District Not Recorded

Earlier today, U.S. Attorney General William P. Barr traveled to Mexico. Together with U.S. Ambassador Christopher Landau, Attorney General Barr met with Mexico’s President Andres Manuel Lopez Obrador, Minister of Foreign Relations Marcelo Ebrard Casaubon, Secretary of Defense Luis Crescencio Sandoval Gonzalez, Secretary of the Navy Admiral Jose Rafael Ojeda Duran, Security Minister Alfonso Durazo Montaño and Attorney General Alejandro Gertz Manero to continue strengthening their bilateral law enforcement cooperation. Attorney General Barr also accompanied Ambassador Landau in a visit to Mexico’s National Shrine, Basilica of Our Lady of Guadalupe.

Attorney General Barr with Foreign Minister Marcelo Ebrard Casaubon at the Mexican Foreign Ministry ahead of their bilateral meeting

Attorney General Barr and Mexican Government counterparts discussed a broad range of issues including their shared commitment to protecting the security and safety of the citizens of both the United States and Mexico from transnational criminal organizations (TCOs) as well as how our countries work together to combat drug, human, and arms trafficking.  They talked about the importance of targeting illicit financial networks and disrupting the illicit movement of cash, weapons, and drugs, combatting corruption, and strengthening cooperation on bringing members of TCOs to justice.

Foreign Minister Marcelo Ebrard Casaubon, Attorney General Barr and U.S. Ambassador Landau

Attorney General Barr thanked the Mexican government for a number of recent matters, including the arrests of individuals suspected in the Nov. 4 murder of nine U.S. citizens in Northern Mexico and Mexico’s partnership in combatting illegal immigration at our shared border.

Secretary of the Navy Admiral Jose Rafael Ojeda Duran, Security Minister Alfonso Durazo Montaño, Attorney General Barr and Foreign Minister Marcelo Ebrard Casaubon

The U.S. law enforcement relationship with Mexico is one of our most important partnerships to combat trans-border crime.  Continued collaboration and successful joint law enforcement programs between the United States and Mexico on justice matters remain a priority for the U.S. Government. Attorney General Barr looks forward to further dialogue on these important matters. He will brief President Trump tomorrow on the trip and make recommendations for next steps. 

 US Ambassador Landau, Attorney General Barr, Foreign Minister Marcelo Ebrard Casaubon, Secretary of the Navy Admiral Jose Rafael Ojeda Duran and Security Minister Alfonso Durazo Montaño

 Attorney General Barr signs the guest book at the Basilica of Our Lady of Guadalupe

Attorney General Barr receiving a gift from Monsignor Salvador Martinez Avila, the Rector of the Sanctuary of the Basilica.

The Department of Justice’s Office of Justice Programs (OJP) today announced that it has awarded more than $376 million in grant funding to enhance state, local and tribal law enforcement operations and reinforce public safety efforts in jurisdictions across the United States.

“Crime and violence hold families, friends and neighborhoods hostage. They also rip those communities apart,” said Principal Deputy Assistant Attorney General Katharine T. Sullivan for the Office of Justice Programs. “These programs simultaneously play a role in mending communities through preventing crime, apprehending and prosecuting perpetrators, facilitating appropriate sentencing and adjudication, and restoring communities and their residents.”

This year, more than $252 million is being awarded to 929 states, tribes, and local governments through the Edward Byrne Justice Assistance Grant Program (JAG), administered by OJP’s Bureau of Justice Assistance (BJA). JAG funding supports a range of program areas including law enforcement; prosecution and courts; crime prevention and education; corrections; drug treatment and enforcement; technology improvement; victim and witness initiatives; mental health programs and others.

Through BJA’s National Sexual Assault Kit Initiative, $40 million will help law enforcement agencies and prosecutors address the challenges associated with sexual assault kits that have not been submitted to crime laboratories for testing. An additional $6.6 million for training and technical assistance will build state and local capacity to address unsolved crimes revealed by evidence obtained when the kits are tested.

BJA is providing more than $6.9 million to 20 state, local and tribal prosecutors through the Innovative Prosecution Solutions for Combatting Violent Crime Program. Prosecutors receive training and technical assistance to use data in the development of their violent crime strategies and create programs that are analysis-driven and based upon promising practices. 

Reducing intellectual property theft and related crime are the focus of six awards, totaling nearly $2.3 million, made through BJA’s Intellectual Property Enforcement Program: Protecting Public Health, Safety, and the Economy from Counterfeit Goods and Product Piracy. The funding is being provided to state, local, tribal and territorial criminal justice systems to address intellectual property enforcement, including prosecution, prevention, training and technical assistance.

This year BJA is providing $500,000 through the Enhancing Task Force Leadership, Operations and Management Program to the Institute of Intergovernmental Research, which will provide training and technical assistance to state and local multi-jurisdictional law enforcement task forces created to address local crime. The program promotes integrity and accountability by emphasizing best practices to reduce liability and enhance officer safety and effectiveness.

Through BJA’s Upholding the Rule of Law and Preventing Wrongful Convictions Program, 12 awards totaling more than $3.2 million are supporting state and local policymakers, practitioners, and entities that represent individuals with post-conviction claims of innocence to review wrongful conviction claims cases and enact measures to prevent future errors and ensure justice.

Two awards totaling $5 million are being provided to National Criminal Justice Association and National Association of Criminal Justice Defense Lawyers through BJA’s Justice for All: Effective Administration of Criminal Justice Training and Technical Assistance Program. The recipients will deliver training and technical services to state and local governments requesting assistance.

To assist confinement facilities and the agencies that oversee them, BJA is providing 13 grants totaling more than $2.4 million to state, local and tribal governments for responding to incidents of sexual abuse in these facilities. The awards are made through the Implementing the Prison Rape Elimination Act Standards, Protecting Inmates, and Safeguarding Communities Program.

BJA’s Comprehensive Corrections Training and Technical Assistance Program is providing more than $23.7 million, to seven organizations that will provide comprehensive training and technical assistance to BJA grantees and criminal justice practitioners to improve correctional services and increase public safety through improving outcomes for people incarcerated and detained in correctional facilities. The recipients are Advocates for Human Potential, Inc.; American Correctional Association; American Institutes of for Research in the Behavioral Sciences; Impact Justice; the Moss Group, Inc.; the Research Triangle Institute; and the Urban Institute.

OJP’s Office of Juvenile Justice and Delinquency Prevention is providing more than $1.9 million in funding to four organizations under the Supporting Effective Interventions for Adolescent Sex Offenders and Youth with Sexual Behavioral Problems Program. The program also helps fund treatment and supportive services for victims and their caregivers. Three recipients are receiving $475,000; they are Youth Outreach Services, Ill; Cayuga Counseling Services, Inc., New York; and the Joseph J. Peters Institute, Pennsylvania. The University of Oklahoma Health Sciences Center is receiving $517,592 to provide training and technical assistance to the award recipients.

Through OJP’s Office for Victims of Crime, 36 public law enforcement agencies, of which four are tribal, are receiving over $12 million to develop victim specialist programs that connect survivors and families to coordinated trauma-informed services.   OVC is also awarding $2.25 million to the   International Association of Chiefs of Police for related training and technical assistance. 

OJP’s Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART) is providing more than $15.7 million to 59 states, U.S. territories and tribal communities to be used to help jurisdictions meet the requirements of the Sex Offender Registration and Notification Act, Title I of the Adam Walsh Child Protection and Safety Act.

SMART is also awarding more than $1.6 million for the maintenance of the Dru Sjodin National Sex Offender Public Website, a resource that provides the public access to sex offender data nationwide. The funding also provides sex offender registry systems and tools at no cost to U.S. states, territories and federally recognized tribes who are implementing standards established by the Adam Walsh Act to close gaps and loopholes in reporting.

Information about the programs and awards announced today is available here. For more information about OJP awards, visit the OJP Awards Data webpage.

The Office of Justice Programs, directed by Principal Deputy Assistant Attorney General Katharine T. Sullivan, provides federal leadership, grants, training and technical assistance, and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.

The U.S. Department of Justice today announced the opening of the grant solicitation period for comprehensive funding to tribal communities to support crime prevention, victim services, and coordinated community responses to violence against native women.

The Department’s FY 2020 Coordinated Tribal Assistance Solicitation, or CTAS, posts today online at https://www.justice.gov/tribal/open-solicitations. The solicitation contains details about available grants and describes how federally-recognized American Indian and Alaska Native tribal governments and tribal consortia can apply for funding to aid in developing a comprehensive and coordinated approach to public safety and victimization.

“Increasing public safety, reducing violent crime and servicing crime victims — especially women and children — across American Indian and Alaska Native communities is a top priority for the Justice Department,” said Attorney General William P. Barr. “We will continue to provide funding to tribes and villages to bolster law enforcement, protect citizens and provide justice.”

The funding from the Department of Justice’s Bureau of Justice Assistance (BJA), Office for Juvenile Justice and Delinquency Prevention (OJJDP), Office for Victims of Crime (OVC), Office of Community Oriented Policing Services (COPS Office) and Office on Violence Against Women (OVW) can be used for a variety of public safety and justice-related projects and services. Funds can be used to enhance law enforcement; bolster adult and juvenile justice systems; prevent and control juvenile delinquency; serve native victims of crimes such as child abuse, sexual assault, domestic violence, and elder abuse; improve responses to violence against native women; and support other efforts to combat crime.

Applications for CTAS are submitted online through the Department’s Grants Management System, or “GMS.” Applicants must register with GMS prior to submitting an application. The application deadline is 9 p.m. EST, Feb. 25, 2020. Applicants will submit a single application and select from any or all of the eight competitive grant programs, referred to as purpose areas. This approach allows the Department’s grant-making components to consider the totality of a tribal nation’s overall public safety needs.  

The eight purpose areas are:

• COPS Office’s Public Safety and Community Policing
• Comprehensive Tribal Justice Systems Strategic Planning
• BJA’s Tribal Justice Systems Program
• BJA’s Tribal Justice System Infrastructure Program
• OVW’s Violence Against Women Tribal Governments Program
• OVC’s Children’s Justice Act Partnerships for Indian Communities
• OJJDP’s Juvenile Tribal Healing to Wellness Courts
• OJJDP’s Tribal Youth Program

The Department of Justice has incorporated feedback from tribal meetings, listening sessions, consultations and other methods into this year’s solicitation. Accordingly, the Department has streamlined the application process to reduce requirements for repetitive input from applicants. For example, the application’s required question and answer templates have been refined across the purpose areas to ensure greater clarify and reduce duplication. Also, previously required documents such as the tribal authority to apply have been eliminated (except for tribal designees) to reduce the burden on applicants.

To address tribal feedback about long-term sustained funding, the Justice Department is making changes to award lengths. For Fiscal Year 2020, awards under the following Purpose Areas will be made for 60 months for:

• COPS Office’s Public Safety and Community Policing (hiring officers)
• Comprehensive Tribal Justice Systems Strategic Planning
• BJA’s Tribal Justice Systems Program
• BJA’s Tribal Justice System Infrastructure Program
• OJJDP’s Juvenile Tribal Healing to Wellness Courts
• OJJDP’s Tribal Youth Program

Also new to Fiscal Year 2020 is a change to OVW’s Violence Against Women Tribal Governments Program. Awards will be made for up to $900,000 for 36 months. At the end of the 36-month period, grantees may be eligible to receive 24 months of additional noncompetitive funding up to $600,000 to continue their projects.

Additionally, the scope of BJA’s Tribal Justice System Infrastructure Program (Purpose Area 4) has been expanded to fund support of physical infrastructure projects related to domestic violence shelters, safe homes, transitional living facilities, and advocacy programs. Purpose Area 4 will also include funding for adding associated capacity, equipment, and infrastructure to support staff training, fitness and wellness.

This year’s solicitation will not include two purpose areas included in previous years: OVC’s Tribal Victim Services Program (Purpose Area 7) and BJA’s Addressing Violent Crime in Native Communities (Purpose Area 10). OVC’s Victims Services Program will be offered via a stand-alone solicitation separate from CTAS.  Resources to support tribes’ efforts to address investigations and prosecutions of violent crime in native communities will be managed through a separate, targeted process. More details on this program to reduce violent crime in tribal communities will be announced separately.

Fact sheets and other relevant information regarding this year’s CTAS can be found online at: https://www.justice.gov/tribal/grants. The Department will also facilitate a series of webinars to guide applicants through the CTAS application requirements. Details, including how to register for these webinars, will be made available online in coming weeks at https://www.justice.gov/tribal/open-solicitations.

Additionally, tribes and tribal consortia may also be eligible for non-tribal federal grant programs and are encouraged to explore other funding opportunities, which may be found at DOJ’s Tribal Justice and Safety website at https://www.justice.gov/tribal/open-solicitations or the www.grants.gov website.

In FY 2019, the Department funded 149 tribes with 236 awards totaling more than $273.4 million in grants to improve public safety, serve victims of crime, combat violence against women and support youth programs in American Indian and Alaska Native communities.

CTAS is administered by the Department’s Office of Justice Programs, Office of Community Oriented Policing Services and Office on Violence Against Women.

Today’s announcement is part of the DOJ’s ongoing initiative to increase engagement, coordination and action on public safety in tribal communities.

WASHINGTON – Unitrans International Inc. (Unitrans), a privately held Virginia defense contracting company, has agreed to pay $45 million to resolve criminal obstruction charges and civil False Claims Act allegations relating to the illegal transportation of goods across Iran in connection with a contract to provide material and logistical support to U.S. troops in Afghanistan.

Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division, Assistant Attorney General Jody Hunt of the Justice Department’s Civil Division, U.S. Attorney Zachary Terwilliger of the Eastern District of Virginia, Special Agent in Charge Raymond Villanueva of U.S. Immigrations and Customs Enforcement’s Homeland Security Investigations’ (HSI) Washington, D.C. Field Office, Special Inspector General for Afghanistan Reconstruction (SIGAR) John F. Sopko, and Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service - Mid-Atlantic Field Office (DCIS) made the announcement.

As part of the global resolution, Unitrans entered into a non-prosecution agreement (NPA) with the Department of Justice and agreed to pay $31.5 million as a combined criminal monetary penalty and victim compensation payment amount in this matter.

In connection with the NPA, Unitrans admitted that certain of its officers, as well as officers of Anham FZCO (Anham), an associated Dubai Free Zone company incorporated under the laws of the United Arab Emirates, obstructed proceedings pending before the U.S. Defense Logistics Agency (DLA). In June 2012, the DLA awarded Anham a contract to provide material and logistical support to U.S. troops in Afghanistan. This contract required Anham to certify that it would comply with all executive orders, proclamations and statutes that prohibit U.S. persons and companies from shipping materials through Iran.

Between November 2011 and May 2012, officers of Unitrans, which provided logistical services to Anham, facilitated the transportation of construction materials to Afghanistan through Iran. These materials were used in the construction of a warehouse that Anham used to assist in the performance of the troop support contract that Anham had with the DLA. At the time of the shipments, high level officers at Unitrans and Anham were aware of the activity and took no action to stop the conduct, Unitrans admitted.

According to the factual statement agreed to as part of the NPA, on Sept. 23, 2013, Anham’s then-CEO, who was also an indirect and partial owner of Unitrans, sent an email to a representative of DLA about the shipments to Afghanistan through Iran. The email stated: “At no time did Anham acquire any goods in, or from, Iran. The senior team at Anham had no knowledge of these shipments and upon learning of this possibility made a voluntary disclosure to the U.S. government that Anham was investigating whether any violations had in fact occurred.”

The Department of Justice has separately entered into non-prosecution agreements with three individuals who were previously indicted in relation to the scheme.

To resolve a related civil matter, Unitrans also has agreed to pay $27 million to resolve allegations under the False Claims Act that it, along with Anham fraudulently induced DLA and the Army to award wartime contracts for food and trucks by knowingly and falsely certifying compliance with United States sanctions against Iran. The civil agreement also resolves allegations that Anham FZCO knowingly and falsely represented construction progress on its Bagram warehouse to induce DLA to award the prime vendor contract to provide food to U.S. troops in Afghanistan. The civil settlement will credit $13.5 million of Unitrans’ payment under the NPA, and require an additional payment by Unitrans of $13.5 million. The defendants did not admit liability as a result of the Civil Agreement. The allegations resolved by the civil settlement were brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by Rory Maxwell, John Bush, and Supreme Foodservice GmbH. The Act permits private parties to sue on behalf of the government for false claims and receive a share of any recovery. Under the Act, the United States may intervene in such a suit or, as it did in this case, allow the private party to pursue the action.

HSI–Washington, D.C., DCIS, and investigators from SIGAR investigated the criminal case. Trial Attorneys James Gelber and Danny Nguyen of the Criminal Division’s Fraud Section prosecuted the case. Trial Attorney Art Coulter of the Civil Division’s Fraud Section and Assistant U.S. Attorney Krista Anderson of the Eastern District of Virginia handled the civil litigation supported by the Defense Contract Audit Agency.

The qui tam case is captioned U.S. ex rel. Maxwell, et al. v. Anham, USA, et al., 1:14-CV-0156 (E.D.VA). There has been no determination of liability in the civil case.

CHICAGO — A federal judge today sentenced a Chicago man to more than 16 years in prison for shooting an agent from the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives.

ERNESTO GODINEZ shot the agent on May 4, 2018, in the Back of the Yards neighborhood of Chicago.  At the time of the early morning shooting, the agent and several law enforcement officers were conducting a covert investigation in the 4300 block of South Hermitage Avenue.  The agent was wounded in the head but survived.

A federal jury earlier this year convicted Godinez, 29, of both counts against him, including one count of assault of a federal officer, and one count of discharging a firearm during a crime of violence.  U.S. District Judge Harry D. Leinenweber imposed a sentence of 16 years and eight months in prison.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois, and Timothy Jones, Special Agent-in-Charge of the Chicago Field Division of ATF.  Substantial assistance was provided by the Chicago Police Department, FBI, U.S. Marshals Service, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, U.S. Drug Enforcement Administration, and Illinois State Police.

“The depravity of the defendant’s crime is remarkable,” Assistant U.S. Attorneys Kavitha J. Babu and Nicholas J. Eichenseer argued in the government’s sentencing memorandum.  “This was indiscriminate, deadly violence by a recidivist shooter.  It is critical that assaults on law enforcement be met with serious punishment.”

“The primary goal of our violent crime prosecutions is to ensure public safety,” said U.S. Attorney Lausch.  “To that end, we will continue to aggressively prosecute repeat violent offenders like Defendant Godinez in order to hold them accountable for their reprehensible conduct and to deter others from committing similar crimes.  I commend the AUSAs, agents, and officers involved in this case for their outstanding work to seek justice.  Our office will continue to use every available federal law enforcement tool to investigate, prosecute, and seek stiff prison sentences for those offenders who illegally use, possess, or transfer firearms.”

“This experience emboldens us to continue in our efforts to reduce gun violence in the city of Chicago,” said ATF SAC Jones.  “We stand together with the families of all victims of violence in our city as they seek the closure we found today.  We commit all of ATF’s resources to investigate violent crimes in partnership with the Chicago Police Department to ensure that offenders are prosecuted to the fullest extent of the law.”

In a settlement to resolve alleged violations of the Clean Air Act, Lehigh Cement Company LLC (Lehigh) and Lehigh White Cement Company, LLC (Lehigh White) have agreed to invest approximately $12 million in pollution control technology at their 11 portland cement manufacturing plants, announced the Department of Justice and the U.S. Environmental Protection Agency (EPA). Today’s settlement will reduce more than 4,555 tons of harmful nitrogen oxides (NOx) and 989 tons of sulfur dioxide (SO2) pollution each year.

“This settlement with Lehigh and Lehigh White will significantly reduce harmful air emissions at their cement plants nationwide,” said Bruce Gelber, Deputy Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.  “The settlement is a product of the federal government’s close work with state and local agencies who all share the goal of improving air quality in their regions in compliance with state and federal laws.”

“Today’s settlement will require these cement manufacturers to improve their operations to reduce harmful air pollutants,” said Assistant Administrator of the Office of Enforcement and Compliance Assurance Susan Bodine.  “The upgrades at these facilities will improve air quality for the surrounding communities.”

Under this settlement, the companies will install and operate equipment to control NOx and meet emission limits that are consistent with controls at comparable cement kilns across the country.  This settlement also requires the companies to operate existing pollution controls at four kilns and meet more stringent emission limits.  For controlling SO2, Lehigh will install and operate pollution control equipment at several kilns, and will meet low SO2 emission limits at all kilns.

Lehigh has agreed to mitigate the effects of past excess emissions from its facilities by replacing old diesel truck engines at its facilities in Union Bridge, MD, and Mason City, IA, at an estimated cost of approximately $650,000, which is expected to reduce smog-forming NOx by approximately 25 tons per year.  Lehigh will also pay a civil penalty of $1.3 million to resolve Clean Air Act violations.

The settlement is the 12th settlement to address harmful air pollution from Portland cement manufacturing facilities.  Sulfur dioxide and nitrogen oxides, two key pollutants emitted from cement plants, can harm human health and are significant contributors to acid rain, smog, and haze.  These pollutants are converted in the air into fine particles that can cause severe respiratory and cardiovascular impacts and premature death.  Reducing these harmful air pollutants will benefit communities located near the Lehigh plants, particularly communities disproportionately impacted by environmental risks and vulnerable populations, including children.

The Lehigh cement plants covered by the settlement are located in Leeds, AL.; Cupertino, Redding, and Tehachapi, CA.; Mason City, IA; Mitchell, IN; Union Bridge, MD; Glens Falls, NY, and Fleetwood, PA.  Lehigh White’s facilities are located in York, PA and Woodway, TX.  Seven state and state or regional agencies have joined the United States in the settlement, consisting of Indiana, Iowa, Maryland, New York, the Pennsylvania Department of Environmental Protection, Jefferson County Board of Health (Alabama), and Bay Area Air Quality Management District (California).  The states and state and regional agencies will share in the civil penalty.

The settlement was lodged today in the U.S. District Court for the Eastern District of Pennsylvania and is subject to a 30-day public comment period and final court approval.  It will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html.

More information about this settlement:

https://www.epa.gov/enforcement/lehigh-cement-company-llc-and-lehigh-white-cement-company-llc-clean-air-act-settlement

More about EPA’s National Enforcement Initiatives:

https://www.epa.gov/enforcement/cement-manufacturing-enforcement-initiative

Rising Pharmaceuticals Inc. (Rising), a generic pharmaceutical company headquartered in New Jersey, was charged for conspiring to fix prices and allocate customers for a generic hypertension drug, the Department of Justice announced today.  

According to a one-count felony charge filed today in the United States District Court for the Eastern District of Pennsylvania in Philadelphia, from about April 2014 until at least September 2015, Rising participated in a criminal antitrust conspiracy with a competing manufacturer of generic drugs and its executives to fix prices and allocate customers for Benazepril HCTZ, a medicine used to treat hypertension.  This charge is the fourth in the Department of Justice’s Antitrust Division’s ongoing criminal investigation in the generic pharmaceuticals industry; previously, two executives were charged and pleaded guilty to criminal antitrust violations, and a corporation, Heritage Pharmaceuticals Inc., was charged and entered into a deferred prosecution agreement with the Antitrust Division.

Today, the Antitrust Division also announced a deferred prosecution agreement resolving the charge against Rising, under which the company admits that it conspired to fix prices and allocate customers for Benazepril HCTZ.  Under the deferred prosecution agreement, Rising agrees that $1,543,207 is the appropriate amount of restitution it owes to victims of the charged conduct. To account for Rising’s separate agreement with the Department’s Civil Division, which requires Rising to pay approximately $1.1 million in civil damages for False Claims Act violations predicated on Rising’s antitrust conduct, the deferred prosecution agreement calls for an offset of Rising’s restitution, to $438,066.  The agreement also requires Rising to pay a $1.5 million monetary penalty, reduced from the fine of approximately $3.6 million called for under the U.S. Sentencing Guidelines, due to Rising’s financial condition and liquidation.  Both the deferred prosecution agreement and civil settlement agreement require approval in the bankruptcy court.  Once approved, the deferred prosecution agreement will be filed in district court.

In addition, under the deferred prosecution agreement, Rising has agreed to cooperate fully with Antitrust Division’s ongoing criminal investigation.  To allow Rising to comply with the agreement’s terms, the United States will defer prosecuting Rising for three years, or until its ongoing bankruptcy proceedings become final, whichever comes first.  The agreement will not be final until accepted by the court.

“Today’s charge, like the previous corporate and individual charges announced in this investigation, publicly affirms the Antitrust Division’s steadfast commitment to prosecuting the companies and executives who fixed prices of generic pharmaceuticals,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “Rising and its co-conspirators exploited patients that rely on Benazepril HCTZ as a low-cost alternative to brand-name medications to treat high blood pressure.  The deferred prosecution agreement is an important step in restoring integrity to the generics industry.  It will require from Rising not only an admission of guilt, a criminal penalty and cooperation in the ongoing investigation, but also restitution to the direct purchasers that bought Benazepril HCTZ at artificially inflated prices.”

“The U.S. Postal Service Office of Inspector General appreciates the opportunity to assist in these critical generics industry antitrust investigations,” said Special Agent in Charge Scott Pierce.  “Aggressively pursuing those companies and executives who foster behavior related to price fixing, bid rigging and market allocation helps to ensure an open process by which generic pharmaceuticals can be competitively priced and sold.  Working closely with the Department of Justice and our counterparts at the Federal Bureau of Investigation, the U.S. Postal Service Office of Inspector General stands ready to support these vital efforts going forward.”

“The FBI is proud to join our partners in this effort to uncover companies and individuals who attempt to exploit necessary medicines to cheat the economic system and illegally amass wealth,” said Timothy R. Slater, Assistant Director in Charge of the FBI’s Washington Field Office.  “Today’s announcement shows the FBI’s level of commitment to investigating allegations of antitrust violations and illuminating criminal behavior so that the perpetrators can be held accountable.”

The Antitrust Division entered into this deferred prosecution agreement with Rising based on the individual facts and circumstances of this case.  Among those facts and circumstances, the agreement specifically identifies the company’s substantial and ongoing cooperation with the investigation to date, including its disclosure of information regarding criminal antitrust violations involving drugs other than those identified in the criminal charge and the agreement.  According to the agreement, this cooperation has allowed the United States to advance its investigation into criminal antitrust conspiracies among other manufacturers of generic pharmaceuticals.  Other facts and circumstances identified in the agreement include Rising’s agreement to pay restitution, and the fact that a conviction (including a guilty plea) would result in substantial delay to Rising’s ongoing bankruptcy proceeding and liquidation.  The agreement can ensure that Rising is held accountable for its criminal conduct and preserves the United States’ ability to prosecute it should material breaches occur.

In a separate civil resolution, Rising has agreed to pay $1.1 million to resolve allegations under the False Claims Act related to the price-fixing conspiracy.  The government alleged that between 2013 and 2016, Rising paid and received remuneration through arrangements on price, supply, and allocation of customers with another pharmaceutical manufacturer for certain generic drugs in violation of the Anti-Kickback Statute, and that its sale of these drugs resulted in claims submitted to the Medicare and Medicaid programs.

“My Office is proud to announce the next civil healthcare fraud settlement with the Antitrust Division and the Civil Division,” said William M. McSwain, U.S. Attorney for the Eastern District of Pennsylvania.  “We remain focused on price-fixing and market allocation in generic drugs and addressing the impact on federal healthcare programs like Medicare and Medicaid.  This resolution with Rising is another important accomplishment in that area, which will only serve to accelerate our ongoing investigation.”

“Hypertension medicines are vital for patient health, and engaging in schemes to price fix these generic medicines is illegal and could potentially be dangerous, as some patients may have an inability to pay for the medicines they need,” said Maureen R. Dixon, Special Agent in Charge of the Philadelphia Regional Office of the Inspector General, Department of Health and Human Services.  “HHS-OIG will continue to work with our law enforcement partners to investigate allegations of companies engaging in actions that put the public and the Medicare program at risk.”

The criminal charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the generic pharmaceutical industry, which is being conducted by the Antitrust Division with the assistance of the United States Postal Service Office of Inspector General, the FBI’s Washington Field Office and the U.S. Attorney’s Office for the Eastern District of Pennsylvania.  Anyone with information on market allocation, price fixing, bid rigging and other anticompetitive conduct related to the generic pharmaceutical industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.html.

The civil settlement was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Eastern District of Pennsylvania with support from the Department of Health and Human Services Office of the Inspector General.  Except for those facts admitted to in the deferred prosecution agreement, the claims resolved by the civil settlement are allegations only, and there has been no determination of liability.

Attorney General William P. Barr and Justice Department leadership today announced the recipients of the Third Annual Attorney General’s Award for Distinguished Service in Policing, recognizing the exceptional work of 19 law enforcement officers and deputies from 12 jurisdictions across the country.

“Honoring and supporting the work of law enforcement of­ficers and deputies is a top priority for the Trump Administration, and today is an opportunity for me to personally express my gratitude and commitment to those who risk their lives daily to protect our communities,” said Attorney General Barr. “The Attorney General’s Award for Distinguished Service in Policing honors exceptional police officers and the vital public service they provide. The brave men and women in law enforcement are engaged in an unrelenting and often unacknowledged fight to keep our communities safe each and every day. It is an honor to thank them for their service.”

President Donald J. Trump established clear directives for the Department of Justice – with three Executive Orders – demonstrating his strong support of the law enforcement community. These Executive Orders commit the Department to working in tandem with state and local law enforcement to restore the rule of law, reduce violent crime, dismantle criminal gangs, and combat the growing drug epidemic. Today the Department of Justice continues to support the President’s directive to honor law enforcement officers by announcing the third annual Attorney General’s Award for Distinguished Service in Policing.

The Attorney General’s Award recognizes individual state, local, and tribal sworn rank-and-file police officers and deputies for exceptional efforts in policing. The awarded officers and deputies have demonstrated active engagement with the community in one of three areas: criminal investigations, field operations or innovations in community policing. The Department received 199 nominations for 414 individuals ranging from state police departments, to local police, to campus public safety agencies. This award highlights the work that troopers, officers and deputies do to prevent, intervene in, and respond to crime and public safety issues. The individuals recognized today include:

CRIMINAL INVESTIGATIONS

Detective William Maldonado of the Suffolk County Police Department, New York:

Detective William Maldonado is being recognized posthumously for his effort in leading the criminal investigation into the violent trans­national street gang MS-13. Detective Maldonado was assigned to assist in the investigation of the disappearance of a young man. Intelligence gathered by Detective Maldonado indicated the missing boy was a murder victim of MS-13. Without the detective’s work, along with his team, the murder spree would no doubt have continued. Instead, several dozen people were arrested, charged with 17 murders, the Suffolk County MS-13 Sailor Clique was eliminated, and several other cliques were disrupted. Maldonado accomplished this while battling cancer, and rarely missed work. He succumbed to his illness in 2018, but not before arrests were made in the cases.

Detectives George Duarte and Jeffrey Richards of the Providence Police Department, Rhode Island:

Detectives George Duarte and Jeffrey Richards are being recognized for their extraordinary investigative work in solving an abduction and sexual assault case of a 14-year-old girl. Their investigation not only solved that case, but also led to solving several other cases of sexual assault by the same suspect. Because of their work, the detectives were able to have this vicious predator removed from the community, victims of unreported crimes were helped, and justice was brought to a number of other victims.

Detectives Sandra Marquez and Kenneth Sealy of the Aventura Police Department, Florida:

Detectives Kenneth Sealy and Sandra Marquez are being recognized for their investigative work in solving several high-dollar fraud schemes targeting multiple businesses and retail stores. During an intense investigation involving a large credit card fraud ring operating in south Florida, the detectives identified approximately $194,000 in fraudulent transactions and seized another $218,000. Another case involved money laundering and widespread credit card fraud committed in multiple states, which included a loss of almost $4 million over three years. The detectives are continuing this important work in coordination with several federal agencies.

FIELD OPERATIONS

Officers Evan Jurgensen, Nicholas Kelly, Rachel Mynier, and John Yenchak of the Prince William County Police Department, Virginia:

In November 2018, the Prince William County Police Department received a call reporting an active shooter. Within minutes of responding to the scene, Officers Jurgensen, Kelly, Mynier and Yenchak had to take cover from gunfire. Officer Mynier noticed movement on the roof of a residence and transmitted a warning to incoming units, and in doing so saved lives. After the shooter ignored officers’ commands, he was eventually struck and fell to the ground. Although officers feared a possible second shooter, they exposed themselves to harm once again to extract the shooter for medical treatment, and also pulled an occupant from the residence to safety. The heroism demonstrated by each officer represents true courage.

Deputy Richard Hassna of the Alameda County Sheriff’s Office, California:

Deputy Richard Hassna is being recognized for his innovative use of small unmanned aerial systems (UAS) for public safety operations. In 2018, during the deadly Camp Fire in Butte County, Deputy Hassna led more than 16 unmanned aerial vehicle teams, and conducted 517 flights in two days, taking more than 70,000 images. These images were stitched into a map that allowed residents to see the damage to their property, without being exposed to danger. This was likely the largest response of small UAS’s to a disaster scene in U.S. history. Deputy Hassna has also developed tactics and training for this technology that has redefined high-risk tactical operations and air support as we know it.

Deputy Ross Jessop of the Missoula County Sheriff’s Office, Montana:

Deputy Jessop is being recognized for his action and dedication to duty in saving the life of a kidnapped baby. In July 2018, the Sheriff’s Office received a call about a man with a gun, who had fled in a vehicle with his girlfriend’s infant son. One hour later the suspect appeared back on the scene without the baby. The suspect said he killed and buried the baby; but his irrational statements led investigators to search for the missing child. During Deputy Jessop’s search in more than a million acres of forest, he heard a faint whimper, and found a baby boy lying face down. To his surprise, the baby was alive and uninjured. There is no question Deputy Jessop’s  instincts, perseverance, and dedication saved the child’s life.

Officers Aaron Bates and Alexander Stotik of the Cohasset Police Department, Massachusetts:

Officers Bates and Stotik are being recognized for their courageous actions that saved the life of a woman who was being brutally attacked. The officers were dispatched to a home where neighbors complained of loud noises and a fight. After investigating, the officers heard a muffled scream, kicked in a locked door, and saw what they described as an “attempted murder in progress.” After a heated struggle, the officers were able to subdue the suspect, place him under arrest, and get medical attention for the victim. The officers exhibited extraordinary valor, bravery, courage, and professionalism in the face of extreme danger that would no doubt have resulted in the murder of the victim.

INNOVATIONS IN COMMUNITY POLICING

Officer Phalon McFate of the Las Vegas Metropolitan Police Department, Nevada:

Officer McFate developed Project Daybreak, an initiative used to address violent crime-hot spots in downtown Las Vegas neighborhoods. Since it started, Project Daybreak has significantly contributed to decreasing violent crime – down by 50 percent in these neighborhoods. Through positive police interactions, Officer McFate was able to create transparency and build trust in neighborhoods, where these previously did not exist. The success of Project Daybreak is a direct result of Officer McFate’s passion and commitment to her community.

Officer Jesse Guardiola of the Tulsa Police Department, Oklahoma:

Officer Guardiola is being recognized for the Hispanic outreach program he has developed, which provides survival Spanish language training, and educates law enforcement and the community on the immigrant Hispanic culture. The program has received national recognition and is being promoted as a national model for Hispanic community outreach. Through his efforts, Officer Guardiola is building bridges and making a difference in Tulsa, Oklahoma.

Detective Anthony Roberson of the Providence Police Department, Rhode Island:

Detective Roberson is being recognized for his use of community policing initiatives that build partnerships between law enforcement and local businesses to support underserved families.  The “Shop with a Cop” program has now served 300 children.  The “Handshake Initiative” has grown from 40 to 200 mentors, and is benefiting families of all backgrounds, across the city. Through these programs, Detective Roberson is giving back to his community, increasing partnerships and building bridges between law enforcement, families and businesses. 

Officer Jonathan Plunkett of the Irving Police Department, Texas:

In August 2016, after the murder of five police officers in Dallas, Officer Plunkett began working on an outreach initiative to bridge the gap between the African-American community and law enforcement. The idea was to connect with the community in places where residents would feel comfortable, and be open to sharing their concerns and engaging in dialogue. Officer Plunkett knew that barbershops would work.  The initiative, which began with one shop, has now increased to 16 shops, and is known as ShopTalk. Through ShopTalk, Officer Plunkett has created a way to build mutual trust and respect between law enforcement and community members who had not been reached with traditional police outreach efforts.

Detective Kathleen Lucero of the Isleta Tribal Police Department, New Mexico:

Detective Lucero is being recognized for community policing initiatives that provide resources to impoverished youth, and build connections between law enforcement and the community. Through the annual Reaching for A Star initiative, Detective Lucero provides gifts and food to more than 150 children and their families during the holiday season. Through her Camp Courage program, 60 children participate in a youth camp every summer. Detective Lucero’s on-and off-duty dedication cannot be overstated and has made a true impact on the community. 

Officer Troy Quick of the Conyers Police Department, Georgia:

Officer Quick is making a lasting impact on the youth within his community. As a School Resource Officer at Rockdale County High School, Officer Quick has been able to help a number of students leave gang life. Whether it is though the mentoring sessions he coordinates for students, donating items to families in need, or just taking an interest in student’s daily lives, Officer Quick is a true example of dedication and service.

The Justice Department announced today that it has filed a complaint with a U.S. District Court in Norfolk, Virginia, seeking entry of a court order requiring Franchise Group Intermediate L 1 LLC, (Liberty) the national franchisor and owner of Liberty Tax Service stores, to refrain from specific acts, enact enhanced internal compliance controls regarding the detection of false tax returns, and pay for an independent monitor to oversee Liberty’s compliance with the proposed court order. Separately, the United States and Liberty filed a joint motion and proposed order that, if adopted by the court, would resolve the matter.

Liberty is one of the largest tax preparation service providers in the United States, according to its public filings. Through its stores, Liberty filed approximately 1.3 to 1.9 million tax returns each year between 2015 and 2019, and for tax years 2012 to 2018, Liberty claimed over $28 billion in federal tax refunds on behalf of its customers, the complaint asserts. According to Liberty’s 2019 Annual Report filed with the SEC, and as reflected in the complaint, the Justice Department has been investigating Liberty’s policies, practices and procedures in connection with Liberty’s tax return preparation activities. Liberty has cooperated to resolve this matter.

The complaint alleges that Liberty directly controls its company-owned stores and that it maintains a substantial degree of control over franchisees. According to the complaint, returns prepared by franchisees and filed electronically with the IRS flow through Liberty before they are filed. The government claims Liberty failed to maintain adequate controls over tax returns prepared by its franchisees, and failed to take steps to prevent the filing of potentially false or fraudulent returns prepared by franchisees, despite having the capability to do so and despite notice of fraud at some of its franchisee stores.

Between 2013 and 2018 the Department of Justice filed 10 separate civil enforcement actions against Liberty Tax Service franchisees, or their owners, former owners or managers, some of whom Liberty designated as “Elite 18” franchisees because their “performance and attitude set the standard for the [Liberty Tax Service] organization.” The government contends its allegations in those lawsuits show common patterns across top Liberty franchisees of concocting fictitious income for customers to claim Earned Income Tax Credits, fabricating expenses to reduce customers’ reported income tax liability, claiming improper or false dependents, and falsifying education expenses to claim refundable education tax credits.

In their joint motion, the parties request relief that would:

• Permanently bar Liberty from engaging or employing certain individuals going forward, including the company’s founder and former CEO, John T. Hewitt;

and require Liberty to:

• Implement enhanced compliance measures, including training programs and additional resources to monitor, detect, and report non-compliance with federal laws and regulations, as well as to ensure effective quality control over tax return preparation throughout the Liberty Tax Service system;
• Conduct a minimum number of onsite compliance reviews of its stores, test its stores’ compliance with tax laws using mystery shoppers, and automatically prevent electronic transmission of tax returns to the IRS that report certain items with a high risk of fraud until the company independently verifies the accuracy of the tax return;
• Disclose to the United States any violations Liberty discovers from onsite reviews, mystery shoppers, and automatic holds of tax returns, as well as internal reviews Liberty previously conducted of its officers and employees who violated federal tax laws;
• Enact specific verification requirements at Liberty Tax Service stores for tax returns that claim itemized tax deductions or report certain forms of income to claim the Earned Income Tax Credit;
• Maintain a whistleblower program to encourage Liberty employees, franchisees, and franchisee employees to report suspected fraudulent activity; and
• Engage a third party, approved by the United States, to act as an independent monitor to review the company’s compliance with terms of the order, to assess the sufficiency of Liberty’s fraud prevention measures, and to report findings to a government official designated by the United States and, if necessary, to the court.

Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2019. The IRS has some tips on their 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’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

International senior counterterrorism (CT) officials, academic experts, U.S. interagency representatives, and organizations dedicated to policing initiatives and extremism topics met in Washington, DC from Dec. 2 to 4, to openly discuss and address current knowledge on community-oriented policing for countering violent extremism (CVE) to further improve mutual exchanges and better connect multilateral cooperation and national implementation of CT and CVE practices.

The meeting, convened by the U.S. Department of Justice’s International Criminal Investigative Training Assistance Program (ICITAP) of the Department’s Criminal Division, the U.S. Department of State’s Bureau of Counterterrorism, Hedayah, and the Global Center on Cooperative Security in cooperation with the U.S. Institute of Peace (USIP), provided the opportunity for senior officials to launch two joint publications of USIP and Hedayah funded by the Bureau of Counterterrorism, and also to further strengthen implementation of CT and CVE good practices and responses to terrorism and violent extremism.

In the meeting, USIP and Hedayah presented the results of two programs, Community-Oriented Policing for CVE Capacity and Positive Policing Messages: Countering Violent Extremism Narratives.  These works, published by Hedayah, represent the efforts of various international partners along with the two organizations in order to establish a framework for policing for CVE and to emphasize the importance of systematic communication by law enforcement with the community.

The meeting also addressed topics of mutual interest, including the challenges of policing certain rural and urban areas, new trends in terrorism, women in policing, police academies, strategic communications by law enforcement as part of a strategy to counter violent extremism, and new methods of responding to potential terrorists, as well as probationary and corrections programs.  In addition, ICITAP presented a toolkit based upon community-oriented policing and standardized incident management systems providing multiple examples of how law enforcement can engage the community to create resilience and prevent terrorism, respond to incidents effectively through pre-planning and communications, and dedicate resources to the community and police recovery after a traumatic incident, in addition to justice solutions for offenders.

“ICITAP is proud to partner with the Department of State’s Bureau of Counterterrorism and other key members of the U.S. and international community to counter threats of violent extremism around the globe,” said Gregory Ducot, the Acting Director of ICITAP.  “This three-day Policing for Countering Violent Extremism Symposium serves as a forum for ICITAP to bring theory to practice, analyze the drivers of violent extremism, and share field-tested tools that have been utilized effectively throughout the world.  By bringing together experts committed to preventing and countering extremism, ICITAP anticipates that this symposium will lead to the assembly of a CVE community of interest, which will guide the interagency to more effectively combat the rise of violent extremism.”

The discussions in the meeting will inform upcoming international meetings on CVE, including one focused on women in policing.  

To learn more about ICITAP, visit: https://www.justice.gov/criminal-icitap.

Following a seven-week jury trial in U.S. District Court earlier this year, a federal jury convicted five members of the Gangster Disciples of multiple counts relating to a racketeering conspiracy and a drug distribution conspiracy, which plagued the Clarksville, Tennessee, area with violence and murders for more than a decade, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Don Cochran for the Middle District of Tennessee.

Marcus Termaine Darden, aka, “Tuff,” 41, and Elance Justin Lucas, aka, “Mac Luke,” 30, both of Guthrie, Kentucky; Derrick Lamar Kilgore, aka, “Smut,” 35, and DeCarlos Titington, aka, “Los,” 44, both of Clarksville, Tennessee, were convicted at trial.

Following sentencing hearings that began last week and concluded today, Chief U.S. District Judge Waverly D. Crenshaw, Jr. sentenced Darden, Kilgore, Titington and Lucas to 40 years, 35 years, 22.5 years, and 20 years in prison, respectively. 

Of the 12 individuals charged in this conspiracy, five previously pleaded guilty, including Rex Whitlock, aka “Stackhouse,” 34, of Clarksville, who was sentenced in January to 30 years in federal prison, and Lorenzo Brown, aka “Zo,” of Murfreesboro, Tennessee, who was sentenced in November to 15 years in federal prison. 

According to evidence and testimony at trial, the defendants are all members of the Gangster Disciples, a criminal organization that originated in Chicago and spread through the midwestern and eastern United States. During a portion of the conspiracy, Darden was the “regent” of the “615 region” of the Gangster Disciples, making him the highest-ranking member of the gang in the middle Tennessee area. In that role, Darden exercised control over Gangster Disciples activities in Clarksville, Nashville, Murfreesboro, and Gallatin, among other cities. Darden also reported to a statewide “governor” of the Gangster Disciples.

Members of the Gangster Disciples criminal enterprise engaged in acts of violence including murder, attempted murder, witness intimidation, and obstruction of justice. These members also sold powder cocaine, crack cocaine, marijuana, and other controlled substances, and exercised control over certain territories in Clarksville. As part of the conspiracy, each defendant agreed that a member would commit at least two acts of racketeering activity for the Gangster Disciples.

The evidence at trial proved that the defendants and other members of the Gangster Disciples murdered members of the rival Bloods gang in Clarksville, including Hairston, in September 2007. The evidence also showed that, in January 2006, and as part of the Gangster Disciples’ effort to consolidate power in Clarksville, Darden shot a rival Crips gang member, who was life-flighted to Vanderbilt Medical Center for treatment. In December 2007, Darden also shot an unarmed person in the parking lot of a nightclub because that individual had “disrespected” him. These defendants were also responsible for a drive-by shooting in Clarksville in August 2014, targeting members of the rival Vice Lords gang.  During this shooting, members of the Gangster Disciples, including Kilgore, rode through a residential neighborhood and began firing AK-47 style assault weapons.  During this incident, four innocent bystanders, including a 16-year-old, were struck by gunfire and were transported to a local hospital for treatment.  One woman was shot three times in the abdomen and suffered serious, life threatening injuries.

Titington also attempted to shoot and kill two members of the rival Vice Lords gang after a brawl inside a convenience store in Clarksville in December 2014.  During this incident, Titington fired 14 rounds from a Glock semi-automatic handgun, striking a vehicle occupied by rival Vice Lord gang members.  Titington pleaded guilty to this conduct in state court, and although he was acquitted of federal attempted murder in aid of racketeering charges in connection with this conduct, he was convicted on a racketeering conspiracy charge which encompassed this conduct.

These violent acts were intended to further the gang’s activities and maintain and increase a member’s position within the organization. Evidence at trial also established that the defendants engaged in witness intimidation through violence or threats of violence, and prevented or deterred individuals from cooperating with law enforcement. Additionally, the government introduced evidence and testimony showing that law enforcement officers conducted undercover buys of cocaine and crack cocaine from Darden, Burks, Kilgore and Lucas between 2010 and 2015.  During this investigation, law enforcement also seized numerous firearms, controlled substances, and other contraband.

This extensive investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms, and Explosives; the Tennessee Bureau of Investigation; the Montgomery County Sheriff’s Office; the Clarksville Police Department; the Rutherford County Sheriff’s Office; the Murfreesboro Police Department; the Gallatin Police Department; the Kentucky State Police; the 19th Judicial District Drug Task Force; and the Hopkinsville, Kentucky Police Department.  Assistant United States Attorney Ben Schrader of the Middle District of Tennessee and Trial Attorneys Shauna Hale and Ivana Nizich of the Criminal Division’s Organized Crime and Gang Section, are prosecuting the case. 

The former President and Chief Executive Officer of Bumble Bee Foods LLC was convicted today in San Francisco, California, for his participation in an antitrust conspiracy to fix prices of canned tuna, the Justice Department announced.

Following a four-week trial in the U.S. District Court for the Northern District of California in San Francisco, a jury convicted Christopher Lischewski, the former CEO of Bumble Bee, for conspiring to fix prices of canned tuna sold in the United States from in or about November 2010 until in or about December 2013.

“Today’s verdict reaffirms the Division’s commitment to rooting out collusion that robs American consumers of the benefits of competition when they purchase household staples like canned tuna,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “The jury’s verdict is a reminder that no one, including members of the C-Suite, is above the law. Executives who conspire to cheat consumers for their own benefit will be held accountable for their illegal conduct.”

“This guilty verdict demonstrates the FBI’s commitment to working with our law enforcement partners to investigate price-fixing schemes that harm consumers,” said FBI San Francisco Special Agent in Charge John F. Bennett.  “A company’s senior leadership sets the example for how it should operate, and in this case a CEO prioritized his own greed at the expense of American consumers.”

According to evidence presented at trial, Lischewski participated in a conspiracy to fix prices of canned tuna that affected hundreds of millions of dollars in sales throughout the United States.  He also authorized and supervised his subordinates’ participation in the conspiracy.  Lischewski and his co-conspirators employed measures to conceal their conspiratorial conduct, including meeting at offsite locations, using third-party e-mail addresses, and discouraging retention of documents concerning the conspiracy.

Bumble Bee pleaded guilty and was sentenced to pay a criminal fine of at least $25 million.  In September, StarKist Co. was sentenced to pay a $100 million criminal fine. In addition to Bumble Bee and StarKist, four individuals, including Lischewski, have been charged in the investigation.  The other three individuals pled guilty and testified in Lischewski’s trial.

The Antitrust Division’s investigation of collusion in the market for packaged seafood is ongoing.  The investigation in today’s case is being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Field Office. Anyone with information on price fixing, bid rigging or other anticompetitive conduct related to the packaged-seafood industry should contact the Antitrust Division’s San Francisco Office at 415-934-5300, visit www.justice.gov/atr/contact/newcase.html, or call the FBI tip line at 415-553-7400.

Earlier today, an indictment was unsealed against the CEO of an online payment processing company, and seven others, charging them with conspiring to make and conceal conduit and excessive campaign contributions, and related offenses, during the U.S. presidential election in 2016 and thereafter.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge Timothy R. Slater of the FBI’s Washington Field Office made the announcement.

A federal grand jury in the District of Columbia indicted Ahmad “Andy” Khawaja, 48, of Los Angeles, California, on Nov. 7, 2019, along with George Nader, Roy Boulos, Rudy Dekermenjian, Mohammad “Moe” Diab, Rani El-Saadi, Stevan Hill and Thayne Whipple. The 53 count indictment charges Khawaja with two counts of conspiracy, three counts of making conduit contributions, three counts of causing excessive contributions, 13 counts of making false statements, 13 counts of causing false records to be filed, and one count of obstruction of a federal grand jury investigation. Nader is charged with conspiring with Khawaja to make conduit campaign contributions, and related offenses. Boulos, Dekermenjian, Diab, El-Saadi, Hill, and Whipple are charged with conspiring with Khawaja and each other to make conduit campaign contributions and conceal excessive contributions, and related offenses.

According to the indictment, from March 2016 through January 2017, Khawaja conspired with Nader to conceal the source of more than $3.5 million in campaign contributions, directed to political committees associated with a candidate for President of the United States in the 2016 election. By design, these contributions appeared to be in the names of Khawaja, his wife, and his company. In reality, they allegedly were funded by Nader. Khawaja and Nader allegedly made these contributions in an effort to gain influence with high-level political figures, including the candidate. As Khawaja and Nader arranged these payments, Nader allegedly reported to an official from a foreign government about his efforts to gain influence.

The indictment also alleges that, from March 2016 through 2018, Khawaja conspired with Boulos, Dekermenjian, Diab, El-Saadi, Hill, and Whipple to conceal Khawaja’s excessive contributions, which totaled more than $1.8 million, to various political committees. Among other things, these contributions allegedly allowed Khawaja to host a private fundraiser for a presidential candidate in 2016 and a private fundraising dinner for an elected official in 2018.

The indictment further alleges that, from June 2019 through July 2019, Khawaja obstructed a grand jury investigation of this matter in the District of Columbia. Knowing that a witness had been called to testify before the grand jury, Khawaja allegedly provided that witness with false information about Nader and his connection to Khawaja’s company. Boulos, Diab, Hill, and Whipple also are charged with obstructing the grand jury’s investigation by lying to the FBI.

Currently, Nader is in federal custody on other charges.

An indictment is not a finding of guilt. It merely alleges that crimes have been committed. A defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.

The FBI’s Washington Field Office is investigating the case and Deputy Chief John D. Keller and Trial Attorneys James C. Mann and Michael J. Romano of the Criminal Division’s Public Integrity Section are prosecuting the case.

A medical doctor who formerly practiced in Tennessee pleaded guilty today for his role in unlawfully distributing controlled substances.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Don Cochran of the Middle District of Tennessee, Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Atlanta Field Office and Director David B. Rausch of the Tennessee Bureau of Investigation (TBI) made the announcement.

Darrel R. Rinehart M.D., 64, of Indianapolis, Indiana, formerly of Columbia, Tennessee, pleaded guilty to one count of unlawful distribution of controlled substances before Chief U.S. District Judge Waverly D. Crenshaw Jr. of the Middle District of Tennessee.  Sentencing has been scheduled for July 30, 2020, before Chief Judge Crenshaw.

Pursuant to his guilty plea, Rinehart admitted that in January 2016 he knowingly distributed hydrocodone, a Schedule II controlled substance, to a patient who did not have any significant underlying health issues justifying such a prescription.  He further admitted to distributing Schedule II controlled substances, primarily opioids, to four different patients without a legitimate medical purpose and outside the course of professional practice on 18 other occasions between December 2014 and December 2015.

The HHS-OIG, TBI and the District Attorney General for the Tennessee’s 22nd Judicial District investigated the case.  Assistant Chief Kilby Macfadden and Trial Attorney William M. Grady of the Criminal Division’s Fraud Section are prosecuting the case

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The Fraud Section leads the Appalachian Regional Prescription Opioid (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.

Today, Texas is seeking to join the United States, Arkansas, Colorado, Florida, Kansas, Louisiana, Nebraska, Ohio, Oklahoma and South Dakota in the suit and proposed settlement relating to the proposed merger of T-Mobile and Sprint.  The settlement requires a substantial divestiture package in order to launch Dish Network Corp., a Colorado-based satellite television provider, as a fourth nationwide provider of retail mobile wireless services.  The settlement also will expedite the deployment of multiple high-quality 5G networks for the benefit of American consumers and entrepreneurs.

“We are pleased that Texas has joined other states in leaving the New York and California litigation and in deciding to join our settlement,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “The merger, coupled with competition from DISH, will benefit Texans and American consumers nationwide.” 

The Department’s Antitrust Division and now 10 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.  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 U.S. 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 U.S. 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.

The Department of Justice’s Antitrust Division announced today that it completed a nearly two-year long investigation into the standard-setting activities of the GSM Association (GSMA), a trade association for mobile network operators. The Antitrust Division’s investigation revealed that, in recent years, the GSMA used its industry influence to steer the design of eSIMs technology in mobile devices.  In response to the investigation, the GSMA has drafted new standard-setting procedures that will incorporate more input from non-operator members of the mobile communications industry.  The new standard-setting process will have a greater likelihood of creating procompetitive benefits for consumers of mobile devices; it will also curb the ability of mobile network operators to use the GSMA standard as a way to avoid new forms of disruptive competition that the embedded SIMs (eSIMs) technology may unleash. 

The GSMA expressed its intent to adopt the new procedures in a request for a business review letter from the Antitrust Division.  After completing its investigation, the division is today issuing a business review letter that expresses concern about the past procedures and some of the resulting provisions in the standard.  The letter concludes, however, that the proposed changes appear to adequately address those concerns.  In light of these planned changes, the Antitrust Division has no present intention to bring an enforcement action against the GSMA or its mobile network operator members.

“I am pleased that the GSMA is ready to use its standard-setting process to create a more consumer-friendly eSIM standard,” said Assistant Attorney General Makan Delrahim. “The GSMA’s old procedures resulted in certain eSIMs rules that benefitted only its incumbent mobile network operators at the risk of innovation and American consumers.  The new procedures proposed going forward significantly reduce that risk and should result in new innovative offerings for consumers.” 

The mobile communications industry has begun to migrate away from traditional SIM cards—a removable plastic card that is preprogrammed to connect to a single mobile network—and toward innovative eSIMs, which perform the same function as a SIM card but are soldered into the device and capable of being remotely programmed and re-programmed to connect to different operators’ mobile networks. The mobile industry refers to this process as Remote SIM Provisioning (RSP).

According to the Antitrust Division’s investigation, the GSMA and its mobile network operator members used an unbalanced standard-setting process, with procedures that stacked the deck in their favor, to enact an RSP Specification that included provisions designed to limit competition among networks. When standard-setting organizations are used in an anticompetitive manner, the division stands ready to evaluate that conduct under the antitrust laws and take whatever action is necessary to restore competition.

The GSMA is a non-profit association with its headquarters in London, United Kingdom, and additional offices throughout the world, including offices in Atlanta, Georgia, and San Francisco, California. The GSMA is a trade association representing mobile operators worldwide, including more than 750 operators and over 350 companies in the broader mobile ecosystem. GSMA’s membership includes all of the major mobile network operators worldwide, including the major, national carriers in the United States.

Under the Department of Justice’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided.  The department reserves the right to challenge the proposed action under the antitrust laws if the actual operation of the proposed conduct proves to be anticompetitive in purpose or effect.

Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division.  After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure.  Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at [email protected].

The Justice Department announced today the publication of its updated Policy on the Use of Unmanned Aircraft Systems.  In light of advancements in unmanned aircraft system (UAS) technology, and lessons learned from the Federal Bureau of Investigation’s limited use of UAS, the Policy enables the Department of Justice’s law enforcement components to safely and responsibly employ UAS technology within a framework designed to provide accountability and protect privacy and civil liberties.

“UAS technology assists the Department in protecting public safety and, most importantly, reduces risks to officers and the public,” said Beth A. Williams, Assistant Attorney General for the Office of Legal Policy.  “Our new policy promotes the responsible, appropriate, and effective use of UAS by the Department and can serve as a model for our state, local, tribal, and territorial public safety partners as they develop their own UAS programs and best practices.” 

The Policy permits the use of UAS only in connection with properly authorized investigations and activities.  It also requires compliance with the Constitution and all applicable laws and regulations, including regulations issued by the Federal Aviation Administration.  Department of Justice components anticipate using UAS to support crime scene response and investigation, search and rescue, and site security, among other authorized uses.  In order to ensure accountability and airspace safety, the Department requires UAS operations to be approved at an appropriate level and conducted by personnel who meet Department-wide training standards.  Importantly, the new policy also requires components to evaluate UAS acquisitions for cybersecurity risks, guarding against potential threats to the supply chain and DOJ’s networks.    

The Policy reflects the Department’s strong commitment to the protection of privacy and civil liberties, mandating annual privacy reviews of UAS programs and assessments of new UAS technology from a privacy perspective.  It also places limits on data retention, generally requiring privacy sensitive data to be deleted within 180 days, unless certain exceptions are met. 

In addition to utilizing UAS as a law enforcement tool, the Department takes seriously the threat posed by unlawful and unsafe uses of UAS.  The Department has trained federal prosecutors and agents across the country on the criminal and civil enforcement tools available to counter the misuse of UAS, such as the use of drones to smuggle contraband into prisons or violate restricted airspace.  Department of Justice personnel have also trained and collaborated with senior state, local, tribal, and territorial law enforcement officials who face this new threat on a daily basis.   The Department welcomes lawful and beneficial uses of UAS, which promise to enhance the economy and transform the delivery of goods and the provision of critical services ranging from search-and-rescue to industrial inspections.  At the same time, the Department will not hesitate to take action against those who threaten the safety of our skies and the public. 

The updated Policy announced today draws on the Department’s long history of leveraging cutting-edge technology to protect the public while promoting our values and the rule of law.  

The publication of the updated policy can be found here. 

The Department of Justice and the U.S. Department of Education today filed a Statement of Interest in federal court in Maryland, explaining that the Maryland State Department of Education discriminated against Bethel Christian Academy when it excluded the school from its BOOST Scholarship program due to the school’s beliefs regarding marriage and gender set forth in its Parent-Student Handbook. The United States’ brief explains that the school is likely to succeed on its claims under the First Amendment’s Free Speech and Free Exercise Clauses, and thus may be entitled to a preliminary injunction from the United States District Court for the District of Maryland.

“The First and Fourteenth Amendments to the United States Constitution protect religious schools from coercive government actions that force them to choose between abandoning or betraying their faith and participating in public programs,” said Eric Dreiband, Assistant Attorney General for the Civil Rights Division. “The Department of Justice will continue to fight for the rights of religious people and organizations, whether or not their beliefs are popular with government officials.”

“Americans do not give up their religious liberty protections simply because they may participate in a government program or interact with a state government,” said Robert S. Eitel, Senior Counselor to the Secretary of Education. “The U.S. Department of Education cannot sit on its hands as the First Amendment rights of Bethel Christian Academy are violated. We are pleased to work with the Justice Department in this important matter.”

Maryland’s BOOST program provides scholarships to students from low-income backgrounds to attend nonpublic schools. Bethel Christian Academy is a nonpublic K-to-8 school in Savage, Maryland run by Bethel Ministries, a Pentecostal church. Bethel Christian Academy provides a rigorous academic program for a diverse student body that is 85 percent nonwhite. 

Since its inception in 2016, the BOOST program has required participating schools to accept scholarship students without regard to race, color, national origin, or sexual orientation. Starting in 2019, the program added a requirement that schools not discriminate at all on these bases as well as on gender identity or expression. The nondiscrimination provisions provide, however, that they do not “require any school or institution to adopt any rule, regulation, or policy that conflicts with its religious or moral teachings.” 

Bethel Christian Academy states that it does not discriminate on the basis of sexual orientation or gender identity, and that it has no intention of doing so in the future. However, it states in its Parent-Student Handbook that it supports “the biblical view of marriage defined as a covenant between one man and one woman” and that it believes “that God immutably bestows gender upon each person at birth as male or female to reflect His image.” 

As a result of this language, in 2018, Maryland officials removed Bethel Christian Academy from the BOOST program, and demanded the return of $102,600 for previously paid scholarships.  The school filed suit and, on Oct. 31, 2019, asked the court for a preliminary injunction.

The United States’ Statement of Interest explains that the Maryland officials’ actions violated the Free Speech and Free Exercise Clauses of the Constitution. Regarding free speech, the United States explains that while states may prohibit discriminatory conduct, the school has represented that it will not discriminate against students based on their sexual orientation or gender identity.  Accordingly, the officials are punishing the school for its beliefs and expression in violation of the First Amendment. With regard to the free exercise of religion, the United States points out that two years ago, in Trinity Lutheran Church of Columbia v. Comer, the Supreme Court made clear that a private organization cannot be required to renounce its religious character to participate in a public benefit program.

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.

Attorney General William P. Barr issued the following statement:

“American Indian and Alaska Native people suffer from unacceptable and disproportionately high levels of violence, which can have lasting impacts on families and communities.  Native American women face particularly high rates of violence, with at least half suffering sexual or intimate-partner violence in their lifetime.  Too many of these families have experienced the loss of loved ones who went missing or were murdered. President Trump establishing the Task Force on Missing and Murdered American Indians and Alaska Natives will enable us to further strengthen the federal, state, and tribal law enforcement response to these continuing problems.” 

Laboratory Boston Heart Diagnostics Corporation (Boston Heart), of Framingham, Massachusetts, has agreed to pay $26.67 million to resolve False Claims Act allegations involving payments for patient referrals in violation of the Anti-Kickback Statute and the Stark Law, as well as claims otherwise improperly billed to federal healthcare programs for laboratory testing, the Department of Justice announced today.

The settlement announced today resolves allegations that Boston Heart conspired with others to pay doctors kickbacks disguised as investment returns.  From 2015 to 2017, Boston Heart allegedly agreed to provide laboratory testing services to small Texas hospitals in exchange for per-test payments.  To generate more referrals for the hospitals and more money for itself, Boston Heart allegedly coordinated with the hospitals’ independent marketers, who set up companies known as management service organizations (MSOs), to make payments to referring physicians that were disguised as investment returns but were actually based on, and offered in exchange for, the physicians’ referrals.  Boston Heart allegedly helped the MSOs identify physician targets, referred interested physicians to the MSOs to secure their business, and participated with the MSOs in sales pitches to offer physicians money in exchange for referrals.  As a result, physicians allegedly referred patients to the Texas hospitals and Boston Heart for laboratory tests performed by Boston Heart, which were then billed to Medicare, Medicaid, and TRICARE. 

“Paying kickbacks to doctors in exchange for referrals undermines the integrity of federal healthcare programs,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “We will hold accountable those who enter into unlawful agreements that harm taxpayers, corrupt doctors’ medical judgment, and subject patients to expensive and unnecessary testing.”

“This company created lots of complex relationships to try to hide what it was doing, and that is illegally paying kickbacks for medical referrals,” said US Attorney Joseph D. Brown for the Eastern District of Texas.  “The law requires that medical decisions be made based on what is best for the patient, not on what financially benefits the healthcare provider.   Doctors and hospitals need to understand that these kinds of violations will be pursued.”

“This office will continue to take all appropriate action to help prevent improper inducements that can corrupt the integrity of physician decision-making,” said U.S. Attorney McGregor W. Scott for the Eastern District of California.

“When medical companies pursue profits by paying kickbacks to doctors, they undermine our health care system,” said U.S. Attorney Jessie K. Liu for the District of Columbia. “This settlement represents our continued commitment to fight aggressively to protect patients and the integrity of federal health care programs.”

“Schemes designed to defraud federal healthcare programs undermine our healthcare system by driving up medical costs, wasting taxpayer dollars, and often harming patients,” said Special Agent in Charge C.J. Porter of the Office of Inspector General at the U.S. Department of Health and Human Services (OIG-HHS).  “This settlement shows our unwavering commitment to working closely with our law enforcement partners to hold accountable those misusing healthcare funds, regardless of the complexity of the scheme used to circumvent laws and regulations.”

“The Defense Criminal Investigative Service (DCIS), in partnership with our federal law enforcement partners, will continue to aggressively investigate those who defraud the federal government, and ultimately the American taxpayers, in order to protect the integrity of federal healthcare programs,” said Special Agent in Charge Michael C. Mentavlos of the DCIS Southwest Field Office.  “Fraud and abuse pose a significant threat to the viability of TRICARE, the Department of Defense’s healthcare program for service members, retirees, and their families.”

The settlement also resolves allegations that Boston Heart conspired with the Texas hospitals and others to submit claims for outpatient laboratory testing for patients who were not hospital outpatients, in order to receive higher reimbursements from federal healthcare programs.

In addition, the settlement resolves allegations that Boston Heart directly or indirectly paid processing and handling fees, waived patient copayments and deductibles, and provided physician practices with in-office dietitians in exchange for physician referrals for laboratory testing.  Those allegations were originally made in two cases filed under the whistleblower, or qui tam, provision of the False Claims Act.  The act permits private parties to sue for fraud on behalf of the United States and to share in any recovery.  The whistleblowers will receive approximately $4.36 million of the settlement.

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded programs.  The Stark Law forbids a laboratory from billing Medicare and Medicaid for certain services referred by physicians that have a financial relationship with the laboratory.  The Anti-Kickback Statute and the Stark Law are intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The civil settlement was the result of an investigation by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Offices for the Eastern District of Texas, District of Columbia, and Eastern District of California, OIG-HHS, and DCIS.  The two lawsuits are captioned United States ex rel. Riedel v. Boston Heart Diagnostics Corp., No. 1:12-cv-1423 (D.D.C.) and United States ex rel. FBH1 LLC v. Boston Heart Diagnostics Corp., No. 2:17-cv-2061 (E.D. Cal.).  The claims resolved by the settlement are allegations only and there has been no determination of liability.

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).

Today, a federal jury convicted Brett Palkowitsch, 32, an officer with the St. Paul Police Department, of using excessive force against an unarmed civilian, announced Assistant Attorney General Eric Dreiband of the Civil Rights Division and FBI Minneapolis Special Agent in Charge Jill Sanborn.

 “The behavior of the defendant will not be tolerated and the Department of Justice will seek to prosecute those who abuse their power,” said Assistant Attorney General Eric Dreiband for the Civil Rights Division. “We commend the officers who came forward and brought about the opening of the investigation. We also thank our law enforcement partners who assisted in this case.”

"Law enforcement officers receive certain powers from the government so they can protect the rights of the citizens they serve," said FBI Minneapolis Special Agent in Charge, Jill Sanborn.  "When an individual officer’s actions violate that trust, he or she should be held accountable which the jury confirmed with today's verdict. We thank all those who assisted on this case," Sanborn added.

The evidence presented at trial established that the Defendant and other officers responded to a 911 call alleging that an unidentified black male with dreadlocks and a white t-shirt had been involved in a street fight and was carrying a gun. Upon their arrival on scene, officers found no evidence of any street fight, but they noticed one man who matched that general description, sitting in his car talking on a cellphone. One of the responding officers, along with his police K-9, approached the man’s car and, without identifying himself as a police officer, yelled at the man to get out. The man, later identified as Frank Baker, got out of the car, as the officer yelled commands and the police K-9 barked loudly at him. Seven seconds later, the officer released the K-9, which took Mr. Baker to the ground and began mauling his leg. While Mr. .Baker was on the ground, screaming in pain, the Defendant arrived and kicked Mr. Baker three times in the ribs. The defendant’s kicks broke seven of Mr. Baker’s ribs and caused both of his lungs to collapse, putting him in critical condition. Officers found no gun at the scene and no evidence that Mr. Baker, a 52-year-old grandfather who lived in the neighborhood, had been involved in any fight.

Two of the officers who witnessed the defendant’s actions that night, Officers Joseph Dick and Anthony Spencer, reported the Defendant to their supervisor. Mr. Dick and Mr. Spencer both testified for the government at trial, about the defendant’s use of force and about harassment and retaliation they suffered after stepping forward to report a fellow officer. Dick, Spencer, and a third officer from the scene told the jury that they saw no legitimate reason for the defendant’s kicks. Additionally, officers testified that the defendant boasted afterward about having kicked Mr. Baker.

Following more than two weeks of trial, the jury in the U.S. District Court in St. Paul, MN, deliberated for 11 hours before finding the Defendant guilty of using excessive force. 

The Defendant faces a maximum sentence of 10 years in federal prison. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.  

This case was investigated by the Minneapolis Division of the FBI, and was prosecuted by Special Litigation Counsel Christopher J. Perras and Trial Attorney Zachary Dembo of the Justice Department’s Civil Rights Division.

ERIE, Pa. - An Ohio resident has been sentenced in federal court to 40 months in jail and ordered to pay $13,000 in restitution on his conviction of violating federal laws relating to the sexual exploitation of children, United States Attorney Scott W. Brady announced today.

United States District Judge David S. Cercone imposed the sentence on John Trisket, Jr., 48, of Millersburg, Ohio.

According to information presented to the court, Trisket possessed computer images depicting minors engaging in sexually explicit conduct.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys' Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute individuals who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.

Assistant United States Attorney Christian A. Trabold prosecuted this case on behalf of the government.

United States Attorney Brady commended the Department of Homeland Security for the investigation leading to the successful prosecution of Trisket.

Two Long Island, New York, corporations and their owners pleaded guilty today in federal court for their scheme to falsely-label seafood that they later sold across the country.

In a plea agreement with the government, Roy Tuccillo Sr, 59, and his son, Roy Tuccillo Jr, 32, both of Jericho, New York, and two of their Westbury, New York, food processing and distribution companies, Anchor Frozen Foods Inc, and Advanced Frozen Foods Inc, pleaded to conspiracy to commit wire fraud. They admitted to importing giant squid from Peru, marketing it as octopus, and using e-mail and wire transactions to sell it to grocery stores in interstate commerce.

“Seafood fraud is illegal, undermines confidence in the market place, and can have serious consequences for fish, fishermen, the seafood industry and consumers,” said James Landon, Director of the National Oceanic and Atmospheric Administration’s (NOAA) Office of Law Enforcement.  “NOAA’s enforcement priorities include uncovering and investigating incidents of seafood fraud, and we will seek to continue to bring to justice those who engage in this illegal activity.”

Octopus and squid are distinct species of fish with great variance in their taxonomy, habitat, and physical characteristics. The U.S. Food and Drug Administration requires food companies selling squid to market it by its name or as calamari, while octopus is the only acceptable name when selling octopus. In general, octopus has a greater retail price than squid.

From 2011 to 2014, the defendants imported, processed, marketed, sold, and distributed over 113,000 pounds of squid worth $1.1 million that they had falsely labeled as octopus. The defendants admitted to defrauding over ten grocery stores that in turn sold the product to consumers. The Lacey Act prohibits submitting false descriptions of fish that were transported and sold in interstate commerce. 

The maximum sentence for Tuccillo Sr and Tuccillo Jr is five years imprisonment, three years of post-release supervision and a fine up to $250,000. The corporations may be placed on five years of probation and pay a fine up to $500,000. Any fine may be adjusted to twice the pecuniary loss or gain.

The Department of Commerce’s National Oceanic and Atmospheric Administration Office of Law Enforcement investigated this case with assistance from the U.S. Food and Drug Administration. Trial attorney Ryan Connors and senior trial attorney David Kehoe of the Justice Department’s Environmental Crimes Section are prosecuting the case.

The Department of Justice Office of Juvenile Justice and Delinquency Prevention (OJJDP), within the Office of Justice Programs (OJP), recently upgraded the America’s Missing: Broadcast Emergency Response (AMBER) Alert website, which now includes access to AMBER Alert in Indian Country.

The AMBER Alert program was established in 1996 when Dallas-Fort Worth broadcasters teamed with local police to develop an early warning system to help find abducted children. The program was created as a legacy to 9-year-old Amber Hagerman, who was kidnapped while riding her bicycle in Arlington, Texas, and then murdered. Other states and communities soon set up their own AMBER plans as the idea was adopted across the nation.  Born Nov. 25, 1986, Amber Hagerman would have turned 33 today.

The website, managed by OJP, provides historical data on the program, publications, statistics, points of contact and other valuable information to help regional and state-level AMBER Alert training and coordination efforts. OJP helps states develop AMBER Alert plans and provides guidance on the issuance and dissemination of AMBER Alerts. States’ plans establish a framework to synchronize communication with law enforcement and the public and to coordinate search efforts for abducted children. Since its inception 23 years ago, the AMBER Alert program has helped 967 abducted children return home safely.

“We know that when an AMBER Alert is part of the response, the odds are high that an abducted child will come home safely,” said OJP Principal Deputy Assistant Attorney General Katharine T. Sullivan, who is the National Coordinator for the AMBER Alert Program. “This updated website gives our AMBER Alert partners more information, greater access to resources and a better chance to rescue endangered children.”

The website upgrade gives much needed access to Native American and Alaska Native communities who suffer rates of violence that far exceed the national average, including disproportionate rates of missing and murdered women and children. The website will also feature a summary of the AMBER Alert in Indian Country Initiative. This Initiative is a part of the 2018 Ashlynne Mike AMBER Alert in Indian Country Act which was born out of the abduction and murder of 11-year-old Ashlynne Mike of the Navajo Nation in 2016. At the time, tribal law enforcement officers did not have an AMBER Alert plan to notify people living on the reservation — a serious problem shared by tribes across the country. The legislation makes grants available to federally recognized tribes and villages and permits the use of grant funds to integrate state or regional AMBER Alert communication plans with tribes across the nation. The website updates will also provide other training and technical assistance resources. A Justice Department survey of 100 federally recognized tribes from 26 states revealed that 76 tribes participate in a state or regional AMBER Alert plan.

The website links to resources that support the AMBER Alert program through national partners and grantees of the OJJDP. These partners include the National Center for Missing & Exploited Children, Fox Valley Technical College, the Federal Communications Commission and the Federal Emergency Management Agency.

In addition to the website upgrade, the Department will conduct its annual National AMBER Alert Symposium next summer. The 2020 event will be a joint event to include AMBER Alert coordinators, Missing Persons Clearinghouse managers, as well as those working on issues implementing AMBER Alert in Indian Country.

The website can be accessed at https://amberalert.ojp.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 and technical assistance, and other resources to improve the nation’s capacity to prevent and reduce crime, assist victims and enhance the rule of law by strengthening the criminal and juvenile justice systems. More information about OJP and its components can be found at www.ojp.gov.

An Iowa man pleaded guilty today to a fraud charge for his role in a crude oil futures trading scheme, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Inspector in Charge Delany DeLeon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group in Washington.

Lon Olen Friedrichsen, 61, of Alton, Iowa, pleaded guilty to one count of wire fraud before U.S. Magistrate Judge Kelly K.E. Mahoney of the Northern District of Iowa.  Sentencing has been not yet been scheduled.

As part of his guilty plea, Friedrichsen admitted that he solicited victims on Craigslist by falsely advertising himself as an experienced and successful trader handling millions of dollars in investor funds.  In fact, Friedrichsen had no such experience; he was not handling millions of dollars in funds; and regularly incurred massive losses in victims’ accounts, he admitted.  In furtherance of his scheme, Friedrichsen repeatedly sent victims account performance records showing tens of thousands of dollars in profits.  Friedichsen admitted that these records were in fact from practice accounts and that he sent these emails intending that the victims believe that the practice accounts were actual trading accounts. 

Friedrichsen further admitted that, as a result of these misrepresentations, he induced victims to enter into agreements obligating them to open trading accounts that the victims were to fund with thousands of dollars.  Victims would then provide Friedrichsen with login credentials so he could access the accounts and agreed to split any profits with Friedrichsen.  Friedrichsen, however, took risky positions that resulted in investors incurring losses of hundreds of thousands of dollars, at which point Friedrichsen disappeared and refused to engage in further communications with investors.  Friedrichsen admitted to causing approximately 40 victims to incur losses exceeding $550,000.  

This case was investigated by the U.S. Postal Inspection Service.  Trial Attorneys Michelle Pascucci and Kevin Mahne of the Criminal Division’s Fraud Section are prosecuting the case.  The Commodity Futures Trading Commission provided assistance in this case. 

The Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.

A federal court permanently enjoined a food company in San Francisco from manufacturing and distributing adulterated food, the Department of Justice announced today.   

In a complaint filed Nov. 22, 2019 at the request of the U.S. Food and Drug Administration (FDA), the United States alleged that Golden Gate Soy Products Inc, violated the Federal Food, Drug and Cosmetic Act (FDCA) by manufacturing and distributing ready-to-eat tofu and other soy-based products, including marinated bean cake, soy milk, and tofu pudding, in a facility with chronic insanitary conditions.  The complaint alleged that FDA inspections uncovered the prolonged presence of Listeria monocytogenes (L. mono) at the company’s facility, and that adequate measures were not put in place to reduce the risk of health hazards such as L. mono.

The complaint, filed in U.S. District Court for the Northern District of California, also named company owners/operators Yong Li Chen and Ling Hong Tang as defendants.  All of the defendants agreed to be bound by a consent decree of permanent injunction filed with the complaint.  

“Consumers should be able to trust that the food they eat is free of dangerous pathogens, like listeria,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “The Department of Justice, working together with the FDA, does not hesitate to take action against food manufacturers and distributors when they fail to comply with consumer safety laws.”

“After documenting a pattern of food safety violations, the FDA worked with DOJ in order to prevent potentially contaminated food from reaching consumers.  Listeria is a harmful pathogen and the company failed to take the appropriate corrective actions resulting in this action,” said FDA Associate Commissioner for Regulatory Affairs Melinda K. Plaisier.  “Americans rely on the FDA to keep their food safe.  When a company fails to follow the law, the FDA will take action to protect the public health.”

According to the complaint, three FDA inspections of the defendants’ facility — in September-October 2017, June 2018, and February 2019 — all uncovered violations of FDA food safety regulations.  Although the defendants were advised numerous times of their violative practices and the need to take corrective action, inspectors continued to find L. mono in the facility.

The consent decree entered by the court permanently enjoins the defendants from violating the FDCA.  Under the order, the defendants may not manufacture or distribute food until they comply with specific remedial measures.  Among other requirements, the defendants must hire a qualified independent expert to develop an effective sanitation control program.  Before manufacturing or distributing any food, defendants must first receive FDA’s written determination that their manufacturing practices comply with the law.  

This matter was handled by Trial Attorney Meredith B. Healy of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel for Enforcement Noah T. Katzen of the FDA’s Office of the Chief Counsel and the United States Attorney’s Office for the Northern District of California.

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.

WASHINGTON – John Lee, an attorney who once represented Hyundai Construction Equipment Americas LLC, was arraigned Nov. 21 on an indictment issued on Oct. 8, for knowingly making false statements while testifying under oath before a federal grand jury and for obstructing justice.

The indictment relates to Lee’s work for Hyundai, which entered a guilty plea and was sentenced to pay a criminal fine for violating the Clean Air Act and conspiring to defraud the United States on Nov. 14, 2018. Hyundai has satisfied its liability in that matter.

The case against Lee is about testimony he gave under oath and pursuant to a privilege waiver issued by Hyundai. The indictment includes three perjury charges and one obstruction of justice charge. It alleges that during his testimony before a grand jury, Lee denied giving Hyundai employees advice about submitting a “TPEM” report that contained false information to the U.S. Environmental Protection Agency (EPA) regarding Hyundai’s compliance with Clean Air Act regulations.

The indictment goes on to allege that this was a false statement because Lee both received the TPEM report by electronic mail and approved its filing. Lee is also charged with falsely denying that he directed Hyundai employees to use their personal email accounts—rather than work accounts—to discuss Hyundai’s regulatory issues, and falsely denying that he received emails about the regulatory issues on his own personal email account.

Lastly, the indictment alleges that Lee knowingly failed to produce relevant emails in response to a grand jury subpoena, in an effort to impede the grand jury investigation.

“Lying to the grand jury, concealing information, and obstructing a federal investigation undermines the public’s trust in the criminal justice system and will not be tolerated,” said Assistant Attorney General Jeffrey Bossert Clark of the Environment and Natural Resources Division. “The Department of Justice will aggressively investigate and prosecute those who seek to cover up or obstruct a federal investigation.”

“In order to safeguard the environment, it is essential that governments receive accurate and honest information,” said Susan P. Bodine, EPA Assistant Administrator for the Office of Enforcement and Compliance Assurance. “This indictment sends a clear message that EPA and its law enforcement partners will continue to hold companies and their employees fully accountable for illegal conduct that jeopardizes environmental protection.”

The case was investigated by EPA’s Criminal Investigation Division. Senior Counsel Krishna S. Dighe of the Department of Justice, Environmental Crimes Section, and Assistant U.S. Attorney Nathan Kitchens of the Northern District of Georgia are prosecuting the case.

An indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent unless and until proven guilty.

 

Today, Solicitor General Noel Francisco issued the following statement on the passing of former Deputy Solicitor General David Shapiro:

“We are saddened to learn of the passing earlier this week of Professor David Shapiro.  In addition to his tenure at Harvard Law School, David Shapiro was a Deputy Solicitor General in the Department of Justice from 1988 to 1991.  He was a highly respected member of the legal profession and gifted appellate advocate on behalf of the United States, arguing ten cases before the Supreme Court.  As a scholar, he was a preeminent expert in the field of federal courts and federal jurisdiction.  As a colleague, he is remembered by those here at the Department as a rigorous thinker, elegant writer, and warm mentor -- open, straightforward, intellectually engaging, and all with good humor.  We are honored to count David Shapiro as an alumnus of the Office of the Solicitor General, we are grateful for his service, and we join others who knew him in mourning his loss.”

A former tax return preparer was sentenced to 24 months in prison today for aiding in the preparation of a false tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

According to court filings and statements made in court, Mariano Exantus owned and operated Latrex Multi Service, a tax return preparation business located in Uniondale, New York. From at least 2011 through 2016, Exantus prepared and filed fraudulent tax returns for his clients with the Internal Revenue Service (IRS) in which he inflated their refunds, or caused the clients to be issued a refund to which they were not legally entitled. On these returns, Exantus falsified itemized deductions and also claimed false credits, including the American Opportunity Tax Credit. Exantus’s conduct caused a tax loss of more than $250,000 to the United States.

In addition to the prison term, U.S. District Judge Arthur D. Spatt ordered Exantus to serve one year of supervised release, and to pay restitution to the IRS.

Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS - Criminal Investigation, who conducted the investigation, and Trial Attorneys Carl Brooker and Sarah Ranney of the Tax Division, who prosecuted the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

The United States filed a civil injunction suit seeking to bar Dimary Cordero, aka Dimary Cordero Torres, and her businesses — NMB Accounting and Tax Services LLC (NMB), and WFS Accounting and Tax Services LLC (WFS) — from owning or operating a tax return preparation business and preparing tax returns for others, the Justice Department announced today. The complaint also seeks an order that Cordero, NMB and WFS disgorge ill-gotten fees that they obtained through their alleged misconduct.

According to the complaint, filed in the U.S. District Court for the Southern District of Florida, Cordero operates tax preparation stores in North Miami Beach and Miami, Florida through her businesses. The complaint alleges that the defendants falsely increase their customers’ refunds and profit through high, often undisclosed fees, at the expense of their customers and the Treasury.

The complaint alleges that the defendants engage in the following misconduct:

• Falsely claiming the Earned Income Tax Credit;
• Fabricating businesses and related business income and expenses;
• Fabricating deductions, such as personal expenses and phony job-related expenses;
• Claiming education credits based on fabricated education-related expenses and
• Charging deceptive and unconscionable fees.

In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

A former Central Intelligence Agency (CIA) case officer was sentenced today to 19 years in prison for conspiring to communicate, deliver and transmit national defense information to the People’s Republic of China (PRC).

“In just over a year, we have convicted three Americans for committing espionage offenses on behalf of the Chinese government.  Each has now received a sentence of at least a decade,” said Assistant Attorney General for National Security John C. Demers.  “Sadly, all three of them are former members of the U.S. Intelligence Community.  These convictions and sentences should send a strong message to current and former security clearance holders: be aware that the Chinese government targets you -- and if you betray us, be aware that the Department of Justice will hold you accountable.”

“As I stated at the time of the defendant’s admission of guilt, those Americans entrusted with our government’s most closely held secrets have a tremendous responsibility to safeguard that information,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia.  “Instead of embracing that responsibility and honoring his commitment to not disclose national defense information, Lee sold out his country, conspired to become a spy for a foreign government, and then repeatedly lied to investigators about his conduct.  This prosecution and sentence should serve as a clear warning to others who are contemplating selling out to the highest bidder and capitalizing on their position of trust.  My thanks to the prosecutors, agents and our intelligence community partners for their terrific work on this important case.”

According to court documents, Jerry Chun Shing Lee, 55, left the CIA in 2007 and began residing in Hong Kong.  In April 2010, two Chinese intelligence officers (IOs) approached Lee and offered to pay him for national defense information he had acquired as a CIA case officer.  The IOs also told Lee they had prepared for him a gift of $100,000 cash, and they offered to take care of him “for life” in exchange for his cooperation.

Beginning sometime in May 2010 and continuing into at least 2011, Lee received requests for information, or taskings, from the Chinese IOs.  The majority of the taskings asked Lee to reveal sensitive information about the CIA, including national defense information.  On May 14, 2010, Lee made or caused to be made a cash deposit of $138,000 HKD (approximately $17,468 in USD) into his personal bank account in Hong Kong.  This would be the first of hundreds of thousands of dollars (USD equivalent) in cash deposits Lee made or caused to be made into his personal HSBC account from May 2010 through December 2013.

On May 26, 2010, Lee created on his laptop computer a document that described, among other things, certain locations to which the CIA would assign officers with certain identified experience, as well as the particular location and timeframe of a sensitive CIA operation.  After Lee created this document, he transferred it from his laptop to a thumb drive.  The document included national defense information of the United States that was classified at the Secret level.

In August 2012, the FBI conducted a court-authorized search of a hotel room in Honolulu, Hawaii, registered in Lee’s name.  The search revealed that Lee possessed the thumb drive within his personal luggage.  The FBI forensically imaged the thumb drive and later located the document in the unallocated space of the thumb drive, meaning that it had been deleted.  The search also revealed that Lee possessed a day planner and an address book that contained handwritten notes made by Lee that mostly related to his work as a CIA case officer prior to 2004.  These notes included, among other things, intelligence provided by CIA assets, true names of assets, operational meeting locations and phone numbers, and information about covert facilities.

“Mr. Lee served as a CIA officer and was entrusted with extremely sensitive national security information, and he broke that trust with no regard for the consequences,” said John Brown, Assistant Director of Counterintelligence for the FBI.  “His actions aided a foreign government, hurt our national security, and jeopardized the safety of his former intelligence colleagues.  The FBI takes such acts of betrayal very seriously and will be relentless in pursuing these cases.  I want to thank the agents, analysts, and prosecutors who worked tirelessly to bring Mr. Lee to justice.”

“Lee betrayed his own country for greed and put his former colleagues at risk.  The seriousness of his betrayal and crime is demonstrated by today's sentencing,” said Timothy R. Slater, Assistant Director in Charge of the FBI's Washington Field Office.  “The FBI and our partners will continue to aggressively pursue those who put our nation's security in danger to benefit our adversaries.  The U.S. government will not stand by while the Chinese intelligence service targets our government employees for their gain and to the detriment of U.S. national security.”

During 2012, Lee had a series of interviews with the CIA.  Throughout these interviews, in response to questions about what the IOs had wanted from him, Lee intentionally failed to disclose that he had received taskings from them.  In May 2013, the FBI conducted multiple interviews with Lee.  During one of those interviews, Lee admitted that he had received taskings but stated that he had not kept the written requests because they would tend to incriminate him.

The FBI interviewers also confronted Lee with the sensitive document discovered on the thumb drive.  Lee falsely denied that he possessed it, claimed not to know who created it, and denied knowing why it would have been on his computer.  He also denied deleting the document.  Approximately one week later, in another FBI interview, Lee admitted that he created the document in response to two taskings from the IOs and transferred it to a thumb drive.  He also said he thought about giving it to the IOs but never did.

In a January 2018 interview with the FBI, Lee falsely denied that he ever kept any work-related notes at home.  When shown a photocopy of the front covers of the day planner and address book described above, as well as a copy of his handwriting therein, Lee falsely denied that he possessed the notebooks while transiting through Hawaii in August 2012.  Lee also falsely denied that either of the books contained notes from asset meetings but conceded that any such notes would be classified.  Further, Lee falsely denied that he ever put the sensitive document on a thumb drive, notwithstanding the fact that he had admitted having done so when interviewed by FBI agents in May 2013.  Finally, Lee also falsely told the interviewing agents that in drafting this document he was writing down things “more [like] a diary thing,” notwithstanding the fact that in May 2013 he had told FBI agents that he had created the document in response to two taskings from the Chinese IOs.

Lee pleaded guilty to conspiracy to deliver national defense information to aid a foreign government on May 1.

John C. Demers, Assistant Attorney General for National Security, G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia, and Timothy R. Slater, Assistant Director of the FBI’s Washington Field Office, made the announcement of the sentencing by Senior U.S. District Judge T.S. Ellis III. Assistant U.S. Attorney Neil Hammerstrom and Trial Attorneys Patrick T. Murphy and Adam L. Small of the National Security Division’s Counterintelligence and Export Control Section prosecuted the case with assistance from Assistant U.S. Attorney Inayat Delawala.

As part of the Department of Justice’s review of nearly 1,300 legacy antitrust judgments, the Antitrust Division today announced that it has filed in the District Court for the Southern District of New York a motion to terminate the Paramount Consent Decrees, which for over 70 years have regulated how certain movie studios distribute films to movie theatres.

After a thorough review, including a 60-day public comment period, the Antitrust Division has determined that the Paramount decrees have served their original remedial purposes and no longer serve to promote or protect competition and innovation.

“The Paramount decrees long ago ended the horizontal conspiracy among movie companies in the 1930s and ‘40s and undid the effects of that conspiracy on the marketplace,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division.  “The Division has concluded that these decrees have served their purpose, and their continued existence may actually harm American consumers by standing in the way of innovative business models for the exhibition of America’s great creative films.”

In 1938, the Division filed an antitrust lawsuit against several major motion picture companies alleging that those companies had engaged in an industry-wide conspiracy to control the motion picture distribution and exhibition markets. After several years of litigation, including a Supreme Court decision in United States v. Paramount, 334 U.S. 131 (1948), the Division and the defendants entered into a series of consent decrees, collectively called the Paramount decrees.  These decrees required the movie studios to separate their distribution operations from their exhibition businesses.  They also banned various motion picture distribution practices, including block booking (bundling multiple films into one theatre license), circuit dealing (entering into one license that covered all theatres in a theatre circuit), resale price maintenance (setting minimum prices on movie tickets), and granting overbroad clearances (exclusive film licenses for specific geographic areas).

The Paramount decrees, like other legacy antitrust judgments, have no sunset provisions or termination dates.  They continue to govern how the film industry conducts its business, despite significant changes to the industry, including technological innovations, new movie platforms, new competitors and business models, and shifting consumer demand.  Unlike 70 years ago, the first-run movie palaces of the 1930s and ‘40s that had one screen and showed one movie at a time have been replaced by multiplex theatres that have multiple screens showing movies from many different distributors at the same time.  New technology has created many different movie platforms that did not exist when the decrees were entered into, including cable and broadcast television, DVDs, and the Internet through movie streaming and download services.

The Justice Department’s motion to terminate the Paramount decrees would allow a two-year transition period for block-booking and circuit dealing to allow the theatre and motion picture industry to have an orderly transition to the new licensing changes.

Two U.S. citizens residing in Iraq were charged in two separate indictments yesterday for their alleged participation in schemes to defraud Iraqi companies out of millions of dollars by impersonating U.S. officials.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge Stanley Newell of the Defense Criminal Investigative Service’s (DCIS) Transnational Operations Field Office, Special Agent in Charge L. Scott Moreland of the U.S. Army Criminal Investigation Command’s (Army-CI) Mid-Atlantic Fraud Field Office and Resident Agent in Charge John R. Deptula Jr. of Army CI’s Southwest Asia Fraud Office made the announcement.

Riza Mohammad, 40, and Sabah Hasan Sachet, 48, were charged in two indictments returned in the District of Kansas.  Mohammad and Sachet were each charged with one count of conspiracy to commit wire fraud, six counts of wire fraud, one count of false impersonation of U.S. officials, and one count of wrongful use of U.S. government seals. 

The indictments allege that Mohammad and Sachet, along with their co-conspirators, induced companies doing business in Iraq to enter into fraudulent contracts, under which the victim companies were to provide materials worth millions of dollars to the U.S. government and receive payment in return.  However, the purported contracts were false and the victim companies that provided materials and/or made payments to obtain the contracts were never paid.  Mohammad, Sachet and their co-conspirators allegedly emailed the victim companies forged contracts and other documents that contained falsified U.S. government seals and impersonated U.S. officials during in-person meetings with the victim companies, all in order to defraud the victim companies by deceiving them into believing they were doing business with the U.S. government.  The defendants were collectively responsible for defrauding the victim companies out of items worth millions of dollars, the indictment alleges.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

DCIS and Army-CI investigated the case.  Trial Attorneys Michael McCarthy and Katie Rasor of the Criminal Division’s Fraud Section are prosecuting the case.  The Criminal Division’s Office of International Affairs is also providing assistance in this matter.

 

A Long Island, New York, business owner was sentenced to 12 months and one day in prison today for tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

According to documents filed in this case and statements made in court, Warren J. Krotz, 62, of Huntington, New York, owned and operated W. Krotz Enterprises Inc. (WKEI), a professional painting business that provided services throughout Long Island. From 2010 through 2016, Krotz evaded both his individual income and employment tax liabilities. During this time, Krotz cashed approximately $6 million in checks at several check-cashing facilities. These checks were gross receipts of WKEI, but Krotz did not report the amounts on WKEI’s corporate income tax returns. Krotz also paid approximately $2 million in cash wages to employees, and did not withhold and pay over to the Internal Revenue Service (IRS) approximately $300,000 in employment taxes that were due.

Additionally, Krotz admitted to receiving approximately $3 million in income that he did not report on his personal tax returns. In total, Krotz admitted to causing a tax loss to the IRS of approximately one million dollars.

In addition to the prison term, U.S. District Judge Denis R. Hurley sentenced Krotz to serve three years of supervised release and to pay restitution of $1,031,633 to the IRS.

Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Jessica Moran and Kathryn Sparks of the Tax Division, who are prosecuting this case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

NEW ORLEANS, LOUISIANA – U.S. Attorney Peter G. Strasser announced today that OLIN D. GRANT, JR., a resident of Jefferson Parish, pled guilty on November 20, 2019 to Counts 2 and 3 of a four-count indictment, pursuant to a plea agreement with the Government.  GRANT was indicted by a Federal Grand Jury on June 20, 2019 for Count 1, Possession with the Intent to Distribute Marijuana; Count 2, Possession of a Firearm in Furtherance of a Drug Trafficking Crime; Count 3, Possession of a Machine gun; and Count 4, Possession of a Non-Registered Firearm. 

Today, OLIN D. GRANT, JR. pled guilty as charged to Count 2, Possession of a Firearm in Furtherance of a Drug Trafficking Crime, in violation of 18 U.S.C. § 924(c)(1)(A).  At sentencing for this count, OLIN D. GRANT, JR. faces a mandatory minimum sentence of 5 years up to life imprisonment, along with a $250,000 fine and up to 5 years supervised release following any term of imprisonment.  This sentence must run consecutively to all other sentences imposed upon the defendant.  GRANT also pled guilty as charged to Count 3, Possession of a Machine gun, in violation of 18 U.S.C. § 922(o).  At sentencing for this count, OLIN D. GRANT, JR. faces a maximum term of imprisonment of 10 years, along with a $250,000 fine and up to 3 years supervised release.

This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safe for everyone.  Former Attorney General Jeff Sessions made turning the tide of rising violent crime in America a top priority.  In October 2017, as part of a series of actions to address this crime trend, then Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN was launched in 2001.

The case was investigated by the Jefferson Parish Sheriff’s Office and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  It was prosecuted by Assistant United States Attorneys

Melissa Bücher and Brittany Reed of the Violent Crime/Strike Force Unit of the U.S. Attorney’s Office.

 

Jewish Hospital & St. Mary’s Healthcare Inc., doing business as Pharmacy Plus and Pharmacy Plus Specialty (collectively, Jewish Hospital), of Louisville, Kentucky, have agreed to pay $10,101,132 to resolve False Claims Act allegations that they knowingly submitted false claims to the Medicare program, the Department of Justice has announced.

“Healthcare providers will be held accountable when then knowingly submit false claims for prescription drugs that do not meet requirements to establish medical necessity,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “We take appropriate steps to protect Medicare funds and the integrity of our federal healthcare programs.”

The settlement announced today resolves allegations that Jewish Hospital knowingly submitted claims to Medicare for prescription drugs that did not meet Medicare coverage requirements, including the need to obtain the treating physician’s signature on the order establishing medical necessity, to confirm that refills were reasonable and necessary, and to document that the medications were in fact delivered.  The settlement also resolves allegations that Jewish Hospital submitted claims to Medicare that resulted from improper remuneration provided to Medicare beneficiaries in the form of free blood glucose testing supplies and waiver of co-payments and deductibles for insulin, in violation of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b), which prohibits offering, paying, soliciting, or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally-funded programs. 

“Paying for medically unnecessary drugs robs vital government health programs of precious resources and can violate the law,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services.  “We will continue working with our law enforcement partners to protect beneficiaries and taxpayers.”

The settlement resolves allegations originally brought in a lawsuit filed by Robert Stone, a pharmacist, under the whistleblower or qui tam provision of the False Claims Act, which allows private parties to bring suit on behalf of the government and to share in any recovery.  Mr. Stone will receive $1.85 million.

The settlement was the result of an investigation by the Department of Justice’s Civil Division, Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Kentucky, and the Office of Inspector General at the U.S. Department of Health and Human Services. 

The lawsuit is captioned United States ex rel. Stone v. Jewish Hosp. & St. Mary’s Healthcare, Inc., et al., Civil Action No. 3:17-294 (W.D. Ky.).  The claims resolved by the settlement are allegations only, and there has been no determination of liability.

A former currency trader was convicted today in New York for his participation in an antitrust conspiracy to manipulate prices for emerging market currencies in the global foreign currency exchange (FX) market, the Justice Department announced today.

Following a three-week trial in the U.S. District Court for the Southern District of New York, a jury convicted Akshay Aiyer (former Executive Director at a major multinational bank) of conspiring to fix prices and rig bids in Central and Eastern European, Middle Eastern and African (CEEMEA) currencies, which were generally traded against the U.S. dollar and the euro, from at least October 2010 through at least January 2013.

“Today, a jury of citizens held the defendant accountable for fixing prices and rigging bids for emerging market currencies traded in the United States and elsewhere,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “This conviction serves as a reminder of our commitment to hold individuals responsible for their involvement in complex financial schemes which violate the integrity of the global financial markets.”

“Today’s verdict holds the defendant accountable for manipulating the foreign currency market for his own benefit at the expense of free and open competition,” said Federal Deposit Insurance Corporation (FDIC) Inspector General Jay N. Lerner.  “We are dedicated to working with our law enforcement partners to investigate such complex crimes which undermine the integrity of financial markets, and to bring bank insiders to justice.”

According to evidence presented at trial, the defendant engaged in near-daily communications with his co-conspirators by phone, text and through an exclusive electronic chat room to coordinate their trades of the CEEMEA currencies in the FX spot market.  The jury heard evidence that the defendant and his co-conspirators manipulated exchange rates by agreeing to withhold bids or offers to avoid moving the exchange rate in a direction adverse to open positions held by co-conspirators and by coordinating their trading to manipulate the rates in an effort to increase their profits.  By agreeing not to buy or sell at certain times, the conspiring traders protected each other’s trading positions by withholding supply of or demand for currency and suppressing competition in the FX spot market for emerging market currencies.  They also heard evidence that the defendant and his co-conspirators took steps to conceal their actions by, among other steps, using code names, communicating on personal cell phones during work hours and meeting in person to discuss particular customers and trading strategies.

The Antitrust Division has charged five companies and six individuals in its investigation of collusion in the FX spot market. On May 20, 2015, four major banks – Citicorp, JPMorgan Chase & Co., Barclays PLC and The Royal Bank of Scotland plc – pleaded guilty and agreed to pay collectively more than $2.5 billion in criminal fines for their participation in an antitrust conspiracy in the euro-U.S. dollar FX spot market.  On Jan. 25, 2018, BNP Paribas USA Inc. pleaded guilty and agreed to pay a $90 million criminal fine for its participation in an antitrust conspiracy involving emerging market FX prices.  On Jan. 4, 2017 and Jan. 12, 2017, plea agreements were announced for two former traders in connection with an antitrust conspiracy involving emerging market FX prices.

The Antitrust Division’s investigation of collusion in the financial markets is ongoing.  The investigation in today’s case is being conducted by the FDIC Office of Inspector General and the FBI’s Washington Field Office, and the prosecution is being handled by the Antitrust Division’s New York Office.  The Criminal Division’s Fraud Section also provided substantial assistance in this matter.  Anyone with information on price fixing, bid rigging or other anticompetitive conduct in the financial markets should contact the Antitrust Division’s New York Office at 212-335-8000 or visit www.justice.gov/atr/contact/newcase.html.

A federal jury in Denver, Colorado, found Martin Fields guilty yesterday of conspiracy to defraud the United States, conspiracy to commit money laundering, making false claims against the United States, and money laundering, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.

According to the evidence presented at trial, Fields, along with Matthew Taylor, Calvin Glover, and others, filed false claims for tax credits under a federal program that encourages the production and use of renewable fuels. To accomplish the scheme, Fields and his coconspirators created a fake company, Shintan Inc., that purported to be in the business of creating renewable biodiesel fuel. From 2010 to 2013, Fields and his coconspirators filed documents with the Internal Revenue Service (IRS) claiming more than $7.2 million in tax credits for production of renewable fuel. In fact, however, Shintan produced no qualifying renewable fuel, and the documents filed with the IRS were false. To avoid detection, Fields and his coconspirators laundered the fraudulently obtained funds through bank accounts belonging to Shintan and other shell companies. As a result of the scheme, Fields personally received at least $1.8 million.

Fields’s co-conspirators, Taylor and Glover, previously pleaded guilty – Taylor to money laundering and money laundering conspiracy and Glover to conspiracy to defraud the IRS.  

Sentencing is scheduled for Feb. 7, 2020. Fields faces a maximum sentence of five years in prison for conspiracy to defraud the government and for each false claim count, and 10 years in prison for money laundering conspiracy and each money laundering count. He also faces a period of supervised release, restitution and monetary penalties. 

Principal Deputy Assistant Attorney General Zuckerman thanked special agents of IRS-Criminal Investigation and EPA Criminal Investigation Division, who conducted the investigation, and Tax Division Trial Attorneys Sarah A. Kiewlicz, and Stephen K. Moulton, who are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

A citizen and resident of the Dominican Republic pleaded guilty today in Miami, Florida, to multiple criminal charges in connection with a sophisticated global cellphone fraud scheme that involved compromising cellphone customers’ accounts in the United States and “cloning” their phones to make fraudulent international calls.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan of the Southern District of Florida and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement. 

Edgar Estarlin Peralta Lopez, 42, pleaded guilty to one count of conspiracy to commit wire fraud, access device fraud, the use, production or possession of modified telecommunications instruments and the use or possession of hardware or software configured to obtain telecommunications services; one count of wire fraud and one count of aggravated identity theft.  Sentencing is scheduled for Jan. 24, 2020, before U.S. District Judge Beth Bloom of the Southern District of Florida. 

According to the plea agreement, Peralta and his co-conspirators participated in a scheme to steal access to existing cellphone accounts, and fraudulently open new cellphone accounts, using the personal information of individuals around the United States. 

In the plea agreement, Peralta admitted that he played at least two roles in the conspiracy.  First, he was a telecommunications trafficker.  Specifically, Peralta would contract with telecommunication companies to transmit international calls for them for payment and then route those calls through cellphones reprogrammed with stolen or compromised telecommunications identifying information located at “call sites” in the United States.  Peralta and other co-conspirators transmitted thousands of calls to Cuba, Jamaica, the Dominican Republic, and other countries with high calling rates.  The calls were later billed to United States customers’ compromised accounts.  Second, Peralta was a “line” supplier, providing his co-conspirators with stolen or compromised telecommunications identifying information that they then used to reprogram the cellphones they controlled at call sites.

In addition, in the plea agreement, Peralta admitted to trafficking in approximately 3,158 combinations of stolen or compromised telecommunications identifying information, which were found in around over 1,390 emails he exchanged with co-conspirators.  Verizon Wireless reported that fraudulent use of just three of these combinations resulted in a loss of over $33,000.  Peralta admitted to a loss amount of at least $315,800.    

Peralta is a citizen of the Dominican Republic.  He was arrested in the Dominican Republic at the request of the United States, extradited to Miami in August where he is currently in custody.

Peralta is the sixth and last defendant to plead guilty in the case.  Previously, defendants Edwin Fana, Farintong Calderon, Jose Santana, Ramon Batista and Braulio de la Cruz pleaded guilty to similar charges and have already been sentenced to prison terms ranging from 36 months to 75 months. 

The FBI Miami’s Cyber Task Force investigated the case, dubbed Operation Toll Free, which is part of the FBI’s ongoing effort to combat large-scale telecommunications fraud.  The Criminal Division’s Office of International Affairs handled the extradition in this matter, with assistance from the U.S. Marshals Service.  Senior Counsel Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jared M. Strauss of the Southern District of Florida are prosecuting the case.

A citizen of Sweden has been extradited from Thailand to the United States today to stand trial for alleged securities fraud, wire fraud and money laundering.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney David L. Anderson of the Northern District of California and Special Agent in Charge Kelly R. Jackson of the IRS Criminal Investigation (IRS-CI), Washington, D.C. Field Office made the announcement.  

On July 25, 2019, a federal grand jury indicted Roger Nils-Jonas Karlsson, 45, and his company, Eastern Metal Securities (EMS), charging the defendants with engaging in a scheme to defraud victims of more than $11 million.  Karlsson was arrested June 17, 2019, in Thailand.

According to a complaint filed March 4, 2019, in connection with the case, since September 2006, Karlsson, also known by several aliases, including Steve Heyden, Euclid Deodoris, Joshua Millard, Lars Georgsson, Paramon Larasoft and Kenth Westerberg, used websites to communicate false representations to victims in a scheme to defraud potential investors.  For example, one website, www.easternmetalsecurities.com, allegedly was registered to a fictitious person and advertised shares in a product called a “Pre Funded Reversed Pension Plan” (PFRPP).  The indictment alleges Karlsson used the website to invite potential investors to purchase shares of the plan for $98 per share in exchange for an eventual payout of 1.15 kilograms of gold per share, even though as of Jan. 2, 2019, 1.15 kilograms of gold was worth more than $45,000. 

Karlsson also allegedly advised investors that, in the unlikely event that the gold payout did not happen, he guaranteed to them 97 percent of the amount they invested.  According to the complaint, the government found no evidence of any accounts held by Karlsson that would allow him to pay off the investors.  Instead, the complaint alleges, the funds provided by victims were transferred to Karlsson’s personal bank accounts and now appear to be tied up in real estate in Thailand.

The complaint further describes how Karlsson allegedly used a second website, www.hci25.com, to make multiple false communications to potential investors.  Karlsson allegedly brought the investors in HCI25 together with the investors in the PFRPP and posted multiple communications to delay the moment investors would realize there would be no payout.  For example, on one occasion, Karlsson allegedly explained that a payout had not occurred because releasing so much money all at once could cause a negative effect on financial systems throughout the world.  Karlsson also falsely represented that EMS was working with the U.S. Securities and Exchange Commission to prepare the way for a payout.

The complaint alleges Karlsson directed his victims to make investments using virtual currencies, such as Bitcoin.  Karlsson allegedly defrauded no less than 3,575 victims of more than $11 million. 

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

Trial Attorney Catherine Alden Pelker of the Department of Justice Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney William Frentzen of the Northern District of California are prosecuting this case with the assistance of Bridget Kilkenny.  This prosecution is the result of an investigation by the IRS-CI Washington, D.C. Cyber Crimes Unit.  The Criminal Division’s Office of International Affairs, the FBI Legal Attaché Office in Thailand, the IRS Criminal Investigation Attaché Office in Hong Kong and the Royal Thai Police Crime Suppression Division provided significant assistance.

A former salesperson in the New York offices of a U.S. bank (Bank A) was charged in a superseding indictment filed yesterday and made public today for his alleged participation in a racketeering conspiracy 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, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and Assistant Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office.

Jeffrey Ruffo, 56, of Morristown, New Jersey, was charged in a superseding indictment filed in the Northern District of Illinois 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) and one count of conspiracy to commit wire fraud affecting a financial institution, bank fraud, commodities fraud, price manipulation and spoofing.

The superseding indictment follows the original indictment filed on Aug. 22, 2019, which charges Gregg Smith, 55, of Scarsdale, New York; Michael Nowak, 45, of Montclair, New Jersey; and Christopher Jordan, 47, of Mountainside, New Jersey, with one count of 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.  Those original charges – as well as the original charges of one count of attempted price manipulation, one count of commodities fraud and one count of spoofing against Smith and Nowak – are incorporated into the superseding indictment. 

The case is pending before U.S. District Judge Edmond E. Chang of the Northern District of Illinois.  The next status hearing in the case is scheduled for Dec. 5, 2019, at 10:45 a.m., during which Ruffo is expected to be arraigned.

The superseding indictment alleges that between approximately March 2008 and August 2016, Ruffo along with the other defendants and co-conspirators were members of Bank A’s global precious metals desk in New York, London and Singapore, with varying degrees of seniority and supervisory responsibility over others on the desk.  Ruffo, who joined Bank A in May 2008, worked there until August 2017.  During that time, he was an executive director and a salesperson on Bank A’s precious metals desk in New York, specializing in hedge fund sales.  Ruffo’s clients included hedge funds that were global investment management firms that invested in precious metals. 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 superseding 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 superseding indictment alleges.

As also alleged in the superseding 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 superseding indictment alleges that one of the reasons the defendants and their co‑conspirators used Deceptive Orders in their trading was to service and benefit key clients, including Ruffo’s hedge fund clients, which were important sources of revenue and market intelligence for the precious metals desk at Bank A.  For example, as alleged in the superseding indictment, if a hedge fund client wished to purchase gold, Ruffo would receive the order and communicate it to Smith, who, with Ruffo’s knowledge and encouragement, would then place Deceptive Orders to sell gold futures contracts in order to artificially lower the price at which the hedge fund could buy (or the defendants and their co-conspirators could buy on the hedge fund’s behalf).  By passing along the lower price, the superseding indictment alleges, the defendants and their co-conspirators hoped to retain that hedge fund’s business for the precious metals desk at Bank A.

The charges in the superseding indictment are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

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 Attorney Matthew F. Sullivan and Assistant Chief Avi Perry of the Criminal Division’s Fraud Section are prosecuting the case.

Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information at https://www.justice.gov/criminal-fraud/victim-witness-program.

Federal District Court Judge Alan B. Johnson sentenced LEWAUN CHRISTOPHER PORTER, 43, of Aurora, Colorado on November 12, 2019 for possession with intent to distribute methamphetamine, cocaine, and heroin, carrying a firearm during and in relation to a drug trafficking crime, and being a felon in possession of a firearm.  Porter was arrested in Cheyenne, Wyoming.  He received one hundred eight months of imprisonment, to be followed by sixty months of supervised release, and ordered to pay community restitution in the amount of $200.00 and a $300.00 special assessment.  The Wyoming Division of Criminal Investigation investigated this case.

Federal District Court Judge Alan B. Johnson sentenced DAVID ANTHONY MCKEOWN, 51, of Casper, Wyoming on November 12, 2019 for conspiracy to distribute methamphetamine.  McKeown was arrested in Casper, Wyoming.  He received eighty-four months of imprisonment, to be followed by sixty months of supervised release, and ordered to pay community restitution in the amount of $400.00 and a $100.00 special assessment.  The Wyoming Division of Criminal Investigation investigated this case.

Federal District Court Judge Nancy D. Freudenthal sentenced NICHOLAS ROSS HALCOTT, 20, of Cheyenne, Wyoming on November 14, 2019 for stealing of firearms from federal firearms license.  Halcott was arrested in Cheyenne, Wyoming.  He received thirty-seven months of imprisonment, to be followed by thirty-six months of supervised release, and ordered to pay restitution in the amount of $3,500.00 and a $100.00 special assessment.  The Cheyenne Police Department and the ATF investigated this case.

 

The United States has filed a complaint against Sioux Falls, South Dakota, neurosurgeon Wilson Asfora M.D., Medical Designs LLC, and Sicage LLC alleging False Claims Act violations arising from the alleged payment of kickbacks to Asfora tied to the devices he used in spinal surgeries, the Justice Department announced today.  Medical Designs and Sicage are medical device distributorships in South Dakota owned and operated by Asfora.         

The Anti‑Kickback Statute prohibits offering or paying anything of value to induce the referral of items or services covered by Medicare, Medicaid, and other federal healthcare programs.  The government’s complaint alleges that Asfora, Medical Designs, and Sicage engaged in multiple kickback schemes designed to pay Asfora hundreds of thousands of dollars in exchange for Asfora using spinal devices distributed by Medical Designs and Sicage in his spine surgeries.  Despite receiving numerous warnings that he was performing medically unnecessary procedures with the devices in which he had a financial interest, Asfora allegedly continued to perform such procedures while personally profiting from his use of devices sold by Medical Designs and Sicage.  The United States previously resolved related civil claims against several Sanford Health entities in October 2019.

“The Department of Justice will seek to hold accountable physicians and medical device companies that receive or pay illegal kickbacks in any form,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “Improper inducements have no place in our federal healthcare system where medical decisions should be based on the healthcare needs of patients and not on a physician’s personal financial interest.”

“Our office will aggressively pursue anyone who colludes to violate federal law and compromise the integrity of our healthcare system,” said U.S. Attorney Ron Parsons for the District of South Dakota.

“Government health program patients should be confident that surgical procedures are medically needed, not performed to increase physician profits,” said Curt L. Muller, Special Agent in Charge of the Office of Inspector General at the U.S. Department of Health and Human Services.  “For years our fraud alert has warned that physician distributorships are inherently suspect under the Anti-Kickback statute.”

The United States filed its complaint in a lawsuit pending in the U.S. District Court for the District of South Dakota that was filed under the qui tam, or whistleblower, provisions of the False Claims Act.  Under the act, a private citizen can sue on behalf of the government and receive a share of any recovery.  The act permits the United States to intervene and take over responsibility for litigating the case, as it has done here.  Those who violate the act are subject to treble damages and penalties.

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud.  One of the most powerful tools in this effort is the False Claims Act.  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800‑HHS‑TIPS (800-447-8477).    

This matter is being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of South Dakota, with assistance from the Department of Health and Human Service’s Office of Inspector General. 

The case is captioned United States ex rel. Bechtold, et al. v. Asfora, et al., No. 4:16-cv-04115-LLP (D.S.D.).  The claims asserted against the defendants are allegations only, and there has been no determination of liability.

          Today, United States Attorney General William P. Barr announced the launch of Project Guardian, a new initiative designed to reduce gun violence and enforce federal firearms laws across the country. Specifically, Project Guardian focuses on investigating, prosecuting, and preventing gun crimes.

          Reducing gun violence and enforcing federal firearms laws have always been among the Department’s highest priorities. In order to develop a new and robust effort to promote and ensure public safety, the Department reviewed and adapted some of the successes of past strategies to curb gun violence. Project Guardian draws on the Department’s earlier achievements, such as the “Triggerlock” program, and it serves as a complementary effort to the success of Project Safe Neighborhoods (PSN). In addition, the initiative emphasizes the importance of using all modern technologies available to law enforcement to promote gun crime intelligence.

          “Gun crime remains a pervasive problem in too many communities across America. Today, the Department of Justice is redoubling its commitment to tackling this issue through the launch of Project Guardian,” said Attorney General William P. Barr. “Building on the success of past programs like Triggerlock, Project Guardian will strengthen our efforts to reduce gun violence by allowing the federal government and our state and local partners to better target offenders who use guns in crimes and those who try to buy guns illegally.”

          “ATF has a long history of strong partnerships in the law enforcement community,” said Acting Director Regina Lombardo. “Make no mistake, the women and men of ATF remain steadfast to our core mission of getting crime guns off of our streets. ATF and U.S. Attorneys nationwide will leverage these partnerships even further through enhanced community outreach initiatives and coordination with local, state, and tribal law enforcement and prosecutors to cut the pipeline of crime guns from those violent individuals who seek to terrorize our communities. Project Guardian will enhance ATF’s Crime Gun Intelligence, to include identifying, investigating and prosecuting those involved in the straw purchases of firearms, lying on federal firearms transaction forms, and those subject to the mental health prohibition of possessing firearms.” 

          Project Guardian’s implementation is based on five principles:

1. Coordinated Prosecution. Federal prosecutors and law enforcement will coordinate with state, local, and tribal law enforcement and prosecutors to consider potential federal prosecution for new cases involving a defendant who: a) was arrested in possession of a firearm; b) is believed to have used a firearm in committing a crime of violence or drug trafficking crime prosecutable in federal court; or c) is suspected of actively committing violent crime(s) in the community on behalf of a criminal organization.
    
2. Enforcing the Background Check System. United States Attorneys, in consultation with the Special Agent in Charge of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in their district, will create new, or review existing, guidelines for intake and prosecution of federal cases involving false statements (including lie-and-try, lie-and-buy, and straw purchasers) made during the acquisition or attempted acquisition of firearms from Federal Firearms Licensees.
    
   Particular emphasis is placed on individuals convicted of violent felonies or misdemeanor crimes of domestic violence, individuals subject to protective orders, and individuals who are fugitives where the underlying offense is a felony or misdemeanor crime of domestic violence; individuals suspected of involvement in criminal organizations or of providing firearms to criminal organizations; and individuals involved in repeat denials.
    
3. Improved Information Sharing. On a regular basis, and as often as practicable given current technical limitations, ATF will provide to state law enforcement fusion centers a report listing individuals for whom the National Instant Criminal Background Check System (NICS) has issued denials, including the basis for the denial, so that state and local law enforcement can take appropriate steps under their laws.
    
4. Coordinated Response to Mental Health Denials. Each United States Attorney will ensure that whenever there is federal case information regarding individuals who are prohibited from possessing a firearm under the mental health prohibition, such information continues to be entered timely and accurately into the United States Attorneys’ Offices’ case-management system for prompt submission to NICS. ATF should engage in additional outreach to state and local law enforcement on how to use this denial information to better assure public safety. 
    
   Additionally, United States Attorneys will consult with relevant district stakeholders to assess feasibility of adopting disruption of early engagement programs to address mental-health-prohibited individuals who attempt to acquire a firearm. United States Attorneys should consider, when appropriate, recommending court-ordered mental health treatment for any sentences issued to individuals prohibited based on mental health.
    
5. Crime Gun Intelligence Coordination. Federal, state, local, and tribal prosecutors and law enforcement will work together to ensure effective use of the ATF’s Crime Gun Intelligence Centers (CGICs), and all related resources, to maximize the use of modern intelligence tools and technology. These tools can greatly enhance the speed and effectiveness in identifying trigger-pullers and finding their guns, but the success depends in large part on state, local, and tribal law enforcement partners sharing ballistic evidence and firearm recovery data with the ATF.

 

          Federal law enforcement represents only about 15% of all law enforcement resources nationwide. Therefore, partnerships with state, local, and tribal law enforcement and the communities they serve are critical to addressing gun crime. The Department recognizes that sharing information with our state, local, and tribal law enforcement partners at every level will enhance public safety, and provide a greater depth of resources available to address gun crime on a national level.

Six Las Vegas, Nevada area residents were charged with running a fraudulent mass-mailing scheme that tricked hundreds of thousands of consumers into paying more than $10 million in fees for falsely promised cash prizes, the Department of Justice has announced.

The unsealed indictment charges Mario Castro, 51, Jose Salud Castro, 70, Salvador Castro, 53, Miguel Castro, 55, Jose Luis Mendez, 45, and Andrea Burrow, 49, with mail fraud and conspiracy to commit mail fraud.  The indictment, secured by the Department’s Consumer Protection Branch and the U.S. Attorney’s Office for the District of Nevada, also charges Salvador Castro with making a false statement to investigators.  U.S. Postal Inspectors arrested five of the defendants last night. The sixth, Jose Salud Castro, turned himself into authorities this morning.

According to the indictment, the defendants’ prize-notification scheme led victims, many of whom were elderly and vulnerable, to believe that they could pay a small $20 or $30 fee to claim a large cash prize.  The indictment alleged that none of the victims who submitted fees ever received a large cash prize.

“The Department will pursue and prosecute those who defraud elderly or vulnerable consumers,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We have alleged that these defendants perpetrated a cruel hoax on their victims and relentlessly targeted many with repeated fraudulent mailings.”

The indictment asserts that the defendants operated the scheme from 2010 to February 2018, when postal inspectors executed multiple search warrants and the Department of Justice obtained a court order shutting down the fraudulent mail operation.  Mario Castro, Jose Salud Castro, Salvador Castro, Miguel Castro, and Jose Luis Mendez allegedly worked at the printing and mailing businesses that sent the fraudulent mail and shared the profits from the fraudulent prize notices.  The remaining defendant, Andrea Burrow, opened victim return mail, sorted cash and other payments, and entered data from the victims’ responses into a database that the scheme used to target past victims with more fraudulent mail, according to the indictment.

The defendants are alleged to have ignored multiple cease and desist orders from the United States Postal Service that prohibited their mailing companies from sending fraudulent mail.  The defendants responded by changing the names of their companies and using straw owners to hide their continuing fraud. 

Three of the defendants’ co-conspirators – Patti Kern, Edgar Del Rio, and Sean O’Connor – pleaded guilty to conspiracy to commit mail fraud earlier this year.

“It will be a priority of this office to dismantle organizations like this one that prey on the elderly and vulnerable,” said U.S. Attorney Nicholas Trutanich for the District of Nevada. “We will continue to investigate and prosecute these large-scale frauds that operate in Nevada and across the country.”

“Many people who received these solicitations in the mail thought they were winners, but they were not.  In fact, they were victims of scams exploiting the vulnerable.  For many years, the U.S. Postal Inspection Service has been at the forefront of protecting consumers from fraud.  The consequences of this type of financial fraud scheme are far reaching and damaging.  Anyone who engages in such conduct should know they will not go undetected and will be held accountable,” said Inspector in Charge Delany De Leon-Colon of U.S. Postal Inspection Service’s Criminal Investigations Group at National Headquarters. 

The mail fraud and conspiracy charges each carry a statutory maximum sentence of 20 years in prison.  The false statement charge carries a statutory maximum sentence of five years in prison.  Each charge also carries a statutory maximum fine of $250,000 or twice the gross gain or gross loss from the offense.

An indictment is an accusation by a federal grand jury and is not evidence of guilt.  The defendants should be presumed innocent unless and until proven guilty.

The U.S. Postal Inspection Service investigated the case.  The case is being prosecuted by Trial Attorneys Timothy Finley and Daniel Zytnick of the Department of Justice’s Consumer Protection Branch and Assistant U.S. Attorney Nicholas Dickinson of the District of Nevada. 

Since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the Department of Justice has participated in hundreds of enforcement actions in criminal and civil cases that targeted or disproportionately affected seniors.  In particular, this past March the Department announced the largest elder fraud enforcement action in American history, charging more than 260 defendants in a nationwide elder fraud sweep.  The Department has likewise conducted hundreds of trainings and outreach sessions across the country since the passage of the Act.  Additional information on the Department of Justice’s efforts to combat elder fraud is at: https://www.justice.gov/civil/consumer-protection-branch/elder-fraud.

With the objective of strengthening cooperation among governments to counter transnational crime and terrorism, the Department of Justice’s Office of Overseas Prosecutorial Development, Assistance and Training (OPDAT), Office of International Affairs and Money Laundering and Asset Recovery Section  of the Criminal Division and the Department’s National Security Division, along with experts from Argentina, Brazil, Paraguay and the United States with experience in countering terrorism, terrorist financing, and transnational crime met for the first time as a Regional Security Mechanism (RSM) in Asunción, Paraguay on Nov. 12 and 13. 

On July 19, during Secretary of State Michael R. Pompeo’s visit to Buenos Aires for a counterterrorism ministerial meeting, Argentina, the United States, Brazil and Paraguay agreed to establish the RSM to bolster cooperation among these governments to counter transnational crime and terrorism. Transnational criminal groups, terrorists and those who support them continue to engage in a wide range of illicit schemes in the region. The RSM focuses on identifying vulnerabilities that these groups are exploiting and on developing solutions to address these threats. The RSM held its first meeting at the expert level this week.

The experts shared information to deepen each country’s understanding of the risks of terrorists and organized criminal groups and those who support them pose to the region; identify vulnerabilities that these groups are exploiting; and develop recommendations to mitigate these risks and increase regional cooperation to combat these groups.   

The Ministry of Foreign Affairs of Paraguay hosted this two-day meeting and led the delegation of the Government of Paraguay composed of investigators, prosecutors, financial analysts and customs officials.   

This initiative is part of the continuous effort of the U.S. Embassy of Paraguay in promoting cooperation to increase local and regional institutional and inter-institutional capacity, provide staff training and technical assistance, as well as better information exchange between participating countries.   

OPDAT has been in the Tri Border Area (TBA) of Brazil, Paraguay, and Argentina since 2015, posting a money laundering/terrorism financing-focused Intermittent Advisor to Paraguay and a computer hacking and intellectual property adviser to Brazil.  In 2017, OPDAT added a resident advisor in Buenos Aires dedicated to counterterrorism issues in the TBA.  In 2018, OPDAT expanded to add a resident legal advisor in Asunción focused on counterterrorism issues.  In 2020, OPDAT will add a counterterrorism focused intermittent advisor in Brazil. 

The advisor in Buenos Aires has promoted legal and regulatory reforms, provided case-based mentoring and capacity building, and encouraged greater regional cooperation.  Over the past two years, after receiving OPDAT training and mentoring on these topics, Argentine authorities are increasingly using undercover officers, informal sources of information, cooperating defendants, and interagency task forces to advance investigations involving complex crimes and criminal organizations.  In July, Argentina – also with OPDAT support – developed and deployed a domestic terrorist designation regime, which included Hizballah and its top leaders as designated terrorists. 

In August, Paraguay announced its own terrorist designations.  These designations, also developed with OPDAT support, declared Hamas, Hizballah, ISIS, and Al Q’aida to be terrorist organizations.  The designations, which were passed with technical assistance from OPDAT are currently awaiting the President’s signature, will serve as the basis for freezing assets linked to designated terrorist organizations or any entity linked to terrorism or its financing.  In addition to work on terrorist designations and asset freezes, the Paraguay program coordinates and conducts training to counter terrorist financing; provides case-based mentoring to build capacity to investigate, prosecute, and adjudicate such cases; and continues to work with Paraguayans to form a financial crimes/terrorism financing task force.

Peter Volino, a former vice president at Industrial and Commercial Bank of China Financial Services LLC (ICBCFS), pleaded guilty to a criminal antitrust charge for his involvement in a bid-rigging conspiracy for certain financial instruments, the Department of Justice announced.

Volino admitted that, from at least as early as May 2012 until at least August 2014, he and his counterparts at other broker-dealers conspired to submit rigged bids to borrow pre-release American Depository Receipts (ADRs).  Volino’s plea is the fourth in the investigation; Banca IMI Securities Corp., ICBCFS, and former Banca IMI executive Larry Meyers previously pleaded guilty.

“The guilty plea announced today represents the culmination of a years-long investigation by the Division’s prosecutors and our FBI partners into collusion that infected bidding for pre-release ADRs,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division.  “The Division is committed to detecting, rooting out, and prosecuting antitrust crimes affecting our financial markets and to holding personally accountable executives who try to get ahead by violating the antitrust laws.”

Worldwide, thousands of publicly traded companies list their shares of common stock only on foreign stock exchanges.  Most U.S. investors are unable to purchase or sell such foreign shares.  The U.S. Securities and Exchange Commission, however, permits four U.S. depository banks to create ADRs, which represent foreign ordinary shares and can be traded in the United States.  Through the purchase and sale of ADRs, U.S. investors are able to gain exposure to — including the ability to receive dividends from — companies whose common stock is listed only on foreign exchanges.

Volino pleaded guilty to conspiring to borrow pre-release ADRs from U.S. depository banks at artificially suppressed rates.  During the conspiracy, a U.S. depository bank began using an auction-style process for pre-release ADRs and invited ICBCFS and other broker-dealers to submit competitive bids for rates to borrow ADRs.  In response, Volino and his co-conspirators conspired to suppress competition between them in an effort to artificially increase their profits under the auction-style process.  On at least 24 occasions, ICBCFS, through Volino, reached an agreement with one or more co-conspirators as to the bids they would submit to U.S. depository banks.  On many occasions, the conspirators agreed that they all would submit the same bid.  Volino and his co-conspirators reached these agreements using, among other means, private chat rooms and text messages.

“As demonstrated through this multi-year investigation, which has led to four plea agreements, the FBI is committed to rooting out corruption and fraud,” said Assistant Director in Charge Timothy R. Slater of the FBI’s Washington Field Office.  “Today’s plea is the result of our continuous, persistent efforts to protect competition in the financial market and identify those engaged in fraudulent conduct.”

A criminal violation of Section 1 of the Sherman Act carries a maximum term of imprisonment of 10 years and a maximum fine of $1 million for individuals.  The 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 Washington Criminal II Section of the Antitrust Division, the FBI’s International Corruption Unit, and the FBI’s Washington Field Office are conducting the investigation into bid rigging in the market for pre-release ADRs. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal II Section at 202-598-4000 or visit www.justice.gov/atr/contact/newcase.html.

On Nov. 14, 2019, the Attorney General published and submitted to Congress the first semiannual report on the Fix NICS Act. The report, required by the Fix NICS Act passed by Congress in March 2018, reflects strong compliance with the Act and demonstrates renewed efforts at all levels of government to improve the sharing of records and information that are vital to the effective operation of the National Instant Criminal Background Check System (NICS).

 “An effective NICS system is critical to ensuring that we keep guns out of the hands of those who should not have them,” said Attorney General William P. Barr. “I am encouraged by the results of this initial report. Fix NICS implementation is still in its infancy, yet already we’re seeing great strides being made across government – state, tribal, and federal law enforcement - to strengthen the NICS. Given the preliminary data, it is clear that the Fix NICS Act is well on its way to doing exactly what it was intended to do – make the NICS better.”

The NICS is a computerized system designed to help determine if a person is disqualified from possessing or receiving firearms by conducting a search of available relevant records. The databases searched by the NICS contain records with information relevant to the legal prohibitions against firearm possession and purchasing under both federal and state law. To function effectively, the NICS must have access to complete, accurate, and timely information submitted by relevant agencies in all levels of government across the country.

The 2018 Fix NICS Act was passed to encourage government agencies to improve their records submission processes and further strengthen the NICS. Under the Fix NICS Act:

• Federal agencies:
  • must report certain record submission metrics to the Attorney General in semiannual certifications; and
  • must establish four-year implementation plans to improve records submissions.
• States and tribal governments:
  • are incentivized with grant preferences to establish four-year implementation plans.
• The Attorney General:
  • must publish and submit to Congress a semiannual report on federal agency compliance with the Act; and
  • must determine whether federal agencies, states, and Indian tribal governments have achieved substantial compliance with the benchmarks set out in their implementation plans. 

Report Highlights:

Compliance:

• 45 federal agencies submitted certifications and implementation plans
• All 50 states, the District of Columbia, and Indian tribal governments established implementation plans and
• Another 44 federal agencies certified they do not have any relevant records

Early Results:

The efforts by federal agencies, states, and Indian tribal governments under the Act are already paying off. Between April 2018 and August 2019:

• There was an increase of over six million records in the three national databases searched with every NICS check—a 6.2 percent increase. In addition, there was a 15 percent increase in records in one of those databases, the NICS Indices.
• The number of Firearm Retrieval Referrals (FRRs) (where a prohibited person is able to purchase a firearm because the background check could not be concluded within three business days due to incomplete records) decreased each month in comparison to the same month during the previous year, for an average monthly decline of 102 FRRs. 
• With the exception of June 2018, there was an increase in the percentage of NICS checks resulting in an immediate determination (not requiring a delay for further research) compared to the previous year. Specifically, there was an average increase of 0.51 percent for each month when compared with the same month of the previous year.  

• From May 2019 through July 2019, the military branches enhanced their record reporting by increasing entries into the Controlled Substance category by 10 percent, with an overall increase in multiple categories of 2.63 percent.
• The U.S. Customs and Border Protection entered approximately 13 million illegal or unlawful alien records into the NICS Indices in October 2019.

Although the implementation plans have been in place for just a few months, these early indicators are encouraging. As the plans are executed over the next several years, the Department of Justice expects to see a real and lasting positive impact on NICS records and operations. 

The complete report can be accessed here: https://www.justice.gov/ag/fix-nics-report-2019.

Representatives from the Office of International Affairs and the Judicial Attaché Office of the U.S. Department of Justice’s Criminal Division; the U.S. Department of State; and the Attorney General of the Republic of Colombia, Mr. Fabio Espitia Garzón; the Minister of Justice, Ms. Margarita Cabello Blanco; and representatives from Colombia’s Ministry of Foreign Affairs are meeting in Cartagena, Colombia this week for a consultations meeting on extradition and legal assistance matters between Colombia and the United States.

This meeting is a mechanism whose purpose is to address judicial cooperation in criminal matters, expedite proceedings between both countries in extradition and legal assistance matters, share good practices and experiences, hold working group sessions, and have a direct dialogue regarding the challenges imposed by the joint work in the fight against transnational organized crime.

Similarly, issues related to criminal finances, tools to economically dismantle organizations devoted to organized crime, and asset sharing and forfeiture will be addressed.

The Colombian State is also represented by the Directors from the Office of the Attorney General of the Republic of Colombia, including the Director of the International Affairs Office; the Delegate against Organized Crime; the Delegate for Criminal Finances; the Special Director of Extinction of Domain and Asset Forfeiture;  the Vice-Minister of Justice and Law, Juan Francisco Espinosa Palacios; and the Directors of International Affairs and Transitional Justice from the Ministry of Justice. 

Advisers from the Directorate of International Legal Affairs and the Directorate of Migration, Consular Affairs and Citizen Service of the Ministry of Foreign Affairs of Colombia also will participate.

There have been three previous similar meetings: the first two held in 2016 and 2017 in Bogotá, Colombia, and the last one held in 2018 in Washington, DC.

 

The Louisiana Department of Health has agreed to resolve allegations that it submitted false and inflated Medicaid claims for long-term nursing home and hospice care, the Department of Justice announced today.  Under the settlement agreement, the state agency has agreed to pay $13,422,550. 

“Today’s settlement demonstrates that we will take whatever steps are appropriate in our effort to protect federal healthcare programs, including Medicaid, from false claims,” said Assistant Attorney General Jody Hunt for the Department of Justice’s Civil Division.  “Anyone who seeks to profit at the expense of Federal taxpayers, including state agencies, will face appropriate consequences.”

“This office will remain vigilant in its efforts to ensure the integrity of the Medicaid program by continuing to pursue those who commit improprieties against the program – whether they be providers or beneficiaries, or those more central to the administration of the program,” said Brandon J. Fremin, the U.S. Attorney for the Middle District of Louisiana.  “The people of Louisiana deserve it.  I am grateful to the dedicated AUSAs and staff in our Civil Division and to the Office of Inspector General for the U.S. Department of Health and Human Services for their hard work and dedication to this very important matter.”

Medicaid is a joint federal and state program providing financial assistance to individuals with low incomes to enable them to receive medical care.  The Medicaid program makes quarterly grant awards to each participating state covering an amount, commonly known as the federal share, of the state’s expenditures for healthcare services covered by the state’s Medicaid plan.  The federal share is determined by a percentage rate that is subject to change from quarter to quarter.  Nursing homes and hospices typically submitted claims to Louisiana on the tenth day of the month following the month during which the services were actually provided.  Louisiana then paid these claims, sought Federal reimbursement for those expenditures, and received Federal reimbursement based on the rate in effect at that time.

The United States alleged that the Louisiana Department of Health knew that the rates determining the federal share of Louisiana’s Medicaid payments were set to decrease following the months of December 2010, March 2011, June 2011, and September 2013.  To receive the higher Federal share percentage rates in effect during these months, the Louisiana Department of Health fraudulently caused its healthcare contractor, Molina Medical Solutions, to prepare, submit, and pay claims for nursing home and hospice services in these months, before the providers had submitted to Louisiana any claims for them.  Louisiana then claimed Federal reimbursement for those premature payments.  As a result, the Louisiana Department of Health received a Federal share based upon the higher percentage rate in effect in those months, rather than the lower percentage rate in effect the following months when the providers actually submitted their claims to Louisiana. 

This settlement was the result of an investigation by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Middle District of Louisiana, and the U.S. Department of Health and Human Services Office of Inspector General. 

The claims resolved by this settlement are allegations only, and there has been no determination of liability.