District Not Recorded

On September 20, 2016, INTERPOL Washington’s Deputy Director Wayne Salzgaber briefed the Story County, Iowa, Board of Supervisors on current programs with the County Sheriff’s Department. The meeting took place during the Board’s regularly scheduled Business Meeting, chaired by Rick Sanders.  Board Members Wayne Clinton and Martin Chitty also attended.

Deputy Director Wayne Salzgaber summarized how the Story County Sheriff’s Office and the State of Iowa support INTERPOL Washington, also known as the U.S. National Central Bureau. Salzgaber said that under Sheriff Paul Fitzgerald, the relationship between INTERPOL Washington and Story County is flourishing.  This is exemplified by the county’s participation in, and support of, numerous INTERPOL Washington initiatives.

For example, Story County consistently sends officials to INTERPOL Washington as “secondees” or “detailees.” Under this program, representatives from federal and local law enforcement organizations work at INTERPOL Washington on a temporary basis, during which time they apply investigative techniques from their home agencies to INTERPOL Washington cases. In return, they learn to leverage INTERPOL’s tools at their home agencies when they return.

Earlier this year, Elizabeth Quinn, Story County Deputy Sheriff, spent 6 months in Washington working In the Human Trafficking and Child Protection Division.  Currently Micah Andersen, Story County Assistant Jail Administrator, is assigned to the Fugitive and Alien Division at INTERPOL Washington. With partnership a core value of INTERPOL, important assignments like these help INTERPOL Washington grow its global police network by maintaining partnerships with federal and local law enforcement agencies as well as international organizations. Salzgaber thanked the Sheriff and the Board for allowing this relationship to grow.

From his prior position as President of the National Sheriff’s Association and other key leadership positions in NSA and Iowa, Sheriff Fitzgerald also strongly advocates state-wide and nationally for INTERPOL’s State and Local Liaison program. This program establishes an INTERPOL liaison in every state, as well as in some large metropolitan areas. The liaisons are officers in the field who can follow up on leads, locate and identify individuals, and make notifications.  According to Salzgaber, “This, the relationship we have with state and locals, is what we value the most . . . because we need to make sure on the federal side that we’re connecting up to our local communities.”

Iowa is also an early adopter, and one of only 12 states participating in, one of INTERPOL Washington’s key tools known as Federation.  Federation allows all U.S. law enforcement agencies to query both domestic and INTERPOL indices in a single search. This enables officers to find out in real time whether the subject of an investigation poses a known transnational and or terrorist criminal threat.  These combined searches can be conducted from both fixed and mobile platforms, including vehicle-mounted and hand-held devices. Salzgaber said that INTERPOL Washington wants to “make sure that every law enforcement officer is connected.”

INTERPOL Washington presents the Story County Board of Supervisors with a token of appreciation for their continued support.  Left to right are: Wayne Clinton, Wayne Salzgaber, Rick Sanders, and Martin Chitty. 

He ended the discussion with his desire to expand and further strengthen the connection that INTERPOL Washington has with state and local law enforcement agencies.

INTERPOL Washington facilitates the exchange of police information and promotes cooperation and assistance among law enforcement authorities around the world. U.S. law enforcement agencies can gain more information about federation by contacting INTERPOL Washington’s Office of the Chief Information Officer at 202-616-9000 or on-line at Nlets at  http://www.nlets.org .

A federal court in Helena, Montana has permanently barred Montana-based attorney James Tarpey, as well as two companies he founded, including Project Philanthropy Inc., a District of Columbia corporation which does business as Donate for a Cause, and Timeshare Closings Inc., a Colorado corporation which does business as Resort Closings Inc., from promoting an allegedly abusive timeshare donation scheme, the Justice Department announced today.  Tarpey and the two companies agreed to the injunction.

According to the complaint, based on false promises of generous tax savings, Tarpey, Donate for a Cause and Timeshare Closings encouraged timeshare owners to donate their unwanted timeshares to Donate for a Cause, a tax-exempt entity organized and operated by Tarpey.  The complaint alleges that the customers receive an appraisal that grossly overvalues the donated timeshare rights and customers use that appraisal to claim a large charitable donation deduction, even when the true market value of the timeshare right is a small fraction of the appraised value.

According to the complaint, the timeshare donation scheme was aggressively marketed via the Internet and through national and local media outlets, including ABC 7 News in Los Angeles, Fox 10 News in Phoenix, Arizona, the TODAY Show and Fox 4 News in Kansas City, Missouri. 

The orders permanently bar Tarpey, Donate for a Cause and Timeshare Closings from promoting or marketing any arrangement that involves charitable contribution deductions claimed on federal tax returns.  The orders also bar Tarpey, Donate for a Cause and Timeshare Closings from preparing, or assisting others in preparing, any property appraisal that will be used in connection with federal taxes.  The orders require Tarpey, Donate for a Cause and Timeshare Closings to post a copy of the injunction on websites that they use to advertise timeshare donations, including but not limited to www.donateforacause.org.  The orders also require that Donate for a Cause notify all of its customers of the injunction and that Tarpey and Timeshare Closings notify their employees involved with timeshare donations of the injunction.

The United States also sued three individuals alleged to be Tarpey’s associates Ron Broyles of California, Curt Thor of Washington and Suzanne Tarpey of Montana.  According to the complaint, these individuals assisted Tarpey in facilitating the timeshare donation scheme.  Thor previously consented to an order permanently barring him from preparing timeshare appraisals and giving advice regarding charitable contribution deductions on federal tax returns.  The government’s claims against Broyles and Suzanne Tarpey remain pending with the court.

The Internal Revenue Service (IRS) warns taxpayers to be wary of scams that involve claiming inflated charitable contribution deductions and recommends anyone who may have improperly claimed such deductions to consult a tax professional.  Guidelines for valuing and deducting property donations to charity can be found in Publication 526 and Publication 561, available on IRS.gov.

Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, thanked Revenue Agent Kate Lopez of the IRS, who conducted the investigation and Trial Attorneys Richard G. Rose, Harris J. Phillips and Gretchen E. Nygaard of the Tax Division, who are litigating this case.

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

 

The Department of Justice today awarded grants totaling more than $49 million to state, local and tribal jurisdictions, law enforcement agencies and victim service providers to combat human trafficking across the United States.

Today’s awards include funding to provide comprehensive and specialized services for human trafficking victims, support task forces that investigate and prosecute human trafficking cases, assist child victims of sex trafficking, and support research designed to improve understanding of the nature of human trafficking crimes and develop best practices to prevent and respond to such crimes. Funding comes out of the Office of Justice Programs’ (OJP’s) Office for Victims of Crime, Bureau of Justice Assistance, Office of Juvenile Justice and Delinquency Prevention and National Institute of Justice, and DOJ’s Office on Violence Against Women.

Human trafficking includes sex and labor trafficking of foreign nationals and U.S. citizens of all ages.

“The true measure of our strength as a society is how we treat the most vulnerable among us,” said Attorney General Loretta E. Lynch. “That is why the Department of Justice is committed to fighting human trafficking, a heinous crime that preys on the young and the defenseless. These critical grants will fund efforts across the country to deepen our understanding of this appalling practice, to bring traffickers to justice, and to support survivors as they heal and begin their lives anew.”

This year’s announcement includes awards for $15.8 million to 22 law enforcement agencies and victim service providers to operate multidisciplinary task forces, enabling them to conduct criminal investigations, prosecutions, prevention and community education initiatives to combat human trafficking as well as to provide comprehensive services to trafficking victims. Within each task force location, one award supports the lead law enforcement agency and another award supports the lead victim service provider. The grantees will work collaboratively with other members of the task force, including the U.S. Attorney’s Office; the local prosecutor’s office; federal, state and local law enforcement agencies; and community and system-based service providers. 

More than $20 million was awarded to 34 victim service providers. Some providers received grants to provide comprehensive services to any human trafficking victim identified within a target geographic region. Other providers received grants to offer specialized services for victims of human trafficking, including culturally, linguistically and developmentally-appropriate and trauma-informed services for underserved victims. 

Two states will receive a total of $4.75 million for improving outcomes for child and youth trafficking victims, while three organizations have been awarded a total of $1.2 million to increase services for urban American Indian and Alaska Native victims of sex trafficking. Two individuals have been awarded grants to provide the Office for Victims of Crime with in-house subject matter expertise on the topics of human trafficking task forces and survivor-informed services. In addition, $2.9 million was awarded for training and technical assistance, and more than $2.6 million was awarded to six nonprofit and faith-based organizations to provide mentoring and other direct services to youth victimized by or at risk of domestic sex trafficking and commercial sexual exploitation. A $300,000 grant will fund training and assistance for Office on Violence Against Women grantees to help them plug gaps in services for youth victims of sex trafficking.

Finally, more than $1.7 million supports four research and evaluation projects designed to address gaps in knowledge about human trafficking. Funds will be used to evaluate investigation and prosecution strategies, identify effective approaches for serving human trafficking victims, measure the prevalence of trafficking among homeless and runaway youth, and assess human trafficking in Indian Country.

Twenty five states and the District of Columbia were impacted by these awards: Alaska, Arizona, California, Connecticut, Florida, Georgia, Illinois, Kentucky, Maine, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, Nevada, New York, Pennsylvania, South Carolina, Texas, Virginia, Washington, and Wisconsin. 

 

The Department of Justice and the U.S. Environmental Protection Agency (EPA) and today announced a settlement with Chemoil Corporation that requires the company to retire 65 million renewable fuel credits to resolve alleged violations of the Renewable Fuel Standard (RFS) program.  The current market value of the credits -- along with an additional 7.7 million renewable identification numbers (RINs) already retired by Chemoil in the lead up to this settlement -- is more than $71 million.  Chemoil will also pay a $27 million civil penalty under the settlement, the largest in the history of the EPA’s fuel programs.

The Department of Justice and EPA allege that Chemoil exported at least 48.5 million gallons of biodiesel from 2011 to 2013, but failed to retire the more than 72 million RINs that were generated for the exported fuel.  RINs are credits created when a company produces or imports renewable fuel and can be traded or sold to refiners and fuel importers or exporters to help them comply with the RFS program requirements.

The RFS program requires exporters to retire RINs for renewable fuel like biodiesel, because the fuel exported is no longer available for blending into United States’ fossil fuel supply and, for that reason, cannot be used to meet the renewable fuel volume mandate established by Congress.  If exporters fail to retire the appropriate number and type of RINs associated with the exported fuel, as the United States alleges happened here, it artificially inflates the volume of renewable fuel available for blending in this country and the number of RINs available to meet the renewable fuel volume mandate.  Ensuring exporters comply with the regulations for RIN retirement is critical to the proper functioning and integrity of the RFS program.

“Congress adopted the Renewable Fuel Standards program to achieve significant greenhouse gas emissions reductions, reduce the nation’s dependence on foreign oil, and grow our domestic renewable energy industry,” said Assistant Attorney John C. Cruden for the Department of Justice Environment and Natural Resources Division.  “By ensuring a level playing field within the industry through vigorous compliance monitoring and enforcement, we help ensure that these important Congressional goals are met.”

“This settlement delivers on the greenhouse gas emissions reduction goals that Congress envisioned for the Renewable Fuel Standard,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.  “It’s vital that companies retire renewable fuel credits when exporting fuel abroad.  Upholding this requirement is a key way EPA is working to maintain program integrity and a level playing field for companies that follow the law.” 

EPA discovered the alleged violations as a result of tips from RFS program participants.

EPA is responsible for developing and implementing regulations to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel.  The RFS program - created under the Energy Policy Act of 2005 - was developed in collaboration with refiners, renewable fuel producers and many other stakeholders.  It was expanded and strengthened under the Energy Independence and Security Act of 2007, which was designed to encourage the blending of renewable fuels into our nation’s motor vehicle fuel supply to reduce the nation’s dependence on foreign oil, help grow the nation’s renewable energy industry and achieve greenhouse gas reductions.

Chemoil is based in San Francisco, California, and sells marine, aviation, diesel, renewable fuels and residual oil products.

The proposed settlement, lodged today in the U.S. District Court for the Northern District of California, is subject to a 30-day public comment period and final court approval.

For more information on the settlement and for information on how to submit a comment, visit: https://www.epa.gov/enforcement/chemoil-corporation-renewable-fuel-standard-settlement.

Branch Banking & Trust Company (BB&T) has agreed to pay the United States $83 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today.  BB&T is headquartered in Winston-Salem, North Carolina.

“The FHA program depends on Direct Endorsement Lenders endorsing only eligible loans for FHA mortgage insurance, and complying with HUD’s quality control requirements,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Lenders like BB&T that participate in the FHA program must make adherence to the FHA program rules a priority.  The Department has and will continue to hold accountable those lenders that prioritize profits over program compliance.”

“While profiting from the FHA program, BB&T exposed the taxpayers to losses by failing to comply with HUD guidelines, and then took the additional step of falsely certifying that it had complied with such guidelines,” said U.S. Attorney John Horn of the Northern District of Georgia. “This settlement recovers substantial losses caused by BB&T’s decision to place its own profits above its commitment to adhere to HUD underwriting and quality control requirements.”

Since at least January 2006, BB&T has participated as a Direct Endorsement lender (DEL) in the FHA insurance program.  A DEL has the authority to originate, underwrite, and endorse mortgages for FHA insurance.  If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan.  Under the DEL program, the FHA does not review a loan before it is endorsed for FHA insurance for compliance with FHA’s credit and eligibility standards, but instead relies on the efforts of the DEL to verify compliance.  DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance.

The settlement announced today resolves allegations that BB&T failed to comply with certain FHA origination, underwriting and quality control requirements.  As part of the settlement, BB&T admitted to the following facts: Between Jan. 1, 2006 and Sept. 30, 2014, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s quality control requirements.  BB&T significantly increased its loan volume between 2006 and 2009—more than doubling all loan originations, while increasing the number of FHA insured loans six fold.  This increase in volume was accompanied by an increase in the number of loans internally rated “Serious-Marketability” by BB&T’s quality control department —the most significant quality control defect rating and a defect that rendered a loan ineligible for FHA insurance.  Between 2007 and 2011, the percentage of loans underwritten by BB&T each year that were rated Serious-Marketability by its quality control department always exceeded 30 percent, and exceeded as much as 50 percent in 2010 and 2011.  BB&T nevertheless endorsed many of these loans for FHA insurance and, if they defaulted, sought payment from HUD for the insured loans.

The monthly reviews and reports that BB&T’s quality control department shared with management alerted BB&T to deficiencies in many of its FHA loans.  A 2010 internal memorandum at BB&T stated that “increased volume of FHA requests and changes to regulatory requirements have resulted in origination, processing and underwriting errors.  Some employees are not applying current and accurate FHA guidelines.”  A proposal to improve BB&T’s underwriting of FHA loans with additional training as well as a testing and certification process for underwriters was prepared in 2010, but neither recommendation was implemented until after 2014.

Additionally, between 2006 and 2014, BB&T’s quality control process did not satisfy certain FHA requirements.  Although loan volume more than doubled from 2006 to 2009, the number of quality control employees remained the same.  The quality control department requested additional employees in 2009, yet new employees were not added until 2013.  Because BB&T’s quality control department did not have adequate staff, it instituted a cap on the number of loans it reviewed.  As a result, between 2009 and 2014, the quality control department did not always review the number of loans necessary to comply with HUD’s loan review sampling requirements.  Additionally, BB&T did not perform reviews of its lender branch offices, as required by HUD, before beginning the reviews again in late 2014.

Finally, since at least 2006, HUD has required self-reporting.  However, despite internal ratings showing that 30 percent or more of the loans underwritten by BB&T between 2007 and 2011 had Serious-Marketability findings, and were thus ineligible for FHA insurance, BB&T did not self-report any loans containing material underwriting defects until 2013.

As a result of BB&T’s conduct and omissions, HUD insured loans endorsed by BB&T that were not eligible for FHA mortgage insurance under the DEL program, and that HUD would not otherwise have insured.  HUD subsequently incurred substantial losses when it paid insurance claims on those loans.

“Lenders are required to apply FHA’s standards to each mortgage loan we insure and to honestly certify to us that they’ve done so,” said Associate General Counsel Dane M. Narode for HUD’s Program Enforcement.  “Today’s settlement reminds all lenders that sound underwriting is the bedrock of a healthy housing market and the financial futures of homeowners we support.”

“Today’s settlement agreement resolves allegations that BB&T, entrusted by American taxpayers to comply with FHA regulations, failed to conform with certain FHA origination, underwriting and quality control requirements,” said Inspector General David A. Montoya for HUD.  “This settlement demonstrates a continued commitment to address the failures and halt the business practices that potentially harm the FHA program and its participants.”

The settlement was the result of a joint investigation conducted by HUD, the HUD Office of Inspector General, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of Georgia.  The claims asserted against BB&T are allegations only, and there has been no determination of liability.

Vibra Healthcare LLC (Vibra), a national hospital chain headquartered in Mechanicsburg, Pennsylvania, has agreed to $32.7 million, plus interest, to resolve claims that Vibra violated the False Claims Act by billing Medicare for medically unnecessary services, the Department of Justice announced today. 

“Medicare beneficiaries are entitled to receive care that is determined by their clinical needs and not the financial interests of healthcare providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “All providers of taxpayer-funded federal healthcare services, whether contractors or direct billers, will be held accountable when their actions cause false claims for medically unnecessary services to be submitted.”

Vibra operates approximately 36 freestanding long term care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs) in 18 states.  LTCHs provide inpatient hospital services for patients whose medically complex conditions require long hospital stays and programs of care.  IRFs are intended for patients needing rehabilitative services that require hospital-level care.  The government alleged that between 2006 and 2013, Vibra admitted numerous patients to five of its LTCHs and to one of its IRFs who did not demonstrate signs or symptoms that would qualify them for admission.  Moreover, Vibra allegedly extended the stays of its LTCH patients without regard to medical necessity, qualification and/or quality of care.  In some instances, Vibra allegedly ignored the recommendations of its own clinicians, who deemed these patients ready for discharge.

“Pursuing and recovering fraudulent billing for unnecessary services is a priority of my office,” stated U.S. Attorney John E. Kuhn Jr. for the Western District of Kentucky.  “This significant case against Vibra Healthcare and today’s settlement agreement is but one example of the vigorous work against healthcare fraud taking place in the Western District of Kentucky and across the nation.”

As part of the settlement, Vibra also agreed to enter into a chain-wide corporate integrity agreement with the Inspector General of the U.S. Department of Health and Human Services. 

“Medical necessity is fundamental if health providers wish to claim taxpayer funds for medical care,” said Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG).  “OIG is committed to protecting precious Medicare dollars and ensuring that beneficiaries receive quality, necessary long term care.”

Part of the allegations resolved by this settlement were originally filed under the qui tam or whistleblower provisions of the False Claims Act by Sylvia Daniel, a former health information coder at Vibra Hospital of Southeastern Michigan.  Daniel filed her suit in the Southern District of Texas, where one of Vibra’s LTCHs was located.  Under the False Claims Act, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery.  Daniel will receive at least $4 million.   

This settlement illustrates the government’s emphasis on combating healthcare fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $30.7 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal healthcare programs.

This matter was handled by the Civil Division’s Commercial Litigation Branch; the U.S. Attorneys’ Offices for the Southern District of Texas in Houston and for the Western District of Kentucky; and the HHS-OIG.  The qui tam case is captioned United States ex rel. Daniel v. Vibra Healthcare, LLC, Civil Action No. 10-5099 (S.D. Tex.).              

The claims resolved by the settlements are allegations only and there has been no determination of liability.  

The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a settlement with Sears Home Improvement Products Inc. that resolves alleged violations of the federal Lead Renovation, Repair and Painting (RRP) Rule for work performed by Sears’ contractors during home renovation projects across the country.  Under the settlement, Sears will implement a comprehensive, corporate-wide program to ensure that the contractors it hires to perform work are properly certified and follow required procedures to prevent exposure to lead dust from home renovation activities.  Sears will also pay a $400,000 civil penalty.

“This settlement will help prevent children and workers’ exposure to lead during home renovations in communities across the United States by ensuring that Sears’ contractors are fully aware of their obligations under lead safety regulations,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “Sears is required to implement system wide changes across the corporation which will provide additional protection for consumers and bring the company into compliance with the law.”   

“Today’s settlement will have a widespread impact across the home improvement industry, significantly reducing exposure to lead paint dust among children and vulnerable citizens,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.  “In order to contract with Sears, a worker must follow lead safe practices. Contractors will carry this certification to every job they do.  EPA expects all renovation companies to ensure their contractors follow these critical laws that protect public health.”

EPA discovered the alleged violations through a review of Sears’ records from projects performed by the company’s renovation contractors at numerous projects in cities across California and in Georgia, Minnesota, Nevada, New York and Wisconsin. 

The government also alleged that Sears failed to establish, retain, or provide compliance documentation showing that specific contractors had been certified by EPA, had been properly trained, had used lead-safe work practices, or had performed required post-renovation cleaning.

Under the settlement, Sears will implement a company-wide program to ensure that the contractors it hires to perform work for its customers comply with the RRP Rule during renovations of any child-occupied facilities, such as day-care centers and pre-schools and any housing that was built before 1978.  For these projects, Sears must contract with only EPA-certified and state-certified firms and renovators, ensure they maintain certification and ensure they use lead safe work practices checklists during renovations.

Sears will also add a link on its website to EPA’s content on lead-safe work practices and use a company-wide system to actively track the RRP firm and renovator certifications of its contractors.  In addition, Sears must suspend any contractor that is not operating in compliance with the RRP Rule, investigate all reports of potential noncompliance and ensure that any violations are corrected and reported to EPA.

EPA reached a similar settlement with home improvement retailer Lowe’s Home Centers in 2014 requiring the company to implement a comprehensive, corporate-wide compliance program at its over 1,700 stores nationwide to ensure that the contractors it hires to perform work minimize lead dust from home renovation activities.

The RRP Rule, which is a part of the federal Toxic Substances Control Act, is intended to ensure that owners and occupants of housing built before 1978, as well as any child-occupied facilities, receive information on lead-based paint hazards before renovations begin, that individuals performing such renovations are properly trained and certified by EPA and follow specific work practices to reduce the potential for lead-based paint exposure.  Home improvement companies such as Sears that contract with renovators to perform renovation work for their customers must ensure that those contractors comply with all of the requirements of the RRP Rule.

Lead-based paint was banned in 1978 but still remains in many homes and apartments across the country.  Lead dust hazards can occur when lead paint deteriorates or is disrupted during home renovation and remodeling activities.  Lead exposure can cause a range of health problems, from behavioral disorders and learning disabilities to seizures and death, putting young children at the greatest risk because their nervous systems are still developing.  A blood lead test is the only way to determine if a child has a high lead level.  Parents who think their child has been in contact with lead dust should contact their child's health care provider.

Renovation firms that are certified under EPA’s RRP Rule are encouraged to display EPA’s “Lead-Safe” logo on worker’s uniforms, signs, websites and other material, as appropriate.  Consumers can protect themselves by looking for the logo before hiring a renovation firm.  Consumers can learn more about the RRP Rule and hiring a certified firm by calling the National Lead Information Center at 1 (800) 424-LEAD or visiting www.epa.gov/lead.

Sears Home Improvement Products is part of the Sears Home Services division, within Sears Holdings Corporation.  The Home Services division makes over 12 million service and installation calls annually through a network of 6,700 technicians and Sears’ 705 retail stores in the United States.  Sears Home Improvement Products is headquartered in Longwood, Florida, does business in 45 states, and maintains 58 district offices.

The consent decree was lodged in the U.S. District Court for the Northern District Court of Illinois.  Notice of the lodging of the consent decree will appear in the Federal Register allowing for a 30-day public comment period before the consent decree can be entered by the court as final judgment.  To view the consent decree: www.justice.gov/enrd/Consent_Decrees.html.

More information about EPA’s enforcement of the RRP Rule: www.epa.gov/lead/enforcing-lead-laws-and-regulations

Violations of the lead-based paint RRP Rule regulations can be reported to EPA: www.epa.gov/enforcement/report-environmental-violations

Used Secret Foreign Accounts to Hide over $7 Million in Funds and Evade Taxes

A New York City man pleaded guilty today to a criminal information charging him with tax evasion for tax years 2003 through 2005 and 2007 through 2010, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Robert L. Capers of the Eastern District of New York.

“Mr. Hager concealed over $7.3 million in undeclared foreign accounts in Switzerland and Israel and used a sham British Virgin Island entity in order to evade over $650,000 in U.S. taxes,” said Principal Deputy Assistant Attorney General Ciraolo. “As this case demonstrates, the Department and the Internal Revenue Service (IRS), together with our global partners, are successfully working on a daily basis to locate such undeclared accounts, identify those responsible and hold them accountable.”

According to information presented in court, between 1987 through 2011, Markus Hager, 68, utilized a series of undeclared foreign financial accounts to evade his individual income taxes by concealing assets and income from the IRS in those accounts.  Between 1987 and 2008, Hager maintained several undeclared accounts at UBS, including two numbered accounts and an account held in the name of Contactus Partnership Associated S.A. (Contactus), a sham British Virgin Islands entity.  By the close of 2004, the value of Hager’s undeclared accounts at UBS exceeded $7.3 million. 

Hager closed the UBS accounts in 2008 and transferred the assets to a newly opened account at Clariden Leu, which he controlled and held in the name of Contactus.  Shortly thereafter, Hager closed the Contactus account at Clariden Leu and transferred the assets to a newly opened account held in the name of the same sham entity at a different Swiss bank.  Hager caused that Swiss bank to falsely record Hager’s Belgian cousin as the owner of the assets in the Contactus account.  Approximately six months later, Hager closed the Contactus account at the Swiss bank and transferred the assets to an account at a bank in Israel that Hager caused to be opened in the name of a different Belgian cousin.

From 2005 to 2011, Hager also controlled an undeclared account at Bank Leumi in Israel, which he falsely held under the name of a relative who was not a U.S. person and who resided outside the United States.  In February 2010, after obtaining an Israeli Identity Card, Hager opened an account in his own name at Bank Leumi in Israel but falsely reported that he lived in the United Kingdom and signed a document, under the penalties of perjury, on which he falsely claimed that he was not a U.S. citizen.

According to the information filed, Hager repatriated funds from his undeclared foreign financial accounts by having an attorney draft a sham loan agreement between himself and Contactus and wiring funds from some of his undeclared foreign financial accounts into his attorney’s escrow account.

According to the information filed, Hager filed false federal and New York State income tax returns on which he failed to report the income from his foreign financial accounts and failed to pay tax on that income.  According to the information, Hager evaded approximately $652,580 in federal taxes for tax years 2003 through 2005 and 2007 through 2010.  Hager also failed to report his ownership and control of his foreign financial accounts to the Department of the Treasury on a Report of Foreign Bank and Financial Account even though an accounting firm had informed Hager of his obligation to do so and advised him of the civil and criminal penalties he could suffer for the failure to do so.

“In pleading guilty today, Markus Hager became another example of an individual who attempted to conceal the true source of his money‎ and was caught,” said Chief Richard Weber of  IRS-Criminal Investigation (IRS-CI).  “IRS-CI will continue to take every step necessary to ferret out those who attempt to avoid their reporting obligations under the law.”

Sentencing has been set for ­Jan. 4, 2017.  Hager faces a statutory maximum sentence of five years in prison, as well as a term of supervised release and monetary penalties.  According to the plea agreement, Hager agreed to pay restitution to the IRS.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Capers commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Senior Litigation Counsel Mark F. Daly and Assistant Chief Andrew Kameros of the Tax Division and Assistant U.S. Attorney Erik Paulsen of the Eastern District of New York, who are prosecuting this case.

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

On September 27, 2016, Massachusetts State Representative Harold P. Naughton, Jr., (D-MA), and Chairman of the Joint Committee on Public Safety and Homeland Security, met with INTERPOL Washington leadership to discuss matters of mutual interest.

 

The visit included an overview of INTERPOL Washington operations as well as a discussion of how Massachusetts’ law enforcement agencies can benefit from federation. This process enables investigators to query both domestic and INTERPOL indices in a single search transaction, and to make real-time, concurrent determination of the domestic and/or international criminal or terrorist threat posed by persons of investigative interest. Federated searches can be conducted from both fixed and mobile platforms, including vehicle mounted and hand-held devices. Currently, 12 states and the District of Columbia have federated their search queries.

 

The decision to federate rests with individual states.  U.S. law enforcement agencies can gain more information about federation by contacting INTERPOL Washington’s Office of the Chief Information Officer at 202-616-9000 or on-line at Nlets at  http://www.nlets.org .

 

A retired officer of the Royal Canadian Mounted Police pleaded guilty today to 10 money laundering offenses in the U.S. District Court for the District of Maine, announced Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  Gregory R. Logan, 59, of St. John, New Brunswick, was extradited to the United States on March 11.  Logan, who has been detained since his extradition, will remain in jail pending his sentencing hearing before U.S. District Judge John A. Woodcock Jr. for the District of Maine in Bangor, Maine.

Logan was indicted in the District of Maine in November 2012 and charged with conspiracy, smuggling and money laundering.  All of the counts arose from Logan’s scheme to smuggle narwhal tusks from Canada to the United States for sale to American customers and transfer the proceeds of those sales back to Canada.  Logan was arrested in Canada, based on a request from the United States, in December 2013.  Logan pleaded guilty to a related wildlife smuggling crime in Canada and the terms of his extradition limited the case against him in the United States to the money laundering offenses.  Also charged in the original indictment was Andrew J. Zarauskas of Union, New Jersey.  Zarauskas was convicted after a jury trial in Bangor and sentenced to 33 months in prison.

Narwhals are medium-sized toothed whales that are native to the Arctic.  They are known for their distinctive ivory tusk which can grow to more than eight feet in length.  Given the threats to their population, narwhals are protected domestically by the Marine Mammal Protection Act and internationally by the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) – an international treaty to which more than 170 countries, including the United States and Canada, are parties.  It is illegal to import narwhals, or their parts, into the United States for commercial purposes.  Further, any importation must be accompanied by a permit and must be declared to U.S. Customs and Border Protection and the U.S. Fish and Wildlife Service.

According to the indictment, Logan smuggled more than 250 narwhal tusks into the United States between 2000 and 2010.  As part of the plea agreement, Logan agreed that the market value of the narwhal tusks in this case was between $1.5 million and $3 million. Knowing that the tusks were illegal to bring into the United States and sell, Logan transported them across the border in false compartments in his vehicle and trailer.  Logan utilized a shipping store in Ellsworth, Maine, to send the tusks to customers throughout the United States, including Zarauskas and others.  Logan knew that his customers would re-sell the tusks for a profit and in an attempt to increase that re-sale price, Logan would occasionally provide fraudulent documentation claiming that the tusks had originally belonged to a private collector in Maine who had acquired them legally.

In addition to shipping the tusks from Maine, Logan maintained a post office box the Ellsworth shipping store as well as an account at a bank in Bangor.  Logan instructed his customers to send payment in the form of checks to the post office box, or wire money directly to his Maine bank account.  Logan then transported the money to Canada by having the shipping store forward his mail to him in Canada, and by using an ATM card to withdraw money from his Maine bank account at Canadian ATM machines.  At times, Logan also directed his customers to send funds directly to him in Canada.

Logan faces a maximum sentence of 20 years’ imprisonment and a $500,000 fine, per count of conviction.  The case was investigated by special agents of the National Oceanic and Atmospheric Administration, Office of Law Enforcement; U.S. Fish & Wildlife Service, Office of Law Enforcement; and Wildlife Officers from Environment and Climate Change Canada.  The case is being prosecuted by Trial Attorneys James B. Nelson and Lauren D. Steele.   

El Acuerdo Conciliatorio Prevé Más de $165.000 en Indemnizaciones a Prestatarios Hispanos Quienes Obtuvieron  Préstamos al Consumidor en Texas

El Departamento de Justicia anunció hoy que Charter Bank de Corpus Christi, Texas, mantendrá políticas de establecimiento de precios uniformes y pagará más de $165.000 dólares como parte de un acuerdo conciliatorio en resolución de alegatos de que adoptó un patrón o una práctica de discriminación en base al origen nacional.

El acuerdo conciliatorio, que está sujeto a la aprobación del tribunal, fue radicado junto con la demanda del departamento en el Tribunal Federal de Distrito del Distrito Sur de Texas.  La demanda alega que Charter violó la Ley de Igualdad de Oportunidades de Crédito [Equal Credit Opportunity Act (ECOA)] entre 2009 y 2014 al cobrar tasas de interés más altas a prestatarios hispanos que a prestatarios no hispanos con perfiles similares, en préstamos al consumidor garantizados por vehículos.  La discriminación afectó a alrededor de 500 préstamos realizados a través de las sucursales del banco.  El préstamo al consumidor con garantía vehicular le permite al consumidor pedir prestado dinero del banco utilizando el capital de un vehículo que ya pertenece al cliente.  La demanda alega que la discriminación se produjo porque Charter les permitió a sus empleados utilizar su propio criterio para ajustar las tasas de interés al alza o a la baja  por aproximadamente tres puntos porcentuales, sin que esto se basara en el riesgo de crédito del prestatario.

“Las prácticas de otorgamiento de préstamos que discriminan a los clientes debido a su origen nacional violan la ley y ponen en peligro la base de una economía libre y justa,” declaró la Secretaria de Justicia Auxiliar Adjunta Principal Vanita Gupta, jefa de la División de Derechos Civiles del Departamento de Justicia.  “Las familias trabajadoras dependen del acceso al crédito para poder tomar dinero prestado para pagar por las necesidades de la vida diaria.  Este acuerdo conciliatorio garantizará que Charter Bank cumpla con la ley, proporcione reparación a los consumidores y protecciones contra la discriminación en el futuro.”

“El otorgamiento justo de préstamos por los bancos, independientemente del origen nacional, está garantizado por la ley,” declaró el Fiscal Federal Kenneth Magidson del Distrito Sur de Texas.  “Este caso asociado a Charter Bank demuestra nuestro compromiso de asegurar que esto se cumpla.”

La demanda se originó a partir de una remisión en el 2014 a la División de Derechos Civiles del departamento por parte del Federal Deposit Insurance Corporation (FDIC).  Charter es regulado por el FDIC.

Según el acuerdo conciliatorio, Charter pagará $165.820 a víctimas hispanas de la discriminación, monitoreará sus préstamos con respecto a potenciales disparidades basadas en el origen nacional y brindará capacitación en oportunidades iguales de crédito a sus empleados.  Con anterioridad al acuerdo conciliatorio, Charter realizó una revisión de sus políticas de establecimiento de precios de modo a incluir normas objetivas, no discrecionales y no discriminatorias para la determinación de las tasas de interés para préstamos a consumidores.  Este acuerdo conciliatorio exige que Charter mantenga las políticas revisadas durante al menos cuatro años.

La Sección de Vivienda y Cumplimiento de la Ley Civil de la División de Derechos Civiles es responsable, en el Departamento de Justicia, de hacer valer las leyes de otorgamiento justo de préstamos.  Desde 2010, la División de Derechos Civiles ha provisto más de $ 1,5 mil millones en reparación monetaria para prestatarios individuales y comunidades afectadas al hacer valer la Ley de Vivienda Justa, la ECOA y la Ley de Amparo Civil para Miembros del Servicio Militar  [Servicemembers Civil Relief Act (SCRA)].  Los informes anuales del Secretario de Justicia de EE.UU. al Congreso sobre el cumplimiento de la ECOA destacan los logros del departamento en el otorgamiento de préstamos justos y están disponibles en www.justice.gov/crt/publications/.

La División de Derechos Civiles y la Fiscalía Federal del Distrito Sur de Texas son miembros del Grupo de Trabajo de Coacción contra el Fraude Financiero, establecido por el Presidente Obama para llevar adelante una iniciativa agresiva, coordinada y proactiva para la investigación y el enjuiciamiento de los delitos financieros.  El grupo de trabajo incluye a representantes de una amplia gama de dependencias federales, autoridades reguladoras, inspectores generales y miembros de las fuerzas del orden público estatales y locales, quienes, trabajando en conjunto, aprovechan un poderoso espectro de recursos de coacción penal y civil.  El grupo de trabajo está trabajando para mejorar la labor en todo el poder ejecutivo federal, y con asociados estatales y locales, para investigar y enjuiciar delitos financieros importantes, asegurar un castigo justo y eficaz para quienes cometan delitos financieros, combatir la discriminación en los mercados de préstamos y financieros, y recuperar fondos para las víctimas de delitos financieros.  Para obtener más información sobre el grupo de trabajo, visite www.StopFraud.gov.

Para obtener información adicional sobre la labor del Departamento de Justicia para hacer valer las leyes de otorgamiento justo de préstamos, visite el portal del departamento www.justice.gov/fairhousing.

A dual Jamaican and U.S. citizen pleaded guilty for her role in a Jamaican-based fraudulent lottery scheme, the Department of Justice announced today.

Felecia Roxanne Lindo, 32, who is currently residing in New York, pleaded guilty in the Western District of North Carolina to one count of conspiracy to commit wire fraud.  Lindo was charged in connection with a fraudulent lottery scheme based in Jamaica that induced victims in the United States to send Lindo hundreds of thousands of dollars to cover purported fees for lottery winnings that victims had not won and never received.  Sentencing will be scheduled at a later date.

“The Justice Department is committed to prosecuting those responsible for fraudulent international lottery schemes, which frequently target elderly Americans,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will continue to pursue and prosecute this criminal activity, wherever the fraudsters may be.”

“Today’s prosecution represents another step in our efforts to stem the tide of international scams preying on innocent Americans,” said U.S. Attorney Jill Westmorland Rose for the Western District of North Carolina.  “Fraudsters located outside the United States frequently rely on co-conspirators in the United States to help their scams succeed.  Such illegal conduct will be investigated and prosecuted.”

This prosecution is part of the Department of Justice’s effort working with federal and local law enforcement to combat fraudulent lottery schemes in Jamaica preying on American citizens.  According to the U.S. Postal Inspection Service, Americans have lost tens of millions of dollars to fraudulent foreign lotteries.

Lindo pleaded guilty to one count of conspiracy to commit wire fraud with enhanced penalties for telemarketing.  As part of her guilty plea, Lindo acknowledged that from in or about 2011 through at least in or about September 2012, Lindo was a member of a conspiracy that targeted victims in the United States. Victims of the scheme received a telephone call stating that they had won money in a sweepstakes or lottery.  Victims were instructed to send thousands of dollars for fees or other expenses in order to release their purported lottery winnings.  Victims sent hundreds of thousands of dollars to Lindo in the United States, who then forwarded a portion of the money to Jamaica.  Lindo acknowledged there was no lottery and no winnings were paid and that she kept some the victims’ money for her own benefit.

“The Postal Inspection Service seeks to stop the victimization of American citizens, many of whom are older Americans, by those engaged in international lottery schemes,” said Inspector in Charge David W. Bosch of the U.S. Postal Inspection Service’s Philadelphia, Pennsylvania Division. “Regardless whether these criminals reside within our borders or beyond, we will continue to work with our law enforcement partners here and abroad to bring these offenders to justice.”

Principal Deputy Assistant Attorney General Mizer and U.S. Attorney Rose commended the investigative efforts of the U.S. Postal Inspection Service and the Internal Revenue Service Criminal Investigation.  The case is being prosecuted by Trial Attorney Raquel Toledo of the Civil Division’s Consumer Protection Branch, with the assistance of Assistant U.S. Attorney Kelli H. Ferry of the Western District of North Carolina.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the Western District of North Carolina, visit its website at https://www.justice.gov/usao-wdnc.

The Department of Justice announced today that Vania Lee Allen has been sentenced to 40 months in prison for her role in a Jamaica-based lottery fraud scheme, followed by three years of supervised release.  Allen was also order to pay $117,000 in restitution.

Allen, 30, pleaded guilty on June 22 in the Southern District of Georgia to one count of conspiracy to commit wire fraud and false impersonation of an employee of the United States.  

“Lottery fraud scams based in Jamaica targeting Americans typically need help from at least one co-conspirator in the United States,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Impersonating an FBI agent to convince an innocent victim that this so-called international lottery is real is deceitful, pure and simple.  The Justice Department will actively pursue and charge those who participate in such criminal activity.”

As part of her guilty plea, Allen acknowledged that she and a co-conspirator in Jamaica sought to unlawfully enrich themselves through a fraudulent lottery scheme targeting an elderly resident of Evans, Georgia. 

An indictment charging Allen was filed on March 3.  According to the indictment, Allen’s co-conspirator falsely informed the victim that he had won money in a lottery and instructed the victim to make payments to various people in order to collect the purported lottery winnings.  As part of her plea agreement, Allen acknowledged that in order to induce the victim to continue to make payments as directed by her co-conspirator, Allen traveled from Jamaica to the United States to meet with the victim personally.  Allen also acknowledged that when she met the victim, she falsely portrayed herself as a FBI agent, provided the victim with a cell phone, and directed him to speak with the person on the line, who was Allen’s co-conspirator in Jamaica.

“The prison sentence given by the Court demonstrates the significant consequences of engaging in fraud designed to steal from Americans,” said U.S. Attorney Edward J. Tarver of the Southern District of Georgia.  “International lottery scams will not be allowed to continually target the most vulnerable segments of our communities without fear of severe consequences.  This U.S. Attorney’s Office and the Department of Justice’s Consumer Protection Branch will prosecute fraudsters whether they operate from inside or outside of the United States.”

“The Postal Inspection Service seeks to stop the victimization of American citizens, many of whom are older Americans, by those engaged in international lottery schemes,” said Inspector in Charge David W. Bosch of the U.S. Postal Inspection Service’s Philadelphia, Pennsylvania Division. “Today’s sentencing demonstrates there are no safe havens for these international criminals, who attempt to hide their criminal misdeeds behind their country’s borders.”

This prosecution is part of the Department of Justice’s effort to work with federal and local law enforcement to combat fraudulent lottery schemes in Jamaica that prey on U.S. citizens.  According to the U.S. Postal Inspection Service, Americans have lost tens of millions of dollars to fraudulent foreign lotteries.

The case was prosecuted by Trial Attorney Clint Narver of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney C. Troy Clark of the Southern District of Georgia.  The case was investigated by the U.S. Postal Inspection Service and the Columbia County Georgia Sherriff’s Office.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.  For more information about the U.S. Attorney’s Office for the Southern District of Georgia, visit its website at http://www.justice.gov/usao-sdga.

WASHINGTON – Attorney General Loretta E. Lynch released the following statement on the departure, effective Oct. 15, 2016, of Assistant Attorney General for National Security John P. Carlin: 

“John Carlin has been a trusted and tireless leader of the Justice Department’s National Security Division.  He is wholly devoted to the department’ s most important mission – protecting our country against acts of terrorism and other national security threats – and he has set a high standard by relentlessly pursuing those who seek to harm our people and threaten our assets.  For the better part of two decades at the Department of Justice, John distinguished himself as a leader who skillfully used all the tools at his disposal to enhance our public safety and uphold our national security.  I have come to rely heavily on his sound judgment and clear vision as he handled some of the most challenging issues the department faced.  He exemplifies the highest standards of excellence, integrity, and professionalism in public service.” 

“As Assistant Attorney General, John helped lead the department’s response to terrorist threats ranging from the Boston Marathon bombing to the recent bombings in New York and New Jersey.  He oversaw the unprecedented indictment of five members of the Chinese military for cyber-enabled economic espionage and the investigation of the attack on Sony Pictures Entertainment’s computer systems.  And he forged crucial collaborations with our partners in the intelligence community, law enforcement, and the private sector, enhancing our collective ability to detect and deter threats as they arise.”

“I thank John for his extraordinary service to the Department of Justice and to the nation, and I wish him all the best in his future endeavors.”

The owner and manager of a New Jersey feedstock collector and processor pleaded guilty to conspiracy and obstruction for his role in a scheme that generated over $6 million in fraudulent tax credits and the U.S. Environmental Protection Agency (EPA) renewable fuels credits (RIN credits) connected to the purported production of biodiesel fuel.

Malek Jalal, 52, pleaded guilty before U.S. District Magistrate Judge Norah McCann King for the Southern District of Ohio, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, Acting U.S. Attorney Benjamin C. Glassman for the Southern District of Ohio, Special Agent in Charge Kathy A. Enstrom for the Internal Revenue Service’s Criminal Investigation and Acting Special Agent in Charge John Gauthier of EPA’s Criminal Enforcement Program in Ohio.

According to his plea, Jalal engaged in a scheme with other coconspirators to fraudulently claim tax credits and RIN credits multiple times on the same loads of fuel.  Jalal, who owned Unity Fuels, bought fuel from a New York-based company that arranged for tax credits and RIN credits to be claimed on it.  Unity Fuels then blended the fuel with other material and sold it back to the New York company in order to claim tax credits and RIN credits again.  Jalal also admitted to obstruction of justice for providing a federal grand jury with altered and falsified documents and to destroying other documents in connection with the subpoena.

“Congress enacted programs incentivizing the production of biofuels in order to make the United States more energy independent and to modernize our energy economy,” said Assistant Attorney General Cruden.  “The fraud perpetrated by Mr. Jalal and his co-conspirators undermines these important public policies.  This case demonstrates that the Justice Department will vigorously prosecute those seeking to manipulate these programs for personal gain.”

“Violations of renewable fuels laws can have serious impacts on the marketplace and hurt companies that play by the rules,” said Acting Special Agent in Charge Gauthier.  “EPA and its law enforcement partners will continue to protect public health and the environment by prosecuting those who blatantly violate laws that reduce greenhouse gas emissions.”

Conspiracy is punishable by up to five years in prison. Obstruction is punishable by up to 20 years in prison.  U.S. District Judge Graham will determine the sentence following a pre-sentence investigation by the court.

Assistant Attorney General Cruden and Acting U.S. Attorney Glassman commended the cooperative investigation by law enforcement, as well as Department of Justice Trial Attorney Adam Cullman, Senior Trial Attorney Jeremy Korzenik and Assistant United States Attorney J. Michael Marous, who represented the United States in this case. 

Kirby Inland Marine L.P. has agreed to pay $4.9 million in Clean Water Act civil penalties and to implement fleet-wide operational improvements to settle claims stemming from a 4,000-barrel (168,000-gallon) oil spill in the Houston Ship Channel in March 2014, the Department of Justice and the Coast Guard announced today.  

In its complaint, filed today in the U.S. District Court for the Southern District of Texas along with the notice of lodging of a consent decree, the United States alleges that Kirby is liable under the Clean Water Act for the oil spill.  The spill occurred on March 22, 2014, when a Kirby tow boat, the Miss Susan, was pushing two 300-foot oil barges in the “Texas City Y” area of the Houston Ship Channel in fog conditions.  Despite detecting the nearby presence of a 585-foot bulk cargo ship, the Summer Wind, traveling up the Houston Ship Channel, Kirby’s tow boat and barges tried to cross the channel in front of the cargo ship.  As a result, Kirby’s lead oil barge was struck by the cargo ship and approximately 4,000 barrels of heavy marine fuel oil spilled out of the barge into the waterway. From there, oil flowed out of the channel and spread down the Texas coastline.  Approximately 160 miles of shoreline were oiled as a result of the spill, including sensitive marsh habitat, the national wildlife refuge on Matagorda Island, Mustang Island State Park and Padre Island National Seashore.  A full assessment of the injuries caused by the spill to marine and terrestrial natural resources is ongoing and will be addressed separately.

“This settlement sends a clear message that vessel owners and operators have a responsibility to protect our waters, people and the environment from oil spills and those who violate that duty will be held accountable under the law,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “The remedial measures in this agreement will upgrade navigational equipment, provide employee training, and improve operational practices across an entire fleet of vessels.” 

“This case illustrates the inherent risk in transporting oil and other chemicals along our waterways,” said Eighth Coast Guard District Commander, Rear Adm. David Callahan. “The Coast Guard remains committed to enforcement, prevention and response with regards to our nation's waterways and natural resources.”

In addition to payment of the civil penalties, Kirby in the consent decree commits to improve its operations across its entire fleet of hundreds of vessels operating in the inland waters of the United States.  These remedial measures require Kirby to install enhanced navigational equipment on vessels, provide employee training on the new and enhanced equipment, provide additional navigation skills training, including a simulator-based exercise involving a Texas City Y scenario and improved operational practices such as entering complete tow dimensions in each vessel’s automatic identification systems before embarking on every transit.  As part of the settlement, Kirby also agrees to waive any limits on its liability under the Oil Pollution Act related to the oil spill incident at issue in this case.

The remedial measures and the penalties to be paid by Kirby under the consent decree are in addition to the costs the company has already incurred or will incur to clean up the oil spill, reimburse federal and State response efforts, compensate victims of the oil spill and compensate the public for injuries to natural resources.

Section 311(b) of the Clean Water Act makes it unlawful to discharge oil or hazardous substances into or upon the navigable waters of the United States or adjoining shorelines in quantities that may be harmful to the environment or public health.  The penalty paid for this spill will be deposited in the federal Oil Spill Liability Trust Fund managed by the National Pollution Funds Center.  The Oil Spill Liability Trust Fund is used to pay for federal response activities and to compensate for damages when there is a discharge or substantial threat of discharge of oil or hazardous substances to waters of the United States or adjoining shorelines.

The proposed consent decree, lodged in the Southern District of Texas, is subject to a 30-day public comment period and court review and approval. A copy of the consent decree is available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html.

The Department of Justice announced today that it has reached a $1 million settlement with Ralph J. Cox III, the former chief executive officer of Sumter, South Carolina-based Tuomey Healthcare System, for his involvement in the hospital’s illegal Medicare and Medicaid billings for services referred by physicians with whom the hospital had improper financial relationships. 

Under the terms of the settlement agreement, Cox will also be excluded for four years from participating in federal health care programs, including providing management or administrative services paid for by federal health care programs.  The illegal physician arrangements resulted in a $237.4 million judgment against Tuomey following a jury verdict.  On Oct.16, 2015, the United States resolved its judgment against Tuomey for payments totaling $72.4 million, and the hospital was sold to Palmetto Health, a multi-hospital healthcare system based in Columbia, South Carolina.

“Sweetheart deals between hospitals and referring physicians distort medical decision making and drive up the cost of healthcare for patients and insurers alike,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Patients have a right to be confident that a physician who orders a procedure or test does so because that service is in the patient’s best interest, and not because the physician stands to gain financially from the referral.  Today’s settlement demonstrates that the Justice Department and its law enforcement partners will hold individual decision makers accountable for their involvement in causing the companies and facilities they run to engage in unlawful activities.”

The judgment against Tuomey related to violations of the Stark Law, a statute that prohibits hospitals from billing Medicare for certain services, including inpatient and outpatient hospital care, that have been referred by physicians with whom the hospital has an improper financial relationship.  The Stark Law includes exceptions for many common hospital-physician arrangements, but generally requires that any payments that a hospital makes to a referring physician be at fair market value for the physician’s actual services, and not take into account the volume or value of the physician’s referrals to the hospital.  The government alleged that Cox, fearing that Tuomey could lose lucrative outpatient procedure referrals to a new freestanding surgery center, caused Tuomey to enter into contracts with 19 specialist physicians that required the physicians to refer their outpatient procedures to Tuomey and, in exchange, paid them compensation that far exceeded fair market value and included part of the money Tuomey received from Medicare for the referred procedures.  During the trial against the hospital, the government argued that Cox ignored and suppressed warnings from one of Tuomey’s attorneys that the physician contracts were “risky” and raised “red flags.” 

On May 8, 2013, after a month-long trial, a South Carolina jury determined that the contracts violated the Stark Law.  The jury also concluded that Tuomey had filed more than 21,000 false claims with Medicare.  On Oct.  2, 2013, the trial court entered a judgment under the False Claims Act in favor of the United States for $237.4 million.  The United States Court of Appeals for the Fourth Circuit affirmed the judgment on July 2, 2015.  Cox was terminated as Tuomey’s chief executive officer in the fall of 2013.

“Our office was pleased to partner with the Justice Department’s Civil Division and the Department of Health and Human Services, Office of the Inspector General (HHS-OIG) in this important case,” said U.S. Attorney John Stuart Bruce for the Eastern District of North Carolina.  “The lengthy legal process has vindicated the government’s position that the financial arrangement between this hospital corporation and certain physicians was improper and not in the interest of patients.”

“Individuals and entities that defraud Federal health care programs face exclusion from those programs by the Department of Health and Human Services Office of Inspector General (OIG),” said Gregory E. Demske, chief counsel to the HHS Inspector General.  “OIG is committed to protecting the programs and patients from health care executives who, like Mr. Cox, lead or participate in schemes to defraud Medicare or Medicaid. Entities engage in fraud because of actions by individuals and OIG will continue to identify and take administrative enforcement actions against such individuals.”

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $30.7 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal health care programs.”  Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).

The judgment against Tuomey and this settlement were the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Eastern District of North Carolina and HHS and its OIG.     

The case against the hospital is captioned United States ex rel. Drakeford v. Tuomey Healthcare System, Inc., Case No. 3:05-cv-02858 (MBS) (D.S.C.).  The claims resolved by the settlement with Cox are allegations only, and there has been no determination of his individual liability.   

The Office of Justice Programs’ Bureau of Justice Assistance (BJA) today announced awards totaling more than $38 million to help state, tribal and local government agencies to process sexual assault kits in law enforcement custody that have not been submitted to forensic laboratories.

Funded under BJA’s National Sexual Assault Kit Initiative, this program provides funding to support a community-based comprehensive approach to inventory and test kits that were housed in law enforcement storage rooms or other facilities that have never been submitted to the lab for testing. The program also enables jurisdictions to assign personnel to pursue leads and criminal investigations based on evidence discovered through kit testing, as well as to develop evidence-based tracking systems and train law enforcement on sexual assault investigations.  Further, grantees can use the funds to conduct research on outcomes in sexual assault cases and increase collection of DNA that may lead to identification of serial sex offenders.

“Reducing the backlog of untested sexual assault kits is a complex issue that requires a comprehensive, evidence-based and community-supported approach to resolve,” said Director Denise O’Donnell of the Bureau of Justice Assistance.  “These grants provide resources and improve processes to test kits, provide training to law enforcement personnel and improve the justice system while providing justice and resolution to the victims of sexual assault.”

In FY 2016, BJA made 19 grant awards totaling $25 million to state, local and tribal jurisdictions in support of new efforts to improve the processing of sexual assault kits and improve their capacity to act on evidence resulting from these efforts.  BJA also made seven supplemental awards totaling over $6 million to grantees that received National Sexual Assault Kit Initiative awards in previous years to help them continue their efforts to address the challenges surrounding the processing of untested sexual assault kits.

An additional $5 million was awarded to Research Triangle Institute to provide training and technical assistance to the grantees in the development and implementation of sexual assault kit submission, tracking and investigation processes.  BJA provided $2 million to the National Institute of Justice to support evaluation of the programs funded by the National Sexual Assault Kit Initiative.

For a complete monetary and geographical breakdown of the grants awarded under this program, visit http://go.usa.gov/xKFcx.

The Office of Justice Programs (OJP), headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking (SMART). More information about OJP and its components can be found at www.ojp.gov.

The Office of Justice Programs’ Bureau of Justice Assistance (BJA) today announced funding of more than $5.6 million through two separate programs.  One is a new initiative designed to help communities reduce and prosecute gun crime; the other is an annual grant that enables jurisdictions to leverage technology and information sharing to enhance criminal justice operations.

Nearly $3 million was awarded to three cities—Metropolitan Police Dept. of the District of Columbia ($999,129), Wisconsin’s Milwaukee Police Dept. ($1 million), and the City of Los Angeles ($1 million)—via BJA’s National Crime Gun Intelligence Center Initiative, a newly developed initiative in 2016.  The program, which is supported and administered in partnership between BJA and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), supports the implementation of three crime gun intelligence centers in the above listed cities.  These centers employ multidisciplinary teams to identify perpetrators and connect criminal activity and sources of gun crime for immediate disruption, investigation and prosecution.  Each site will also work closely with a research partner to help guide implementation and evaluate program outcomes.

Another $2.6 million was awarded to six cities and the Washington, D.C.-based Police Foundation ($499,826) to enhance information sharing capacities through the use of innovative technological solutions to reduce crime.  Funded through BJA’s annual competitive grant Technology Innovation for Public Safety Program, the resources provided through this grant are intended to help selectees address a precipitous or extraordinary increase in crime in individual jurisdictions.  To combat this, awardees are enabled to share information across crime-fighting agencies.  This collaboration can help address specific local crime problems, which often require multidisciplinary responses involving public safety agencies, personnel and shared investment in technology.

“The Office of Justice Programs is committed to giving our state and local partners the tools they need to drive down crime and maintain public safety for the long run,” said Assistant Attorney General Karol V. Mason of the Office of Justice Programs.  “These new resources will expand community capability to investigate and prosecute gun offenses and support data sharing and other technological solutions to serious violence challenges.”

The six cities and police departments awarded under the Technology Innovation for Public Safety Program include: the New Castle County Division of Police, Del. ($306,700); the City of Hartford, Connecticut ($245,681); the City of Cincinnati, Ohio ($370,673); the Los Angeles Police Department ($395,717); the City of Memphis, Tennessee ($401,193); and the St. Louis, Missouri, County Government ($400,636).

For additional information about the National Crime Gun Intelligence Center Initiative, visit http://go.usa.gov/xKefx. For additional information about the Technology Innovation for Public Safety Program, visit http://go.usa.gov/xKefa.

The Office of Justice Programs (OJP), headed by Assistant Attorney General Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims.  OJP has six bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART). More information about OJP and its components can be found at www.ojp.gov.

Assistant Attorney General Karol V. Mason of the Justice Department’s Office of Justice Programs (OJP) today announced funding of more than $34.5 million, through nine separate grant programs, to more than 40 jurisdictions, research institutions and other grantees, to reduce crime, improve community safety and provide a science-based approach to criminal justice operations.                          

Administered under OJP’s Bureau of Justice Assistance, the “Smart Suite” of programs represents a strategic approach that brings more science into criminal justice operations by leveraging innovative applications of analysis, technology and evidence-based practices with the goal of improving performance and effectiveness while containing costs.  The Smart Suite touches every aspect of the criminal justice system, from arrest to prosecution to reentry, relying on practitioner-researcher relationships that use data, evidence and innovation to enable jurisdictions to understand the full nature and extent of local crime challenges.

During the Sept. 7, 2016, Smart Suite Summit, Assistant Attorney General Mason described the programs’ proven track records of helping communities target crime hot spots, promote neighborhood revitalization and increase public safety.  She noted that Corning, California—a Byrne Criminal Justice Program grant recipient—saw a 30 percent decrease in violent crime since early 2015.  Under the Smart Prosecution Initiative, the St. Louis, Missouri, Circuit Attorney’s Office is now working with police, courts and local university researchers on a gun diversion program that targets individuals convicted of a felony.

“These successes are no accident,” said Assistant Attorney General Mason.  “They happened because of a commitment to smart, sustainable public safety strategies grounded in data and research.  These awards help communities pursue evidence-based and community partnerships to reduce crime and increase public safety.”

Grants awarded to specific jurisdictions under individual 2016 Smart Suite programs include the following:

Enhancing Researcher-Practitioner Partnerships: Smart Suite Training and Technical Assistance Program: More than $2.1 million was awarded to Michigan State University under this program, which supports the development, enhancement, and needs of researcher-practitioner relationships in all of the Smart Suite programs. The training and technical assistance includes measuring individual program outcomes; using data to identify criminal justice and public safety-related problems; assessing implementation fidelity; developing logic models; developing “real time” products and resources for strategic decision making; and making recommendations for program improvement. For more information about this program, visit http://go.usa.gov/xKep8.

Byrne Criminal Justice Innovation Program: About $8 million was awarded to 10 local criminal justice and community agencies and research institutions via  this program, which helps  communities develop comprehensive strategies that target neighborhoods with hot spots of crime and violence. Awardees include: the Boston Public Health Commission; the City of Battle Creek, MI; the Board of Highland County Ohio Commissioners; Rockdale County, GA; the City of Hartford, CT; the City of Shreveport, LA; the Milwaukee Police Dept., WI; the University of Maryland; Northwest N.J. Community Action Program, Inc.; and the City of Tulsa, OK. For more information about this program, visit http://go.usa.gov/xKeyw. 

Smart Policing Initiative. More than $4.4 million was awarded to five jurisdictions and the Criminal Justice Coordinating Council under this program. This initiative seeks to promote analysis-driven, evidence-based policing by encouraging state, local, and tribal law enforcement agencies to develop effective, economical and innovative responses to crime. Awardees include: The City of Lowell, MA; the City of Madison, WI; the Detroit Police Dept.; the Kansas City, MO Board of Police Commissioners; and the County of Sacramento, CA. Nearly $1 million went to CNA Corporation to provide training and technical assistance to grant recipients. For more information about this program, visit http://go.usa.gov/xKeyf.

Project Safe Neighborhoods: More than $5.7 million was awarded to 16 jurisdictions under this program, which creates safer neighborhoods through a sustained reduction in gang violence and gun crime. PSN has a cooperative approach and unified strategies led by the U.S. Attorney (USA) who with a collaborative PSN task force of federal, state, and local law enforcement, community members, and other key partners to implements using data and research with a local research partner.

Smart Prosecution Initiative: More than $2.2 million was awarded to five jurisdictions under this program, which encourages state, local, and tribal prosecutorial agencies to develop analysis-driven, evidence-based and economically-sound practices. Awardees include: Essex County, N.J. Prosecutor’s Office; D.C. Office of the Attorney General; Chatham County, GA Board of Commissioners/District Attorney; Jackson County, MO Prosecutor’s Office; and the Florida State Attorney’s Office, 11th Judicial Circuit. This award includes $461,852 in funding to the Association of Prosecuting Attorneys for training and technical assistance. For more information about this program, visit http://go.usa.gov/xKeyd.

Smart Defense Initiative Answering Gideon’s Call: Improving Public Defense Delivery Systems Competitive Grant: Nearly $400,000 was awarded to support the expansion of the Smart Defense program to Contra Costa County, CA, in addition to the five sites funded in FY 2015.  Smart Defense strives to ensure that all persons accused of a crime have the aid of a lawyer with the time, ability, and resources to present an effective defense. For more information about this program, visit http://go.usa.gov/xKeyU.

Smart Pretrial Initiative: Nearly $300,000 was awarded to support the sustainment phase of this effort to enhance the pretrial process in three locations, to enhance the use of risk assessment in pretrial decisions, enhance the fairness of the process and to increase pretrial detention and use of jail for low risk persons in the pretrial process. 

Smart Reentry: Focus on Evidence-based Strategies for Successful Reentry from Incarceration to Community Program: Nearly $6 million was awarded to six jurisdictions under this program, which helps communities develop strategies that increase formerly incarcerated individuals’ successful reentry into their communities. Awardees include: the Wisconsin Dept. of Justice; Newark, N.J.; Contra Costa County, CA; Fulton County, GA; Prince George’s County, MD; and Muscogee Creek Nation, OK. For more information about this program, visit http://go.usa.gov/xKepm

Smart Supervision Program: More than $5.4 million was awarded to seven jurisdictions under this program. This initiative is designed to improve supervision strategies that will reduce recidivism through evidence-based probation and parole approaches.  Awardees include: Cuyahoga County, Ohio, Common Pleas Court; Office of the Attorney General of Virginia; the Wisconsin Dept. of Corrections; the Connecticut Judicial Branch; the Louisiana Dept. of Public Safety and Corrections; the Ohio Dept. of Rehabilitation and Correction; and the Virginia Dept. of Corrections. Two additional awards totaling $737,886 will be awarded separately to the National Reentry Resource Center for training and technical assistance for this program. For more information about this program, visit http://go.usa.gov/xKeV3.

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The Office of Justice Programs (OJP), headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six bureaus and offices: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime, and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking (SMART). More information about OJP and its components can be found at www.ojp.gov.

Dewey W. Willis Jr. of Newport, North Carolina, pleaded guilty today in U.S. District Court in Wilmington, North Carolina, to federal charges regarding the illegal harvest and sale of Atlantic striped bass from federal waters off the coast of North Carolina during 2010, the Justice Department announced today. 

This multi-defendant investigation began as a result of the National Oceanic and Atmospheric Administration (NOAA) receiving intelligence and directing the U.S. Coast Guard to board the fishing vessel Lady Samaira in February 2010, based on a complaint that multiple vessels were fishing Striped Bass illegally.  Along with 13 other commercial fishermen, Willis was charged with violating the Lacey Act, a federal law that prohibits individuals from transporting, selling or buying fish and wildlife harvested illegally.  Additionally, Willis, along with 11 of these fishermen, also has been charged with filing false reports in connection with the illegally harvested fish.  Specifically, the indictment against Willis alleges that the he transported and sold Atlantic striped bass, knowing that they were unlawfully harvested from federal waters off the coast of North Carolina.  In an effort to hide his illegal fishing activities, Willis, falsely reported harvesting these fish from state waters, where it would have been legal.

Willis is licensed by the state of North Carolina and NOAA to fish in state waters only for striped bass.  The defendant faces a maximum sentence of five years in prison and a $250,000 fine.  A sentencing hearing has been scheduled for Dec. 12.

“The illegal poaching of striped bass by commercial fishermen has a major impact on the survival of this iconic fish resource and has the potential to devastate the future livelihoods of law abiding commercial fishermen,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “Today’s plea agreement demonstrates the department’s dedication to pursuing those who fail to respect the law and fail to adequately monitor their harvest to stay within legal limits.”  

“Our office was pleased to partner with the Environment and Natural Resources Division of the Department of Justice in this significant case,” said U.S. Attorney John Stuart Bruce for the Eastern District of North Carolina.  “This prosecution makes clear that efforts to circumvent laws regulating commercial fishing will be enforced vigorously.”

In early spring each year, wild coastal striped bass, Morone saxatilis, known regionally as “rockfish,” “striper” or “rock,” enter the estuary or river where they were born to spawn and then return to ocean waters to live, migrating along the coastline.  They may live up to 30 years and reach 50 pounds or more.  The population of coastal Atlantic striped bass depends heavily upon the capability of older, larger, female striped bass to successfully reproduce.   

Under federal law, Atlantic striped bass may not be harvested from or possessed in federal waters.  This ban on fishing for Atlantic striped bass in federal waters has been in place since 1990 due to drastic declines of the stock that occurred in the 1970’s.  North Carolina allows fishermen to harvest fish from state waters, but often limits fishermen to no more than 100 fish per fishing trip.  Commercial fishermen are required to report on a fishing vessel trip report the fish harvested from state waters; that report is then submitted to NOAA’s National Marine Fisheries Service (NMFS).  NOAA uses the information on this report to assess the fishery and its sustainability throughout the eastern seaboard.

According to the Atlantic Marine Fisheries Commission, “striped bass have formed the basis of one of the most important fisheries on the Atlantic coast for centuries.  Early records recount their abundance as being so great at one time they were used to fertilize fields.  However, overfishing and poor environmental conditions lead to the collapse of the fishery in the 1980s.”

The North Carolina Division of Marine Fisheries, along with other states, has reduced the catch limits for the 2015 striped bass commercial fishing season in the Atlantic Ocean and Albemarle Sound/Roanoke River areas, citing a decline in stocks.  The division cited 2013 surveys revealing that the female spawning stock has been steadily declining.  The reduction applies to all commercial and recreational striped bass fishing for all the eastern coastal states.

The Lacey Act makes it unlawful for a person to transport or sell fish that were taken in violation of any law or regulation of the United States and carries a maximum penalty of five years in prison and a fine of up to $250,000, plus the potential forfeiture of the vessels and vehicles used in committing the offense.

The investigation was conducted by the Law Enforcement Offices of NOAA, with assistance of the Investigative Service from the U.S. Coast Guard, the North Carolina Marine Patrol and the Virginia Marine Police.  This case is being prosecuted by Trial Attorney Shennie Patel of the Justice Department’s Environmental Crimes Section and Assistant U.S. Attorney Banumathi Rangarajan for the Eastern District of North Carolina.

Defendant Failed to Report More than $4.8 Million in Income from Real Estate Transactions and Other Sources

A Chevy Chase, Maryland, man was sentenced to 54 months in prison today after pleading guilty to a federal tax evasion charge stemming from his failure to pay taxes on more than $4.8 million in income that he accrued over a six-year period, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, U.S. Attorney Channing D. Phillips for the District of Columbia and Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Washington, D.C. Field Office.

Cornell M. Jones Jr., 59, pleaded guilty on Jan. 19 to one count of tax evasion.  According to the government’s evidence, Jones was the managing member of WFJ LLC, a Washington, D.C., company that engaged in real estate transactions.  He was also the executive director of Miracle Hands, a non-profit organization in Washington, D.C.  In 2012, the IRS revoked Miracle Hand’s tax-exempt status over its failure to file tax returns for 2009 through 2011.

The government’s evidence showed that neither Jones nor WFJ filed returns for 2008 through 2013.  WFJ generated income through the sale and leasing of commercial properties in Northeast Washington, D.C., and through payments it received for consulting work purportedly done by Jones.  Jones used WFJ’s income for his personal benefit, which included more than $1 million in cash that he withdrew from WFJ bank accounts.  During the years 2008 through 2013, Jones received approximately $4,806,019.04 in taxable income that he failed to report to the IRS.  The tax due and owing to the United States on this amount is approximately $1,759,953.

In addition to the prison term, U.S. District Judge Richard J. Leon for the District of Columbia ordered Jones to serve three years of supervised release, 360 hours of community service and pay restitution to the IRS in the amount of $1,759,953.

Principal Deputy Assistant Attorney General Ciraolo, U.S. Attorney Phillips and Special Agent in Charge Jankowski thanked special agents of IRS-CI, who conducted the investigation, and Assistant U.S. Attorney Anthony Saler for the District of Columbia and Trial Attorney Kenneth C. Vert of the Tax Division, who prosecuted the case.  Assistance was provided by Assistant U.S. Attorneys David A. Last, Arvind K. Lal and Michael K. Atkinson; Criminal Investigator Juan Juarez; Financial Analyst Bryan J. Snitselaar; and Paralegal Specialists C. Rosalind Pressley and Toni Donato, all of the U.S. Attorney’s Office for the District of Columbia.

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

More Than $67 Million in Grants to Support Local Law Enforcement Efforts Also Announced

Attorney General Loretta E. Lynch  today announced the addition of two cities—Jackson, Mississippi, and Nashville, Tennessee—to the Justice Department’s Violence Reduction Network (VRN), providing federal resources and funding to help reduce violence in these newly-partnered sites.

Established two years ago, VRN is a comprehensive program designed to leverage existing resources and provide a hands-on approach to reduce violence in some of the country’s most challenging cities.  Partnered cities under VRN have violence levels exceeding the national average.  Cities are selected through a quantitative and qualitative evaluation process in consultation with U.S. Attorneys and Department of Justice law enforcement partners.

Through VRN, the Justice Department enlists tactical and operational expertise available from the Bureau of Justice Assistance, the Federal Bureau of Investigation (FBI), the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), the U.S. Marshals Service (USMS), the Drug Enforcement Administration (DEA), the Executive Office of the U.S. Attorneys, the Community Oriented Policing Services Office and the Office on Violence Against Women.  These resources, in collaboration with resources offered through the Department of Justice’s Office of Justice Programs, provide customized training and technical assistance and immediate subject matter expertise tailored to each partnered site’s unique challenges.  As a result, each site receives the benefit of pooled resources, peer-to-peer exchanges, federal site analyses and a variety of regular newsletters, webinars, and other training resources.

“Since launching the Violence Reduction Network with five cities in 2014, we have witnessed extraordinary activity and unprecedented collaboration throughout the VRN,” said Attorney General Lynch.  “Cooperation is the hallmark of the Violence Reduction Network, and the work we have done together reminds us that we are not helpless – or hopeless – in the face of violence.  It makes clear that by bridging divides and building trust, we can shape the direction of our communities.  Today, I am pleased to welcome Jackson and Nashville as new partners.  I applaud the leaders of both cities for their commitment, and I am excited to have them join this innovative network.”

During the event, Attorney General Lynch also announced over $54 million in grants to law enforcement agencies, research institutions, states, cities, tribes and other local government organizations to support body-worn camera programs and address untested sexual assault kits.  Assistant Attorney General Karol V. Mason announced an additional $13.6 million to help develop innovative, data-driven approaches to crime; reduce and more effectively prosecute gun crimes and increase public safety through community-based partnerships.

“We recognize that federal funding is only part of the solution,” said Assistant Attorney General Mason.  “Success in reducing violence ultimately depends on our ability to work together, to marshal existing resources, and to engage all stakeholders in the work of protecting communities.”

Today’s announcement was made before an audience of U.S. Attorneys, police chiefs, sheriffs, mayors, local leaders from the two sites and Department of Justice representatives at the 3rd Annual VRN Summit.  The addition of Jackson and Nashville brings the total number of partnered sites to 15 since VRN was established in 2014.

For additional information about the Violence Reduction Network, visit http://go.usa.gov/xKePD.

 

FALLS CHURCH, VA – The Executive Office for Immigration Review (EOIR) today announced the investiture of 15 new immigration judges. Acting Chief Immigration Judge Michael C. McGoings presided over the investiture during a ceremony held Sept. 23, 2016, in the ceremonial courtroom of the E. Barrett Prettyman U.S. Courthouse, in Washington, D.C.

After a thorough application process, Attorney General Loretta E. Lynch appointed Valerie A. Burch, Timothy M. Cole, Molly S. Frazer, Ivan Gardzelewski, Njeri B. Maldonado, Nancy J. Paul, Robin Kandell Paulino, Jennifer I. Peyton, G. William Riggs, Walter Hammele Ruehle, Ian Robert Simons, Mario J. Sturla, P. Michael Truman, Elizabeth L. Young, and Richard Zanfardino to their new positions.

“We welcome these 15 appointees to the immigration judge corps,” said McGoings. “With these appointments, EOIR now has 291 immigration judges, setting a new all-time high for our immigration judge corps and further strengthening our efforts to address the agency’s pending caseload of more than 500,000.”

Biographical information follows.

Valerie A. Burch, Immigration Judge, San Francisco Immigration Court

Attorney General Loretta E. Lynch appointed Valerie A. Burch to begin hearing cases in September 2016. Judge Burch earned a Bachelor of Arts degree in 2000 from the University of Rochester and a Juris Doctor in 2004 from the Penn State Dickinson School of Law. From 2012 to September 2016, she was an attorney for The Shagin Law Group, in Harrisburg, Pa. From 2007 through 2012, she was a staff attorney for the American Civil Liberties Union of Pennsylvania, in Harrisburg, Pa. From 2004 through 2007, she was a managing attorney for the Pennsylvania Immigration Resource Center, in York, Pa. Judge Burch is a member of the Pennsylvania Bar.

Timothy M. Cole, Immigration Judge, Miami Immigration Court

Attorney General Loretta E. Lynch appointed Timothy M. Cole to begin hearing cases in September 2016. Judge Cole earned both a Bachelor of Arts degree and a Bachelor of Business Administration degree in 2002 from the University of Texas at Austin, and a Juris Doctor in 2007 from the George Mason University School of Law. From April 2014 to September 2016, and previously from 2008 through 2012, he served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Miami. From 2012 through 2014, he served as a special assistant U.S. attorney for the U.S. Attorney’s Office, Southern District of Florida, Department of Justice (DOJ). From 2007 through 2008, he served as a judicial law clerk for the Miami Immigration Court, Executive Office for Immigration Review, DOJ. From 2003 through 2004, he was a volunteer for the AmeriCorps National Civilian Community Corps. Judge Cole is a member of the Virginia State Bar.

Molly S. Frazer, Immigration Judge, Florence Immigration Court

Attorney General Loretta E. Lynch appointed Molly S. Frazer to begin hearing cases in September 2016. Judge Frazer earned a Bachelor of Arts degree in 1983 from the University of Iowa and a Juris Doctor in 1986 from the Drake University Law School. From 2004 to September 2016, she served as a senior attorney for Customs and Border Protection, Department of Homeland Security (DHS), in Tucson, Ariz. From 2000 through 2004 she served as an assistant chief counsel for the former Immigration and Naturalization Service (INS), Department of Justice (DOJ), and Immigration and Customs Enforcement, DHS. From 1996 through 2000, she served as a sector counsel for the U.S. Border Patrol, INS, DOJ. From 1990 through 1996, she was an assistant county attorney for Story County, Iowa. From 1988 through 1990, she was an assistant city attorney for the City of Waterloo, Iowa. From 1986 through 1987, she was an assistant county attorney for Black Hawk County, Iowa. Judge Frazer is a member of the Iowa State Bar and the State Bar of Texas.

Ivan Gardzelewski, Immigration Judge, Denver Immigration Court

Attorney General Loretta E. Lynch appointed Ivan Gardzelewski to begin hearing cases in September 2016. Judge Gardzelewski earned a Bachelor of Arts degree in 2000 from Augustana College and a Juris Doctor in 2004 from the University of Oregon School of Law. From 2007 to September 2016, he served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Denver. From 2009 through 2010, he served as a special assistant U.S. attorney for the U.S. Attorney’s Office, District of Colorado, Department of Justice, in Denver. In 2007, he served as a deputy district attorney for the Colorado Fifth Judicial District Attorney’s Office, in Breckenridge, Colo. From 2004 through 2007, he served as a municipal prosecutor for the Lakewood City Attorney’s Office, in Lakewood, Colo. Judge Gardzelewski is a member of Colorado Bar.

Njeri B. Maldonado, Immigration Judge, Stewart Immigration Court

Attorney General Loretta E. Lynch appointed Njeri B. Maldonado to begin hearing cases in September 2016. Judge Maldonado earned a Bachelor of Arts degree in 2001 from Xavier University of Louisiana and a Juris Doctor in 2005 from the Loyola University School of Law.  From 2009 to September 2016, Judge Maldonado served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Atlanta.  From 2012 through 2013, she served as a special assistant U.S. attorney for the U.S. Attorney’s Office, Northern District of Georgia, Department of Justice, in Atlanta. From 2005 through 2008, she served an associate attorney for Blue Williams LLP, in Metairie, La. Judge Maldonado is a member of the Louisiana State Bar.

Nancy J. Paul, Immigration Judge, Omaha Immigration Court

Attorney General Loretta E. Lynch appointed Nancy J. Paul to begin hearing cases in September 2016. Judge Paul earned a Bachelor of Science degree in 1985 from the University of Nebraska and a Juris Doctor in 1988 from the Creighton University School of Law. From 2010 to September 2016, she served as a board member and treasurer for the Great Plains Colon Cancer Task Force, in Omaha, Neb. From 2008 through 2010, she served as a military commission judge for the Office of the Military Commissions, in Guantanamo Bay, Cuba. From 2003 through 2010, she served as a military judge for the U.S. Air Force (USAF), at Offutt Air Force Base, Neb., and Travis Air Base, Calif. From 2003 through 2010, she also served as an adjunct instructor for the Air Force Judge Advocate General’s School. From 2000 through 2003, she served as the chief of Operations and International Law, USAF, at Davis-Monthan Air Force Base, Ariz. From 1997 through 2000, she served as a deputy and acting staff judge advocate for the USAF at Hurlburt Field, Fla. From 1994 through 1997, she served as the chief of the Adverse Actions Division, USAF, at Hickam Air Force Base, Hawaii. From 1993 through 1994, she served as a deputy staff judge advocate for the USAF, at Plattsburgh Air Force Base, N.Y. From 1992 through 1993, she served as area defense counsel for the USAF, at Offutt Air Force Base. From 1988 through 1992, she served as the chief of Military Justice and General Law at Offutt Air Force Base. Judge Paul is a member of the Nebraska State Bar.

Robin Kandell Paulino, Immigration Judge, San Francisco Immigration Court

Attorney General Loretta E. Lynch appointed Robin Kandell Paulino to begin hearing cases in September 2016. Judge Paulino earned a Bachelor of Arts degree in 1991 from the University of Arizona and a Juris Doctor in 1995 from the University of San Diego School of Law. From 2007 to September 2016, she served as a senior attorney and assistant general counsel for Legal & Corporate Affairs, Microsoft Corporation. From 1998 through 2007, she served as a senior associate and managing attorney for Fragomen, Del Rey, Bernsen & Loewy, in Santa Clara, Calif. From 1996 through 1998, she served as an associate attorney for Korenberg, Abramowitz & Feldun, in Calif. Previously, she served as an associate attorney for Swanson & Swanson, in Los Angeles. Judge Paulino is a member of the State Bar of California.

Jennifer I. Peyton, Immigration Judge, Chicago Immigration Court

Attorney General Loretta E. Lynch appointed Jennifer I. Peyton to begin hearing cases in September 2016. Judge Peyton earned a Bachelor of Arts degree in 1994 from Trinity College and a Juris Doctor in 1998 from the Case Western Reserve University School of Law. From April 2016 to September 2016, she was in private practice as a partner at Brown LLC. From 2003 to April 2016, she was in private practice as managing partner of Jennifer I. Peyton, Attorney at Law LLC, in Cleveland. In 2013, she joined the faculty of the Cleveland State University Cleveland-Marshall College of Law, where she served as an adjunct clinical professor, and in 2006 she joined the faculty of the Case Western University School of Law, where she served as an adjunct professor. Judge Peyton is a member of the Ohio State Bar.

 

G. William Riggs, Immigration Judge, Miami Immigration Court

Attorney General Loretta E. Lynch appointed G. William Riggs to begin hearing cases in September 2016. Judge Riggs earned a Bachelor of Applied Arts degree in 1985 from Florida Atlantic University, a Juris Doctor in 1990 from Nova Southeastern University, and a Master of Laws degree in 2002 from the U.S. Army Judge Advocate General’s School. From 2008 to September 2016, he served in various capacities for the U.S. Marine Corps (USMC) at Camp Lejeune, N.C., including as deputy assistant chief of staff for Force Preservation, staff judge advocate, and circuit military judge for the Eastern Judicial Circuit. From 2008 through 2009, he served as a senior rule of law advisor and deputy rule of law team leader for the Provincial Reconstruction Team, USMC, at Camp Ramadi, Iraq. From 2004 through 2008, he served as a staff judge advocate for the USMC Forces Central Command, at MacDill Air Force Base, Fla. From 2002 through 2004, he served as the head of the Operational Law Branch, Navy International and Operational Law, Department of the Navy, at the Pentagon. Prior to 2002, he served in various legal positions for the USMC, including as a staff judge advocate, deputy staff judge advocate, assistant staff judge advocate, prosecutor, defense counsel, and legal assistance attorney. From 1994 through 1996, he was in private practice at G. William Riggs PA, in West Palm Beach, Fla. Judge Riggs is a member of the Florida Bar.

Walter Hammele Ruehle, Immigration Judge, Buffalo Immigration Court

Attorney General Loretta E. Lynch appointed Walter Hammele Ruehle to begin hearing cases in September 2016. Judge Ruehle earned a Bachelor of Arts degree in 1976 from the State University of New York at Oneonta and a Juris Doctor in 1979 from the Union University Albany Law School. From 1993 to September 2016, he served in various capacities for the Legal Aid Society, including as an attorney, director of the Immigration Program, and director of the Upstate New York Immigration Law Project. From 1991 through 1993, he served as an associate attorney for the Law Offices of James J. Piampino, in Rochester, N.Y. From 1990 through 1991, he served as a staff and directing attorney for the Neighborhood Legal Services, in Hartford, Conn. From 1979 through 1990, he served in various capacities for the Farmworker Legal Services of N.Y., including as a staff attorney, supervising and managing attorney, litigation director, and legal consultant. In 2012 and 2013, he also served as an adjunct professor at the Cornell Law School. Judge Ruehle is a member of the Connecticut Bar and the New York State Bar.

Ian Robert Simons, Immigration Judge, Adelanto Immigration Court

Attorney General Loretta E. Lynch appointed Ian Robert Simons to begin hearing cases in September 2016. Judge Simons earned a Bachelor of Arts degree in 1998 from Michigan State University and a Juris Doctor in 2001 from the Michigan State University College of Law. From 2009 to September 2016, he served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Detroit. From 2011 through 2013, he served as a special assistant U.S. attorney for the U.S. Attorney’s Office, District of Arizona, Department of Justice, in Phoenix. From 2001 through 2009, he served as an assistant prosecutor for the Oakland County Prosecutor’s Office, in Pontiac, Mich. Judge Simons is a member of the State Bar of Michigan.

Mario J. Sturla, Immigration Judge, Boston Immigration Court

Attorney General Loretta E. Lynch appointed Mario J. Sturla to begin hearing cases in September 2016. Judge Sturla earned a Bachelor of Arts degree in 2003 from Brown University and Juris Doctor in 2006 from the Yeshiva University Benjamin N. Cardozo School of Law. From 2015 to September 2016, he served as a deputy chief counsel, and previously from 2008 through 2015 as an assistant chief counsel, for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Boston. From 2007 through 2008, he served as a staff attorney for the Office of Legal Affairs, U.S. Court of Appeals for the Second Circuit, in New York City. From 2006 through 2007, he served as a judicial law clerk for the New York City Immigration Court, Executive Office for Immigration Review, Department of Justice, entering on duty through the Attorney General’s Honors Program. Judge Sturla is a member of the Massachusetts Bar.

P. Michael Truman, Immigration Judge, Salt Lake City Immigration Court

Attorney General Loretta E. Lynch appointed P. Michael Truman to begin hearing cases in September 2016. Judge Truman earned a Bachelor of Arts degree in 2001 from Brigham Young University and a Juris Doctor in 2004 from the S.J. Quinney College of Law, University of Utah. From 2011 to September 2016, he served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security, in Denver. From 2005 through 2011, he served as a trial attorney for the Office of Immigration Litigation, Department of Justice. From 2004 through 2005, he served as a law clerk for Justice Michael J. Wilkins, Utah Supreme Court. Judge Truman is a member of the Utah State Bar.

Elizabeth L. Young, Immigration Judge, San Francisco Immigration Court

Attorney General Loretta E. Lynch appointed Elizabeth L. Young to begin hearing cases in September 2016. Judge Young earned a Bachelor of Arts degree in 1999 from Hendrix College and a Juris Doctor in 2004 from The George Washington University School of Law. From 2011 to September 2016, she served as an associate professor of law, and previously from 2008 through 2011 as an assistant professor of law, for the University of Arkansas School of Law. From 2007 through 2008, she served as a visiting professor at The George Washington University School of Law. From 2004 through 2007, she served as an attorney advisor for the San Francisco Immigration Court, Executive Office for Immigration Review, Department of Justice. Judge Young is a member of the Arkansas Bar, the State Bar of California, and the Virginia State Bar.

Richard Zanfardino, Immigration Judge, Portland Immigration Court

Attorney General Loretta E. Lynch appointed Richard Zanfardino to begin hearing cases in September 2016. Judge Zanfardino earned both a Bachelor of Arts degree in 1989 and a Bachelor of Arts degree in 1990 from North Carolina State University, and a Juris Doctor in 1996 from the Columbus School of Law, Catholic University of America. From 2006 to September 2016, he served as a trial attorney for the Office of Immigration Litigation, Department of Justice (DOJ). From 1997 through 2006, he served as an attorney advisor for the Board of Immigration Appeals, Executive Office for Immigration Review, DOJ. From 2003 through 2004, he served as a special assistant U.S. attorney for the U.S. Attorney’s Office, DOJ, in Washington, D.C. Judge Zanfardino is a member of the District of Columbia Bar.

Attorney General Loretta E. Lynch today announced awards totaling over $20 million to 106 state, city, tribal and municipal law enforcement agencies to establish and enhance law enforcement body-worn camera programs across the United States.

The awards, funded under the Office of Justice Programs’ Bureau of Justice Assistance’s (BJA) Fiscal Year 2016 Body-Worn Camera Policy and Implementation Program, will help law enforcement organizations implement body-worn camera policies, practices and evaluation methods to make a positive impact on the quality of policing in individual communities.  Under this grant announcement, BJA awarded more than $16 million to state, local, and tribal law enforcement agencies, as well as a $3 million supplemental award to continue support for body-worn camera training and technical assistance.  An additional $474,000 was awarded earlier this year under the 2016 Small Agency Body-Worn Camera Policy and Implementation Program.

“As we strive to support local leaders and law enforcement officials in their work to protect their communities, we are mindful that effective public safety requires more than arrests and prosecutions,” said Attorney General Lynch.  “It also requires winning – and keeping – the trust and confidence of the citizens we serve.  These grants will help more than 100 law enforcement agencies promote transparency and ensure accountability, clearing the way for the closer cooperation between residents and officers that is so vital to public safety.”

BJA expects award recipients to create programs that will be integrated as part of individual jurisdictions’ holistic problem-solving and community-engagement strategies.

The Body Worn Camera program was launched last year in response to a recommendation by the President’s Task Force on 21st Century Policing that law enforcement agencies use technology to strengthen relations with communities.  BJA convened a Body-Worn Camera Expert Panel that identified issues and considerations confronting communities considering adoption of body camera technology.  Initial research has shown that law enforcement use of body-worn camera programs improve law enforcement’s interaction with the public.

Today’s awardees include law enforcement agencies located in the following 32 states and Puerto Rico: Alabama, Arkansas, Arizona, Florida, California, Colorado, Delaware, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, Montana, New Jersey, New York, Nevada, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Wisconsin, and Wyoming.  Tribal awardees include: Pokagon Band of Potawatomi Indians, the Little Traverse Bay Bands of Odawa Indians and the Nottawaseppi Huron Band of the Potawatomi.

For additional information about this grant program, visit http://go.usa.gov/xKpJH.

Attorney General Loretta E. Lynch and Secretary of the Interior Sally Jewell today announced that, as a result of an initiative begun in the summer of this year, the United States has reached settlement with 17 additional tribal governments who alleged that the Department of the Interior and the Department of the Treasury had mismanaged monetary assets and natural resources held in trust by the United States for the benefit of the tribes.  With these resolutions, the Obama Administration will have settled the vast majority of the outstanding claims, some dating back more than a century, with more than 100 tribes and totaling over $3.3 billion.

“These historical grievances were a barrier to our shared progress toward a brighter future,” said Attorney General Lynch.  “With today’s announcement, those barriers have been removed and decades of contention have been ended honorably and fairly.  These settlements reflect the shared vision, the mutual respect and the enduring partnership that we hope to achieve between tribes and the federal government and I look forward to all that we will achieve together in the days to come.”

“Settling these long-standing disputes reflects the Obama Administration’s continued commitment to reconciliation and empowerment for Indian Country,” said Secretary Jewell.  “As we turn the page on past challenges in our government-to-government relationship with tribes, we’re moving forward with tribal governments to ensure proper management of tribal trust assets.  I commend the Department of Justice, our Interior Solicitors, tribal leaders and other key officials for recognizing the importance of communication and mutual respect, opening a new era of trust between the United States Government and tribal governments.”

In April 2012, the Justice and Interior Departments announced more than $1 billion in settlements with 41 federally-recognized tribes for similar claims, the result of nearly two years of negotiations, between 2009 and the 2012 announcement, the Departments of Justice and of the Interior had settled with six other tribes.  Since April 2012, the United States has reached settlement for claims of 57 additional tribes – including 17 reached after negotiations this summer and early fall - for an additional $1.9 billion, following through on its commitment to bring to an end, honorably and fairly, this protracted litigation that has burdened both the plaintiffs and the United States.

Ending these long-running disputes about the United States’ management of trust funds and non-monetary trust resources will allow the United States and the tribes to move beyond the distrust exacerbated by years of litigation.  These settlement agreements represent a significant milestone in the improvement of the United States’ relationship with Indian tribes. 

The Department of the Interior manages almost 56 million acres of trust lands for federally-recognized tribes and more than 100,000 leases on those lands for various uses, including housing, timber harvesting, farming, grazing, oil and gas extraction, business leasing, rights-of-way and easements.  Interior also manages about 2,500 tribal trust accounts for more than 250 tribes.

Under the negotiated settlement agreements, litigation will end regarding the Department of the Interior’s accounting and management of the tribes’ trust accounts, trust lands and other natural resources.  With monies from the congressionally-appropriated Judgment Fund, which is used to pay settlements or final judgments against the government, the United States will compensate the tribes for their breach of trust claims and the tribes will waive, release and dismiss their claims with prejudice.  The parties have agreed to information-sharing procedures that will strengthen the management of trust assets and improve communications between the settling tribes and the Department of the Interior.  The settlement agreements also include dispute resolution provisions to reduce the likelihood of future litigation.

The Department of Justice today announced more than $107 million in grants to American Indian and Alaska Native communities to improve public safety help victims and strengthen tribal institutions.  The announcement was made at the Eighth Annual White House Tribal Nations Conference, taking place today and tomorrow.  This amount includes 236 grants under the department’s Coordinated Tribal Assistance Solicitation (CTAS), totaling more than $102 million, to 131 American Indian tribes, Alaska Native villages, tribal consortia and tribal designees.  In addition, the Office on Violence Against Women (OVW) announced seven awards worth more than $2 million to help tribes develop plans for implementing changes in their criminal justice systems necessary to exercise their jurisdiction over domestic violence crimes as outlined in the Violence Against Women Reauthorization Act of 2013.

Also included in the awards announced today are six awards totaling more than $3 million in juvenile justice grants to support the American Indian/Alaska Native Defending Childhood Policy Initiative and a National Institute of Justice grant to study sex trafficking in Indian country.

 “These vital grants support everything from hiring law enforcement officers to empowering native youth, giving tribes the resources they need to meet the particular challenges facing their communities,” said Attorney General Loretta E. Lynch.  “We are also proud to continue support for those tribes exercising greater authority over crimes of domestic violence under the VAWA 2013 tribal provisions, the direct result of a proposal by this Justice Department and written into law by Congress that is today making communities safer and stronger.”  

CTAS provides a single application for tribal-specific grant programs.  The department developed CTAS to streamline support provided through its Office of Community Oriented Policing Services, Office of Justice Programs and OVW and awarded the first round of consolidated grants in September 2010.

Since then, under CTAS, more than 1,600 grants totaling more than $726 million have been provided to enhance law enforcement practices, victim services and sustain crime prevention and intervention efforts in nine purpose areas: public safety and community policing; justice systems planning; alcohol and substance abuse; corrections and correctional alternatives; children’s justice act partnerships; services for victims of crime; violence against women; juvenile justice; and tribal youth programs.

American Indians and Alaska Natives experience disproportionate rates of violence and victimization and often encounter significant obstacles to accessing culturally relevant services.  CTAS funding helps tribes to develop and strengthen tribal justice systems’ response to crime, while significantly increasing programs and services available to them.

A listing of today’s CTAS awards can be found here.  A fact sheet on CTAS is available at www.justice.gov/tribal/grants.

Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in American Indian and Alaska Native communities.

Read more about the special domestic violence jurisdiction provisions in VAWA 2013: www.justice.gov/tribal/violence-against-women-act-vawa-reauthorization-2013-0

Attorney General Lynch Announces Support, Calls on Governors to Strengthen PDMP Efforts

As part of the Obama Administration’s commitment to address the rising public health challenges caused by the national prescription opioids and heroin epidemic, Attorney General Loretta E. Lynch issued a memo this week announcing the department’s three-part prevention, enforcement and treatment strategy.  The memo lays out action items, institutionalizes best practices, and builds on existing efforts by U.S. Attorney’s Offices, the Drug Enforcement Administration and other Department of Justice components.

Additionally, Attorney General Lynch sent a letter to Governors calling on them to strengthen the effectiveness of Prescription Drug Monitoring Programs (PDMPs) and to improve data sharing of vital information from doctors and pharmacists about patient prescriptions—both within states and among neighboring states.  To further this effort, the department also announced an $8.8 million grant to 20 states to help reduce prescription drug abuse, misuse and diversion.  The awards, funded under the Bureau of Justice Assistance (BJA)’s Harold Rogers Prescription Drug Monitoring Program FY 2016 Competitive Grant Program, enable awardees to create, implement and enhance PDMPs. 

A fact sheet of the strategy memo is outlined below.  

FACT SHEET ON THE DEPARTMENT OF JUSTICE STRATEGY MEMO TO ADDRESS PRESCRIPTION OPIOID ABUSE AND HEROIN EPIDEMIC THROUGH PREVENTION, ENFORCEMENT, AND TREATMENT

The heroin and prescription opioid epidemic is one of the most urgent law enforcement and public health challenges facing our country.  The Department of Health and Human Services recently announced that 3.8 million people ages 12 and older are currently misusing prescription pain relievers in our country.  In 2014, more than sixty percent of the 47,000 drug overdose deaths in America involved opioids, reflecting a dramatic increase over the past two decades.   

The Department of Justice memo to federal prosecutors identifies some of the key action items that the department is taking now or will take in the near future to combat the prescription opioid and heroin epidemic as part of the Obama Administration’s overall strategy to address the opioid epidemic.  While the epidemic is a national problem, the department has and will continue to tailor efforts to the needs of each region, implemented by those who know their communities best. 

PREVENTION

Action Items: Strengthen Prescription Drug Monitoring Programs (PDMPs)

• The Bureau of Justice Assistance (BJA) will prioritize requests for Harold Rogers PDMP Grant Program funding that involve the development and implementation of information exchanges between state PDMPs (or between PDMPs and other data sharing partners).
• BJA will develop and promote the use of “report cards” and other reports to alert prescribers about potentially inappropriate prescribing practices and encourage use of the PDMP.
• The Office of Justice Programs (OJP) will study the need for the creation of new grant programs or the modification of existing programs to promote formulation of timely, cleaned, de-identified PDMP information and other public data sets that are fully accessible by public health and law enforcement officials.

Action Items:  Ensure Safe Drug Disposal

• The Drug Enforcement Administration (DEA) will expand efforts to develop community coalitions to help prevent the diversion of unused prescription opioids from homes. 
• The DEA will work with federal, state, local and tribal law enforcement and public health officials to develop “mobile” pick-up programs, which will be designed to make take-back options available to rural and underserved communities through coordinated regional efforts.
• The DEA will expand efforts to engage retail pharmacies seeking to establish permanent collection receptacles.

Action Items:  Prevent Overdose Deaths with Naloxone

• BJA will promote the use of its “Law Enforcement Naloxone Toolkit” by all state, local and tribal law enforcement agencies throughout the country that do not already have a naloxone program.
• OJP will develop plans for continuing to expand access to naloxone and for enhancing information sharing regarding the effectiveness of naloxone programs.

ENFORCEMENT

Action Items: Investigate and Prosecute High-Impact Cases

• Directing the department’s resources towards the greatest threats, including but not limited to individuals and institutions responsible for the trafficking of heroin and fentanyl, those who improperly prescribe or divert opioids and those who use violence to further drug-trafficking activities.

Action Items: Enhance Regulatory Enforcement 

• The DEA will develop metrics for measuring the effectiveness of its expanded regulatory efforts and use these metrics to refine its regulatory efforts.
• The DEA will expand engagement with the registrant community, especially manufacturers, doctors and pharmacists who handle opioid analgesics.

Action Items: Encourage Information Sharing

• The DEA and the Organized Crime Drug Enforcement Task Force (OCDETF) will partner with federal, state, local and tribal law enforcement and public health partners to better facilitate information sharing through the use of investigative de-confliction tools, including the DEA Analysis and Response Tracking System (DARTS) and the De-confliction and Information Coordination Effort (DICE), as well as other information coordination systems, in coordination with DEA’s Special Operations Division, the OCDETF Fusion Center and the El Paso Intelligence Center (EPIC), with the goal of sharing de-identified, real-time data between public health and public safety, when feasible, to reach maximum harm reduction in communities.
• The Community Oriented Policing Services (COPS) Office will require its grant recipients to share with the OCDETF Fusion Center relevant law enforcement information collected as a result of such funding.
• The DEA will expand its Drug/Heroin Data Capture project, a three-part data collection and sharing initiative, based at EPIC. 
• The DEA will convene pathologist, toxicologists, medical examiners and state officials to better understand the challenges faced by overburdened state systems as those resource capabilities inform investigative and prosecutorial resource decisions and to assist those systems when possible.

Fund Enforcement-Related Research

• The National Institute of Justice (NIJ) will expand its study of the forensic analysis of evidence from medico-legal death investigations and law enforcement seizures, to develop profiles for fentanyl and other controlled substances to inform trend analysis and provide tactical intelligence.
• NIJ will conduct research on drug intelligence and community surveillance, which are crucial to understanding drug markets and use trends, identifying drug deterrent and interdiction opportunities and pursuing organized crime targets.

TREATMENT

Share Best Practices for Early Intervention

• BJA and COPS will highlight and promote successful models where law enforcement is assisting individuals who have overdosed by directing them to treatment programs, as well as connecting individuals who voluntarily seek help from law enforcement to treatment.

Support Medication-Assisted Treatment (MAT)

• In the near term, subject to funding, the department will support medication-assisted treatment by taking the following step: the Bureau of Prison (BOP) will commit to implementing a nationwide plan to expand medication-assisted treatment to all Residential Reentry Centers. 

Promote Treatment Options Throughout the Criminal Justice System

In the near term, the department will support criminal justice system treatment models by taking the following steps:

• The National Institute of Corrections will draft and release a document for state, local and tribal correctional agencies compiling research and best practices for residential substance abuse treatment programs.
• BJA will draft and publicly release a document that highlights promising initiatives in communities throughout the United States that address the treatment needs of individuals with opioid use disorders who enter the criminal justice system.

To combat the opioid epidemic, the department’s components must work together and with other federal, state, local and tribal agencies to seek a comprehensive solution.  The strategy outlined in the U.S. Attorney memo, expressed in the Attorney General’s letter to Governors and made possible through grants like BJA’s Harold Rogers Prescription Drug Monitoring Program FY 2016 Competitive Grant Program, embraces an approach that focuses on prevention, enforcement and treatment, and identifies next steps that are immediately actionable.

For more on opioid week, please visit: https://www.justice.gov/opioidawareness/heroin-opioid-awareness-week.

Convicted of Illegally Selling Firearms and Underreporting More than $10 Million in Gross Receipts

A Salt Lake County, Utah man was convicted today by a federal jury of one count of dealing in firearms without a license and five counts of filing false tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney John W. Huber for the District of Utah.

“Individuals such as Mr. Webber, who view themselves above the law and engage in criminal conduct to line their own pockets with funds that belong to the U.S. Treasury, will be held to account for their crimes and face severe consequences, including prosecution and incarceration,” said Principal Deputy Assistant Attorney General Ciraolo.  “The Tax Division thanks its colleagues in the District of Utah and other federal agencies for their continued efforts to ensure that everyone pays their fair share.”

Pursuant to an agreement reached with the United States in 2007, Adam Michael Webber, was barred from applying for a federal firearms license or engaging in the business of dealing firearms.  According to the evidence presented at trial, between 2007 and 2008, Webber was the sole owner of HK Parts, an Internet gun parts business that operated originally as a sole proprietorship and later as an S corporation. In 2008, Webber added firearms to his product line and primarily sold them on the Internet at hkparts.net.  He also sold firearms and firearm parts out of the basement of his residence.  Webber never held a federal firearms license and, from 2009 through May 2012, illegally sold firearms under the auspices of a company owned by another Utah resident.  Webber also sold firearms to undercover Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agents on two separate occasions, including selling one firearm for cash in a parking lot.  In May 2012, approximately $180,000 in cash, a 70 pound silver bar, silver coins and firearms were found at Webber’s residence during the execution of a search warrant.

From 2007 through 2010, Webber earned more than $10 million in gross receipts from his illegal firearms business.  For those years, he reported only a total of $183,397 in gross receipts, underreporting his earnings on his 2007, 2008 and 2009 individual income tax returns and underreporting gross receipts on his 2009 and 2010 corporate tax returns.  In 2010, Webber paid $670,000 in cash for a new home in Salt Lake County.

Sentencing is set for Dec. 1.  Webber faces a statutory maximum sentence of up to five years in prison for dealing in firearms without a license and up to three years in prison for each count of filing a false tax return, as well as a period of supervised release and monetary penalties. 

“This defendant repeatedly purchased firearms for resale without a federal firearms license and substantially under reported the gross receipts of the sales on his taxes,” said U.S. Attorney Huber.  “Around 2,000 firearms were involved in this conduct. Evidence at trial showed that Mr. Webber claimed a mere fraction of his gross receipts on his tax forms over a four-year period.”

“The laws regulating the buying and selling of firearms exist to prevent criminals and other prohibited people from illegally accessing firearms,” said ATF Special Agent in Charge Ken Croke.  “By circumventing these laws, Webber knowingly and intentionally put people’s lives at risk.”

“Illegal firearms dealers can create public safety and national security vulnerabilities by potentially arming criminals and terrorists without a traceable paper trail, while also hurting the image and business reputation of licensed law-abiding firearms dealers,” said Special Agent in Charge David A. Thompson of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (HSI) Denver office.  “Frequently, such successful criminal cases are identified, investigated and presented for prosecution by combining the law enforcement resources and authorities of multiple agencies.  Our HSI special agents routinely work cooperatively with other law enforcement partners to shut down these criminal operations that pose a public safety risk to our communities.”

“Mr. Webber's crimes were not victimless,” said Special Agent in Charge Tara Sullivan of the Internal Revenue Service-Criminal Investigation (IRS-CI) Field Office in Las Vegas, Nevada.   “Reporting inaccurate information on your taxes cheats the government and is unfair to honest taxpayers.  Mr. Webber decided that he was above the law and IRS CI holds all offenders accountable.”

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Huber commended the special agents of ATF, IRS-CI and HSI, who conducted the investigation and Assistant U.S. Attorneys Cy H. Castle and J. Drew Yeates and Paralegal Heather Nielson of the U.S. Attorney’s Office in the District of Utah and Trial Attorney Kathleen M. Barry of the Tax Division, who prosecuted the case.

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

The U.S. Departments of Justice, of the Army, and of the Interior today invited representatives from all 567 federally recognized tribes to participate in formal, government-to-government consultations on how federal decision-making on infrastructure projects can better allow for timely and meaningful tribal input.  Starting with a listening session on Oct. 11, formal tribal consultations are scheduled in six regions of the country, from Oct. 25 through Nov. 21.  The deadline for written input will be Nov. 30.

The three departments previously announced on Sept. 9, the intention to hold these consultation sessions after important issues were raised by the Standing Rock Sioux Tribe and other tribal nations and their members regarding the Dakota Access pipeline specifically and pipeline-related decision-making more generally.

The consultations will focus on how the federal government can better ensure meaningful tribal input into infrastructure-related decisions and the protection of tribal lands, resources and treaty rights and will also explore with tribes whether new legislation should be proposed to Congress to alter the current statutory framework to promote those goals.

For a copy of the invitation letter that was sent to all tribal leaders today, please click here.

The Office of Justice Programs’ Bureau of Justice Assistance (BJA) today announced funding of more than $8.8 million in 20 separate awards to 19 state health and pharmacy boards and departments to better track and share prescription drug information to help reduce drug abuse, misuse, and diversion.

The awards, funded under the BJA’s Harold Rogers Prescription Drug Monitoring Program FY 2016 Competitive Grant Program, enable awardees to create, implement, and enhance Prescription Drug Monitoring Programs (PDMPs). PDMPs are state-run databases that collect data about controlled substance prescriptions dispensed by pharmacies and doctors. Authorized users, including prescribers and dispensers, are permitted to monitor dispensing activity through these programs. Checking a PDMP before prescribing helps to improve appropriate pain management care, prevent diversion of drugs, and identify patients who may have an opioid use disorder and need treatment.  In certain states, law enforcement officers may also obtain authorization to access PDMP data. Evidence suggests that PDMPs improve patient care while preventing abuse and overdose deaths. 

“Misuse of prescription drugs is a national problem, that requires the cooperative efforts of all medical, health, pharmaceutical, law enforcement agencies, and other partners to solve,” said Assistant Attorney General Karol V. Mason of the Office of Justice Programs. “These awards provide a foundation of resources for enabling data collection, sharing, and collaboration to help prevent prescription medication misuse and abuse.” 

These awards support collaboration between law enforcement, prosecutors, public health, treatment professionals, pharmacies, and the medical community to promote strategies that inform effective policies, support investigations, and offer treatment intervention and prevention efforts for at-risk individuals and communities. The awards are administered by BJA in coordination with a myriad of partners, including the U.S. Drug Enforcement Administration’s Office of Diversion Control, the Office of National Drug Control Policy, the U.S. Centers for Disease Control and Prevention, the U.S. Food and Drug Administration, and the Substance Abuse and Mental Health Service Administration.

Today’s awardees include:

• Alabama Dept. of Public Health
• Arkansas Dept. of Health
• Arizona State Board of Pharmacy
• Connecticut Dept. of Consumer Protection
• Dept. of Public Health Social Services
• Kentucky Cabinet for Health and Human Services
• Illinois Dept. of Human Services
• City of Lowell, Massachusetts
• Maryland Dept. of Health and Mental Hygiene
• State of Michigan Dept. of Licensing and Regulatory Affairs
• Minnesota Board of Pharmacy
• Mississippi Board of Pharmacy
• Multnomah County Health Dept., Oregon
• Ohio Office of Criminal Justice Services
• Ohio Board of Pharmacy
• South Dakota Dept. of Health
• Tennessee Dept. of Health
• University of Florida
• Utah Dept. of Health

Today’s awards were announced as part of Prescription Opioid and Heroin Epidemic Awareness Week, which President Obama established by proclamation Sept. 16. Departments across the federal government are continuing to use all available tools to combat this epidemic by expanding evidence-based prevention and treatment programs, increasing access to the overdose-reversal medicine naloxone, improving opioid prescribing practices, and supporting targeted enforcement activities.

For additional information about this grant program, visit http://go.usa.gov/xKW3Q.

WASHINGTON – U.S. Immigration and Customs Enforcement (ICE) arrested 36 fugitives during concurrent nationwide operations this week – Operation Safe Nation and Operation No Safe Haven III. Of those arrested, 17 were sought because they may pose a threat to public safety or national security, including individuals suspected of providing material support to a terrorist organization and 19 were sought for their known or suspected roles in human rights violations overseas.

 

During the operations that concluded Wednesday, the ICE National Fugitive Operations Program arrested the fugitives in coordination with the ICE Human Rights Violators and War Crimes Center, the ICE Counterterrorism Section and ICE field offices around the country.

 

ICE credits the success of this operation to the combined efforts of the U.S. National Central Bureau-Interpol Washington which provided critical support with deconfliction, foreign criminal history, and identity confirmation information.

 

“Interpol’s investigative tools provide U.S. law enforcement with a suite of databases that provide real-time biometric, travel document, and criminal background information,” according to Interpol Washington Director Geoffrey S. Shank. “These operations exemplify what can be achieved when U.S. and international law enforcement agencies have immediate access to information."

 

Read full article here: https://www.ice.gov/news/releases/ice-arrests-36-fugitives-across-us-during-operation-safe-nation-and-operation-no-safe

The government has intervened in a False Claims Act lawsuit against Energy & Process Corporation (E&P), of Tucker, Georgia, alleging that E&P knowingly failed to perform required quality assurance procedures and supplied defective steel reinforcing bars (rebar) in connection with a contract to construct a Department of Energy (DOE) nuclear waste treatment facility, the Justice Department announced today.

“The Department of Justice is committed to ensuring that construction suppliers who are paid a premium to meet high safety standards actually supply the goods and perform the work for which they are paid,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “When contractors cut corners, they not only cheat American taxpayers, but they also can put public safety at risk, particularly when their misconduct affects a facility that houses and processes nuclear materials.” 

The lawsuit alleges that although the DOE paid E&P a premium to supply rebar that met stringent regulatory standards for the Mixed Oxide Fuel Fabrication and Reactor Irradiation Services facility in the DOE’s Savannah River site near Aiken, South Carolina, E&P failed to perform most of the necessary quality assurance measures, while falsely certifying that those requirements had been met.  The lawsuit further alleges that one-third of the rebar supplied by E&P and used in the construction was found to be defective.

“To ensure that the nuclear facility would be safe, the government paid E&P a sizable premium for exhaustive quality control procedures,” said U.S. Attorney John Horn of the Northern District of Georgia.  “This lawsuit alleges that E&P intentionally failed to perform the quality control work, and then concealed its failing by providing false certifications to the government.  In intervening in this lawsuit, the U.S. Attorney’s Office seeks to ensure that entities that defraud the government are identified and held responsible.”

The lawsuit was filed by Deborah Cook, a former employee of the prime contractor building the DOE facility, under the qui tam, or whistleblower, provisions of the False Claims Act.  Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  The act permits the government to intervene in such lawsuits, as it has done in this case.  Defendants found liable under the act are subject to treble damages and penalties. 

This matter was investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Offices of the Northern District of Georgia and the District of South Carolina and the DOE’s Office of Inspector General.

The case is captioned United States ex rel. Cook v. Shaw Areva Mox Services, LLC, et al., Case No. 01:13-cv-4023 (N.D. Ga.). 

The claims asserted against E&P are allegations only and there has been no determination of liability. 

A federal jury in Los Angeles convicted the owner of a medical clinic for his role in a health care fraud scheme and for filing false income tax returns.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Field Office, Acting Special Agent in Charge Anthony J. Orlando of Internal Revenue Service Criminal Investigation’s (IRS-CI) Los Angeles Field Office and Special Agent in Charge Scott Rezendes of the Office of Personnel Management Office of Inspector General (OPM-OIG) Field Operations made the announcement.

Michael Huynh, 66, of Northridge, California, was convicted on Sept. 21, 2016, of one count of conspiracy to commit health care fraud and 11 counts of filing false tax returns after a seven-day trial before U.S. District Judge Otis D. Wright II of the Central District of California.  Huynh will be sentenced on Jan. 30, 2017.

Evidence introduced at trial showed that Huynh, the office manager and part-owner of a medical clinic, provided false prescriptions to a pharmacist and co-conspirator, Farhad N. Dany Sharim, who submitted false claims to insurance companies for drugs that were never dispensed.  Once Sharim received payments from the insurance companies, he paid Huynh for the false prescriptions.  Trial evidence showed that between January 2004 and November 2009, Huynh received 82 checks from Sharim totaling over $1.1 million.   Evidence at trial also demonstrated that Huynh filed false federal tax returns for tax years 2007 through 2011 that underreported the medical clinic’s gross receipts and sales on the corporate tax returns and total income on the individual tax returns.  Trial evidence showed underreported income of over $1.6 million.

Sharim pleaded guilty to one count of conspiracy to commit health care fraud on Nov. 18, 2013 and will be sentenced on Dec. 5, 2016.

The FBI, IRS-CI and OPM-OIG investigated the case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California.  Fraud Section Trial Attorney Alexis Gregorian and Assistant United States Attorney Steven Arkow prosecuted the case.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,900 defendants who have collectively billed the Medicare program for more than $10 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.

Government Agencies and Non-Profits Collaborate to Launch Public Education Campaign

The Justice Department, in coordination with the U.S. Postal Inspection Service (USPIS), the Department of the Treasury’s Office of Foreign Assets Control (OFAC) and other law enforcement partners, today announced wide-ranging enforcement actions – including criminal charges, economic sanctions, seizure of criminal proceeds and civil injunction lawsuits – along with the execution of search warrants to combat a global network of mass mailing fraud schemes that collectively have defrauded millions of elderly and vulnerable victims across the United States out of hundreds of millions of dollars.  Simultaneously, a consortium of government agencies and non-profit groups led by the department’s Consumer Protection Branch and Elder Justice Initiative announced a public education campaign to heighten public awareness and educate potential victims and their families about these schemes. 

The actions announced today are part of a broader effort by the department and its international law enforcement partners to attack fraud schemes targeting older Americans and other vulnerable populations that involve individuals and entities across the globe, including Canada, France, India, the Netherlands, Singapore, Switzerland, Turkey and the United States. 

“Every year, fraudulent mail schemes target millions of Americans with false promises of wealth and riches, swindling hundreds of thousands of our fellow citizens,” said Attorney General Loretta E.  Lynch.  “Today’s actions send a clear message that the Department of Justice is determined to hold the perpetrators of these harmful schemes accountable.  And they make unmistakably clear that we are committed to protecting our people from exploitation – especially our older citizens, who are so often the focus of these shameful ruses.  I want to thank our partners across the federal government for their assistance in bringing these actions, and I pledge the department’s ongoing dedication to ending mail fraud.”

“The law enforcement and civil injunction efforts announced today are just a part of our initiative,” said Postal Service’s Chief Postal Inspector Guy Cottrell. “We believe that consumer education is the best defense against these scammers. We can’t arrest all of these con artists, so preventing the crime is critical.”

The mail schemes involve a complicated web of actors located across the world and each scheme follows a similar pattern.  Fraudulent “direct mailers” create letters falsely claiming that the recipient has won, or will soon win, cash or valuable prizes, or otherwise will come into good fortune.  In order to collect these benefits, the letters say that the recipients need only send in a small amount of money for a processing fee or taxes.  The letters appear to come from legitimate sources, typically on official-looking letterhead, and – even though they are in reality identical form letters – the letters appear to be personally addressed.  Some solicitations even use fonts that appear to be handwritten.

Today’s actions include both criminal and civil cases against multiple “direct mailers” who, collectively, are responsible for dozens of schemes involving tens of millions of dollars every year.   In addition, today’s actions also seek to shut down several other actors who work with the mailers to carry out these schemes: an India-based printer that manufactures the solicitations and arranges for bulk shipment to U.S. victims; list brokers who buy, sell or rent lists of victims from one mailer to another so that once a victim has fallen prey to one scheme, others are able to target this victim; and a Canadian payment processor that, for more than 20 years, has helped dozens of international fraudsters gain access to U.S. banks and take money from victims.

“The Civil Division’s Consumer Protection Branch is working with international and domestic law enforcement through the International Mass-Marketing Fraud Working Group to dismantle these complex frauds through both civil and criminal actions,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.   “And we will continue to work with federal partners and non-governmental organizations to educate the public about this threat to vulnerable consumers.”

“The defendants targeted the elderly and vulnerable by selling false promises of cash and lavish prizes,” said U.S. Attorney Robert L. Capers for the Eastern District of New York.  “Not surprisingly, the only good fortune befell the defendants.  We will employ every available means, including educating consumers, to protect the public from these schemes.”

Actions against Canadian Payment Processor

The Justice Department, OFAC, and USPIS took simultaneous actions today against PacNet Services Ltd. (PacNet), an international payments processor and money services business based in Vancouver, Canada, along with affiliate companies and their operators.  Today OFAC designated the PacNet Group as a significant transnational criminal organization (TCO) pursuant to Executive Order (E.O.) 13581, “Blocking Property of Transnational Criminal Organizations.”  OFAC is also designating a global network of 12 individuals and 24 entities across 18 countries.  As a result of today’s action, all property and interests in property of the designated persons subject to U.S. jurisdiction are blocked, and U.S. persons are prohibited from engaging in transactions with them.

In addition, USPIS has sought and obtained a seizure warrant in the U.S. District Court for the Eastern District of New York for the funds in a PacNet U.S. bank account that is used to process payments received through fraudulent mailings.  The matter is being investigated by the USPIS team assigned to the Consumer Protection Branch, in conjunction with the USPIS’s Newark Division, Internal Revenue Service-Criminal Investigation’s Newark Field Office and Homeland Security Investigation’s El Dorado Money Laundering Task Force.

According to court filings made public today, PacNet has a 20-year history of engaging in money laundering and mail fraud, by knowingly processing payments on behalf of a wide range of mail fraud schemes that target victims in the United States and throughout the world.  According to these records, in 2016 alone, PacNet has processed payments for the perpetrators of more than 100 different mail fraud campaigns, collectively involving tens of millions of dollars.  In doing so, PacNet provides fraudsters in other countries with unfettered access to U.S. banks.  The records also identify PacNet as the processor for each of the defendants named in the cases announced by the Department today.

“PacNet has knowingly facilitated the fraudulent activities of its customers for many years, and today’s designations are aimed at shielding Americans and the nation’s financial system from the large-scale, illicit money flows that are generated by these scams against vulnerable individuals,” said OFAC Acting Director John E. Smith.  “Treasury will continue to use its authorities to respond to the evolving nature of transnational organized crime.”

Criminal Charges and Civil Injunction Action Filed against Turkish Direct Mailer

In a criminal complaint filed in the U.S. District Court for the Eastern District of New York, the government charged Ercan Barka, 34, a resident of Turkey, with conspiracy to commit mail fraud.According to the criminal complaint, Barka arranged for fraudulent solicitations to be mass-mailed to victims across the United States.The fraudulent solicitations told recipients that they had won cash awards or lavish prize items and needed to pay a “fee” to claim their winnings.Victims allegedly received nothing in return for their fees.Barka was arrested by U.S. Postal Inspectors at JFK International Airport in New York on Sept. 3, as he was about to board a plane bound for Turkey.

The government also brought a civil injunction action under the Anti-Fraud Injunction Statute against Barka and True Vision LLC, a Delaware-based corporation through which he operates.The civil complaint seeks to preliminarily and permanently ban Barka from participating in mail fraud schemes.The complaint alleges that Barka sends millions of fraudulent mailings to potential U.S. victims each year and that, since 2012, U.S. victims have paid more than $29 million to Barka’s mailing campaigns.

Civil Action under the Anti-Fraud Injunction Statute against Swiss/Singaporean Direct Mailer, Indian Printer and Connecticut “List Broker”

In a separate civil action, the United States brought suit to shut down entities and individuals, some of whom have engaged in numerous predatory mail fraud schemes for more than a decade, targeting primarily the elderly and vulnerable.  First, the complaint names BDK Mailing GmbH, Mailing Force Pte. Ltd. and Only Three Pte. Ltd. (collectively BDK).  These entities, under common ownership, are based in Switzerland and Singapore.  The complaint also names BDK’s principals, Chantal Seguy, 58, and Marion Elchlepp, 25, both of Paris, and Aurore Jouffroy, of Zurich.  BDK acts as a “direct mailer” responsible for mailing millions of multi-piece solicitations to potential victims throughout the United States that profess to come from financial entities, scholars and world-renowned psychics, with contrived names like “Harrison Institute,” “Dr. Grant,” “Finkelstein & Partner,” and “Marie de Fortune,” among others.  The solicitations are written to give the impression that they are personalized and inform recipients that they will receive large sums of money, guaranteed money-making methods and/or powerful talismans in return for payment of a fee of $50 to $55.  In reality, the complaint alleges, the purported senders and the promised winnings are fictitious.  Although victims send in the requested fees by cash, check or credit card, they receive nothing in return.  The complaint alleges that tens of thousands of victims send approximately $50 to $60 million annually in response to the defendants’ fraudulent solicitation packets.

In addition, the complaint names Macromark Inc., a Connecticut-based list broker that has marketed BDK’s lead lists to third-party direct mailers, and Mary Ellen Meyer, 45, of Mahopac, New York, a Macromark client service manager.  The complaint alleges that Macromark and Meyer have rented lead lists to BDK and other fraudulent direct mailers who Macromark and Meyer knew would use the lists to personalize and address hundreds of thousands of solicitation packets to potential victims across the United States.  Macromark marketed the lead lists as containing the demographic information of individuals likely to send money in response to the solicitations.  The lists collectively contained approximately 750,000 potential victim names and addresses, according to the complaint. 

Finally, the complaint names Mail Order Solutions India Pvt. Ltd. (MOSI), an India-based printer and distributor, and its principals, Dharti Desai, 49, of New York County and Mumbai, India, and Mehul Desai, also of Mumbai.  As alleged in the complaint, MOSI and its principals have served as one of BDK’s printer/distributors since at least 2005.  MOSI designs, edits and proofreads BDK’s solicitations, then “lettershops” them (folds, inserts and seals the various printed elements of the solicitations into mailing envelopes).  MOSI prepares the letters for entry into the U.S. mail either as air freight to JFK (or another international airport) for delivery to a domestic mailing house, or by shipping the letters to Singapore, Fiji or Hungary for introduction via the foreign post.  The complaint alleges that since 2013, MOSI has shipped at least 24.5 million solicitation packets to the United States.

Civil Action under the Anti-Fraud Injunction Statute against New York Direct Mailer

In another civil injunction action, the department seeks to stop a collection of businesses and individuals who have operated a direct mailing scheme based out of Long Island, New York, since at least 2012.  The  complaint alleges that DMCS Inc., Direct Marketing Consulting Services Inc., Horizon Marketing Services Inc. (Horizon), Quantum Marketing Inc. (Quantum) and their principals, Sean Novis, 46; Gary Denkberg, 53; and Cathy Johnson, 34, all of Nassau County, New York, committed mail fraud in connection with their scheme.  The complaint alleges that the defendants send fraudulent solicitations styled as notifications that the recipient has won a large cash prize, typically worth more than $1 million.  The complaint alleges that the defendants mail hundreds of thousands of solicitations to potential victims throughout the United States every year and have grossed roughly $30.4 million since 2012. 

Consent Decree Entered against Dutch “Caging Service”

Also today, the department announced that the U.S. District Court for the Eastern District of New York entered a consent decree of permanent injunction against two Dutch caging businesses and their principal, Erik Dekker, 54, of Langbroek, the Netherlands, to prevent them from assisting mass-mailing fraud schemes.  The businesses – Kommunikatie Service Buitenland B.V. (KSB) and Trends Service in Kommunikatie B.V. – are known collectively as Trends.  The complaint, which was filed June 1, alleged that Trends and Dekker used P.O. boxes in the Netherlands from which they collected tens of millions of dollars in victim payments for multiple international mail fraud schemes, tracked victims’ information and forwarded proceeds to PacNet for processing.

Also on June 1, Dutch law enforcement agents executed search warrants on the business address used by both companies and on Dekker’s home address.  The Dutch authorities also took control of the Dutch P.O. boxes used by the defendants to receive victim funds.  The coordinated U.S. and Dutch enforcement actions immediately stopped the use of Dutch P.O. boxes to receive payments from fraud victims.  Further investigation revealed that Trends was providing caging services for the Barka and BDK schemes targeted in today’s actions.

Trends and Dekker agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from performing caging services for prize or psychic mailing campaigns, or any other mailing campaign that misrepresents itself to consumers.  The injunction also allows USPIS to intercept U.S. mail headed to the defendants, and to return that mail – along with any money being sent to the defendants – to U.S. victims.

Criminal Charges against Nevada Mass Mailer

On Sept. 20, pursuant to a 24-count indictment unsealed that day, Glen Burke, 56, of Las Vegas, was arrested on charges related to operating fraudulent schemes including a mass-mailing prize campaign that violated a federal court order.  According to the charges, Burke’s business mailed solicitations designed to fool recipients into believing that they had won thousands or millions of dollars.  The solicitations allegedly used fictitious names and in many cases looked like they came from law firms or financial institutions.  The indictment alleges that the solicitations advised consumers to pay a fee – usually $20 to $30 – in order to claim their winnings.  Once consumers paid, however, Burke allegedly failed to send anyone their promised winnings of thousands or millions of dollars.

The indictment also charges Burke and a co-defendant, Michael Rossi, 51, of Las Vegas, with running a fraudulent telemarketing campaign that mirrored the mass-mailing campaign.  Rossi was also arrested on Sept. 20.  According to the indictment, telemarketers hired by Burke and Rossi falsely told consumers that they had been selected to receive a valuable prize worth thousands of dollars, and that they would receive the prize if they bought certain products.  Burke and Rossi are charged with conspiracy, mail fraud and wire fraud in connection with telephone promotions. 

The indictment includes criminal contempt charges against Burke, which stem from a court order entered as part of a Federal Trade Commission (FTC) case brought in 1997, in which the FTC successfully obtained an order that barred Burke from misrepresenting material information to consumers.  Criminal contempt of court has no statutory maximum penalty.

In addition to the contempt charges, Burke and Rossi are each charged with 16 counts of wire fraud, five counts of mail fraud and one count of conspiracy.  Each of these counts carries a statutory maximum penalty of 20 years in prison.  The indictment also seeks forfeiture of criminal proceeds.

FTC Action against California Mailer, Florida Printer and Florida List Broker

The FTC filed a case today in U.S. District Court for the Central District of California against Terry Somenzi, 74, of Los Angeles, who did business through a company called International Advisory Services Inc.; David Raff, 54, of Weston, Florida, and his company, Millennium Direct Inc., also doing business as MDI Lists; and Ian Gamberg, 37, also of Weston, doing business through Printmail Corporate Solutions Inc.  As alleged in the FTC’s complaint, since at least 2013, the defendants participated in mailing hundreds of thousands of cash prize notifications from fictitious companies, including Paulson Independent Distributors, International Procurement Center, Keller, Sloan & Associates and Phelps Ingram Distributors, informing mostly elderly consumers that they won a substantial cash prize of nearly $1 million or more.  The notifications instruct consumers to pay a fee of approximately $25 to collect their prizes, but those who paid received nothing in return.  According to the complaint, Somenzi and Raff, directly and through third-parties, provided the cash prize notifications and mailing lists of consumers’ names and addresses to Gamberg, who then arranged to have the notifications printed and mailed.  Many consumers who paid the “fees” later received numerous other deceptive personalized cash prize notifications from the defendants and other companies who purchased lists containing the consumers’ personal information.

“In the 21st century, the scam in your mailbox just as likely comes from the other side of the world as from the other side of town,” said Director Jessica Rich of the FTC’s Bureau of Consumer Protection.  “The FTC’s efforts to protect consumers don’t stop at our borders; we work with partners around the world against the perpetrators of mass mailing fraud. Regardless of where the fraud comes from, we encourage consumers to let us know if they have been scam victims; we share complaint information with our law enforcement partners in the United States. and abroad.  Report your complaint at www.ftc.gov, or, for international scams, at the 36-agency joint website www.econsumer.gov.”

Iowa Attorney General Actions against List Broker and Direct Mailers

The Iowa State Attorney General took action today against fraudulent mass mailers and others facilitating their schemes.  It negotiated an Assurance of Voluntary Compliance (AVC) with list broker Macromark to resolve allegations that the company facilitated fraudulent activities on the part of operations that mailed deceptive solicitations relating to sweepstakes and psychics.  The AVC with Macromark requires it to refrain from any facilitation of such fraudulent activities affecting Iowa residents and to pay $30,000 into a fund that protects elderly Iowans against consumer fraud. 

The Iowa Attorney General also brought an action under the Iowa Consumer Fraud Act seeking an injunction, restitution and other relief against Waverly Direct Inc., and its owner, Gordon Shearer, a New York-based direct mailer.  Shearer and his company allegedly sent out deceptive mailings from the so-called “Numerological Resource Center.”  These defendants maintain lists of vulnerable people who fell prey to their schemes, according to Iowa's lawsuit, and market these lists to other mass mailers through a list broker. 

Finally, the Iowa Attorney General brought a lawsuit under the Iowa Consumer Fraud Act against Nicholas Valenti of Nevada.  Valenti has allegedly been involved in marketing the rights to send out deceptive mailings regarding techniques for winning lotteries and other chance-dominated gaming activities. 

* * *

The charges and allegations in the indictments and criminal complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.  The claims made in the civil complaints are allegations only, and there has been no determination of liability. 

Public Education

            Reflecting the government’s unified effort to combat elder financial exploitation, the Consumer Protection Branch and Elder Justice Initiative have spearheaded a multi-agency education campaign to inform the public about mass mailing fraud and how it can be avoided.  Agency partners include the USPIS, the FTC, the Consumer Financial Protection Bureau, the Social Security Administration, the Securities and Exchange Commission, the Commodities Futures Trading Commission and USA.gov.  As described in detail in the fact sheet, each agency is using its means of public outreach to broadcast information about the prevalence of mass mailing fraud.  The outreach includes messages to caregivers – such as friends, relatives, social workers and others in contact with older individuals – about the need to be vigilant against prize or psychic letters being sent to those under their care. 

In addition, and as described in detail in the fact sheet, the government has also joined forces with non-governmental organizations in the elder justice and consumer protection arena, each of which will contribute to the public education campaign.  These groups include AARP, Consumers Union, Consumer Federation of America, the Elder Justice Coalition, Meals on Wheels Association of America, National Adult Protection Services Association, National Association of Area Agencies on Aging (n4a), National Association of States United for Aging and Disabilities, National Center for Victims of Crime and National Consumers League.  Using their vast networks and communication tools, these organizations will alert their members and the public to the scourge of mass mailing fraud schemes and offer tips to combat financial exploitation.  Their tools include websites, newsletters, social media channels, training and outreach events and other means.

U.S. law enforcement’s actions against mass-mailing fraud arise out of a larger worldwide effort.  Mass-mailing fraud has been identified as a major financial threat by the International Mass-Marketing Fraud Working Group (IMMFWG), a network of civil and criminal law enforcement agencies from Australia, Belgium, Canada, Europol, the Netherlands, Nigeria, Norway, Spain, the United Kingdom and the United States.  The IMMFWG is co-chaired by the U.S. Department of Justice and FTC, and law enforcement in the United Kingdom.  Recent actions have been taken by law enforcement agencies from several working group countries, including Belgium, Canada, the Netherlands and the United Kingdom, to disrupt mass mailing fraud schemes and gather evidence for prosecution of criminal participants.  Through these efforts, the working group serves as a model for international cooperation against specific threats that endanger the financial well-being of each country’s residents.

More information on fraud against the elderly is available at https://www.justice.gov/elderjustice/.  For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.  

A settlement has been reached with the city of Seattle, Washington, to resolve its liability for injured natural resources at the Lower Duwamish Waterway Superfund Site in Seattle by funding restoration projects, the Justice Department announced today.  To restore the natural resources, the city of Seattle has purchased restoration credits from Bluefield Holdings, a company that develops restoration projects.  This is the first natural resource damages settlement to fund restoration through the purchase of credits in restoration projects developed by a restoration development company.  Each of the contemplated restoration projects address natural resource injuries at the site and the trustees will oversee and ensure the projects are constructed and implemented appropriately.

The settlement is a collaboration involving the city of Seattle, Bluefield Holdings and the Lower Duwamish Waterway Superfund Site natural resource trustees: the National Oceanic and Atmospheric Administration (NOAA), the Department of the Interior (DOI), the Washington State Department of Ecology, the Suquamish Tribe and the Muckleshoot Indian Tribe.  The city of Seattle purchased restoration credits from Bluefield to account for the city’s share of the injuries to natural resources from hazardous substances released into the Lower Duwamish Waterway.  The city’s credit purchase totals approximately $3.5 million worth of restoration, when calculated using the cost of projects developed directly by the natural resource trustees.  In addition, the city will make available a number of properties along the Lower Duwamish Waterway for potential restoration project development by Bluefield. 

“The city of Seattle is acting responsibly to resolve its liability for injuries to natural resources by acting to restore those resources by creatively utilizing restoration credits,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “Everyone comes out ahead when parties resolve their liability in this way, and the benefits of this resolution, cleaner waterways, will be enjoyed by Seattle residents and generations to come.”

Projects developed by restoration development companies can have advantages over more traditional restoration approaches.  For responsible parties that prefer not to develop restoration projects themselves, purchasing credits can be less expensive than paying the natural resource trustees to build a project.  And while natural resources trustees must certify and monitor restoration projects built by others for credits generated by those projects to be suitable to settle natural resource damages liability at the impacted site, this arrangement is much less time-intensive for the trustees than designing and constructing projects themselves.

“Settlements like this demonstrate that when trustees work with responsible parties to focus on natural resources we can restore the environment without litigation,” said Regional Director Robyn Thorson of the Interior Department’s Fish and Wildlife Service, Pacific Region 1.

 “Today's agreement shows that natural resource trustees' obligation to restore injured resources and compensate for lost use can be met by innovative approaches like the restoration credits approach used here,” said Lois Schiffer, General Counsel of NOAA.  “NOAA is pleased that the Bluefield Holdings’ projects will compensate for the natural resource injuries that occurred from the releases of hazardous substances by responsible parties into the Lower Duwamish River as well as those from Harbor Island and Lockheed West Superfund Sites.  These innovative approaches save money and that assure the public that the right kind of restoration will be implemented for each site on an expedited basis.”  

 The Lower Duwamish Waterway Superfund Site is one of the largest Superfund sites in Washington State and includes the stretch of the Duwamish River that flows into Elliott Bay in Seattle.  Over the years, a number of industrial and municipal operations have polluted the site with hazardous substances.  The natural resource trustees have previously settled with The Boeing Company for natural resource damages related to its polluting activities along the Lower Duwamish Waterway. 

The consent decree, lodged in the U.S. District Court for the Western District of Washington, is subject to a 30-day public comment period and approval by the federal court.  A copy of the consent decree is available on the Justice Department Web site at www.justice.gov/enrd/Consent_Decrees.html.

Worked With Others to Seek More Than $700,000 in Fraudulent Refunds

Two Maryland residents were sentenced today for their involvement in a far-reaching stolen identity refund fraud scheme in which they worked with others to seek over $700,000 in income tax refunds through the filing of fraudulent federal income tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, U.S. Attorney Channing D. Phillips of the District of Columbia, Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Inspector in Charge Terrence P. Mckeown of the U.S. Postal Inspection Service, Washington Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.

Wayne Gardner, 50, of Capitol Heights, Maryland, and Michael Whittaker, 32, of Cumberland, Maryland, are among approximately 20 participants in this scheme who have pleaded guilty to charges in the U.S. District Court for the District of Columbia.  According to court documents, the overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million. The two men pleaded guilty on Jan. 20, to one count each of conspiracy to commit theft of public money and theft of public money.

U.S. District Judge Ellen S. Huvelle for the District of Columbia sentenced Gardner to serve 16 months in prison, 200 hours of community service and ordered him to pay $158,160 in restitution to the IRS, and sentenced Whittaker to serve 18 months in prison and ordered him to pay $397,090.95 in restitution to the IRS.  The restitution ordered represents the value of the U.S. Treasury checks that were negotiated as a result of their conduct.  Following their prison terms, the men will be placed on three years of supervised release.

According to the government’s evidence, Gardner and Whittaker participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance.  The refunds were sought for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners.  Returns were also filed in the names of, and refunds were issued to, people who were willing participants in the scheme.  The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.

According to documents filed with the court, Gardner and Whittaker obtained the means of identification of third parties, including names and social security numbers and provided them to a co-conspirator for use in the preparation of fraudulent income tax returns.  Whittaker admitted to providing 21 means of identification from August 2010 to May 2012.  He also permitted various residential addresses that he controlled to be used as purported taxpayer addresses for the delivery of tax refund checks and deposited U.S. Treasury checks that were received as part of this scheme into his bank accounts.  Gardner admitted to providing 65 means of identification to a co-conspirator between August and December 2010, and his involvement in the filing of 116 fraudulent tax returns that sought refunds of approximately $299,984.  Whittaker admitted that he was involved in the filing of 135 fraudulent tax returns that sought refunds of approximately $494,902.

The fraudulent tax returns that were filed as part of the scheme included Schedules C or C-EZ that falsely claimed that each “taxpayer” operated a business, such as “barber” or “childcare,” as a sole proprietorship.  The returns falsely stated that the “taxpayer” had gross receipts and two or more dependent children, when, in fact, the “taxpayer” was either a victim of identity theft, was misled into providing his or her identifying information, or was a willing participant in the scheme. 

Two other defendants recently were sentenced for their roles in the conspiracy:

Bernard Rankin, 44, of Glenarden, Maryland, was sentenced to serve 15 months in prison and ordered to perform 100 hours of community service and pay $190,487 in restitution.  He pleaded guilty on Nov. 4, 2015, to conspiracy to defraud the United States with respect to claims.  Rankin admitted permitting the use of his residential address and bank account in the scheme and recruiting another individual to take part as well.

Lakisha Jackson, 40, of District Heights, Maryland, was sentenced to serve six months in a halfway house and ordered to perform 100 hours of community service and pay $175,953 in restitution.  She pleaded guilty on May 3, to one count of conspiracy to commit theft of public money. Jackson admitted that she allowed her residential address to be used in the scheme.

In announcing the sentences, Principal Deputy Assistant Attorney General Ciraolo, U.S. Attorney Phillips, Special Agent in Charge Jankowski, Inspector in Charge Mckeown and Assistant Inspector General Phillips commended those who investigated the case.  They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialists Donna Galindo, Julie Dailey, and Jessica Mundi.  Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender and Thomas F. Koelbl and former Trial Attorney Jessica Moran of the Tax Division, who prosecuted the case.

A federal grand jury sitting in Portland, Oregon returned an indictment, unsealed today, charging three individuals with federal crimes related to hundreds of false federal income tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Billy Williams for the District of Oregon.

Lawrence Collins and Icy Love Martin are charged with conspiring with Mystique Pratcher, who was charged elsewhere, to file at least 160 false federal income tax returns fraudulently claiming more than $680,000 in federal income tax refunds and theft of government funds.  The indictment alleges that from approximately January 2009 through April 2012, Collins provided identities, addresses and bank accounts to Pratcher, which Pratcher used to prepare and file false federal income tax returns.  The indictment further alleges that Collins provided Pratcher with a bank account in Martin’s name, to which Pratcher directed more than $20,000 in fraudulent refunds.

The indictment further charges Collins, Martin and Nigeria Crawford with conspiring to file at least 35 false federal income tax returns that fraudulently claimed more than $259,000 in federal income tax refunds.  The indictment alleges that from approximately January 2012 through April 2014, Crawford prepared and filed false federal individual income tax returns using identities, addresses and bank accounts obtained through Collins.  The indictment further alleges that Crawford directed more than $30,000 in fraudulently obtained tax refunds into Martin’s bank accounts and at least $32,000 in fraudulently obtained tax refunds to stored-value debit cards in Crawford’s name.  

Martin also is charged with two additional counts of theft of government funds.  Crawford also is charged with 14 counts of filing false, fictitious, or fraudulent claims, 14 counts of wire fraud, and four counts of aggravated identity theft arising out of the scheme, as well as two counts of theft of government funds for receiving $15,642 in Supplemental Nutrition Assistance Program benefits and $7,681 in Temporary Assistance for Needy Families benefits.  The indictment alleges that, in applying for these benefits, Crawford failed to disclose wages and her receipt of fraudulently obtained individual income tax refunds.

If convicted, Collins, Martin and Crawford each face a statutory maximum sentence of 10 years in prison for each count of conspiracy to defraud the government, five years in prison for each count of filing false claims, 10 years in prison for each count of theft of government funds, 20 years in prison for each count of wire fraud and a mandatory consecutive sentence of two years for each count of aggravated identity theft.  In addition, each defendant faces terms of supervised release and monetary penalties.

An indictment merely alleges that crimes have been committed and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Billy Williams thanked special agents of the Internal Revenue Service-Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorney Leslie A. Goemaat and Assistant U.S. Attorney Quinn P. Harrington, who are prosecuting the case.

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

Assistant Attorney General John C. Cruden for the Environment and Natural Resources Division made the following statement regarding President Obama’s Presidential Memorandum on Climate Change and National Security.  The memorandum announced today establishes a policy that the impacts of climate change must be considered in the development of national security-related doctrine, policies, and plans: 

“Climate change presents real and in some cases imminent consequences for our nation’s environment and natural resources, but it will also gravely impact the entire world, our weather systems, the frequency of natural disasters and infectious disease, the viability of our coastal cities and the sustainability of our food, water resources and wildlife.  It is nothing short of a threat to national security, world order and the rule of law.  We must meet this threat to the planet we all share with courageous and far-sighted action.”

The Departments of Justice and the Interior joined with the state of Montana today to announce a proposed settlement with ExxonMobil Pipeline Company to resolve claims stemming from the July 2011 oil spill into the Yellowstone River.

ExxonMobil Pipeline Company has agreed to pay $12 million in natural resource damages to the federal government and the state of Montana as trustees for the natural resources injured by the spill.  A proposed consent decree was filed in federal court today.  The state and federal government have also issued a draft restoration plan which sets forth proposed actions to restore the river and wildlife habitat, and improve public lands and recreational resources.

 “This proposed settlement will restore this great natural resource for the people and the environment of Montana and its benefits will flow for generations to come,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “This agreement will require Exxon Mobil Pipeline Company to make this river – upon which both people and wildlife depend for enjoyment and sustenance – whole again.” 

“This settlement is an important part of the work being done to ensure that the 2.7 million miles of oil, gas and liquid chemical pipeline in this country remain safe and that when incidents occur, the operators assume responsibility for cleanup,” said U.S. Attorney Mike Cotter for the District of Montana.  “This settlement was the product of significant collaborative work by federal and state negotiators over a number of years and sends a strong message to operators in this field that they must assume the costs and risks, as well as reaping the benefits, of extracting natural resources.”

“Montanans deserve and expect ExxonMobil Pipeline Company to be held accountable for the damages they caused to Montana’s Yellowstone River, our communities and our economy,” said Governor Steve Bullock for the state of Montana.  “This proposed settlement goes a long way in protecting Montana’s Yellowstone River, one of the last, great, free-flowing rivers in the United States that plays a vital role in our strong $6 billion outdoor economy.”

“This settlement was reached through the efforts of the Montana Department of Justice’s Natural Resource Damage Program and the U.S. Departments of Justice and the Interior,” said Attorney General Tim Fox for the state of Montana.  “Under a joint State-Federal restoration plan, also issued today for public comment, these funds will be used to restore and improve the environmental and recreational resources of this great river.”

The state and federal government are seeking public comment on both the proposed consent decree and the draft restoration plan.

On July 1, 2011, a 12-inch diameter Silvertip pipeline owned by ExxonMobil Pipeline Company ruptured near Laurel, Montana, resulting in the discharge of crude oil into the Yellowstone River and floodplain.  The discharge is estimated to have been approximately 63,000 gallons (about 1,500 barrels) of oil.  The discharge occurred during a high-flow event, affecting approximately 85 river miles and associated floodplain.  Oil from the spill, along with the cleanup activities, harmed natural resources including fish and other aquatic life, birds (including migratory birds), wildlife, large woody debris piles, aquatic habitat, terrestrial habitat, recreational use and the services provided by these natural resources.  These public natural resources are under Trusteeship of the state of Montana and the U.S. Department of the Interior under the Oil Pollution Act and other laws.

The primary goal of the Oil Pollution Act is to make the environment and public whole for injuries to natural resources and services resulting from a discharge of oil or other hazardous substances to the environment.  In the restoration plan, the trustees have presented an evaluation of injuries to the natural resources, restoration alternatives and projects that benefit the same or similar resources injured by the oil spill.  

Projects include:

• Acquiring terrestrial/riparian bottomland to conserve and restore terrestrial habitat with some acquisitions focusing on habitat requirements for injured birds;
• Acquiring and restoring terrestrial/riparian habitat;
• Controlling invasive woody species on state and federal lands;
• Acquiring channel migration or other easements or fee title land acquisitions to provide areas for large woody debris recruitment;
• Removing flanked riprap from the river;
• Removing side channel blockages;
• Providing fish passage around fish barriers;
• Restoring and stabilizing river banks using soft bank restoration techniques;
• Increasing American white pelican production through improvement of breeding and nesting areas;
• Improving city parks and public lands bordering the Yellowstone River;
• Improving urban fishing opportunities adjacent to the Yellowstone River;
• Developing new and preserving existing public access on the Yellowstone River.

The trustees evaluated a range of restoration alternatives that would provide resource services to compensate the public for losses pending natural recovery of resources injured by the oil spill.  The trustees have identified preferred restoration alternatives designed to address the resource injuries.  The trustees plan to work with project partners such as local, state and federal agencies and nonprofit organizations and landowners to implement the projects.

The trustees will host a public meeting to summarize key components of the restoration plan and hear public comment.  The public meeting will be held on Wednesday, Oct. 12, at the Montana Fish, Wildlife and Parks conference room at 2300 Lake Elmo Drive in Billings, Montana, from 6:00 PM to 8:00 PM.  The trustees will review and consider comments received during the public comment period when preparing the final restoration plan.

Today’s settlement, lodged with the U.S. District Court for the District of Montana, is subject to a 30-day public comment period following notification in the Federal Register and final approval by the court.  To view the consent decree or to submit a comment, visit the department’s website: www.justice.gov/enrd/Consent_Decrees.html.

The Justice Department reached a resolution agreement today with Wheaton College in Massachusetts to ensure the college implements a swift and effective response to allegations of sexual assault and harassment involving students. 

In August 2015, after receiving a complaint regarding Wheaton’s handling of a report of sexual assault, the department initiated an investigation and compliance review under Title IX of the Education Amendments of 1972, which prohibits sex discrimination in education programs and activities receiving federal financial assistance.  The department reviewed Wheaton’s handling of sexual assault and harassment complaints over an approximately three and a half-year period, as well as its policies, grievance procedures, training and student education efforts.

The agreement details specific steps Wheaton will take to:

• revise its policies, procedures and investigative practices to provide a grievance process that ensures prompt and equitable resolution of sexual assault and harassment allegations; 
• adequately investigate and respond to allegations of retaliation by students who have alleged sexual harassment or assault;
• take sufficient action to fully eliminate a hostile environment based on sex, prevent its recurrence and remedy its effects; and
• ensure that the individuals designated to coordinate its Title IX efforts receive adequate training and coordinate these efforts effectively. 

“We commend Wheaton College and President Hanno for their cooperation in our review as well as their work to foster a safe and healthy campus environment where all students can achieve their full potential,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.  “This agreement will protect the civil rights of all students and ensure the college uses a prompt, fair and reliable process for responding to allegations of sexual assault.  We look forward to continuing our collaborative work.”

The prevention of sex-based discrimination is a top priority of the Justice Department’s Civil Rights Division.  Additional information about the Civil Rights Division is available at www.justice.gov/crt. 

Wheaton Settlement Agreement

FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced Attorney General Loretta E. Lynch’s appointment of MaryBeth Keller to the position of chief immigration judge. In this capacity, Judge Keller is responsible for overseeing the administration of EOIR’s 58 immigration courts across the United States.

“After a very careful selection process, I am pleased to announce EOIR’s next chief immigration judge,” said Director Juan P. Osuna. “Judge Keller’s 28 years of experience at EOIR provide her with an in-depth knowledge of the agency’s history and operations, which will greatly assist her in leading our immigration judge corps during this time of tremendous change, challenge, and opportunity for the Nation’s immigration court system.”

Biographical information follows.

MaryBeth Keller, Chief Immigration Judge

Attorney General Loretta E. Lynch appointed MaryBeth Keller as the chief immigration judge in September 2016. Immediately prior to her current position, and beginning in February 2008, Judge Keller served EOIR as the assistant chief immigration judge (ACIJ) for issues of judge conduct and professionalism. She also supervised courts and served as the agency representative and chief negotiator dealing with the National Association of Immigration Judges employee union. Judge Keller received a Bachelor of Arts degree in 1984 from the Catholic University of America and a Juris Doctor in 1987 from the University of Virginia School of Law. From July 2004 to February 2008, Judge Keller served as general counsel at EOIR. During that time, from July 2006 to February 2008, she served as acting ACIJ for Conduct and Professionalism, and from October 2004 to April 2006, she served as acting chief administrative hearing officer. From 1988 to 2004, Judge Keller served as a senior manager and as an attorney at the Board of Immigration Appeals, EOIR. From 1987 to 1988, she served as a judicial law clerk in the 5th Judicial District of Iowa, in Des Moines, Iowa. Judge Keller is a member of the Iowa State Bar.

The U.S. District Court for the Eastern District of Texas entered a stipulated order for permanent injunction and civil penalty judgment against David J. Devany, former vice president of Commercial Recovery Systems Inc. (CRS), of Plano, Texas, to prevent future deceptive and abusive debt collection practices, the Department of Justice announced today.

“Deceptive debt collection practices are an all too common problem,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We at the Department of Justice will continue to work with the Federal Trade Commission and others to ensure that these practices stop and that those who engage in them are held accountable.”

CRS is a third-party debt collector that primarily collects auto loan and credit card debts on behalf of creditors.  On Jan. 21, 2015, the United States filed a complaint against CRS, its president, Timothy Ford, and its former vice president, Devany.  The complaint alleges that, in numerous instances, collectors at CRS called consumers and falsely claimed to be attorneys or judicial employees.  According to the complaint, collectors also falsely stated that lawsuits had already been filed against consumers and offered to resolve the fictitious lawsuits “out of court.”  They left voicemail messages falsely representing that a failure to return the collector’s call would result in a waiver of rights.  The government alleges that, in some instances, collectors told consumers that their wages, taxes and 401(K) plans would be garnished if they did not pay.  In reality, CRS had neither the intent nor the authority to file lawsuits against the consumers or attempt to have their wages garnished.

Prompted by numerous consumer complaints of deceptive and abusive debt collection practices, the U.S. Federal Trade Commission (FTC) launched an investigation.  The complaint was filed in the U.S. District Court for the Eastern District of Texas at the request of the FTC and alleges violation of the Federal Trade Commission Act and the Fair Debt Collection Practices Act.  The government sought civil monetary penalties and a permanent injunction to prevent the defendants from further engaging in such violations.

In previous rulings, U.S. District Judge Amos L. Mazzant III for the Eastern District of Texas found that CRS had engaged in numerous, widespread violations of the law and entered a permanent injunction against the company and its president, Ford.  U.S. District Judge Mazzant further found Ford liable for civil penalties, to be determined by the court in a later proceeding. 

On Sept. 9, the United States and Devany filed a proposed stipulated order for permanent injunction and civil penalty judgment, by which they agreed to resolve the litigation as between those two parties.  The stipulated order, entered by the district court, permanently bans Devany from engaging in debt collection and other related activities.  It assesses a partially suspended judgment in the amount of $496,000, which approximates Devany’s earnings from 2011 to 2014, during which Devany served as vice-president and numerous violations took place.  The stipulated order also assesses an immediate civil penalty payment of $10,000, which is based upon Devany’s current ability to pay.  The partial suspension of judgment is to remain in effect as long as Devany abides by the all requirements of the stipulated order. 

The government is represented by Trial Attorney Heide L. Herrmann of the Civil Division’s Consumer Protection Branch, with the assistance of Attorneys Anne D. LeJeune and Reid A. Tepfer of the FTC’s Southwest Region.

A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.

Defendant to Pay Full Restitution to IRS and Civil Penalty of More Than $850,000

A Weston, Connecticut man, who used a Panamanian bank account to conceal over $1.5 million in income from the sale of duty-free alcohol and tobacco products pleaded guilty today to one count of conspiring to conceal assets and income from the Internal Revenue Service (IRS), announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney Paul J. Fishman for the District of New Jersey.       

Saul Hyatt, 53, pleaded guilty today before U.S. District Judge Freda L. Wolfson of the District of New Jersey to an Information charging him with conspiracy to conceal assets in an undeclared bank account held in Panama for his benefit.  According to documents filed with the court, Hyatt conspired with another individual in the United States and others to conceal his assets and income derived from the sale of duty-free alcohol and tobacco products.  To execute the scheme, Hyatt used a registered Panamanian corporation, Centennial Group, to buy and sell the duty-free products.  The alcohol shipped through a customs-bonded warehouse in the Foreign Trade Zone in Fort Lauderdale, Florida.  The tobacco products, Chinese-brand cigarettes sold under the names “Chung Hwa” and “Double Happiness,” passed through a customs-bonded warehouse in North Bergen, New Jersey.  From 2006 to 2012, Hyatt directed that $1,627,832 in profits from the sale of duty-free alcohol and tobacco products be wired to his undeclared bank account in Panama.  Hyatt repatriated money from the Panamanian bank account to buy a Mercedes Benz SL 550R automobile and to pay for $19,000 in interior design goods and services. 

U.S. persons are required to report to the IRS on Schedule B of a U.S. Individual Income Tax Return any financial interest in, or signature authority over, a financial account in a foreign country by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained.  U.S. persons also must report all income earned from foreign financial accounts and, if the accounts have an aggregate value of more than $10,000 at any time during the calendar year, file with the Department of the Treasury a Report of Foreign Bank and Financial Accounts (FBAR).

Hyatt failed to report income earned on his Panamanian account, and failed to file an FBAR for the years at issue.  Hyatt admitted that this scheme resulted in a tax loss of $521,986.

“The Department continues to vigorously pursue and prosecute those who conceal their assets and income in offshore accounts in an effort to evade paying their fair share of taxes,” said Principal Deputy Assistant Attorney General Ciraolo. “Nearly eight years after the IRS announced its first offshore voluntary disclosure program, individuals who fail to disclose their interests in foreign accounts and report income earned on these accounts should be well aware that there are significant consequences for this criminal conduct.” 

“The Panamanian banking system should not be a haven to hide profits made from United States businesses,” said U.S. Attorney Fishman.  “When American taxpayers use foreign bank accounts to hide their assets, we will investigate and prosecute them to the fullest extent of the law.”

“Concealing income and assets offshore is not tax planning,” said Special Agent in Charge Jonathan D. Larsen of IRS-Criminal Investigation, Newark Field Office.  “Plain and simple, this is international tax fraud. The facts in this case are clear.  Mr. Hyatt earned income through the sale of duty-free alcohol and tobacco products and intentionally had over $1.6 million of profits wired into an undeclared offshore bank account in Panama.  Today’s plea shows how determined we are at the IRS and Department of Justice in uncovering this type of international tax fraud and putting a stop to it.”

Judge Wolfson set sentencing for Jan. 6, 2017.  Hyatt faces a statutory maximum sentence of five years in prison, as well as a term of supervised release and monetary penalties. Hyatt has agreed to file true and accurate tax returns and to pay the IRS all taxes and penalties owed, in addition to paying an $854,465.50 penalty for failure to disclose his foreign accounts.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Fishman commended special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney Joseph Mack and Tax Division Trial Attorney Michael C. Vasiliadis, who are prosecuting the case.  

More Than 100 Charged in Wide-Spread Auto Parts Investigation

A federal grand jury in the U.S. District Court for the Eastern District of Michigan returned an indictment charging one current automotive parts industry executive and one former automotive parts industry executive with conspiring to obstruct a federal investigation.  The current executive also was charged with attempted obstruction of justice, the Justice Department announced today.

The indictment, filed today in Detroit, charges Futoshi Higashida and Mikio Katsumaru with conspiring to obstruct a federal investigation.  Higashida is also charged with attempted obstruction of justice.  During the charged conspiracy, Katsumaru was employed by an automotive parts company in Japan, and Higashida worked there and in Novi, Michigan, as president of that company’s U.S. joint venture with another company.

According to the indictment, the defendants, along with their co-conspirators, conspired from at least as early as June 2008 until at least September 2012 to delete emails and electronic records and to destroy documents referring to communications with competitors.  In addition, according to the indictment, Higashida instructed another individual on or about September 25, 2012, to ensure that no phone numbers or call records remained on his cellular telephone and that no data remained on his computer that would reflect competitor communications.  The charges contained in the indictment are allegations and not evidence of guilt.  The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

“Individuals will not escape prosecution by covering up or destroying evidence of their own or their company’s wrong-doing,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division.  “Obstructing a federal antitrust investigation – criminal or civil – is a serious criminal violation that the Antitrust Division will vigorously pursue.”

“Federal investigations are serious matters, and we will pursue any individuals who are involved in destroying evidence to keep it from the FBI,” said Howard S. Marshall, Special Agent in Charge of the Louisville office of the FBI.  “The FBI is committed to aggressively investigating companies and individuals who engage in criminal conduct that corrupts the global marketplace.  We will continue our work with the Department of Justice’s Antitrust Division to uncover schemes aimed at creating an unfair competitive advantage by way of price fixing, bid rigging or other illegal means."

A total of 65 individuals and 46 companies have been charged in the Antitrust Division’s investigations into the automotive parts industry.  This indictment was brought by the Antitrust Division’s Chicago Office and the FBI’s Louisville Field Office, Covington Resident Agency, with the assistance of the FBI’s International Corruption Unit and the U.S. Attorney’s Offices for the Eastern District of Michigan and the Eastern District of Kentucky.  Anyone with information about anticompetitive conduct in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or contact the FBI’s Louisville Field Office at 502-263-6000.

Higashida Indictment

A Nashville, Tennessee, resident and a LaVergne, Tennessee, resident pleaded guilty in separate cases this week to assisting in the preparation of false tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney David Rivera for the Middle District of Tennessee. 

According to documents filed with the court, Tracey Brown, 48, of Nashville, operated a tax return preparation business, Total Tax Services, from her residence.  Brown admitted that from at least January 2006 through December 2010, she routinely filed false tax returns on behalf of her clients in order to increase their refunds, without her clients’ knowledge or permission.  She further admitted that on these false returns she claimed a variety of false items, such as false medical expenses, charitable contributions and business losses, with an intended tax loss of approximately $443,605. 

According to court documents, Michelle Theus, 42, of LaVergne, was a tax return preparer operating under the name Cole Tax Services in LaVergne.  Theus admitted that from 2009 through 2012 she filed false tax returns on behalf of her clients for the 2008 through 2011 tax years.  Unbeknownst to her clients, Theus routinely reported false items on the tax returns she prepared, such as false dependents and false education and childcare credits, in order to increase her clients’ refunds.  Theus further admitted that often she would prepare and provide the client with an accurate return and then prepare and file a false tax return in the client’s name that claimed an inflated refund.  In most cases, Theus directed the Internal Revenue Service (IRS) to split the fraudulently-inflated refunds into separate bank accounts, having the portion expected by the client deposited into the clients’ bank accounts and having the inflated portion of the refund deposited into one of her or her family members’ accounts.  Theus took steps to conceal her wrongdoing from the IRS and her clients by not signing the tax returns she prepared, which gave the IRS the impression that the clients prepared the tax returns themselves and by listing her and her family members’ addresses on the tax returns to divert correspondence from the IRS away from the clients.  Theus admitted that she prepared approximately 206 tax returns for her clients and that the intended tax loss for these returns is approximately $450,959.

In addition to preparing false tax returns for her clients, Theus admitted that she prepared and filed false 2009 and 2010 income tax returns for herself that substantially underreported the income she earned from her tax preparation business.  Theus failed to report more than $95,000 in income for 2009 and 2010, which resulted in additional tax loss of $37,275.

Brown is scheduled to be sentenced on Dec. 21 and Theus is scheduled to be sentenced on Jan. 11, 2017.  They each face a statutory maximum sentence of three years in prison, as well as a term of supervised release and monetary penalties.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Rivera commended special agents of IRS-Criminal Investigation, who conducted the investigations and Assistant U.S. Attorneys Tom Jaworski and S. Carran Daughtrey and Trial Attorneys Alexander Effendi and Nathan Brooks of the Tax Division, who are prosecuting these cases.

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

The Department of Justice today announced awards totaling over $4 million to 13 state and local jurisdictions to help them use evidence-based principles and practices to rehabilitate and ultimately reduce recidivism among military veterans.

The awards, funded under the Bureau of Justice Assistance’s 2016 Adult Drug Court Discretionary Grant Program, provide government court systems with financial and technical assistance to develop and implement Veterans Treatment Courts that tailor substance abuse treatment, mandatory drug testing, sanctions and incentives, and other transitional services for military veterans who are substance abusers.  One in six veterans who served in either Operation Enduring Freedom or Operation Iraqi Freedom suffer from substance abuse, according to the nonprofit Justice for Vets.

“Our military veterans often risk life and limb for their country,” said Principal Deputy Associate Attorney General Bill Baer.  “We owe our very best to help those who struggle with substance abuse get back on their feet, stay sober and successfully and productively integrate into civilian life.”

Veterans Treatment Courts enable participants’ likelihood of successful rehabilitation through early, continuous and intense judicially-supervised treatment.  Veterans Treatment Courts also serve as a “one-stop-shop” to link veterans with services, benefits and program providers, including the Department of Veterans Affairs, Veterans Service Organizations and volunteer veteran mentors.

Today’s awardees include: Kansas 10th Judicial District Court ($314,494); the 14th Judicial District Attorney’s Office in Louisiana ($350,000); Roseau County ($305,501) and Anoka County ($300,000), both in Minnesota; Miami-Dade County, Florida ($350,000); City of Norfolk, Virginia, Community Service Board ($300,000); the Judiciary Courts of the State of Montana ($300,000); Missouri 22nd Judicial Circuit, St. Louis City Drug Court ($300,000); the Riverside, California, County Probation Department ($300,000) and the Superior Court of California, County of Solano ($296,875); Denton County, Texas ($299,732); La Crosse, Wisconsin, Area Veterans Court ($300,000); and the Administrative Office of Pennsylvania Courts ($300,000).

An additional $144,499 was provided to the National Institute of Corrections to supplement a project to develop, pilot and evaluate a risk assessment tool for justice-involved veterans. 

Vu Johnnie Nguyen of Virginia Beach, Virginia, pleaded guilty today in U.S. District Court in Asheville, North Carolina, to federal charges for unlawfully trafficking in American black bear gall bladders and other American black bear parts, the Justice Department announced.  The conviction arose from a year-long investigation into Nguyen’s unlawful purchase, sale and transportation of American black bear parts from the Western District of North Carolina.  Bear gall bladders and paws are often used in Asian traditional medicine markets.

“The American Black Bear is a beautiful sight to behold by hikers and campers in the Blue Ridge Mountains and elsewhere in North America, and we will not allow their parts, such as gall bladders, to be taken and sold,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division.  “Black bears are a protected species under both U.S. and North Carolina laws and we will prosecute those who attempt to deal illegally in their parts."

“Nguyen repeatedly engaged in the illegal trafficking of American black bear gall bladders and other parts, a crime that is both reprehensible and a violation of federal and state laws,” said U.S. Attorney for the Western District of North Carolina Jill Westmoreland Rose. “The abundance of American black bears in western North Carolina mountains often attracts the attention of traffickers looking for a steady source of supply of bear parts to satisfy the ever growing demand in domestic and foreign black markets.  Nguyen’s prosecution speaks to our commitment to protect our wildlife resources and to apply stringent punishment to those who ignore the law for profit.”

“When we think of the victims of wildlife trafficking, it’s elephants and rhinos in Africa, tigers in India and parrots in South America that usually come to mind; but there are many animals and plants here in the United States that are also repeatedly subjected to poaching for illegal international trade, including black bear,” said U.S. Fish and Wildlife Service Director Dan Ashe.  “This case shows our continued commitment to bringing criminals who deprive our children of the chance to see these magnificent creatures to justice.”

Nguyen entered his guilty plea before U.S. District Court Judge Dennis Howell for the Western District of North Carolina —specifically, a felony charge under the Lacey Act.  The Lacey Act is the federal law that makes it illegal to transport or sell wildlife taken, possessed, transported or sold in violation of state law.  Animal parts, like American black bear gall bladders, paws, claws and meat are considered wildlife under both the Lacey Act and North Carolina law and under North Carolina law, it is illegal for anyone to possess for sale or buy any bear or bear parts.

According to the documents filed with the court, Nguyen illegally engaged in conduct that involved the sale and purchase and intent to sell 18 American black bear gall bladders, 16 American black bear claws, two American black bear paws and approximately 50 pounds of American black bear meat in 2014.  Nguyen further admitted that on three separate occasions—Jan. 6, 2014, March 5, 2014, and Dec. 17, 2014—he knowingly transported or caused to be transported American black bear parts when he knew that they were sold in violation of North Carolina law.

Nguyen faces a maximum sentence of five years in prison and a $250,000 fine.  As part of the agreement, he has agreed to publish a statement apologizing for his illegal conduct.

The case is prosecuted by the Justice Department’s Environmental Crimes Section Trial Attorney Shennie Patel and the U.S. Attorney’s Office for the Western District of North Carolina in Asheville.  The case was investigated by the U. S. Fish and Wildlife Service’s Office of Law Enforcement and the North Carolina Wildlife Resources Commission Division of Law Enforcement. 

          Alicia A.G. Limtiaco, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to be speak at the Association of Government (AGA) 8th Biennial Guam Professional Development Conference held on September 12-14, 2016, at the Westin Resort Guam.  The theme of the conference was “Tools, Trends, and Techniques in Today’s Financial Environment.”

          U.S. Attorney Limtiaco’s presentation was on Cybersecurity Awareness.  U.S. Attorney Limtiaco shared that cybersecurity is a top priority for the U.S. Government and that securing the nation’s networks and information from exploitation and damage requires improved information-sharing and enhanced coordination between the private and public sectors.  To that end, the U.S. Department of Justice (DOJ) meets with companies like those in attendance at the conference to discuss the potential cybersecurity threats they face and what DOJ and its federal partners can do to help defend, respond, enforce, prevent and protect our community and our country.  U.S. Attorney Limtiaco also discussed cybercrimes such as identity theft and other online fraud schemes and the importance of protecting one’s privacy on social media.

          The training was attended by over 130 participants from Guam and our neighboring islands of Saipan, Northern Mariana Islands, Pohnpei, Federated States of Micronesia, the Republic of Palau and the Republic of the Marshall Islands.  

 

Shown here are AGA Guam President-Elect Clariza Mae Roque, AGA National President Douglas A. Glenn, U.S. Attorney Alicia Limtiaco and AGA Guam President Yukari B. Hechanova U.S. Attorney Alicia Limtiaco addressing participants at the AGA   8th Bieenial Guam Professional Development Conference

 

Chairman of the Board and Senior Vice President of Reimbursement Analysis to Pay an Additional $1.5 Million

North American Health Care Inc. (NAHC), its chairman of the board, John Sorenson, and its senior vice president of Reimbursement Analysis, Margaret Gelvezon, have agreed to pay a total of $30 million to resolve allegations that they violated the False Claims Act by causing the submission of false claims to government health care programs for medically unnecessary rehabilitation therapy services provided to residents at NAHC’s skilled nursing facilities (SNFs), the Department of Justice announced today.  Under the settlement agreement, NAHC has agreed to pay $28.5 million. Mr. Sorensen has agreed to pay $1 million and Ms. Gelvezon has agreed to pay $500,000. 

“Medicare patients and those insured by TRICARE are entitled to receive care necessary for their clinical needs and not the financial needs of their health providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Health care providers will be held accountable if they bill for unnecessary services or treatment.”    

NAHC is a private, for-profit company headquartered in Orange County, California, that has service agreements to operate 35 SNFs, most of them in California.  The SNFs provide inpatient rehabilitation services, including physical, occupational, and speech therapy, to patients.  The United States contends that NAHC caused false claims to be submitted to Medicare and TRICARE, seeking payment for medically unnecessary rehabilitation therapy services provided to residents at the NAHC facilities.  

The United States further contends that Gelvezon, in her capacity as an officer of NAHC, contributed to this conduct by creating the improper billing scheme.  The government also contends that Sorensen, in his capacity as chairman of the board of NAHC, reinforced this scheme at the NAHC facilities.  The United States contends that this conduct occurred during the period from Jan. 21, 2005, to Oct. 31, 2009, for all of the NAHC SNFs and continued during the period of Nov. 1, 2009, to Dec. 3, 2011, for three of the SNFs in the Northern District of California area. 

“This office is committed to safeguarding the federal health care programs and the patients who are enrolled in them,” said U.S. Attorney Brian J. Stretch for the Northern District of California.  “Skilled nursing facilities such as NAHC treat some of the most vulnerable patients in the health care system.  These facilities, and the individuals who run them, will be held accountable when they provide treatment based on financial motivations instead of the patients’ needs.”       

 “Providing medically unnecessary services to this fragile population can be taxing both for the patient and the program,” said Department of Health and Human Services-Office of the Inspector General (HHS-OIG) Special Agent in Charge Steven Ryan.  “Today’s settlement should send a message to others who may be engaging in these schemes that we will pursue justice for our beneficiaries and the programs.”

As part of this settlement, NAHC has also entered into a five-year Corporate Integrity Agreement (CIA) with the HHS-OIG.  The CIA applies to all facilities managed by NAHC and requires an independent review organization to annually review therapy services billed to Medicare.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $30.6 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal health care programs.

This matter was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of California, HHS-OIG and the FBI.     

The claims resolved by the settlements are allegations only and there has been no determination of liability.