District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Former Alabama Resident Charged by Criminal Complaint with Attempting to Provide Material Support and Resources to a Foreign Terrorist OrganizationRead the Press Release
Alaa Mohd Abusaad was charged today by criminal complaint in Birmingham, Alabama with attempting to provide material support and resources to al Qaeda, a designated foreign terrorist organization, and aiding and abetting others, in violation of Title 18, United States Code, Sections 2339B and 2. Assistant Attorney General for National Security John C. Demers, United States Attorney Jay E. Town of the Northern District of Alabama, and FBI Special Agent in Charge Johnnie Sharp Jr. of the Birmingham Division made the announcement today.
As set forth in the complaint, Abusaad instructed an FBI undercover employee (UCE) about how to send money to the mujahedeen—fighters engaged in jihad. Abusaad told the UCE that money “is always needed. You can’t have a war without weapons. You can’t prepare a soldier without equipment.” Abusaad also advised the UCE on how to send money in a manner that would avoid detection by law enforcement, including by using fake names and addresses when conducting electronic money transfers. Subsequently, Abusaad introduced the UCE to a financial facilitator who could route the UCE’s money to “brothers that work with aq” (meaning al Qaeda).
If convicted, Abusaad faces a maximum penalty of 20 years’ imprisonment, a $250,000 fine, and up to a life term supervised release. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the assigned judge.
Investigation of the case was conducted by the FBI, including FBI offices in Birmingham, Alabama and Cleveland, and Toledo, Ohio. The prosecution is being handled by Assistant United States Attorneys Henry Cornelius and Manu Balachandran, and Trial Attorney Jennifer Levy of the National Security Division’s Counterterrorism Section.
The charges contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Edward A. Baza Sentenced to Prison in Ice Trafficking CaseRead the Press Release
SHAWN N. ANDERSON, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that defendant EDWARD A. BAZA (“BAZA”), age 65, originally from Guam but residing in Hesperia, California, was sentenced on October 22, 2018, in District Court to a 45-month term of imprisonment, to be followed by two years of supervised release, and 50 hours of community service. The Court also ordered BAZA to pay a mandatory $100 assessment fee. In addition, defendants who are convicted of a federal drug offense may no longer qualify for certain federal benefits.
On June 12, 2018, BAZA pled guilty to the charge of Unlawful Use of the Mail to Facilitate the Conspiracy to Distribute Methamphetamine, in violation of 18 U.S.C. § 1952(a)(3)(A). The investigation revealed that BAZA and other individuals used the mail system in an attempt to distribute methamphetamine on Guam. On August 19, 2013, a package addressed to BAZA’s girlfriend was searched pursuant to a federal search warrant. Agents found methamphetamine concealed inside a Chips Ahoy cookie container. BAZA and his girlfriend went to the post office to claim the package. The substance was later determined to contain 137.3 grams of methamphetamine hydrochloride, with a 90% purity. The drugs had a street value of up to $123,000.
The U.S. Postal Service and the Drug Enforcement Administration conducted the investigation. The case was prosecuted by Belinda Alcantara, Assistant United States Attorney for the District of Guam.
Oregon Tax Fraud Promoter Sentenced to Prison for Sending Fraudulent Financial Instruments and Failing to File Tax ReturnsRead the Press Release
A Hillsboro, Oregon, tax fraud promoter was sentenced to ten years in prison today for submitting fraudulent financial instruments to financial institutions and the U.S. Treasury and failing to file income tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents and evidence presented at his April 2017 jury trial, from approximately 2008 through 2015, Winston Shrout, 70, created and submitted more than 300 fraudulent financial instruments with the intent of defrauding financial institutions and the U.S. Treasury. Shrout held seminars and private meetings to promote and market the use of these fraudulent financial instruments to pay off debts, including federal taxes. Shrout sold recordings of his seminars, templates for fraudulent financial instruments and other materials through his website.
The evidence presented at trial also proved that Shrout failed to file his 2009 through 2014 tax returns despite earning substantial income from seminars, licensing fees associated with the sale of his products and annual pension payments. Shrout admitted during trial that he had not paid income tax for at least twenty years.
In addition to the term of imprisonment, U.S. District Judge Robert E. Jones ordered Shrout to serve five years of supervised release and pay restitution to the IRS.
Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Trial Attorneys Stuart Wexler and Lee Langston of the Tax Division, who prosecuted the case. Principal Deputy Assistant Attorney General Zuckerman also thanked the U.S. Attorney’s Office for the District of Oregon for their support during the investigation and prosecution of this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
High-Ranking North Carolina Bloods Gang Leader Sentenced to 19 Years for Racketeering ConspiracyRead the Press Release
A high-ranking North Carolina leader of the Nine Trey Gangsters set of the United Blood Nation (UBN or Bloods) street gang, was sentenced today to 19 years in prison for racketeering conspiracy. Also sentenced today were two other members of the Bloods gang. Sixty-seven defendants have now either pleaded guilty or have been convicted at trial.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney R. Andrew Murray for the Western District of North Carolina, and Special Agent in Charge John A. Strong of the FBI Charlotte, North Carolina Field Division, made the announcement.
Cynthia Gilmore, aka Cynthia Young and Lady Bynt, 43, of Raleigh, North Carolina, was sentenced by Chief Judge Frank D. Whitney to serve 228 months in prison. Gilmore had been convicted, together with UBN Godfathers Pedro Gutierrez and James Baxton, by a federal jury sitting in Charlotte on May 17, following a two-week trial. In addition, two other Bloods members were also sentenced today. Robert Allen McClinton, aka Trigga, 29, of Charlotte, North Carolina, was sentenced by Judge Whitney to serve 43 months in prison. Renaldo Rodregus Camp, aka Rodeo and Drop, 40, of Shelby, North Carolina, was sentenced by Judge Whitney to serve 70 months in prison.
“As a trusted leader of the Nine Trey Gangsters, Cynthia Gilmore played an integral role in the gang’s violent mission by trafficking narcotics, robbing other drug dealers, and acting as a communications conduit for Pedro Gutierrez, the gang’s incarcerated leader who had previously ordered a gang war,” said Assistant Attorney General Benczkowski. “Now totaling 67 defendants adjudicated guilty, the Department of Justice’s prosecution of the Nine Trey Gangsters continues to disrupt and weaken this violent prison and street gang, and serves as a testament to what cooperation between federal, state, and local law enforcement can accomplish.”
“Cynthia Gilmore was a gang member who had risen to the leadership ranks within the Nine Trey Gangsters, a powerful set of the Bloods in North Carolina, said U.S. Attorney Murray. “As a gang member, Gilmore engaged in racketeering criminal acts, including robbery and drug trafficking, to support the gang and pay her dues. As a trusted gang leader, Gilmore had direct access to the gang’s highest leadership, including to the Bloods’ Godfather, Pedro Gutierrez, with whom she had face-to-face meetings while he was incarcerated in New York. As the Godfather’s messenger, Gilmore assisted Gutierrez in maintaining control over the gang, and made certain that other gang members knew, understood, and executed Gutierrez’s orders. With another Bloods leader and two more gang members put behind bars, my office continues our work to dismantle criminal enterprises and to protect the people of the Western District from violent street gangs.”
In February 2017, President Donald Trump directed the Department of Justice “to reduce crime in America,” and Attorney General Jeff Sessions has made violent crime reduction and eliminating gangs a priority during his tenure. In June 2018, the Attorney General announced the largest increase in Assistant U.S. Attorneys—311 new prosecutors, including eight in North Carolina—to combat violent crime and carry out other Department priorities.
Additionally, Attorney General Sessions last year announced a reinvigorated Project Safe Neighborhoods program aimed at reducing the rising tide of violent crime in America. The U.S. Attorney’s Office for the Western District of North Carolina is an active participant in PSN.
Deputy Attorney General Rod Rosenstein mentioned many of these announcements and more when he delivered remarks in August to the 17th Annual Gangs Across the Carolinas Conference, a conference which Attorney General Sessions delivered remarks to in August 2017.
According to court documents and evidence presented at trial, the UBN is a violent criminal street gang operating throughout the east coast of the United States since it was founded as a prison gang in 1993. UBN members are often identified by their use of the color red, and can also often be identified by common tattoos or burn marks. Examples include: a three-circle pattern, usually burned onto the upper arm, known as a “dog paw”; the acronym “M.O.B.,” which stands for “Member of Bloods”; the words “damu,” or “eastside”; the number five; the five-pointed star; and the five-pointed crown. UBN members have distinct hand signs and written codes, which are used to identify other members and rival gang members. The Nine Trey Gangster set of the UBN refer to themselves as “Billies.”
According to court documents and evidence presented at trial, the UBN is governed by a common set of 31 rules, known as “The 31,” which were originally written by the founders of the UBN. Members of the UBN are expected to conduct themselves and their illegal activity according to rules and regulations set by their leaders. Prominent among these is a requirement to pay monthly dues to the organization, often in the amounts of $31 or $93. A percentage of these funds are transferred to incarcerated UBN leadership in New York; these funds also are used locally to conduct gang business. UBN gang dues are derived from illegal activity performed by subordinate UBN members including narcotics trafficking, robberies, wire fraud, and bank fraud, among other forms of illegal racketeering activities.
According to court documents and evidence presented at trial, the Nine Trey Gangsters’ leadership proceeds in rank, from lowest to highest, from “Scrap,” “1-Star General” through “5-Star General,” “Low,” “High,” and “Godfather.”
Evidence at trial established that Gilmore was a high-ranking leader of the Nine Trey Gangsters in North Carolina with the rank of “Low,” and that she was involved in drug trafficking and the robbery of other drug dealers. Evidence also established that Gilmore traveled regularly between North Carolina and New York State, where she met with Pedro Gutierrez, the highest ranking leader of the United Blood Nation, who was incarcerated at the time. Evidence further established that Gilmore assisted Gutierrez’s control of the Bloods organization in North Carolina by sending him dues and by passing along communications from Gutierrez to other gang leaders and members.
In all, 67 defendants have been adjudicated guilty in this case, including the three defendants who were found guilty at trial; 64 defendants have pleaded guilty in this investigation. Twelve defendants in high-ranking leadership positions have been convicted:
- Montraya Antwain Atkinson, aka Hardbody, 31, of Raleigh, North Carolina, pleaded guilty to racketeering conspiracy. According to the factual basis of his plea agreement, Atkinson admitted to holding the leadership rank of “High,” and admitted to possessing marijuana and cocaine with intent to distribute, and to purchasing and selling powder cocaine. Atkinson was sentenced on Aug. 21 to a term of 208 months in prison;
- James Baxton, aka Frank White and Grown, 44, of New York City, New York, was convicted at trial on May 17. Trial evidence established that Baxton was a “Worldwide High” of the Nine Trey Gangsters and that, while incarcerated in the New York State Department of Corrections, Baxton trafficked heroin within the prison system and engaged in wire fraud by threatening the relatives of other incarcerated inmates. Baxton was sentenced on Sept. 4 to a term of 240 months in prison, to be served federally after completing a term in New York State prison;
- Adrian Nayron Coker, aka Gotti, 28, of Gastonia, North Carolina, pleaded guilty to racketeering conspiracy and three counts of possession with intent to distribute narcotics. According to the factual basis of his plea agreement, Coker admitted to holding the leadership rank of “Low,” and to possessing a stolen firearm and ammunition, despite having previously been convicted of a felony. Coker was also recorded discussing a potential murder of a rival gang member. Coker was sentenced on June 18, to a term of 140 months in prison;
- Pedro Gutierrez, aka Magoo, Light, and Inferno, of New York City, New York, was convicted at trial on May 17. Based on evidence introduced during the trial, Gutierrez was a “Godfather” of the Nine Trey Gangsters and had served since 2003 as the “Chairman” of the council that governs the UBN. As the Godfather of the set, Gutierrez, along with Baxton, conducted gang business and participated in the distribution of gang dues while incarcerated in the New York State Department of Corrections. Trial evidence also established that Gutierrez ordered a gang war in North Carolina in 2011, directing that members of the Bloods gang attack and kill members of a renegade gang called Pretty Tony. The war resulted in numerous injuries among inmates and the lockdown of five North Carolina prisons for six months. Gutierrez was sentenced on Sept. 4 to a term of 240 months in prison, to be served consecutively to the remainder of a New York State sentence for murder;
- Bianca Kiashie Harrison, aka Lady Gunz, 28, of Midway Park, North Carolina, pleaded guilty to racketeering conspiracy. According to the factual basis of her plea agreement, Harrison admitted to holding the leadership rank of “High,” and to participating, at facilities within the New York Department of Corrections, in gang leadership meetings with alleged UBN Godfathers Gutierrez and Baxton. Harrison was sentenced on June 18, to a term of 32 months in prison;
- Quincy Delone Haynes, aka Black Montana, 39, of Lawndale, North Carolina, pleaded guilty to racketeering conspiracy and three counts of trafficking cocaine. According to the factual basis of this plea agreement, Haynes admitted to holding the leadership rank of “Low.” Haynes was sentenced on Aug. 15, to a term of 64 months in prison;
- Bobby Earl Hines, aka Swahili Red, 35, of North Carolina, pleaded guilty to racketeering conspiracy. According to the factual basis of his plea agreement, Hines admitted to holding the leadership rank of “High”;
- Barrington Audley Lattibeaudiere, aka Bandana and Bobby Seale, 31, of Fort Lauderdale, Florida, pleaded guilty to racketeering conspiracy and conspiracy to commit wire fraud. According to the factual basis of his plea agreement, Lattibeaudiere admitted to holding the leadership rank of “High,” and coordinating the transmission of hundreds of dollars of UBN gang dues to Gutierrez and Baxton. Lattibeaudiere further admitted to participating in a scheme to make and attempt to make over $64,000 in purchases using fraudulent credit and gift cards. Lattibeaudiere was sentenced on June 19, to serve 56 months in prison;
- MyQuan Lamar Nelson, aka Dripz, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and conspiracy to possess with intent to distribute heroin, and according to the factual basis of his plea agreement admitted to holding the leadership rank of “Low;”
- Omari Rosero, aka Uno B, 41, of Elmira, New York, pleaded guilty to racketeering conspiracy. During his plea, Omari Rosero admitted to holding the leadership rank of “High,” and to serving as an acting “Godfather” of the entire UBN. Rosero was sentenced on July 31, to 87 months in prison, to be served federally after completing a sentence in New York State;
- Porsha Talina Rosero, aka Lady Uno B, 35, of Syracuse, New York, pleaded guilty to racketeering conspiracy. Rosero admitted to participating in the distribution of gang dues, and to participating in a phone call during which Omari Rosero stated that a suspected cooperator would be “faded straight up.” Porsha Rosero was sentenced on July 31, to serve 21 months in prison; and
- Tywlain Wilson, aka 5 Alive, 25, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy, possession with intent to distribute marijuana, and firearm possession in furtherance of a drug trafficking crime. According to the factual basis of his plea agreement, Wilson admitted to holding the leadership rank of “Low.” Wilson was sentenced on July 30, to serve 82 months in prison.
The following 34 defendants have also pleaded guilty and have been sentenced in this investigation:
- Sherman Devante Addison, aka Ace, 24, of Lawndale, North Carolina, pleaded guilty to racketeering conspiracy. Addison was sentenced on Aug. 15, to serve 33 months in prison;
- Freddrec Deandre Banks, aka Drec and Banga, 22, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy. Banks was sentenced on Aug. 14, to serve 33 months in prison;
- Destinee Danyell Blakeney, aka Lady Rude, 23, of Morven, North Carolina, pleaded guilty to racketeering conspiracy. Blakeney was sentenced on July 31, to serve 18 months in prison;
- Shakira Monique Campbell, aka Lady Rage, 24, of Charlotte, North Carolina, pleaded guilty to possession of cocaine. Campbell was sentenced to serve eight months in prison;
- Brandon Khalil Covington, aka Blokka, 25, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm in furtherance of drug trafficking. Covington was sentenced to serve 87 months in prison
- Alex Levi Cox, aka Quick, 28, of Loris, South Carolina, pleaded guilty to racketeering conspiracy. Cox was sentenced on Aug. 21, to serve 17 months in prison;
- Richard Diaz, aka Damu, 34, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Diaz was sentenced on Aug. 15, to serve 33 months in prison;
- Christopher Dentre Hamrick, aka Red Dot, 29, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm by a convicted felon. Hamrick was sentenced on May 30, to serve 64 months in prison;
- Lavaughn Antonio Hanton, aka Killem and Billy-D, 35, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Hanton was sentenced on Aug. 21, to 216 months in prison;
- Anthony ONeil Harrison, aka Ant, 20, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Harrison was sentenced on June 25, to serve 27 months in prison;
- Delonte Maurice Hicks, aka BBB Shooter and Black, 29, of Bennettsville, South Carolina, pleaded guilty to racketeering conspiracy. Hicks was sentenced on May 31, to serve 24 months in prison;
- Raheam Shumar Hopper, aka Bone, 24, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy. Hopper was sentenced on June 20, to serve 27 months in prison;
- Donl Lequintin Hunsucker, aka Remy, 31, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Hunsucker was sentenced on Aug. 15, to serve 52 months in prison;
- Muhammad John Jackson, aka Picasso, 33, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Jackson was sentenced on Aug. 21, to serve 27 months in prison;
- Terrence Thomas Johnsom, aka Sypher, 41, of Durham, North Carolina, pleaded guilty to racketeering conspiracy. Johnsom was sentenced on May 30, to serve 57 months in prison;
- Joe Tarpeh Johnson, aka JR, Big Pusha and Kutthroat, 26, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud. Johnson was sentenced on April 28, to serve 31 months in prison;
- Latif Nakia Antoine Johnson, aka Billy Solo, 24, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Johnson was sentenced on July 9, to serve 18 months in prison;
- Rashad Monte King, aka Billy Kilo Montana, 26, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. King was sentenced on July 30, to serve 25 months in prison;
- David Matthew Lowe, aka Gucci, 26, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy. Lowe was sentenced on May 29, to serve 24 months in prison;
- Charles Kenyon Lytle, aka Kam, 40, of Concord, North Carolina, pleaded guilty to racketeering conspiracy and to possession of a firearm by a convicted felon. Lytle was sentenced on Aug. 22, to serve 46 months in prison;
- Brandon Theodore Manning, aka Billy B, 29, of Columbia, South Carolina, pleaded guilty to racketeering conspiracy. Manning was sentenced on July 31, to serve 21 months in prison;
- Travis McClain, aka Fridaay Daa Thuurteenth, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. McClain was sentenced on Aug. 14, to serve 27 months in prison;
- Isaac Nabah McIntosh, aka Mac, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. McIntosh was sentenced on July 30, to serve 18 months in prison;
- D’Angelo De’Mara McNeil, aka Dutch, 27, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. McNeil was sentenced on June 20, to serve 33 months in prison;
- Kolawole Olalekan Omotosho, aka Rugged Red, 19, of Jacksonville, North Carolina, pleaded guilty to racketeering conspiracy. Omotosho was sentenced on May 29, to serve 33 months in prison;
- James Brandin Pegues, 31, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Pegues was sentenced on May 29, to serve 33 months in prison;
- Deshawn Deonta Peterkin, aka Proo, 29, of Wallace, South Carolina, pleaded guilty to racketeering conspiracy. Peterkin was sentenced on June 25, to serve 21 months in prison;
- Austin Demontry Potts, aka Big Tek and B-Tek, 24, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Potts was sentenced on May 29, to serve 30 months in prison;
- Rashad Sattar, 20, of Lauderdale Lakes, Florida, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud. Sattar was sentenced on Aug. 22, to serve 33 months in prison;
- Anthony Bernard Smith, aka Redd Lion, 25, of Gastonia, North Carolina, pleaded guilty to racketeering conspiracy. Smith was sentenced on April 23, to serve 44 months in prison;
- Cedric Surratt, aka Hollywood, 5-Star and Lingo, 30, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Surratt was sentenced on June 20, to serve 28 months in prison;
- Peatrez Lamar Teaste, aka P-Wheezy, 25, of Loris, South Carolina, pleaded guilty to racketeering conspiracy. Teaste was sentenced on Aug. 21, to serve 109 months in prison;
- Lavon Christopher Turner, aka Hungry, 28, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and to conspiracy to commit wire fraud. Turner was sentenced on April 23, to serve 35 months in prison; and
- Jesse James Watkins, aka Showtime, 34, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy. Watkins was sentenced on July 30, to serve 27 months in prison.
The following 19 defendants have also pleaded guilty and are awaiting sentencing in this case:
- Aaron Demitri Alexander, aka A Dawg, 25, of Charlotte, North Carolina, pleaded guilty on July 9, to racketeering conspiracy;
- Antarious Quashard Byers, aka Bang, 25, of Shelby, North Carolina, pleaded guilty on Aug. 28, to racketeering conspiracy;
- Renaldo Rodregus Camp, aka Rodeo and Drop, 40, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and to possession with intent to distribute cocaine;
- Marquel Michael Cunningham, aka Omega, 22, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- James Walter Dowdle, aka Staxx, 25, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and use of a firearm in furtherance of a crime of violence;
- John Paul Durant, aka JP, Glock and Gudda, 29, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Shamon Movair Goins, aka Rugie, 28, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy;
- Jasmin Reikeem Hicks, aka Rude, 28, of Morven, North Carolina, pleaded guilty to racketeering conspiracy;
- Wesley Javon Howze, aka Drama, 22, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Juan Cruz Leon, aka Jefe, 22, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy;
- Terry Lavon Maddox, aka Turbo, 27, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy and possession with intent to distribute cocaine base;
- Robert Allen McClinton, aka Trigga, 29, of Charlotte, North Carolina, pleaded guilty to racketeering conspiracy and two counts of possession with intent to distribute cocaine base;
- Christopher Lashon Miller, aka Dro, 24, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Johnny Thomas Mitchell, aka Joker, 38, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Christopher O’Brien Moore, aka Ratchet, 23, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Kenneth Marquise Ruff, aka Red Hot, 28, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy;
- Isaiah Devon Stallworth, aka Zay and Juice, 25, of Charlotte, North Carolina, pleaded guilty on Jan. 5, to racketeering conspiracy and to use of a firearm in furtherance of a crime of violence;
- Jhad Elijah Thorbourne, aka Flight, 24, of Charlotte, North Carolina, pleaded guilty on July 19, to racketeering conspiracy; and
- Patrick Wray, aka Ike and Murda, 30, of Shelby, North Carolina, pleaded guilty to racketeering conspiracy.
The investigation was conducted by the FBI; the Charlotte Mecklenburg Police Department; the Shelby Police Department; the Cleveland County Sheriff’s Office; the Gastonia Police Department; the North Carolina State Highway Patrol; the Mecklenburg County Sheriff’s Office; the North Carolina Division of Adult Correction and Juvenile Justice; the North Carolina Department of Motor Vehicles; the U.S. Federal Probation; the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives; the IRS Criminal Investigation; the U.S. Postal Inspection Service; the U.S. Army Criminal Investigation Command; and the New York Department of Corrections and Community Supervision, Office of Special Investigations. Trial Attorneys Andrew L. Creighton and Beth Lipman of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Matt Warren and Christopher Hess for the Western District of North Carolina are prosecuting the case.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Forces (OCDETF) Program. OCDETF is a joint federal, state, and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations, and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Former Texas Company CFO Pleads Guilty to Employment Tax FraudRead the Press Release
The former Chief Financial Officer of an Austin, Texas based company pleaded guilty today to willfully failing to pay over employment taxes to the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents, from 2010 to 2016, John Herzer was the CFO of AXO Staff Leasing (AXO), a professional employer organization. Herzer handled all of the company’s finances and had final authority over which creditors to pay and when to pay them. Herzer was also responsible for collecting and paying to the IRS taxes withheld from AXO’s employees’ wages. Despite this obligation, Herzer did not pay to the IRS AXO’s employment tax withholdings and instead used more than $4.9 million of those funds for his own benefit including paying personal expenses and transferring millions of dollars to his own bank accounts. In total, Herzer’s fraudulent conduct caused a tax loss to the IRS of more than $13 million.
A sentencing date has not yet been scheduled. Herzer faces a statutory maximum sentence of five years imprisonment, as well as a term of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Robert Kemins and David Zisserson, who prosecuted the case. Principal Deputy Assistant Attorney General Zuckerman also thanked the U.S. Attorney’s Office for the Western District of Texas (Austin Division) for their substantial assistance.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Eight New Orleans-Area Defendants Plead Guilty to Scheme to Possess Oxycodone by Fraud; Six of the Eight Also Plead Guilty to Scheme to Possess with Intent to Distribute Oxycodone on the Black MarketRead the Press Release
Eight New Orleans, Louisiana-area defendants have pleaded guilty for their participation in a conspiracy to obtain oxycodone through fraud by using fictitious prescriptions. Six of the eight defendants have also pleaded guilty for the roles in a scheme to possess with intent to distribute oxycodone on the black market.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Peter G. Strasser of the Eastern District of Louisiana, Special Agent in Charge Eric J. Rommal of the FBI’s New Orleans Field Office, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Field Office and Special Agent in Charge Stephen G. Azzam of the U.S. Drug Enforcement Administration (DEA)’s New Orleans Field Division made the announcement.
Jesse J. Wildenfels, 39, of Metairie, Louisiana, pleaded guilty today to a dual-object conspiracy to acquire and obtain possession of oxycodone by fraud and to possess oxycodone with the intent to distribute. On Oct. 17, Luis R. Cabrera Jr., 38, of Norco, Louisiana; Vicki J. Skeldon, 44, of Metairie; Stephanie N. Free, 28, of Gretna, Louisiana; Jarrod A. Doubleday, 47, of Livingston, Louisiana; John A. Doubleday, 52, of Place, Louisiana; Whitney J. Swan III, 48, of Saint Rose, Louisiana; and Cynthia B. Foret, 41, also of Norco, pleaded guilty to their roles in violating the Controlled Substances Act. Cabrera, Skeldon, Free, John Doubleday and Swan pleaded guilty to a dual-object conspiracy to acquire and obtain possession of oxycodone by fraud and to possess oxycodone with the intent to distribute. Jarrod Doubleday and Foret pleaded guilty to conspiracy to obtain possession of oxycodone by fraud.
“These defendants were responsible for over 10,000 Oxycodone pills flowing onto the streets in and around New Orleans,” said Assistant Attorney General Benczkowski. “I commend the prosecutors in the Medicare Fraud Strike Force and the U.S. Attorney’s Office, along with our law enforcement partners, for their outstanding efforts to disrupt the illegal sale of opioids on the black market.”
“The proliferation of illegally obtained opioids flooding our community has made a significant contribution to the abuse of prescription drugs which plagues many families,” said U.S. Attorney Strasser. “Cases such as this shows the commitment DOJ has to our community by combating this growing threat.”
“Driven by greed and addiction, these eight defendants manipulated a system established to assist patients with legitimate medical conditions,” said FBI Special Agent in Charge Rommal. “Through their illicit gains, these defendants contributed to the daily oxycodone epidemic taking this nation by storm. By removing these defendants from our streets and communities, the FBI, in conjunction with our federal, state, and local law enforcement partners were able to take the drugs out of an addict’s hands and hopefully save a life or two.”
“The eight individuals involved in this scheme heartlessly contributed to the opioid epidemic plaguing our society today,” said DEA Special Agent in Charge Azzam. “This malicious conduct puts lives at risk and won’t be tolerated. DEA, along with our law enforcement partners, will continue to aggressively pursue those who seek to perpetuate and profit from the opioid crisis in this country and bring them to justice.”
The charges stem from the defendants’ involvement in a prescription drug diversion conspiracy in the greater New Orleans area. The conspiracy in total resulted in the diversion of approximately 10,000 oxycodone pills on the black market.
In pleading guilty, Cabrera, Skeldon, Free, John Doubleday, Swan and Wildenfels admitted that, between February 2017 and June 2018, they either provided their personal identifying information for the purpose of having fictitious prescriptions for oxycodone created in their names or referred co-conspirators for the purpose of having fictitious prescriptions for oxycodone written in their co-conspirators’ names. The prescriptions were then filled at area pharmacies and a portion of oxycodone pills obtained with those prescriptions were subsequently sold on the black market. Additionally, in pleading guilty, Jarrod Doubleday admitted to filling fictitious prescriptions for oxycodone in his own name between April 2017 and May 2017. And, in pleading guilty, Foret admitted to forging prescriptions for oxycodone in her own name and in the name of her co-conspirators between February 2015 and October 2016, which were ultimately filled.
U.S. District Judge Lance M. Africk for the Eastern District of Louisiana set sentencing for Cabrera, Skeldon, Free, Doubleday and Swan on Jan. 24, 2019, and for Doubleday, Foret and Wildenfels on Feb. 7, 2019.
This case was investigated by the FBI, HHS-OIG, the DEA and the Jefferson Parish Sheriff’s Office. Trial Attorney Jared Hasten of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Myles Ranier of the Eastern District of Louisiana are prosecuting the case.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in 12 cities across the country, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Department of Justice and Department of Interior Team up for Major Expansion of Tribal Access to National Crime Information DatabasesRead the Press Release
The Department of Justice and the Department of the Interior announced a dramatic expansion of the federal government’s key program that provides tribes with access to national crime information databases, the Justice Department’s Tribal Access Program for National Crime Information (TAP).
By the end of 2019, the Justice Department will expand the number of TAP participating tribes by more than 50 percent—from 47 tribes to 72. The Department of the Interior (DOI) will fund the instillation of TAP Kiosks at three locations where the BIA-Office of Indian Services (BIA-OIS) deliver direct service social services by the end of 2019 and DOI aims to expand TAP access at all 28 BIA-Office of Justice Services (BIA-OJS) operated law enforcement agencies and detention service centers. These BIA locations will provide some degree of access to TAP for services delivered to more than 50 tribal communities that currently do not have any direct access.
“For far too long, a lack of access to federal criminal databases has hurt tribal law enforcement—preventing them from doing their jobs and keeping their communities safe,” said Deputy Attorney General Rod Rosenstein. “With the Tribal Access Program, participating tribes will be able to protect victims of domestic violence, register sex offenders, keep guns out of dangerous hands, and help locate missing people. This milestone demonstrates our deep commitment to strengthening public safety in Indian country.”
“I am proud to authorize the funding for the expansion of the Tribal Access Program to the Bureau of Indian Affairs to make the future of justice in Indian Country stronger,” said Assistant Secretary for Indian Affairs Tara Sweeney at the 75th National Congress of American Indians Convention today. “The Bureau of Indian Affairs is proud to grant greater access to these important databases at more locations throughout Indian Country. Performing background checks is a critical step in protecting our precious Native children in foster care, and tribal communities served by the BIA will benefit from access to this extensive public safety tool.”
“Access to information is vital to effective law enforcement,” said Trent Shores, U.S. Attorney for the Northern District of Oklahoma and the Chairman of the Attorney General’s Advisory Subcommittee on Native American Issues. “The Tribal Access Program will enhance and improve the ability of tribal law enforcement officers to serve their communities. The Native American Issues Subcommittee is proud to support the continued expansion of this tool throughout Indian Country.
The Native American Issues Subcommittee (NAIS) is comprised of United States Attorneys with Indian Country in their federal districts. They advise the Attorney General regarding the development and implementation of policies pertaining to justice in Indian Country. The NAIS identified ‘increased law enforcement resources’ as one of four priority areas to improve justice services in Indian Country. Support for and increased dissemination of the TAP was unanimously supported by the US Attorneys at a recent NAIS meeting in Indian Country in Tulsa, Oklahoma.
“We at the BIA-OJS look forward to having direct access to these vital resources,” said Deputy BIA Director for Office of Justice Services Charles Addington. “We have waited years for the opportunity to streamline how we access these critical databases and the funding authorized by AS-IA Sweeney will allow our law enforcement officers the ability to receive the information they need to do their jobs effectively and keep them safe.”
TAP, offered in two versions, TAP-FULL and TAP-LIGHT, allows tribes to more effectively serve and protect their communities by fostering the exchange of critical data through several national databases through the FBI’s Criminal Justice Information Systems (CJIS) network, including the National Crime Information Center (NCIC), Next Generation Identification (NGI), National Data Exchange (N-DEx), National Instant Criminal Background Check System (NICS), Law Enforcement Enterprise Portal (LEEP) as well as other national systems such as the International Justice and Public Safety Network (Nlets). TAP enhances tribal efforts to register sex offenders pursuant to the Sex Offender Registration and Notification Act (SORNA); have orders of protection enforced nationwide; protect children; keep firearms away from persons who are disqualified from receiving them; improve the safety of public housing, and allow tribes to enter their arrests and convictions into national databases.
TAP-FULL consists of a kiosk workstation that provide access to national systems and is capable of processing finger and palm prints, as well as taking mugshots and submitting records to national databases. TAP-LIGHT is software for criminal agencies that include police departments, prosecutors, criminal courts, jails, and probation departments. Both versions provide federally recognized tribes the ability to access and exchange data with national crime information databases for both civil and criminal purpose. TAP is currently available to 47 tribes nationwide with over 220 tribal criminal justice and civil agencies participating.
For more information on TAP, including a list and map of present TAP-FULL and TAP-LIGHT tribes, visit www.justice.gov/tribal/tribal-access-program-tap
For more information about the Justice Department’s work on tribal justice and public safety issues, visit: www.justice.gov/tribal
Virginia Man Sentenced to 25 Years in Prison for Producing Images of Himself Sexually Abusing a ChildRead the Press Release
A Centreville, Virginia man was sentenced today to 25 years in prison followed by a lifetime of supervised release for producing child pornography, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger of the Eastern District of Virginia, Special Agent in Charge Matthew J. DeSarno of the FBI’s Washington Field Office’s Criminal Division, and Fairfax County Chief of Police Colonel Edwin C. Roessler Jr. announced.
Kenneth Wayne Burk, 37, a power washer, was sentenced by U.S. District Judge Leonie M. Brinkema of the Eastern District of Virginia.
According to court documents, law enforcement began investigating Burk after a minor accused him of sexual abuse. In 2017, law enforcement seized electronic devices from Burk’s home in Centreville, and a forensic examination of these devices revealed numerous images of Burk sexually abusing the minor between 2013 and 2017.
The case was investigated by the FBI and the Fairfax County Police Department. Trial Attorney Kyle P. Reynolds of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Whitney D. Russell of the Eastern District of Virginia prosecuted the case.
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 U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Russian National Charged with Interfering in U.S. Political SystemRead the Press Release
A criminal complaint was unsealed in Alexandria, Virginia, today charging a Russian national for her alleged role in a Russian conspiracy to interfere in the U.S. political system, including the 2018 midterm election. Assistant Attorney General for National Security John C. Demers, U.S. Attorney G. Zachary Terwilliger of the Eastern District of Virginia, and FBI Director Christopher Wray made the announcement after the charges were unsealed.
“Today’s charges allege that Russian national Elena Alekseevna Khusyaynova conspired with others who were part of a Russian influence campaign to interfere with U.S. democracy,” said Assistant Attorney General Demers. “Our nation is built upon a hard-fought and unwavering commitment to democracy. Americans disagree in good faith on all manner of issues, and we will protect their right to do so. Unlawful foreign interference with these debates debases their democratic integrity, and we will make every effort to disrupt it and hold those involved accountable.”
“The strategic goal of this alleged conspiracy, which continues to this day, is to sow discord in the U.S. political system and to undermine faith in our democratic institutions,” said U.S. Attorney Terwilliger. “This case demonstrates that federal law enforcement authorities will work aggressively to investigate and prosecute the perpetrators of unlawful foreign influence activities, and that we will not stand by idly while foreign actors obstruct the lawful functions of our government. I want to thank the agents and prosecutors for their determined work on this case.”
“This case serves as a stark reminder to all Americans: Our foreign adversaries continue their efforts to interfere in our democracy by creating social and political division, spreading distrust in our political system, and advocating for the support or defeat of particular political candidates,” said Director Wray. “We take all threats to our democracy very seriously, and we’re committed to working with our partners to identify and stop these unlawful influence operations. Together, we must remain diligent and determined to protect our democratic institutions and maintain trust in our electoral process.”
According to allegations in the criminal complaint, Elena Alekseevna Khusyaynova, 44, of St. Petersburg, Russia, served as the chief accountant of “Project Lakhta,” a Russian umbrella effort funded by Russian oligarch Yevgeniy Viktorovich Prigozhin and two companies he controls, Concord Management and Consulting LLC, and Concord Catering. Project Lakhta includes multiple components, some involving domestic audiences within the Russian Federation and others targeting foreign audiences in the United States, members of the European Union, and Ukraine, among others.
Khusyaynova allegedly managed the financing of Project Lakhta operations, including foreign influence activities directed at the United States. The financial documents she controlled include detailed expenses for activities in the United States, such as expenditures for activists, advertisements on social media platforms, registration of domain names, the purchase of proxy servers, and “promoting news postings on social networks.” Between January 2016 and June 2018, Project Lakhta’s proposed operating budget totaled more than $35 million, although only a portion of these funds were directed at the United States. Between January and June 2018 alone, Project Lakhta’s proposed operating budget totaled more than $10 million.
The alleged conspiracy, in which Khusyaynova is alleged to have played a central financial management role, sought to conduct what it called internally “information warfare against the United States.” This effort was not only designed to spread distrust towards candidates for U.S. political office and the U.S. political system in general, but also to defraud the United States by impeding the lawful functions of government agencies in administering relevant federal requirements.
The conspirators allegedly took extraordinary steps to make it appear that they were ordinary American political activists. This included the use of virtual private networks and other means to disguise their activities and to obfuscate their Russian origin. They used social media platforms to create thousands of social media and email accounts that appeared to be operated by U.S. persons, and used them to create and amplify divisive social and political content targeting U.S. audiences. These accounts also were used to advocate for the election or electoral defeat of particular candidates in the 2016 and 2018 U.S. elections. Some social media accounts posted tens of thousands of messages, and had tens of thousands of followers.
The conspiracy allegedly used social media and other internet platforms to address a wide variety of topics, including immigration, gun control and the Second Amendment, the Confederate flag, race relations, LGBT issues, the Women’s March, and the NFL national anthem debate. Members of the conspiracy took advantage of specific events in the United States to anchor their themes, including the shootings of church members in Charleston, South Carolina, and concert attendees in Las Vegas; the Charlottesville “Unite the Right” rally and associated violence; police shootings of African-American men; as well as the personnel and policy decisions of the current U.S. presidential administration.
The conspirators’ alleged activities did not exclusively adopt one ideological view; they wrote on topics from varied and sometimes opposing perspectives. Members of the conspiracy were directed, among other things, to create “political intensity through supporting radical groups” and to “aggravate the conflict between minorities and the rest of the population.” The actors also developed playbooks and strategic messaging documents that offered guidance on how to target particular social groups, including the timing of messages, the types of news outlets to use, and how to frame divisive messages.
The criminal complaint does not include any allegation that Khusyaynova or the broader conspiracy had any effect on the outcome of an election. The complaint also does not allege that any American knowingly participated in the Project Lakhta operation.
The investigative team received exceptional cooperation from private sector companies, such as Facebook and Twitter.
Assistant U.S. Attorney Jay V. Prabhu and Special Assistant U.S. Attorney Alex Iftimie are prosecuting the case, with assistance of Trial Attorneys Matthew Y. Chang and Patrick T. Murphy of the National Security Division’s Counterintelligence and Export Control Section.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:18-mj-464.
A criminal complaint contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Successfully Closes Its Memorandum of Agreement with Shelby County, TennesseeRead the Press Release
The Department of Justice today announced that it is successfully closing its memorandum of agreement with the Juvenile Court of Memphis and Shelby County and the Shelby County Detention Center.
Shelby County and the Civil Rights Division of the Department of Justice entered into the agreement in December of 2012 to address the results of an investigation by the Department into the operations of the County’s juvenile justice system. The investigation looked into the operation and administration of the County’s juvenile court as well as the conditions of confinement for juveniles held in the County’s Detention Center.
Over the last six years, Shelby County has implemented a number of significant reforms under the agreement. To ensure that it protects the constitutional rights of juveniles to receive due process and equal protection under the law, the County has for the first time established and funded a juvenile unit in the public defender’s office that now represents the majority of juveniles who appear before the Juvenile Court. The County now provides counsel to juveniles at both probation conferences and at court hearings. The County has also undertaken efforts to ensure that decisions made at different levels of the juvenile justice system are unbiased and guided by objective criteria. Finally, the County has taken numerous steps to prevent the unnecessary use of force in the Detention Center and to protect juveniles from the risk of suicide.
“The Department of Justice is committed to protecting the constitutional rights of all juveniles who enter the justice system,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “Shelby County made commendable efforts to improve its juvenile justice system. The Department is pleased to see Shelby County and its local elected officials embrace and show public commitment to continuing the reforms it has made.”
The Department of Justice applauds Shelby County’s reform efforts and appreciates the productive partnership that the County has established with the Department over the last six years.
More information about the Civil Rights Division and the civil rights laws it enforces is available at www.usdoj.gov/crt.
In the Aftermath of Hurricane Michael Department of Justice Reminds the Public to be Aware of Fraud and Report it to the National Center for Disaster FraudRead the Press Release
The Department of Justice established the National Center for Disaster Fraud (NCDF) in the wake of Hurricane Katrina, when billions of dollars in federal disaster relief poured into the Gulf Coast region, which opened opportunities for criminals to exploit people during vulnerable times. The NCDF, a national coordinating agency within the Department’s Criminal Division, operates a call center at Louisiana State University in Baton Rouge and serves as a centralized clearinghouse for disaster fraud complaints and information relating to both natural and man-made disasters. The NCDF seeks to improve and further the detection, prevention, investigation, and prosecution of fraud related to natural and man-made disasters, and to advocate for victims of such fraud. More than 20 federal, state, and local agencies participate in the NCDF, which allows them to forward on complaints to the appropriate agency for investigation.
“Following Hurricane Michael’s landfall and as recovery efforts continue, it is important for people to be on the lookout for fraudsters who seek to profit from natural disasters through identity theft schemes, impersonation of government officials and solicitations for fake charities,” said Deputy Attorney General Rod Rosenstein. “The Department of Justice is committed to detecting this type of fraud, and we will aggressively prosecute the offenders. Through our National Center for Disaster Fraud, and in conjunction with our law enforcement partners, we are working to keep Americans from becoming victims of these schemes.”
Since Hurricane Michael’s landfall, many people are left without food, water, or shelter, and are experiencing devastating damage to life and property. Unfortunately, there are criminals ready to take advantage of victims before, during, and especially after a natural disaster. They are looking to strike those at their most vulnerable time.
While compassion, assistance, and solidarity are generally prevalent in the aftermath of natural disasters, unscrupulous individuals and organizations also use these tragic events to take advantage of those in need. Examples of illegal activity being reported to the NCDF and law enforcement include:
- Impersonation of federal law enforcement officials;
- Identity theft;
- Fraudulent submission of claims to insurance companies and the federal government;
- Fraudulent activity related to solicitations for donations and charitable giving;
- Fraudulent activity related to individuals and organizations promising high investment returns from profits from recovery and cleanup efforts;
- Price gouging;
- Contractor Fraud;
- Debris removal fraud;
- Theft, looting, and other violent crime
Numerous U.S. Attorney Offices in districts impacted by recent hurricanes have established task forces comprised of local, state and federal agencies in their respective areas to combat disaster fraud.
“The NCDF has an excellent staff of investigators, analysts, call center operators, and managers who are well prepared to handle the anticipated volume of complaints after the recent hurricanes and help ensure that each report of fraud reaches the appropriate investigative agency,” said U.S. Attorney Brandon J. Fremin for the Middle District of Louisiana, who is also the NCDF’s Executive Director. “Raising public awareness is a great way for the NCDF to reach thousands of people who may one day be subjected to fraudulent schemes.”
Members of the public are reminded to apply a critical eye and exercise due diligence before trusting anyone purporting to be working on behalf of disaster victims. They should also exercise the same care before giving contributions to anyone soliciting donations on behalf of disaster victims as well as being extremely cautious before providing personal identifying or financial information to anyone, especially those who may contact you after a natural disaster. Solicitations can originate from e-mails, websites, door-to-door collections, mailings and telephone calls, and similar methods. Members of the public who suspect fraud, waste, abuse, or allegations of mismanagement involving disaster relief operations, or believe they have been the victim of fraud from a person or organization soliciting relief funds on behalf of disaster victims, should contact the National Disaster Fraud Hotline toll free at (866) 720-5721. The telephone line is staffed by live operators 24 hours a day, seven days a week. You can also fax information to the Center at (225) 334-4707, or email it to [email protected]. Learn more about the NCDF at www.justice.gov/disaster-fraud and watch a public service announcement here. Tips for the public on how to avoid being victimized of fraud are at https://www.justice.gov/opa/pr/tips-avoiding-fraudulent-charitable-contribution-schemes.
Former U.S. Navy Commander Sentenced to Prison for Bribery Conspiracy with Foreign Defense Contractor in Massive U.S. Navy Corruption and Fraud CaseRead the Press Release
A former U.S. Navy Commander was sentenced today to 30 months in prison, followed by three years of supervised release, a $10,000 fine and $21,625.60 in restitution by the Honorable Janis L. Sammartino of the U.S. District Court for the Southern District of California. The case relates to a wide-ranging corruption and fraud investigation involving foreign defense contractor Leonard Glenn Francis and his Singapore-based company, Glenn Defense Marine Asia (GDMA).
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney Adam L. Braverman for the Southern District of California, made the announcement.
Earlier this year, Amundson, 51, of Ramsey, Minnesota pleaded guilty to one count of conspiracy to commit bribery, admitting that he conspired with Francis and others to receive things of value in exchange for taking official acts for the benefit of GDMA and violating his official duties to the U.S. Navy. Francis pleaded guilty in 2015 to bribery and fraud charges.
According to admissions made as part of his guilty plea, from May 2005 to May 2013, Amundson served as the officer responsible for coordinating the U.S. Navy’s joint military exercises with its foreign navy counterparts. As part of his duties, Amundson was responsible for building and maintaining cooperative relationships with the U.S. Navy’s foreign navy exercise partners. Amundson admitted that from September 2012 through October 2013, Francis paid for dinner, drinks, transportation, other entertainment expenses, and the services of prostitutes for Amundson and other U.S. Navy officers, in return for sensitive information, such as U.S. Navy ship schedules, and for taking other actions in favor of GDMA and in violation of his official duties. Amundson further admitted that after being interviewed by federal criminal investigators in October 2013, he deleted e-mail correspondence with Francis.
So far, 33 defendants have been charged and 21 have pleaded guilty, many admitting to accepting things of value from Francis in exchange for helping the contractor win and maintain contracts and overbill the Navy by millions of dollars.
The investigation is being conducted by the Defense Criminal Investigative Service, Naval Criminal Investigative Service and Defense Contract Audit Agency. The case is being prosecuted by Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Patrick Hovakimian of the Southern District of California.
Former Lobbyist Indicted for Obstruction of JusticeRead the Press Release
A former lobbyist was charged in an indictment with obstructing justice in connection with an ongoing federal investigation and proceedings concerning a multi-million dollar high-yield investment fraud scheme, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.
Christopher Petrella, 51, of Greer, South Carolina, was arrested yesterday and charged in the Western District of North Carolina with one count of obstruction of justice.
Ten individuals had been previously indicted by a Charlotte grand jury for their alleged roles in a high-yield investment scheme involving Niyato Industries Inc. The charges in that case allege that the defendants raised money from investors by representing that Niyato manufactured electric and compressed natural gas (“CNG”) automobiles when, in truth, the company had no facilities, no operations, and no capability to manufacture anything. That case is scheduled for trial.
The indictment returned on Tuesday and unsealed yesterday alleges that Petrella, who worked to promote Niyato and purportedly lobbied on Niyato’s behalf, attempted to obstruct, influence and impede the ongoing federal investigation into the alleged Niyato fraud, as well as the upcoming trial, by misleading federal law enforcement about his own involvement with Niyato and by portraying himself as a whistleblower. Petrella is alleged to have produced to a federal law enforcement agent a bogus “quarterly report” related to his lobbying work for Niyato. According to the indictment, Petrella also falsely claimed he had filed the “quarterly report” with the U.S. Congress pursuant to certain requirements applicable to federal lobbyists. The bogus “quarterly report” purportedly disclosed to authorities that certain individuals had made false and misleading statements about Niyato’s business and operations on Niyato’s Twitter and Facebook pages. In reality, the indictment alleges that the “quarterly report” Petrella produced to federal law enforcement was a sham and Petrella’s statement that he had filed the document with the U.S. Congress was false.
Petrella’s initial court appearance is scheduled on Wednesday, Oct. 24, at 10:40 a.m. before Magistrate Judge David S. Cayer in the Western District of North Carolina.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Postal Inspection Service. Trial Attorneys William Bowne and Christopher Fenton of the Criminal Division’s Fraud Section are prosecuting the case.
Acting Assistant Attorney General Jeffrey H. Wood Delivers Keynote Speech at the 26th Fall Conference of the American Bar Association’s Environment, Energy, and Resources SectionRead the Press Release
Remarks as Prepared for Delivery
Thank you for that kind introduction and thank you to the ABA Section of Environment, Energy, and Resources (SEER) for the honor of joining you this morning as a keynote speaker. Let me also recognize this year’s conference chair, Juge Gregg, who has done a remarkable job coordinating SEER’s 26th Annual Fall Conference.
Throughout my sixteen years of law practice, I have benefitted from many of this Section’s conferences and the excellent journals and publications produced by your members. A copy of the Spring 2004 edition of the Natural Resources & Environment Magazine, entitled “Enforcement and Compliance,” sits on my coffee table at Main Justice. I always appreciated that this Section provides both senior experienced attorneys as well as recent law graduates an opportunity to put their ideas and legal analyses out there for consideration among the nation’s environmental lawyers. My article – about state enforcement barring environmental citizen suits – is on pages 57 to 61 of the Spring 2004 edition. I had just graduated law school one year earlier, and I co-wrote the article with a cherished former colleague, Tripp Head, since lost to cancer, who was active in this Section and taught me a great deal about writing and lawyering.
If you glance through this edition, you will also see articles from others in this respected Section, including former Assistant Attorney General John Cruden and Deputy AAG Bruce Gelber, who co-authored an article on pages 10 to 18 about federal environmental enforcement, not to mention the article on pages 27 to 31 co-authored by Karen Mignone, Chair-Elect of the Section. Year after year, ABA SEER makes valuable contributions to the practice of environmental law across our nation. Thank you to all who contribute to make the Section so successful in its mission.
Introduction to ENRD
Since January 20, 2017, I have been honored to serve as the Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division. About to celebrate its 110th birthday next year, our historic division is a powerful force for good in our country. It is our Division’s responsibility to enforce the nation’s environmental laws and to defend good governance by federal agencies engaged in management of natural resources, environmental protection, and land acquisition. We also have a vital role in Indian Country as well. With almost 600 attorneys, paralegals, and staff, and with a docket of more than 6,000 cases and matters, ENRD is engaged every day, all across the country, in pursuit of our important mission under law.
We have continued to look forward to the arrival of Jeff Clark as our next Assistant Attorney General. After a longer wait than was deserved, we were very pleased to see the Senate confirm Jeff last week. He is an exceptional lawyer and will do a great job as the leader of our Division. He served previously as a Deputy AAG during the tenure of AAG Tom Sansonetti, an outstanding leader of our historic Division in his own right. We currently anticipate Jeff Clark’s tenure to officially begin on November 1, 2018, at which point I will shed the “Acting” AAG title and continue serving in the Division as the Principal Deputy Assistant Attorney General.
In our front office, we are fortunate to be joined by our current team of Deputy AAGs: Bruce Gelber; Jean Williams; Eric Grant; and Jonathan Brightbill. Justin Heminger, an excellent attorney from our Environmental Defense Section, currently serves as Chief of Staff. We have a strong front office team focused on fulfilling the critical mission of ENRD. Jeff Clark’s arrival will undoubtedly make our team even stronger.
Our Division has been busy over the last 21 months. This morning, I want to share with you some insights into what we have been doing, and how we are approaching our civil and criminal enforcement matters and our defense of agency actions, including key priorities of this Administration. I’ll conclude with some remarks about our Supreme Court practice, including the mandamus petition we filed just yesterday in the Juliana litigation, described by some news reports as the “kids’ climate case,” but perhaps more appropriately should be called the “Jim Hansen case.”
ENRD and the Rule of Law
Under the leadership of Attorney General Jeff Sessions and Deputy Attorney General Rod Rosenstein, one overriding principle has governed our work: the impartial rule of law. This principle is reflected in virtually every speech they deliver, and it undergirds every decision they make. Recently, Attorney General Sessions framed the principle this way: “No greater good can be done for the overall health and well-being of our Republic, than preserving and strengthening the impartial rule of law.” He also framed it this way: “The rule of law is more than an outcome. It is a formal process that creates an opportunity for a jury or a court to produce a just outcome—and a just outcome may not be the politically popular one.”
Last week, I was honored to join the Attorney General in London where he delivered a major international speech about our nation’s efforts to combat the illegal trade in protected wildlife. He expressed our country’s longstanding view that the poaching and trafficking of protected wildlife is a “threat to good governance, a threat to the rule of law, and a challenge to our stewardship responsibilities for this good earth.” Again, he emphasized, “It is the rule of law that forms the foundation for liberty, safety, and prosperity.” Absent good institutions and the rule of law, which we are beyond blessed to have inherited in this great nation, we are utterly helpless in the fight to ensure clean air, clean water, clean land, and the conservation of natural resources.
Likewise, Deputy Attorney General Rosenstein recently reinforced that point when he was the keynote speaker at our Division’s annual awards ceremony in September, where we recognized the exceptional work of attorneys and support staff from across the Division as well as our agency partners. DAG Rosenstein reminded us that, in his words:
Government lawyers are obligated to advocate for the truth. Only we are accountable for investigating and disclosing evidence of innocence. Only we are accountable for refraining from advocating arguments that we know to be wrong. That is because our duty is to the truth and not a particular outcome in any case. That is what the rule of law is all about.
Enforcement and the Rule of Law
At ENRD, this fundamental principle of the impartial rule of law is a touchstone for our own work. Earlier this year, I issued a directive to our civil and criminal enforcement lawyers identifying central principles – the impartial rule of law, first among them – that should govern our environmental enforcement activities. We also sought to highlight other principles like cooperative federalism, exercising pragmatic decision-making, and protecting taxpayers and the public fisc, and we identified our current enforcement priorities. This directive, which the Attorney General reviewed and approved, is available for review on our website.
When the new Administration took office, there were probably some who mistakenly believed that we would be soft on enforcement. Twenty-one months later, I suspect that there are fewer who have that belief. Since January of 2017, our Division has recovered more than $1 billion in injunctive relief under Superfund to require cleanups of contaminated sites across the nation; obtained record-setting civil penalties in cases involving illegal dredging of protected streams and wetlands; and sought a record-sized civil fine for oil spills at land-based oil production facilities. These are just a few examples of our enforcement successes.
In fact, in the twelve month period from January 20, 2017 to January 20, 2018, my first year as Acting AAG, we secured $1.57 billion in civil penalties – our second best year over the past twenty years. Some may point out that much of that penalty comes from the Clean Air Act defeat device case against Volkswagen, which we concluded in 2017. But when you take out that penalty, ENRD still recovered $121 million in civil penalties, which by itself is higher than the civil penalties that we recovered over the same period in twelve of the last twenty years.
One trend that we have observed in our enforcement work is that we are initiating fewer cases per year than we used to file. But that is not a recent change – it is a long-term trend that you can see playing out over the past two decades. Many factors have contributed to this. For example, in many of our recent cases, we address violations of federal law at multiple facilities in the same settlement. Thus, in August of this year, we settled with a glass manufacturing company to resolve Clean Air Act violations at all six of the company’s facilities located in six different states. Rule of law does not mean weak enforcement – it means vigorous but even-handed enforcement that is consistent with a sound interpretation of applicable statutes and regulations.
Since I became Acting AAG, our Division also has pursued a broad range of criminal cases. Our prosecutors have convicted more than 30 defendants for wildlife trafficking crimes, with another 25 charged during that period. This is on top of significant numbers of additional defendants who have been charged and convicted in wildlife crimes cases brought by U.S. Attorney Offices across our country.
Earlier this year, our Division’s prosecutors obtained a significant prison sentence for a New York defendant found guilty of smuggling parts taken from endangered African lions and tigers. In another case this year, a California resident was sentenced to more than two years in federal prison for smuggling horns taken from endangered African black rhinos. And as part of a multi-year operation that included this case, at least 50 other defendants have been arrested, charged, convicted, and sentenced in recent years for smuggling ivory taken from African or Asian elephants, rhino horns, and other protected species. Last week, while in London with the Attorney General, I met with our counterparts at Interpol, and many countries to discuss ways to even more effectively pursue this international conservation imperative. Next week, the Attorney General is convening a forum to continue the discussion. We will be joined by leading experts from across the federal government who will be looking at ways to more effectively pursue criminal enforcement of our wildlife trafficking laws.
Just this week, our environmental prosecutors obtained guilty verdicts against four defendants in New Jersey charged with felony dog fighting. And we have been supporting the Administration’s efforts to combat the illegal growth of marijuana on our nation’s public lands, which is having devastating effects on water resources and protected species in the Western United States, especially right here in California.
Throughout our civil and criminal enforcement program, we have prioritized our work in cases involving fraud against the United States, as well as rooting out and bringing enforcement actions against those who would undermine the integrity of environmental programs and the public’s trust in them.
In just the last two months alone, our Division has announced several successes in fighting fraud. Let me quickly mention several of those.
We announced a major Clean Air Act civil settlement that requires the defendant – an energy company – to retire 36 million renewable fuel credits (valued at $10 million) and to pay a $25 million civil penalty.
We obtained a 63-month prison sentence for an Ohio man and $26 million in restitution for his role in a conspiracy that generated millions of dollars in fraudulent renewable fuel credits.
We reached a major settlement with an auto parts company over aftermarket defeat devices in vehicles.
And we obtained a guilty plea involving a seafood company selling millions of dollars of foreign crab meat falsely labeled as blue crab and as “product of USA.”
I am proud of the hard work of our ENRD enforcement attorneys – both civil and criminal – in these cases and many others across our full docket. These successes are also shared with our agency partners. On that point, let me say this: I have known and worked with Acting Administrator Andrew Wheeler and Susan Bodine, the Assistant Administrator for EPA’s enforcement office (OECA) for many years, before our time in this Administration, and I know they understand and appreciate the rule of law and the importance of enforcing our nation’s environmental laws. It is an honor to work alongside them in our shared mission of environmental enforcement.
Defending Good Governance
Even as we vigorously enforce the law consistent with sound principles of federal enforcement, our Division is also defending lawful actions by the agencies we serve. This includes the strong defense of federal permits that authorize the construction and operation of energy infrastructure projects like the Dakota Access Pipeline, which was held up in the prior administration but is now fully operational. We are in active and ongoing litigation related to many pipelines as well as other infrastructure projects around the nation. These infrastructure cases are a priority for the Division. Likewise, the Division has made it a priority to defend the rightful prerogative of a new administration to review and reconsider the costs, benefits, soundness, and legality of the prior administration’s policies and regulations.
In our defensive work, I have the privilege of working alongside great lawyers like Daniel Jorjani at the Interior Department, Stephen Vaden at the Agriculture Department, George Fibbe at the Energy Department, Paul Ney and Harry Kelso at the Defense Department, and EPA’s General Counsel Matt Leopold. Matt happens to also be a former ENRD attorney and is a longtime friend who I know is as committed as anyone to the Constitution, the rule of law, and our mission under law to protect human health and the environment. I was glad to see him on the program for this conference as well, with our Deputy AAG, Jon Brightbill.
As has been discussed at many of the sessions at this conference, the Trump Administration is undertaking an ambitious agenda of regulatory reform, which many credit with helping to fuel the economic growth and job creation that our nation is currently enjoying. ENRD is supporting this regulatory reform work by advising our client agencies on high-priority rulemakings and ensuring the effective defense of regulatory actions in court. Anyone who has litigated on behalf of the federal government knows that you win some and you lose some. While we strive to win, we seek to do so consistent with doing justice. In our regulatory rollback and reform work, our aim at ENRD is to avoid unnecessary litigation, support the integrity of the administrative process, and conserve the resources of the courts, the agencies, and other litigants, while also defending the rightful prerogative of the Administration to set its own policy agenda.
Of course, the vast majority of our defensive cases are Administrative Procedure Act (APA) cases. As such, the administrative record forms the factual backbone of these cases. Often, our ability to successfully defend an agency action depends on the record used by the agency to make its decision. We work every day to ensure that the agencies provide a complete and appropriate administrative record when their decisions are challenged in court. We also want those records to contain all the necessary record documents – no more and no less. This means that documents that are not properly part of the record should be excluded from the record. For instance, just because a document is subject to disclosure under a FOIA request related to a certain agency action does not mean the same document is necessarily considered part of the administrative record. This is especially true for deliberative documents. The FOIA analysis is different than the determination of whether a particular document is properly part of the administrative record, and FOIA might yield documents that were never even seen by the agency’s decisionmaker.
To assist our client agencies in that task, I issued a memorandum last year setting forth the Division’s current position on the contents of administrative records. That memorandum, which reverses a position announced by ENRD in January 1999, is consistent with the position taken by the Office of the Solicitor General in briefs filed in federal appellate courts. The memo makes clear that agency “deliberative documents” are not properly part of the record, and therefore, generally should not be produced as part of the administrative record filed with the court, nor listed in a privilege log. This position is based on the determination that documents reflecting internal deliberations are immaterial to the purpose of record review litigation under the APA, and including them would chill free and frank agency discussion and decision-making. This is an issue that continually arises in our APA cases.
Another issue that arises often in our defensive work is the propriety of nationwide injunctions. Attorney General Sessions recently issued a memorandum on this topic. His view, and the position of the United States, is very clear: the trend of federal courts issuing nationwide injunctions should be challenged. There has been a recent increase in the number of judges who have been willing to issue injunctions or orders that block the entire federal government from enforcing a law or policy throughout the country. Attorney General Sessions was unequivocal about such actions, stating in a recent memo that “[t]hese abuses of judicial power are contrary to law.” He explained that “[t]he Constitution does not grant to a single district judge the power to veto executive branch actions with respect to parties not before the court. Nor does it provide the judiciary with authority to conduct oversight of or review policy of the executive branch.”
This has been the longstanding position of the Executive Branch under previous Administrations from both political parties. The litigation guidelines issued by Attorney General Sessions will help ENRD attorneys present strong and consistent arguments in court against the issuance of nationwide injunctions. You can expect our attorneys to be making these arguments in your cases, should the issue come up. This is true even in cases where we might have a policy preference for a particular court to enjoin a rule. Again, this is based in the impartial rule of law.
ENRD in the Supreme Court
Turning next to our ENRD practice at the Supreme Court, if you attended yesterday’s Supreme Court review panel, you heard there are seven environmental, natural resource, and Indian law cases before the Supreme Court this term. Not surprisingly, ENRD, working with the Office of the Solicitor General, is involved in all of them. This includes cases about designation of critical habitat, Fifth Amendment claims against local municipalities in federal court, Indian treaty rights, uranium mining, and National Park Service lands in Alaska.
Through the years, the United States has a strong record on environmental and natural resource cases before the Supreme Court, particularly in cases where we ask the Court for review. Interestingly, looking back over the last decade, the United States has filed cert petitions in just eighteen ENRD cases, and of those eighteen petitions, the Supreme Court granted cert in nine cases – half of them.
Of course, as this term demonstrates, ENRD’s docket of Supreme Court cases usually originates from cases in which our opponents have sought Supreme Court review or the Court has asked the United States for its views on whether a particular petition in a non-government case should be granted. In fact, of the seven merits-stage cases in which ENRD is involved so far this term, all of the petitions were filed by other parties. And of those seven cases, we filed amicus briefs at the petition stage in four of them – one “uninvited” amicus brief in which we supported the State of Oklahoma’s cert petition in Carpenter v. Murphy (involving the territorial boundaries of the Creek Nation), and three amicus briefs filed at the request of the Supreme Court in which we also supported cert: Washington Dept. of Licensing v. Cougar Den, Inc. (involving state taxation on off-Indian reservation commercial activities); Virginia Uranium, Inc. v. Warren (involving federal preemption of state laws regulating uranium mining); and Herrera v. Wyoming (involving an 1868 federal treaty and the application of hunting regulations to members of an Indian tribe). You will note that most of these cases relate to Indian country issues, which remains a topic of particular interest for the Supreme Court.
Finally, just yesterday, the United States filed a mandamus petition in the Supreme Court in the Juliana litigation. The history of the case may be familiar to many of you, but let me take a moment to recount the timeline and the issues.
In 2015, the Juliana plaintiffs – 21 minors, an environmental advocacy organization, and a guardian purporting to represent “future generations” – sued the United States, the President, eight Executive Branch agencies, and other federal defendants for depriving them of an asserted right to “a climate system capable of sustaining human life” under the Due Process Clause of the Fifth Amendment and related legal theories. As relief, these plaintiffs asked the district court to order the federal government to “move to swiftly phase out CO2 emissions, as well as take such other action as necessary to ensure that atmospheric CO2 is no more concentrated than 350 ppm by 2100, including to develop a national plan to restore Earth’s energy balance, and implement that national plan so as to stabilize the climate system.” As the district court judge herself framed it, “really the endgame is setting up a survival plan unless one of the other branches of government act – unless they act.” The federal district court in Oregon has set a 50-day trial to begin on October 29, just ten days from now.
On behalf of the United States, ENRD moved to dismiss the case long ago, and more recently we moved for judgment on the pleadings. We showed that the plaintiffs lack standing; that the purported constitutional right that they assert simply does not exist; that the public trust doctrine, which exists only as a matter of state law, is totally inapplicable here; and that the plaintiffs have not identified specific governmental actions that could be subject to challenge under the APA. Because we firmly believe there is no legal basis for this case to be heard in federal court, we also moved to stay the trial until the district court ruled on those dispositive motions.
In fact, no fewer than three courts have recently ruled that claims of this nature are not justiciable. In July of this year, in City of New York v. BP, a federal district court in New York rejected claims against energy companies on trespass and nuisance theories alleging that their sale and promotion of fossil fuels contributed to global warming. The court explained that “[t]o litigate such an action for injuries from foreign greenhouse gas emissions in federal court would severely infringe upon the foreign-policy decisions that are squarely within the purview of the political branches of the U.S. government.” The court also recognized that “global warming and solutions thereto must be addressed by the two other branches of government,” and they “are not for the judiciary to ameliorate.”
Similarly, in June of this year, Judge Alsup in the Northern District of California dismissed public nuisance climate change claims brought by the cities of Oakland and San Francisco against oil companies, on the basis that those claims are barred by the separation of powers. In that case, ENRD filed an amicus brief explaining the United States’ position that courts should refrain from fashioning new judicial remedies to address climate change issues – a position with which the district court agreed.
And in August of this year, in a case styled Aji P. v. Washington, a Washington state court rejected climate change claims by twelve young Washington residents, including one of the named plaintiffs in the Juliana lawsuit. Similar to the plaintiffs in the Oregon lawsuit, the plaintiffs here asked the Washington court to order the State to develop “an enforceable state climate recovery plan” and retain jurisdiction to “approve, monitor and enforce compliance” with that plan. The court correctly dismissed the case, finding that the “relief requested by Plaintiffs would require the Court to usurp the roles of the legislative and executive branches of our state government” in violation of the separation of powers.
The Washington court also addressed a second issue relevant to the Oregon case: whether the Constitution provides a fundamental right to a healthy climate. In the Washington case, the plaintiffs asserted a constitutional right nearly identical to the one that the plaintiffs request the Oregon court to recognize: a right to “stable climate system that sustains human life and liberty.” But the Washington court declined to recognize such a right, stating: “A stable and healthy climate, like world peace and economic prosperity, is a shared aspiration – the goal of a people, rather than the right of a person. These types of aims are the objectives of a polity, to be pursued through the political branches of government. They are not individual rights that can be enforced by a court of law.”
In the Oregon case, however, the court has consistently ignored or rejected these basic principles of separation of powers and has invoked, instead, a purported “failure of the legal system to protect humanity from the collapse of finite natural resources by the uncontrolled pursuit of short-term profits,” and stated that the “third branch can, and should, take another long and careful look at the barriers to litigation created by modern doctrines of subject-matter jurisdiction and deference to the legislative and administrative branches.”
In our view, the Oregon lawsuit is an unconstitutional attempt to use a single court to control the entire nation’s energy and climate policy. It is a matter of separation of powers and preserving the opportunity in our system of government for those policies to be decided by the elected branches, not the courts.
The Attorney General, in a speech earlier this week about judicial encroachment into the policymaking sphere, put it this way:
[The courts] should decide legal questions based on the law and the facts – not their policy preferences. It is of no moment whether a judge likes or dislikes a policy matter. Sometimes judges adopt the view that they can order some policy outcome since the politically accountable branches failed to act. Their failure to act is a policy decision, not a gap for the judiciary to fill. When Congress rejects a proposed policy, a decision has been made – just as surely as when they pass a bill into law. Courts have no right to impose the rejected choice.
Thus, federal district court judges are not empowered to fashion immigration policy, combat climate change, solve the opioid crisis, or run police departments. The Legislative and Executive branches – of federal and state government – are the constitutionally authorized branches to do these things, and if these branches haven’t done so to the satisfaction of an unaccountable judge, it’s not because they need judicial expertise or advice.
The Justice Department is continuing our efforts to see that the Oregon case is dismissed, as is clearly warranted by law. Our mandamus petition, filed yesterday in the Supreme Court, makes a strong and persuasive case for dismissal. We will see how the Court decides the issue. In the meantime, trial preparation continues.
Beyond the legal defects, the fallacies of the plaintiffs’ policy approaches are significant, as well. They are ignoring the clear fact that the United States is the global leader in environmental protection. Indeed, the United States leads the world in greenhouse gas reductions, and the United States is the global leader in the development of new energy technologies that are helping to reduce emissions. And importantly, the plaintiffs in Oregon are ignoring the fact that clean and responsible production and use of fossil fuels remains vital to the health and well-being of the American people, as the Article I and Article II branches of our government, across Administrations, have continued to recognize through their legislative enactments and policies. At bottom, our defense in the Juliana case is built on the rule of law and the Constitution. It is, in a very real sense, about defending democracy.
Conclusion
As you can tell, ENRD is a busy place. Since I joined the Division on January 20, 2017, it has felt more like a sprint than a marathon. But I am proud of what we have achieved over these 21 months, and I am confident that many more successes lie ahead for the Division under the leadership of AAG Jeff Clark.
So, let me conclude, again, by thanking Juge Gregg and the other organizers of this important conference. It is an honor for me to address you this morning. Thank you.
Utah Man Charged in Seven-Count Federal Indictment with Threat to Use a Biological Toxin as a WeaponRead the Press Release
A federal grand jury in Salt Lake City returned a seven-count indictment Thursday morning charging William Clyde Allen, III, age 39, of Logan, Utah, in connection with ricin-related threats. The indictment alleges he knowingly threatened to use a biological agent and toxin, specifically ricin, as a weapon.
Assistant Attorney General John C. Demers of the Department of Justice’s National Security Division, U.S. Attorney John W. Huber of Utah, Special Agent in Charge Eric K. Barnhart of the FBI’s Salt Lake City Field Office, Special Agent in Charge John Gullickson of the U.S. Secret Service’s Denver Field Office, and U.S. Postal Inspector Jared D. Bingham, Team Leader in Salt Lake City, announced the indictment.
The indictment also charges Allen with one count of mailing a threat against the President and five counts of mailing threatening communications to an officer or an employee of the United States in the indictment returned Thursday morning.
Allen was arrested on a federal complaint filed Oct. 5, 2018. He was ordered detained pending resolution of the case at a detention hearing Monday. U.S. Magistrate Judge Dustin B. Pead found him to be a danger to the community. Allen entered a plea of not guilty to the charges Thursday morning in U.S. District Court. U.S. District Judge David Sam will preside over a four-day trial starting Dec. 26, 2018, in Salt Lake City.
The indictment alleges the defendant sent a letter to the President of the United States with the language “Jack and the Missile Bean Stock Powder” and containing castor bean material.
Five counts of the indictment charge Allen with mailing threatening communications to an officer or an employee of the United States, including Secretary of Defense James N. Mattis; Admiral John M. Richardson, Chief of Naval Operations; FBI Director Christopher A. Wray; CIA Director Gina Haspel; and Secretary of the Air Force Heather Wilson.
Ricin naturally exists in, and may be extracted from, the seeds of the castor bean. The extraction of ricin from these seeds does not require technical expertise. Small doses of ricin are lethal to human beings if ingested, inhaled, or injected. According to Center for Disease Control information, there are no known antidotes for poisoning from ricin. Allen purchased 380 castor beans in December 2017 in quantities of 100 (two purchases) and 30 (six purchases).
The potential maximum penalty for threatening to use a biological toxin as a weapon is life in prison. Mailing a threat against The President has a potential maximum penalty of five years in prison and mailing a threatening communications to an officer or an employee of the United States has a potential 10-year sentence.
Indictments are not a finding of guilt. Individuals charged in indictments are presumed innocent unless or until proven guilty in court.
The U.S. Attorney’s Office in Salt Lake City, with the assistance of the Department of Justice’s National Security Division’s Counterterrorism Section, is prosecuting the case. U.S. Postal Inspectors and special agents of the FBI and U.S. Secret Service are investigating the case.Un hombre de Nueva Orleans se declara culpable de un delito de odio cometido durante el disparo de tres hombres afroestadounidenses que intentaban huir de la zona tras el Huracán KatrinaRead the Press Release
Roland J. Bourgeois, Jr., de 55 años, vecino de Nueva Orleans, Luisiana, compareció ante la Jueza Superior del Tribunal Federal de Distrito Mary Ann Vial Lemmon y se declaró culpable ante los cargos de que, tras el Huracán Katrina, disparó a tres hombres jóvenes afroestadounidenses por motivo de su raza mientras los hombres intentaban huir de Nueva Orleans. Así anunciaron John Gore, el Fiscal General Auxiliar en funciones de la División de Derechos Civiles; Peter G. Strasser, el Fiscal Federal para el Distrito Oriental de Luisiana; y Eric J. Rommal, el Agente Especial Encargado de la División del Buró Federal de Investigaciones (FBI, por sus siglas en inglés) en Nueva Orleans.
Según los documentos presentados en apoyo de la declaración, poco después de la llegada del Huracán Katrina a Nueva Orleans, Bourgeois y otros hombres blancos, vecinos del barrio de Algiers Point, acordaron utilizar fuerza para alejar a los afroestadounidenses de su barrio. Transportaron árboles caídos para bloquear las calles cerca de sus casas y comenzaron patrullas armadas en el barrio.
El 1 de septiembre del 2005, tres hombres jóvenes afroestadounidenses, D.H, M.A. y C.C., caminaron a Algiers Point en un intento de llegar al desembarque del transbordador, un lugar que las agencias estatales y federales estaban usando como punto de evacuación. Cuando los tres hombres cruzaron la barricada construida por Bourgeois y otros, Bourgeois abrió fuego con una escopeta y lesionó a los tres hombres. Después de que huyeran, Bourgeois se jactó que había «dado con uno» y prometió «matar a ese [palabra racista] si el hombre llegara a sobrevivir. Bourgeois advirtió a uno de sus vecinos que «se disparará a cualquier cosa que pase por esta calle cuya tez sea más oscura que un saco de papel marrón».
«Esta declaración de culpabilidad demuestra el compromiso continuo del Departamento de Justicia a lo largo del tiempo a hacer que los autores de delitos de odio rindan cuentas de sus acciones», declaró el Fiscal General Auxiliar en funciones John Gore. «Todo estadounidense, independientemente de su raza, tiene derecho a vivir libre de violencia y daños físicos».
«Una de las tareas principales del Departamento de Justicia es la defensa de los derechos civiles de nuestros ciudadanos. Esta condena demuestra el compromiso de los cuerpos del orden público a hacer que los individuos rindan cuentas de sus acciones, a pesar del paso del tiempo», afirmó el Fiscal Federal Strasser. «Espero que esta declaración de culpabilidad ofrezca un atisbo de paz a aquellos que fueron directamente impactados por este delito y a esta gran ciudad que sufrió tanto en los días después del Huracán Katrina».
«Aunque estos delitos y el Huracán Katrina ocurrieron hace más de 13 años, el FBI no se olvida. La declaración de culpabilidad de hoy es una prueba de que la justicia perdura y de que continuaremos persiguiendo a aquellos que vulneren y priven a otros de sus derechos civiles», dijo el Agente Especial Encargado del FBI Eric J. Rommal.
Bourgeois será condenado el 17 de enero del 2019. Conforme los términos del acuerdo de admisión de culpabilidad, Bourgeois se enfrenta a un mínimo de cinco años de cárcel y un máximo de diez años. Previamente, Bourgeois fue acusado en una acusación formal de cinco cargos en julio del 2010.
El FBI llevó a cabo la investigación. El caso está siendo enjuiciado por el Fiscal Federal Auxiliar para el Distrito Oriental de Luisiana David Howard Sinkman y el Consejero de Litigios Especiales Jared Fishman y la Abogada de Litigios Mary J. Hahn de la División de Derechos Civiles.
Two Michigan Home Health Agency Owners Sentenced to Prison for Health Care FraudRead the Press Release
Two Detroit-area home health agency owners were sentenced to 10 and six years in prison, respectively, for their roles in a multimillion dollar scheme to defraud Medicare by billing for home health services that were never provided.
Assistant Attorney General Brian A. Benczowski of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.
Hafiz Tahir, 49, and Tasneem Tahir, 44, both of Brownstown, Michigan, were sentenced by U.S. District Judge Marianne O. Battani of the Eastern District of Michigan, to 10 and six years in prison, respectively. Judge Battani also ordered the defendants to pay restitution in the amount of $9,674,575 and $4,447,667, respectively, jointly and severally with their co-conspirators. Judge Battani entered money judgments against Hafiz Tahir, in the amount of $5,575,562.33, and Tasneem Tahir, in the amount of $2,605,176.70. The Tahirs were also ordered to forfeit to the United States their interest in $226,000 located in a Lebanese bank, two pieces of real property and cash in lieu of two vehicles. The defendants each pleaded guilty to one count of conspiracy to commit health care fraud and wire fraud and one count of conspiracy to pay and receive health care kickbacks.
As part of their guilty pleas, Hafiz and Tasneem Tahir admitted that they paid illegal kickbacks in exchange for the referral of Medicare beneficiaries to home health agencies that they owned. They further admitted that between 2009 and 2017, they submitted false and fraudulent claims to Medicare for home health services that were never provided.
Hafiz and Tasneem Tahir were charged along with Hoda Sabbagh, aka Donna Hamadani, 54, of Milford, Michigan; Emma King, 69, of Detroit, Michigan; and Antonio Kho, 72, of Oak Park, Michigan. King and Kho pleaded guilty and are pending sentencing. Sabbagh remains a fugitive.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The FBI and HHS-OIG investigated the case. Trial Attorney Rebecca Yuan of the Fraud Section prosecuted the case. The financial investigation was conducted in coordination with the Forfeiture and Financial Litigation Unit of the U.S. Attorney’s Office for the Eastern District of Michigan. Assistant U.S. Attorney Shankar Ramamurthy of the Eastern District of Michigan handled the asset forfeiture proceedings.
The Criminal Division’s Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in 12 cities across the country, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Three Former Biscayne Park Patrol Officers Sentenced for Deprivation of Civil Rights by Intentionally Making False ArrestsRead the Press Release
Acting Assistant Attorney General John Gore for the Justice Department’s Civil Rights Division, U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Katherine Fernandez Rundle, Miami-Dade State Attorney, Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Troy Walker, Special Agent in Charge, Florida Department of Law Enforcement (FDLE), today announced that former Biscayne Park Police Officer Guillermo Ravelo was sentenced to 27 months incarceration for conspiracy to deprive a person of his civil rights and deprivation of civil rights under color of law.
“These officers conspired to falsely arrest individuals in the name of providing deceptive clearance statistics for the benefit of Chief Atesiano,” said Acting Assistant Attorney General John Gore. “Chief Atesiano and these officers abused their authority and the Department will continue to ensure officers such as these are held accountable.”
“Officers who use excessive force and make false arrests maliciously cause harm to their victims and scourge our justice system,” said U.S. Attorney Ariana Fajardo Orshan. “With great power, comes great responsibility. Through aggressive federal prosecutions, the U.S. Attorney’s Office for the Southern District of Florida will continue to guard the invaluable civil rights of every member of our community and hold those accountable who violate our constitutional protections.”
“These three police officers from Biscayne Park disgraced themselves and damaged the public’s trust in law enforcement. Their actions are inexcusable and are not representative of the law enforcement professionals who serve us selflessly,” said Robert F. Lasky, Special Agent in Charge, FBI Miami. “The citizens of South Florida can take comfort in the fact that the vast majority of police officers are honest, forthright individuals who are committed to doing the job right. To those officers who aren’t, the FBI’s Miami Area Corruption Task Force was assembled and designed to root them out.”
“Honesty and integrity are the core values of every effective police officer,” said State Attorney Katherine Fernandez Rundle. “Former Biscayne Park Police Officers Guillermo Ravelo, Charlie Dayoub and Raul Fernandez undermined their essential task of protecting the community, in some instances by using excessive force and in others, by conspiring to deprive suspects of their civil rights so as to produce bogus arrests. This absolute abuse of power by all three officers violated every aspect of the oath Ravelo, Dayoub, and Fernandez took the day they became police officers.”
“The officers’ actions are everything we guard against in law enforcement and violated our most important principals,” said FDLE Miami Special Agent in Charge Troy Walker. “When an officer abuses the public’s trust, there must be severe consequences. I thank the U.S. Attorney’s Office for their work on this case.”
According to court filings, on Jan. 23, 2013 and Feb. 26, 2014, at the direction of then Biscayne Park Police Department Chief Raimundo Atesiano, Ravelo falsely arrested a victim identified as “C.D.” and another victim identified as “E.B.” C.D. was charged with two residential burglaries, and E.B. was charged with five vehicle burglaries, both without probable cause. In a separate incident, on April 7, 2013, Ravelo responded to a request for assistance from another Biscayne Park police officer who had conducted a traffic stop. During the arrest of the driver, Ravelo used unreasonable force by striking the handcuffed driver with his fists.
Former Chief Atesiano previously pleaded guilty to acting under color of law as chief of police when on three separate occasions he ordered officers Ravelo, Charlie Dayoub and Raul Fernandez to falsely arrest and charge individuals with unsolved burglaries. In court filings related to the plea, Atesiano admitted that he instructed Ravelo to falsely arrest and charge E.B for five vehicle burglaries based upon what Atesiano knew were false confessions. Former Chief Atesiano is scheduled to be sentenced on Nov. 27, 2018.
Former officers Charlie Dayoub and Raul Fernandez were each sentenced to 12 months in prison for their role in falsely arresting a 16-year old juvenile, “T.D.,” for four unsolved burglaries. Dayoub and Fernandez were the first officers to cooperate with the government and accept responsibility for their criminal acts. Their cooperation directly implicated Atesiano and resulted in an indictment being returned against the former chief charging civil rights violations.
As noted at the hearing and in court filings, on June 13, 2013, Chief Atesiano instructed the officers to unlawfully arrest and falsely charge T.D., a juvenile previously known to Chief Atesiano and Dayoub. Dayoub and Fernandez complied with Chief Atesiano’s instructions and falsely arrested T.D. Fernandez wrote narratives containing fabricated information in support of the four arrest affidavits that falsely claimed an investigation revealed that T.D. had committed the four burglaries. Dayoub signed and attested that the contents of the affidavits were true even though he, like Chief Atesiano and Fernandez, knew that no evidence existed to substantiate the arrest. T.D. was subsequently arrested for the four burglaries.
According to court filings, Chief Atesiano intentionally encouraged officers to arrest individuals without a legal basis in order to have arrests effectuated for all reported burglaries, which created a fictitious 100% clearance rate for that category of crime.
This case was investigated by the FBI, including the FBI Miami Area Corruption Task Force, and FDLE, and assisted by the Miami-Dade State Attorney’s Office. This case was prosecuted by Assistant U.S. Attorney Harry C. Wallace, Jr., Department of Justice Trial Attorney Donald W. Tunnage, and Assistant State Attorney Trent Reichling.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
StarKist Co. Agrees to Plead Guilty for Price FixingRead the Press Release
StarKist Co. has agreed to plead guilty for its role in a conspiracy to fix prices of packaged seafood sold in the United States, the Department of Justice announced today.
According to a one-count felony charge filed today in the U.S. District Court for the Northern District of California in San Francisco, StarKist and its co-conspirators agreed to fix the prices of canned tuna fish from as early as November 2011, through at least as late as December 2013. In addition to pleading guilty, StarKist has agreed to cooperate in the investigation. StarKist faces a criminal fine of up to $100 million. The amount of StarKist’s fine will be determined at a sentencing hearing and the plea agreement is subject to court approval.
“The conspiracy to fix prices on these household staples had direct effects on the pocketbooks of American consumers,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “All Americans have the right to the benefits of free and open competition — the best goods and services at a price free from collusion. We will continue to hold companies and individuals who cheat consumers accountable.”
“Our citizens' confidence in the ability to buy goods within an unbiased market is key to sustaining an efficient and fair economy,” said Special Agent in Charge John F. Bennett, FBI San Francisco. “This investigation stands as a symbol of our commitment to holding corporations and senior leadership accountable and ensuring that activities such as price fixing will not be tolerated.”
A total of six charges have resulted from this federal antitrust investigation into the packaged seafood industry, which 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.
New Orleans Man Pleads Guilty to Hate Crime in Shooting of Three African-American Men Attempting to Evacuate After Hurricane KatrinaRead the Press Release
Bourgeois shot at three young African-American men fleeing Hurricane Katrina in 2005
Roland J. Bourgeois, Jr., 55, of New Orleans, LA, appeared yesterday before Senior U.S. District Court Judge Mary Ann Vial Lemmon and pleaded guilty to charges that, in the wake of Hurricane Katrina, he shot at three young African-American men because of their race as the men attempted to evacuate New Orleans, announced Acting Assistant Attorney General for the Civil Rights Division John Gore; U.S. Attorney for the Eastern District of Louisiana Peter G. Strasser; and FBI New Orleans Division Special Agent in Charge Eric J. Rommal.
According to documents filed in connection with the plea, shortly after Hurricane Katrina struck New Orleans, Bourgeois and other white male residents of the Algiers Point neighborhood agreed that they would use force to keep out African Americans from their neighborhood. They moved fallen trees to barricade the streets near their homes and started armed patrols of the neighborhood.
On Sept. 1, 2005, three young African-American men – D.H., M.A., and C.C. – walked to Algiers Point in an effort to reach the ferry landing, a site that state and federal agencies were using as an evacuation point. When the three men crossed a barricade constructed by Bourgeois and others, Bourgeois opened fire with a shotgun, wounding all three men. After the men fled, Bourgeois boasted that he had “got one” and pledged to “kill that [racial slur]” if the man had survived. Bourgeois warned one of his neighbors: “Anything coming up this street darker than a brown paper bag is getting shot.”
“This guilty plea demonstrates the Justice Department’s continued commitment over time to holding perpetrators of hate crimes accountable for their actions,” said Acting Assistant Attorney General John Gore. “All Americans have the right to be free from violence or physical harm, regardless of their race.”
“Upholding the civil rights of our citizens is one of the most important duties of the DOJ. This plea demonstrates the resolve of law enforcement to hold individuals responsible for their actions, despite the passage of time,” said U.S. Attorney Strasser. “Hopefully this plea brings some measure of finality to those affected by this crime and to this city that endured so much in the days following Hurricane Katrina.”
“Even though these crimes and Hurricane Katrina occurred over 13 years ago, the FBI does not forget. Today’s guilty plea is proof that the arms of justice are long and we will continue to seek out those who violate and deprive others of their civil rights,” said FBI Special Agent in Charge Eric J. Rommal.
Bourgeois will be sentenced on Jan. 17, 2019. Under the terms of the plea agreement, Bourgeois faces a minimum of five years of imprisonment and a maximum of ten years. Bourgeois was previously charged in a five-count indictment in July 2010.
The FBI conducted the investigation. The case is being prosecuted by Assistant United States Attorney David Howard Sinkman of the Eastern District of Louisiana and Special Litigation Counsel Jared Fishman and Trial Attorney Mary J. Hahn of the Civil Rights Division.
Former FBI Agent Sentenced for Leaking Classified InformationRead the Press Release
Terry J. Albury, 39, a former Special Agent of the FBI, was sentenced today to 48 months in the District of Minnesota in connection with his unauthorized disclosure and retention of classified national defense information.
The announcement was made by Attorney General Jeff Sessions, FBI Director Chris Wray, Assistant Director in Charge of the Washington Field Office Nancy McNamara, and U.S. Attorney G. Zachary Terwilliger for the Eastern District of Virginia, after sentencing by U.S. District Judge Wilhelmina M. Wright.
"We are conducting perhaps the most aggressive campaign against leaks in Department history," said Attorney General Sessions. "Crimes like the one committed by the defendant in this case will not be tolerated—they will be prosecuted to the fullest extent of the law and punished. I want to thank Assistant Attorney General Demers, U.S. Attorney Terwilliger, and their attorneys for their hard work in prosecuting this important case. Today's sentence should be a warning to every would-be leaker in the federal government that if they disclose classified information, they will pay a high price."
"Every FBI agent has a solemn obligation to protect classified information from unauthorized disclosure to safeguard our national security. Terry Albury betrayed that responsibility, and he betrayed the trust bestowed on him by the American people," said FBI Director Christopher Wray. "His sentencing today demonstrates those who violate the law by disclosing classified information will be held responsible for their reckless and illegal actions."
“Leaking classified national defense information to the media is a crime that damages our national security,” said U.S. Attorney Terwilliger. “Albury transmitted classified information not just to one hostile foreign power, but to every hostile foreign power with the ability to pick up a newspaper or access the Internet. To be clear, this was not whistleblower activity. Albury made no attempts to engage in any of the legitimate whistleblower processes available to him, and instead chose to betray his oath and his colleagues by leaking classified national defense information to the press. This case should send a message to anyone considering violating the public’s trust and compromising our national security by disclosing classified information. We will remain steadfast and dogged in pursuit of these challenging but critical national security cases.”
"Terry Albury willingly disclosed classified information that he had taken an oath to protect, for his own purposes," said Assistant Director in Charge Nancy McNamara. "He violated the trust that was placed in him by willfully providing information that could endanger national security to individuals not authorized to receive it and lied to the FBI about his actions. Albury violated the trust that was placed in him and his attempt to leverage national security information for his own reasons brought him to this sentence today. The FBI will continue to take all necessary and appropriate steps to thoroughly investigate individuals, no matter their position, who undermine the integrity of our justice system by lying to federal investigators."
According to court documents, Albury worked as an FBI Special Agent in the Minneapolis field office at the time of the disclosures, held a Top Secret//Sensitive Compartmented Information security clearance, and his daily duties provided him access to sensitive and classified FBI and other U.S. government information.
According to court documents, beginning in 2016 and continuing through August 2017, Albury knowingly and willfully disclosed national defense information, classified at the Secret level, to a reporter. Albury employed methods to avoid detection, including printing documents that he created by cutting and pasting portions of an original document into a new document so as to avoid leaving a record of having printed the original, classified document. Albury also accessed documents on a classified computer and took pictures of the computer screen in order to photograph certain classified documents. Those additional classified documents were recovered on an electronic storage device found during a search of his home.
Assistant U.S. Attorney Danya E. Atiyeh of the Eastern District of Virginia, and Trial Attorneys Patrick T. Murphy and David C. Recker of the National Security Division’s Counterintelligence and Export Control Section prosecuted the case.Department of Justice, EPA Reach Clean Air Act Settlement with Ohio Based Hazardous Waste CompanyRead the Press Release
The Department of Justice and U.S. Environmental Protection Agency (EPA) entered into a settlement with Heritage Thermal Services Inc., a subsidiary of Heritage Environmental Services LLC, resolving allegations that the company violated the Clean Air Act at its hazardous waste incinerator located in East Liverpool, Ohio.
Some of the alleged violations arose from an explosion at the incinerator on July 13, 2013, which ruptured incinerator ducting, releasing untreated flue gas, steam, and boiler ash beyond the incinerator’s fence line.
“The July 2013 explosion at the Heritage incinerator was a consequence of systemic failures to comply with the Clean Air Act, which protects communities and American workers from harmful releases of air pollutants,” said Acting Assistant Attorney General Jeffrey H. Wood. “This settlement requires the company to comply with Clean Air Act requirements and to perform important lead abatement work to make the East Liverpool community a safer and healthier place for workers and residents.”
“Today’s settlement will bring the Heritage plant into compliance with Clean Air Act regulations, preventing incidents like the July 2013 explosion,” said EPA Office of Enforcement and Compliance Assurance Associate Administrator Susan Bodine. “In addition, Heritage will perform a project that will help to protect people, especially children, from the harmful health effects of lead exposure.”
The U.S. alleges that Heritage violated the Clean Air Act on hundreds of days beginning in November 2010 and continuing thereafter, including violations emanating from the July 13, 2013 explosion. The violations include failures to comply with applicable emissions limits, operating parameter limits, and other Clean Air Act regulatory requirements.
The settlement, which was lodged in federal court for the Northern District of Ohio, requires that Heritage undertake extensive measures designed to bring its operations into compliance with the Clean Air Act. For instance, Heritage will not accept certain wastes that cause the kind of excess emissions that contributed to the July 2013 incident. Heritage is also required to investigate and implement corrective measures to reduce future emissions and will study whether other changes in its production process would also prevent Clean Air Act violations. Heritage is also required to pay a penalty of $288,000, and to spend at least $302,500 performing lead hazard abatement work at properties within 25 miles of East Liverpool, Ohio where the owners cannot afford to undertake lead abatement or replacement of lead water service lines.
The Department of Justice and EPA will hold a public meeting at the East Liverpool City Council Chambers on November 7, 2018, from 6:30 pm to 8:30 pm EDT to provide the public with information about the settlement and to answer questions by the public.
The proposed settlement is subject to a 30-day public comment period and final court approval. To view the consent decree or to submit a comment, visit the department’s website at: www.justice.gov/enrd/Consent_Decrees.html.
Information about EPA Region 5's air enforcement program is at http://www.epa.gov/region5/air/enforce/index.html.
Potential environmental violations may be reported at http://www.epa.gov/compliance/complaints.
Two Former Deutsche Bank Traders Convicted for Role in Scheme to Manipulate a Critical Global Benchmark Interest RateRead the Press Release
A former supervisor of Deutsche Bank’s Pool Trading Desk and a former derivatives trader were convicted today in New York for their participation in a scheme to manipulate the London Interbank Offered Rate (LIBOR), a critical global benchmark tied to trillions of dollars in derivatives, loans, mortgages, and other financial products.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division; and Special Agent in Charge Matthew J. DeSarno of the FBI’s Washington Field Office’s Criminal Division made the announcement.
Following a month long jury trial before the Hon. Chief Judge Colleen McMahon of the U.S. District Court for the Southern District of New York, a jury convicted former Deutsche Bank supervisor Matthew Connolly, 53, of Basking Ridge, New Jersey, of one count of conspiracy and two counts of wire fraud and former derivatives trader Gavin Campbell Black, 48, of London, of one count of conspiracy and one count of wire fraud. A sentencing date has not been set.
“Matthew Connolly and Gavin Black undermined the integrity of our financial markets by manipulating LIBOR, which is widely considered to be the most important number in the financial world because of its impact on trillions of dollars in financial products,” said Assistant Attorney General Benczkowski. “The Justice Department and its law enforcement partners will aggressively investigate and prosecute individuals and financial institutions who engage in this sort of misconduct.”
“Today’s convictions demonstrate our continuing commitment to prosecute those who fraudulently manipulated the financial markets for their own personal benefit and, in doing so, undermined free market competition,” said Assistant Attorney General Delrahim. “Such conduct will not be tolerated by this administration, especially when it threatens to destabilize global markets and financial stability worldwide. This case is a compelling example of effective coordination among law enforcement agencies — both at home and abroad. The Antitrust Division will continue to work with its many partners to aggressively pursue other individuals involved in this or other illegal schemes that undermine free financial markets.”
“Today’s conviction should serve as a reminder of our commitment to hold individuals and institutions accountable for their involvement in complex fraud schemes,” said Special Agent in Charge DeSarno. “The FBI will continue to work with our global partners in bringing those who undermine our financial markets to justice.”
According to evidence presented at trial, LIBOR is an averaged interest rate, calculated based on submissions from lending banks around the world, reflecting the honest and unbiased rates those banks believed they would be charged if borrowing from other banks. LIBOR was published by the British Bankers’ Association, a trade association based in London. The published LIBOR “fix” for USD currency was the result of a calculation based upon submissions from a panel of 16 banks, including Deutsche Bank.
Connolly was Deutsche Bank’s director of the Pool Trading Desk in New York, where he supervised traders who traded USD LIBOR-based derivative products. Black was a director on Deutsche Bank’s Money Market and Derivatives Desk in London, who also traded USD LIBOR-based derivative products. In order to increase Deutsche Bank’s profits on derivatives contracts tied to the USD LIBOR, Connolly directed his subordinates to reach out to Deutsche Bank’s LIBOR submitters to ask them to submit false and fraudulent LIBOR contributions consistent with his traders’ or the banks’ financial interests, rather than the honest and unbiased costs of borrowing, the evidence showed. The jury also heard evidence that Black asked Deutsche Bank’s cash traders who were responsible for submitting the bank’s LIBOR rates to ask that they adjust their submissions to favor his derivative trading positions. According to evidence at trial, several Deutsche Bank LIBOR submitters accommodated the defendants’ LIBOR manipulation requests.
In April 2015, Deutsche Bank entered into a deferred prosecution agreement to resolve wire fraud and antitrust charges and Deutsche Bank Group Services (UK) Limited pleaded guilty to one count of wire fraud, collectively agreeing to pay a $775 million fine, for the bank’s role in the scheme. Two Deutsche Bank traders pleaded guilty to fraud charges related to the LIBOR manipulation scheme.
Special agents, forensic accountants and intelligence analysts of the FBI’s Washington Field Office are conducting the investigation. Senior Litigation Counsel Carol L. Sipperly and Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section and Trial Attorneys Michael Koenig and Christina Brown of the Justice Department’s Antitrust Division are prosecuting the case. The department acknowledges the contributions of Clair Dobbin, of Three Raymond Buildings Barristers, and Alan Ward, of Stephenson Harwood LLP, for their advocacy on behalf of the United States in the British courts.
The investigation leading to this case has required, and has greatly benefitted from, a diligent and wide-ranging assistance among various enforcement agencies both in the United States and abroad. In particular, the Department acknowledges and expresses its appreciation for this assistance from the Commodity Futures Trading Commission’s Division of Enforcement, the U.K. Financial Conduct Authority, and the U.K. Serious Fraud Office. Valuable assistance was provided by the Justice Department’s Office of International Affairs and the Civil Division’s Office of Foreign Litigation.
Texas Man Sentenced to Almost 25 Years for Hate Crime in Burning Down Mosque in Victoria, TexasRead the Press Release
The Justice Department today announced that Marq Perez, 26, was sentenced to more than 24 years in prison for burning down the Victoria Islamic Center on Jan. 28, 2017. Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division, U.S. Attorney Ryan Patrick for the Southern District of Texas, Special Agent in Charge Fred Milanowski of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and Special Agent in Charge Perrye K. Turner of the FBI made the announcement.
A jury found Perez guilty on July 16, for a hate crime in the burning of the Victoria Islamic Center (the mosque) on Jan. 28, 2017, and for the use of fire to commit a federal felony. In addition, the jury found that Perez possessed an unregistered destructive device for a separate but related incident that occurred on Jan. 15, 2017.
“Everyone in this country has the right to worship freely without fear of violence,” said Acting Assistant Attorney General John Gore. “This defendant terrorized the Muslim community in Victoria, and the Department partnered with federal, state, and local agencies to ensure that the person responsible for this heinous hate crime would be found and prosecuted.”
“The Attorney General has said that the Freedom of religion is indeed our ‘first freedom’—being the first listed right of our First Amendment,” said Patrick. “The Department of Justice prosecutes violent and dangerous crime, but also, and particularly when that crime interferes with someone’s ability to practice their religious faith. Not only was this a dangerous and potentially deadly act, but also one spurred from hate. I am glad justice was served in this case.”
“ATF is the primary federal law enforcement agency tasked with investigating House of Worship Fires and views an arson against a house of worship as not just an attack on a building, but as an attack against an entire community,” said Milanowski. “ATF is pleased the defendant has been held accountable for this crime and will continue to respond to these violent crimes using all available resources.”
“Mr. Perez sought to provoke terror within the tranquil space of the Victoria Islamic Center," said FBI Assistant Special Agent-in-Charge Edward Michel. "By deliberately burning down this mosque, Mr. Perez attacked a specific religious congregation in the hope of spreading fear, conflict and depriving Victoria’s Islamic community of their peaceful and safe place to worship. Today's sentencing illustrates that hate crimes will not be tolerated. No one in this country should feel afraid to openly practice their religion or express their beliefs. The FBI will continue to aggressively investigate civil rights violations wherever and whenever they occur."
Testimony at trial detailed how Perez conducted what he described as “recon” by breaking into the mosque a week before he set it on fire. Evidence presented at trial showed that Perez communicated with someone through Facebook about breaking into the mosque a second time, the same night of the fire. A witness who was with Perez on the night of the fire described how Perez used a lighter to set papers on fire inside the mosque and how excited Perez was upon seeing the mosque in flames just minutes later. The witness testified that Perez said that he burned down the mosque, because he wanted to “send a message.” During the execution of a search warrant, federal agents recovered stolen property taken from the mosque the night of the fire in Perez’s home. Several witnesses at trial also testified about Perez’s animus towards Muslims and that he often used anti-Muslim slurs.
When Perez learned that the Victoria Muslim community had raised money to rebuild the mosque, he told a witness that he would burn the mosque down again if it was rebuilt.
Members of the mosque testified at the trial that they watched from afar as federal, state, and local law enforcement officers tried to extinguish the fire, but observed that the fire could not be put out until it had engulfed the entire mosque. Those witnesses also testified that, after the destruction of the mosque, the Victoria Islamic Center raised money online from over 20,000 individuals from all over the United States and over 90 countries to rebuild the mosque.
ATF and FBI conducted the investigation along with the City of Victoria Fire Marshal’s Office, Victoria Fire Department, Victoria Police Department, Texas Department of Public Safety - Criminal Investigations Division and Texas Rangers with assistance of Texas State Fire Marshal’s Office and Sheriff’s Offices in Victoria and Nueces Counties and the Victoria County District Attorney’s Office.
Assistant U.S. Attorneys Sharad S. Khandelwal and Kate Suh prosecuted the case along with Trial Attorney Saeed Mody of the Department of Justice’s Civil Rights Division.
Justice Department Smashes Records for Violent Crime, Gun Crime, Illegal Immigration Prosecutions, Increases Drug and White Collar ProsecutionsRead the Press Release
Under the leadership of Attorney General Jeff Sessions, the Department of Justice charged the largest number of violent crime and firearm defendants in its history in Fiscal Year (FY) 2018.
“President Donald Trump is a law-and-order President—and this is a law-and-order administration,” said Attorney General Jeff Sessions. “The Department of Justice is breaking law enforcement records and doing so by significant margins. When I took office as Attorney General, I ordered federal prosecutors and agents to take illegal guns off of our streets, to prosecute crimes aggressively, to protect our nation’s borders, and to target white collar fraud. With support from our state and local partners, our federal prosecutors and agents have delivered—and I am grateful to them and the fabulous state and local officers who worked so hard to make these achievements possible. And we are seeing results. Violent crime and homicides, which jumped in 2015 and 2016, both dropped in 2017 and will drop again in 2018. There can be no doubt that good law enforcement policies can make our communities safer.”
According to data from the Executive Office for United States Attorneys (EOUSA), the number of defendants charged with criminal felony offenses increased by nearly 15 percent from more than 71,200 defendants in FY 2017 to more than 81,800 in FY 2018.
In FY 2018, the Justice Department charged the largest number of violent crime defendants since EOUSA started to track this category more than 25 years ago (more than 16,800)—surpassing by nearly 15 percent the previous record set just last year.
In FY 2018, the Justice Department charged more than 15,300 defendants with federal firearms offenses, which is 17 percent more than the previous record.
In FY 2018, over 23,400 defendants were charged with felony illegal re-entry, an increase of more than 38 percent from FY 2017.
In FY 2018, over 23,600 defendants were charged with drug-related offenses, an increase of more than six percent from FY 2017.
Also in FY 2018, the Justice Department increased white-collar prosecutions by more than three percent, charging more than 6,500 defendants.
Finally, in FY 2018, more than 68,400 defendants were charged with misdemeanor illegal entry. This is the highest number of such defendants charged since EOUSA started to track this category and an almost 86 percent increase from the previous year. This total is also more than 4 percent higher than the previous record of over 65,500 defendants set in FY 2013.
Justice, Treasury, and State Departments Announce Coordinated Enforcement Efforts Against Cartel Jalisco Nueva GeneracionRead the Press Release
The United States of America, through its Departments of Justice, Treasury, and State announced today a series of measures to target and dismantle the Cartel Jalisco Nueva Generacion (CJNG) – one of the largest, most dangerous drug cartels currently operating in Mexico. These measures include the unsealing of 15 indictments, the State Department’s approval of large rewards, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designations, and the establishment of a citizen tip-line.
CJNG is one of the most powerful cartels in Mexico and the Department of Justice considers it to be one of the five most dangerous transnational criminal organizations in the world, responsible for trafficking many tons of cocaine, methamphetamine and fentanyl-laced heroin into the United States, as well as for violence and significant loss of life in Mexico.
Attorney General Jeff Sessions of the U.S. Department of Justice, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Acting Administrator Uttam Dhillon of the U.S. Drug Enforcement Administration (DEA), FBI Deputy Director David L. Bowdich, Director Andrea Gacki of OFAC, Assistant Secretary for International Narcotics and Law Enforcement Affairs Kirsten D. Madison of the U.S. Department of State, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Executive Associate Director Derek Benner and Chief Don Fort of IRS Criminal Investigation (IRS-CI), made the announcement.
Background
Founded in 2011, CJNG has grown in size and strength rapidly since its inception. Today, the DEA estimates the CJNG exerts influence in 23 of 31 (75 percent) of Mexican states, including key drug production and transportation corridors. CJNG is a powerful drug cartel in Mexico as a result of the organization’s disciplined command and control, sophisticated money laundering techniques, efficient drug transportation routes, and extreme violence. The cartel has also expanded globally, with significant presence and illicit business not only throughout the United States and Mexico, but also Europe, Asia, and Australia.
“We will continue to hammer transnational criminal organizations like the Cartel de San Jalisco Nueva Generacion, or CJNG,” said Attorney General Sessions. “The DEA has said for three years in a row that Mexican drug cartels are the single gravest drug threat that this country faces. President Trump recognizes this, and the day I was sworn in as Attorney General, he ordered me to dismantle transnational criminal organizations, including the cartels. We have been faithful to that order. Today, I am announcing 15 indictments returned against the leaders of CJNG. These indictments are our next steps—but not our last. We will continue following President Trump’s order.”
“DEA has a strong partnership with the Government of Mexico that is demonstrated in the relentless pursuit of the violent leadership of the CJNG cartel,” said Acting Administrator Dhillon. “We will continue to work closely with our international partners to bring Nemiso Cervantes aka El Mencho to justice and dismantle drug cartels like CJNG.”
Unsealing of Indictments
Today, the Department of Justice Criminal Division’s Narcotic and Dangerous Drug Section, U.S. Attorney’s Office in the Southern District of California, the Northern District of Illinois, the Southern District of Mississippi, and the Eastern District of Virginia are announcing 15 indictments, some recently unsealed, against the following CJNG leaders, financiers, transporters, and sources of drug supply:
Nemesio Oseguera Cervantes, aka “Mencho”: Oseguera Cervantes, 52, is the lead defendant in a three-count superseding indictment returned in the District of Columbia in 2017 alleging that he is the leader of a Continuing Criminal Enterprise, conspired to distribute significant quantities of narcotics for illegal importation into the United States, and has used a firearm during and in relation to these drug trafficking crimes. In addition to the indictment in the District of Columbia, Oseguera Cervantes has also been charged with drug trafficking offenses in the Southern District of Mississippi (SDMS). He is currently a fugitive and was designated as a “Kingpin” under the Foreign Narcotics Kingpin Designation Act by the Department of the Treasury in April 2015.
Ruben Oseguera Gonzalez, aka, “Menchito”: Oseguera Gonzalez, 28, Oseguera Cervantes’ son, served as the CJNG’s second in command until the time of his arrest by Mexican authorities in June 2015. Oseguera Gonzalez is charged in a two-count indictment returned in the District of Columbia in 2017 alleging that between 2007 and February 2017, Oseguera Gonzalez engaged a conspiracy to distribute significant quantities of narcotics for illegal importation into the United States and that Oseguera Gonzalez engaged in the use of a firearm during and in relation to one or more drug trafficking crimes. Oseguera Gonzalez remains in Mexican custody and is currently pending extradition to the United States.
Abigael Gonzalez Valencia: Gonzalez Valencia, 45, the head of the “Cuinis” organization, is charged in a three-count indictment returned in the District of Columbia in 2014 alleging that he was a leader in a Continuing Criminal Enterprise, conspired to distribute significant quantities of narcotics for illegal importation into the United States, and used a firearm during and in relation to one or more drug trafficking crimes. The CJNG has flourished in significant part because of its close affiliation with the Cuinis organization, which is the primary financial support network of the CJNG drug trafficking efforts. The Cuinis organization is composed of multiple members of the Gonzalez Valencia family. The relationship between the Cuinis organization and the CJNG is cemented through both intertwined drug trafficking and money laundering dealings as well as familial relationships, including the marriage of one member of the Gonzalez Valencia family to CJNG leader Nemesio Oseguera Cervantes. Gonzalez Valencia was designated as a “Kingpin” under the Foreign Narcotics Kingpin Designation Act by the Department of the Treasury in April 2015. Gonzalez Valencia was arrested by Mexican authorities in February 2015 pursuant to his charges in the United States and is awaiting extradition.
Jesus Contreras Arceo, aka “Canasto”: Contreras Arceo, 41, is charged in a two-count indictment returned in the Eastern District of Virginia in 2017 alleging that between 2011 until March 2017, Contreras Arceo engaged in a conspiracy to distribute significant quantities of narcotics for illegal importation into the United States and that Contreras Arceo engaged in a conspiracy to commit money laundering. Contreras Arceo was arrested by Mexican authorities in July 2018 pursuant to his charges in the United States and is awaiting extradition.
Erick Valencia Salazar, aka “El 85”: Valencia Salazar, 41, is charged in a one-count indictment returned in the District of Columbia in 2018 alleging that between 2003 until August 2018, Valencia Salazar engaged in a conspiracy to distribute significant quantities of narcotics for illegal importation into the United States. Valencia Salazar is currently a fugitive and is believed to be in Mexico.
Juan Perez-Vargas, aka, “Piolin”: Perez-Vargas, 37, is charged in a two-count indictment returned in the Southern District of California in 2017 alleging that Perez-Vargas engaged in a conspiracy to distribute significant quantities of narcotics for illegal importation into the United States. Perez-Vargas was arrested by Mexican authorities in September 2017 pursuant to his charges in the United States and is awaiting extradition.
Diego Pineda Sanchez, aka “Botas” and Carlos Parra-Pedroza: Pineda Sanchez, 33, and Parra-Pedroza, 35, are charged with 28 others in a 63-count indictment returned in the Northern District of Illinois in 2015, alleging that between 2011 and September 2014, Pineda Sanchez and Parra-Pedroza led a Mexico-based conspiracy to launder more than $100 million in narcotics proceeds belonging to Mexico-based drug traffickers, through the purchase and resale of gold. The evidence in the case established that Pineda Sanchez and Parra-Pedroza laundered most of these narcotics proceeds on behalf of CJNG and its leader, Nemesio Oseguera Cervantes aka “Mencho.” Pineda Sanchez and Parra-Pedroza have pleaded guilty to the money laundering conspiracy charges, and are facing a statutory maximum sentence of 20 years in prison. On Oct. 5, Pineda Sanchez was sentenced to serve 15 years in prison by the U.S. District Court in Chicago. The Court will set a sentencing date for Parra-Pedroza at a status hearing on Nov. 1. All other charged and arrested members of the conspiracy have pleaded guilty and have either been sentenced or are awaiting sentencing.
The following individuals linked to the CJNG have also been indicted as a result of the coordinated efforts against the cartel:
- Oswaldo de Jesus Miramontes-Diaz, 44, was charged in the Central District of California in 2015. Miramontes-Diaz is currently serving a sentence pursuant to the charges in the United States;
- Gerardo Gonzalez Valencia, aka, “Lalo,” 41, was charged in the District of Columbia in 2016. He was arrested by Uruguayan authorities in April 2016 on these charges, and is awaiting extradition;
- Jose Gonzalez Valencia, aka, “Chepa,” 42, was charged in the District of Columbia in 2016. He was arrested by Brazilian authorities in December 2017 on these charges, and is awaiting extradition;
- Ulises Yovany Mora-Tapia, aka, “Yiyo,” 33, was charged in the District of Columbia in 2016. Mora-Tapia is currently a fugitive and is believed to be in Mexico;
- Jorge Manuel Cobian-Gonzalez, 43, was charged in the Eastern District of Virginia in 2017. Cobian-Gonzalez is currently awaiting trial;
- Juan Manuel Abouzaid El Bayeh aka, “El Escorpion,” 45, was charged in the District of Columbia in 2017. Abouzaid El Bayeh is currently a fugitive and is believed to be in Mexico; and
- Alfredo Galindo-Salazar aka, “Tucan,” 47, was charged in the District of Columbia in 2018. Galindo-Salazar is currently a fugitive and is believed to be in Mexico.
Treasury OFAC Designations
Since April 2015, OFAC has announced nine designation actions totaling 63 separate individuals and entities in Mexico tied to the CJNG and the Cuinis organization. In the initial 2015 designation action, both Nemesio Oseguera Cervantes and Abigael Gonzalez Valencia were designated by OFAC as Specially Designated Narcotics Traffickers under the Foreign Narcotics Kingpin Designation Act. These Kingpin Act designation actions targeting the CJNG and the Cuinis organization are among the most aggressive and targeted in OFAC’s history against Mexican drug trafficking organizations. Based upon this series of OFAC designations, Mexican authorities were able to seize the Hotelito Desconocido, an exclusive boutique hotel on the Pacific coast of Mexico, which was controlled by members of Los Cuinis organization. OFAC designations have allowed U.S. and Mexican government officials to follow the money of the CJNG and the Cuinis organization in an effort to disrupt their money laundering activities.
“Treasury has strategically targeted leaders of CJNG and the Cuinis organizations, as well as complicit family members, criminal operatives, and businesses under their control,” said OFAC Director Gacki. “Our goal is to disrupt the cartels’ finances, which are overwhelmingly generated from drug sales that occur in the United States, and deny them access to the U.S. financial system. OFAC is committed to working with the Department of Justice and Mexican counterparts in order to apply economic pressure on CJNG and the Cuinis organizations until they are effectively dismantled.”
State Department Award and DEA Tip-Line
As part of continuing efforts to cripple the operations of the CJNG, the U.S. Department of State has previously issued a number of rewards through the Narcotics Rewards Program for information leading to the arrest of critical CJNG operatives. Previously, the Department of State issued rewards through the Narcotics Rewards Program for up to the amount of $5 million for information leading to the arrests of Nemesio Oseguera Cervantes, Abigael Gonzalez Valencia, and Jose Gonzalez Valencia. Effective immediately, the Department of State is announcing an increase to the Narcotics Rewards Program reward for information leading to the arrest of the leader of the CJNG, Nemesio Oseguera Cervantes aka, “El Mencho.” Now $10 million, the reward is one of the largest ever approved for the Narcotics Rewards Program. Additionally, the Department of State is announding a Narcotics Rewards Program reward for information leading to the arrest of high ranking CJNG member Erick Valencia Salazar, aka, “El 85,” in the amount of $5 million. Individuals with information about this organization should contact law enforcement authorities by calling 1-213-237-9990, via email at [email protected], or via Twitter by contacting the handle, @DEALosAngeles.
“The $10 million reward for information leading to the arrest of “El Mencho” is among the highest the Narcotics Rewards Program currently offers,” said Assistant Secretary for International Narcotics and Law Enforcement Affairs Madison. “This reflects the U.S. government’s strong commitment to bringing Oseguera Cervantes to justice.”
Acknowledgments
These cases are the result of the ongoing efforts by the Organized Crime Drug Enforcement Task Forces (OCDETF), and were significantly aided by coordination and support from the multi-agency Special Operations Division (SOD) near Washington, D.C. OCDETF is a partnership that brings together the combined expertise and unique abilities of federal, state, and local enforcement agencies. The principal mission of the OCDETF program is to identify, disrupt, dismantle and prosecute high-level members of drug trafficking, weapons trafficking, and money laundering organizations and enterprises.
These cases are being prosecuted by the Criminal Division’s Narcotic and Dangerous Drug Section in conjunction with DEA Los Angeles Field Division, DEA Mexico City, DEA Guadalajara, DEA Chicago, FBI New York, FBI’s Legal Attaché Office in Mexico City, Homeland Security Investigations (HSI) Chicago and HSI Riverside; the Southern District of California in conjunction with DEA San Diego, DEA Guadalajara and HSI San Ysidro; the Northern District of Illinois in conjunction with the IRS-CI Chicago; the Bureau of Alcohol, Tobacco, Firearms, and Explosives Chicago and HSI Chicago; the SDMS in conjunction with DEA Gulfport and the Eastern District of Virginia in conjunction with the DEA Bilateral Investigations Unit.
The United States would like to acknowledge the significant contributions of the Government of Mexico in their bilateral efforts to target and dismantle the CJNG. The daily coordination between the Government of Mexico with the U.S. Department of Justice, Treasury and State to target this violent drug cartel has a direct impact on the lives and livelihood of millions of citizens in the United States and Mexico.
Relevant Court documents and visuals can be found at: https://www.justice.gov/opa/documents-and-resources-october-16-2018-press-conference?utm_medium=email&utm_source=govdelivery.
Former State Street Executive Sentenced for Scheme to Defraud Clients through Secret Trading CommissionsRead the Press Release
A former executive vice president of State Street Corporation was sentenced today in federal court in Boston, Massachusetts, in connection with engaging in a scheme to defraud at least six of the bank’s clients through secret commissions applied to billions of dollars of securities trades.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Andrew E. Lelling for the District of Massachusetts, and Special Agent in Charge Harold H. Shaw of the FBI’s Boston Field Office, made the announcement.
Ross McLellan, 47, of Hingham, Massachusetts, was sentenced by U.S. District Court Judge Leo T. Sorokin to 18 months in prison and two years of supervised release. In June 2018, McLellan was convicted by a federal jury of one count of conspiring to commit securities fraud and wire fraud, two counts of securities fraud and two counts of wire fraud.
In April 2016, McLellan, a former executive vice president of State Street who served as global head of its Portfolio Solutions Group and president of its U.S. broker-dealer unit, and Edward Pennings, 47, of Surrey, England, a former senior managing director of State Street and the head of its Portfolio Solutions Group for Europe, the Middle East and Africa, were indicted. In June 2017, Pennings pleaded guilty and is scheduled to be sentenced on Nov. 6. Also in June 2017, Richard Boomgaardt, 44, of Sevenoaks, England, a former managing director of State Street, was charged separately and pleaded guilty in July 2017 to one count of conspiracy to commit securities fraud and wire fraud. Boomgaardt was sentenced in July 2018 to one year of probation.
According to the evidence presented at trial, between February 2010 and September 2011, McLellan, Pennings, and Boomgaardt conspired to add secret commissions to fixed income and equity trades performed for at least six clients of the bank’s “transition management” business, which helps institutional clients move their investments between and among asset managers or liquidate large investment portfolios. The commissions were charged on top of fees that the clients had agreed to pay to the bank, and despite written instructions to the bank’s traders that generally reflected that the clients were not to be charged trading commissions. McLellan, Pennings, and Boomgaardt took steps to hide the commissions from the clients and others within the bank, including by directing that the commissions not be broken out in post-trade reports. For example, in a telephone call in March 2010, Pennings instructed Boomgaardt not to talk about the plans to charge hidden commissions on one transaction “with anyone . . . because it’s not going to help our story. Don’t even share it with the rest of the team, to be honest.”
The evidence at trial demonstrated that in June 2010 McLellan and Boomgaardt requested that the bank’s traders provide them with the reported daily high and low prices of securities that the bank had traded for the client so that they could determine the amount of the commissions to be applied to each security without attracting the client’s attention. In March 2011 McLellan instructed a U.S. fixed income trader to charge a commission of one basis point (0.01 percent) of yield to each trade conducted for another client – notwithstanding that the written trading instructions for the transaction said to charge zero commissions – and subsequently instructed the trader to delete any reference to the commissions from the trading results he sent to the transition manager assigned to the project.
The evidence at trial further showed that, in June 2011, when one of the affected clients inquired about whether it had, in fact, been charged commissions in breach of its agreement with the bank, Pennings initially denied that any commissions had been charged. Later, at McLellan’s direction, Pennings acknowledged only that “inadvertent commissions” had been applied to securities traded in the United States, but did not disclose that they had, in fact, been intentionally charged in both the United States and in Europe. McLellan and Pennings sought to mislead the bank’s compliance staff into believing that the commissions had been charged in error and that the amount of the overcharges was limited to the commissions applied on U.S. securities.
The case was investigated by the FBI. Valuable assistance was provided by the Securities & Exchange Commission and the Justice Department’s Office of International Affairs.
Trial Attorney William Johnston of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Stephen E. Frank of the District of Massachusetts prosecuted the case.
Dallas Physicians and Nurses Sentenced to Prison for Role in $11 Million Medicare Fraud SchemeRead the Press Release
Two Dallas doctors and three nurses were sentenced yesterday in an $11.3 million Medicare fraud scheme involving false and fraudulent claims for home health services.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Dallas Region, Special Agent in Charge Eric Jackson of the FBI’s Dallas Field Office, and Director of Law Enforcement David Maxwell of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU), made the announcement
Patience Okoroji, 60, of Dallas County, Texas, was sentenced by U.S. District Judge Reed O’Connor of the Northern District of Texas to serve 120 months in prison for her role in the fraudulent scheme as a part-owner of Timely Home Health Services Inc. (Timely) and a Licensed Vocational Nurse (LVN). Kelly Robinett, M.D., 69, of Denton County, Texas, who was a former part-owner and supervising physician at Boomer House Calls (Boomer) of Frisco, Texas, was sentenced to serve 42 months in prison; Joy Ogwuegbu, 42, of Collin County, Texas, the former Director of Nursing at Timely, was sentenced to serve 42 months in prison and Kingsley Nwanguma, 48, of Dallas County, an LVN at Timely, was sentenced to serve 42 months in prison. Angel Claudio, M.D., 61, of Hidalgo County was sentenced to serve six months in prison.
On June 22, following a five-day trial before Judge O’Connor, Robinett and Nwanguma were each convicted of one count of conspiracy to commit health care fraud. In addition, Robinett and Nwanguma were each convicted of three counts of health care fraud, and Ogwuegbu was convicted of four counts of health care fraud. Claudio; Okoroji; Usani Ewah, 60, of Dallas County, a part-owner of Timely and a registered nurse (RN); and Shawn Chamberlain, 49, of Collin County, a part-owner of Boomer and a physician’s assistant, all pleaded guilty. Chamberlain and Ewah are awaiting sentencing.
According to evidence presented at trial, from 2007 through 2015, Okoroji, Ewah, Nwanguma, Ogwuegbu, Claudio, Robinett, and Chamberlain engaged in a scheme to defraud Medicare by submitting and causing the submission of false and fraudulent claims to Medicare, through Timely, a home health agency, and Boomer, a physician house call company. The evidence presented at trial showed that Robinett, a doctor of osteopathic medicine, certified Medicare beneficiaries—whom he had never seen and did not care to see—for medically unnecessary home health services that were often not provided. The evidence further established that Ogwuegbu, a registered nurse, falsified nursing assessments and Nwanguma, a licensed vocational nurse, falsified nursing notes, to make it appear as if Medicare beneficiaries were qualified for and were provided skilled nursing services.
Evidence at trial demonstrated that Timely billed Medicare for over $11.3 million for home health services purportedly provided to Timely’s patients, some of which was attributable to certifications Robinett signed. Court documents also show that Robinett’s company, Boomer, billed Medicare over $1.6 million for medically unnecessary home health certifications and services and physician’s home visits.
This case was investigated by the HHS-OIG, FBI, and MFCU. Assistant Deputy Chief Adrienne Frazior and Trial Attorneys Aleza Remis and Christina Liu of the Criminal Division’s Fraud Section are prosecuting the case.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in 12 cities across the country, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Health Care CEO Pleads Guilty to $150 Million Health Care Fraud Scheme Involving Harmful Injections and Unnecessary Prescription of Millions of OpioidsRead the Press Release
A health care CEO pleaded guilty today to a superseding indictment as part of an investigation into a $300 million health care fraud scheme that involved the distribution of over 6.6 million dosage units of controlled substances and the administration of medically unnecessary injections that resulted in patient harm.
Attorney General Jeff Sessions, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Region and Special Agent in Charge Manny Muriel of IRS Criminal Investigation (IRS-CI) Detroit made the announcement.
Mashiyat Rashid, 38, of West Bloomfield, Michigan, was the CEO of the Tri-County Wellness Group of medical providers in Michigan and Ohio, and pleaded guilty to one count of conspiracy to commit health care fraud and wire fraud, and one count of money laundering. In connection with his plea agreement, Rashid agreed to the entry of a forfeiture money judgment in the amount of $51,396,917.70, as well as forfeiture to the United States of property traceable to proceeds of the health care fraud scheme, including over $11.5 million, commercial real estate, residential real estate, and a Detroit Pistons season ticket membership.
“The Department of Justice has made ending the opioid crisis a top priority and taken historic new steps to stop the spread of addiction,” said Attorney General Sessions. “That includes prosecuting important cases like this one. The defendant and physicians working for him allegedly flooded the streets with some 4.2 million unnecessary doses of drugs like oxycodone and required patients to undergo expensive and unnecessary back injections in exchange for pills. And while people were suffering, this corporate executive lived in luxury funded by ill-gotten gains. Today’s guilty plea helps us bring the defendant to justice and reduce the supply of illegal drugs flowing into our communities. And so I want to thank our FBI agents, our partners with HHS and IRS Criminal Investigation and everyone else who helped investigate and prosecute this case. Opioid prescription abuse is clearly a cause of some of the addiction we are seeing today. Successful conclusions of important cases like this one will have a great impact. We are not through yet. There will be more cases like this. Ending opioid prescription abuse is achievable and we intend to end it.”
“Health Care Fraud diverts taxpayer dollars from Medicare and lines the pockets of dishonest health care providers,” said U.S. Attorney Schneider. “This case is particularly troubling in that Rashid, through his clinics, made Michigan’s opioid crisis even worse by prescribing over six million dosages of medically unnecessary opioids to individuals who were already suffering from opioid addiction.”
“Health care fraud schemes such as these threaten the vital trust between a patient and his or her health care provider, undermine the integrity of our health care system, and cost all Americans billions of dollars,” said FBI Special Agent in Charge Slater. “Americans already struggling with health care issues and rising premiums are further burdened with each dollar lost to fraud. To those dishonest and unethical physicians and healthcare providers who prioritize profits over their pledge to provide honest services to those in need, the message should be clear: that the collective resources of local, state and federal law enforcement will expose these schemes and will bring you to justice.”
“Ensuring the appropriate prescribing and use of controlled substances is essential to protecting the health and safety of patients and the Medicare program,” said HHS-OIG Special Agent in Charge Pugh. “Health care professionals play a key role in combatting opioid misuse but some choose to exploit patients and commit criminal acts in order to pursue financial gain and when this happens the OIG and our law enforcement partners will be there to hold them accountable.”
“Hippocratic Oaths and Laws are in place for a reason and in this particular case, it’s about controlling medically unnecessary dosages and administered injections,” said IRS-CI Special Agent in Charge Muriel. “Mashiyat Rashid and others allowed greed to drive their moral compass, contributing to the growing opioid epidemic our nation is facing. IRS-CI and its law enforcement partners will painstakingly work, day in and day out, to catch these greedy healthcare providers in efforts to keep dangerous prescriptions off the streets of our communities.”
In connection with his guilty plea, Rashid stated that he was the CEO of Tri-County Wellness Group, and owned, controlled and operated numerous pain clinics, laboratories and other providers in Michigan and Ohio. As alleged in the superseding indictment, from 2008 until their arrest in 2017, Rashid and physicians working in Rashid’s clinics conspired to obtain patients by prescribing over 4.2 million dosage units of medically unnecessary controlled substances, including oxycodone, hydrocodone and oxymorphone, to Medicare beneficiaries, some of whom were addicted to narcotics. Some of these opioids were allegedly resold on the street.
As part of his plea, Rashid admitted that he conspired with physicians to require Medicare beneficiaries who wished to obtain controlled substances to submit to expensive, medically unnecessary, and painful injections. Rashid paid physicians based on the number of injections that Medicare paid for, regardless of the medical necessity of the injections. In turn, the physicians conducted these repetitive and unnecessary injections on patients in order to increase revenue for Rashid, themselves, and their co-conspirators. Rashid stated that the beneficiaries included vulnerable patients, including those addicted to opioids, who were willing to submit to unnecessary and painful injections in order to obtain pills.
When Medicare conducted a medical review of the injection claims, it determined that 100 percent of the claims were not eligible for Medicare reimbursement and summarily suspended the medical billing privileges of one of the pain clinics involved in the scheme. In order to conceal the continued billing of these fraudulent claims to Medicare, the guilty plea states, Rashid and others created new shell companies that they enrolled in Medicare to keep billing the same fraudulent claims, often changing only the name of the company on the door to the medical practice and/or inventing new suite numbers to conceal the continuation of the fraudulent practices at the same location.
Rashid also owned a diagnostic laboratory and caused physicians to order medically unnecessary urine drug testing from the laboratory. When Medicare conducted a medical review of claims submitted by the laboratory, it determined that 95 percent of the claims were not eligible for Medicare reimbursement. In order to conceal the continued billing of these fraudulent urine drug testing claims to Medicare, the guilty plea states, Rashid and others created a new corporate entity that they enrolled in Medicare so that physicians could keep ordering the same fraudulent urine drug testing claims through this new entity.
In addition, Rashid stated in his guilty plea that he paid illegal health care kickbacks to obtain patients and solicited illegal kickbacks and bribes for physicians to refer Medicare beneficiaries to specific third-party home health agencies, laboratories and diagnostic providers even though those referrals were medically unnecessary.
Further, Rashid pleaded guilty to committing money laundering in connection with a $6.6 million wire transfer on April 13, 2016. The superseding indictment alleges that Rashid transferred the proceeds derived from the conspiracy to live an extravagant lifestyle and spend millions of dollars on luxury clothes from retailers like Hermes, rare Richard Mille watches, and exotic automobiles such as a Lamborghini and Rolls Royce Ghost; a mansion and other real estate in the Detroit, Michigan area; and to sit courtside or in the first row of NBA basketball games, including the NBA Finals.
Rashid; Spilios Pappas, 61, of Monclova, Ohio; Joseph Betro, 57, of Novi, Michigan; Tariq Omar, 61, of West Bloomfield, Michigan; and Mohammed Zahoor, 51, also of Novi, were each charged in a superseding indictment with one count of conspiracy to commit health care fraud and wire fraud. Pappas, Betro, Omar, and Zahoor were each additionally charged with one count of health care fraud. All of the defendants were previously charged in an original indictment, along with Yasser Mozeb, 35, of Oakland County, Michigan and Abdul Haq, 72, of Ypsilanti, Michigan. Mozeb and Haq have pleaded guilty, along with 12 other defendants, including seven other physicians. The case is pending before U.S. District Judge Denise Page Hood of the Eastern District of Michigan. Trial has been scheduled to begin on Nov. 27 before Judge Hood. Rashid’s sentencing is set for April 11.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI, HHS-OIG and IRS-CI. Trial Attorney Jacob Foster of the Criminal Division’s Fraud Section is prosecuting the case. The financial investigation into Rashid’s assets was conducted by a partnership between the FBI, IRS, U.S. Marshals Service, Department of Justice’s Health Care Fraud Unit, and the U.S. Attorney’s Office’s Forfeiture and Financial Litigation Unit. The group conducted an extensive pre-indictment investigation and continued to support the prosecution through today’s guilty plea. Assistant U.S. Attorney Shankar Ramamurthy and DOJ Trial Attorney Jacob Foster led the financial investigation.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in 12 cities across the country, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Attorney General Sessions Announces New Measures to Fight Transnational Organized CrimeRead the Press Release
Attorney General Jeff Sessions today announced a series of measures to dismantle transnational criminal organizations.
“The day I was sworn in as Attorney General, President Trump sent me an executive order to dismantle transnational criminal organizations—the gangs and cartels who flood our streets with drugs and violence,” Attorney General Sessions said. “We embrace that order and we carry it out every single day. Today, to increase our effectiveness, I am putting in place new leadership to drive our transnational organized crime efforts and forming a Transnational Organized Crime Task Force of experienced prosecutors that will coordinate and optimize the Department’s efforts to take each of these groups off of our streets for good.”
The Attorney General has appointed Associate Deputy Attorney General Patrick Hovakimian to serve as the Department’s first Director of Counter Transnational Organized Crime. Hovakimian has served in Department leadership since early 2017 and also as an AUSA in the Southern District of California, where he is co-lead counsel in a series of transnational public corruption and fraud cases. In addition to his duties as federal prosecutor, earlier this year the President nominated and the U.S. Senate confirmed Hovakimian to serve as a Commissioner of the Foreign Claims Settlement Commission of the United States.
Attorney General Sessions has appointed Adam Cohen as the new Director of Organized Crime and Drug Enforcement Task Force (OCDETF). Cohen is currently the Chief of the Criminal Division Special Operations Unit’s Office of Enforcement Operations and has served in the Criminal Division for 10 years. He has also served as an Assistant United States Attorney (AUSA) for five years and as a state prosecutor in Florida for seven years. He also led the National Gang Targeting Enforcement and Coordination Center for nearly three years and has served as a Deputy Chief of the Narcotics and Dangerous Drug Section. He is a past recipient of the Assistant Attorney General’s Award for Reduction and Deterrence of Violent and Organized Crime, as well as the DEA Administrator’s Award for his work to counter narcotics trafficking.
On February 9, 2017, President Donald J. Trump issued Executive Order 13773, which directed the federal government to “ensure that Federal law enforcement agencies give a high priority and devote sufficient resources to efforts to identify, interdict, disrupt, and dismantle transnational criminal organizations[.]”
Following this Executive Order, Attorney General Sessions directed the FBI, DEA, OCDETF, and the Department’s Criminal Division to identify top transnational criminal groups that threaten the safety and prosperity of the United States and its allies. As a result of that review, the Attorney General is designating the following criminal groups as top transnational organized crime threats:
• MS-13
• Cartel de Jalisco Nueva Generacion (CJNG)
• Sinaloa Cartel
• Clan del Golfo, and
• Lebanese Hezbollah.
The Attorney General’s TOC Task Force will be led by the Deputy Attorney General and will be composed of experienced prosecutors. It will be organized into one subcommittee for each of the target groups.
The subcommittee on MS-13 will be led by Assistant U.S. Attorney John Durham of the U.S. Attorney’s Office for the Eastern District of New York. AUSA Durham has played a significant role in the FBI’s Long Island Task Force, which has arrested hundreds of MS-13 members.
The subcommittee on Cartel Jalisco Nueva Generacion will be led by Trial Attorney Brett Reynolds of the Narcotic and Dangerous Drug Section of the Department’s Criminal Division. Reynolds has led or co-led several investigations into the Cartel that have led to indictments of some of its highest ranking members.
The subcommittee on the Sinaloa Cartel will be led by Assistant U.S. Attorney Matthew Sutton of the United States Attorney’s Office for the Southern District of California. AUSA Sutton prosecuted several Sinaloa kingpins and led multiple international investigations targeting Sinaloa Cartel leaders, resulting in seizures of millions of dollars in drug proceeds and thousands of kilograms of illicit drugs.
The subcommittee on Clan del Golfo will be led by Assistant U.S. Attorney Robert Emery of the United States Attorney’s Office for the Southern District of Florida. AUSA Emery has secured convictions against the top leadership of Clan del Golfo, including kingpin Henry de Jesus Lopez Londoño, who commanded over 1,000 armed men for the cartel.
The subcommittee on Lebanese Hezbollah will be led by Assistant U.S. Attorney Ilan Graff of the United States Attorney’s Office for the Southern District of New York. AUSA Graff is overseeing the prosecution of two alleged members of Hezbollah’s External Security Organization, the first such operatives to be charged with terrorism offenses in the United States.
Attorney General Sessions has ordered each of these subcommittees to provide specific recommendations within 90 days on how to disrupt and dismantle TOC, whether through prosecution, diplomacy, or other lawful means.
This new Task Force builds upon work that Attorney General Sessions has already done to dismantle these groups. On January 11, 2018, Attorney General Sessions established the Hezbollah Financing and Narcoterrorism Team (HFNT), a group of experienced international narcotics trafficking, terrorism, organized crime, and money laundering prosecutors. HFNT prosecutors and investigators are tasked with investigating individuals and networks providing support to Hezbollah, and pursuing prosecutions in any appropriate cases. The new subcommittee—which will be staffed and led by HFNT members—will aid the ongoing work of the HFNT.
On October 23, 2017, Attorney General Sessions formally designated MS-13 as a priority target for OCDETF.
U.S. Army Reservist, Who Exploited Opioid Addictions of Young Women, Convicted of Sex Trafficking and Related OffensesRead the Press Release
Defendant forced victims struggling with opioid addictions to prostitute for his profit
Xaver M. Boston, 29, of Charlotte, North Carolina, was convicted yesterday by a federal jury of six counts of sex trafficking and one count of using an interstate facility to promote a prostitution enterprise. The verdict was announced by Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division, U.S. Attorney R. Andrew Murray of the Western District of North Carolina, and Special Agent in Charge John Strong of the FBI Charlotte, North Carolina, Field Division. U.S. District Judge Robert J. Conrad, Jr. presided over the trial.
Evidence presented during the three day trial, including the testimony of three of the four victims identified in the indictment by their initials, revealed that Boston, who served in the U.S. Army as a reserve military policeman, operated an extensive sex trafficking enterprise in the Charlotte area between 2012 and September 2017, except for a brief period when he was deployed overseas. Boston recruited the victims—young women and one teenager who were all struggling with drug addictions—by promising to provide them with a place to live and drugs to feed their addictions. He also falsely promised them a house, car, and other material possessions. Boston then advertised them on Backpage.com for prostitution and collected the proceeds for his own profit.
After recruiting the victims, Boston controlled their supply of highly addictive drugs such as heroin and hydrocodone pills. Without the drugs, the victims would experience excruciating physical and mental pain and withdrawal symptoms. In order to coerce the victims to prostitute, Boston withheld their drugs until after they completed commercial sex acts, and he withheld it as punishment if they failed to turn over all of the prostitution proceeds or otherwise violated his rules.
Evidence presented at trial also showed that Boston used violence to control and coerce the victims on occasion. For example, he choked one victim on multiple occasions, and he punched and slapped others as well. Boston also used a pistol to strike one victim in the face, breaking her nose.
“The defendant in this case preyed upon young vulnerable women, exploiting their drug addictions and forcing them to engage in prostitution for his own profit,” said Acting Assistant Attorney General Gore. “The Civil Rights Division will continue its vigorous efforts to work with our federal and state partners to hold human traffickers accountable and vindicate the rights of victims.”
“Boston is a predator who ran a criminal enterprise that violated the most basic standards of human decency,” said U.S. Attorney Murray. “The defendant preyed on and abused vulnerable young women with the intention of exploiting them for his financial gain, and used violence and drugs to exert his control. My office will continue to prosecute sex traffickers and work with our law enforcement partners to identify those who engage in this illegal, dehumanizing business.”
“Xaver Boston promised his victims a better life, instead he robbed them of their civil rights and freedom to make a profit, now he will pay the price. The FBI devotes a significant amount of resources to help sex trafficking victims recover from the trauma they suffer at the hands of ruthless people like Boston,” said John Strong, Special Agent in Charge of the FBI in North Carolina.
After deliberating for seven hours, the jury found the defendant guilty of seven out of nine counts contained in the indictment. Boston is currently in federal custody. Each sex trafficking charge carries a minimum sentence of 15 years in prison and a maximum sentence of life, mandatory restitution and a $250,000 fine. A sentencing date has not been set.
The case was investigated by the FBI Charlotte, North Carolina, Field Division with assistance from the Charlotte-Mecklenburg Police Department. The case is being prosecuted by Assistant U.S. Attorney Kimlani M. Ford of the Western District of North Carolina and Trial Attorney Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Three Traders Charged, and Two Agree to Plead Guilty, in Connection with over $60 Million Commodities Fraud and Spoofing ConspiracyRead the Press Release
Three former commodities traders of a New York-based financial services firm (“Trading Firm A”) were charged yesterday for their alleged participation in an over $60 million commodities fraud and spoofing conspiracy that was perpetrated through the U.S. commodities markets. Two of these traders have agreed to plead guilty for their respective roles in the criminal conspiracy.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas and Special Agent in Charge Jeffrey S. Sallet of the FBI’s Chicago Field Office made the announcement.
Yuchun “Bruce” Mao, 39, a citizen of the People’s Republic of China, was indicted on one count of conspiracy to commit commodities fraud, two counts of commodities fraud and two counts of spoofing. Kamaldeep Gandhi, 36, of Chicago, was charged by criminal information with two counts of conspiracy to engage in wire fraud, commodities fraud and spoofing. Krishna Mohan, 33, of New York, New York, was charged by criminal information with one count of conspiracy to engage in wire fraud, commodities fraud, and spoofing.
“As alleged in today’s charges, these individuals engaged in a sophisticated scheme to distort the futures market for their own advantage by placing large ‘spoofed’ trading orders that they never intended to execute,” said Assistant Attorney General Benczkowski. “Investor trust is the cornerstone of our trading markets, and the Criminal Division will aggressively investigate and prosecute those who undermine that trust by engaging in spoofing or any other illegal conduct.”
“The Southern District of Texas aggressively prosecutes white collar crime,” said U.S. Attorney Patrick. “Home to the second most Fortune 500 companies in the nation, our Houston division is uniquely suited to prosecute white collar fraud in whatever form it comes, and we enjoy terrific relationships with law enforcement partners around the country and from around the world.”
“These charges demonstrate the FBI’s firm commitment to hold accountable those who seek to deceive and defraud the public,” said Special Agent in Charge Sallet. “Such schemes cannot be allowed to threaten confidence in the free market, which represents one of many strengths of our great nation. We will continue to work together to aggressively pursue anyone who undermines the integrity of our financial markets and disregards the rule of law.”
The indictment alleges that Mao was co-head of a trading team that traded commodities on behalf of Trading Firm A, working in Chicago and New York. The indictment alleges that from in or around March 2012 through in or around March 2014, Mao and others conspired to mislead the markets for E-Mini S&P 500 and E‑Mini NASDAQ 100 futures contracts traded on the Chicago Mercantile Exchange (CME), and E-Mini Dow futures contracts traded on the Chicago Board of Trade (CBOT). The indictment further alleges that Mao and his co-conspirators deceived market participants and manipulated markets by placing thousands of orders that they did not intend to execute, or “spoof orders,” in order to create the false and misleading appearance of increased supply or demand. Market participants that traded futures contracts in these three markets while the spoof orders distorted market prices incurred market losses of over $60 million. Mao and his co-conspirators are alleged to have placed these spoof orders in order to benefit themselves Trading Firm A.
Count one of the criminal information alleges that Gandhi conspired, with Mao and others, to commit the underlying offenses while employed at Trading Firm A. Count two of the criminal information alleges that, from in or around May 2014 through in or around October 2014, Gandhi, while employed at a second Chicago-based trading firm (identified in the information as “Trading Firm B”), conspired with others to mislead the markets for E-Mini S&P 500 futures contracts traded on the CME by agreeing to place, and himself placing, spoof orders for E-Mini S&P 500 futures contracts in order to create the false and misleading appearance of increased supply or demand. Gandhi has agreed to plead guilty to the charges in the criminal information.
The charges against Mohan arise from his participation in the conspiracy alleged above while employed at Trading Firm A. Mohan has agreed to plead guilty to the charge in the criminal information.
The FBI’s Chicago Field Office is investigating the case. Trial Attorneys Mark Cipolletti, Jeffery Le Riche and Matthew Sullivan of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney John Lewis of the Southern District of Texas are prosecuting the case. The CFTC’s Division of Enforcement provided substantial assistance in this case.
The charges in the indictment and the two criminal informations are merely allegations, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Individuals who believe that they may be a victim in these cases should visit the Fraud Section’s Victim Witness website for more information.
Maryland Man Sentenced to 25 Years in Prison for Traveling to the Philippines to Engage in Illicit Sexual Conduct and Producing Child PornographyRead the Press Release
A Reisterstown, Maryland man was sentenced today to 300 months in prison and ordered to pay $125,000 in restitution, to be followed by a lifetime of supervised release, for traveling from the United States to the Philippines and engaging in illicit sexual conduct with a minor and to producing child pornography with the intent to transport the child pornography to the United States.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney Robert K. Hur of the District of Maryland; Acting Special Agent in Charge Cardell T. Morant of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) Baltimore; Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office; Chief Terrence B. Sheridan of the Baltimore County Police Department and Baltimore County State’s Attorney Scott Shellenberger made the announcement.
“Martin Hall traveled across the globe for the express purpose of sexually abusing children and creating images of that abuse,” said Assistant Attorney General Benczkowski. “This case serves as a stern warning to offenders - no matter how far you travel to abuse and exploit children, or how sophisticated your efforts to hide your identity, our prosecutors, agents, and local law enforcement will work together to hold you accountable and bring you to justice.”
“As this case demonstrates, children are cruelly and sexually abused to produce child pornography,” U.S. Attorney Robert K. Hur said. “Martin Hall traveled to the Philippines to abuse minors, filmed the abuse, and brought those images back to the U.S. We prosecute these crimes without the children having to testify because we have photo and video evidence of the crimes. This sentence, which includes restitution to the victims, sends a strong message that we will bring these criminals to justice to try to save even more children from becoming victims, and to help child victims recover.”
“Time and again we see these egregious offenders believe that they may hide their crimes across international borders or in the depths of cyberspace. Time and again, our investigators disprove such a notion, find these offenders and bring them before our justice system to face the consequences,” said Acting Special Agent in Charge Morant. “While we cannot undo the harm and trauma Martin Hall has inflicted, I am pleased with today’s announcement knowing that the just burden of his crimes will weigh heavily on him.”
Martin Hall, 56, a former computer programmer, pleaded guilty on July 11, before U.S. District Court Judge Ellen L. Hollander of the District of Maryland to one count of traveling in foreign commerce from the United States to the Philippines between April 2016 and August 2016 to engage in illicit sexual conduct with a person under the age of 18 and to one count of producing child pornography with the intent to transport the child pornography to the United States between July 2016 and August 2016. Judge Hollander sentenced Hall earlier today and remanded him to the custody of the U.S. Marshals Service.
According to admissions made in connection with his plea, Hall travelled to the Philippines and other countries in Southeast Asia for the purpose of engaging in illicit sexual activity with minor females. Hall’s conduct included engaging in sexual acts with minors, producing images and videos of the minors engaging in sexually explicit conduct, and transporting the images and videos back to Maryland. Additionally, Hall used sophisticated computer programs to download and store thousands of images and videos of child pornography.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the FBI. This case is being prosecuted by Trial Attorney Kaylynn Shoop of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Paul Budlow of the District of Maryland.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc.
Attorney General Sessions Announces New Chicago Gun Crimes Prosecution Team, Files Brief to Stop Dangerous Consent DecreeRead the Press Release
Following an order from President Trump, Attorney General Jeff Sessions today announced that he is providing more resources for law enforcement in Chicago and filing a brief opposing a proposed consent decree on Chicago police.
“Public safety, security and order are the fundamental responsibility of the executive branches of our state, local and federal governments,” Attorney General Sessions said. “This constitutional duty rests primarily, for large cities, on their police departments. These departments are composed of some of our finest citizens who daily display courage, respect for law, judgment, and integrity. It is these officers who stand between crime and security. There is one government institution, and one alone, that has the ability to make Chicago safer—that is the Chicago Police Department. Our goal should be to empower it to fulfill its duties, not to restrict its proper functioning or excessively demean the entire Department for the errors of a few. Make no mistake: unjustified restrictions on proper policing and disrespect for our officers directly led to this tragic murder surge in Chicago.
“At a fundamental level, there is a misperception that police are the problem and that their failures, their lack of training, and their abuses create crime. But the truth is the police are the solution to crime, and criminals are the problem. The results of the ACLU settlement in November 2015, as revealed by Judge Cassel’s study, established this fact dramatically, conclusively, and most painfully for the City of Chicago. When police are restrained from using lawfully established policies of community engagement, when arrests went down, and when their work and character were disrespected, crime surged. There must never be another consent decree that continues the folly of the ACLU settlement.”
On October 8, 2018, President Trump directed Attorney General Sessions to work with local law enforcement to help Chicago police officers do their jobs and reduce violent crime.
Pursuant to the President’s order, Attorney General Sessions is sending five additional violent crime prosecutors to Chicago. With these additional resources, United States Attorney for the Northern District of Illinois John Lausch is creating a Gun Crimes Prosecution Team that will focus on investigating and prosecuting gun cases from the most violent neighborhoods in Chicago. Working with state and local law enforcement, this new unit will help ensure that Chicago’s most dangerous criminals are charged quickly after arrest and prosecuted, disrupting the cycle of violence in the neighborhoods most in need.
The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) will assign five Violent Crime Coordinators (VCCs) to U.S Attorney Lausch’s Project Safe Neighborhoods team. These experienced VCCs will join the existing ATF VCC in Chicago in the daily review of firearm arrests and seizures in the city to ensure the most violent firearm offenders are promptly and effectively prosecuted in federal court.
In June 2017, Attorney General Sessions created the Chicago Crime Gun Strike Force, a permanent team of 21 additional permanent ATF special agents, six intelligence research specialists, 12 task force officers from the Chicago Police Department, two task force officers from the Illinois State Police, and four ballistics specialists who are focused on the most violent offenders in the most violent areas. Working with the Chicago Police Department, the Strike Force has enhanced substantially firearms enforcement in the City of Chicago.
Since the Strike Force began operation, ATF firearm arrests in Chicago have increased by 24.6 percent; ATF firearm seizures/recoveries have increased by 45.8 percent, and CPD has increased firearm seizures by 11.3 percent. As of September 2018, violent crime has been reduced in all four police districts where the Strike Force has been assigned, including a 49 percent decrease in homicides in the Seventh District and a 37 percent decrease in shootings in the Ninth District.
On October 9, Attorney General Sessions announced that the Department of Justice will file a statement of interest in the state of Illinois’ lawsuit against Chicago over its policing policies. The statement of interest seeks to prevent the imposition of a consent decree on Chicago’s police officers.
After Chicago reached a settlement with the ACLU in 2015 and the settlement went into effect in January of 2016, the use of Terry stops in Chicago declined by 75 percent. Chicago police made 24 percent fewer arrests in 2016 than they made in 2015, and about half as many arrests as they made in 2011.
In 2016, Chicago saw the biggest single-year increase in the murder rate in at least 60 years, with murders 68.5 percent above the previous 10-year average. More people were killed in Chicago in 2016 than in any of the previous 20 years. More people were murdered in Chicago in 2016 than in New York and Los Angeles combined—even though Chicago has one-fifth of the population of those two cities. An estimated 22 percent of the nationwide increase in homicide in 2016 happened in Chicago alone.
Chicago’s agreement with the ACLU remains in effect.
In August 2017, the state of Illinois sued Chicago, alleging the use of excessive force and racially biased policing. In September 2018, Illinois and Chicago submitted a proposed consent decree to the United States District Court for the Northern District of Illinois for approval. The court has provided a public comment period on the proposed consent decree, which is set to close on October 12.
Today the Department has filed a statement of interest in this lawsuit, commenting that there is no need for a consent decree on the Chicago Police Department, let alone the consent decree the parties have proposed.
The Department’s Statement of Interest argues that the proposed consent decree would deprive local, democratically accountable officials of the flexibility they need to ensure the safety of the people of Chicago. Specifically, the Statement of Interest explains that the proposed consent decree (1) is not narrowly tailored to remedy specific violations of federal law; (2) unfairly inhibits the Chicago Superintendent of Police—who is accountable to the elected Mayor—from exercising his duty to administer the Chicago Police Department; (3) turns over long-term budgetary control of the Chicago Police Department to the federal court and the proposed Monitor, and (4) uses vague or subjective terms to define key metrics for compliance.
The Statement of Interest “asks the court not to enter the Proposed Consent Decree but, rather, to allow state and local officials—and Chicago’s brave front-line police officers—to engage in flexible and localized efforts to advance the goal of safe, effective, and constitutional policing in Chicago.”
On March 31, 2017, Attorney General Sessions ordered a review of the Department’s existing or proposed consent decrees to ensure that they fully and effectively promote public and officer safety, uphold civil rights, and respect the honorable work of law enforcement officers.
Virginia Man Sentenced to 35 Years in Prison for Producing and Distributing Child PornographyRead the Press Release
A Manassas Park, Virginia man was sentenced today to 35 years in prison and a lifetime of supervised release for producing and distributing child pornography, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger of the Eastern District of Virginia, and Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office announced.
Michael Gerald Moody, 44, a delivery driver for a frozen foods company, was sentenced by U.S. District Judge Liam O’Grady of the Eastern District of Virginia.
“Michael Moody sexually abused a child and used mobile devices and encrypted messaging applications to create and distribute images of that abuse over the internet,” said Assistant Attorney General Benczkowski. “Thanks to the tremendous efforts of the prosecutors, agents, and local law enforcement who worked on this case, Moody will spend many years in prison and his victim has received some measure of justice for the trauma Moody so callously inflicted.”
“The facts underlying this case show that Moody is a predator who poses a singular danger to children,” said U.S. Attorney Terwilliger. “I applaud the swift and dedicated work of the FBI and the Manassas Park Police Department, which was essential to ensuring that Moody will stay far away from any minors for a long time. With the assistance of our state and local partners, our office will continue to zealously prosecute anyone who commits these horrible crimes against children in the Eastern District of Virginia.”
“Sexual predators are turning to different social media platforms and the internet to exploit innocent children,” said Assistant Director in Charge McNamara. “Today's sentencing should serve as a warning to those who try to hide their illegal activities behind technology. Criminals who think they are acting anonymously to advertise, distribute, possess and trade child pornography will be found and held accountable. Our children must be protected from these predators.”
According to court documents, between 2017 and February 2018, Moody used a child to engage in sexually explicit conduct and he captured numerous images of that conduct with his cellular phone. In addition, Moody engaged in text chats with other individuals through the online messaging application Kik Messenger. These chats principally focused on the exchange of child pornography and discussions of the sexual abuse of children. In the course of these chats, Moody distributed child pornography—including images that he himself produced, as well as other images—to at least eight other individuals.
The case was investigated by the FBI with the assistance of the Manassas Park Police Department. Trial Attorney Kyle P. Reynolds of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Jay V. Prabhu of the Eastern District of Virginia prosecuted the case.
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 U.S. Attorneys’ Offices and the Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Justice Department and ATF Name 22 Sites to Receive New National Integrated Ballistic Information Network EquipmentRead the Press Release
Evidence based forensic tool to help solve violent crime
The Department of Justice and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) today announced the deployment of ballistic imaging equipment used by ATF’s National Integrated Ballistic Information Network (NIBIN) to 22 state and local law enforcement agencies.
"Under President Donald Trump, the Department of Justice is prosecuting more firearm offenders than ever before," Attorney General Sessions said. "Ballistics technology has given law enforcement an unprecedented ability to make connections between cases and track down dangerous criminals. Today this Department of Justice is once again investing in the 85 percent of law enforcement officers who serve at the state and local levels and we are equipping them with cutting edge technology that will lead to smarter, targeted prosecutions of the most dangerous people in their communities. I have no doubt that this equipment will help to reduce crime in America."
“Crime Gun Intelligence, including the timely use of the NIBIN network, is the cornerstone of ATF’s violent crime reduction strategy. By deploying equipment to these 22 law enforcement agencies, investigators will now receive investigative leads within 48 hours. They will have new opportunities to disrupt the shooting cycle and make our communities safer,” said ATF Deputy Director Thomas Brandon.
As the only crime gun ballistic network in the United States, NIBIN compares images of cartridge casings recovered at crime scenes and firearms recovered by law enforcement to connect shooting incidents and identify shooters. ATF’s broader Crime Gun Intelligence strategy involves multiple technologies to identify criminal shooters and uses NIBIN as a leads-generator in support of this comprehensive approach. The deployments of this NIBIN equipment will help fill gaps in the intelligence and investigative networks and allow for a more efficient processing of firearm related violent crime evidence.
There are 16 agencies receiving NIBIN equipment for the first time:
- Anchorage, AK PD
- Aurora, IL PD
- Berks County, PA
- Charleston, WV PD
- Cheney, WA State Patrol
- Des Moines, IA PD
- Frederick County, MD Sheriff’s Office
- Ft. Myers, FL PD
- Glendale, AZ PD
- Nassau County, NY Public Safety Center
- Lexington, KY PD
- Miami Gardens, FL PD
- Orange County, NY Intelligence Center
- Pensacola, FL Escambia Co Sheriff
- Richmond, VA PD
- San Bernardino, CA PD
Six agencies are receiving additional equipment to enhance their successful crime gun intelligence programs:
- Baton Rouge, LA State Crime Lab
- Cincinnati, OH PD
- Denver, CO PD
- Detroit, MI PD
- Jacksonville, FL PD
- Philadelphia, PA PD
ATF has 25 Crime Gun Intelligence Centers (CGIC) across the United States in which ATF collaborates with local police departments and federal, state, and local prosecutors. The CGICs utilize cutting-edge technology and dedicated investigative teams to disrupt shooters and identify their source of crime guns before they can commit further criminal acts.
To support local participation in the CGIC approach, the Department recently awarded $5 million under the Local Law Enforcement CGIC Integration Initiative to encourage local jurisdictions to use intelligence, technology, and community engagement to identify unlawfully used firearms and to prosecute those who commit violent crimes. The Department also awarded more than $30 million to Project Safe Neighborhoods (PSN), the centerpiece of the Department’s crime reduction efforts. Through PSN, the Department is targeting the most violent criminals in the most violent areas by utilizing policing tools like CGICs.
NIBIN is helping cities solve crimes every day. Examples of these NIBIN success stories include:
- In January 2017, an unknown suspect shot a victim at a gas station in Detroit, Michigan. Police recovered cartridge casings and entered them into NIBIN. In April 2017, an unknown suspect fatally shot a limousine driver at a gas station. NIBIN linked the two scenes, and in so doing, provided investigators the intelligence they needed to identify the shooter and remove a murderer from the streets. The shooter was sentenced to life in prison.
- Detectives in New Albany, Indiana, investigated a homicide but had no suspect, one cartridge casing, and information that led them to believe the shooter may have fled to Louisville, Kentucky. A month later, the Louisville Police Department responded to an incident where several shots had been fired inside an apartment. The firearm recovered at that scene was linked by NIBIN to the murder in New Albany. As a result, the shooter was arrested, charged with the homicide, and sentenced to 17 years in prison.
- In 2018, Cincinnati Police investigated a homicide and recovered cartridge casings from the scene, subsequently entering them into NIBIN. A month later, the Cincinnati Police stopped two suspects for driving a stolen car. During the stop, the police recovered two firearms from the car and entered them into NIBIN. NIBIN linked the guns to the murder, and after being prosecuted for the homicide, the two suspects were sentenced to 18 and 50 years in prison.
More information on NIBIN and Crime Gun Intelligence can be found here: NIBIN Fact Sheet and CGIC Fact Sheet.
Attorney General Jeff Sessions Welcomes Jeffrey Clark as Assistant Attorney General for the Environment and Natural Resources DivisionRead the Press Release
Attorney General Jeff Sessions welcomed the confirmation of Jeffrey Bossert Clark as the Assistant Attorney General of the Department of Justice’s Environment and Natural Resources Division (ENRD) today.
“Jeff Clark is one of the leading environmental litigators in the country, and has been counsel in many of the most significant environmental and natural resource cases of the past two decades, both here at the Department of Justice and in private practice,” said Attorney General Sessions. “Jeff has four years of experience as part of the Environment and Natural Resources Division leadership team, working on virtually every case that the division litigated in the courts of appeals and every environmental case argued before the Supreme Court. He is ready to lead this Division — and it should not have taken us 16 months to get him confirmed. And so today I want to congratulate Jeff and to thank my former colleagues in the Senate for confirming his nomination to this important role.”
ENRD is responsible for litigation in trial and appellate courts on behalf of the United States regarding the prevention and clean-up of pollution, challenges to federal programs and activities, the stewardship of public lands and natural resources, property acquisition to promote national security, wildlife protection, and Indian rights and claims.
Prior to his appointment as Assistant Attorney General, Mr. Clark was a partner with the international law firm of Kirkland & Ellis LLP in its Washington, D.C. office. During his time at the firm, he practiced in diverse areas of law, ranging from environmental to antitrust. Mr. Clark has argued and won numerous cases in multiple U.S. Courts of Appeals. He has deep experience in matters involving the Clean Air Act, the National Environmental Policy Act, the Energy Policy and Conservation Act of 1975, and the Energy Independence and Security Act of 2007.
Before joining the firm, Mr. Clark served as a Deputy Assistant Attorney General within ENRD from 2001 to 2005. In that role, he oversaw ENRD’s Appellate Section and the Indian Resources Section, where he reviewed, edited, and contributed to virtually every brief ENRD filed in the Courts of Appeals, including several cases of exceptional significance that he personally briefed and argued. During his time in ENRD, Mr. Clark also worked on all environmental or natural resource cases argued in front of the Supreme Court.
Mr. Clark received his bachelor’s degree in Economics and History from Harvard University and earned a master’s degree in Urban Affairs and Public Policy from the University of Delaware. He obtained his law degree from the Georgetown University Law Center, where he was an editor for the Georgetown Law Journal.
Attorney General Jeff Sessions Welcomes Eric Dreiband as Assistant Attorney General for the Civil Rights DivisionRead the Press Release
Attorney General Jeff Sessions today welcomed the confirmation of Eric Dreiband as the Department of Justice’s Assistant Attorney General for the Civil Rights Division.
“Eric has distinguished himself as an outstanding lawyer and a committed public servant,” said Attorney General Jeff Sessions. “His previous experience in protecting the civil and constitutional rights of all individuals will enable him to effectively lead the Civil Rights Division.”
Mr. Dreiband’s background spans the public and private sector, and also the issues covered by the Civil Rights Division. He previously served as the General Counsel of the United States Equal Employment Opportunity Commission (EEOC) from 2003-2005. As General Counsel, he led litigation teams on a number of federal employment discrimination enforcement matters, including enforcement of the Civil Rights Act of 1964. Prior to his tenure at the EEOC, Mr. Dreiband served as Deputy Administrator of the Department of Labor’s Wage and Hour Division. In this capacity, he helped lead enforcement efforts for the federal government of the Fair Labor Standards Act, the Family and Medical Leave Act, among other laws.
Prior to his nomination by President Trump to serve as the Assistant Attorney General for the Civil Rights Division, Mr. Dreiband was a partner in the Washington, D.C. office of the law firm of Jones Day. Mr. Dreiband received his J.D., with honors, from Northwestern University Pritzker School of Law, his M.T.S. from Harvard Divinity School, and his A.B. from Princeton University.
Two Washington, D.C. Siblings Plead Guilty for Attack Outside D.C. CourthouseRead the Press Release
Washington, D.C. siblings pleaded guilty today for their April attack on a federal prosecutor and a murder victim’s daughter outside the Superior Court for the District of Columbia, announced Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.
Maurice Hight, 28, pleaded guilty today to one count of felony assault on a federal official. Tiera Hight, 21, pleaded guilty today to one count of misdemeanor assault on a federal official and one count of misdemeanor assault in violation of District of Columbia Code. According to admissions made in connection with their plea agreements, on April 5, 2018, Maurice and Tiera Hight were in a courtroom in the Superior Court for the District of Columbia waiting for a verdict against their brother, who was being tried for murder. After the guilty verdict, Maurice and Tiera Hight exited the courthouse and waited outside. Several minutes later, the murder victim’s daughter exited the courthouse, escorted by a federal prosecutor. As they approached the street, Tiera Hight walked directly towards the pair and she and Maurice Hight began to circle them. Tiera Hight then began to spit on the murder victim’s daughter and physically attacked her. The federal prosecutor intervened, but Tiera Hight continued her attack. Maurice Hight then joined the fight, forcibly grabbing the federal prosecutor, pulling her down and punching her in the right side of the face with a closed fist. The federal prosecutor fell hard to the ground and sustained swelling and bruises to her face and arm. Two deputy U.S. Marshals in the area placed Maurice Hight under arrest, and Maurice Hight proceeded to spit in the face of one of the deputy U.S. Marshals.
“Our criminal justice system cannot tolerate violence against crime victims or those entrusted with enforcing our laws,” said Assistant Attorney General Benczkowski. “Today’s guilty pleas reinforce the Department of Justice’s steadfast commitment to prosecuting anyone who engages in vindictive attacks against victims of crime or federal officials.”
The Hights will be sentenced on Dec. 18 before Senior U.S. District Judge Paul L. Friedman of the District of Columbia.
The Criminal Investigations and Intelligence Unit for the U.S. Attorney’s Office for the District of Columbia investigated this case. Trial Attorneys Jennifer A. Clarke and Lauren Bell of the Criminal Division’s Public Integrity Section are prosecuting the case.
Justice Department Requires CVS and Aetna to Divest Aetna’s Medicare Individual Part D Prescription Drug Plan Business to Proceed with MergerRead the Press Release
The Department of Justice announced today that it is requiring CVS Health Corporation (CVS) and Aetna Inc. (Aetna) to divest Aetna’s Medicare Part D prescription drug plan business for individuals in order to proceed with their $69 billion merger. The proposed divestiture to WellCare Health Plans, Inc. (WellCare), an experienced health insurer focused on government-sponsored health plans, including Medicare Part D individual prescription drug plans, would fully resolve the Department’s competition concerns.
“Today’s settlement resolves competition concerns posed by this transaction and preserves competition in the sale of Medicare Part D prescription drug plans for individuals,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “The divestitures required here allow for the creation of an integrated pharmacy and health benefits company that has the potential to generate benefits by improving the quality and lowering the costs of the healthcare services that American consumers can obtain.”
The Department’s Antitrust Division, along with the offices of five state attorneys general, today filed a civil antitrust lawsuit in the U.S. District Court for the District of Columbia to enjoin the proposed transaction, along with a proposed settlement that, if approved by the court, would fully resolve the Department’s competitive concerns. The participating state attorneys general offices represent California, Florida, Hawaii, Mississippi, and Washington.
CVS, the nation’s largest retail pharmacy chain, and Aetna, the nation’s third-largest health-insurance company, are significant competitors in the sale of Medicare Part D prescription drug plans to individuals, together serving 6.8 million members nationwide.
According to the Department’s complaint, the combination of CVS, which markets its Medicare Part D individual prescription drug plans under the “SilverScript” brand, and Aetna would cause anticompetitive effects, including increased prices, inferior customer service, and decreased innovation in sixteen Medicare Part D regions covering twenty-two states. The complaint alleges that the loss of competition between CVS and Aetna would result in lower-quality services and increased costs for consumers, the federal government, and ultimately, taxpayers.
Under the terms of the proposed settlement, Aetna must divest its individual prescription drug plan business to WellCare and allow WellCare the opportunity to hire key employees who currently operate the business. Aetna must also assist WellCare in operating the business during the transition and in transferring the affected customers through a process regulated by the Centers for Medicare and Medicaid Services, an agency within the U.S. Department of Health and Human Services.
The settlement also includes, consistent with other settlements, several provisions designed to improve the effectiveness of the decree and the Division’s future ability to enforce it.
CVS, headquartered in Woonsocket, Rhode Island, operates the nation’s largest retail pharmacy chain, owns a large pharmacy benefit manager called Caremark, and is the nation’s second-largest provider of individual prescription drug plans, with approximately 4.8 million members. CVS earned revenues of approximately $185 billion in 2017.
Aetna, headquartered in Hartford, Connecticut, is the nation’s third-largest health-insurance company and fourth-largest individual prescription drug plan insurer, with over two million prescription drug plan members. Aetna earned revenues of approximately $60 billion in 2017.
As required by the Tunney Act, the proposed consent decree, along with the Department’s competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Peter Mucchetti, Chief, Healthcare and Consumer Products Section, Antitrust Division, Department of Justice, 450 Fifth Street NW, Suite 4100, Washington, DC 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
Acting Assistant Attorney General Jeffrey H. Wood Delivers Remarks at the 29th Interpol Wildlife Crime Working Group Meeting in LondonRead the Press Release
Remarks as Prepared for Delivery
Good Morning. On behalf of the Attorney General of the United States, Jeff Sessions, I want to express appreciation to INTERPOL for inviting me here today, specifically the members of the Wildlife Crime Working Group and its chair, Grant Miller, and the members of the Environmental Crimes Enforcement Committee and its chair, Calum McDonald. I also want to express appreciation to Her Majesty’s Government for hosting this week’s series of important meetings and events on the topic of wildlife trafficking.
It is my honor to serve as the Acting Assistant Attorney General of the Justice Department’s Environment and Natural Resources Division. In this role, I am privileged to lead a talented team of more than 600 attorneys and staff at the U.S. Department of Justice. They work hard every day to enforce our nation’s environmental and conservation laws and to defend good governance and the rule of law across our nation.
I am delighted to open today’s session of INTERPOL’s 29th Wildlife Crime Working Group meeting, and to address you, the investigators, police, and prosecutors who work each day in your respective sovereign nations to uncover and punish criminals who illegally poach and traffic protected wildlife. You are the ones on the front lines in your nations who will be responsible for putting into action the commitments expressed at the London Conference this week. Without your on-the-ground efforts each day, the goals and promises made by the delegates here this week would go unmet and unfulfilled. And those who seek to decimate protected wildlife for selfish and illegal gain would go undetected and unpunished.
The United States is committed to working across our government, and with multi-national entities such as INTERPOL, to focus our international investments to combat wildlife trafficking in the most strategic and effective way possible.
Within the first month of his presidency, President Trump directly engaged this fight when he issued an Executive Order recognizing wildlife trafficking as a dangerous form of transnational organized crime. In that order, President Trump directed the U.S. Government to use all the tools at its disposal to disrupt and dismantle organized criminal organizations and the lawless networks they operate.
His Administration has responded to that call. We estimate that the United States government will fund more than $90 million in counter-wildlife trafficking programs and projects in the coming year, including our criminal investigatory and prosecution efforts.
The U.S. Department of Justice is fully engaged in this effort.
Under the leadership of Attorney General Sessions, who will also be here this week to deliver the United States Official Statement to the London Conference on Wildlife Trafficking, the Department of Justice is prosecuting criminals engaged in wildlife poaching and trafficking, and continuing to seek stiff penalties for those convicted of wildlife trafficking and related offenses.
Each year, American law enforcement prosecutes thousands of poaching and other wildlife crimes, at both the federal and state levels. Federal prosecutors in the Department of Justice work aggressively with investigative agents from the Fish and Wildlife Service, National Oceanic & Atmospheric Administration, the Department of Homeland Security, and others to pursue criminal cases to the fullest extent.
Since the Trump Administration took office in January of 2017, our Division’s prosecutors have convicted more than 30 defendants for wildlife trafficking crimes, with another 25 charged during that period. During this same period, significant numbers of additional defendants have been charged and convicted in cases brought by U.S. Attorney Offices across our country, and many other cases are currently under investigation for possible prosecution.
Earlier this year, our Division’s prosecutors obtained a significant prison sentence for a New York defendant found guilty of smuggling parts taken from endangered African lions and tigers. In another case this year, a California resident was sentenced to more than two years in federal prison for smuggling horns taken from endangered African black rhinos. And as part of a multi-year operation that included this case, at least 50 other defendants have been arrested, charged, convicted, and sentenced in recent years for smuggling ivory taken from African or Asian elephants, rhino horns, and other protected species.
Across our government, we will continue our efforts not just to seize illegal wildlife items and arrest couriers, but we will also work our way up the chain to disrupt organized criminal networks. To meet this challenge, we are committed to improving our working relationships with those in other countries engaged in the same efforts.
We all recognize that our host nation this week, the United Kingdom, is a leader in this fight. In just the last two weeks, the U.K. arrested and will extradite to the U.S. an individual charged with trafficking in rhino horns. This kind of international cooperation is essential to effectively prosecute traffickers and those in their networks, no matter where they are located.
Likewise, where we are able under U.S. law, we will continue to pursue charges stemming from financial transactions connected to wildlife trafficking. We support efforts to broaden all countries’ efforts to attack the financing of wildlife trafficking and deprive networks of the proceeds of their crimes. As you know, criminals are in this business to profit, and the more effectively we pursue those profits, the more we can disrupt this illegal trade. To that end, we have worked this year to improve intelligence gathering, as well as to improve the sharing and leveraging of that intelligence to better identify networks involved in these crimes. These efforts are showing results.
As those here know, INTERPOL also plays a key role in these collaborative efforts, and the opportunities that working groups such as this one provide are key to those efforts. During my tenure at the Department of Justice, our prosecutors have continued to help advance INTERPOL’s environmental crimes efforts. Our prosecutors serve in a leadership position on INTERPOL’s Environmental Compliance and Enforcement Committee, and in a leadership position in other environmental crimes working groups. To tackle challenges like the illegal wildlife trade, we need forums like this one for law enforcement officials to meet to discuss new strategies and practices, share experience and expertise, and build the bridges of cooperation that are vital in this international fight.
Let me conclude with this: the reasons for battling this illegality are clear and justified.
First, wildlife trafficking violates our nation’s laws, and the lawbreakers know it. The federal Lacey Act—on the books for almost 120 years —makes it a felony punishable by up to five years in prison to knowingly import, export, buy, sell, or even receive wildlife that a person knows was killed illegally, or taken in violation of federal or foreign law. Currently, the Lacey Act, though imperfect, is the strongest tool that federal prosecutors have to stop the flow of illegally poached wildlife into, out of, and around the United States.
Second, these crimes are more pervasive than many outside this room realize. The annual value of illegal wildlife trafficking ranks alongside the illicit trade in drugs, weapons, and humans. A recent U.S. Government Accountability Office report cites estimates for this illegal trade as high as $23 billion annually.
Third, we know that many of these crimes are intertwined with, and often funding, other forms of violent or organized crime. It is becoming increasingly clear that at least some of the proceeds of wildlife smuggling, especially wildlife taken illegally from Africa, are funding large criminal organizations and even terrorist groups. Wildlife trafficking not only threatens the continued viability of thousands of species worldwide, but the substantial illicit funds derived from this trafficking threaten global security, fuel corruption and lawlessness, and harm legitimate businesses. And we are not talking about small change here: just one kilogram of rhino horn can sell for as much as $70,000 in Asian markets. We cannot abide commerce like this, derived from the illegal slaughter of protected wildlife, to fund other criminality and lawlessness around the world.
Fourth, ending the senseless extermination of God’s majestic creatures is simply the right thing to do. We don’t want to just tell our children and grandchildren about the African elephant and the black rhino; we want our children and grandchildren to see and experience these creatures themselves. As the Psalmist wrote, “How many are your works, Lord! In wisdom you made them all; the earth is full of your creatures.” (Psalm 104:24, NIV).
Under Attorney General Sessions, the Justice Department’s prosecutors are fighting to make sure that those who scheme and plot to criminally profit from the exploitation of protected wildlife are brought to justice, as many defendants across our country are learning.
We are grateful for your work on this vital mission as well. Thank you.
Texas Hospital Administrator Convicted of Health Care Fraud for Role in $16 Million Medicare Fraud SchemeRead the Press Release
A federal jury convicted a Houston-area hospital administrator on Friday for his role in a $16 million Medicare fraud scheme.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ryan K. Patrick of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Dallas Region, Special Agent in Charge D. Richard Goss of IRS Criminal Investigation’s (IRS-CI) Houston Field Office, and Unit Division Chief Stormy Kelly of the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) made the announcement.
Starsky D. Bomer, 45, of Harris County, Texas, was convicted of one count of conspiracy to pay and receive healthcare kickbacks, two counts of violating the Anti-Kickback Statute, and one count of conspiracy to commit health care fraud following a five-day trial. Sentencing has been scheduled for Jan. 28, 2019 before U.S. District Judge Vanessa D. Gilmore of the Southern District of Texas, who presided over the trial.
According to evidence presented at trial, from 2011 until February 2013, Bomer and others engaged in a scheme to defraud Medicare by submitting to Medicare, through Atrium Medical Center (Atrium) and Pristine Healthcare (Pristine), approximately $16 million in false and fraudulent claims for partial hospitalization program (PHP) services. A PHP is a form of intensive outpatient treatment for severe mental illness.
The evidence presented at trial showed that Bomer, the hospitals’ chief financial officer and chief operating officer, orchestrated a scheme by which he and others paid illegal bribes and kickbacks to group home owners and patient recruiters in exchange for sending Medicare patients to Atrium and Pristine’s PHPs. Bomer disguised bribes and kickbacks as salary payments and transportations payments to group home owners in exchange for patient referrals, the evidence showed. In addition, evidence presented at trial showed that Bomer knew that most of the patients admitted to Atrium and Pristine’s PHPs did not qualify for and were never provided legitimate partial hospital services.
Evidence at trial demonstrated that Bomer and his coconspirators billed Medicare over $16 million for psychiatric treatment purportedly provided to PHP patients at Atrium and Pristine’s PHPs.
The case was investigated by the HHS-OIG, FBI, IRS-CI, OPM-OIG, and MFCU. The case was prosecuted by Trial Attorneys Jason Knutson, Aleza Remis, and Gerald M. Moody Jr. of the Criminal Division’s Fraud Section.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in 12 cities across the country, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
Miami-Area Pharmacy Owner Pleads Guilty for Role in $8.4 Million Medicare Fraud SchemeRead the Press Release
The owner of a Miami-area pharmacy pleaded guilty for his role in Medicare prescription fraud scheme involving approximately $8.4 million in fraudulent billings.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division; U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida; Special Agent in Charge Robert Lasky of the FBI’s Miami Field Office; Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); Special Agent in Charge Brian Swain of the U.S. Secret Service (USSS), and Special Agent in Charge Adolphus P. Wright of the U.S. Drug Enforcement Administration (DEA) Miami Field Division made the announcement.
Antonio Perez Jr., 48, of Miami Beach, Florida, pleaded guilty today before U.S. District Judge Federico A. Moreno to one count of conspiracy to commit health care fraud.
According to admissions made in connection with his guilty plea, Perez Jr. was the owner of A.R.A. Medical Services Inc., which did business under the name Valles Pharmacy Discount (Valles Pharmacy). Perez Jr. pleaded guilty to agreeing to pay illegal health care kickbacks to Medicare beneficiaries in exchange for a promise from the beneficiaries to fill their prescriptions at Valles Pharmacy, and to allow Valles Pharmacy to submit claims to Medicare for prescription drugs that were not provided to the beneficiaries. Perez Jr. also admitted that he submitted claims to Medicare for expensive prescription medications that Valles Pharmacy never purchased, and were never provided to Medicare beneficiaries. According to admissions made in connection with Perez Jr.’s plea, during the course of the scheme, Valles Pharmacy Discount submitted over $32 million in claims to Medicare for prescription drugs, of which approximately $8.4 million was for medically unnessecary prescription drugs that Valles Pharmacy never purchased, and were never provided to Medicare beneficiaries. Perez Jr. also agreed to forfeit a property located on Collins Avenue in Miami Beach, as well as several bank accounts used to carry out the fraud.
The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. The case was prosecuted by Trial Attorney Timothy P. Loper of the Criminal Division’s Fraud Section.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in 12 cities across the country, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
Leader of International Cyber Fraud Ring Returned to United States to Face Federal Racketeering ChargesRead the Press Release
A Romanian national was returned to the United States Friday to face federal charges that accuse him of being the leader of an international cyber fraud ring that used malware to steal in excess of four million dollars after taking people’s passwords, personal identifying information, and bank account information.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Justin E. Herdman of the Northern District of Ohio, Peter Elliot of the U.S. Marshals Service, Stephen D. Anthony of the FBI and Chief Kevin Bielozer of the Westlake Police Department made the announcement.
Romeo Vasile Chita, 38, was charged in a four-count indictment unsealed in U.S. District Court in Cleveland, Ohio. The charges include racketeering, wire fraud conspiracy, conspiracy to launder money and conspiracy to traffic in counterfeit services.
Eight other defendants were named in the indictment unsealed today. Two defendants—Daniel Mihai Radu, 39; and Manuel Tudor, 37, —have already been extradited from Romania and are awaiting trial in Cleveland. The other five defendants remain at large.
“Romeo Vasile Chita allegedly led a multinational criminal enterprise that stole sensitive personal data through deceptive phishing emails and organized fraudulent online auctions, causing millions of dollars in losses to innocent victims,” said Assistant Attorney General Benczkowski. “The Criminal Division will continue to work with our law enforcement partners, both domestic and international, to aggressively disrupt and dismantle international cyber criminal organizations that victimize our citizens and businesses.”
“This defendant led an international operation that used fraudulent emails and the internet to scam hard-working people out of their savings,” said U.S. Attorney Herdman. “It is gratifying that this defendant will be forced to answer the charges filed against him.”
According to the indictment, Chita was based in Romania and led a racketeering enterprise that operated in the United States, Romania, Canada, Croatia, Latvia, Hungary, Bosnia, China, Jordan, Malaysia and elsewhere. The goal of the enterprise was to generate money through various criminal acts, including wire fraud, trafficking in counterfeit services, and money laundering. It began operating as early as 2007.
Among other things, Chita’s group sent “phishing” emails purporting to be from the Better Business Bureau, the IRS, U.S. Tax Court, the National Payroll Records Center, and others. When a victim clicked on a link in a fraudulent email, specialized malware incorporating a “keylogger” was installed onto the victims’ computers, allowing members of the criminal enterprise to capture sensitive and confidential information, including the victims’ bank account information.
The conspirators, including Chita, then transmitted the sensitive information to each other and others for the purpose of fraudulently withdrawing funds from the victims’ bank accounts. The stolen funds were then transferred to specific accounts in the United States, where the money was withdrawn and transferred to other members of the conspiracy. The conspirators used their own network of accounts and “money mules” to transfer hundreds of thousands of dollars at a time to conceal the origin of the money.
The defendants also are alleged to have engaged in an extensive campaign of online auction fraud, placing ads for non-existent cars and other expensive items on eBay, Craigslist, Autotrader.com, and other websites. According to the indictment, victims were tricked into wiring thousands of dollars to money mules to purchase these vehicles. The money mules then transferred and laundered the proceeds for the benefit of the enterprise.
Chita managed and facilitated the various schemes, as well as directing other conspirators to launder fraudulently obtained money.
This case was investigated by the U.S. Marshals Service, the FBI, the Westlake Police Department and the U.S. Secret Service. The case is being prosecuted by Senior Counsel Brian L. Levine of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Duncan Brown of the Northern District of Ohio. Valuable assistance is being provided by the Justice Department’s Office of International Affairs. The Justice Department thanks the government of Romania for its assistance in this matter.
The prosecution of Chita is timely, as it occurs during National Cyber Security Awareness Month (NCSAM). NCSAM – observed every October – was created as a collaborative effort between government and industry to ensure all Americans have the resources they need to stay safer and more secure online. The Department of Justice encourages citizens to take advantage of cybersecurity tips and information provided by law enforcement to ensure their personal information is secured.
An indictment is merely an allegation, and the defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Justice Department Settles Immigration-Related Discrimination Claim Against Georgia Poultry Processing CompanyRead the Press Release
The Justice Department today announced that it has reached a settlement with Mar-Jac Poultry, Inc., a poultry processing company in Gainesville, Georgia. The settlement resolves a long-standing lawsuit filed by the Justice Department alleging that Mar-Jac Poultry violated the Immigration and Nationality Act (INA) by discriminating against work-authorized non-U.S. citizens when verifying their work authorization.
The Department filed its complaint on July 14, 2011, after investigating a charge that a worker filed. The complaint alleged that from at least July 1, 2009 to at least January 27, 2011, Mar-Jac Poultry routinely required work-authorized non-U.S. citizens to present a document issued by the Department of Homeland Security, such as a Permanent Resident Card or Employment Authorization Document, to prove their work authorization, but did not require specific documents from U.S. citizens. On March 3, 2017, the court found that Mar-Jac was liable for a pattern or practice of this type of discrimination against non-U.S. citizens Respondent hired between June 16, 2010 and February 9, 2011, leaving monetary and other remedies for future resolution. All work-authorized individuals, whether U.S. citizens or non-U.S. citizens, have the right to choose which valid documentation to present to prove they are authorized to work. The INA’s antidiscrimination provision prohibits employers from subjecting employees to unnecessary documentary demands based on employees’ citizenship status or national origin.
“Even an employer that hires many non-U.S. citizens can violate the INA if it treats employees differently based on citizenship status or national origin when verifying their identity and work authorization,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “This case demonstrates the Department’s commitment to ensuring that all employers implement the employment eligibility verification process in a non-discriminatory manner.”
Under the settlement agreement, Mar-Jac will pay a civil penalty of $190,000; pay $1020 to a refugee the company fired when he did not produce a DHS-issued document to reverify his work authority; pay up to $23,980 in back pay to compensate other affected employees and applicants; train its employees on the INA’s anti-discrimination provision; and be subject to departmental monitoring for two years.
The Division’s Immigrant and Employee Rights Section (IER) is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, or recruitment or referral for a fee; unfair documentary practices; and retaliation and intimidation.
For more information about protections against employment discrimination under immigration laws, call IER’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call IER’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar; email [email protected]; or visit IER’s English and Spanish websites. Subscribe to GovDelivery to receive updates from IER.
Applicants or employees who believe they were subjected to different documentary requirements based on their citizenship, immigration status, or national origin; or discrimination based on their citizenship, immigration status, or national origin in hiring, firing, or recruitment or referral, should contact IER’s worker hotline for assistance.
Former Upstate New York Democratic Party Chair Pleads Guilty to Conspiracy to Cause Foreign Campaign DonationRead the Press Release
A former Erie County, New York Democratic party chair pleaded guilty today to conspiring to illegally cause a $25,000 campaign donation from a foreign source to a New York state official running for reelection.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division and U.S. Attorney James P. Kennedy Jr. for the Western District of New York made the announcement.
G. Steven Pigeon, 58, of Buffalo, New York, pleaded guilty before U.S. District Judge Richard J. Arcara to an information charging him with conspiracy to cause a foreign donation in a state election in violation of federal law. Sentencing is set for Jan. 25, 2019.
As part of his plea, Pigeon admitted that while working as a political consultant and lobbyist in Buffalo, New York, he represented a foreign client, Company A. At the time, the CEO of Company A was Person A, a Canadian citizen. In early 2014, despite knowing that it was illegal to make a foreign donation to a state political campaign, Pigeon solicited Person A to make a $25,000 donation to the reelection campaign of a New York state elected official, Public Official A. The campaign rejected the donation from Person A because Person A was not a citizen or permanent legal resident of the United States. Pigeon and Person A then agreed to cause the donation from Person A to be made through Person B, a permanent legal resident of the United States and an employee of Company A. On or about Feb. 24, 2014, as directed by Person A, Person B made a $25,000 donation to Public Official A’s campaign. Pigeon and Person A knew that Person A would pay for, or reimburse, the donation. As a result of the $25,000 donation, Pigeon and Person A were granted entry to a fundraising event for Public Official A in New York City on Feb. 26, 2014.
“Steven Pigeon undermined the transparency and integrity of the electoral process by funneling foreign money into a campaign,” said Assistant Attorney General Benczkowski. “The Criminal Division and our law enforcement partners are committed to protecting our electoral process and we will aggressively pursue those who seek to circumvent our campaign finance laws.”
“Transparency in political activity, including the disclosure of the sources of political contributions, is a necessary check on the power of money and a necessary ingredient for a healthy democracy,” said U.S. Attorney Kennedy. “Schemes such as this, which introduce obfuscation and secrecy into the political process, threaten our very democracy by endeavoring to use anonymity as a means of eliminating accountability.”
The plea is the result of an investigation by the FBI Buffalo Field Office, under the direction of Special Agent in Charge Gary Loeffert; the New York State Attorney General’s Office, under the direction of Barbara Underwood; and the New York State Police, under the direction of Major Edward Kennedy. The case is being prosecuted by Deputy Chief John Keller of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Paul E. Bonanno of the Western District of New York.
Former Manager for a Colorado Resort Sentenced to Prison for Tax FraudRead the Press Release
A Scottsdale, Arizona man, who formerly resided in Pagosa Springs, Colorado, was sentenced today in the U.S. District Court for the District of Colorado to eighteen months in prison for filing a false tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
According to court documents, William Whittington, 68, filed a false 2010 individual income tax return, on which he underreported income received from his offshore accounts and through the payment of his personal expenses by an entity over which he exercised managerial control. From 2010 to 2012, Whittington directed that the Springs Resort & Spa, in Pagosa Springs, Colorado, a business managed by Whittington and family members at the time, pay over $1 million of his personal expenses. The total additional tax due for those three years, 2010 through 2012, based on Whittington’s failure to report the payment of the personal expenses as income is $364,994.00.
From 2003 to 2010, Whittington failed to report $9.7 million in investment income generated through two offshore bank accounts in Liechtenstein. Combined with the tax loss from the resort payment of his personal expenses, Whittington’s fraudulent conduct created a $1.8 million tax loss.
Whittington is a competitive racecar driver, whose team won the 1979 24 Hours of Le Mans. Whittington was previously sentenced to prison in 1987 for evading income tax and importing multiple tons of marijuana. See United States v. Whittington, 918 F.2d 149 (11th Cir. 1990).
In addition to the term of imprisonment imposed, U.S. District Court Judge Robert E. Blackburn ordered Whittington to serve one year of supervised release. Whittington paid approximately $1.8 million in restitution to the Internal Revenue Service as a condition of his plea agreement.
Principal Deputy Assistant Attorney General Zuckerman commended special agents of IRS–Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Kathleen M. Barry, Lori A. Hendrickson, and Sarah A. Kiewlicz, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Dark Web Administrator Sentenced to 20 Years in Prison for Narcotics Trafficking and Money LaunderingRead the Press Release
A French national who was serving at times as an administrator and senior moderator on one of the largest dark web criminal marketplaces was sentenced to 20 years in prison today, after previously pleading guilty to conspiracy to possess with the intent to distribute controlled substances and conspiracy to launder money.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Special Agent in Charge Adolphus P. Wright of the U.S. Drug Enforcement Administration (DEA) Miami Field Office, Special Agent in Charge Robert F. Lasky of FBI Miami Field Office, and Special Agent in Charge Michael J. De Palma of IRS Criminal Investigation (IRS-CI), made the announcement.
Gal Vallerius, aka “Oxymonster,” 36, pleaded guilty before U.S. District Court Judge Robert N. Scola Jr. in the Southern District of Florida on Aug. 28. Judge Scola sentenced Vallerius to serve 240 months in prison. Vallierius forfeited 99.98947177 bitcoin and 121.94805811 bitcoin cash.
According to the court record, including the agreed upon factual proffer, beginning in or around November 2013 a criminal online marketplace known as Dream Market began operating on the Tor “dark web” network. Dream Market was designed to promote and facilitate the anonymous sale of illegal items. In time, the Dream Market website became one of the largest dark web criminal marketplaces. All of the items and services on Dream Market were offered for sale in exchange for Bitcoin and other peer-to-peer crypto-currencies.
According to the agreed upon factual proffer, Vallerius first participated in the conspiracy by becoming a vendor on Dream Market. As a vendor, he sold Oxycodone and Ritalin under the moniker “Oxymonster.” Shortly thereafter, Dream Market employed the defendant who acted at times as an administrator and senior moderator. In these positions, he played a role supporting the daily illicit transactions between buyers and vendors on Dream Market, such as trafficking in narcotics, and the laundering of illicit proceeds using virtual currencies, Dream Market’s tumblers and the dark web.
This investigation and prosecution was carried out by members of the South Florida High Intensity Drug Trafficking Area (HIDTA) Task Force. The South Florida HIDTA, established in 1990, is made up of federal, state and local law enforcement agencies that, cooperatively, target the region’s drug trafficking and money laundering organizations. The South Florida HIDTA is funded by the Office of National Drug Control Policy which sponsors a variety of initiatives focused on combatting the nation’s illicit drug trafficking threats.
The prosecution is a result of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state, and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high-level members of drug trafficking enterprises, bringing together the combined expertise and unique abilities of federal, state, and local law enforcement.
The investigation was conducted by DEA Miami Field Office and Paris Country Office, FBI Miami’s Cyber Task Force, IRS-CI Miami Field Office, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations Miami and Atlanta Field Offices, U.S. Customs and Border Protection’s Field Operations Atlanta, U.S. Postal Inspection Service’s Miami Field Office, the Department of Justice’s Office of International Affairs, Europol, Special Operations Division (SOD), Finnish National Police, Finnish International Judicial Administration of the Ministry of Justice, Dutch National Police, French Ministry of Justice and the Direction Interregionale de la Police Judiciaire as well as the U.S. Attorney’s Office for the Northern District of Georgia. The case was prosecuted by Trial Attorney C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Juan A. Gonzalez and former Assistant U.S. Attorney Frank R. Maderal of the Southern District of Florida.
Man Convicted of First-Degree Murder for Joint Kidnapping, Torture, and Execution of Gender-Fluid Teen Kedarie JohnsonRead the Press Release
Jaron N. Purham was convicted yesterday of first-degree murder for his role in the kidnapping, torture, and execution of gender-fluid high school student Kedarie Johnson, announced Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division and Des Moines County Attorney Amy K. Beavers. Purham’s co-defendant, Jorge Sanders-Galvez, was previously convicted of first-degree murder last year for his role in the killing, and his been sentenced to life imprisonment without the possibility of parole. The killing rocked the small town of Burlington, Iowa, where Kedarie was a popular and well-loved member of the community.
Last year, Attorney General Jeff Sessions and Acting Assistant Attorney General John Gore authorized a federal hate-crimes prosecutor from the Civil Rights Division, Christopher J. Perras, to be cross-designated as a Special Assistant County Attorney to assist with the prosecutions of both defendants in this case. Prosecuting hate crimes and bringing perpetrators of these egregious crimes to justice is a top priority for this Justice Department.
“I am proud of the collaboration and hard work conducted in this case to bring two men to justice for their abhorrent actions,” said Acting Assistant Attorney General John Gore. “The Justice Department will continue to work diligently to ensure that individuals are able to live free from acts of violence, no matter their gender identity, what they believe, or how they worship.”
“I am privileged to have fought for justice for Kedarie and those with alternate lifestyles,” said Des Moines County Attorney Amy K. Beavers. “Alongside my partners in the Iowa Attorney Generals Office Laura Roan and the U.S. Department of Justice Chris Perras with Sgt. Short and DCI Agent Matt George I am grateful that justice was served.”
The evidence at trial established that on the night of the murder, the defendants were pulling out of a grocery store parking lot when they noticed Kedarie Johnson walking down the street all by himself. Kedarie (who used male pronouns to refer to himself) sometimes dressed as a boy and went by his given name, and sometimes dressed as a girl and went by the name Kandiece. On the night of the murder, he was dressed in women’s clothing and presenting as female, and the defendants began to follow slowly behind him. Eventually, the defendants pulled up alongside Kedarie and flirted with him. They convinced Kedarie to get inside, and they drove him to a location where they often took young women to have sex with them. The physical evidence showed that, at the house, the defendants knocked Kedarie unconscious, stuffed a plastic bag down his throat, wrapped a makeshift gag around his mouth, and wrapped another plastic bag around his head. They then drove Kedarie to an alleyway. Forensic evidence established that at some point, Kedarie regained consciousness and began struggling violently to breathe. The defendants got out in the alleyway, threw Kedarie onto the ground, and shot him twice in the chest, one bullet embedding in his spine and the other piercing his heart. The defendants then doused Kedarie’s body in bleach to destroy any DNA evidence.
There were no eyewitnesses to the kidnapping or the murder, so Purham and Sanders-Galvez were convicted largely on the physical, electronic, and forensic evidence they left behind. Police found Kedarie’s backpack and sneakers at the defendants’ place, as well as a ripped bedsheet that matched fibers found on Kedarie’s body. When police located Purham, he was driving the car that had been seen on surveillance video following Kedarie shortly before his abduction and murder. When police searched the car, they found a .357 revolver, which a ballistics expert determined to be the murder weapon. Records from the Defendants’ cellphone and social media accounts established that Sanders-Galvez had purchased the murder weapon over Facebook a few months before the murder. Records also showed that the Defendants’ phones both went dead during the two-hour period in which they committed the crime; that the Defendants posted on Facebook, approximately one hour after the murder, that they were skipping town; and that the Defendants both searched the internet in the days following the murder for updates on the status of the homicide investigation.
The investigation was conducted by law enforcement officers from the Burlington (Iowa) Police Department and the Iowa Department of Criminal Investigation, with assistance from the FBI. Des Moines County Attorney Amy K. Beavers invited Iowa Assistant Attorney General Laura M. Roan, an experienced state murder prosecutor, and Trial Attorney Christopher J. Perras, a federal hate-crimes prosecutor from the Civil Rights Division of the Department of Justice, to assist with the prosecution.
Purham will be sentenced on Nov. 19. The mandatory sentence for first-degree murder in Iowa is life imprisonment without the possibility of parole.
Virginia Man Pleads Guilty to Receipt of Child PornographyRead the Press Release
WASHINGTON - An Alexandria, Virginia man pleaded guilty to one count of receipt of child pornography today in federal court in Alexandria, Virginia.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney G. Zachary Terwilliger for the Eastern District of Virginia, and Assistant Director in Charge Nancy McNamara of the FBI’s Washington Field Office, made the announcement today.
Kerry Sipult, 51, pleaded guilty to one count of receipt of child pornography before Senior Judge Claude M. Hilton of the Eastern District of Virginia. According to the Information to which Sipult pleaded guilty and to other facts he admitted to in his plea agreement, between Aug. 1, 2014 and Oct. 22, 2014, Sipult used a peer-to-peer program to download, and share, child pornography. As part of the investigation, the FBI seized Sipult’s computer and other electronic storage devices and recovered over 4,000 child pornography images and/or videos. Sipult was released from custody subject to electronic monitoring. Sipult is scheduled for sentencing on Jan. 11.
The investigation was conducted by the Washington Field Office’s Child Exploitation and Human Trafficking Task Force, which is composed of FBI agents, deputy U.S. Marshals, detectives from Arlington County Police, Fairfax County Police, Loudoun County Sheriff’s Office, Prince William County Police, Fauquier County Sheriff’s Office, Leesburg Police Department, Alexandria City Police, Virginia State Police and agents of various federal Office of Inspector Generals. Trial Attorney Ralph Paradiso of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Whitney Russell of the Eastern District of Virginia are prosecuting the case.