District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Department of Justice Awards More Than $29 Million in Public Safety Funding to Northern District of OhioRead the Press Release
The Department of Justice today announced awards of more than $29 million to support public safety efforts in the Northern District of Ohio. The funding from the Office of Justice Programs (OJP), Office on Violence Against Women (OVW), and the Office of Community Oriented Policing Services (COPS) will support violent crime reduction, opioid/substance abuse reduction efforts, victim services, transitional housing for domestic violence victims, law enforcement activities, justice mental health, and juvenile justice.
“The Department of Justice is proud to announce funding for the Northern District of Ohio to further reduce violent crime, train judges and prosecutors, and serve victims of crime,” said Attorney General William P. Barr. “We applaud U.S. Attorney Justin Herdman for his fine work there, and we are confident that his stewardship of the additional resources will yield tangible results in his community.”
“It was an honor to announce the Department’s awards in and beyond Cleveland today, and to meet with those working on the ground to end domestic and sexual violence,” said Laura L. Rogers, Acting Director of the Office on Violence Against Women. “During Domestic Violence Awareness Month, it is heartening to hear about efforts in Cleveland, including the high risk team’s use of innovative strategies to prevent domestic violence homicides. I am delighted to announce funding for specialized courts, prosecutors, law enforcement, and victims services providers who are working around the clock to protect and bring justice for victims.”
“Community safety and justice is a round-the-clock operation in communities across the country, including the Northern District of Ohio,” said Katharine T. Sullivan, Principal Deputy Assistant Attorney General for the Office of Justice Programs. “This is why the Office of Justice Programs is pleased to announce critical grant funding going to the Northern District of Ohio that will support opioid and substance abuse reduction, bolster law enforcement, create specialized courts to handle domestic violence cases, and give over $3 million toward the Sexual Assault Kit Initiative that addresses the growing number of unsubmitted SAKs in law enforcement custody and helps provide resolution for victims when possible.”
OVW Acting Director Rogers made the announcement at the Cuyahoga County Justice Center on Wednesday afternoon along with U.S. Attorney Justin Herdman and Judge Sherrie Miday. Acting Director Rogers also recognized U.S. Attorney Herdman and his work in the Northern District of Ohio. Corresponding with National Domestic Violence Awareness Month, Acting Director Rogers and U.S. Attorney Herdman discussed the Department’s work in bolstering law enforcement and providing services in the District that victims need to find safety, stability, and justice.
“These funds will save lives, whether that is expanding a program that identifies the most dangerous abusers, provides emergency shelter to our most vulnerable victims, allows law enforcement to do a better job tracking and sharing crime data, just to name a few,” U.S. Attorney Justin Herdman said. “These grant awards demonstrate the Justice Department’s commitment to working across the state and country, with jurisdictions large and small, to make our communities safer.”
The awards were made by the three grant-making components of the Department of Justice—OVW, the Office of Community Oriented Policing Services and the Office of Justice Programs.
A full list of COPS awards is available online at https://cops.usdoj.gov/grants. OJP awards, organized under specific grant programs, are available online at https://ojp.gov/funding/Explore/OJPAwardData.htm. For OVW awards, visit https://www.justice.gov/ovw/awards.
About the Office of Community Oriented Policing Services:
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1994, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of approximately 130,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about the COPS Office, please visit www.cops.usdoj.gov.
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 justice system. More information about OJP and its components can be found at www.ojp.gov.
About the Office on Violence Against Women:
The Office on Violence Against Women provides leadership in developing the nation’s capacity to reduce violence through the implementation of the Violence Against Women Act and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing federal grant programs, OVW undertakes initiatives in response to special needs identified by communities facing acute challenges. Learn more at www.justice.gov/ovw.
Ohio Doctor Pleads Guilty to Unlawful Distribution of OpioidsRead the Press Release
The owner of a Cincinnati-area medical practice pleaded guilty today for illegally distributing opioids.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Keith Martin of the Drug Enforcement Administration’s (DEA) Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.
Raymond Noschang, M.D., 59, of Cincinnati, Ohio, pleaded guilty to eight counts of unlawful distribution of oxycodone before U.S. District Judge Susan J. Dlott of the Southern District of Ohio. Sentencing has not yet been scheduled.
As part of his guilty plea, Noschang admitted that he prescribed controlled substances to patients in amounts and for lengths of time that were outside the scope of legitimate medical practice. Noschang also admitted that he routinely prescribed controlled substances to patients even though various “red flags” suggested that he should stop writing those prescriptions, change the prescriptions and/or counsel patients accordingly. Further, Noschang admitted that he prescribed dangerous combinations of drugs known to heighten the risk of overdose and death.
As part of his guilty plea, Noschang admitted that the amount of drugs attributable to his conduct is between 400 and 700 kilograms of converted drug weight.
The DEA, HHS-OIG and the Ohio Board of Pharmacy investigated the case. Trial Attorneys Tom Tynan, Leslie Garthwaite and Chris Jason of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the ARPO Strike Force. Since its inception in October 2018, the ARPO Strike Force, which operates in 10 districts, has charged more than 70 defendants who are collectively responsible for distributing more than 40 million pills. The Health Care Fraud Unit, in general, maintains 15 strike forces operating in 24 districts, and has charged nearly 4,200 defendants who have collectively billed the Medicare program for more than $15 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
Justice Department Settles Immigration-Related Discrimination Claim Against Oregon School DistrictRead the Press Release
The Department of Justice announced today that it reached a settlement agreement with Marion County School District 103, aka Woodburn School District, a public school district that serves suburban and rural communities in Marion County, Oregon. The settlement resolves a complaint that the Woodburn School District violated the anti-discrimination provision of the Immigration and Nationality Act (INA) when it refused to hire a work-authorized non-U.S. citizen as a teacher.
“The Department of Justice is committed to removing unlawful discriminatory barriers that deprive workers of opportunities because of their citizenship status or national origin,” said Assistant Attorney General Eric Dreiband of the Civil Rights Division. “We commend the Woodburn School District for working with the Division to swiftly resolve this matter and prevent future violations.”
The Department’s investigation concluded that the Woodburn School District discriminated against an applicant for a teaching position by refusing to hire him because of his citizenship status even though the District’s hiring committee considered him to be the most qualified applicant. The Department also concluded that the Woodburn School District pre-screened the applicant when it asked for specific documentation to verify the applicant’s citizenship status and work authorization, but did not make similar requests of U.S. citizens. The INA generally prohibits employers from refusing to hire certain work-authorized non-U.S. citizens because of their citizenship status. It also prohibits employers from pre-screening applicants by requesting specific documentation to prove work authorization based on employees’ citizenship status or national origin.
Under the settlement, the Woodburn School District will pay the rejected applicant $5,774.81; pay the maximum civil penalties applicable ($5,543) to the United States; and be subject to departmental monitoring, training, and reporting requirements for a three-year period.
The Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; retaliation and intimidation.
For more information about protections against employment discrimination under immigration laws, call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar; email [email protected]; or visit IER’s English or Spanish websites.
Applicants or employees who believe they were subjected to retaliation; different documentary requirements based on their citizenship, immigration status, or national origin; or discrimination based on their citizenship, immigration status, or national origin in hiring, firing, or recruitment or referral for a fee, should contact IER’s worker hotline for assistance.
Department of Justice Awards More than $16.5 Million in Public Safety FundingRead the Press Release
Office on Violence Against Women (OVW) Acting Director Laura L. Rogers today announced awards of more than $16.5 million to support public safety efforts in the Northern District of Texas. Funds will help law enforcement agencies, local cities and counties, campus safety, and victim service providers and domestic violence shelters fight gun, gang, drug and domestic and sexual violence and bring criminals to justice.
“The Department of Justice is providing well-deserved funding to local law enforcement in North Texas to help further advance the critical efforts of fighting violent crime and serving victims of crime and abuse,” said Attorney General William P. Barr. “I’m grateful to U.S. Attorney Erin Nealy Cox for her leadership there and, especially, for her steadfast work with the Department in the prevention of domestic-violence homicides.”
Acting Director Rogers made the announcement at Family Place Inc., a domestic violence shelter in Dallas. Acting Director Rogers also recognized U.S. Attorney for the Northern District of Texas, Erin Nealy Cox, for her work as the Vice Chair of the Advisory Committee to the Attorney General and Chair of the Workgroup on prosecuting gun crimes to stop and reduce domestic violence. Corresponding with National Domestic Violence Awareness Month, Acting Director Rogers and U.S. Attorney Nealy Cox discussed the Department’s work in bolstering law enforcement, providing victim services, and keeping firearms out of the hands of abusers.
“The Department of Justice is proud to make this critical funding available to the Northern District of Texas, making public safety resources available to help law enforcement officers reduce crime and protect the citizens of Texas,” said Acting Director Rogers. “We are also grateful for the hard work and exceptional leadership of U.S. Attorney Erin Nealy Cox, who represents the Justice Department’s most vital link between Washington and the communities of her district and represents the Attorney General’s priority of ending violent crime—especially violent domestic and sexual violence. We congratulate the award recipients and look forward to seeing the good work that the awards will produce.”
“We’re grateful to all our grantees for their work protecting and empowering victims of domestic abuse,” said U.S. Attorney Nealy Cox. “The Justice Department is proud to stand alongside them in the fight to end domestic violence.”
The awards were made by the three grant-making components of the Department of Justice—OVW, the Office of Community Oriented Policing Services and the Office of Justice Programs.
A full list of COPS awards is available online at https://cops.usdoj.gov/grants. OJP awards, organized under specific grant programs, are available online at https://ojp.gov/funding/Explore/OJPAwardData.htm. For OVW awards, visit https://www.justice.gov/ovw/awards.
About the Office of Community Oriented Policing Services:
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1994, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of approximately 130,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about the COPS Office, please visit www.cops.usdoj.gov.
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 justice system. More information about OJP and its components can be found at www.ojp.gov.
About the Office on Violence Against Women:
The Office on Violence Against Women provides leadership in developing the nation’s capacity to reduce violence through the implementation of the Violence Against Women Act and subsequent legislation. Created in 1995, OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. In addition to overseeing federal grant programs, OVW undertakes initiatives in response to special needs identified by communities facing acute challenges. Learn more at www.justice.gov/ovw.
36 Arrested During Joint Law Enforcement Initiative in Northern AlabamaRead the Press Release
HUNTSVILLE – A joint federal, state, and local law enforcement initiative has resulted in the arrests of 36 individuals on a variety of criminal charges, including drug trafficking, money laundering, using communication facilities to facilitate drug trafficking and various firearms offenses, announced U.S. Attorney Jay E. Town, DEA Assistant Special Agent in Charge Clay Morris, FBI Special Agent in Charge Johnnie Sharp, Jr., and United States Postal Inspector in Charge, Houston Division, Adrian Gonzalez. The majority of the defendants were arrested in north Alabama, however some defendants were arrested in California, Iowa, Virginia and Tennessee.
“There is no daylight between local, state and federal law enforcement,” Town said. “These indictments represent the hard work of many of our law enforcement partners, and exemplify our global efforts of taking on the most dangerous criminals menacing our neighborhoods. Our relationships across the board have never been stronger.”
"These arrests are indicative of DEA's commitment to rid our communities of drug trafficking organizations determined to profit on the backs of addiction," said Morris. "Citizens in Northern Alabama can rest assured that the DEA and our law enforcement partners are determined to ensure these communities remain safe and a great place to live. The success of this investigation is an outstanding example of our law enforcement community's resolve and determination."
"North Alabama is safer today as a result of this operation," Sharp said. "This was an outstanding example of law enforcement partnerships working together to remove dangerous criminals from our neighborhoods."
“The Postal Service has no interest in being the unwitting accomplice to anyone using the U.S. Mail to distribute illegal drugs or other harmful substances,” Gonzalez said. “Postal Inspectors will continue to work with our local and federal law enforcement partners to investigate and hold accountable those who misuse the U.S. Mail. Through our joint efforts, we have dismantled a criminal organization that posed a direct threat to various communities in multiple states.”
“We thank our State and Federal partners for their efforts and support in helping rid our community of illegal activity,” Madison County Sheriff Kevin Turner said. “We value our partnerships and will continually look for opportunities to enhance our ability to protect and serve all of Madison County”.
The arrests made on October 9, 2019, resulted from the combined efforts of local law enforcement agencies across eight counties in Northern Alabama, along with State and Federal law enforcement partners. Law enforcement agencies participating in the investigation included: Drug Enforcement Agency; United States Attorney’s Office; Federal Bureau of Investigation; Bureau of Alcohol Tobacco and Firearms; United States Postal Inspection Service; Office of the Attorney General State of Alabama; Alabama Law Enforcement Agency; Morgan County Sheriff’s Department; Lawrence County Sheriff’s Department; Decatur Police Department; Lauderdale County Sheriff’s Department; Colbert County Sheriff’s Department; Franklin County Sheriff’s Department; Russellville Police Department; Marion County Sheriff’s Department; Huntsville Police Department, Madison Police Department, Cullman County Sheriff’s Department, Cullman Police Department, and the Wayne County (Tennessee) Sheriff’s Department.
In the spring of 2018, Special Agents of the DEA, and members of the Morgan County Sheriff’s Office, Lawrence County Sheriff’s Office and ALEA began an investigation involving quantities of high quality methamphetamine being sold in Morgan and Lawrence County. Agents quickly learned that the methamphetamine was being distributed not only in those areas, but also in the surrounding areas as far south as Cullman and as far north as Tennessee, by multiple affiliated individuals. Agents also learned that the methamphetamine was coming from the San Bernardino area of California.
During the course of the investigation, over 74 pounds of “ice” methamphetamine, a kilo of cocaine hydrochloride and 46 grams of “crack” cocaine was seized. Twenty guns were seized, including two assault rifles and a short barrel shotgun. Some of the guns seized were identified as stolen. Over $123,000 was seized by federal agencies. This amount does not include amounts of money seized and forfeited by state and local agencies.
DEA, FBI, and USPIS, investigated the case, which Mary Stuart Burrell is prosecuting.
The charges in the indictment are merely allegations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
36 Arrested During Joint Law Enforcement InitiativeRead the Press Release
HUNTSVILLE – A joint federal, state, and local law enforcement initiative has resulted in the arrests of 36 individuals on a variety of criminal charges, including drug trafficking, money laundering, using communication facilities to facilitate drug trafficking and various firearms offenses, announced U.S. Attorney Jay E. Town, DEA Assistant Special Agent in Charge Clay Morris, FBI Special Agent in Charge Johnnie Sharp, Jr., and United States Postal Inspector in Charge, Houston Division, Adrian Gonzalez. The majority of the defendants were arrested in north Alabama, however some defendants were arrested in California, Iowa, Virginia and Tennessee.
“There is no daylight between local, state and federal law enforcement,” Town said. “These indictments represent the hard work of many of our law enforcement partners, and exemplify our global efforts of taking on the most dangerous criminals menacing our neighborhoods. Our relationships across the board have never been stronger.”
"These arrests are indicative of DEA's commitment to rid our communities of drug trafficking organizations determined to profit on the backs of addiction," said Morris. "Citizens in Northern Alabama can rest assured that the DEA and our law enforcement partners are determined to ensure these communities remain safe and a great place to live. The success of this investigation is an outstanding example of our law enforcement community's resolve and determination."
“North Alabama is safer today as a result of this operation,” Sharp said. “This was an outstanding example of law enforcement partnerships working together to remove dangerous criminals from our neighborhoods.”
“The Postal Service has no interest in being the unwitting accomplice to anyone using the U.S. Mail to distribute illegal drugs or other harmful substances,” Gonzalez said. “Postal Inspectors will continue to work with our local and federal law enforcement partners to investigate and hold accountable those who misuse the U.S. Mail. Through our joint efforts, we have dismantled a criminal organization that posed a direct threat to various communities in multiple states.”
“We thank our State and Federal partners for their efforts and support in helping rid our community of illegal activity,” Madison County Sheriff Kevin Turner said. “We value our partnerships and will continually look for opportunities to enhance our ability to protect and serve all of Madison County”.
The arrests made on October 9, 2019, resulted from the combined efforts of local law enforcement agencies across eight counties in Northern Alabama, along with State and Federal law enforcement partners. Law enforcement agencies participating in the investigation included: Drug Enforcement Agency; United States Attorney’s Office; Federal Bureau of Investigation; Bureau of Alcohol Tobacco and Firearms; United States Postal Inspection Service; Office of the Attorney General State of Alabama; Alabama Law Enforcement Agency; Morgan County Sheriff’s Department; Lawrence County Sheriff’s Department; Decatur Police Department; Lauderdale County Sheriff’s Department; Colbert County Sheriff’s Department; Franklin County Sheriff’s Department; Russellville Police Department; Marion County Sheriff’s Department; Huntsville Police Department, Cullman County Sheriff’s Department, Cullman Police Department, and the Wayne County (Tennessee) Sheriff’s Department.
In the spring of 2018, Special Agents of the DEA, and members of the Morgan County Sheriff’s Office, Lawrence County Sheriff’s Office and ALEA began an investigation involving quantities of high quality methamphetamine being sold in Morgan and Lawrence County. Agents quickly learned that the methamphetamine was being distributed not only in those areas, but also in the surrounding areas as far south as Cullman and as far north as Tennessee, by multiple affiliated individuals. Agents also learned that the methamphetamine was coming from the San Bernardino area of California.
During the course of the investigation, over 74 pounds of “ice” methamphetamine, a kilo of cocaine hydrochloride and 46 grams of “crack” cocaine was seized. Twenty guns were seized, including two assault rifles and a short barrel shotgun. Some of the guns seized were identified as stolen. Over $123,000 was seized by federal agencies. This amount does not include amounts of money seized and forfeited by state and local agencies.
DEA, FBI, and USPIS, investigated the case, which Mary Stuart Burrell is prosecuting.
The charges in the indictment are merely allegations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
defendants_1.pdfMiami-Based Financial Advisor Pleads Guilty for Conspiring to Launder Money Relating to FCPA and Ecuadorian Bribery Law ViolationsRead the Press Release
A financial advisor based in Miami, Florida, pleaded guilty today to a money laundering conspiracy for his role in using the U.S. financial system to launder money to promote violations of the Foreign Corrupt Practices Act (FCPA) and Ecuadorian bribery law violations and to conceal and disguise the true nature of those illegal bribe payments. Specifically, this conspiracy related to a scheme to pay bribes to officials of Ecuador’s state-owned and state-controlled oil company, Empresa Pública de Hidrocarburos del Ecuador (PetroEcuador).
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Kelly Jackson of the IRS-Criminal Investigation’s (IRS-CI) Washington, D.C. office, Special Agent in Charge Raymond Villanueva of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Washington, D.C., office, and Special Agent in Charge George Piro of the FBI’s Miami Field Office made the announcement.
Frank Roberto Chatburn Ripalda (Chatburn), 42, a dual U.S. and Ecuadorian citizen, pleaded guilty in federal district court in Miami before the Honorable Marcia G. Cooke to one count of conspiracy to commit money laundering, which carries a 20-year statutory maximum sentence. Chatburn is scheduled to be sentenced by Judge Cooke on Dec. 18.
According to his admissions at the plea hearing, Chatburn conspired with an oil services contractor to pay nearly $3 million in bribes to Ecuadorian government officials in an effort to obtain and retain contracts with PetroEcuador. As a financial advisor to the contractor, Chatburn agreed to make bribe payments for the benefit of several then-PetroEcuador officials through the use of shell companies and bank accounts in the United States, Panama, the Cayman Islands, Curacao and Switzerland. To conceal the bribe payments and to promote the scheme, Chatburn established Panamanian shell companies with Swiss bank accounts on behalf of two then-PetroEcuador officials.
Chatburn further admitted that he conspired with another Ecuadorian government official to conceal bribe payments intended for the official from Odebrecht S.A., the Brazilian construction conglomerate. Chatburn facilitated hiding these bribe payments by conducting the transactions through several shell companies and bank accounts in multiple jurisdictions, including in the United States. Odebrecht S.A. pleaded guilty on Dec. 21, 2016, in the Eastern District of New York to conspiring to violate the anti-bribery provisions of the FCPA in connection with a broader scheme to pay nearly $800 million in bribes to public officials in twelve countries, including Angola, Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru and Venezuela.
To date, 10 individuals, including former Ecuadorian government officials, oil services contractors and financial advisors, have pleaded guilty to criminal charges in U.S. courts for their involvement in the PetroEcuador bribery and money laundering schemes.
This case was investigated by HSI and IRS-CI, jointly under the auspices of the Global Illicit Financial Team, and by the FBI’s International Corruption Squad in Miami. Deputy Chief Brian Young, Assistant Chiefs David Fuhr and Lorinda Laryea, Trial Attorney Katherine Raut of the Criminal Division’s Fraud Section, and Trial Attorneys Randall Warden and Mary Ann McCarthy of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS) are prosecuting the case.
The U.S. Marshals Service and the Criminal Division’s Office of International Affairs have provided significant assistance by obtaining evidence in this case, as have public authorities in, among other countries, Ecuador, Panama and the Cayman Islands.
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.
To learn more about the government’s FCPA enforcement efforts, go to www.justice.gov/criminal/fraud/fcpa.
Texas Tax Return Preparer Sentenced to Prison for Defrauding the United StatesRead the Press Release
A Texas tax return preparer was sentenced yesterday to 60 months in prison for her role in a scheme to defraud the United States and for 27 months (consecutive) for filing a false federal tax return, for a total of 87 months, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to the indictment and information provided to the court, Stacey Anderson owned a tax return preparation business, Anderson Professional Tax Services, and operated the business out of her residence. With the assistance of co-defendant Janell Lightner, Anderson prepared 2013 and 2014 tax returns claiming false business items and/or education tax credits, in order to fraudulently increase their clients’ tax refunds from the Internal Revenue Service (IRS). These returns were prepared for clients in Texas, Maryland, and the District of Columbia. Anderson also filed a 2014 tax return for herself, falsely claiming an education credit and reporting a fraudulent income amount. The total tax loss generated from this scheme exceeded $10 million.
In addition to the term of imprisonment, U.S. District Judge Alan D. Albright, in Waco, Texas, ordered Anderson to serve a term of three years of supervised release and to pay restitution to the United States in the amount of $8,100,492.64.
On Aug. 6, 2019, co-defendant Janell Lightner pleaded guilty to conspiring to defraud the United States. Her sentencing, also in front of Judge Albright, is currently scheduled for Dec. 5, 2019.
Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS-Criminal Investigation and the Inspector General of the Social Security Administration, who conducted the investigation, and Tax Division Trial Attorneys Robert Kemins and David Zisserson, who prosecuted the case. Mr. Zuckerman also thanked the U.S. Attorney’s Office for the Western District of Texas (Waco Division) for their substantial assistance on this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Executive Office for Immigration Review Announces Case Completion Numbers for Fiscal Year 2019Read the Press Release
The Justice Department’s Executive Office for Immigration Review (EOIR) today announced the agency’s case completion numbers topped 275,000 cases for fiscal year 2019 (FY19), the second highest number of case completions in EOIR’s history. This number marks an increase of roughly 80,000 case completions from fiscal year 2018 (FY18), the same year that EOIR established case completion goals for immigration judges in response to years of declining or stagnant productivity. The FY19 numbers are nearly double the number of completed cases from just three years ago.
“Our immigration courts are doing everything in their power to efficiently adjudicate immigration cases while respecting due process rights, but efficient adjudication alone cannot resolve the crisis at the border,” said EOIR Director James McHenry. “While EOIR is doing an unprecedented job adjudicating cases fairly and expeditiously, the nearly one million case backlog will continue to grow unless Congress acts to address the crisis at the border.”
As part of a continued effort to return the rule of law to America’s immigration system, the Justice Department has introduced initiatives to improve EOIR’s efficiency in adjudicating cases without compromising due process. The Department has also worked to reduce EOIR’s “backlog” of cases by hiring new judges, expanding court capacity, and emphasizing the importance of timely completing cases consistent with the law. However, due to the high volume of immigration cases filed by the Department of Homeland Security (DHS) driven by the ongoing border crisis, EOIR’s pending caseload was approximately 987,000 as of the end of FY19. The 444,000 new cases filed by DHS in FY19 is the highest number in history and is well over the historical average of 225,294 from FY09 to FY16.
EOIR had 442 immigration judges as of Sept. 30, 2019, the highest number in its history. Additionally, 92 new judges were hired in four classes over FY19, and another class of judges is expected to join EOIR in November 2019. On average, immigration judges who performed over the whole year completed 708 cases each in FY19.
Genetic Testing Company and Three Principals Agree to Pay $42.6 Million to Resolve Kickback and Medical Necessity ClaimsRead the Press Release
The Justice Department announced today that UTC Laboratories Inc. (RenRX) has agreed to pay $41.6 million, and its three principals, Tarun Jolly M.D., Patrick Ridgeway, and Barry Griffith, have agreed to pay $1 million to resolve allegations that they violated the False Claims Act by paying kickbacks in exchange for laboratory referrals for pharmacogenetic testing and for furnishing and billing for tests that were not medically necessary. RenRX, a laboratory company headquartered in New Orleans, Louisiana, also agreed to a twenty-five year period of exclusion from participation in any federal health care program.
“The payment of kickbacks in exchange for medical referrals undermines the integrity of our healthcare system. Today’s settlement reflects the Department of Justice’s commitment to ensuring that taxpayer monies are well spent and not wasted on unnecessary medical testing,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.
“Healthcare fraud, in any incarnation, hurts patients, honest medical practitioners, and all of the nation’s taxpayers,” said United States Attorney Peter G. Strasser of the Eastern District of Louisiana. “The favorable resolution of this False Claims Act matter illustrates the collaborative efforts and firm commitment by our federal partners to use all available remedies, both civil and criminal, to address signs of waste and abuse by providers in our healthcare markets.”
The government alleged that between 2013 and 2017, UTC and its principals offered and paid remuneration to physicians to induce the ordering of pharmacogenetic tests, purportedly in return for their participation in a clinical trial known as the Diagnosing Adverse Drug Reactions Registry (DART), clinical trial identifier NCT01970709. The government also alleged that UTC and its principals offered and paid remuneration, including sales commissions, to entities and individuals as part of the scheme, and furnished pharmacogenetic tests that were not medically necessary and billed the Medicare program.
“The payment of cash and thinly-disguised referral bribes, as contended by the government, resulted in a more than $42 million dollar resolution in this case," said Special Agent in Charge CJ Porter of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Additionally, my agency barred RenRX from receiving any payments from federal health programs for a full 25 years. Genetic testing scams are becoming all too common. OIG has a genetic testing fraud alert here.”
The settlement announced today resolves allegations in six lawsuits pending in the United States District Court for the Eastern District of Louisiana: United States ex rel. Bergeron v. UTC Labs., LLC, et al., No. 16-15440 (E.D. La.); United States ex rel. McNeil v. Tarun Jolly, UTC Labs., LLC, et al., No. 14-2247 (E.D. La.); United States ex rel. Green & Lawson v. UTC Labs., LLC d/b/a Renaissance RX & Stone Surgical, LLC, No. 15-297 (E.D. La.); United States ex rel. Church v. UTC Labs., LLC d/b/a Renaissance RX, No. 15-877 (E.D. La.); United States ex rel. Outerbridge v. UTC Labs., LLC d/b/a Renaissance RX, No. 15-1445 (E.D. La.). The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The Act also allows the government to intervene and take over the action, as it did in these cases. The whistleblower shares to be awarded have not yet been determined.
The government’s resolution of this matter illustrates the government’s emphasis on combating health care fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, can be reported to the Department of Health and Human Services (HHS), at 800-HHS-TIPS (800-447-8477).
The investigation was conducted by the U.S. Attorney’s Office for the Eastern District of Louisiana and the Department of Justice’s Civil Division, in conjunction with the HHS-OIG and the FBI.
The claims resolved by the settlements are allegations only and there has been no determination of liability.
Readout of United States-Australia Industry Roundtable Discussion on Trusted Technology EcosystemsRead the Press Release
Today, Attorney General William P. Barr and Australian Minister for Home Affairs Peter Dutton hosted a government-industry roundtable discussion titled, “Shaping a Trusted Technology Ecosystem,” with more than a dozen representatives from the tech-industry landscape.
“Communications networks and supply chains are increasingly vast and complex, and even aggressive efforts by responsible governments will not be able to identify and neutralize every threat,” said Attorney General William P. Barr. “What this highlights is the need to facilitate trusted markets and secure sources of supply to meet the continuing demands we have for innovation and security.”
This dialogue was a critical step in jointly addressing complex supply chain challenges faced by both nations. The collaborative discussion presented an opportunity for industry, Australia and the United States to work together on solutions to ensure an open marketplace, achieve a diverse range of secure technology options, and enhance global technology markets characterized by trust, transparency, and fair competition.
“We already rely on internet-based technologies, but the next suite of developing technologies represent a new challenge in the way that they are securely integrated into our societies and economies,” said Home Affairs Minister Peter Dutton. “It’s clear our existing policy settings are not keeping pace with this technological change and we should be under no illusions that securing these new technologies is a simple task. Government and industry must work together to identify practical solutions to this challenge, and this dialogue today has been a vital first step towards that goal.”
Areas of potential cooperation discussed included more strategically shaping international standards bodies; the creation of public-private partnerships or international consortia that can deliver alternative and trusted solutions to market; and coordinated investment in research and development to support and further our innovative edge.
Also discussed were the concerted, collective and coordinated actions from both government and industry required to achieve meaningful change. The dialogue was a critical step in jointly addressing global supply chain challenges and highlighting the opportunity to work together on solutions.
Justice Department Seeks to Shut Down Georgia Tax Return PreparersRead the Press Release
The United States has filed a civil suit in the Middle District of Georgia seeking to bar Stacy Lee and Heather Lee from owning or operating a tax return preparation business, and preparing tax returns for others, the Justice Department announced today.
The complaint alleges that Stacy Lee has operated her tax return preparation stores under the names of Fast Track Tax Service in Talbotton and TimeLee Tax Service in Columbus.
The complaint further alleges that the defendants fabricate deductions, businesses and related profit or losses, and claim various false credits, including education, energy and childcare credits. By repeatedly underreporting tax liabilities and claiming bogus refunds on behalf of their customers, the defendants have caused the United States to lose substantial tax revenue, according to 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 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.
Joint Statement Announcing United States and Australian Negotiation of a CLOUD Act Agreement by U.S. Attorney General William Barr and Minister for Home Affairs Peter DuttonRead the Press Release
The United States and Australia and have entered into formal negotiations for a bilateral agreement under the U.S. Clarifying Lawful Overseas Use of Data Act (the CLOUD Act), as the first step towards significantly boosting law enforcement cooperation between the two allies, with strong protections for rule of law, privacy and civil liberties.
United States Attorney General William Barr and Australian Minister for Home Affairs, Peter Dutton, announced the negotiations during a meeting on Oct. 7, 2019.
Attorney General Barr said that the United States is pleased that Australia has begun formal negotiations with the United States under the CLOUD Act. “The CLOUD Act was created to permit our close foreign partners who have robust protections for privacy and civil liberties, such as Australia, to enter into executive agreements with the United States,” said U.S. Attorney General Barr. “This agreement, if finalized and approved, will allow service providers in Australia and the United States to respond to lawful orders from the other country without fear of running afoul of restrictions on disclosure, and thus provide more access for both countries to providers holding electronic evidence that is crucial in today’s investigations and prosecutions.”
The Attorney General also noted that the conclusion of an executive agreement with Australia will strengthen public safety for both countries. “The United States looks forward to working with the Australian Government on this agreement, which will enhance each country’s ability to fight crime by allowing faster access to data needed for quick-moving investigations. By increasing the effectiveness of investigations and prosecutions of serious crime, including terrorism, in both countries, citizens of both countries will be safer.”
Minister Dutton said Australia was very pleased to have taken this step.
“Last year, Australia congratulated the United States for its leadership in passing this legislation, which recognized that timely access to electronic information held by U.S.-based service providers is critical to efforts to combat serious crime,” said Mr. Dutton. “Current processes for obtaining electronic information held by service providers in other countries risk loss of evidence and unacceptable delays to criminal justice outcomes. When police are investigating a terrorist plot or serious crime such as child exploitation, they need to be able to move forward without delay, but within the law – and the CLOUD Act strikes exactly that balance. This is the way of the future between likeminded countries. We have some way to go before the agreement is finalized, but once in place it will mean service providers based in the United States can respond directly to electronic data requests issued by our enforcement agencies under Australian law for data critical for the prevention, detection, investigation and prosecution of serious crime.”
The United States enacted the CLOUD Act in 2018 to speed access by foreign partners to electronic information held by U.S.-based global providers that is critical to such foreign partners’ investigations of serious crime. The Act creates a new paradigm: an efficient, privacy and civil liberties-protective approach to ensure effective access to electronic data through executive agreements between the United States and trusted foreign partners.
While this electronic data can currently be sought through the mutual legal assistance (MLA) process, the CLOUD Act provides an alternative expedited framework for obtaining the data. The number of MLA requests for electronic information held by service providers in the United States has increased dramatically in recent years, straining resources and slowing response times. The CLOUD Act addresses delays in the MLA process by providing a new route for trusted partner countries to obtain electronic data.
Underpinned by Australian legislation yet to be introduced, a bilateral CLOUD Act agreement would enable Australian law enforcement to serve domestic orders for communications data needed to combat serious crime directly on U.S.-based companies, and vice versa.
For more information on the CLOUD Act, go to: https://www.justice.gov/dag/page/file/1153466/download and https://www.justice.gov/dag/cloudact.
Justice Department Teams up with AARP and the Oak Ridge Boys to Launch Public Service Announcement to Raise Awareness about Fraud Schemes Targeting Older AmericansRead the Press Release
The Department of Justice today unveiled a new public service announcement (PSA) created in collaboration with AARP and the Oak Ridge Boys.
In announcing the launch of the video and accompanying social media campaign, Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division issued the following statement:
“Fraudsters are targeting and stealing billions of dollars from unsuspecting Americans every year. In order to fight this epidemic, Americans must report fraud schemes and spread the word among their families and friends. I want to thank AARP’s Fraud Watch Network and the Oak Ridge Boys for working with us to fight this critical issue. Through increased awareness and reporting, the Department of Justice can continue to take swift action to end the victimization of vulnerable elderly Americans across the country.”
“Americans are targeted by fraudsters from all over the world,” said U.S. Attorney Trent Shores of the Northern District of Oklahoma. “The scams run by con artists can wreck the financial security of retired Americans. A threat to one’s hard earned savings is a threat to one’s liberty. I am proud to stand with AARP and the Oak Ridge Boys to educate and empower elder Americans to defend themselves against fraudsters.”
“Helping people spot the signs of a scam is key to helping them avoid becoming victims,” said Kathy Stokes, director of fraud prevention programs, AARP. “And encouraging people to report scam attempts and victimization will help others know what to look for, and it will help the good guys in their efforts to go after the bad guys.”
“The Oak Ridge Boys are honored to bring awareness to elder fraud and abuse. For too long people have taken advantage of our senior citizens, and we are teaming up with the Department of Justice and the AARP Fraud Watch Network to help you and your loved ones stay safe from scammers,” said Duane Allen of the Oak Ridge Boys.
"So happy to see the Department of Justice and AARP stepping up to address this problem of elder fraud abuse. We are honored to be stepping up with you. Everyone is susceptible via phone or online, but the elderly are often the targets and victims of identity thieves and scammers. The Oak Ridge Boys are honored to lend our name and image to this worthy cause,” said Joe Bonsall of the Oak Ridge Boys.
If you or a family member, friend, or colleague have been a victim of a fraud scheme, please report to www.aarp.org/fraudwatchnetwork. Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.
View the PSA here.
Justice Department Teams up with AARP and the Oak Ridge Boys to Launch Public Service Announcement to Raise Awareness about Fraud Schemes Targeting Older AmericansRead the Press Release
The Department of Justice today unveiled a new public service announcement (PSA) created in collaboration with AARP and the Oak Ridge Boys.
In announcing the launch of the video and accompanying social media campaign, Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division issued the following statement:
“Fraudsters are targeting and stealing billions of dollars from unsuspecting Americans every year. In order to fight this epidemic, Americans must report fraud schemes and spread the word among their families and friends. I want to thank AARP’s Fraud Watch Network and the Oak Ridge Boys for working with us to fight this critical issue. Through increased awareness and reporting, the Department of Justice can continue to take swift action to end the victimization of vulnerable elderly Americans across the country.”
“Americans are targeted by fraudsters from all over the world,” said U.S. Attorney Trent Shores of the Northern District of Oklahoma. “The scams run by con artists can wreck the financial security of retired Americans. A threat to one’s hard earned savings is a threat to one’s liberty. I am proud to stand with AARP and the Oak Ridge Boys to educate and empower elder Americans to defend themselves against fraudsters.”
“Helping people spot the signs of a scam is key to helping them avoid becoming victims,” said Kathy Stokes, director of fraud prevention programs, AARP. “And encouraging people to report scam attempts and victimization will help others know what to look for, and it will help the good guys in their efforts to go after the bad guys.”
“The Oak Ridge Boys are honored to bring awareness to elder fraud and abuse. For too long people have taken advantage of our senior citizens, and we are teaming up with the Department of Justice and the AARP Fraud Watch Network to help you and your loved ones stay safe from scammers,” said Duane Allen of the Oak Ridge Boys.
"So happy to see the Department of Justice and AARP stepping up to address this problem of elder fraud abuse. We are honored to be stepping up with you. Everyone is susceptible via phone or online, but the elderly are often the targets and victims of identity thieves and scammers. The Oak Ridge Boys are honored to lend our name and image to this worthy cause,” said Joe Bonsall of the Oak Ridge Boys.
If you or a family member, friend, or colleague have been a victim of a fraud scheme, please report to www.aarp.org/fraudwatchnetwork. Information about the Department of Justice’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.
View the PSA here.
U.S. and UK Sign Landmark Cross-Border Data Access Agreement to Combat Criminals and Terrorists OnlineRead the Press Release
The United States and the United Kingdom entered into the world’s first ever CLOUD Act Agreement that will allow American and British law enforcement agencies, with appropriate authorization, to demand electronic data regarding serious crime, including terrorism, child sexual abuse, and cybercrime, directly from tech companies based in the other country, without legal barriers.
The current legal assistance process can take up to two years, but the Agreement will reduce this time period considerably, while protecting privacy and enhancing civil liberties. The historic agreement was signed by U.S. Attorney General William P. Barr and UK Home Secretary Priti Patel at a ceremony at the British Ambassador’s residence in Washington, D.C.
Attorney General William Barr said: “This agreement will enhance the ability of the United States and the United Kingdom to fight serious crime -- including terrorism, transnational organized crime, and child exploitation -- by allowing more efficient and effective access to data needed for quick-moving investigations. Only by addressing the problem of timely access to electronic evidence of crime committed in one country that is stored in another, can we hope to keep pace with twenty-first century threats. This agreement will make the citizens of both countries safer, while at the same time assuring robust protections for privacy and civil liberties.”
Home Secretary Priti Patel said: “Terrorists and paedophiles continue to exploit the internet to spread their messages of hate, plan attacks on our citizens and target the most vulnerable. As Home Secretary I am determined to do everything in my power to stop them. This historic agreement will dramatically speed up investigations, allowing our law enforcement agencies to protect the public. This is just one example of the enduring security partnership we have with the United States and I look forward to continuing to work with them and global partners to tackle these heinous crimes.”
Both governments agreed to terms which broadly lift restrictions for a broad class of investigations, not targeting residents of the other country, and assure providers that disclosures through the Agreement are compatible with data protection laws. Each also committed to obtain permission from the other before using data gained through the agreement in prosecutions relating to a Party’s essential interest—specifically, death penalty prosecutions by the United States and UK cases implicating freedom of speech.
The novel US-UK Bilateral Data Access Agreement will dramatically speed up investigations by removing legal barriers to timely and effective collection of electronic evidence. Under its terms, law enforcement, when armed with appropriate court authorization, may go directly to tech companies based in the other country to access electronic data, rather than going through governments, which can take years. The current Mutual Legal Assistance (MLA) request process, which sees requests for electronic data from law enforcement and other agencies submitted and approved by central governments, can often take many months. Once in place, the Agreement will see the timeline obtaining evidence significantly reduced.
The Agreement will accelerate dozens of complex investigations into suspected terrorists and pedophiles, such as Matthew Falder who was convicted in 2018 in the UK of 137 offenses after an eight-year campaign of online child sexual abuse, blackmail, forced labor and sharing of indecent images, which highlighted the need to speed up these investigations.
The United States will have reciprocal access, under a U.S. court order, to data from UK communication service providers. All requests for access to data will be subject to independent judicial authorization or oversight.
In March 2018, Congress passed the CLOUD Act, which authorizes the United States to enter into bilateral executive agreements with rights-respecting partners that lift each party’s legal barriers to the other party’s access to electronic data for certain criminal investigations. The Agreement was facilitated by the UK’s Crime (Overseas Production Orders) Act 2019, which received Royal Assent in February this year. The Agreement will enter into force following a six-month Congressional review period mandated by the CLOUD Act, and the related review by UK’s Parliament.
We anticipate releasing a copy of the agreement in the near future following Congressional and Parliamentary notification.
For more information on the CLOUD Act, go to: https://www.justice.gov/dag/cloudact.
Attorney General William P. Barr Announces Progress in Making our Communities Safer through Project Safe NeighborhoodsRead the Press Release
Two years ago, the Department of Justice announced the revitalization and enhancement of Project Safe Neighborhoods (PSN), the centerpiece of the department’s violent crime reduction strategy. PSN is an evidence-based program proven to be effective at reducing violent crime. Through PSN, a broad spectrum of stakeholders work together to identify the most pressing violent crime problems in the community and develop comprehensive solutions to address them. As part of this strategy, PSN focuses enforcement efforts on the most violent offenders and partners with locally based prevention and reentry programs for lasting reductions in crime.
Throughout the past two years, the department’s United States Attorneys have partnered with all levels of law enforcement, local organizations, and members of the community to reduce violent crime and make our neighborhoods safer for everyone.
According to FBI’s 2018 Crime in the United States Report released this week, for the second consecutive year, the estimated number of violent crimes in the nation decreased 3.3 percent from the 2017 number. The violent crime rate fell 3.9 percent when compared with the 2017 rate. The 2018 statistics show the estimated rate of violent crime was 368.9 offenses per 100,000 inhabitants.
“The revitalized Project Safe Neighborhoods program is a major success,” said Attorney General William P. Barr. “It packs a powerful punch by combining advanced data with local leadership, further reducing violence in communities across the country and improving overall public safety. U.S. Attorneys continue to focus their enforcement efforts against the most violent criminals and work in partnership with federal, state, local, and tribal police. The Justice Department’s relationships across the board have never been stronger.”
Attorney General Barr Signs Letter to Facebook from US, UK, and Australian Leaders Regarding Use of End-To-End EncryptionRead the Press Release
The Department of Justice today published an open letter to Facebook from international law enforcement partners from the United States, United Kingdom, and Australia in response to the company’s publicly announced plans to implement end-to-end-encryption across its messaging services.
The letter is signed by Attorney General William P. Barr, United Kingdom Home Secretary Priti Patel, Australia’s Minister for Home Affairs Peter Dutton, and Acting Homeland Security Secretary Kevin McAleenan.
Addressed to Facebook’s CEO, Mark Zuckerberg, the letter requests that Facebook not proceed with its end-to-end encryption plan without ensuring there will be no reduction in the safety of Facebook users and others, and without providing law enforcement court-authorized access to the content of communications to protect the public, particularly child users.
Facebook’s proposals would put at risk its own vital work that keeps children safe. In 2018, Facebook made 16.8 million reports of child sexual exploitation and abuse content to the National Center for Missing & Exploited Children (NCMEC), 12 million of which it is estimated would be lost if the company pursues its plan to implement end-to-end encryption.
The concerns highlighted in this letter to Facebook are at the core of the Department of Justice’s Lawful Access Summit that will take place on Friday, Oct. 4, 2019, on warrant-proof encryption and its impact on child exploitation cases.
The summit will feature a keynote address by Attorney General Barr along with remarks by Deputy Attorney General Jeffrey A. Rosen, FBI Director Christopher Wray, and NCMEC co-founder John Walsh. The summit also includes a dialogue with Australian Minister Dutton and U.K. Home Secretary Patel, who will discuss international perspectives on the area of encryption and why Facebook must reconsider its plan to implement end-to-end encryption.
Use of end-to-end encryption, which allows messages to be decrypted only by end users, leaves service providers unable to produce readable content in response to wiretap orders and search warrants. This barrier allows criminals to avoid apprehension by law enforcement by limiting access to crucial evidence in the form of encrypted digital communications. The use of end-to-end encryption and other highly sophisticated encryption technologies significantly hinders, or entirely prevents serious criminal and national security investigations.
Many service providers, device manufacturers, and application developers who use encryption fail to implement technology that would allow the government to obtain electronic evidence necessary to investigate and prosecute threats to public safety and national security. Law enforcement believes it is crucial for technology companies to include lawful access mechanisms in the design of their products or services. The Department of Justice is committed to developing a coherent national and international policy that encourages responsible encryption, enhances public safety, while protecting privacy and cybersecurity.
Antitrust Division Applauds Recognition of Attorney-Client Privilege by Mexico's Competition AgencyRead the Press Release
On Sept. 30, Mexico’s Federal Economic Competition Commission (COFECE) issued guidelines setting forth the agency’s procedures for treatment of attorney-client communications. Previously there had been no specific recognition of attorney-client privilege in Mexico. Protection of privileged material is an essential element of procedural fairness that is included both in the United States-Mexico-Canada-Agreement’s (USMCA’s) Competition Policy Chapter and in the Framework on Competition Agency Procedures (CAP) that the United States and over 60 other jurisdictions launched in May at the annual multilateral conference of the International Competition Network (ICN) in Cartagena, Colombia. The Antitrust Division applauds COFECE’s guidelines, issued after a public consultation.
“These guidelines will add to the due process rights of all firms operating in Mexico and help to harmonize the antitrust enforcement environment in North America,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “They will also encourage firms to seek legal advice and thus contribute to a more effective compliance regime in Mexico.”
Statement from Deputy Attorney General Jeffrey A. Rosen on the United States v. Safehouse RulingRead the Press Release
WASHINGTON – Statement from Deputy Attorney General Jeffrey A. Rosen on the United States v. Safehouse ruling:
“The Department is disappointed in the Court’s ruling and will take all available steps to pursue further judicial review. Any attempt to open illicit drug injection sites in other jurisdictions while this case is pending will continue to be met with immediate action by the Department.”
Philadelphia Tax Preparer Convicted of Preparing False Tax ReturnRead the Press Release
A Philadelphia tax return preparer pleaded guilty to aiding and assisting in the preparation of a false tax return before the United States District Court in Philadelphia, Pennsylvania yesterday, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney William M. McSwaim for the Eastern District of Pennsylvania.
“Tax return preparers, who take advantage of their clients and the tax system to file false tax returns and line their own pockets with refund money, will be prosecuted and held accountable for their criminal conduct,” said Principal Deputy Assistant Attorney General Zuckerman.
“When our tax laws are ignored, especially to this extent, we all lose,” said U.S. Attorney McSwain. “The defendant not only violated the tax laws, but also he victimized individuals who simply wanted to do the right thing and pay their taxes. This sentence should send a message to anyone who thinks he can flout the law: the federal government will investigate and prosecute you.”
“Mr. Coumbassa blatantly ignored the tax laws by preparing false tax returns,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “He used a variety of methods to cheat the government, including falsifying information on tax returns to generate larger refunds for his clients. We owe it to every American taxpayer to use all lawful means to identify and prosecute unscrupulous tax returns preparers like Mr. Coumbassa.”
Abdoulaye Coumbassa (Coumbassa) owned and operated Abbi Tax Services and Accounting (Abbi Tax). From at least 2012 to 2015, Coumbassa prepared and filed fraudulent U.S. Individual Income Tax Returns Forms 1040 (“Forms 1040”) and related forms and schedules on behalf of his clients with the Internal Revenue Service (IRS). The indictment alleged that Coumbassa falsified clients’ returns by, among other things, attaching false Schedules C to the clients’ Forms 1040. These Schedules C falsely claimed that the client had a business that lost money, which loss was used to offset taxable income and therefore inflate the refunds or create a refund rather than tax due and owing. The defendant agreed in his plea agreement that a reasonable estimate of the total tax loss exceeded $2 million.
Sentencing is scheduled for Jan. 30, 2020, before United States District Judge R. Barclay Surrick. Coumbassa faces a statutory maximum sentence of three years in prison and a $250,000 fine for aiding in the preparation of a false tax return. He also faces a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman thanked a special agent of IRS-Criminal Investigation, who conducted the investigation, Assistant United States Attorney Bea Witzleben, and Trial Attorney Sarah Ranney of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
A Philadelphia tax return preparer pleaded guilty to aiding and assisting in the preparation of a false tax return before the United States District Court in Philadelphia, Pennsylvania yesterday, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney William M. McSwaim for the Eastern District of Pennsylvania.
“Tax return preparers, who take advantage of their clients and the tax system to file false tax returns and line their own pockets with refund money, will be prosecuted and held accountable for their criminal conduct,” said Principal Deputy Assistant Attorney General Zuckerman.
“When our tax laws are ignored, especially to this extent, we all lose,” said U.S. Attorney McSwain. “The defendant not only violated the tax laws, but also he victimized individuals who simply wanted to do the right thing and pay their taxes. This sentence should send a message to anyone who thinks he can flout the law: the federal government will investigate and prosecute you.”
“Mr. Coumbassa blatantly ignored the tax laws by preparing false tax returns,” said IRS Criminal Investigation Special Agent in Charge Guy Ficco. “He used a variety of methods to cheat the government, including falsifying information on tax returns to generate larger refunds for his clients. We owe it to every American taxpayer to use all lawful means to identify and prosecute unscrupulous tax returns preparers like Mr. Coumbassa.”
Abdoulaye Coumbassa (Coumbassa) owned and operated Abbi Tax Services and Accounting (Abbi Tax). From at least 2012 to 2015, Coumbassa prepared and filed fraudulent U.S. Individual Income Tax Returns Forms 1040 (“Forms 1040”) and related forms and schedules on behalf of his clients with the Internal Revenue Service (IRS). The indictment alleged that Coumbassa falsified clients’ returns by, among other things, attaching false Schedules C to the clients’ Forms 1040. These Schedules C falsely claimed that the client had a business that lost money, which loss was used to offset taxable income and therefore inflate the refunds or create a refund rather than tax due and owing. The defendant agreed in his plea agreement that a reasonable estimate of the total tax loss exceeded $2 million.
Sentencing is scheduled for Jan. 30, 2020, before United States District Judge R. Barclay Surrick. Coumbassa faces a statutory maximum sentence of three years in prison and a $250,000 fine for aiding in the preparation of a false tax return. He also faces a period of supervised release, restitution, and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman thanked a special agent of IRS-Criminal Investigation, who conducted the investigation, Assistant United States Attorney Bea Witzleben, and Trial Attorney Sarah Ranney of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Nevada Tax Return Preparer Pleads Guilty to Tax CrimesRead the Press Release
A Las Vegas, Nevada, tax return preparer pleaded guilty yesterday to multiple tax crimes, which caused a total tax loss of more than $3.4 million, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Nicholas A. Trutanich for the District of Nevada.
Michael A. Sandoval pleaded guilty to one count of tax evasion, one count of aiding and assisting in the preparation and filing of a false tax return, and one count of making and subscribing a false tax return.
According to documents filed with the court, Sandoval provided payroll and tax preparation services for individuals and companies through his Las Vegas business Nevada Financial Solutions Inc. (NFS). Sandoval used NFS to commit multiple tax crimes. First, when two of his clients provided NFS with $471,178 in payments to be forwarded to the Internal Revenue Service (IRS) as money due for their quarterly employment taxes, Sandoval did not provide those payments to the IRS, but instead spent the funds for his personal benefit. Second, Sandoval filed and caused the filing of false individual income tax returns for a substantial number of clients by reporting fraudulent deductions, including false Schedule C business losses and charitable contribution and state and local tax deductions. These fraudulent deductions caused a tax loss of over $2.8 million. Lastly, Sandoval fraudulently understated his income from NFS on his individual income tax returns for the years 2010 through 2017, causing an additional tax loss of $100,138. In total, Sandoval caused a tax loss totaling $3,425,654.
Sentencing is scheduled for Jan. 9, 2020. Sandoval faces a statutory maximum of five years in prison on the tax evasion charge and three years in prison for each of the false tax return charges. Sandoval also faces a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Trutanich thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Thomas W. Flynn and Eric C. Schmale of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Justice Department Welcomes Florida Joining T-Mobile/Sprint SettlementRead the Press Release
Florida Attorney General Ashley Moody announced today that the state of Florida is joining the United States, Kansas, Louisiana, Nebraska, Ohio, Oklahoma and South Dakota in settling claims relating to the proposed merger of T-Mobile and Sprint. The settlement requires a substantial divestiture package in order to enable a viable facilities-based competitor to enter the market. Further, the settlement will facilitate the expeditious deployment of multiple high-quality 5G networks for the benefit of American consumers and entrepreneurs.
“Florida has been one of the states leading this investigation since the beginning, and I am pleased that they have chosen to join our settlement after completing their thorough review,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “The merger, with the divestitures, will strengthen competition for high-quality 5G networks that will benefit Floridians and American consumers nationwide.”
The Department’s Antitrust Division and now seven co-plaintiff states have sued to block this transaction, and have agreed to settle the lawsuit based on the proposed settlement. That settlement, if approved by the court, would resolve the Justice Department’s and the co-plaintiff states’ competitive concerns.
Under the terms of the proposed settlement, T-Mobile and Sprint must divest Sprint’s prepaid business, including Boost Mobile, Virgin Mobile and Sprint prepaid, to Dish Network Corp., a Colorado-based satellite television provider. The proposed settlement also provides for the divestiture of certain spectrum assets to Dish. Additionally, T-Mobile and Sprint must make available to Dish at least 20,000 cell sites and hundreds of retail locations. T-Mobile must also provide Dish with robust access to the T-Mobile network for a period of seven years while Dish builds out its own 5G network.
T-Mobile US Inc. is a Delaware corporation headquartered in Bellevue, Washington. In 2018, T-Mobile posted revenues of more than $43 billion. Deutsche Telekom AG, a German corporation headquartered in Bonn, Germany, is the controlling shareholder of T-Mobile US Inc.
Sprint Corporation is a Delaware corporation headquartered in Overland Park, Kansas. In 2018, its posted revenue was over $32 billion. Sprint is controlled by SoftBank Group Corp., a Japanese Corporation headquartered in Tokyo, Japan.
Justice Department Alleges Maryland Used Car Dealership Engaged in Illegal Lending Discrimination Against African AmericansRead the Press Release
The Department of Justice filed a lawsuit today alleging that defendant Guaranteed Auto Sales, a used car dealership, along with its owner and manager, defendants Kelly Ann West and Robert Chesgreen, violated the federal Equal Credit Opportunity Act by offering different terms of credit based on race to those seeking to purchase and finance used cars in Glen Burnie, Maryland. The lawsuit is based on the results of testing conducted by the department’s Fair Housing Testing Program, in which individuals pose as prospective car buyers to gather information about possible discriminatory practices.
The complaint, which was filed in the U.S. District Court for the District of Maryland, alleges that defendants engaged in a pattern or practice of discrimination by offering less favorable auto loan terms to African American testers than white testers. Most significantly, the complaint alleges that employees of Guaranteed Auto Sales told African American testers that they needed larger down payments than white testers for the same used cars, and told African American testers that they were required to fund their down payments in one lump sum, while they gave white testers an option of paying in two installments.
“Using race as a factor in determining credit terms, including the amount of down payment that a customer must pay, is despicable and illegal,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “By filing this lawsuit, the Justice Department is acting to ensure that all individuals are treated equally regardless of their race as they seek information about auto financing terms and apply for credit.”
The federal Equal Credit Opportunity Act prohibits lending discrimination based on race, color, religion, national origin, sex, marital status, age, because an applicant receives income from a public assistance program, or because an applicant has in good faith exercised any right under the Consumer Credit Protection Act. The Justice Department’s enforcement of fair lending laws is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section. Additional information about the Section’s fair lending enforcement can be found at www.justice.gov/fairhousing. Individuals who believe that they may have information that relevant to this case can contact the U.S. Department of Justice at (202) 514-4713.
Justice Department Files Statement of Interest in Indiana Lawsuit Brought by Former Teacher Against ArchdioceseRead the Press Release
The Justice Department today filed a Statement of Interest explaining that the First Amendment protects the right of the Roman Catholic Archdiocese of Indianapolis to interpret and apply Catholic doctrine. The lawsuit was brought against the Archdiocese by a former teacher who was fired from a Catholic high school within the diocese because he was in a same-sex marriage in contradiction to Catholic teaching on marriage. The Archdiocese indicated that the school had to terminate the teacher, or the school would forfeit its Catholic identity, which would have led to several repercussions for the school.
“The First Amendment to the United States Constitution protects the right of religious institutions and people to decide what their beliefs are, to teach their faith, and to associate with others who share their faith,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “The First Amendment rightly protects the free exercise of religion.”
“If the First Amendment’s Religion Clauses stand for anything, it is that secular courts cannot entangle themselves in questions of religious law,” said United States Attorney Josh Minkler.
This case stems from a directive issued by the Archdiocese to Cathedral High School, a Catholic school in Indianapolis. The Archdiocese told Cathedral that the school’s continued employment of a teacher in a public, same-sex marriage in contradiction to Catholic teachings on marriage would result in Cathedral’s forfeiture of its Catholic identity. After much deliberation, the school terminated the teacher. The teacher then filed suit against the Archdiocese, claiming the directive to Cathedral interfered with his employment and his contractual relationship with the school.
The government explains in the Statement of Interest that the First Amendment prevents courts from impairing the constitutional rights of religious institutions. The former teacher’s lawsuit attempts to penalize the Archdiocese for determining that schools within its diocese cannot employ teachers in public, same-sex marriages, and simultaneously identify as Catholic. Supreme Court precedent clearly holds that the First Amendment protects the Archdiocese’s right to this form of expressive association, and courts cannot interfere with that right.
The Statement of Interest also makes clear that courts cannot second-guess how religious institutions interpret and apply their own religious laws. Supreme Court precedent explains that the First Amendment forbids courts from engaging in “quintessentially religious controversies.” Instead, as the Statement of Interest explains, “the legitimacy of the Archdiocese’s decision as a matter of Catholic law” is committed exclusively “to the judgment of the Archdiocese.”
In July 2018, the Department of Justice announced the formation of the Religious Liberty Task Force. The Task Force brings together Department components to coordinate their work on religious liberty litigation and policy, and to implement the Attorney General’s 2017 Religious Liberty Guidance.
Brooklyn Businessman Pleads Guilty to Failing to Pay over Employment TaxesRead the Press Release
A Brooklyn, New York, businessman pleaded guilty today to failing to collect, truthfully account for, and pay over employment taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to documents and information provided to the court, Zhi Hui Zheng owned and operated Good Time Sewing Inc. and Perfect Made Apparel Inc., which did business in Brooklyn. As the owner and operator of these businesses, Zheng was responsible for collecting, truthfully accounting for and paying over to the Internal Revenue Service (IRS) Social Security, Medicare and income taxes withheld from his employees’ wages. For seventeen consecutive quarters, beginning from the first quarter of 2012 and continuing through the first quarter of 2016, Zheng failed to collect and pay over the required employment taxes and failed to file the corresponding Forms 941 with the IRS. Zheng has admitted that he did not pay approximately $688,234 in employment taxes due to the IRS.
Sentencing is scheduled for Jan. 14, 2020, before U.S. District Court Judge Nicholas G. Garaufis. The defendant faces a statutory maximum sentence of five years in prison as well as a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Trial Attorneys Mark Kotila and Christopher O’Donnell of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Joint US-EU Statement on Electronic Evidence Sharing NegotiationsRead the Press Release
U.S. Department of Justice and European Commission officials met yesterday to begin formal negotiations on an E.U.-U.S. agreement to facilitate access to electronic evidence in criminal investigations. After a productive first discussion, there was agreement to regular negotiating rounds with the view to concluding an agreement as quickly as possible. Progress will be reviewed at the next E.U.-U.S. Justice and Home Affairs Ministerial in December.
European Commissioner for Justice, Věra Jourová said, “I welcome the start of formal negotiations. Criminals use fast, modern technologies to organize their crimes and cover up their evidence. We need to work together with our American partners to speed up the access of our enforcement authorities to this evidence. This will strengthen our security, while protecting the data privacy and procedural safeguards of our citizens. The launch of negotiations marks an important step towards achieving this.”
U.S. Attorney General William Barr said, “We are pleased that the Council adopted a mandate to authorize the Commission to negotiate an agreement with the United States on facilitating access to certain e-evidence, and that we have obtained authorization to negotiate with the European Union. This type of agreement can enhance public safety and national security by providing an improved and more rapid ability to identify and respond to criminal threats on both sides of the Atlantic, in a manner that assures respect for the rule of law, privacy, and civil liberties. The U.S. is committed to working with the E.U. on this important issue.”
Federal Court Terminates Agreement After the City of Providence Transforms Services for Students with Disabilities at Providence Public High SchoolRead the Press Release
The Justice Department announced today that the U.S. District Court for the District of Rhode Island terminated the Interim Settlement Agreement (ISA), with the City of Providence (City), in U.S. v. Rhode Island and City of Providence. The independent Court Monitor has found that the City has substantially complied with the ISA’s requirements. Because of the City’s commitment to complying with the ISA, the City now provides transitional services and supports to students with intellectual and developmental disabilities (IDD) at Mount Pleasant High School, including community experiences, to enable those students to prepare for and obtain competitive jobs in businesses in the community.
“The Interim Settlement Agreement changed lives,” said Assistant Attorney General Eric Dreiband of the Justice Department’s Civil Rights Division. “Mount Pleasant students are now able to experience employment and other activities in integrated settings, thereby enabling them to prepare for and obtain competitive jobs in the community. We commend the City for its efforts in achieving compliance with the ISA.”
The ISA was the first in the nation to address the rights of individuals with disabilities to receive integrated employment services in the broader community instead of in segregated workshops exclusively for individuals with disabilities. Prior to the ISA, students with IDD at Mount Pleasant spent school days bagging, labeling, and collating jewelry and similar tasks in an in-school sheltered workshop, apart from their classmates without disabilities. Upon exiting school, most of these students did similar work for sub-minimum wage at a sheltered workshop near the school, despite their ability and willingness to work in integrated settings. Now, the students are integrated with their classmates without disabilities and receive services to prepare them for integrated work in careers that match their interests and abilities, in accordance with the ADA.
The papers related to the ISA, including the findings letter, agreement, Court Monitor’s reports, and papers related to the termination as to the City are available here. The ISA still remains in effect as to the State of Rhode Island. The papers related to the State, including the agreements signed by the State and Court Monitor’s reports, are available here. For more information about the ADA, please visit http://www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
U.S. Attorney’s Office Hosts Roundtables on Sexual Harassment and Racial Discrimination in HousingRead the Press Release
Anchorage, Alaska -- U.S. Attorney Bryan Schroder announced that on Wednesday, Sept. 18 and Thursday, Sept. 19, the U.S. Attorney’s Office and Department of Justice’s Civil Rights Division hosted roundtable discussions on combating sexual harassment and racial discrimination in housing in Fairbanks and Anchorage.
The events included state, tribal, and federal agencies, non-profit organizations, and crisis and legal service providers that often work with Alaska’s most vulnerable populations, who could also become victims of sexual harassment or racial discrimination in housing.
“These roundtables compliment the mission of the Attorney General’s Rural Alaska Anti-Violence Enforcement Network (RAAVEN). Many women facing violence and abuse in rural Alaska come to Anchorage or Fairbanks looking for a fresh start and new opportunities. These roundtables will help ensure that women and other vulnerable populations from all over Alaska are treated respectfully and fairly as they seek housing,” said U.S. Attorney Bryan Schroder.
The Department of Justice, through the U.S. Attorney’s Offices and the Civil Rights Division, enforces the Fair Housing Act, which prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability.
Because victims may not be aware that the conduct they have experienced violates the Fair Housing Act or may not know where to turn, the U.S. Attorney’s Office and Department of Justice hope to collaborate with community organizations to raise awareness and help victims report abuse.
The Justice Department brings cases each year involving egregious conduct, including allegations that defendants have requested sexual favors in exchange for reduced rents or making necessary repairs, made unrelenting and unwanted sexual advances to tenants, and evicted tenants who resisted their sexual overtures. In 2017, the Justice Department recovered more than $1 million in damages for victims. The Justice Department’s investigations frequently uncover sexual harassment or racial discrimination that has been ongoing for years or decades and identify numerous victims who never reported the conduct to federal authorities. Many instances of sexual harassment or racial discrimination in housing continue to go unreported.
The roundtables were coordinated by Lauren Marks of the Housing and Civil Enforcement Section of the Civil Rights Division of Department of Justice.
The Department encourages anyone who has experienced sexual harassment or discrimination in housing, or knows someone who has, to contact the Civil Rights Division by calling (844) 380-6178 or emailing: [email protected].
usao/ak/19-066
Prepared by: Katie Schurig, 907-271-5022, [email protected]
The Department of Justice Announces Launch of New Process for Filing Documents Pursuant to the Foreign Agents Registration Act of 1938 (FARA)Read the Press Release
The Department of Justice today announced a new online system for filing, storing, and searching registrations under the Foreign Agents Registration Act of 1938 (FARA).
This enhanced system (known as eFile) will increase public transparency and allow for better analysis of new filings. The system will also benefit new registrants who will file using fillable web-forms (instead of by filling out PDFs), making it easier for them to upload information and to update registrations, as the statute requires. These improvements build on the FARA Unit’s expansion, earlier this summer, of the website’s search features, which enable full-text searches and downloads of results in bulk format (e.g. CSV, XML) or via machine-readable API endpoints (e.g. CSV, XML, JSON) of more than 80,000 online FARA filings, and last year’s decision to publish its advisory opinions online.
“FARA helps protect the integrity of American democracy by combating covert foreign government influence in our political process,” said Assistant Attorney General John C. Demers. “Improving the FARA filing system is part of the Department’s commitment to improving transparency of foreign influence activities. This new system will make it easier for registrants to comply with their legal obligations and for the public to remain informed of their activities. The more accessible we make information on foreign political activities to the public, the better we accomplish our mission.”
The Department’s commitment to transparency and enforcement of the statute has borne fruit:
- In 2018 alone, more than 20 individuals and entities were criminally charged with violations involving FARA. That is more than the total number of individuals and entities charged in the prior 50 years.
- In May, the Division used its civil enforcement authority for the first time since 1991 to obtain a court order requiring RM Broadcasting to register as the agent of a Russian state-owned media enterprise.
- At current rates, the Department is on track to double the number of new registrants and new foreign principals registering annually as of 2016. Moreover, almost twice the number of individuals who work for registrants (known as “short-form registrants”) have registered, increasing transparency concerning the individuals (and not just the entities) engaged in foreign influence activities.
- The FARA Unit has increased the number of inspections of FARA registrants, to audit compliance with their record-keeping and reporting obligations, by over 30 percent, from an average of about 14 a year (from 2010 to 2018) to 20.
The revamped FARA eFile system will streamline the registration process and improve searching and analysis of FARA filings. The new process is self-guided, provides instructions and definitions, and automatically pre-populates data in subsequent filings. Importantly, eFile will help ensure all required fields are completed and responses are standardized, which will promote transparency and efficiency. Applicants can prepare their materials offline, using templates, which they can upload at the time of filing. Although only new FARA registrants will use the web-fillable eFile system at this time, and existing registrants will continue to use the legacy method, further updates to the website are planned that will transition all filings to the new platform. Additional details regarding this feature, including the templates, are posted on the FARA website.
National Telecommunications and Information Administration Releases Report on Effectiveness of Micro-Jamming Contraband Cellphones in PrisonsRead the Press Release
The National Telecommunications and Information Administration (NTIA) has released a report on the effectiveness of a new technology used to block illegal cellphone signals in correctional institutions. Department officials are encouraged by the promising results and the potential for the technology to disable contraband cellphones in prisons.
The NTIA report details the results of an April 2019 Federal Bureau of Prisons (BOP) pilot test of micro-jamming technology at a state prison in Columbia, S.C. The results are promising, showing that the new technology could be effective in preventing the use of contraband cellphones in prisons. As detailed in the report, NTIA observed micro-jamming technology installed and operated within half of an inmate housing unit. The testing was overseen by BOP staff who observed that cell signals inside the housing unit were blocked, while legitimate calls could be made one foot outside of the housing unit perimeter. This test followed two earlier tests at a federal corrections facility in Cumberland, Md., one of which included a micro-jamming test showing that the technology rendered cellular signals inoperable inside a single cell.
Contraband cellphones are used by inmates to engage in criminal activity, or even run entire criminal enterprises, while incarcerated, endangering law enforcement officers (including correctional staff) and the public. For instance, in June 2019, the Department of Justice announced charges against members and associates of the Aryan Brotherhood, many of whom are currently serving life prison sentences for murder. Some of the charged defendants allegedly used cellphones that had been smuggled into prison to order murders and oversee other criminal activities.
There are countless examples of prisoners using illegal cellphones from behind bars to engage in illicit activities, such as sextortion schemes and conspiracies to purchase a mail bomb over the Dark Web or traffic drugs. “We are pleased with the most recent test results, and our efforts to test and employ new technology will continue until inmates cannot use contraband cellphones to terrorize, threaten, or harm our communities,” said Assistant Attorney General Beth Williams. “We also want to thank Senators Lindsey Graham and Tom Cotton and Congressman David Kustoff for their leadership on this important issue."
The BOP will continue to evaluate cell signal detection and interception technologies and work with its partners and Congress to achieve cost-effective options to combat this threat to corrections and public safety. BOP does not endorse any specific vendor or product.
Readout of Principal Deputy Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division Meeting with Paraguay Vice President Hugo Velazquez and Other DelegatesRead the Press Release
Earlier today, Principal Deputy Assistant Attorney General John P. Cronan of the U.S. Department of Justice’s (DOJ) Criminal Division met with Vice-President Hugo Velazquez, Minister of the Anti-Money Laundering Secretariat Carlos Arregui, and Minister of Intelligence Esteban Aquino of Paraguay in Washington, DC.
They discussed coordination on law enforcement matters including extraditions and the need to join forces to combat drug trafficking, illicit financial schemes, investigating and prosecuting complex financial and terrorism financing cases and other transnational crimes.
The past two years have seen a significant increase in bilateral law enforcement cooperation, given the global reach of transnational crime. Principal Deputy Assistant Attorney General Cronan expressed his gratitude to Paraguay for the successful extradition of multiple fugitives in the past two years. Principal Deputy Assistant Attorney General Cronan also commended Paraguay’s action last month to designate ISIS, al-Qaida, Hamas, and Hizballah as terrorist organizations. The Justice Department has offered to support Paraguay in combatting terrorism and fully and effectively implementing these designations.
They discussed their cooperative criminal investigative efforts between the United States and Paraguay as well as the case-based mentoring and technical assistance that the Office of Overseas Prosecutorial Development, Assistance, and Training (OPDAT), and its Asuncion-based Resident Legal Advisor (RLA) is providing.
Both sides agreed to continued collaboration between Justice Department entities and counterparts in the region to achieve their law enforcement priorities.
Online Bidder Pleads Guilty to Antitrust Charge for Rigging Bids at Government AuctionsRead the Press Release
Igor Yurkovetsky pleaded guilty today in connection with an ongoing investigation into a conspiracy to rig bids submitted to the General Services Administration (GSA), the Department of Justice announced.
According to the one-count felony charge filed in the U.S. District Court for the District of Minnesota in Minneapolis, Yurkovetsky conspired to rig bids at online public auctions of surplus government equipment conducted by the GSA. Yurkovetsky, a Pennsylvania resident, is charged with participating in the conspiracy from about July 2012 until as late as May 2018. He is the second individual charged in this investigation, and he has agreed to cooperate in the Department’s ongoing investigation.
“Today’s charge brings to justice another participant in a long-running conspiracy to corrupt online markets and cheat taxpayers and the federal government of the benefits of competition,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “This charge will not be the last in this investigation. The Department and its law enforcement partners are committed to prosecuting individuals who rig bids at government auctions.”
The GSA operates GSA Auctions, which offers the public the opportunity to bid electronically on a wide variety of federal assets, including computer equipment that is no longer needed by government agencies. GSA Auctions sells that equipment via its online auctions, and the proceeds of the auctions are distributed to the government agencies or the U.S. Treasury general fund. According to the charge, the primary purpose of the conspiracy was to suppress and eliminate competition. Additionally, the co-conspirators obtained the equipment by agreeing which co-conspirators would submit bids for particular lots offered for sale by GSA Auctions and which co-conspirator would be designated to win a particular lot.
“The integrity of GSA’s online systems and programs is vital to good government,” said Assistant Inspector General for Investigations James. E. Adams of the GSA. “The GSA Office of Inspector General will continue to ensure these systems and programs are free from corruption and manipulation.”
A criminal violation of Section 1 of the Sherman Act carries a maximum of 10 years in prison and a $1 million criminal fine for individuals. The maximum fines 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 ongoing investigation into bid rigging at GSA auctions is being conducted by the Antitrust Division’s Chicago Office and the GSA Office of Inspector General’s Great Lakes Regional Investigations Office in Chicago, Illinois. Anyone with information concerning bid rigging or fraud related to GSA auctions should contact the Chicago Office of the Antitrust Division at 312-984-7200, the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/report-violations or email the GSA Office of Inspector General at [email protected].
Former U.S. Army Reserve Employee Sentenced in Wire Fraud and Theft SchemeRead the Press Release
A former U.S. Army Reserve employee was sentenced today to 18 months’ imprisonment followed by three years of supervised release on charges of wire fraud and theft of government money as part of a scheme to steal more than $400,000 from the 63rd Regional Support Command at Moffett Field in Mountain View, California.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division made the announcement.
Ramon Torry, 55, of Irvine, California, was sentenced by U.S. District Court Judge Beth Labson Freeman in the Northern District of California, San Jose Division, who also ordered Torry to pay restitution in the amount of $302,982.29 and forfeiture the same amount.
According to admissions that he made during his guilty plea, Torry devised a scheme to steal money from the 63rd Regional Support Command related to a contract for the creation of a Public Service Announcement (PSA) touting the Command’s accomplishments. In February 2016, Torry began creating fake invoices for work allegedly performed by the Calfornia production company for the production of the PSA as well as for training and other services that were never performed. Torry then directed others in the Command to make payments to the company contracted to produce the PSA by both government purchase card and wire payments. Between December 2015 and October 2017, Torry directed payments from the 63rd to the production company totaling more than $414,000. He then directed Person A at the company to kick back more than $300,000 of those funds to Torry, which he converted to his own use and that of others.
The General Services Administration Office of Inspector General and the U.S. Army Criminal Investigation Command investigated the case. Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section is prosecuting the case. Assistant United States Attorney Marissa Harris from the Northern District of California has provided assistance with the case.
Department of Justice Announces Interim Policy on Emerging Method to Generate Leads for Unsolved Violent CrimesRead the Press Release
Today, the Department of Justice announced its Interim Policy on forensic genetic genealogy (FGG), an emerging investigative technique that will combine technological advancements in DNA analysis and searching with traditional genealogy research. FGG is a unique investigative method that can generate leads used by law enforcement to not only identify unknown suspects but to help identify the remains of homicide victims.
“Prosecuting violent crimes is a Department priority for many reasons, including to ensure public safety and to bring justice and closure to victims and victims’ families,” said Deputy Attorney General Jeffrey A. Rosen. “We cannot fulfill our mission if we cannot identify the perpetrators. Forensic genetic genealogy gets us that much closer to being able to solve the formerly unsolvable. But we must not prioritize this investigative advancement above our commitments to privacy and civil liberties; and that is why we have released our Interim Policy – to provide guidance on maintaining that crucial balance.”
The Department’s policy, which will go into effect on Nov. 1, 2019, is designed to balance the Department’s relentless commitment to solving violent crimes and protecting public safety against equally important public interests – such as preserving the privacy and civil liberties of all citizens. In order to do so, the Department’s Interim Policy on Forensic Genetic Genealogical DNA Analysis and Searching (found at www.justice.gov/forensics) provides the first comprehensive guidance to law enforcement on the use of FGG.
The Interim Policy contains nine sections that lay out critical requirements for the use of FGG by law enforcement, including the collaborative interdisciplinary use of the technique, the criteria a case must meet in order to use FGG, and how the practice is used to generate leads for unsolved crimes.
As genetic genealogy websites become more popular and individuals continue to voluntarily submit their DNA or enter their genetic profiles onto publically available genetic genealogy sites, the more biological information there is to compare with DNA samples from crime scenes.
In essence, a DNA sample taken from the scene of a violent crime that does not match any samples available in the FBI’s Combined DNA Index System (CODIS) will not generate a lead for law enforcement. FGG provides an alternative option. However, FGG requires a type of DNA testing that Department laboratories currently do not perform, so the sample must be outsourced to a vender laboratory. After the vender laboratory completes a more comprehensive analysis on the sample, the resulting genetic profile is entered into one or more publicly-available genetic genealogy services and compared by automation against the genetic profiles of individuals who have voluntarily submitted their own samples. The computer’s algorithm then evaluates potential familial relationships between the sample donor and the website’s users. If an association is detected, it generates a lead. Subsequently, law enforcement can use that lead to advance their investigation using traditional investigative and genealogical methods.
The personal genetic information is not transferred, retrieved, downloaded, or retained by the genetic genealogy users – including law enforcement. And before FGG is an option, all other available techniques, including a search of CODIS, must be exhausted.
A final Department policy on forensic genetic genealogy will be issued in 2020.
Soldier at Fort Riley Charged with Distributing Instructions for BombsRead the Press Release
TOPEKA, KAN. B A soldier stationed at Fort Riley was charged in federal court here today with sending over social media instructions for making bombs, U.S. Attorney Stephen McAllister said.
Jarrett William Smith, 24, Fort Riley, Kan., was charged with one count of distributing information related to explosives and weapons of mass destruction.
Smith, a private first class infantry soldier, joined the Army June 12, 2017, and was transferred to Fort Riley, Kan., on July 8, 2019. According to an FBI investigator’s affidavit, Smith said on Facebook he was interested in traveling to the Ukraine to fight with a paramilitary group called the Azov Batallion.
During a Facebook chat, Smith offered to teach other Facebook users to make cell phone explosive devices “in the style of the Afghans.” On Aug. 19, 2019, Smith told an undercover investigator he was looking for “radicals” like himself. Smith talked about killing members of Antifa and destroying nearby cell towers or a local news station. On Aug. 21, Smith told an undercover investigator about how to make a vehicle bomb. When the investigator commented that most of the components were household items, Smith said: “Making AK47s out of expensive parts is cool, but imagine if you will if you were going to WalMart instead of a gun store to buy weapons.”
Smith also described in detail to the undercover investigator how to build a bomb that could be triggered by calling a cell phone.
“Be very careful with the fully armed device,” Smith warned the investigator.
If convicted, Smith could face up to 20 years in federal prison and a fine up to $250,000. The FBI investigated. Assistant U.S. Attorney Tony Mattivi is prosecuting.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.
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Former City of Detroit Building Authority Official Sentenced for Bribery Conspiracy in Connection with the Detroit Demolition ProgramRead the Press Release
Aradondo Haskins, 48, the former Field Operations Manager for the City of Detroit Building Authority overseeing the demolition program in Detroit, was sentenced today to 12 months in prison after having pleaded guilty to charges of conspiracy to commit bribery and honest services fraud in connection with the Detroit Demolition Program.
The Honorable Victoria Roberts sentenced Haskins to serve 12 months in federal prison following his conviction for conspiracy to commit honest services fraud by taking bribes while he was employed at Adamo Group and at the City of Detroit. Following his release from prison, Haskins will serve a two-year term of supervised release. The Court also ordered that Haskins pay a $5,000 fine and that Haskins forfeit $26,500 for the bribes that he took while employed by Adamo and by the City.
The United States Treasury Department created the Blight Elimination Program, which focused on helping communities demolish vacant houses. The program was paid for through the Hardest Hit Fund (HHF), a housing support program intended to protect home values, preserve home ownership and promote economic growth. The City of Detroit was one of the recipients of this HHF money. Approximately $258,656,459 in Hardest Hits Funds have been allocated to the City of Detroit since Oct. 7, 2013.
As stated during Haskins’s guilty plea, from January 2013 through April 2015, Haskins was employed as an "estimator" with Adamo. Adamo is a private, "for profit," company which provides demolition services throughout the United States and Canada, including the City of Detroit. Haskins’s responsibilities at Adamo included assembling bid packages in response to "Requests for Proposals" (RFPs) issued by the City of Detroit. Adamo responded to the RFPs by submitting bids to the City hoping to secure demolition contracts by being the lowest bidder. In assembling the bid packages, Haskins contacted various subcontractors requesting bids for work to be included in Adamo’s submissions. "Contractor A" was one of the subcontractors who received Haskins’s invitation to bid. On several occasions, Contractor A paid Haskins money for disclosing confidential information about bids from Contractor A’s competitors. In return for these payments, Haskins disclosed confidential information about the lowest competitor bid which allowed Contractor A to submit an even lower bid, ensuring that Contractor A was awarded lucrative contracts. Haskins accepted bribes on at least eight occasions while he worked at Adamo totaling approximately $14,000.
According to the plea, due in large part to his experience at Adamo, Haskins was hired by the City of Detroit Building Authority (DBA) as a "Field Operations Manager" for its demolition program. As an official of the City of Detroit, Haskins was the primary point of contact for demolition contractors and he opened and read bids contractors submitted in response to RFPs. Contractor A, knowing that Haskins was still in a position to influence the demolition contract bidding process, continued to pay Haskins to use his official authority to influence the awarding of demolition related contracts to Contractor A. Haskins accepted the cash bribe payments from Contractor A in exchange for providing Contractor A confidential information about bids submitted to the DBA. With the confidential information, Contractor A was able to submit bids low enough to ensure that Contractor A was awarded City of Detroit demolition related contracts. In total, Haskins accepted approximately $11,500 in bribes from Contractor A. After his employment with the City of Detroit, Haskins accepted an additional approximately $1,000 from Contractor A for information Contractor A received while Haskins was employed with the City.
First Assistant U.S. Attorney Saima Mohsin of the Eastern District of Michigan and Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division commended the outstanding work of the Special Inspector General of the Troubled Asset Relief Program (SIGTARP) and the Federal Bureau of Investigation (FBI) in conducting a comprehensive criminal investigation into the demolition program.
"The Antitrust Division will aggressively pursue collusion that corrupts the government contracting process, especially where the illicitly shared bid information enables the government contractor to submit anti-competitive bids to the detriment of taxpayer-funded programs," said Assistant Attorney General Delrahim.
"The City of Detroit and its demolition program were entrusted with millions of taxpayer dollars to tear down abandoned houses in Detroit’s neighborhoods. The corruption of the government contracting process by Aradondo Haskins damaged the integrity of the demolition program and broke the public trust. This prosecution serves as a warning to public officials that soliciting or accepting bribes will be punished and as a promise to the taxpaying public that such violations of the public trust will not be tolerated," said First Assistant U.S. Attorney Mohsin.
"Anti-competitive corruption by city officials that award contracts in the Hardest Hit Fund’s Blight Elimination Program will be met by justice and accountability," said Special Inspector General Christy Goldsmith Romero of the Troubled Asset Relief Program (SIGTARP). "Defendant Haskins started taking bribes from subcontractors when he worked for lead contractor Adamo and continued his crimes as a city official. I commend U.S. Attorney Matthew Schneider and Assistant Attorney General for Antitrust Delrahim for standing united with SIGTARP in fighting corruption in this TARP program."
"Mr. Haskins was sentenced today for corrupting the bidding process both while he was seeking contracts through a federally-funded program and after he became a City of Detroit employee," said Special Agent in Charge Steven M. D'Antuono of the FBI's Detroit Field Office. "The FBI’s Detroit Area Public Corruption Task Force will continue to investigate and fight corruption by those who give illegal, preferential treatment at the expense of honest American business. I would encourage anyone with information about potential public corruption in Michigan to contact FBI Detroit's Public Corruption tipline at 313-965-2222 or our main number at 313-965-2323."
The case was prosecuted by Assistant U.S. Attorneys Sarah Resnick Cohen, Karen Reynolds, Adriana Dydell and DOJ Antitrust Trial Attorney Matthew Stegman.
Department of Justice Antitrust Division Announces Agenda and Panelists for Joint Agency Workshop on Competition in Labor Markets with the U.S. Federal Trade CommissionRead the Press Release
The Department of Justice has released the agenda and list of participants for its public workshop on the role of antitrust enforcement in labor markets and promoting robust competition for the American worker. The workshop will be the first in a two-part series hosted together with the U.S. Federal Trade Commission.
The first workshop, which the Justice Department will host on Sept. 23, 2019, will cover a variety of labor competition issues, including, among other topics, anticompetitive no-poach and wage-fixing agreements, approaches to labor market definition, the role of employer collaboration and contractual arrangements between employers on competition for workers, labor monopsony in merger enforcement, and antitrust exemptions for union activity and collective bargaining. Panelists will discuss recent developments in the law, economic research, and policy proposals, as well as how to effectively develop cases challenging labor monopsony.
The agenda for the workshop includes a morning session from 10 a.m. to 12:30 p.m. and an afternoon session from 2 p.m. to 5:30 p.m. Details are as follows:
Morning Session
Opening Remarks
- Makan Delrahim, Assistant Attorney General for Antitrust, U.S. Department of Justice
Presentation: Economics of Labor Markets and Key Questions for the Workshop
- Ioana Marinescu, Assistant Professor, School of Social Policy & Practice, University of Pennsylvania
- Elena Prager, Assistant Professor of Strategy, Kellogg School of Management, Northwestern University
Panel 1: Approaching Labor Market Definition
Panelists will discuss how labor markets should be defined in antitrust analysis and the appropriate tools, methods and categories of information required for such analysis. The panel also will discuss market definition in merger and non-merger cases, and when antitrust enforcers should investigate labor monopsony theories in merger reviews.
- Orley Ashenfelter, Professor of Economics, Princeton University
- Patrick Greenlee, Economist, Antitrust Division, U.S. Department of Justice
- Dean Harvey, Lieff Cabraser Heimann & Bernstein, LLP
- Kevin Murphy, Professor of Economics, Booth School of Business, University of Chicago
Afternoon Session
Afternoon Remarks
- Ramogi Huma, Executive Director, National College Players Association
Panel 2: Ancillarity, Collaborations and Contractual Arrangements: Assessing Antitrust Harm in Complex Business Settings
Restraints on worker mobility are not always purely horizontal or purely vertical, and they sometimes arise in complex business settings, including a variety of collaborations, that blur the lines between interbrand and intrabrand competition. The panel will explore recent developments in the case law and economic literature and discuss how antitrust enforcers should assess restraints on worker mobility, including restraints that arise within franchise systems and for workers in the “gig” economy.
- Rachel Brass, Partner, Gibson, Dunn & Crutcher LLP
- Darrell Johnson, CEO, FranDATA
- Rahul Rao, Assistant Attorney General, Washington State Attorney General
- Marshall Steinbaum, Assistant Professor, Department of Economics, University of Utah
- Randy Stutz, Vice President of Legal Advocacy, American Antitrust Institute
- Samuel Weglein, Managing Principal, Analysis Group, Inc.
Panel 3: Labor Unions and Collective Bargaining
The panel will address the latest developments in case law and public policy regarding statutory and non-statutory labor exemptions from the antitrust laws for collective bargaining and other union activity. Panelists also will discuss how the evolving status and classification of workers, including workers in the digital economy, dovetails with these labor exemptions.
- Jonathan Berry, Principal Deputy Assistant Secretary for Policy, U.S. Department of Labor
- W. Stephen Cannon, Constantine Cannon LLP
- Matthew Ginsburg, Associate General Counsel, AFL-CIO
- Jeffrey Kessler, Winston & Strawn LLP
- Derek Ludwin, Covington & Burling LLP
- Sanjukta Paul, Assistant Professor of Law, Wayne State University
Closing Remarks
- Ronald Drennan, Acting Economics Director of Enforcement
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 Oct. 23, 2019 at [email protected].
The workshop is free and open to the public and will take place in the DOJ Conference Center, Room 7411 of the Robert F. Kennedy Department of Justice Building, 950 Pennsylvania Avenue NW, Washington, D.C., from 10 a.m. to 5:30 p.m. EDT on Sept. 23, 2019. A recording of the workshop will be available on the Antitrust Division’s website. Registration information, an agenda, directions to the event, and a list of speakers are available on the event webpage. Attendees are encouraged, but not required, to register in advance for the workshop here. Members of the press also should email [email protected]. 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 Alexei Woltornist in the Office of Public Affairs 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 second day of the workshop will be hosted by the Federal Trade Commission and will focus on the legal, economic and consumer protection issues associated with the use of non-compete clauses in employment contracts. The workshop will examine the current state of economic research on the effects of non-compete clauses, and whether additional research would allow the agencies to better understand the short-term and long-term micro and macro effects of such clauses. The Federal Trade Commission will announce the date and agenda for the second workshop at www.ftc.gov.
Container Ship Crewmembers Sentenced for Conspiring to Import over Three Tons of CocaineRead the Press Release
NEW ORLEANS – On September 19, 2019 United States District Judge Barry Ashe sentenced two Colombians, JHONNY RODRIGUEZ ALVAREZ, age 36, and ARIEL CALVO HENAO, age 52, two Ecuadorians, HECTOR RAFAEL GOMEZ LIMONES, age 38, VICENTE LOPEZ MERO, age 61, and four Peruvians JESUS JUSTO TASA CERVANTES, age 65, BORIS WISMARK VERGARA MONCADA, age 54, WALTER REYNALDO VIERA SULLON, age 45 and EDISON OMAR OTERO CRUZ, age 26, for conspiring to import 3,400 kilograms of cocaine into the United States. The sentencings took place over the last several weeks, with the final defendant being sentenced today.
All of the defendants were crewmembers aboard a container vessel that was traveling from Chimbote, Peru to Ensenada, Mexico, which is near the border with the United States. The U.S. Coast Guard interdicted the vessel in international waters south of Costa Rica. After extensive searching, law enforcement found a hidden compartment inside a ballast tank on the vessel. Inside the hidden compartment, law enforcement located approximately 3,400 kilograms of cocaine.
As part of the plea agreement, the crewmembers all acknowledged that after the vessel left port in Peru, it met up at sea with speedboats sent from near the Colombia/Ecuador border. The vessel crew used an onboard crane to load the tons of cocaine off of the speedboats and onto the deck of the container vessel. The crewmembers then moved the cocaine into a secret compartment that had been constructed specifically to hide the cocaine. The sophisticated compartment was secured with headless screws and covered with putty so that it was virtually impossible to detect.
Pursuant to the plea agreement with the United States, the crewmembers, many of whom claimed they were forced into participating in the smuggling operation by the individuals who organized the shipment, faced a statutory maximum sentence of sixty months. District Judge Ashe sentenced each of them to the statutory maximum term, as well as one year of supervised release.
This case was investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Drug Enforcement Administration, with assistance from the United States Coast Guard. This case is being prosecuted by Assistant United States Attorney David Haller.
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Colombian Narcotics Kingpin Sentenced to Prison for Bribing Former Federal Agent to Dismiss IndictmentRead the Press Release
A Colombian Cali Cartel cocaine trafficker was sentenced today to 27 months in prison followed by three years of supervised release in the Southern District of Florida for bribing a former special agent with U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) to secure the dismissal of a drug trafficking indictment filed against him.
According to admissions in the plea agreement, Jose Bayron Piedrahita-Ceballos, 60, of Medellin, Colombia, offered and gave things of value to Christopher Ciccione II, 54, a former federal law enforcement agent, in exchange for Ciccione using his official position to cause a drug trafficking indictment against Piedrahita-Ceballos to be dismissed and to obtain official authorization for Piedrahita-Ceballos to enter the United States. At the time of the dismissal, Ciccione was the case agent for Operation Cornerstone, a large-scale Organized Crime Drug Enforcement Task Force case that resulted in indictments of over 100 Colombia-based cocaine traffickers from the Cali Cartel.
“This defendant was a drug kingpin who paid a Special Agent to bribe his way out of a criminal indictment,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “As today’s sentence shows, the Department of Justice will work diligently to ensure that our justice system is never corrupted in this manner.”
“ICE takes responsibility in ensuring its employees have the trust of the American public,” said Special Agent in Charge Southeast Michael T. Moreland of ICE’s Office of Professional Responsibility (OPR). “To erode that trust, Mr. Piedrahita sought to use an employee for his personal gain and his sentence today conveys to other bad actors that ICE will not tolerate the exploitation of its employees or the American justice system.”
“This case demonstrates the power of collaboration between the U.S. law enforcement and our counterparts abroad,” said Department of Homeland Security Inspector General (DHS-OIG) Dr. Joseph V. Cuffari. “Today’s sentence constitutes a substantial step toward our commitment to thwart any scheme that attempts to corrupt the integrity of U.S. law enforcement personnel and circumvent our justice system.”
Piedrahita-Ceballos, an Operation Cornerstone defendant, and Colombian national Juan Carlos Velasco, 51, gave Ciccione approximately $20,000 in cash, dinner, drinks and prostitution during an extended hotel stay in Bogota, Colombia, in exchange for official acts that resulted in the dismissal of the indictment against Piedrahita-Ceballos. Velasco served as the intermediary between Ciccione and Piedrahita-Ceballos. Velasco and Ciccione have previously pleaded guilty for their conduct in this matter. On Feb. 9, 2018, Ciccione was sentenced to 36 months in prison. On Jan. 19, 2018, Velasco was sentenced to 27 months in prison.
In furtherance of this scheme to obstruct justice, Ciccione misled the U.S. Attorney’s Office, HSI management, and altered TECS records to secure the dismissal. Ciccone also falsified the concurrence of several other federal agents and attempted to obtain entry for Piedrahita-Ceballos into the United States.
The U.S. Department of the Treasury’s Office of Foreign Assets Control designated Piedrahita as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act on May 3, 2016.
ICE-OPR, DHS-OIG and the FBI investigated the case. The Criminal Division’s Office of International Affairs, the Office of the Judicial Attaché in Colombia and the Drug Enforcement Administration provided valuable assistance to the investigation. The Colombian Attorney General’s Office also provided invaluable support. Trial Attorney Jennifer A. Clarke of the Criminal Division’s Public Integrity Section is prosecuting the case.
Attorney General Barr Appoints Nine New U.S. Attorneys to Advisory CommitteeRead the Press Release
Attorney General William P. Barr today announced the appointment of the following nine U.S. Attorneys to serve on the Attorney General’s Advisory Committee (AGAC): David Anderson, Northern District of California; Scott Brady, Western District of Pennsylvania; Maria Chapa Lopez, Middle District of Florida; Halsey Frank, District of Maine; Erica MacDonald, District of Minnesota; Christina Nolan, District of Vermont; Zach Terwilliger, Eastern District of Virginia; Tom Kirsch, Northern District of Indiana; and Nicholas Trutanich, District of Nevada.
“I am pleased to appoint these nine outstanding U.S. Attorneys to this key advisory committee. I am confident that they will serve with distinction,” Attorney General William P. Barr said. “The U.S. Attorneys who comprise the Attorney General’s Advisory Committee play a critical role in carrying out the Department of Justice’s important work, including its efforts to reduce violent crime, combat the opioid crisis, protect the most vulnerable, and enforce the rule of law.”
The Attorney General also thanked the following U.S. Attorneys who have completed their terms and are rotating off the committee: Louis Franklin, Middle District of Alabama; Robert Higdon, Eastern District of North Carolina; John Huber, District of Utah; Rob Hur, District of Maryland; Jeff Jensen, Eastern District of Missouri; Andrew Lelling, District of Massachusetts; Joshua Minkler, Southern District of Indiana; Richard Moore, Southern District of Alabama; Bryan Schroder, District of Alaska; and David Weiss, District of Delaware.
Chaired by U.S Attorney for the District of Columbia, Jessie K. Liu, 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 U.S. Attorneys’ Offices.
Attorney General Barr also announced that U.S. Attorney for the Northern District of Texas Erin Nealy Cox, a current member, will replace U.S. Attorney John Huber as the Vice Chair of the AGAC.
The bios of all U.S. Attorneys are available here.Former Owner of Marble Mining Company in Afghanistan Sentenced to Prison for Defrauding U.S. Government Agency, Leading to Default on a $15.8 Million LoanRead the Press Release
The former owner of a marble mining company in Afghanistan was sentenced to 54 months in prison today for his role in a scheme to defraud the Overseas Private Investment Corporation (OPIC), a U.S. government agency, which led to the default on a $15.8 million loan.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Inspector General for Afghanistan Reconstruction (SIGAR) John F. Sopko and Assistant Director in Charge Timothy R. Slater of the FBI’s Washington Field Office made the announcement.
Azam Doost, aka “Adam Doost,” “Mohammad Azam Doost” and “Mohammad Azim,” 41, most recently of Union City, California, was sentenced by U.S. District Judge Amit P. Mehta of the District of Columbia, who also ordered Doost to serve 36 months of supervised release and to pay $8.9 million in forfeiture and separate restitution in the same amount. After a seven-day jury trial in September 2018, presided over by Judge Mehta, Doost was found guilty of three counts of major fraud against the United States, eight counts of wire fraud, four counts of false statements on loan applications or extensions and eight counts of money laundering.
The evidence at trial showed that in February 2010, while working at his company, Equity Capital Mining LLC, Doost, along with his brother, obtained a $15.8 million loan from OPIC for the development, maintenance and operation of a marble mine in western Afghanistan. The loan proceeds were paid directly from OPIC to the alleged vendors who provided equipment for the mine, as reported to OPIC by Doost or his consultant. Doost was required to deal with these companies in arms-length transactions or, to the extent any transactions were other than at arms-length, he was required to report any affiliation he had with a vendor. Doost falsely informed OPIC that he had no affiliation with any of the vendors with whom he dealt, when in fact he had financial relationships with several of them.
The evidence also showed that Doost’s business partner was listed on the bank accounts for a number of these vendors and that, upon receipt of money from OPIC into the respective accounts, Doost caused significant amounts of this money to be transferred from that respective account to companies and individuals with whom Doost was associated, or to pay debts Doost owed. Doost’s consultant received a commission of $444,000 for his purported consulting services with the first of three disbursements from OPIC, and shortly after $40,000 was transferred from the consultant’s account to a Doost company in California.
The evidence at trial further showed that when the time came for Equity Capital Mining LLC to repay the loan to OPIC, Doost provided purported reasons to OPIC why it was not able to make those repayments at a time when Doost had control of sufficient funds to make those repayments. Doost and his brother failed to repay any of the principal on the OPIC loan, and only a limited amount of interest, and ultimately defaulted on the loan, the evidence showed.
SIGAR investigated the case with assistance from the FBI. Trial Attorneys Daniel Butler and Michael McCarthy of the Criminal Division’s Fraud Section prosecuted the case. The Criminal Division’s Office of International Affairs also provided important assistance.
Former CEO Sentenced to Prison for Defrauding Food and Drug Administration and Distributing Adulterated DrugsRead the Press Release
The former president of a drug compounding company was sentenced to prison for his convictions for conspiring to defraud the Food and Drug Administration (FDA) and for multiple counts of distributing adulterated drugs, the Department of Justice announced today.
U.S. District Judge James R. Sweeney II sentenced Paul J. Elmer, 68, the former president and owner of Pharmakon Pharmacueticals Inc. to 33 months in prison. Elmer also was ordered to pay a $25,000 fine and serve one year of supervised release after serving his prison sentence.
“The Department of Justice takes seriously conduct that unlawfully undermines the safety of compounded drugs,” said Assistant Attorney General Jody Hunt of the Department of Justice's Civil Division. “We will not tolerate actions that impede the FDA’s efforts to ensure the safety of such drugs, and we will thoroughly investigate and prosecute those who knowingly endanger patients.”
On April 10, 2019, after an eight-day trial, a jury in Indianapolis, Indiana, convicted Elmer, formerly a licensed pharmacist, of one felony count of conspiracy to defraud the FDA and to obstruct FDA inspections, three misdemeanor counts of introducing adulterated drugs into interstate commerce, and six misdemeanor counts of adulterating drugs while held for sale after shipment of a drug component in interstate commerce.
Pharmakon was a Noblesville, Indiana, drug compounding company, founded by Elmer, which made and distributed compounded, sterile, intravenous drugs to military and civilian hospitals throughout the United States.
In June 2017, a grand jury returned an indictment against Elmer and Pharmakon’s former compliance director, Caprice R. Bearden, for the conspiracy and adulteration offenses. On April 29, 2019, Bearden was sentenced to five months in prison and three years of supervised release, following her entry of a guilty plea to all charges.
The evidence at trial showed that, between 2013 and 2016, at Elmer’s direction, Pharmakon routinely shipped compounded drugs to hospitals without having received laboratory test results that verified that the drugs were their purported strengths. Furthermore, evidence shows that, despite later receiving laboratory test results showing potency failures, Elmer did not recall over- or under-potent drugs, notify the FDA of the potency failures, or conduct any investigation to determine the cause of the potency failures. The evidence showed that Pharmakon shipped customers at least 70 lots of over- or under-potent drugs from 2013 to 2016.
FDA consumer safety officers testified at trial about two inspections of Pharmakon they conducted in 2014. One inspection was prompted by Pharmakon’s distribution of 200 percent potent midazolam, a sedative that was used to treat premature infants, to an Indianapolis hospital. The consumer safety officers testified to observing — and informing Elmer of — numerous violations of FDA regulations during each inspection. Former Pharmakon employees testified that Elmer and Bearden misled and interfered with these FDA inspections to prevent the FDA from knowing about the potency failures as well as other aspects of the business. Former employees also testified that certain changes in process that Elmer and Bearden told the FDA Pharmakon would enact never happened.
According to other evidence at the trial, in February 2016, Pharmakon distributed 2,460 percent super-potent morphine sulfate, an opioid pain medication, to hospitals in Indianapolis and Chicago. Nurses at the Indianapolis hospital administered the morphine, not knowing that it was 2,460 percent super potent, to infants in the pediatric unit. Three infants suffered adverse effects from the narcotic overdose. One infant needed to be revived through the administration of Naloxone (commonly known as Narcan) and sent by helicopter to a nearby hospital with a neo-natal intensive care unit. These adverse events led to a final FDA inspection in which FDA consumer safety officers testified that they discovered evidence of multiple previous potency failures that had been concealed by Bearden during the first two inspections. Former employees testified that Elmer and Bearden misled and interfered with this final FDA inspection as well.
“Pharmaceutical manufacturers, such as Pharmakon, have a duty to ensure they are producing drugs that are formulated correctly and are safe for public consumption,” said U.S. Attorney Josh Minkler for the Southern District of Indiana. “The U.S. Attorney’s Office is committed to prosecuting those individuals who prioritize profit over safety and negligently compromise the integrity of their product.”
“Producing unsafe drugs puts patients at risk and is particularly concerning when they reach already vulnerable populations such as premature infants. This conviction demonstrates that those, including drug compounders, who distribute harmful drugs will be held accountable under the law,” said Director Catherine A. Hermsen, FDA Office of Criminal Investigations. “The FDA continues to play an important role in protecting patients — including young children — and we will continue to work with our law enforcement partners to pursue and bring to justice those who place profits before the health of U.S. patients.”
“When drug compounders disregard safety standards and violate the law, patient health can be put at significant risk. In this case, we saw unacceptable behavior from the defendant whose company distributed dangerous products that led to serious adverse events in infants,” said Stacy Amin, FDA Chief Counsel. “The FDA is fully committed to working with the Department of Justice to stop these bad actors and protect patients from potential public health risks.”
Assistant Attorney General Jody Hunt and U.S. Attorney Josh Minkler commended the FDA’s Office of Criminal Investigations, which conducted the investigation. The case was prosecuted by Assistant U.S. Attorney Cindy J. Cho of the U.S. Attorney’s Office for the Southern District of Indiana and Senior Litigation Counsel David A. Frank of the Department’s Consumer Protection Branch, with assistance from Paul Joseph of the FDA’s Office of Chief Counsel.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Southern District of Indiana visit its website at https://www.justice.gov/usao-sdin.
Department of Justice and EPA Reach Clean Air Act Settlement with Hyundai for Engines and Construction Equipment Illegally Imported and Sold in the United StatesRead the Press Release
Under a settlement with the U.S. Department of Justice and the U.S. Environmental Protection Agency (EPA), Hyundai Construction Equipment Americas Inc. (HCEA) and Hyundai Heavy Industries Co. Ltd (HHI) (collectively known as “Hyundai”) has agreed to pay a $47 million civil penalty for violating Title II of the Clean Air Act. The settlement resolves allegations that Hyundai sold heavy construction vehicles with diesel engines that were not certified to applicable emission standards.
From 2012 to 2015, Hyundai pre-purchased, or “stockpiled” engines that met outdated emissions standards and then illegally imported, marketed and sold heavy construction equipment with these engines installed, in violation of the Clean Air Act. Additionally, Hyundai imported, marketed and sold units of equipment in quantities that exceeded their exemption allowance limit under the Transition Program for Equipment Manufacturers (TPEM) program regulations. Defendants allegedly introduced into United States commerce at least 2,269 illegal diesel nonroad vehicles. Under the terms of the settlement, Hyundai has agreed to pay a $47 million civil penalty to resolve their Clean Air Act violations.
“Hyundai put profits above the public’s health and the requirements of the law,” said Jeffrey Bossert Clark, Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. “We will not tolerate such schemes that skirt the Clean Air Act, designed by Congress to improve air quality.”
“EPA is holding Hyundai accountable for importing and selling diesel engines and heavy-duty construction vehicles that did not meet Clean Air Act emission standards,” said Susan P. Bodine, EPA Assistant Administrator for the Office of Enforcement and Compliance Assurance. “By ignoring regulatory requirements, Hyundai not only gained a market advantage over their competitors, but they also introduced higher polluting vehicles into the United States, undermining the protection of human health and the environment.”
In 2015, the EPA received a whistleblower tip reporting illegal importation of nonroad diesel equipment that did not meet applicable emission standards. Based upon the information received from the whistleblower, the EPA initiated both criminal and civil investigations. In the criminal proceeding, the court imposed a sentence of, among other things, a $1,950,000 criminal fine.
Hyundai’s illegal nonroad diesel vehicles were not certified as meeting applicable pollutant emission standards, including for nitrogen oxides (NOx) and particulate matter (PM). NOx is a reactive gas that contributes to the formation of PM and ozone. PM is a form of air pollution composed of microscopic solids and liquids suspended in air. Ozone is a highly reactive gas that is formed in the atmosphere, in part, from emissions of NOx. Exposure to ozone and PM is linked to a number of health effects as well as premature death. Children, older adults, people who are active outdoors (including outdoor workers), and people with heart or lung disease are particularly at risk for health effects related to ozone or PM exposure.
For more information on this settlement: https://www.epa.gov/enforcement/hyundai-construction-vehicles-clean-air-act-settlement-information-sheet.
Owner of Detroit-Area Health Care Clinics Pleads Guilty to Drug Diversion SchemeRead the Press Release
The owner of a Detroit-area pain clinic and physical therapy clinic pleaded guilty today for her role in a drug diversion scheme.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Timothy J. Plancon of the U.S. Drug Enforcement Administration (DEA)’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.
Shirley Douglas, 70, of West Bloomfield, Michigan, pleaded guilty to one count of conspiracy to distribute controlled substances before U.S. District Judge David Lawson of the Eastern District of Michigan. Sentencing has been scheduled for Dec. 19, 2019, before Judge Lawson.
As part of her guilty plea, Douglas admitted that, as the owner and operator of Abyssinia Love Knot Physical Therapy L.L.C., which was purportedly a pain clinic and a physical therapy clinic, she conspired with her co-conspirators to employ physicians who would write medically unnecessary prescriptions for controlled substances, such as oxycodone, oxymorphone and other controlled substances. Douglas facilitated patient visits with doctors, and accepted payment from patients and patient recruiters/marketers in exchange for physician visits at which she knew that prescriptions for medically unnecessary controlled substances would be provided. Medicare beneficiaries were also required to sign physical therapy documents as a condition to receive prescriptions for controlled substances, regardless of medical necessity.
The total drug amount attributable to Douglas is in excess of 500,000 oxycodone pills, she admitted.
This case was investigated by the DEA and HHS-OIG. Trial Attorney Patrick Suter and Assistant Chief Malisa Dubal of the Criminal Division’s Fraud Section are prosecuting the case. The case was previously prosecuted by Assistant Chief Drew Bradylyons and Trial Attorney Thomas Tynan.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Compounding Pharmacy, Two of Its Executives, and Private Equity Firm Agree to Pay $21.36 Million to Resolve False Claims Act AllegationsRead the Press Release
The Department of Justice announced today that compounding pharmacy Diabetic Care Rx LLC, or Patient Care America (PCA), PCA’s Chief Executive Officer Patrick Smith, PCA’s former Vice President of Operations Matthew Smith, and private equity firm Riordan, Lewis & Haden Inc. (RLH) have agreed to resolve a lawsuit alleging that they violated the False Claims Act through their involvement in a kickback scheme to generate referrals of prescriptions for expensive pain creams, scar creams, and vitamins, regardless of patient need, which were reimbursed by TRICARE, the federal health care program for military members and their families. PCA and RLH have agreed to pay $21,050,000, Patrick Smith has agreed to pay at least $300,000, and Matthew Smith has agreed to pay at least $12,788. These settlement amounts were based on defendants’ ability to pay.
“Kickback schemes taint decision-making and cause taxpayer-funded health care programs to pay for items or services that patients may not need,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division. “We will hold accountable health care providers involved in such schemes designed to induce referrals of prescriptions that are reimbursed by federal health care programs.”
“The prosecution and resolution of this case demonstrates the U.S. Attorney’s Office continuing commitment to hold all responsible parties to account for the submission of claims to federal health care programs that are tainted by unlawful kickback arrangements,” said United States Attorney Ariana Fajardo Orshan. “Kickback schemes lead to unnecessary medical services and drive up the cost of health care for all.”
“This settlement sends a clear message about the Defense Criminal Investigation Service (DCIS) and its law enforcement partners’ unwavering commitment to protect the integrity of TRICARE, the Department of Defense’s health care program which serves to protect our U.S. military, their family members, and military retirees,” said Special Agent in Charge Cyndy Bruce of the DCIS Southeast Field Office. “Health care providers who manipulate and abuse the TRICARE program in order to seek financial gain by submitting false claims and demonstrating a lack of regard for TRICARE patients and the health care plan which is charged to provide their medical care, will be diligently investigated and held accountable for their actions.”
This settlement resolves a lawsuit pursued by the United States against PCA for allegedly paying kickbacks to outside “marketers” to target military members and their families for prescriptions for compounded creams and vitamins, which were formulated to ensure the highest possible reimbursement from TRICARE. The United States alleged that the marketers paid telemedicine doctors who prescribed the creams and vitamins without seeing the patients, or in some cases, even speaking to them. The settlement also resolves the United States’ allegations that PCA and a marketer routinely jointly paid the copayments owed by patients referred by the marketer, without any verification of the patients’ financial needs, and then disguised the payments as coming from a sham charitable organization, which was affiliated with the marketer. Finally, the settlement resolves the United States’ allegations that PCA continued to claim reimbursement for prescriptions referred by the marketers despite regularly receiving complaints from patients that revealed the prescriptions were being generated without patient consent or a valid patient-prescriber relationship. RLH, the private equity firm that managed PCA on behalf of its investors, allegedly knew of and agreed to the plan to pay outside marketers to generate the prescriptions and financed the kickback payments to the marketers. Patrick Smith and Matthew Smith were executives of PCA who allegedly executed the scheme.
The lawsuit resolved by the settlement was originally filed under the whistleblower (or “qui tam”) provisions of the False Claims Act by Marisela Medrano and Ada Lopez, two former employees of PCA. The qui tam provisions permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The False Claims Act authorizes the United States to intervene and take over such lawsuits, which the United States did here, in part. The share to be awarded in this case has not been determined yet.
This civil settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch (Fraud Section), the United States Attorney’s Office for the Southern District of Florida, the Defense Criminal Investigative Service, and the U.S. Food & Drug Administration’s Office of Criminal Investigations.
The lawsuit is captioned United States ex rel. Medrano and Lopez v. Diabetic Care Rx LLC, d/b/a Patient Care America, et al., No. 15-CV-62617 (S.D. Fla.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
United States Files Civil Lawsuit against Edward Snowden for Publishing a Book in Violation of CIA and NSA Non-Disclosure AgreementsRead the Press Release
The United States today filed a lawsuit against Edward Snowden, a former employee of the Central Intelligence Agency (CIA) and contractor for the National Security Agency (NSA), who published a book entitled Permanent Record in violation of the non-disclosure agreements he signed with both CIA and NSA.
The lawsuit alleges that Snowden published his book without submitting it to the agencies for pre-publication review, in violation of his express obligations under the agreements he signed. Additionally, the lawsuit alleges that Snowden has given public speeches on intelligence-related matters, also in violation of his non-disclosure agreements.
The United States’ lawsuit does not seek to stop or restrict the publication or distribution of Permanent Record. Rather, under well-established Supreme Court precedent, Snepp v. United States, the government seeks to recover all proceeds earned by Snowden because of his failure to submit his publication for pre-publication review in violation of his alleged contractual and fiduciary obligations.
The lawsuit also names as nominal defendants the corporate entities involved in publishing Snowden’s book. The United States is suing the publisher solely to ensure that no funds are transferred to Snowden, or at his direction, while the court resolves the United States’ claims. Snowden is currently living outside of the United States.
“Edward Snowden has violated an obligation he undertook to the United States when he signed agreements as part of his employment by the CIA and as an NSA contractor,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “The United States’ ability to protect sensitive national security information depends on employees’ and contractors’ compliance with their non-disclosure agreements, including their pre-publication review obligations. This lawsuit demonstrates that the Department of Justice does not tolerate these breaches of the public’s trust. We will not permit individuals to enrich themselves, at the expense of the United States, without complying with their pre-publication review obligations.”
“Intelligence information should protect our nation, not provide personal profit,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “This lawsuit will ensure that Edward Snowden receives no monetary benefits from breaching the trust placed in him.”
This lawsuit is separate from the criminal charges brought against Snowden for his alleged disclosures of classified information. This lawsuit is a civil action, and based solely on Snowden’s failure to comply with the clear pre-publication review obligations included in his signed non-disclosure agreements.
This matter is being handled by the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Virginia.
The claims asserted by the United States are allegations only; there has been no determination of liability.
Freight Transportation Company Agrees to Plead Guilty to Antitrust ChargeRead the Press Release
Dip Shipping Company LLC, a Louisiana-based freight forwarder, has agreed to plead guilty to an antitrust charge for its role in a conspiracy to fix prices of freight forwarding services sold to customers in the United States and elsewhere, the Department of Justice announced today. Under the terms of its plea agreement, Dip Shipping agreed to pay a $488,250 criminal fine.
According to a one-count felony charge filed today in the U.S. District Court for the Southern District of Florida in Miami, Dip Shipping conspired with other providers of freight forwarding services to fix, raise and maintain prices charged to customers from September 2010 until at least March 2015. According to court documents, Dip Shipping and its co-conspirators met in the United States and elsewhere to discuss and agree to fix prices. Freight forwarders arrange for and manage the shipment of goods, including receiving, packaging and otherwise preparing cargo destined for international ocean shipment. Dip Shipping is the first company to be charged and to agree to plead guilty in the Justice Department’s ongoing investigation in the freight forwarding industry. The plea agreement is subject to court approval.
As a result of this ongoing federal investigation, Dip Shipping executives Roberto Dip and Jason Handal earlier had pleaded guilty to price fixing. Dip and Handal were sentenced in June 2019 to 18-month and 15-month terms of imprisonment, respectively, for their roles in the conspiracy.
“Dip Shipping and its executives and co-conspirators sought to profit by cheating some of the most vulnerable American consumers,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “The Sherman Act provides for prosecution of both individuals and the companies on whose behalf they act. Today’s charge is further proof that crime does not pay and that we will prosecute those who conspire to violate the antitrust laws to the fullest extent of the law.”
“The FBI remains committed to upholding the Constitution and protecting the American people,” said Acting Special Agent in Charge Anthony Riedlinger of the FBI New Orleans Field Office. “Throughout this investigation the men and women of the FBI, in conjunction with the Department of Justice’s Antitrust Division, were focused on holding accountable those who illegally profited from U.S. consumers. Let today’s plea serve as a stern warning to all companies seeking to defraud the American people, that price fixing will be aggressively investigated and prosecuted to the fullest extent of the law.”
A criminal violation of Section 1 of the Sherman Act carries a maximum fine of $100 million for corporations. 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 ongoing investigation into price fixing in the international freight forwarding industry is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s New Orleans Field Office. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI tip line at 415-553-7400.
In the Aftermath of Hurricane Dorian Department of Justice Reminds the Public to be Aware of Fraud and Report it to the National Center for Disaster FraudRead the Press Release
The Department of Justice established the National Center for Disaster Fraud (NCDF) in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region, which opened opportunities for criminals to exploit people during vulnerable times. The NCDF, a national coordinating agency within the Department’s Criminal Division, operates a call center at Louisiana State University in Baton Rouge and serves as a centralized clearinghouse for disaster fraud complaints and information relating to both natural and man-made disasters. The NCDF seeks to improve and further the detection, prevention, investigation, and prosecution of fraud related to natural and man-made disasters, and to advocate for victims of such fraud. More than 20 federal, state, and local agencies participate in the NCDF, which allows them to forward on complaints to the appropriate agency for investigation.
“In the aftermath of Hurricane Dorian, I urge the public to be wary of fraudsters looking to exploit victims of the hurricane through identity theft schemes, solicitations for fake charities, or other types of fraud. Report suspected disaster fraud to the National Center for Disaster Fraud,” said U.S. Attorney Brandon J. Fremin for the Middle District of Louisiana, who is also the NCDF’s Executive Director.
Since Hurricane Dorian’s landfall, many people are left without food, water, or shelter, and are experiencing devastating damage to life and property. Unfortunately, there are criminals ready to take advantage of victims before, during, and especially after a natural disaster. They are looking to strike those at their most vulnerable time.
While compassion, assistance, and solidarity are generally prevalent in the aftermath of natural disasters, unscrupulous individuals and organizations also use these tragic events to take advantage of those in need. Examples of illegal activity being reported to the NCDF and law enforcement include:
- Impersonation of federal law enforcement officials;
- Identity theft;
- Fraudulent submission of claims to insurance companies and the federal government;
- Fraudulent activity related to solicitations for donations and charitable giving;
- Fraudulent activity related to individuals and organizations promising high investment returns from profits from recovery and cleanup efforts;
- Price gouging;
- Contractor Fraud;
- Debris removal fraud;
- Theft, looting, and other violent crime
Numerous U.S. Attorneys’ offices have established task forces comprised of local, state and federal agencies in their respective areas to combat disaster fraud.
Members of the public are reminded to apply a critical eye and exercise due diligence before trusting anyone purporting to be working on behalf of disaster victims. They should also exercise the same care before giving contributions to anyone soliciting donations on behalf of disaster victims as well as being extremely cautious before providing personal identifying or financial information to anyone, especially those who may contact you after a natural disaster. Solicitations can originate from e-mails, websites, door-to-door collections, mailings and telephone calls, and similar methods. Members of the public who suspect fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, or believe they have been the victim of fraud from a person or organization soliciting relief funds on behalf of disaster victims, should contact the National Disaster Fraud Hotline toll free at (866) 720-5721. The telephone line is staffed by live operators 24 hours a day, seven days a week. You can also fax information to the Center at (225) 334-4707, or email it to [email protected]. Learn more about the NCDF at www.justice.gov/disaster-fraud and watch a public service announcement here. Tips for the public on how to avoid being victimized of fraud are at https://www.justice.gov/opa/pr/tips-avoiding-fraudulent-charitable-contribution-schemes.
Current and Former Precious Metals Traders Charged with Multi-Year Market Manipulation Racketeering ConspiracyRead the Press Release
Two current precious metals traders and one former trader in the New York offices of a U.S. bank (Bank A) were charged in an indictment unsealed today for their alleged participation in a racketeering conspiracy and other federal crimes in connection with the manipulation of the markets for precious metals futures contracts, which spanned over eight years and involved thousands of unlawful trading sequences.
Charged in the indictment are:
- Gregg Smith, 55, of Scarsdale, New York. Smith was an executive director and trader on Bank A’s precious metals desk in New York. He joined Bank A in May 2008 after it acquired another U.S. bank (Bank B).
- Michael Nowak, 45, of Montclair, New Jersey. Nowak was a managing director and ran Bank A’s global precious metals desk. He joined Bank A in July 1996.
- Christopher Jordan, 47, of Mountainside, New Jersey. Jordan joined Bank A in March 2006 and was an executive director and trader on Bank A’s precious metals desk in New York. Jordan left Bank A in December 2009 and worked as a precious metals trader at a Swiss bank (Bank C) in New York from March 2010 until August 2010. From June 2011 until October 2011, Jordan traded precious metals futures contracts as an employee of a financial service company (Company D) in New York.
“The defendants and others allegedly engaged in a massive, multiyear scheme to manipulate the market for precious metals futures contracts and defraud market participants,” said Assistant Attorney General Brian A. Benczkowski. “These charges should leave no doubt that the Department is committed to prosecuting those who undermine the investing public’s trust in the integrity of our commodities markets.”
“Smith, Nowak, Jordan, and their co-conspirators allegedly engaged in a complex scheme to trade precious metals in a way that negatively affected the natural balance of supply-and-demand,” said FBI Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office. “Not only did their alleged behavior affect the markets for precious metals, but also correlated markets and the clients of the bank they represented. For as long as we continue to see this type of illegal activity in the marketplace, we’ll remain dedicated to investigating and bringing to justice those who perpetrate these crimes.”
Each of the three defendants was charged with one count of conspiracy to conduct the affairs of an enterprise involved in interstate or foreign commerce through a pattern of racketeering activity (more commonly referred to as RICO conspiracy); one count of conspiracy to commit wire fraud affecting a financial institution, bank fraud, commodities fraud, price manipulation and spoofing; one count of bank fraud and one count of wire fraud affecting a financial institution. In addition, Smith and Nowak were each charged with one count of attempted price manipulation, one count of commodities fraud and one count of spoofing.
Smith is expected to make an initial appearance in the Southern District of New York before U.S. Magistrate Judge Judith C. McCarthy, and Nowak and Jordan are expected to make their initial appearances in the District of New Jersey before U.S. Magistrate Judge Michael A. Hammer. The case was indicted in the Northern District of Illinois and has been assigned to U.S. District Judge Edmond E. Chang.
As alleged in the indictment, between approximately May 2008 and August 2016, the defendants and their co-conspirators were members of Bank A’s global precious metals trading desk in New York, London and Singapore with varying degrees of seniority and supervisory responsibility over others on the desk. As it relates to the RICO conspiracy, the defendants and their co-conspirators were allegedly members of an enterprise—namely, the precious metals desk at Bank A—and conducted the affairs of the desk through a pattern of racketeering activity, specifically, wire fraud affecting a financial institution and bank fraud.
The indictment alleges that the defendants engaged in widespread spoofing, market manipulation and fraud while working on the precious metals desk at Bank A through the placement of orders they intended to cancel before execution (Deceptive Orders) in an effort to create liquidity and drive prices toward orders they wanted to execute on the opposite side of the market. In thousands of sequences, the defendants and their co-conspirators allegedly placed Deceptive Orders for gold, silver, platinum and palladium futures contracts traded on the New York Mercantile Exchange Inc. (NYMEX) and Commodity Exchange Inc. (COMEX), which are commodities exchanges operated by CME Group Inc. By placing Deceptive Orders, the defendants and their co-conspirators allegedly intended to inject false and misleading information about the genuine supply and demand for precious metals futures contracts into the markets, and to deceive other participants in those markets into believing something untrue, namely that the visible order book accurately reflected market-based forces of supply and demand. This false and misleading information was intended to, and at times did, trick other market participants into reacting to the apparent change and imbalance in supply and demand by buying and selling precious metals futures contracts at quantities, prices and times that they otherwise likely would not have traded, the indictment alleges.
As also alleged in the indictment, the defendants and their co-conspirators defrauded Bank A’s clients who had bought or sold “barrier options” by trading precious metals futures contracts in a manner that attempted to push the price towards a price level at which Bank A would make money on the option (barrier-running), or away from a price level at which Bank A would lose money on the option (barrier-defending). Namely, when barrier-running, the defendants and their co-conspirators would allegedly place orders for precious metals futures contracts in a way that was intended to deliberately trigger the barrier option held by Bank A. Conversely, when barrier-defending, the defendants and their co-conspirators would allegedly place orders for precious metals futures contracts in a way that was intended to deliberately avoid triggering the barrier option held by clients of Bank A.
The indictment also identifies two former Bank A precious metals traders, John Edmonds and Christian Trunz, as being among the defendant’s co-conspirators. Edmonds worked at Bank A from 2004 to 2017 and was a trader on Bank A’s precious metals desk, leaving as a vice president. On Oct. 9, 2018, Edmonds pleaded guilty in the District of Connecticut to an information charging him with one count of commodities fraud and one count of conspiracy to commit wire fraud, commodities fraud, price manipulation and spoofing. Trunz is a former precious metals trader at Bank A who worked at the bank from 2007 to August 20, 2019, leaving as an executive director. On Aug. 20, 2019, Trunz pleaded guilty in the Eastern District of New York to an information charging him with one count of conspiracy to engage in spoofing and one count of spoofing.
This case is the result of an ongoing investigation by the FBI’s New York Field Office. The Commodity Futures Trading Commission’s Division of Enforcement provided assistance in this case. Trial Attorneys Avi Perry and Matthew F. Sullivan of the Criminal Division’s Fraud Section are prosecuting the case.
The charges in the indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Individuals who believe that they may be a victim in these cases should visit the Fraud Section’s Victim Witness website for more information at https://www.justice.gov/criminal-fraud/victim-witness-program.