergers;
- provide a number of examples to provide more clarity about the agencies’ analytical methods in evaluating vertical mergers.
Comments on the draft guidelines can be emailed to [email protected] and [email protected], and must be received no later than Feb. 11, 2020.
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.
Violeta E. Manahan Sentenced to Federal Prison for Conspiring to Distribute MethamphetamineRead the Press Release
SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant Violeta E. Manahan, age 59, from Dededo, Guam, was sentenced in the United States District Court of Guam to 41 months imprisonment for Conspiracy to Distribute Methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1) and 846. The Court also ordered three years of supervised release following imprisonment, 50 hours of community service, and a mandatory $100 assessment fee. In addition, defendants convicted of a federal drug offense may no longer qualify for certain federal benefits.
From January 1, 2013, through March 7, 2017, the United States Postal Inspection Service and the Drug Enforcement Administration intercepted two packages in the mail. The packages were found to contain over 110 grams of methamphetamine hydrochloride (“ice”). The investigation revealed that Jimmy Law mailed the packages to his ex-girlfriend, Manahan. Once on Guam, Manahan distributed the drug to others on island.
U.S. Attorney Anderson stated, “Our federal law enforcement partners continue to aggressively interdict drug shipments destined for Guam via our mail system. We will identify and target any people or organizations that engage in this illicit conduct. As this case reveals, there are substantial federal penalties for aiding or conspiring with others to distribute controlled substances. Those with any role in drug trafficking are potential targets for federal prosecution.”
This case was the result of a joint investigation by the United States Postal Inspection Service and the Drug Enforcement Administration. The case was prosecuted by Rosetta L. San Nicolas, Assistant United States Attorney in the District of Guam.
Seafood Processor and Owner Sentenced for Selling Foreign Crab Meat Falsely Labeled as Product of USARead the Press Release
Capt. Neill’s Seafood Inc. (Capt. Neill’s) of Columbia, North Carolina, and Phillip R. Carawan, the owner, President, and Chief Executive of Capt. Neill’s, were sentenced today by U.S. District Judge Louise Flanagan, in New Bern, North Carolina. Capt. Neill’s was sentenced to a period of five years’ probation and is required to pay a $500,000 fine. Carawan was sentenced to 12 months and one day in prison, followed by three years of supervised release, and is required to pay a $250,000 fine for his role in falsely labeling millions of dollars’ worth of foreign crab meat as “Product of USA.”
“Individuals and companies who seek to profit from the fraudulent mislabeling of seafood harm American fishermen and consumers,” said Assistant Attorney General Jeffrey Bossert Clark for the Justice Department’s Environment and Natural Resources Division. “We are committed to working with our law enforcement partners to hold accountable those who engage in seafood fraud and mislabeling.”
“Seafood mislabeling is consumer fraud that undermines efforts of hardworking, honest fisherman and the free market by devaluing the price of domestic seafood,” said Acting U.S. Attorney General Norman Acker III for the Eastern District of North Carolina. “In this case, the fraudulent scheme artificially deflated the cost of domestic blue crab and gave Carawan an unacceptable economic advantage over law-abiding competitors.”
“Combating seafood fraud continues to be a priority for the NOAA Office of Law Enforcement,” said Director Jim Landon of the Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA) Office of Law Enforcement. “The effects of this type of fraud impact not only the consumer, but also honest fishermen and the livelihoods of others in the fishing industry. We will continue to identify and investigate those who seek to undermine the legal requirement to accurately label seafood products.”
Capt. Neill’s and Carawan were engaged in the business of purchasing, processing, packaging, transporting, and selling seafood and seafood products, including crab meat from domestically harvested blue crab. According to their plea agreements, Capt. Neill’s and Carawan admitted that beginning at least as early as 2012, and continuing through June 16, 2015, Carawan directed company employees to repack foreign crab meat into containers labeled “Product of USA,” which Capt. Neill’s then sold to customers as jumbo domestically harvested blue crab. The falsely labeled crabmeat was then sold primarily to wholesale membership clubs, but also to retailers. Capt. Neill’s and Carawan further admitted that during that time period, the retail market value of the mislabeled crabmeat they sold was $4,082.841.
As part of his plea agreement, Carawan further admitted that he and his company could not and did not process sufficient quantities of domestic blue crab to meet customer demands. To make up the shortfall, Carawan and his company used foreign crab meat to fulfill customer orders. During the periods when the company did not have a sufficient supply of domestic crab, Carawan and Capt. Neill’s purchased crab meat (not live crabs) from South America and Asia.
As a result of the plea and sentence, Capt. Neill’s will pay restitution to persons whom the government confirmed purchased Capt. Neill’s jumbo crab meat between 2012 and June 16, 2015. For individuals who wish to see whether they qualify for restitution and for further information on the prosecution, please visit the following site: https://www.justice.gov/usao-ednc/captneillsseafoodvictiminformationpage
This case was part of an ongoing effort by the NOAA Office of Law Enforcement, in coordination with the Food and Drug Administration, and the Department of Justice to detect, deter, and prosecute those engaged in the false labeling of crab meat.
This prosecution is being handled by the Justice Department’s Environmental Crimes Section and the U.S. Attorney’s Office for the Eastern District of North Carolina. The government is represented by Senior Litigation Counsel Banumathi Rangarajan and Trial Attorney Gary N. Donner.
Justice Department Recovers over $3 Billion from False Claims Act Cases in Fiscal Year 2019Read the Press Release
The Department of Justice obtained more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending Sept. 30, 2019, Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division announced today. Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $62 billion.
“The significant number of settlements and judgments obtained over the past year demonstrate the high priority this administration places on deterring fraud against the government and ensuring that citizens’ tax dollars are well spent,” said Assistant Attorney General Hunt. “The continued success of the department’s False Claims Act enforcement efforts are a testament to the tireless efforts of the civil servants who investigate, litigate, and try these important cases as well as to the fortitude of whistleblowers who report fraud.”
Of the more than $3 billion in settlements and judgments recovered by the Department of Justice this past fiscal year, $2.6 billion relates to matters that involved the health care industry, including drug and medical device manufacturers, managed care providers, hospitals, pharmacies, hospice organizations, laboratories, and physicians. This is the tenth consecutive year that the department’s civil health care fraud settlements and judgments have exceeded $2 billion. The amounts included in the $2.6 billion reflect only federal losses, but in many of these cases the department was instrumental in recovering additional millions of dollars for state Medicaid programs.
In addition to combating health care fraud, the False Claims Act serves as the government’s primary civil tool to redress false claims for federal funds and property involving a multitude of other government operations and functions. The Act helps to protect our military and first responders by ensuring that government contractors provide equipment that is safe, effective, and cost efficient; to protect American businesses and workers by promoting compliance with customs laws, trade agreements, visa requirements, and small business protections; and to protect other critical government programs ranging from the provision of disaster relief funds to farming subsidies.
In 1986, Congress strengthened the Act by increasing incentives for whistleblowers to file lawsuits alleging false claims on behalf of the government. These whistleblower, or qui tam, actions comprise a significant percentage of the False Claims Act cases that are filed. If the government prevails in a qui tam action, the whistleblower, also known as the relator, typically receives a portion of the recovery ranging between 15 and 30 percent. Whistleblowers filed 633 qui tam suits in fiscal year 2019, and this past year the department recovered over $2.1 billion in these and earlier filed suits.
Health Care Fraud
The department investigates and resolves matters involving a wide array of health care providers, goods, and services. The department’s health care fraud enforcement efforts not only recover money for federal health care programs, such as Medicare, Medicaid, and TRICARE, but also help deter fraud schemes that put patients at risk and increase health care costs.
Reflecting the department’s commitment to holding drug companies accountable for their role in the opioid crisis, two of the largest recoveries involving the health care industry this past year came from opioid manufacturers. In one matter, as part of a global resolution of criminal and civil claims, Insys Therapeutics paid $195 million to settle civil allegations that it paid kickbacks to induce physicians and nurse practitioners to prescribe Subsys for their patients. The kickbacks allegedly took the form of sham speaker events, jobs for the prescribers’ relatives and friends, and lavish meals and entertainment. The government also alleged that Insys improperly encouraged physicians to prescribe Subsys for patients who did not have cancer, and lied to insurers about patients’ diagnoses to ensure payment by federal healthcare programs. In another matter, Reckitt Benckiser Group plc paid a total of $1.4 billion to resolve criminal and civil liability related to the marketing of the opioid addiction treatment drug Suboxone, which is a formulation of the opioid buprenorphine. As part of the resolution, RB Group paid $500 million to the United States to resolve civil allegations that it directly or through subsidiaries promoted Suboxone to physicians who were writing prescriptions for uses that were unsafe, ineffective, and medically unnecessary; promoted Suboxone Film using false and misleading claims that it was less susceptible to diversion, abuse, and accidental pediatric exposure than other buprenorphine products; and took steps to delay the entry of generic competition in order to improperly control pricing of Suboxone.
The department also pursued other cases involving drug manufacturers. For example, Avanir Pharmaceuticals paid over $95 million to resolve allegations that it paid kickbacks and engaged in false and misleading marketing to induce healthcare providers in long term care facilities to prescribe the drug Neudexta for behaviors commonly associated with dementia patients, which is not an approved use of the drug. The department also continued to investigate efforts by drug manufacturers to facilitate increases in drug prices by funding the co-payments of Medicare patients. Congress included co-pay 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. This year, seven drug manufacturers – Actelion Pharmaceuticals US Inc., Amgen Inc., Astellas Pharma US Inc., Alexion Pharmaceuticals, Inc., Jazz Pharmacueticals Inc., Lundbeck LLC, and US Worldmeds LLC – paid a combined total of over $624 million to resolve claims that they illegally paid patient copays for their own drugs through purportedly independent foundations that the companies in fact treated as mere conduits.
The department also reported substantial recoveries involving a variety of other healthcare providers. Pathology laboratory company Inform Diagnostics, formerly known as Miraca Life Sciences Inc., paid $63.5 million to resolve allegations that it paid kickbacks to referring physicians in the form of subsidies for electronic health records (EHR) systems and free or discounted technology consulting services. Greenway Health LLC, an EHR software vendor, paid over $57 million to resolve allegations that it misrepresented the capabilities of its EHR product “Prime Suite” and provided unlawful remuneration to users to induce them to recommend Prime Suite to prospective new customers. Encompass Health Corporation (formerly known as HealthSouth Corporation), the nation’s largest operator of inpatient rehabilitation facilities (IRFs), paid $48 million to resolve allegations that some of its IRFs provided inaccurate information to Medicare to maintain their status as an IRF and to earn a higher rate of reimbursement, and that some admissions to its IRFs were not medically necessary.
Procurement Fraud
In the past year, the department also pursued a variety of fraud matters involving the government’s purchase of goods and services. For example, five South Korea-based companies – SK Energy Co. Ltd., GS Caltex Corporation, Hanjin Transportation Co. Ltd., Hyundai Oilbank Co. Ltd. and S-Oil Corporation – agreed to resolve allegations that they engaged in anticompetitive conduct targeting contracts to supply fuel to the U.S. military in South Korea and made false statements to the government in connection with their agreement not to compete. The United States Department of Defense paid substantially more for fuel supply services in South Korea than it would have absent collusion on the fuel supply contracts. In total, the five companies paid over $162 million as part of the False Claims Act settlements.
The Civil Division entered into a $34.6 million settlement with aluminum extrusion manufacturer Hydro Extrusion Portland Inc., formerly known as Sapa Profiles Inc. (SPI), to resolve SPI’s civil liability for causing a government contractor to invoice NASA and the Department of Defense’s Missile Defense Agency (MDA) for aluminum extrusions that did not comply with contract specifications. Government contractors purchased aluminum extrusions from SPI for use on rockets for NASA and missiles provided to the MDA. SPI provided those contractors with falsified certifications after altering the results of tensile tests designed to ensure the consistency and reliability of aluminum extrusions. Several of the rockets used by NASA crashed, resulting in the loss of the NASA payloads that they carried. SPI also resolved related criminal claims arising from the same conduct.
The department recovered over $27 million from Northrop Grumman Systems Corporation (NGSC) in a settlement resolving False Claims Act allegations related to two battlefield communications contracts with the United States Air Force. The settlement resolved allegations that NGSC billed the Air Force for labor hours purportedly incurred by individuals stationed in the Middle East who had not actually worked the hours claimed.
In separate settlement agreements with the Civil Division, American Airlines paid $22 million and British Airways Plc/Iberia Airlines paid $5.8 million to resolve allegations that they falsely reported the times they transferred possession of United States mail to foreign postal administrations or other intended recipients under contracts with the United States Postal Service (USPS). USPS contracted with the airlines to take possession of receptacles of United States mail at six locations in the United States or at various Department of Defense and Department of State locations abroad, and then timely deliver that mail to numerous international and domestic destinations.
The software development company Informatica LLC paid $21.57 million to resolve allegations that it caused the government to be overcharged by providing misleading information about its commercial sales practices that was used in General Services Administration (GSA) contract negotiations. Informatica allegedly provided false information concerning its commercial discounting practices for its products and services to resellers, who then used that false information in negotiations with GSA for government-wide contracts. The false disclosures caused GSA to agree to less favorable pricing, and, ultimately, government purchasers to be overcharged.
Other Fraud Recoveries
The number and variety of judgments and settlements announced during fiscal year 2019 reflect the diversity of fraud recoveries arising under the False Claims Act. For example, Duke University paid $112.5 million to resolve allegations that it violated the False Claims Act by submitting applications and progress reports that contained falsified research on federal grants to the National Institutes of Health (NIH) and to the Environmental Protection Agency (EPA). Luke Hillier, the majority owner and former Chief Executive Officer of Virginia-based defense contractor ADS, Inc., paid $20 million to settle allegations that he fraudulently obtained federal set-aside contracts reserved for small businesses that his company was ineligible to receive. In order to qualify as a small business, companies must satisfy defined eligibility criteria, including requirements concerning size, ownership, and operational control. The government alleged that Hillier caused ADS to falsely represent that it qualified as a small business concern and that, as a result of Hillier’s representations, his company was awarded numerous small business set-aside contracts for which it was ineligible. The government previously resolved related claims against ADS for $16 million and Charles Salle, the former general counsel of ADS, for $225,000.
The department also continued its efforts to hold accountable those who seek to abuse their license to remove minerals from federal lands in exchange for the payment of an appropriate royalty. This past year, gas marketer B. Charles Rogers Gas Ltd. (BCR) and its owners paid over $3.5 million to resolve allegations that they engaged in a scheme to reduce mineral royalty payments for natural gas removed from federal lands. Another individual who worked with BCR while employed as a gas supply manager at a natural gas distributor paid an additional $800,000 to resolve his alleged role in the scheme.
In another matter, Omega Protein Corp. and Omega Protein, Inc. paid $1 million to resolve allegations that it obtained a loan from the United States by falsely certifying compliance with federal environmental laws. A leading domestic producer of Omega-3 rich fish oil, protein-rich specialty fishmeal, and organic fish solubles, Omega allegedly certified to the Oceanic and Atmospheric Administration, an agency within the Department of Commerce, that it was complying with federal environmental laws while knowingly and unlawfully discharging pollutants and oil into U.S. waters.
North Greenville University (NGU) paid $2.5 million to resolve allegations that it submitted false claims to the U.S. Department of Education. Title IV of the Higher Education Act (HEA) prohibits any institution of higher education that receives federal student aid from making incentive payments to student recruiters based on their success in securing student enrollment. The settlement resolves allegations that NGU compensated a student recruiting company based on the number of students who enrolled in NGU’s programs, in violation of the prohibition on incentive compensation.
Holding Individuals Accountable
The department continued its commitment to use the False Claims Act and other civil remedies to deter and redress fraud by individuals as well as corporations. In addition to the settlements with Luke Hillier and Charles Salle discussed above, the following are additional examples of recoveries involving individuals.
The department negotiated separate settlements with the individual owners of seven Osteo Relief Institutes for a total recovery from the owners and their clinics of more than $7.1 million. The settlements resolved allegations that the defendants knowingly billed Medicare for medically unnecessary viscosupplementation injections and medically unnecessary knee braces. Viscosupplementation is a treatment for osteoarthritis, in which a doctor injects a gel-like fluid into a patient’s knee joint to act as a lubricant and to supplement the natural properties of joint fluid. The government alleged that these clinics administered viscosupplementation injections to patients who did not need them, used multiple brands of viscosupplements successively on patients without clinical support, and used discounted viscosupplements reimported from foreign countries. The government also alleged that they provided unnecessary custom knee braces to patients.
In addition to negotiating a settlement with Vanguard Healthcare LLC for approximately $18 million in allowed claims to resolve allegations of grossly substandard nursing home services, the department also pursued Vanguard’s majority owner and CEO and Vanguard’s former director of operations. These two individuals collectively paid $250,000 to resolve allegations that five Vanguard-owned skilled nursing facilities submitted false claims to Medicare and Medicaid for nursing home services that were grossly substandard or worthless, including allegations that the facilities failed to administer medications as prescribed, failed to provide standard infection control or wound care, failed to take prophylactic measures to prevent pressure ulcers, and failed to meet basic nutrition and hygiene needs of their residents.
This year, the department also obtained a $21 million settlement with a compounding pharmacy, Diabetic Care Rx LLC (which does business as Patient Care America), and a private equity firm, Riordan, Lewis & Haden Inc., (RLH) to resolve a lawsuit alleging that they submitted false claims to Tricare, the federal health care program for military members and their families, through their involvement in a kickback scheme to generate referrals of prescriptions for expensive pain creams, scar creams, and vitamins, regardless of patient need. At the same time as this settlement with Diabetic Care and RLH, the department secured settlements totaling over $300,000 with Diabetic Care Rx’s Chief Executive Officer and former Vice President of Operations. All of the settlements were based on the defendants’ ability to pay.
Recoveries in Whistleblower Suits
Of the $3 billion in settlements and judgments reported by the government in fiscal year 2019, over $2.1 billion arose from lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $265 million to the individuals who exposed fraud and false claims by filing these actions.
The number of lawsuits filed under the qui tam provisions of the Act has grown significantly since 1986, with 633 qui tam suits filed this past year – an average of more than 12 new cases every week.
“Whistleblowers continue to play a critical role identifying new and evolving fraud schemes that might otherwise remain undetected,” said Assistant Attorney General Hunt. “Taxpayers have benefitted greatly from these individuals who are often required to make substantial sacrifices to bring these schemes to light.”
In 1986, Senator Charles Grassley and Representative Howard Berman led the successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud. In 2009 and 2010, further improvements were made to the False Claims Act and its whistleblower provisions. Congress also included in the False Claims Act authority for the government to dismiss cases that do not advance the goal of fraud prevention, and during the past year the government made increasing use of this tool to help prioritize and protect the expenditure of government resources.
Finally, Assistant Attorney General Hunt expressed appreciation for the many dedicated public servants throughout the department’s Civil Division and the U.S. Attorneys’ Offices, as well as the agency Offices of Inspector General and the many other federal and state agencies that contributed to the department’s False Claims Act recoveries this past fiscal year.
“The accomplishments announced today reflect the extraordinary efforts of the men and women throughout the government committed to protecting the federal fisc and the integrity of the government’s programs,” said Assistant Attorney General Hunt. “Having served many years in the Civil Division, I have witnessed the passion and dedication of the talented employees who have committed their careers to serving the American people and defending the interests of our great nation.”
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Except where indicated, the government’s claims in the matters described above are allegations only and there has been no determination of liability. The numbers contained in this press release may differ slightly from the original press releases due to accrued interest.
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.
Federal Court in Savannah, Georgia, Enters Permanent Injunction Against Tax Return PreparerRead the Press Release
The U.S. District Court for the Southern District of Georgia has enjoined Andrea Nadel and her business, EZ Accounting & Tax Service LLC (EZ Accounting), along with Estelle Nadel, from preparing federal tax returns for others.
According to the United States’ complaint, Andrea Nadel, EZ Accounting, and Estelle Nadel prepared federal income tax returns that reported false Schedule A and Schedule C deductions in order to manipulate their customers’ claims for the Earned Income Tax Credit and reduce their taxable income. The complaint alleges that the defendants prepared returns that falsely claimed deductions for gifts to charity, unreimbursed employee expenses, tax preparation fees, and taxes paid, and that their practice of claiming these false deductions has resulted in significant lost tax revenues. As set out in the complaint, earlier this year, Andrea Nadel was indicted and pleaded guilty to aiding and assisting the preparation of a false tax return in violation of 26 U.S.C. § 7206(2).
Andrea Nadel, EZ Accounting, and Estelle Nadel agreed to entry of the permanent injunctions without admitting any factual allegations in the complaint.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams and taxpayers seeking a return preparer should remain vigilant. The IRS has information on its website about selecting a return preparer and has launched a free directory of federal tax preparers.
In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Cling Kaipat Sentenced to 46 Months in Prison for Possession of a Stolen Firearm Following a Residential BurglaryRead the Press Release
SAIPAN, CNMI - SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that on January 3, 2020, Cling Philip Kaipat, also known as “Gilbert Kaipat,” was sentenced in U.S. District Court to 46 months imprisonment for Possession of a Stolen Firearm, in violation of 18 U.S.C. § 922(j). Kaipat was also ordered to serve three years of supervised release following his term in prison. He must also perform 50 hours of community service, unless he is gainfully employed during his release.
On November 5, 2015, Kaipat burglarized a home on Saipan. During the course of the crime, he stole a 9mm Smith and Wesson handgun, several rounds of ammunition, and other items. C.N.M.I. Department of Public Safety (DPS) investigators obtained surveillance from a nearby grocery store. The footage depicted an individual wearing dark pants and a dark shirt walking in the direction of the residence. DPS canvassed the neighborhood asking residents whether anyone recognized the individual in the surveillance video. Ultimately, someone identified Kaipat as the perpetrator. The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) then began a federal investigation.
U.S. Attorney Anderson stated, “The results of this case demonstrate the benefits of our local and federal law enforcement partners working together in addressing dangers to our communities. Federal law prohibits the possession of firearms and ammunition under a variety of circumstances, including where the gun itself is stolen. The Department of Justice will continue to focus resources on these prosecutions in an effort to prevent violent crime.”
This investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives, with the assistance and cooperation of the C.N.M.I. Department of Public Safety. The case was prosecuted by Garth R. Backe, Assistant United States Attorney for the District of the Northern Mariana Islands.
Justice Department Announces Addendum to Swiss Bank Program Category 2 Non-Prosecution Agreement with Union Bancaire Privée, UBP SARead the Press Release
The Department of Justice announced today that it has signed an addendum to a non-prosecution agreement with Union Bancaire Privée, UBP SA (UBP), a private bank headquartered in Geneva, Switzerland. The original non-prosecution agreement was signed on Jan. 6, 2016. At that time, UBP reported that it held and managed 2,919 U.S. Related Accounts, with assets under management of approximately $4.9 billion, and paid a penalty of $187,767,000. In reaching today’s agreement, UBP acknowledges it should have disclosed additional U.S.-related accounts to the department at the time of the signing of the non-prosecution agreement.
“Foreign banks that participated in the Swiss Bank Program were obligated to identify all accounts in which U.S. taxpayers held an interest, directly or indirectly,” said Richard E. Zuckerman, Principal Deputy Assistant Attorney General for the Tax Division. “Today’s agreement reflects our continued commitment to ensuring that when entities cooperate and make disclosures to the Department, that they do so fully.”
The Swiss Bank Program provided a path for Swiss banks to resolve potential criminal liabilities in the United States relating to offshore banking services provided to United States taxpayers. Banks eligible to enter the program were required to advise the department that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. As participants in the program, they were required to make a complete disclosure of their cross-border activities, provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers had a direct or indirect interest, cooperate in treaty requests for account information, and provide detailed information about the transfer of funds into and out of U.S.-related accounts, including undeclared accounts.
The department executed non-prosecution agreements with 80 banks between March 2015 and January 2016. The department imposed a total of more than $1.36 billion in Swiss Bank Program penalties. Pursuant to today’s agreement, UBP will pay an additional sum of $14,000,000 and will provide supplemental information regarding its U.S.-related account population, which now includes 97 additional accounts.
Every bank that signed a non-prosecution agreement in the Swiss Bank Program had represented that it had disclosed all known U.S.-related accounts that were open at each bank between Aug. 1, 2008, and Dec. 31, 2014. Each bank also represented that it would, during the term of the non-prosecution agreement, continue to disclose all material information relating to its U.S.-related accounts. In reaching today’s agreement, UBP acknowledges that there were additional U.S.-related accounts that it knew about, or should have known about, but that were not disclosed to the Department at the time of the signing of the non-prosecution agreement. UBP has fully cooperated with the department with respect to the additional U.S.-related accounts.
Principal Deputy Assistant Attorney General Zuckerman thanked Thomas J. Sawyer, Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program, Senior Litigation Counsel Nanette L. Davis, and Attorney Kimberle E. Dodd of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.