District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
EOIR Swears in Five Immigration JudgesRead the Press Release
FALLS CHURCH, VA – The Executive Office for Immigration Review (EOIR) today announced the investiture of five new immigration judges. Acting Chief Immigration Judge Michael C. McGoings presided over the investiture during a ceremony held July 29, 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 Elisa Castrolugo, Samuel B. Cole, Kathryn L. DeAngelis, Lisa Ann J. de Cardona and Eva S. Saltzman to their new positions.
“We are pleased to welcome these five appointees to the immigration judge corps,” said McGoings. “Their arrival brings our immigration judge corps to an all-time high of 277 immigration judges and is another step forward in our efforts to begin reducing our pending caseload of more than 500,000.”
Biographical information follows.
Elisa Castrolugo, Immigration Judge, Houston Immigration Court
Attorney General Loretta E. Lynch appointed Elisa Castrolugo to begin hearing cases in August 2016. Judge Castrolugo earned a Bachelor of Arts degree in 1999 from the University of Texas at Austin and a Juris Doctor in 2003 from the Columbia University School of Law. From 2010 to July 2016, she served as an assistant U.S. attorney for the Southern District of Florida, U.S. Attorney’s Office, Department of Justice (DOJ). From 2005 through 2010, she served as an assistant U.S. attorney for the Western District of Michigan, U.S. Attorney’s Office, DOJ, entering on duty through the Attorney General’s Honors Program. From 2003 through 2005, she served as a law clerk for the Honorable Andrew W. Austin, U.S. District Court, Western District of Texas. From 1995 through 1999, she served as a staff sergeant for the 147th Medical Squadron, Texas Air National Guard. From 1991 through 1995, she served as a senior airman for the 963rd Airborne Air Control Squadron, U.S. Air Force. Judge Castrolugo is a member of the State Bar of Texas.
Samuel B. Cole, Immigration Judge, Chicago Immigration Court
Attorney General Loretta E. Lynch appointed Samuel B. Cole to begin hearing cases in August 2016. Judge Cole earned a Bachelor of Arts degree in 1995 from Rice University and a Juris Doctor in 1998 from the Harvard Law School. From 2003 to July 2016, he served as an assistant U.S. attorney, U.S. Attorney’s Office, Department of Justice, in Chicago. From 1999 through 2003, he served as an associate attorney for McDermott, Will & Emery, in Chicago. Judge Cole is a member of the Illinois State Bar.
Kathryn L. DeAngelis, Immigration Judge, Chicago Immigration Court
Attorney General Loretta E. Lynch appointed Kathryn L. DeAngelis to begin hearing cases in August 2016. Judge DeAngelis earned a Bachelor of Science degree in 1997 from Southampton College, a Master of Science degree in 2000 from the University of Hawaii, and a Juris Doctor in 2005 from the University of Arizona. From 2006 to July 2016, she served as a trial attorney for the Office of Immigration Litigation, Civil Division, Department of Justice. Judge DeAngelis is a member of the State Bar of California.
Lisa Ann J. de Cardona, Immigration Judge, Philadelphia Immigration Court
Attorney General Loretta E. Lynch appointed Lisa Ann J. de Cardona to begin hearing cases in August 2016. Judge de Cardona earned a Bachelor of Arts degree in 1986 from St. Joseph’s University and a Juris Doctor in 1990 from the Widener University School of Law. From 2013 to May 2016, she served as associate program director for the Office of Legal Access Programs, Executive Office for Immigration Review (EOIR), Department of Justice (DOJ). From 2012 through 2013, and previously from 2002 through 2007 and 1991 through 1998, she served as an attorney advisor for the Board of Immigration Appeals (BIA), EOIR, DOJ. From 2007 through 2011, she served as a supervisory attorney advisor for the BIA. From 1990 through 1991, she served as a law clerk for the Office of the Chief Administrative Hearing Officer, EOIR, DOJ, entering on duty through the Attorney General’s Honors Program. Judge de Cardona is a member of the New Jersey State and Pennsylvania Bars.
Eva S. Saltzman, Immigration Judge, Newark Immigration Court
Attorney General Loretta E. Lynch appointed Eva S. Saltzman to begin hearing cases in August 2016. Judge Saltzman earned a Bachelor of Arts degree in 1999 from the University of Wisconsin and a Juris Doctor in 2002 from the Benjamin N. Cardozo School of Law. From 2006 to July 2016, she served as a supervisory staff attorney for the Staff Attorney’s Office, U.S. Court of Appeals for the Second Circuit, in New York. From 2005 through 2006, she served as an associate attorney for Wildes, Weinberg, Grunblatt & Wildes PC, in New York. From 2002 through 2005, she served as an associate attorney for Avirom & Associates LLP, in New York. Judge Saltzman is a member of the Connecticut, District of Columbia, and New York State Bars.
California Man Pleads Guilty to Cashing Fraudulent and Stolen ChecksRead the Press Release
Cashed Tax Refund and Social Security Checks at Walmart Stores
A San Pablo, California, resident pleaded guilty to his role in a conspiracy to commit theft of government property, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, U.S. Attorney Brian J. Stretch of the Northern District of California and Special Agent in Charge Michael T. Batdorf for the Internal Revenue Service’s Criminal Investigation (IRS-CI).
According to the plea agreement, from about August 2013 through April 2015, Devonnie Davison, participated in a conspiracy to illegally obtain money from the federal government by negotiating misappropriated U.S. Treasury checks. He pleaded guilty to one count of conspiracy to commit theft of public money and two counts of theft of public money. Davison admitted that some of the checks were obtained by filing false tax returns with the IRS while others were stolen U.S. Treasury checks acquired by his coconspirators. Davison cashed those checks under false pretenses at Walmart stores in the Bay Area. To carry out the scheme, Walmart cashiers were paid by members of the conspiracy to cash the fraudulent and stolen U.S. Treasury checks. Davison also conspired with other individuals who prepared and filed false tax returns with the IRS and attempted to cash stolen U.S. Treasury checks during 2013, 2014 and 2015, which totaled $521,318.
Davison, along with 10 codefendants, was charged on Nov. 5, 2015, in a 71-count indictment with conspiracy to commit theft of public money, theft of public money, wire fraud, and aggravated identity theft.
Davison faces a statutory maximum term of five years in prison for the count of conspiracy to commit theft of public money and 10 years in prison for the count of theft of public money. He also faces a term of supervised release and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo, U.S. Attorney Stretch and Special Agent in Charge Batdorf commended special agents of IRS-CI, who investigated the case and Assistant U.S. Attorneys Thomas Newman and Jose A. Olivera and Trial Attorney Gregory Bernstein of the Justice Department’s Tax Division, who are prosecuting the case.
Attorney General Loretta E. Lynch, Justice Department Officials to Participate in National Night Out Events in Detroit to Promote Community-Police PartnershipsRead the Press Release
Attorney General Loretta E. Lynch and Department of Justice officials will travel to Detroit on TUESDAY, AUGUST 2, 2016 as part of the 33rd Annual National Night Out. The Attorney General will deliver remarks at the Detroit Police Department’s 6th and 8th Precincts along with U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Mayor Mike Duggan of Detroit, Police Chief James Craig, and National Association of Town Watch Executive Director Matt Peskin. Senior Department of Justice Officials and U.S. Attorneys in districts around the country are expected to also participate in National Night Out events as part of a department wide effort to bring attention to events that build stronger community-police relations.
“For more than 30 years, National Night Out has helped to prevent crime, strengthen community-police relationships, and empower neighborhoods across the United States,” said Attorney General Lynch. “By giving law enforcement and local residents a chance to gather in a positive and supportive environment, National Night Out forges the bonds of trust that are so essential to the creation of stronger, safer, and more united communities where every American can flourish. The Department of Justice is working tirelessly to help build those vibrant communities throughout our nation, and we are proud to stand alongside National Night Out in that vital effort.”
National Night Out is an annual community-building campaign that promotes police-community partnerships and neighborhood camaraderie to make our neighborhoods safer, better places to live. In most areas of the country, the program culminates annually on the first Tuesday of August. National Night Out organizers expect to hold more than 16,000 community events around the country this year.
Established in 1984 from a Department of Justice Bureau of Justice Assistance (BJA) grant, the goal of National Night Out is to build relationships with and between communities and law enforcement, to promote crime prevention efforts, and to send a message to criminals that neighbors are paying attention and are prepared to work together to keep each other safe.
National Night Out Event with the Detroit Police Department’s 6th and 8th Precincts:
WHO: Attorney General Loretta E. Lynch
WHEN: TUESDAY, AUGUST 2, 2016
6:00 p.m. EDT
WHERE: Detroit Police Department, 6th & 8th Precincts
Fitzpatrick Play Field
11450 Warwick Street
Detroit, MI 48228
OPEN PRESS
National Night Out Event with the Detroit Police Department’s 2nd Precinct:
WHO: Head of the of the Civil Rights Division Vanita Gupta
Director Ron Davis of the Office of Community Oriented Policing Services
WHEN: TUESDAY, AUGUST 2, 2016
6:00 p.m. EDT
WHERE: 13530 Lesure St.
Detroit, MI 48227
OPEN PRESS
National Night Out Event with the Detroit Police Department’s 11th Precinct:
WHO: Assistant Attorney General Karol Mason of the Office of Justice Programs
Director Paul Monteiro of the Community Relations Service
WHEN: TUESDAY, AUGUST 2, 2016
6:00 p.m. EDT
WHERE: 5100 Nevada St
Detroit, MI 48234
OPEN PRESS
For information on National Night Out events in your community, visit https://natw.org/. Click here for a list of U.S. Attorneys’ offices that are participating in community events across the country.
September 11th Victim Compensation Fund Begins Accepting New ClaimsRead the Press Release
Payment on All Group A Claims Has Been Authorized
September 11th Victim Compensation Fund (VCF) Special Master Rupa Bhattacharyya announced today that the VCF is once again accepting new claims using a new claim form that was redesigned following the Dec. 18, 2015, reauthorization of the VCF. The new claim form was made available earlier today along with a significantly revamped and improved online claims system. Claimants who do not have consistent access to the Internet will still be able to file a hard copy claim using the new form.
The 9/11 VCF staff learned a great deal over the past five years about which claim form questions were truly necessary and as a result, the Fund was able to reduce the number of overall questions and combine the four versions of the old claim form into one, simplified form. Additionally, VCF staff solicited input from many law firms that represent VCF claimants and incorporated their feedback into the new form and the redesigned online claims system.
“We appreciate the 9/11 community’s support as the Fund’s staff worked over the past six months to finalize the new claim form and believe claimants will agree it was worth the wait,” said Special Master Bhattacharyya. “There is much work yet to be done and I stand ready to help the VCF build upon its successes and move into the next phase of the program with a renewed sense of purpose and commitment to the 9/11 community to provide the deserved compensation to those who have suffered as a result of the terrorist attacks of Sept. 11, 2001.”
The new form results in the need for fewer documents to be submitted in support of a claim and the multiple attestations, certifications and exhibits used with the old claim forms have been replaced with a single signature page. The online system guides claimants to answer only those questions that are applicable to their individual circumstances and also includes a new “smart” document checklist that identifies the documents the claimant will need to submit based on answers to specific claim form questions. Overall, the new online system and claim form are much easier to navigate and more user-friendly – two key goals the VCF set at the start of this effort.
With the launch of the new claim form, the online claims system has returned to full functionality, including the ability to file online amendments to previously submitted claims.
For additional information about the new claim form, the online system and how to file a claim, please visit the “How to File a Claim” page on the VCF’s website at www.vcf.gov. If you have any questions about the claim form, the website, or the VCF process, please contact the VCF’s toll-free Helpline at 1-855-885-1555.
Jacintoport International LLC and Seaboard Marine Ltd Agree to Settle False Claims Allegations Related to Delivery of Humanitarian Food AidRead the Press Release
The Justice Department announced today that Jacintoport International LLC (Jacintoport) and Seaboard Marine Ltd. (Seaboard Marine) have agreed to pay $1.075 million to settle a lawsuit alleging that the companies violated the False Claims Act in connection with a warehousing and logistics contract for the storage and redelivery of humanitarian food aid. Jacintoport is a cargo handling and stevedoring firm headquartered in Houston, Texas, and Seaboard Marine, an affiliate of Jacintoport, is an ocean transportation company headquartered in Miami, Florida.
In its lawsuit, the United States alleged that Jacintoport executed in 2007 a warehousing and logistics contract with the United States Agency for International Development (USAID) for the storage and redelivery of emergency humanitarian food aid. This contract contained explicit caps on the rates Jacintoport could charge ocean carriers to load humanitarian food aid onto ships (referred to as “stevedoring” charges) bound for crisis areas around the world. The complaint alleges that beginning around January 2008 and continuing through at least October 2009, Jacintoport, under the supervision and control of Seaboard, charged ocean carriers more for stevedoring than permitted to load over 50,000 tons of humanitarian food aid. These inflated stevedoring charges were subsequently lumped into other costs for delivering humanitarian food aid and passed on to the United States.
“USAID’s humanitarian food aid program provides critical assistance to starving people all over the world,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Justice Department will hold accountable those who seek to abuse this important program.”
“It is unacceptable for companies that do business with the federal government to inflate their costs,” said U.S. Attorney Channing D. Phillips for the District of Columbia. “This settlement demonstrates our determination to protect the taxpayers’ dollars – and humanitarian programs – from abuse.”
The allegations resolved by this settlement were initially brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by John Raggio, a shipping contractor who allegedly received an invoice from Jacintoport that contained the excessive stevedoring charge. Under the Act’s qui tam provisions, a private citizen, known as a “relator,” can sue on behalf of the United States and share in any recovery. The United States is permitted to intervene in the lawsuit, as it did here. Raggio will receive $215,000. Earlier today, the government requested that the case be dismissed.
This matter was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Columbia, with assistance from the USAID Office of the Inspector General. The claims resolved by this settlement are allegations only and there has been no determination of liability. The case is United States ex. rel. Raggio v. Jacintoport International, LLC, et al. Case No. 1:10-cv-01908 (D.D.C.).
Illinois Man Sentenced to 11 Years in Prison for Attempting to Entice a MinorRead the Press Release
A Springfield, Illinois, man was sentenced today to serve 132 months in prison for attempted enticement of a minor, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Jim Lewis of the Central District of Illinois.
Jeffrey Parkhurst, 59, was sentenced by U.S. District Judge Colin S. Bruce of the Central District of Illinois, who also ordered him to serve a 15 year term of supervised release. Parkhurst was convicted by a federal jury on March 31, 2016.
During the trial, the government presented evidence to establish that Parkhurst knowingly attempted to persuade, induce and entice an individual who he believed to be a minor to engage in illegal sexual activity using the internet and a cell phone. In addition, the government also presented evidence to establish that between January and July of 2015, Parkhurst posted over 60 online advertisements in an effort to persuade, induce and entice an individual who he believed to be a minor to engage in illegal sexual activity.
Parkhurst was arrested on July 27, 2015, in Decatur, Illinois, and initially charged by state authorities. He has remained in custody since his arrest. The defendant was remanded to the custody of the U.S. Marshals Service on Sept. 18, 2015.
The Decatur Police Department and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations investigated the case in cooperation with the Macon County, Illinois, State’s Attorney. Trial Attorney Elly Peirson of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
FBI Employee Pleads Guilty to Acting in the United States as an Agent of the Chinese GovernmentRead the Press Release
Defendant Collected and Caused Sensitive FBI Information to be Provided to the Chinese Government
Kun Shan Chun, a native of the People’s Republic of China and a naturalized U.S. citizen, pleaded guilty today to a criminal information charging him with acting in the United States as an agent of China without providing prior notice to the Attorney General.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Preet Bharara of the Southern District of New York and Assistant Director in Charge Diego P. Rodriguez of the FBI’s New York Field Office made the announcement.
Chun, aka Joey Chun, 46, pleaded guilty before U.S. Magistrate Judge James C. Francis IV of the Southern District of New York. He was an employee of the FBI until his arrest on March 16, 2016.
“Kun Shan Chun violated our nation’s trust by exploiting his official U.S. Government position to provide restricted and sensitive FBI information to the Chinese Government,” said Assistant Attorney General Carlin. “Holding accountable those who work as illegal foreign agents to the detriment of the United States is among the highest priorities of the National Security Division.”
“Americans who act as unauthorized foreign agents commit a federal offense that betrays our nation and threatens our security,” said U.S. Attorney Bharara. “And when the perpetrator is an FBI employee, like Kun Shan Chun, the threat is all the more serious and the betrayal all the more duplicitous. Thanks to the excellent investigative work of the FBI’s Counterintelligence Division, the FBI succeeded in identifying and rooting out this criminal misconduct from within its own ranks.”
“No one is above the law, to include employees of the FBI,” said Assistant Director in Charge Rodriguez. “We understand as an agency we are trusted by the public to protect our nation’s most sensitive information, and we have to do everything in our power to uphold that trust.”
According to the complaint, the information and statements made during today’s court proceeding:
In approximately 1997, Chun began working at the FBI’s New York Field Office as an electronics technician assigned to the Computerized Central Monitoring Facility of the FBI’s Technical Branch. In approximately 1998, and in connection with his employment, the FBI granted Chun a Top Secret security clearance and his duties included accessing sensitive, and in some instances classified, information. In connection with a progressive recruitment process, Chun received and responded to taskings from Chinese nationals and at least one Chinese government official (Chinese Official-1), some, if not all, of whom were aware that Chun worked at the FBI. On multiple occasions prior to his arrest in March 2016, at the direction of Chinese government officials, Chun collected sensitive FBI information and caused it to be transmitted to Chinese Official-1 and others, while at the same time engaging in a prolonged and concerted effort to conceal from the FBI his illicit relationships with these individuals.
Beginning in 2006, Chun and some of his relatives maintained relationships with Chinese nationals purporting to be affiliated with a company in China named Zhuhai Kolion Technology Company Ltd. (Kolion). Chun maintained an indirect financial interest in Kolion, including through a previous investment by one of his parents. In connection with these relationships, Chinese nationals asked Chun to perform research and consulting tasks in the United States, purportedly for the benefit of Kolion, in exchange for financial benefits, including partial compensation for international trips.
Between 2006 and 2010, Chun’s communications and other evidence reflect inquiries from purported employees of Kolion to Chun while he was in the United States, as well as efforts by the defendant to collect, among other things, information regarding solid-state hard drives.
In approximately 2011, during a trip to Italy and France partially paid for by the Chinese nationals, Chun was introduced to Chinese Official-1, who indicated that he worked for the Chinese government and that he knew Chun worked for the FBI. During subsequent private meetings conducted abroad between the two, Chinese Official-1 asked questions regarding sensitive, non-public FBI information. During those meetings, Chun disclosed, among other things, the identity and potential travel patterns of an FBI Special Agent.
In approximately 2012, the FBI conducted a routine investigation relating to Chun’s Top Secret security clearance. In an effort to conceal his relationships with Chinese Official-1 and the other Chinese nationals purporting to be affiliated with Kolion, Chun made a series of false statements on a standardized FBI form related to the investigation. Between 2000 and March 16, 2016, Chun was required by FBI policy to disclose anticipated and actual contact with foreign nationals during his international travel, but he lied on numerous pre- and post-trip FBI debriefing forms by omitting his contacts with Chinese Official-1, other Chinese nationals and Kolion.
On multiple occasions, Chinese Official-1 asked Chun for information regarding the FBI’s internal structure. In approximately March 2013, Chun downloaded an FBI organizational chart from his FBI computer in Manhattan. Chun later admitted to the FBI that, after editing the chart to remove the names of FBI personnel, he saved the document on a piece of digital media and caused it to be transported to Chinese Official-1 in China.
Chinese Official-1 also asked Chun for information regarding technology used by the FBI. In approximately January 2015, Chun took photos of documents displayed in a restricted area of the FBI’s New York Field Office, which summarized sensitive details regarding multiple surveillance technologies used by the FBI. Chun sent the photographs to his personal cell phone and later admitted to the FBI that he caused the photographs to be transported to Chinese Official-1 in China.
In approximately February 2015, the FBI caused an undercover employee (UCE) to be introduced to Chun. The UCE purported to be a U.S. citizen who was born in China and working as a consultant to several firms, including an independent contractor for the Department of Defense, among other entities.
During a recorded meeting in March 2015, Chun told the UCE about his relationship with Kolion and Chinese nationals and later explained to the UCE that Kolion had “government backing,” and that approximately five years prior a relative met a “section chief” whom Chun believed was associated with the Chinese government.
In another recorded meeting in June 2015, Chun told the UCE that he had informed his Chinese associates that the UCE was a consultant who might be in a position to assist them. Chun said that he wished to act as a “sub-consultant” to the UCE and wanted the UCE to “pay” him “a little bit.” In July 2015, after coordinating travel to meet Chun’s Chinese associates, Chun met with the UCE in Hungary twice. During one of the meetings, Chun stated that he knew “firsthand” that the Chinese government was actively recruiting individuals who could provide assistance and that the Chinese government was willing to provide immigration benefits and other compensation in exchange for such assistance. The UCE told Chun that he had access to sensitive information from the U.S. government. Chun responded that his Chinese associates would be interested in that type of information and that Chun expected a “cut” of any payment that the UCE received for providing information to the Chinese government.
The count of acting in the United States as an agent of China without providing notice to the Attorney General carries a maximum sentence of 10 years in prison. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
The FBI’s Counterintelligence Division investigated the case. The prosecution is being handled by Assistant U.S. Attorneys Emil J. Bove III and Andrea L. Surratt of the Southern District of New York’s Terrorism and International Narcotics Unit, with assistance provided by Trial Attorneys Thea D. R. Kendler and David C. Recker of the National Security Division’s Counterintelligence and Export Control Section.
Defendant Frederick A. Obak Sentenced to 16 Years IncarcerationRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that on August 1, 2016, Defendant FREDERICK A. OBAK (“OBAK”)was sentenced by the Honorable Frances Tydingco-Gatewood, Chief Judge, District Court of Guam. Defendant was sentenced to serve sixteen (16) years incarceration followed by three years of supervised release, with credit for time served.
Defendant OBAK pled guilty on May 5, 2014, to two counts of Attempted Possession of Methamphetamine with Intent to Distribute, in violation of Title 21, United States Code, Section 846(a)(1) and (b)(1)(C). Defendant OBAK attempted to receive two packages containing 2,171.3 grams of methamphetamine hydrochloride at Kautz and Sons Glass Company and StayWell Insurance in Hagatna, Guam. OBAK conspired with co-defendants Thomas Kautz and Amos Shioichi Ueda to receive the packages at their places of employment. The contents of the packages were to be broken down for later distribution on Guam. The methamphetamine hydrochloride was concealed within U.S. Priority Mail packages and sent from Washington State to Guam where they were intercepted by the U.S. Postal Inspector. The Drug Enforcement Administration Forensic Laboratory determined that the methamphetamine had a high purity level of 82%. The street value of 2,171.3 grams of methamphetamine hydrochloride exceeds $1,000,000.
According to U.S. Attorney Limtiaco, “Methamphetamine hydrochloride is often associated with crimes against people and property. We cannot and will not tolerate the devastating and destructive effects this drug has on the lives of our families, children and community. The U.S. Attorney’s Office remains committed to the aggressive prosecution of cases involving drug trafficking and distribution.”
The investigation was conducted by the Guam U.S. Postal Inspector and Drug Enforcement Administration, including its Special Agents and Task Force Officers. The case was handled by Assistant U.S. Attorney Rosetta San Nicolas.
Cincinnati-Area Man Pleads Guilty to Terrorism ChargesRead the Press Release
Christopher Lee Cornell, 22, of Green Township, Ohio, pleaded guilty today to one count of attempting to kill government employees, one count of possession of a firearm in furtherance of a crime of violence and one count of attempting to provide material support to a designated foreign terrorist organization.
The plea was announced by Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Benjamin C. Glassman of the Southern District of Ohio and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division. Cornell pleaded guilty before Senior U.S. District Judge Sandra Beckwith of the Southern District of Ohio.
Cornell was originally charged by an indictment returned by a federal grand jury on Jan. 21, 2015. On May 7, 2015, Cornell was additionally charged by superseding indictment with attempting to provide material support to a designated foreign terrorist organization.
According to the plea agreement, from on or about August 2014 through January 2015, Cornell plotted, planned and attempted to travel to Washington, D.C., in order to attack the U.S. Capitol during the State of the Union Address on January 20, 2015.
Cornell admitted that he conducted online research of weapons, the construction of bombs, the U.S. Capitol and other potential targets in the Washington, D.C., area. Cornell intended to kill officers and employees of the United States, and possessed two semi-automatic rifles and approximately 600 rounds of ammunition, according to the plea agreement.
The defendant admitted that his planned attack on the U.S. Capitol was an attempt to provide material support and resources – both personnel and services – to the Islamic State of Iraq and the Levant (ISIL).
The material support count carries a potential maximum sentence of 15 years in prison. Attempted murder of government employees and officials is a crime punishable by up to 20 years in prison. Possession of a firearm in furtherance of an attempted crime of violence is a crime punishable by a mandatory sentence of five years in prison.
Cornell was arrested on Jan. 14, 2015, by the FBI’s Joint Terrorism Task Force (JTTF). After his arrest, he posted statements online that included a call for others to join him in violent jihad against the United States and its citizens on behalf of ISIL, according to his admissions in the plea agreement.
The JTTF is made up of officers and agents from the Cincinnati Police Department; Colerain, Ohio, Police Department; Dayton, Ohio, Police Department; Ohio State Highway Patrol; University of Cincinnati Police Department; U.S. Air Force Office of Special Investigations; FBI; U.S. Immigrations and Customs Enforcement; U.S. Internal Revenue Service; U.S. Secret Service; U.S. Postal Inspection Service; West Chester, Ohio, Police Department; and Xenia, Ohio, Police Department.
Assistant Attorney General Carlin and Acting U.S. Attorney Glassman commended the JTTF for its investigation of this case. The case is being prosecuted by Trial Attorney Michael Dittoe of the National Security Division’s Counterterrorism Section and Assistant U.S. Attorney Tim Mangan of the Southern District of Ohio.
California Businessman Charged with Conspiring with Israeli Banks to Hide IncomeRead the Press Release
Concealed Foreign Accounts and Failed to Report More Than $20 Million
A Los Angeles, California, businessman was charged today in an information, which charges one count of conspiracy to defraud the United States and one count of corruptly endeavoring to impair and impede the due administration of the internal revenue laws, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division.
Masud Sarshar, who owned and operated Apparel Limited Inc., a business that designed, manufactured and sold clothing and other apparel, signed a plea agreement admitting that he maintained several undeclared bank accounts at Bank Leumi and two other Israeli banks, both in his name and in the names of entities that he created. For decades, with the assistance of at least two relationship managers from Bank Leumi and a second Israeli bank (Israeli Bank A), Sarshar hid tens of millions of dollars in assets in these accounts in an effort to conceal income and obstruct the Internal Revenue Service (IRS). As alleged in the information, between 2006 and 2009, Sarshar diverted more than $21 million in untaxed gross business income to these undeclared bank accounts. Between 2007 and 2012, Sarshar also earned more than $2.5 million in interest income from these accounts. Sarshar omitted all of this income from his 2006 through 2011 individual and corporate tax returns and he failed to report his authority over and ownership of these bank accounts in false Reports of Foreign Bank and Financial Accounts (FBARs) that he submitted to the U.S. Department of Treasury.
Sarshar signed a plea agreement to the charges in the information, agreeing to plead guilty and pay more than $8.3 million in restitution to the IRS. If the court accepts the parties’ agreement, Sarshar will be sentenced to 24 months in prison. In addition, Sarshar stipulated to a civil penalty in the amount of 50 percent of the high balance of his undeclared accounts to resolve his civil liability for not disclosing the existence of his Israeli bank accounts.
“Mr. Sarshar stashed millions in secret foreign financial accounts in Israel and then sought to use these accounts to evade his U.S. tax obligations, seeking to cover his tracks along the way,” said Principal Deputy Assistant Attorney General Ciraolo. “The message of this case is clear: There are no safe havens. If you are concealing assets and income in undeclared offshore accounts – or are a banker, an asset manager or otherwise are assisting accountholders in such criminal conduct, your only viable option is to come forward and accept responsibility for your actions. Those who continue to violate U.S. tax laws will be held accountable and pay a heavy price.”
According to the information and statement of facts, Sarshar’s relationship managers at Israeli Bank A (RM1) and at Bank Leumi (RM2) visited him frequently in Los Angeles. At his request, neither bank sent him account statements by mail, but rather, RM1 and RM2 provided Sarshar with his account information in person. For example, RM2 loaded electronic copies of Sarshar’s Bank Leumi account statements on a USB drive, which she concealed in a necklace worn during her trips to the United States. To further maintain the secrecy of his accounts, Sarshar’s meetings with RM1 sometimes occurred in Sarshar’s car. RM1 and RM2 also used these visits to Los Angeles to offer Sarshar other bank products, including “back-to-back” loans. Through back-to-back loans, which Bank Leumi made to Sarshar through its branch in the United States and which Sarshar collateralized with funds from his account at Israeli Bank A, Sarshar was able to bring back to the United States approximately $19 million of his offshore assets without creating a paper trail or otherwise disclosing the existence of the offshore accounts to U.S. authorities. At the direction of RM1 and RM2, Sarshar also obtained Israeli and Iranian passports in an effort to avoid being flagged as a U.S. citizen by the compliance departments at both banks. After receiving both new passports and still being flagged as a U.S. citizen by their compliance departments, RM1 and RM2 advised Sarshar to transfer his remaining funds to yet another Israeli bank, which he did in late 2011.
“As the filing of today’s criminal charges demonstrate, the days of bank secrecy is rapidly changing,” said Chief Richard Weber for IRS-Criminal Investigation. “There's no safe place for taxpayers to divert and hide income anywhere in the world. IRS-CI works vigorously to stop offshore tax schemes such as this one and is proud that our forensic accounting skills helped uncover over $21 million in untaxed gross business income in this investigation.”
Principal Deputy Assistant Attorney General Ciraolo commended special agents from IRS-Criminal Investigation, who are investigating the case and Assistant Chief Tino M. Lisella and Trial Attorney Timothy M. Russo, of the Tax Division, who are prosecuting this case. The Tax Division thanks the U.S. Attorney’s Office of the Central District of California for its assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
"One Community Guam" and "One Community NMI"Read the Press Release
In response to the “Smart on Crime” Initiative announced in 2013 by then-Attorney General Eric Holder, Alicia A.G. Limtiaco, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), spearheaded a joint effort with the U.S. Attorney’s Office Diverse Community Outreach Coalition (“Coalition”) to put a spotlight on the need for support and services for vulnerable populations and those reentering from incarceration.
U.S. Attorney Limtiaco and the Coalition, comprised of the faith-based community, Consular Corps, private sector, government agencies, non-governmental/nonprofit/civic organizations, medical/mental/public health professionals, and educational institutions, recognized that crime prevention, strengthening protections for vulnerable populations, and reentry efforts require community ownership and a true community response for there to be an effective positive impact in the districts. In response to this need, U.S. Attorney Limtiaco and the Coalition identified and implemented key strategies calling for stakeholders in each of the districts to cooperate and collaborate as “One Community Guam” and “One Community CNMI.”
In June 2015, U.S. Attorney Limtiaco, with support of the Coalition, organized unprecedented multi-day training conferences in Guam and Saipan, NMI entitled, “Engaging Our Community in Crime Prevention, Strengthening Protections for Vulnerable Populations, and Reentry Efforts through Workforce Development Strategies.” This year, consistent with recommendations discussed at the 2015 conferences regarding the need for increased public awareness about and the implementation of reentry programs, the U.S. Attorney launched the 2nd Annual “One Community Guam” and “One Community CNMI” conferences, an ambitious schedule of three days of trainings developed to target key stakeholders and critical to the success of vulnerable populations and reentering offenders.
An initial outreach effort by the U.S. Attorney’s Office entitled, “Improving Criminal Justice Outcomes,” was held on March 1, 2016, and focused on community stakeholders. The keynote speaker was Michael G. Santos - author, motivational speaker, life coach, trainer and prison consultant. Mr. Santos served 26 years of a 45-year federal prison term for drug offenses. Mr. Santos developed the “Straight A Guide Reentry Course” and the “Earning Freedom Mastermind Reentry Course.” These programs have been adopted at several penitentiaries and have been lauded as exceptional in preparing inmates for becoming law-abiding, contributing citizens. Mr. Santos spoke to the group via videoconference about his own personal journey through 26 years in federal prison, the challenges faced by those in prison and the opportunities for reentry into the community.
In June 2016, the U.S. Attorney’s Office hosted its second conferences, “One Community Guam” and “One Community CNMI”, this time sponsoring Mr. Santos to provide in-person training to both districts. Upon his arrival in Guam, Mr. Santos hit the ground running by meeting with three groups of inmates at the Department of Corrections and, later, parolees and their families, to discuss the importance of cognitive and life skills development. On June 27 and 28, 2016, Mr. Santos trained at six venues on Guam, and on June 29 and 30, 2016, he travelled to and trained at two venues in Saipan, NMI, to meet with key stakeholders. Training was conducted for adult and youth corrections staff including corrections officers and caseworkers, social workers, and medical, mental and public health professionals, working within or associated with the correctional institutions; law enforcement/prosecutors; public defenders/defense counsel; pretrial officers; probation officers; parole officers; and other related professionals working with our criminal and juvenile justice systems. Mr. Santos also conducted training for selected offenders – adult and justice-involved youth, appropriate to act as peer facilitators for other adult offenders and justice-involved youth. Training for community stakeholders including our nonprofits, faith based community, government agencies, private sector and military counterparts was also held. Mr. Santos’ reentry course included lessons on: (1) how to develop communication skills and why those skills relate to success; (2) how to develop self-directed learning techniques; (3) how to develop critical thinking skills; and (4) how to reject criminal lifestyles and criminal associations. Mr. Santos also explained the “Seven A’s” critical to successful reentry: attitude, aspirations, actions, accountability, awareness, achievement and appreciation.
In total, Mr. Santos worked with leadership from the U.S. Attorney’s Office to conduct 25 training sessions on “Earning Freedom and Reentry” in both Guam and the NMI. The training sessions were widely attended, with over 300 attendees in Guam, and over 80 attendees in Saipan.
On June 30 and July 1, 2016, the U.S. Attorney’s Office hosted its third “One Community” conference in Guam and Saipan entitled, “Employment and Reentry – Connecting Employers and Their Employees with Government Opportunities.”
In Guam, the training focused on “Doing Business with DoD” and provided information on contractual, legal and policy requirements regarding base access in Guam and local procedures used to implement these requirements, including: what DoD contracts say about access; DoD / U.S. Department of the Navy (DoN) / Joint Region Marianas (JRM) policies covering base access, including information on the eligibility of individuals with prior convictions; installation specific application access policies; and appeal of the denial process and related information. Panel members included Small Business Advisors, Naval Facilities Engineering Command Marianas; Regional Program Director for Force Protection, Joint Region Marianas; USAF, 36th Security Force Squadron; and USAF, 36th Wing Staff Judge Advocate and Assistant Staff Judge Advocate. Another panel entitled, “What Employers Need to Know” provided information on Equal Employment Opportunity laws and guidance, including the use of criminal background checks and consideration of arrest and conviction records in employment decisions, and the disparate impact on vulnerable populations and their reentry to the workforce; “Ban the Box” legislation; Work Opportunity Tax Credit (WOTC); affirmative action; social security programs; and related issues. Additional topics included an overview of the immigration process and compliance by employers with federal immigration laws, including the Immigration Reform and Control Act requiring employers to verify the identity and employment eligibility of their employees and criminal and civil sanctions for employment related violations. Speakers on this panel included the Equal Employment Opportunity Commission, U.S. Department of Labor, U.S. Department of Homeland Security/Immigration and Customs Enforcement/Homeland Security Investigations, U.S. Department of Homeland Security/U.S. Citizenship and Immigration Services, and Social Security Administration. The last panel entitled, “A Local Perspective: Employment Challenges, Best Practices and Resources,” discussed challenges and barriers to employment, and strategies and approaches, such as the Workforce Innovation and Opportunity Act (WIOA) and Guam’s Combined State Plan for Program Year 2016-2019 addressing workforce needs of businesses and those seeking jobs including individuals who have consistently faced significant barriers to employment such as ex-offenders, Veterans, low- income individuals, individuals with disabilities, homeless individuals, individuals facing substantial cultural barriers, and other vulnerable populations. Additional topics included the Guam Registered Apprenticeship Program (GRAP) which provides incentives for employers who are sponsors of apprenticeships; and relevant local labor and employment regulations, best practices and resources. Testimonials of employers who have successfully employed offenders who have reentered the community were also shared. Speakers on this panel included Guam Department of Labor, Guam Chamber of Commerce, Guam Contractors Association (GCA), GCA Trades Academy, and Guam Community College. In addition, Mr. Santos spoke about his own personal journey, the importance of and critical need for preparing offenders for reentry into the community, and the important role of employers in the reentry process.
In Saipan, the training included a session on “What Employers Need to Know.” The speakers discussed information on Equal Employment Opportunity laws and guidance, including the use of criminal background checks and consideration of arrest and conviction records in employment decisions, and the disparate impact on vulnerable populations and their reentry to the workforce; “Ban the Box” legislation; Work Opportunity Tax Credit (WOTC); affirmative action; social security programs; and an overview of the immigration process and compliance by employers with federal immigration laws, including the Immigration Reform and Control Act requiring employers to verify the identity and employment eligibility of their employees and criminal and civil sanctions for employment related violations. The second session was on “Earning Freedom and Reentry,” a presentation by Mr. Santos on his journey through federal prison, the challenges faced by those incarcerated, the importance of reentry programs, and the opportunities for reentry into the community. The third session shared “A Local Perspective: Employment Challenges, Best Practices and Resources.” The panel members discussed challenges and barriers to employment, and strategies and approaches to assist the workforce and businesses in hiring individuals who have consistently faced significant barriers, such as ex- offenders, Veterans, low-income individuals, individuals with disabilities, homeless individuals, individuals facing substantial cultural barriers, and other vulnerable populations; WOTC; and relevant local labor and employment regulations, best practices and resources. The speakers included representatives from the Equal Employment Opportunity Commission; Social Security Administration; Homeland Security Investigations, U.S. Department of Homeland Security; U.S. Citizenship and Immigration Services, U.S. Department of Homeland Security; CNMI Department of Labor; Office of Personnel Management; Northern Marianas College; Nutrition Assistance Program and Division of Youth Services, CNMI Department of Community & Cultural Affairs; Northern Marianas Trades Institute; and Island Training Solutions.
In furtherance of the “Smart on Crime” Initiative, the U.S. Attorney worked with the Governor of Guam and the Governor of the Northern Mariana Islands to coordinate the proclamation of April 24-30, 2016, as National Reentry Week. The proclamations were held on May 3, 2016 at the Governor’s Conference Room at Adelup, Guam, and on May 9, 2016, at the Governor’s Conference Room at Capitol Hill, Saipan.
Guam Chamber of Commerce (Chamber) Member Jeff Jones, Chamber President Catherine Castro, Trainer Michael G. Santos, Lt. Gov. of Guam Raymond Tenorio, U.S. Attorney Alicia Limtiaco, Chamber Member Monty McDowell, at the Chamber Luncheon Meeting
Trainer Michael G. Santos with Professional Staff at training held at the U.S. Attorney’s Office in Guam
Community stakeholders with Trainer Michael G. Santos and U.S. Attorney Alicia Limtiaco held at the U.S. Attorney’s Office in Guam
Participants at the “Employment and Reentry – Connecting Employers and Their Employees with Government Opportunities” Conference in Guam
Trainer Michael G. Santos, U.S. Attorney Alicia Limtiaco, AUSA/Prevention and Reentry Coordinator Stephen Leon Guerrero, National Security Specialist/DOSM Joe Quitano, and NMI DOC Commissioner Georgia Cabrera, at training held at the NMI Department of Corrections for DOC officers in Saipan Trainer Michael G. Santos and U.S. Attorney Alicia Limtiaco at Professional Staff training held at the Multi-Purpose Center in Saipan, NMI Trainer Michael G. Santos at the “Earning Freedom and Reentry” session at the “Employment and Reentry – Connecting Employers and Their Employees with Government Opportunities” Conference in Saipan, NMI U.S. Attorney Alicia Limtiaco and Lt. Governor Raymond Tenorio with community stakeholders at the Proclamation Signing at the Governor’s Office in Guam
U.S. Attorney Alicia Limtiaco and Governor of the CNMI Ralph Torres with community stakeholders at the Proclamation Signing at the Governor’s Office in Saipan, NMI
Guam Department of Labor Robert Dames, AUSA/Prevention and Reentry Coordinator Stephen Leon Guerrero, Guam Department of Corrections (DOC) Director Alberto Lamorena, Trainer Michael G. Santos, U.S. Attorney Alicia Limtiaco, DOC Corrections Social Work Administrator Therese Tayama, and DOC Clinical Psychologist Dr. Patricia Taimanglo at presentations conducted by Michael G. Santos with inmates at the DOCStatement by Attorney General Loretta E. Lynch on the Departure of John Walsh from the U.S. Attorney’s Office for the District of ColoradoRead the Press Release
Attorney General Loretta E. Lynch released the following statement on the planned departure of U.S. Attorney John Walsh of the District of Colorado, effective Aug. 10, 2016:
“U.S. Attorney John Walsh has served the people of the District of Colorado and the entire nation with extraordinary distinction,” said Attorney General Lynch. “For the past six years, John has protected our civil liberties, defended our national security and aggressively and successfully prosecuted organized crime, drug cartels and gang violence. He played a key leadership role on the team that won a landmark $7 billion settlement against Citibank, securing millions for defrauded consumers in the largest settlement in the history of the Colorado U.S. Attorney’s office and one of the largest settlements in the Justice Department’s history. He served as a co-chair of the department’s Residential Mortgage-Backed Securities Working Group, where he led efforts to root out fraud and abuse and hold institutions accountable for the kinds of misleading lending practices that helped cause the 2008 financial crisis. And he has been an outstanding leader of the Attorney General’s Advisory Committee – lending valuable insight and advice to the Justice Department as a whole. The people of Colorado, and the country, are safer thanks to John’s keen judgment, deep empathy and unwavering fidelity to justice. I want to thank John for his exemplary service and I look forward to all that he will accomplish in the years to come.”
Department of Justice and EPA Announce $29 Million Settlement for Cleanup Work at Coastal Georgia Superfund SiteRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced that Honeywell International Inc. and Georgia Power Company have agreed to clean up the 760-acre saltwater marsh at the LCP Chemicals Superfund Site in Brunswick, Georgia. The settlement requires the companies to spend an estimated $28.6 million to remove and isolate contaminated sediments in the marsh and to monitor the long-term effectiveness of the work.
“We appreciate that these companies have stepped forward to remedy the contamination to which they and others have contributed,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division. “This settlement makes critical progress toward the remediation of the LCP Chemicals Superfund Site and will minimize risks to people and the environment posed by contamination in the marsh.”
“Back in the 1990s, this U.S. Attorney’s Office secured criminal convictions against six officers and employees of LCP Chemicals-Georgia Inc. who were responsible for dumping mercury and other hazardous chemicals into the waters of the United States,” said U.S. Attorney Edward J. Tarver for the Southern District of Georgia. “The combined sentences totaled over 21 years in prison. The cleanup of this Superfund Site is now in its third decade. I am pleased that Honeywell and Georgia Power have stepped forward to continue cleanup as we work towards fixing the environmental mess caused by other companies’ greed many years ago.”
“EPA is very pleased to reach a settlement ensuring funding for future cleanup costs to address the contamination of the site’s tidal marsh and creeks,” said Regional Administrator Heather McTeer Toney of EPA’s Southeast Region. “We are looking forward to ensuring that cleanup work at this site continues.”
Between 1919 and 1994, the LCP Chemicals site hosted a petroleum refinery, an electric power generation facility and various manufacturing operations, including a mercury cell chlor-alkali plant. These industrial activities led to widespread contamination of the site’s soil, groundwater, surface water and sediment with mercury, polychlorinated biphenyls (PCBs) and other hazardous substances. The site was placed on the federal Superfund list in 1996.
The cleanup work required by the settlement includes dredging and installing protective caps on portions of four tidal creeks, placing a layer of clean sediment on eleven acres of marsh and restoring areas disturbed by construction. The work is expected to reduce concentrations of mercury, PCBs, lead and polycyclic aromatic hydrocarbons in the marsh’s sediments.
Additionally, capping the contaminants in place will prevent them from moving throughout the marsh and contaminating its animal life. The settling parties will also monitor the remedy’s long-term effectiveness at reducing risks to human health and the environment.
EPA and potentially responsible parties, including Honeywell International Inc. and Georgia Power Company, began response work at the site in 1994. Since then, EPA has overseen the demolition of contaminated buildings, the dredging and excavation of 13 acres of marsh and the removal of contaminated soil and waste from the site’s upland areas. This settlement marks an important step in the remediation of the site’s tidal marsh and creeks, which comprise one of the three areas into which the site has been divided. EPA will address the site’s groundwater and upland areas in future actions.
The cleanup is being accomplished under the federal Comprehensive Environmental Response, Compensation and Liability Act, commonly known as Superfund. The Superfund law protects human health and the environment while safeguarding taxpayer dollars by holding parties that contributed to contamination responsible for cleaning it up. Since 1980, EPA’s Superfund program has managed the cleanup of the nation’s most hazardous waste sites and has responded to environmental emergencies, oil spills and natural disasters.
The public has the opportunity to submit written comments on the consent decree, which is subject to the 30-day comment period and final approval by the court. A copy of the consent decree is available at www.justice.gov/enrd/consent-decrees. The Justice Department also concurrently filed a complaint initiating the case that the consent decree resolves.
Attorney General Loretta E. Lynch Statement on Court of Appeals Ruling in North Carolina Voting CaseRead the Press Release
Attorney General Loretta E. Lynch released the following statement today after the ruling by the Fourth Circuit Court of Appeals in the North Carolina voting case:
“I am pleased that the Court of Appeals for the Fourth Circuit has struck down a law that the court described in its ruling as “one of the largest restrictions of the franchise in modern North Carolina history.” As the court found, this law was passed with discriminatory intent. It targeted African-Americans “with almost surgical precision” – imposing stringent ID requirements, reducing same-day registration and constraining out-of-precinct voting to place barriers between citizens and the ballot box. And it sent a message that contradicted some of the most basic principles of our democracy. The ability of Americans to have a voice in the direction of their country – to have a fair and free opportunity to help write the story of this nation – is fundamental to who we are and who we aspire to be. Going forward, the Department of Justice will continue our work to protect that sacred right for all.”
United States Sues Former Executives of Government Contractor for Making False Claims in Connection with Reconstruction Contracts in Afghanistan and IraqRead the Press Release
The Justice Department announced today that the government has filed suit under the False Claims Act against Derish M. Wolff and Salvatore J. Pepe, respectively the former CEO and CFO of Louis Berger Group Inc. (LBG), for conspiring to overbill the U.S. Agency for International Development (USAID) and other government agencies for costs incurred performing reconstruction contracts in Afghanistan, Iraq, and other countries, the Justice Department announced today. LBG is based in East Orange, New Jersey.
“Those who do business with the U.S. government should expect appropriate consequences if they do not deal fairly,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “As this case demonstrates, the government will hold both corporate entities and individuals accountable if they misuse taxpayer funds.”
The government’s complaint alleges that Wolff and Pepe designed and directed various accounting schemes that resulted in LBG billing the government for indirect overhead costs at inflated rates. According to the complaint, for example, Wolff and Pepe shifted portions of salaries of LBG executives and accounting personnel from contracts paid for by foreign and state governments and private entities to contracts paid for by the United States. Wolff and Pepe allegedly certified the false rates and submitted them to the government in annual financial reports.
The United States resolved criminal and civil claims against LBG arising from this conduct on Nov. 5, 2010. At that time, LBG entered into a Deferred Prosecution Agreement and paid $50.6 million to resolve False Claims Act allegations. Pepe pleaded guilty on that date to a charge of conspiracy to defraud the government and was later sentenced to one year probation. Wolff pleaded guilty to the same charge on Dec. 12, 2014, and was later sentenced to 12 months of home confinement and required to pay a $4.5 million fine for his role in the scheme. The complaint filed today asserts civil claims against Wolff and Pepe.
The United States filed its complaint in a lawsuit originally brought under the qui tam, or whistleblower, provisions of the False Claims Act, by Harold Salomon, an LBG accountant from March 2002 to October 2005. Under the Act, a private citizen can sue on behalf of the United States and share in any recovery. The United States is also entitled to intervene in the lawsuit, as it has done in this case.
This matter is being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of Maryland, with investigative support from the FBI, USAID’s Office of Inspector General, the Defense Criminal Investigative Service and the Defense Contract Audit Agency.
“I applaud the dedication of USAID-OIG special agents, along with special agents of the FBI and the Defense Criminal Investigative Service,” said USAID Inspector General Ann Calvaresi Barr. “Their joint investigative work has helped the Justice Department take action against those responsible and signals our continuing commitment to protecting public funds from fraud, waste, and abuse.”
The case is United States ex rel. Harold Salomon v. Derish M. Wolff & Salvatore J. Pepe, Civ. No. RWT-06-1970 (D. Md.). The claims asserted against Wolff and Pepe are allegations only to the extent not admitted in their criminal pleas, and there has been no determination of civil liability.
South Carolina Hospital to Pay $17 Million to Resolve False Claims Act and Stark Law AllegationsRead the Press Release
The Lexington County Health Services District Inc. d/b/a Lexington Medical Center located in West Columbia, South Carolina, has agreed to pay $17 million to resolve allegations that it violated the Physician Self-Referral Law (the Stark Law) and the False Claims Act by maintaining improper financial arrangements with 28 physicians, the Department of Justice announced today.
The Stark Law is intended to ensure that physician referrals are made based on the medical needs of the patients and are not tainted by certain financial arrangements. Thus, the Stark Law generally forbids a hospital from billing Medicare for certain services referred by physicians who have a financial relationship with the hospital unless that relationship falls within enumerated exceptions. The exceptions generally require, among other things, that the financial arrangements do not exceed fair market value, do not take into account the volume or value of any referrals and are commercially reasonable. In addition, arrangements with physicians who are not hospital employees must be set out in writing and satisfy a number of other requirements intended to insulate the referrals from financial considerations.
“This case demonstrates the United States’ commitment to ensuring that doctors who refer Medicare beneficiaries to hospitals for procedures, tests and other health services do so only because they believe the service is in the patient’s best interest, and not because the physician stands to gain financially from the referral,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.
The United States alleged that Lexington Medical Center entered into asset purchase agreements for the acquisition of physician practices or employment agreements with 28 physicians that violated the Stark Law because they took into account the volume or value of physician referrals, were not commercially reasonable or provided compensation in excess of fair market value.
Also as part of the settlement, Lexington Medical Center will enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services-Office of the Inspector General (HHS-OIG) that requires Lexington Medical Center to implement measures designed to avoid or promptly detect future conduct similar to that which gave rise to this settlement.
The settlement resolves allegations filed in a lawsuit by Dr. David Hammett, a former physician employed by Lexington Medical Center, in federal court in Columbia, South Carolina. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. Dr. Hammett will receive approximately $4.5 million of the recovered funds.
This civil 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 billion through False Claims Act cases, with more than $18.3 billion of that amount recovered in cases involving fraud against federal health care programs.”
The case was handled by the U.S. Attorney’s Office for the District of South Carolina, the Civil Division’s Commercial Litigation Branch and HHS-OIG.
The lawsuit is captioned United States ex rel. Hammett v. Lexington County Health Services District, Case No. 3:14-cv-03653 (D. S.C.). The claims settled by this agreement are allegations only; there has been no determination of liability.
Justice Department Reaches Agreement with a North Carolina YMCA to Ensure Equal Opportunities for Children with DiabetesRead the Press Release
The Justice Department reached a settlement agreement today with YMCA of the Triangle in Raleigh, North Carolina, to resolve allegations that it violated the Americans with Disabilities Act (ADA) by denying a child the opportunity to participate in an after-school program because of his Type 1 diabetes.
Title III of the ADA prohibits discrimination on the basis of disability by public accommodations, including private camps and childcare programs. Under the ADA, such entities generally must make reasonable modifications to their policies, practices or procedures when necessary to provide equal access to a child with a disability. When a parent and a child’s physician determine that it is appropriate for a trained layperson to assist a child with diabetes care, a camp or childcare program must provide this as a reasonable modification under the ADA, unless doing so would fundamentally alter the program.
YMCA of the Triangle refused to perform diabetes related tasks, including administering glucagon in the event of a low blood glucose level emergency. YMCA of the Triangle serves Wake, Durham, Lee, Johnston, Orange, Chatham and Pamlico counties in North Carolina, with 13 branches and three overnight camps. It administers after-school programs at 53 sites to nearly 5,000 children.
“After-school and camp programs enable children to learn from their peers and socialize with their friends,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Parents must be able to trust that their kids will receive the care and support they need, and providers who run these programs must fully comply with the ADA. The Justice Department will continue to aggressively fight all forms of discrimination that deny children with disabilities the protections the law requires and the opportunities they deserve.”
Under the terms of the agreement, the YMCA will:
- adopt a non-discrimination policy;
- train its staff on the ADA and diabetes management;
- provide information for parents on how to request modifications for children with disabilities;
- designate an ADA compliance officer who will monitor compliance with the agreement and review requests for reasonable modifications, among other duties;
- pay $5,000 in compensation to the complainant; and
- report to the United States on its compliance on an annual basis.
ADA enforcement is a top priority of the department’s Civil Rights Division. Those interested in finding out more about this settlement or the obligations of camps and child care programs under the ADA may call the department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD) or access its ADA website at www.ada.gov. ADA complaints may be filed online at http://www.ada.gov/complaint/.
YMCA of the Triangle Settlement Agreement
New York Tax Return Preparer Convicted of Aiding and Assisting in the Preparation of False Tax ReturnsRead the Press Release
A Queens, New York, tax return preparer was convicted by a federal jury yesterday in the U.S. District Court for the Eastern District of New York of preparing false income tax returns for clients of her tax return preparation business, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Williesteina Jacobs was convicted of 21 counts of aiding and assisting in the preparation of false income tax returns after a seven day jury trial. According to court documents and testimony at trial, between 2007 and 2010, Jacobs operated International Professional Business Services, a tax preparation business located in South Richmond Hill, New York, and Jamaica, New York. During the years at issue, Jacobs prepared false individual income tax returns on behalf of clients for submission to the Internal Revenue Service (IRS). These tax returns claimed false losses from Schedule C businesses and grossly inflated or wholly fictitious Schedule A deductions. The false items on these returns resulted in the clients receiving larger tax refunds than they were entitled to receive.
“With yesterday’s verdict, Williesteina Jacobs is held accountable for her crimes against the United States and the harm she caused to our nation’s tax system,” said Principal Deputy Assistant Attorney General Ciraolo. “Tax return preparers owe a duty to their clients to prepare accurate and honest returns, and when they willfully fail to do so, the Department stands ready with its partners in the IRS to investigate and aggressively prosecute these offenders.”
“Taxpayers rely on tax return preparers to prepare accurate tax returns,” said Chief Richard Weber of IRS-Criminal Investigation. “Return preparers who willfully falsify tax returns in order to generate more business for themselves violate the trust their clients place in them and violate the law. The verdict reinforces our commitment to identify and prosecute crooked tax preparers.”
U.S. District Judge William F. Kuntz for the Eastern District of New York did not set a date for the sentencing hearing. The defendant faces a statutory maximum sentence of three years in prison and a maximum fine of $250,000 on each count of conviction.
Principal Deputy Assistant Attorney General Ciraolo commended agents of IRS-Criminal Investigation, who investigated the case and Tax Division Trial Attorneys Yael T. Epstein and Andrew J. Kameros, who prosecuted the case, and Paralegal Carol Saunders of the Tax Division, who assisted the trial team.
Georgia Couple Sentenced to Prison in a Stolen Identity Tax Refund Fraud Scheme Involving IRS “Get Transcript” DatabaseRead the Press Release
An Austell, Georgia, couple was sentenced to prison for their role in a stolen identity tax refund fraud scheme, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney John A. Horn of the Northern District of Georgia.
On July 27, U.S. District Chief Judge Thomas W. Thrash Jr. for the Northern District of Georgia, sentenced Anthony Alika, 42, to serve 80 months in prison, followed by three years of supervised release and Sonia Alika, 27, to serve 21 months in prison, followed by three years of supervised release. District Chief Judge Thrash ordered Anthony Alika and Sonia Alika to pay $1,963,251.75 and $245,790.08 in restitution to the Internal Revenue Service (IRS), respectively. In April, Anthony Alika pleaded guilty to one count of conspiracy to commit money laundering and Sonia Alika pleaded guilty to one count of illegal structuring of cash withdrawals to evade bank reporting requirements.
“Anthony and Sonia Alika, driven by greed and a fast buck, lined their pockets by laundering more than $1 million stolen from the U.S. Treasury in the form of fraudulent income tax returns filed using data illegally obtained from the IRS Get Transcript database,” said Principal Deputy Assistant Attorney General Ciraolo. “The sentences imposed today send a clear message to those pursuing similar criminal schemes. The department, working with the IRS and its other law enforcement partners, will aggressively prosecute and seek substantial prison terms for individuals who engage in stolen identity refund fraud.”
“This fraud conspiracy featured a literal highlight reel of our current economic crime threats, including cyber intrusions, identity theft, phony tax returns and money laundering, all to the order of millions of dollars,” said U.S. Attorney Horn. “These schemes create nightmares for citizens who endure the process of repairing their credit and IRS returns, and this case reflects law enforcement’s commitment to punish these criminals and do all we can to prevent further victims.”
“Today’s sentencing of Anthony Alika and Sonia Alika is a victory for the many American taxpayers who have been victims of sophisticated stolen identity refund fraud schemes,” said Chief Richard Weber of IRS Criminal Investigation. “The Alikas demonstrated a blatant disregard for the integrity of the U.S. tax system and caused immeasurable hardship to innocent victims. We continue to work hard to protect the sanctity and integrity of the tax system while working for justice for those individuals whose identities were stolen.”
In January, Anthony Alika and Sonia Alika were charged with laundering the proceeds from their stolen identity refund fraud scheme. The indictment alleged that Anthony Alika, along with Rapheal Atebefia, 33, of Austell, were members of a conspiracy which obtained means of identification of actual individuals, including their names and social security numbers and used this information to access the IRS’s “Get Transcript” database. The indictment further alleged that Anthony Alika, Atebefia and others obtained prepaid debit cards from stores located in multiple states, registered the cards in the names of the stolen identities, filed false income tax returns using the stolen identities and information obtained from the Get Transcript database and directed the IRS to deposit the tax refunds onto these cards. Get Transcript is an online service the IRS offers to allow taxpayers to order copies of their past tax returns. To conceal their fraud, Anthony Alika, Atebefia and others were alleged to have used the prepaid debit cards to purchase money orders which were subsequently deposited into bank accounts. The Alikas and Atefibia then structured cash withdrawals of the proceeds in order to prevent the bank from filing Currency Transaction Reports (CTRs).
As part of his guilty plea, Anthony Alika admitted that during 2015, he received money orders from several individuals and deposited them into bank accounts in his and his wife’s name. Anthony Alika structured the cash withdrawals from his bank accounts in amounts less than $10,000 to evade the bank reporting requirements. Anthony Alika admitted that the funds used to purchase the money orders were the proceeds of illegal activity, including the filing of fraudulent tax returns using stolen identities. Anthony Alika admitted that he laundered over $1.5 million. Sonia Alika admitted as part of her guilty plea that between February and June 2015, she withdrew more than $250,000 from multiple bank accounts she controlled in amounts less than $10,000 to prevent the bank from filing CTRs.
On June 22, Atebefia was sentenced to serve 15 months in prison followed by three years’ supervised release for his role in the scheme.
Many tax fraudsters depend for their success on filing a fraudulent return with a stolen identity before their victims file their genuine returns. Filing early and avoiding use of obvious usernames and passwords for online tax websites are two ways to help protect yourself.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Horn commended special agents of IRS-Criminal Investigation and the U.S. Postal Service, who investigated the case and Trial Attorneys Michael C. Boteler and Charles M. Edgar, Jr. of the Tax Division and Assistant U.S. Attorney Brian Pearce, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Former Club Rage Bouncer Sentenced to 70 Months in Prison for Tax FraudRead the Press Release
United States Attorney Andrew M. Luger today announced the sentence of JOHN HUNTER, SR., 47, to 70 months in federal prison for filing false tax returns. Following a four-day trial before Senior U.S. District Court Judge David S. Doty, a jury on December 3, 2015, found HUNTER guilty of all the charges against him, including conspiracy to defraud the United States, false claims, and aggravated identity theft. HUNTER was sentenced today before Judge Doty in U.S. District Court in Minneapolis, Minn.
"Today's 70 month sentencing of Mr. John Hunter exemplifies the driven focus of IRS Special Agents as they relentlessly pursue identity theft and refund fraud crimes," said Shea Jones, Special Agent in Charge of the St. Paul Field Office IRS Criminal Investigation. “IRS Criminal Investigation, together with the U.S. Attorney’s Office, will continue to investigate the criminals who are stealing from the American taxpayer.”
As proven at trial, in 2010, HUNTER fraudulently claimed more than $200,000 in tax refunds to which he was not entitled. HUNTER misrepresented both his income and the incomes of 48 others, using their personal identifying information to file false tax returns. In 2009, HUNTER claimed a $8,222 tax refund based on earnings of $13,000 from his job at the Maplewood nightclub, Club Rage, in 2009. His actual earnings were closer to $4,000 and no taxes had been withheld from his paychecks.
As proven at trial, HUNTER also recruited dozens of friends and acquaintances, including minors, for whom he would file fraudulent returns by exaggerating or falsifying their incomes. HUNTER claimed that several of these acquaintances had worked at Club Rage or Holiday Stores, though they never had.
As proven at trial, HUNTER unsuccessfully tried to continue his scheme in 2012, claiming that he had earned over $19,000 at Jimmy John’s sandwich shop. He also filed false taxes for two others without their knowledge, claiming almost $20,000 in fraudulent refunds. The IRS rejected his claims.
This case was the result of an investigation conducted by IRS Criminal Investigations Division with substantial assistance from the Minnesota Department of Revenue.
This case was prosecuted by Assistant U.S. Attorneys Joseph Thompson and Amber Brennan.
Defendant Information:
JOHN HUNTER, SR., 47
Eagan, Minn.
Convicted:
- Conspiracy to defraud the United States, 1 count
- False claims, 8 counts
- Aggravated identity theft, 2 counts
Sentenced:
- 70 months in prison
###
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Cement Manufacturer Cemex to Reduce Harmful Air Pollution from Five Plants under Settlement with EPA and Justice DepartmentRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a settlement with Cemex Inc., under which the company will invest approximately $10 million to cut emissions of harmful air pollution at five of its cement manufacturing plants in Alabama, Kentucky, Tennessee and Texas to resolve alleged violations of the Clean Air Act. Under the consent decree lodged in the U.S. District Court for the Eastern District of Tennessee, Cemex will also pay a $1.69 million civil penalty, conduct energy audits at the five plants, and spend $150,000 on energy efficiency projects to mitigate the effects of past excess emissions of nitrogen oxides (NOx)from its facilities.
“The cement sector is a significant source of air pollution posing real health risks to the communities where they reside, including vulnerable communities across the U.S. who deserve better air quality than they have gotten over the years,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “This agreement will require Cemex to pay a penalty and install important pollution controls to achieve reductions in harmful air emissions, thereby making Cemex a better neighbor to local residents.”
“This settlement requires Cemex to use state of the art technology to reduce harmful air pollution, improving public health in vulnerable communities across the South and Southeast,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “EPA is committed to tackling clean air violations at the largest sources, cutting the pollutants that cause respiratory illnesses like asthma.”
The five Cemex facilities produce Portland cement, a key ingredient in concrete, mortar, and stucco are located in Demopolis, Alabama, Louisville, Kentucky, Knoxville, Tennessee, and New Braunfels and Odessa, Texas. The Knox County, Tennessee, and Louisville air pollution control authorities participated in this settlement.
Cemex is required to install pollution control technology that will reduce emissions of NOx and establish strict limits for sulfur dioxide (SO2) emissions, which will improve air quality in local communities. Cemex will install and continuously operate a selective non-catalytic reduction system for controlling NOx at the five plants and meet emission limits that are consistent with the current best available control technology for NOx. EPA estimates this will result in NOx emissions reductions of over 4,000 tons per year. Each facility will also be subject to strict SO2 emission limits.
NOx and SO2, two key pollutants emitted from cement plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze. The pollutants are converted in the air into fine particles of particulate matter that can cause severe respiratory and cardiovascular impacts and premature death. Reducing these harmful air pollutants will benefit the communities located near the Cemex plants, particularly communities disproportionately impacted by environmental risks and vulnerable populations, including children.
This settlement is part of EPA’s National Enforcement Initiative to control harmful emissions from large sources of pollution, which includes cement manufacturing plants, under the Clean Air Act’s Prevention of Significant Deterioration requirements. The total combined SO2 and NOx emission reductions secured from cement plant settlements under this initiative will exceed 75,000 tons each year once all the required pollution controls have been installed and implemented.
The settlement is subject to a 30-day public comment period and final court approval. Information about submitting a public comment is available at: www.justice.gov/enrd/consent-decrees.
Washington CPA Pleads Guilty to Filing False Tax ReturnsRead the Press Release
A Spokane, Washington, certified public accountant pleaded guilty today to three counts of making and subscribing false corporate income tax returns announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Michael C. Ormsby for the Eastern District of Washington.
Roger Stadtmueller, 53, admitted owning Zazz Inc., a corporation under which he provided accounting and consulting services, including income tax preparation, bookkeeping and financial auditing for clients. Stadtmueller admitted that he made and subscribed false and fraudulent corporate tax returns for Zazz for the calendar years 2006, 2007 and 2008, by understating Zazz’s gross receipts by approximately $1.8 million.
Sentencing is scheduled for Oct. 11 at 2:30 p.m. Stadtmueller faces a statutory maximum sentence of three years in prison and financial penalties for each of the three counts of filing false corporate tax returns. Stadtmueller also agreed to pay restitution to the Internal Revenue Service (IRS) in the amount of $400,000.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Ormsby commended special agents of the IRS-Criminal Investigation, who investigated the case, and Senior Litigation Counsel Corey J. Smith and Trial Attorneys Lisa L. Bellamy and Eric C. Schmale of the Tax Division, who are prosecuting the case.
Defendant Franklin John Salas Sentenced to 108 Months IncarcerationRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that on July 25, 2016, Defendant FRANKLIN JOHN SALAS was sentenced by the Honorable Frances Tydingco-Gatewood, Chief Judge, District Court of Guam. Defendant was sentenced to serve 108 months incarceration followed by three years of supervised release, with credit for time served.
Defendant FRANKLIN JOHN SALAS pled guilty on December 9, 2014 to Attempted Possession of Methamphetamine with Intent to Distribute in violation of Title 21 U.S.C. Section 846(a)(1) and (b)(1)(C). Defendant SALAS attempted to receive 52.6 grams of methamphetamine hydrochloride at the Barrigada Post Office on October 29, 2014. The methamphetamine was concealed within card-sized envelopes and sent from Las Vegas, Nevada to Guam where it was intercepted by the U.S. Postal Inspector. The Drug Enforcement Administration Forensic Laboratory determined that the methamphetamine had a high purity level of 98.8%.
U.S. Attorney Limtiaco notes that methamphetamine hydrochloride is associated with violent crimes and has a devastating effect on individuals and the community. The U.S. Attorney’s Office is committed to the aggressive prosecution of cases involving drug distribution.
The investigation was conducted by the Guam U.S. Postal Inspector and Drug Enforcement Administration. The case was handled by Assistant U.S. Attorney Rosetta San Nicolas.
LATAM Airlines Group Resolves Foreign Corrupt Practices Act Investigation and Agrees to Pay $12.75 Million Criminal PenaltyRead the Press Release
LATAM Airlines Group S.A. (LATAM), a commercial airline company based in Chile, has agreed to pay a $12.75 million criminal penalty in connection with a scheme to pay bribes to Argentine union officials via a false consulting contract with a third-party intermediary in violation of the accounting provisions of the Foreign Corrupt Practices Act (FCPA).
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.
According to admissions made in the resolution documents, executives at LATAM’s predecessor-in-interest, LAN Airlines S.A. (LAN), executed a fictitious $1.15 million consulting agreement with an advisor to the Secretary of Argentina’s Ministry of Transportation in October 2006. Although the agreement purportedly required the consultant to undertake a study of Argentine airline routes, the consultant never provided any such services. Instead, the purported consultant funneled the monies he received pursuant to the contract to Argentine labor union officials in exchange for the union agreeing to accept lower wages and to not enforce what would have been a costly labor rule. In total, LAN profited by more than $6.7 million as a result of the bribes paid to the union officials.
LATAM entered into a three-year deferred prosecution agreement (DPA) to resolve the case. As part of the DPA, LATAM agreed to pay a $12.75 million criminal penalty, continue to cooperate with the department’s investigation, enhance its compliance program and retain an independent corporate compliance monitor for a term of at least 27 months. The department reached this resolution based on a number of factors, including the fact that LATAM did not voluntarily disclose the FCPA violations, but did cooperate with the department’s investigation after the press in Argentina uncovered and reported the conduct approximately four years after it had occurred. After LATAM began cooperating, it did so fully and provided all relevant facts known to it, including about individuals involved in the misconduct. LATAM did not, however, remediate adequately. LATAM failed to discipline in any way the employees responsible for the criminal conduct, including at least one high-level company executive, and thus the ability of the compliance program to be effective in practice is compromised. As a result, the company paid a penalty within the U.S. Sentencing Guidelines range instead of receiving a discount off the bottom of the range.
In a related matter, LATAM reached a settlement today with the U.S. Securities and Exchange Commission (SEC) under which it agreed to pay $6.74 million in disgorgement and $2.7 million in prejudgment interest. Thus, the approximately $22.2 million in combined penalty, disgorgement and prejudgment interest far exceeds the $6.7 million in savings the company had received from its improper payments.
The FBI’s Miami Field Office investigated the case. Senior Trial Attorney Jason Linder of the Criminal Division’s Fraud Section prosecuted the case. The SEC also provided assistance during the investigation.
Georgia Real Estate Investor Pleads Guilty to Bid Rigging and Bank Fraud at Public Home Foreclosure AuctionsRead the Press Release
A Georgia real estate investor pleaded guilty today for his role in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia, the Department of Justice announced.
James R. Patterson Jr. admitted that he agreed with other real estate investors to rig auctions of foreclosed homes in Gwinnett County from May 2007 until at least November 2011. According to court documents filed in the U.S. District Court for the Northern District of Georgia, Patterson and his co-conspirators agreed not to compete for the purchase of selected foreclosed homes so that they could win the auctions for those homes with artificially low bids. The winning bidders then paid off the conspirators who had refrained from bidding against them. As a result, conspirators profited from money that otherwise would have gone to mortgage holders and other secured debt holders and in some cases, to the people who owned the foreclosed homes.
Including the individual pleading today, twenty-two defendants have been charged in connection with the Justice Department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area. Twenty of those have either pleaded guilty or agreed to plead guilty.
These charges have been filed as a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia, in connection with the president’s Financial Fraud Enforcement Task Force. The president established the task force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.
For more information about the task force, please visit www.StopFraud.gov. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.
Johnson & Johnson Subsidiary Acclarent Inc. Pays Government $18 Million to Settle False Claims Act AllegationsRead the Press Release
California-based medical device manufacturer Acclarent Inc., a subsidiary of Johnson & Johnson, has agreed to pay $18 million to resolve allegations that the company caused health care providers to submit false claims to Medicare and other federal health care programs by marketing and distributing its sinus spacer product for use as a drug delivery device without U.S. Food and Drug Administration (FDA) approval of that use, the Justice Department announced today.
“The FDA approval process serves an important role in ensuring that federal health care participants receive devices that are safe, effective and medically appropriate,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will not permit companies to circumvent that process and put profits over patient safety.”
“The FDA plays a fundamental role in ensuring the safety and efficacy of medical devices and drugs in this country,” said U.S. Attorney Carmen M. Ortiz. “Every time that patients receive a medical device or fill a prescription they should be able to take for granted that the FDA’s requirements have been met. We will vigorously pursue those who ignore or seek to circumvent these important patient protections.”
“It is imperative that medical device companies adhere to FDA approval requirements so that patients are not subject to questionable medical treatments at taxpayer expense,” said Special Agent in Charge Phillip M. Coyne of the Department of Health and Human Services Office of Inspector General. “Our investigators, working closely with our law enforcement partners, will continue to pursue allegations of such misconduct to hold fraudsters accountable and deter those tempted to launch such illegal scams.”
Acclarent sold a variety of medical devices used in sinus surgeries, including a device known as the Relieva Stratus MicroFlow Spacer (Stratus). In 2006, Acclarent received FDA clearance to market the Stratus as a spacer to be used only with saline to maintain sinus openings following surgery. The government alleged that Acclarent intended for the Stratus to be used instead as a drug-delivery device for prescription corticosteroids, including Kenalog-40, and that the device was specifically designed and engineered for this use.
The government further alleged that Acclarent marketed the Stratus as a drug delivery device even after the FDA rejected the company’s 2007 request to expand the approved uses for the Stratus. For example, Acclarent employees trained physicians using a video that demonstrated the Stratus being used with prescription corticosteroid Kenalog-40 and also used a white, milky substance resembling Kenalog-40 when demonstrating the Stratus.
In 2010, Acclarent added a warning to its label regarding use of active drug substances in the Stratus; however, the government alleged that Acclarent nonetheless continued to market the Stratus for drug delivery. By May 2013, Acclarent discontinued all sales of the Stratus and the company agreed to withdraw all FDA marketing clearances for the device, which is no longer commercially available in the United States.
On Wednesday, July 20th, Acclarent’s former Chief Executive Officer, William Facteau, 47, of Atherton, California and former Vice President of Sales, Patrick Fabian, 49, of Lake Elmo, Minnesota were convicted following a six-week jury trial of 10 misdemeanor counts of introducing adulterated and misbranded medical devices into interstate commerce.
The civil settlement with Acclarent resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in the District of Massachusetts and is captioned United States ex rel. Melayna Lokosky v. Acclarent, Inc. As part of today’s resolution, Lokosky will receive approximately $3.5 million from the settlement.
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 billion through False Claims Act cases, with more than $18.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement with Acclarent was the result of a coordinated effort among the U.S. Attorney’s Office for the District of Massachusetts and the Civil Division’s Commercial Litigation Branch, with assistance from the FDA’s Office of Chief Counsel and HHS’ Office of Counsel to the Inspector General. The investigation was conducted by the FBI’s Boston Field Office, HHS-OIG, the Defense Health Agency, FDA’s Office of Criminal Investigations, the Department of Veterans Affairs Office of Inspector General and the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service.
The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Court Shuts Down Dallas Tax Return PreparerRead the Press Release
A Dallas-area tax return preparer continually and repeatedly prepared federal income tax returns that contained false or inflated deductions and credits, according to a 2015 lawsuit filed by the Justice Department. Now a federal court has permanently barred the defendants in that case from preparing federal tax returns for others.
According to the 2015 complaint, Allan Ukiru Kadagi, Akay Tax Services, Akay Express Tax Services, Akay Express Tax Services Inc. and Cleanshine Tax Services prepared returns for their customers that claimed false, improper, or inflated business expense deductions and false, improper, or inflated education expenses and credits. As a result, their customers repeatedly reported and paid less tax than they owed, according to the complaint. The returns also claimed the earned income tax credit beyond what the customers were eligible to receive, the complaint alleged. The complaint further alleges that Kadagi and the companies misused Preparer Tax Identification Numbers and Kadagi did not provide true copies of tax returns filed with the Internal Revenue Service (IRS) to his clients.
The court order requires the defendants to turn over to the United States a list of all persons for whom they prepared federal tax returns since Jan. 1, 2014. It also authorizes the United States to monitor the defendants’ compliance with the terms of the injunction.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Owner of Juvenile Mental Health Facilities Convicted in Bribery SchemeRead the Press Release
The owner of two Arkansas mental health companies that provide inpatient and outpatient mental health services to juveniles was found guilty yesterday of engaging in a scheme to bribe a former deputy director of the Arkansas Department of Human Services (ADHS), announced Assistant Attorney General Leslie R. Caldwell of the Department of Justice’s Criminal Division.
Theodore E. Suhl, 50, of Warm Springs, Arkansas, was convicted by a federal jury of two counts of honest services fraud, one count of federal funds bribery and one count of interstate travel in aid of bribery.
The evidence presented at trial showed that Suhl bribed former deputy director of ADHS, Steven B. Jones, using intermediaries Phillip W. Carter and a local pastor. Trial evidence demonstrated that beginning in approximately April 2007, Suhl, Jones and Carter periodically met at restaurants in Memphis, Tennessee, or in rural Arkansas in order for Suhl to request assistance for his companies from Jones in his capacity as deputy director of ADHS. Jones agreed to perform official acts that benefitted Suhl and Suhl’s businesses and provided internal ADHS information to Suhl, according to evidence presented at trial. The trial evidence also showed that, in exchange for Jones’s agreement to perform official acts, Suhl paid Jones by funneling cash payments through the pastor’s church and providing the bribe payments to Jones in cash so that the transactions would not be easily traceable.
Jones pleaded guilty to federal funds bribery and conspiracy for his involvement in the scheme and was sentenced to 30 months in prison. Carter pleaded guilty to conspiracy to commit federal funds bribery and honest services wire fraud and was sentenced to 24 months in prison.
The FBI’s Little Rock Field Office investigated the case. Trial Attorneys Lauren Bell, John D. Keller and Amanda R. Vaughn of the Criminal Division’s Public Integrity Section are prosecuting the case.
Loan Company Employee Sentenced to Prison for Stealing Identities Used to File False Tax ReturnsRead the Press Release
A Montgomery County, Alabama, resident was sentenced to 48 months in prison for her role in a stolen identity refund fraud scheme, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.
Wendy Huff, 32, admitted that between January 2013 and August 2015, she worked at two loan companies in Montgomery, Alabama, and had access to the personal identifying information of customers. Huff agreed to steal information from her employers and provide it to her co-conspirator James Vernon Battle, 31. Battle used that information to file over 335 returns claiming more than $400,000 in fraudulent refunds and directed the requested tax refunds to prepaid debit cards and U.S. Treasury checks, which were mailed to addresses in Montgomery, including Huff’s residence. Battle also brought several U.S. Treasury tax refund checks to Huff’s workplace where she used her position to cash them. Huff returned half of the proceeds to Battle and kept the balance for herself.
Huff pleaded guilty in March to one count of conspiracy to commit mail fraud and one count of aggravated identity theft. In addition to the prison term, U.S. District Judge Joel Dubina for the Middle District of Alabama sentenced Huff to three years of supervised release and ordered her to pay $102,322 in restitution to the Internal Revenue Service (IRS). Battle is scheduled to be sentenced on Aug. 31.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Beck commended special agents of IRS-Criminal Investigation and the U.S. Secret Service, who investigated the case and Trial Attorneys Michael C. Boteler and Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Justice Department and State Attorneys General Sue to Block Anthem’s Acquisition of Cigna, Aetna’s Acquisition of HumanaRead the Press Release
Lawsuits Challenge Unprecedented Consolidation in the Health Insurance Industry
The U.S. Department of Justice and attorneys general from multiple states and the District of Columbia sued today to block Anthem’s proposed acquisition of Cigna and Aetna’s proposed acquisition of Humana, alleging that the transactions would increase concentration and harm competition across the country, reducing from five to three the number of large, national health insurers in the nation.
The department and state attorneys general filed these two merger challenges in the U.S. District Court for the District of Columbia. The complaints allege that the two mergers – valued at $54 billion and $37 billion – would harm seniors, working families and individuals, employers and doctors and other healthcare providers by limiting price competition, reducing benefits, decreasing incentives to provide innovative wellness programs and lowering the quality of care.
“Competitive insurance markets are essential to providing Americans the affordable and high-quality healthcare they deserve,” said Attorney General Loretta E. Lynch. “These mergers would restrict competition for health insurance products sold in markets across the country and would give tremendous power over the nation’s health insurance industry to just three large companies. Our actions seek to preserve competition that keeps premiums down and drives insurers to collaborate with doctors and hospitals to provide better healthcare for all Americans.”
“We all, including seniors, everyday workers and the previously uninsured and underinsured deserve affordable health insurance options,” said Principal Deputy Associate Attorney General Bill Baer. “Competition today drives these four successful firms to fight to give us affordable options. There is no reason to put that dynamic at risk and that is why we are asking the court to stop these mergers and keep competition working for the benefit of the American consumer.”
“The proposed mergers would eliminate two innovative competitors – Cigna and Humana – at a time when competition has been pressuring insurers to develop new models of care designed to keep Americans healthier, to deliver healthcare more efficiently and to control the costs of providing care,” said Deputy Assistant Attorney General Sonia Pfaffenroth of the Justice Department’s Antitrust Division. “The department will continue to work with our state colleagues to protect competition and innovation in this vitally important industry.”
Eleven states – California, Colorado, Connecticut, Georgia, Iowa, Maine, Maryland, New Hampshire, New York, Tennessee and Virginia – and the District of Columbia joined the department’s challenge of Anthem’s $54 billion acquisition of Cigna. Eight states –Delaware, Florida, Georgia, Iowa, Illinois, Ohio, Pennsylvania and Virginia – and the District of Columbia joined the department’s challenge of Aetna’s $37 billion acquisition of Humana.
The suit against Anthem and Cigna alleges that their merger would substantially reduce competition for millions of consumers who receive commercial health insurance coverage from national employers throughout the United States; from large-group employers in at least 35 metropolitan areas, including New York, Los Angeles, San Francisco, Denver and Indianapolis; and from public exchanges created by the Affordable Care Act in St. Louis and Denver. The complaint also alleges that the elimination of Cigna threatens competition among commercial insurers for the purchase of healthcare services from hospitals, physicians and other healthcare providers. The merger would eliminate substantial head-to-head competition in all these markets, and it would remove the independent competitive force of Cigna, which has been a leader in the industry’s transition to value-based care.
The lawsuit against Aetna and Humana alleges that their merger would substantially reduce Medicare Advantage competition in more than 350 counties in 21 states, affecting more than 1.5 million Medicare Advantage customers in those counties. Before seeking to acquire Humana, Aetna had pursued aggressive expansion in Medicare Advantage. Aetna, the nation’s fourth-largest Medicare Advantage insurer by membership, has nearly doubled its Medicare Advantage footprint over the past four years. Humana is the nation’s second-largest Medicare Advantage insurer by membership. The lawsuit also alleges that Aetna’s purchase of Humana would substantially reduce competition to sell commercial health insurance to individuals and families on the public exchanges in 17 counties in Florida, Georgia and Missouri, affecting more than 700,000 people in those counties. The lawsuit alleges that by buying Humana, Aetna would eliminate one of its strongest and most capable competitors in these markets.
Anthem, Inc. is headquartered in Indianapolis, Indiana. It is the nation’s second-largest health insurer and the largest member of the Blue Cross and Blue Shield Association. It holds the Blue Cross license in 14 states and provides health insurance to 39 million people. In 2015, Anthem reported over $79 billion in revenues.
Cigna Corp. is headquartered in Hartford, Connecticut. It is the nation’s fourth-largest health insurer. It operates in every state and the District of Columbia and provides health insurance to 15 million people. In 2015, Cigna reported $38 billion in revenues.
Aetna Inc. is headquartered in Hartford, Connecticut. It is the nation’s third-largest health insurer. It operates in every state and the District of Columbiaand provides health insurance to 23 million people. In 2015, Aetna reported $60 billion in revenues.
Humana Inc. is headquartered in Louisville, Kentucky. It is the nation’s fifth-largest health insurer, operates in every state and the District of Columbia and provides health insurance to 14 million people. In 2015, Humana reported $54 billion in revenues.
Aetna-Humana Complaint
Anthem-Cigna Complaint
Justice Department Files Suit Against Bensalem Township, Pennsylvania, over Denial of Zoning Approval for MosqueRead the Press Release
The Justice Department announced today that it has filed a lawsuit against Bensalem Township, Pennsylvania, alleging that the township violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA) when it denied zoning approval to allow the Bensalem Masjid to build a mosque on three adjoining parcels of land in the township.
The complaint, filed in the Eastern District of Pennsylvania, alleges that Bensalem Township’s denial of a variance imposed a substantial burden on the Bensalem Masjid’s religious exercise, treated the Bensalem Masjid less favorably than the township treats nonreligious assemblies and discriminated against the Bensalem Masjid on the basis of religion. According to allegations in the complaint, the township placed unreasonable limitations on religious assemblies through its land use regulations. The complaint also alleges that the township only permits places of worship in one district without a variance or rezoning by the township and that no properties were available in that district when the Bensalem Masjid acquired the property.
“Our Constitution protects the rights of religious communities to build places of worship free from unlawful interference and unnecessary barriers,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Department of Justice will continue to challenge unjustified local zoning actions around the country when they encroach upon this important civil right.”
RLUIPA contains multiple provisions prohibiting religious discrimination and protecting against unjustified burdens on religious exercise. Persons who believe that they have been subjected to religious discrimination in land use or zoning may contact the Civil Rights Division’s Housing and Civil Enforcement Section at (800) 896-7743.
More information about RLUIPA, including questions and answers about the law and other documents, may be found at http://www.justice.gov/crt/about/hce/rluipaexplain.php.
Bensalem Township Complaint
Attorney General Lynch Names Rupa Bhattacharyya as Special Master of the September 11th Victim Compensation FundRead the Press Release
Attorney General Loretta E. Lynch today announced that she has chosen Rupa Bhattacharyya to head the September 11th Victim Compensation Fund (VCF) after current VCF Special Master Sheila L. Birnbaum steps down later this month.
Special Master Birnbaum will continue to the full-time practice of law at Quinn Emanuel, LLP, where she is a partner. Bhattacharyya, who currently serves as Director of the Justice Department’s Constitutional and Specialized Tort Litigation Section in the Civil Division’s Torts Branch, will assume her new position on July 21.
“Rupa Bhattacharyya is an exceptional administrator and a devoted public servant, and I am delighted to name her as the new Special Master of the VCF,” said Attorney General Lynch. “Throughout her career at the Treasury and Justice Departments, she has earned a reputation for fairness, efficiency and integrity. I am confident that under her leadership, the VCF will continue to guarantee that those whose lives were forever changed by the events of September 11th, 2001, can receive the compensation they deserve. I thank outgoing Special Master Sheila Birnbaum for her outstanding leadership of the VCF over the last five years and I welcome Ms. Bhattacharyya to her new post.”
“As a life-long New Yorker, serving as Special Master of the VCF has been perhaps the most personally rewarding work of my career,” said Special Master Birnbaum. “My goal from the beginning was to establish a program that is fair, transparent and easy to navigate and I believe we have accomplished this and more over the past five years. It has been a true privilege to work on behalf of the victims of 9/11 and their resilience is inspiring. As the VCF moves into a new chapter following the reauthorization, I know the team is well poised to continue to succeed in compensating those most impacted by the events of Sept. 11, 2001.”
Birnbaum has served as VCF Special Master since May 2011, after the fund created under the James Zadroga 9/11 Health & Compensation Act (Zadroga Act) was signed into law by President Obama on Jan. 2, 2011. The VCF was reauthorized in December 2015 and under Birnbaum’s leadership has rendered award decisions on more than 10,000 claims and paid over $1.8 billion to first responders, recovery workers and residents who suffered physical harm or were killed as a result of the terrorist-related aircraft crashes of Sept. 11, 2001, or the debris removal efforts that took place in the immediate aftermath.
The VCF accomplishments under Birnbaum’s leadership include:
- Drafting and issuing the final rule to reflect the Zadroga Act when the VCF first re-opened in 2011 and then issuing the revised rule to reflect the December 2015 Reauthorization statute;
- Establishing collaborative, ongoing working relationships with “partner” entities such as the WTC Health Program (NIOSH), local, state and federal agencies, key employers such as FDNY and NYPD and advocacy groups focused on 9/11 issues, all in an effort to ease the burden on claimants and ensure efficient claims processing;
- Establishing an ongoing focus on outreach and communications with claimants, including the VCF website (available in four languages), a toll-free Helpline, town hall meetings and pro bono legal clinics in coordination with the New York City Bar;
- Developing productive working relationships with law firms representing VCF claimants, including frequent conference calls and meetings to keep attorneys updated on VCF progress and activity;
- Design and implementation of the initial claim form and redesign of a simpler form to meet the reauthorization mandate, as well as enhancements to the online system;
- Continuous efforts to improve the quality of claim submissions to support faster review and decision-making and simplify and streamline the claim review process as it evolved;
- Conducting extensive outreach for the Oct. 3, 2013, filing deadline to ensure all potential claimants knew of the deadline and had an easy way to register to preserve their right to file a future claim;
- Hiring of VCF staff and expansion of team to meet claimants’ needs, including identifying and personally training hearing officers to conduct hearings; and
- Improving transparency by providing various public reports on a weekly, quarterly and annual basis, along with frequent “Messages from the Special Master” providing updates on the VCF.
“I am honored to be selected by the Attorney General for this important service,” Bhattacharyya said. “I look forward to working alongside the dedicated VCF staff to ensure that 9/11 claimants promptly receive the payments to which they are entitled.”
Prior to Bhattacharyya’s selection to run the 9/11 VCF, she has served as the Justice Department’s Constitutional and Specialized Torts Branch Director since April 2012. As Director, Bhattacharyya oversees separate groups of attorneys and professional staff for the Vaccine Injury Compensation Program, which has paid in excess of $3.4 billion to more than 4,700 people since the Program’s 1988 inception under the National Childhood Vaccine Injury Act; the Radiation Exposure Compensation Act program, which has awarded more than $2 billion in compassionate compensation to eligible claimants under the Radiation Exposure Compensation Act; and the Constitutional Torts staff, which defends constitutional tort claims brought against federal officials sued in their individual capacities in federal district courts and reviews and makes determinations on requests for individual capacity representation from federal employees. Bhattacharrya has also served informally as an advisor to the Civil Division on matters related to the 9/11 VCF, including implementation of the reauthorizing legislation and promulgation of the associated regulations. She additionally serves as an advisor to other government components on compensation and representation programs, including the newly created U.S. Victims of State Sponsored Terrorism Fund, administered by the Department’s Criminal Division.
Bhattacharyya also served for nearly four years as the Deputy Assistant General Counsel for International Affairs at the U.S. Department of the Treasury, providing legal and legislative advice on a broad range of international economic and financial matters as well as administrative matters including hiring and budget. In 2012, she received an Exceptional Service Award from the Secretary of the Treasury for playing a critical role in framing the legal contours of key national security objectives of the Treasury Department, for contributing significantly to the implementation of the Dodd-Frank Act, particularly with respect to its international implications and for deploying information technology resources to enhance information sharing and streamlining procedures for processing Freedom of Information Act requests.
She previously worked for nearly 12 years as an attorney in the Justice Department’s Civil Division, mostly in the Federal Programs Branch. She was awarded the Attorney General’s John Marshall Award for Outstanding Legal Achievement for Trial Litigation, as well as three Special Commendations from the Assistant Attorney General of the Civil Division for Outstanding Service. Before coming to the Justice Department, Bhattacharyya clerked for then Chief Judge Julia Smith Gibbons of the U.S. District Court for the Western District of Tennessee.
Bhattacharyya received her J.D. from Harvard Law School, a Masters of Arts in Law and Diplomacy (M.A.L.D.) from the Fletcher School of Law and Diplomacy at Tufts University and her B.A. from Tulane University.
For additional information on the Victim Compensation Fund, please visit: www.vcf.gov.
United States, Enbridge Reach $177 Million Settlement After 2010 Oil Spills in Michigan and IllinoisRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency today announced a settlement with Enbridge Energy Limited Partnership and several related Enbridge companies to resolve claims stemming from its 2010 oil spills in Marshall, Michigan, and Romeoville, Illinois. Enbridge has agreed to spend at least $110 million on a series of measures to prevent spills and improve operations across nearly 2,000 miles of its pipeline system in the Great Lakes region. Enbridge will also pay civil penalties totaling $62 million for Clean Water Act violations -- $61 million for discharging at least 20,082 barrels of oil in Marshall and $1 million for discharging at least 6,427 barrels of oil in Romeoville.
In addition, the proposed settlement will resolve Enbridge’s liability under the Oil Pollution Act, based on Enbridge’s commitment to pay over $5.4 million in unreimbursed costs incurred by the government in connection with cleanup of the Marshall spill, as well as all future removal costs incurred by the government in connection with that spill. Today’s settlement includes an extensive set of specific requirements to prevent spills and enhance leak detection capabilities throughout Enbridge’s Lakehead pipeline system - a network of 14 pipelines spanning nearly 2,000 miles across seven states. Enbridge must also take major actions to improve its spill preparedness and emergency response programs. Under the settlement, Enbridge is also required to replace close to 300 miles of one of its pipelines, after obtaining all necessary approvals. Enbridge’s Lakehead System delivers approximately 1.7 million barrels of oil in the United States each day.
“This settlement will make the delivery of our nation’s energy resources safer and more environmentally responsible,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “It requires Enbridge to take robust measures to improve the maintenance and monitoring of its Lakehead pipeline system, protecting lakes, rivers, land and communities across the upper midwest, as well as pay a significant penalty.”
In addition to payments required under the proposed settlement, Enbridge has already reimbursed the government for $57.8 million in cleanup costs from the Marshall spill and $650,000 for cleanup costs from the Romeoville spill and Enbridge reportedly incurred costs in excess of $1 billion for required cleanup activities relating to the Marshall and Romeoville spills.
“This agreement puts in place advanced leak detection and monitoring requirements to make sure a disaster like this one doesn’t happen again,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “This comprehensive program – including an independent third party to audit compliance – will protect our waterways and the people who depend on them.”
“My office is pleased with this settlement, which not only provides financial accountability for the environmental harm caused by the oil spill in Marshall but also puts in place significant measures to protect the people and vital natural resources of this district going forward,” said U.S. Attorney Patrick Miles Jr. for the Western District of Michigan. “Prevention of future pipeline leaks and immediate detection and repair of problem areas are critical when protecting health and the environment. With the EPA and our other federal partners, the U.S. Attorney’s Office will vigorously enforce the Clean Water Act and other federal environmental laws in this district.”
“This was one of the largest inland oil spills in U.S. history when Enbridge discharged one million gallons of oil to Talmadge Creek near Marshall,” said Acting EPA Regional Administrator Robert Kaplan. “Together with our state and local emergency responders, EPA was able to contain the spill before it reached the Great Lakes. After 22 months of arduous cleanup work, the Kalamazoo River finally reopened for recreational activities.”
Under the settlement, Enbridge is committing to the following measures, which it estimates will cost at least $110 million:
- Implement an enhanced pipeline inspection and spill prevention program;
- Implement enhanced measures to improve leak detection and control room operations;
- Commit to additional leak detection and spill prevention requirements for a portion of Enbridge’s Line 5 that crosses the Straits of Mackinac in Michigan;
- Create and maintain an integrated database for its Lakehead Pipeline System;
- Enhance its emergency spill response preparedness programs by conducting four emergency spill response exercises to test and practice Enbridge’s response to a major inland oil spill;
- Improve training and coordination with state and local emergency responders by requiring incident command system training for employees, provide training to local responders, participate in area response planning and organize response exercises;
- Hire an independent third party to assist with review of implementation of the requirements in the settlement agreement;
The government’s complaint alleges that Enbridge owned or operated a 30 inch-pipeline, known as Line 6B, that ruptured near Marshall on July 25, 2010, discharging oil into the environment. Although the Line 6B rupture triggered numerous alarms in Enbridge’s control room, Enbridge failed to recognize a pipeline had ruptured until at least 17 hours later. In the meantime, Enbridge had restarted Line 6B on two separate occasions on July 26, 2010, pumping additional oil into the ruptured pipeline causing additional discharges of oil into the environment. Ultimately, Line 6B discharged at least 20,082 barrels of crude oil, much of which entered Talmadge Creek and flowed into the Kalamazoo River which flows to Lake Michigan. Flooding caused by heavy rains pushed the discharged oil over the river's banks into its flood plains and accelerated its migration over 35 miles downstream before it was contained. Enbridge later replaced Line 6B, which originates in Griffith, Ind., crosses the lower peninsula of Michigan and ends in Sarnia, Canada, with a new, larger pipeline, also known as Line 6B. The rupture and discharges were caused by stress corrosion cracking on the pipeline, control room misinterpretations and other problems and pervasive organization failures at Enbridge.
The complaint also alleges that on Sept. 9, 2010, another Enbridge pipeline, known as Line 6A, discharged at least 6,427 barrels of oil which Romeoville, much of which flowed through a drainage ditch into a retention pond in Romeoville.
There will be a 30 day public comment period on the consent decree lodged today. Information on how to comment on the consent decree will be available in the Federal Register and on the Department of Justice’s website: www.justice.gov/enrd/consent-decrees.
- Implement an enhanced pipeline inspection and spill prevention program;
United States Seeks to Recover More Than $1 Billion Obtained from Corruption Involving Malaysian Sovereign Wealth FundRead the Press Release
Attorney General Loretta E. Lynch announced today the filing of civil forfeiture complaints seeking the forfeiture and recovery of more than $1 billion in assets associated with an international conspiracy to launder funds misappropriated from a Malaysian sovereign wealth fund. Today’s complaints represent the largest single action ever brought under the Kleptocracy Asset Recovery Initiative.
Attorney General Lynch was joined in the announcement by 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, FBI Deputy Director Andrew G. McCabe and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI).
According to the complaints, from 2009 through 2015, more than $3.5 billion in funds belonging to 1Malaysia Development Berhad (1MDB) was allegedly misappropriated by high-level officials of 1MDB and their associates. With today’s complaints, the United States seeks to recover more than $1 billion laundered through the United States and traceable to the conspiracy. 1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people. Instead, as detailed in the complaints, 1MDB officials and their associates allegedly misappropriated more than $3 billion.
“The Department of Justice will not allow the American financial system to be used as a conduit for corruption,” said Attorney General Lynch. “With this action, we are seeking to forfeit and recover funds that were intended to grow the Malaysian economy and support the Malaysian people. Instead, they were stolen, laundered through American financial institutions and used to enrich a few officials and their associates. Corrupt officials around the world should make no mistake that we will be relentless in our efforts to deny them the proceeds of their crimes. ”
“According to the allegations in the complaints, this is a case where life imitated art,” said Assistant Attorney General Caldwell. “The associates of these corrupt 1MDB officials are alleged to have used some of the illicit proceeds of their fraud scheme to fund the production of The Wolf of Wall Street, a movie about a corrupt stockbroker who tried to hide his own illicit profits in a perceived foreign safe haven. But whether corrupt officials try to hide stolen assets across international borders – or behind the silver screen – the Department of Justice is committed to ensuring that there is no safe haven.”
“Stolen money that is subsequently used to purchase interests in music companies, artwork or high-end real estate is subject to forfeiture under U.S. law,” said U.S. Attorney Decker. “Today’s actions are the result of the tremendous dedication of attorneys in my office and the Department of Justice, as well as law enforcement agents across the country. All of us are committed to sending a message that we will not allow the United States to become a playground for the corrupt, a platform for money laundering or a place to hide and invest stolen riches.”
“The United States will not be a safe haven for assets stolen by corrupt foreign officials,” said Deputy Director McCabe. “Public corruption, no matter where it occurs, is a threat to a fair and competitive global economy. The FBI is committed to working with our foreign and domestic partners to identify and return these stolen assets to their legitimate owners, the Malaysian people. I want to thank the FBI and IRS investigative team who worked with the prosecutors and our international partners on this case.”
“Today’s announcement underscores the breadth of the alleged corruption and money laundering related to the 1MDB fund,” said Chief Weber. “We cannot allow the massive, brazen and blatant diversion of billions of dollars to be laundered through U.S. financial institutions without consequences.”
As alleged in the complaints, the members of the conspiracy – which included officials at 1MDB, their relatives and other associates – allegedly diverted more than $3.5 billion in 1MDB funds. Using fraudulent documents and representations, the co-conspirators allegedly laundered the funds through a series of complex transactions and fraudulent shell companies with bank accounts located in the Singapore, Switzerland, Luxembourg and the United States. These transactions were allegedly intended to conceal the origin, source and ownership of the funds, and were ultimately processed through U.S. financial institutions and were used to acquire and invest in assets located in the United States.
In seeking recovery of more than $1 billion, the complaints detail the alleged misappropriation of 1MDB’s assets as it occurred over the course of at least three schemes. In 2009, the complaints allege that 1MDB officials and their associates embezzled approximately $1 billion that was intended to be invested to exploit energy concessions purportedly owned by a foreign partner. Instead, the funds were transferred through shell companies and were used to acquire a number of assets, as set forth in the complaints. The complaints also allege that the co-conspirators misappropriated more than $1.3 billion in funds raised through two bond offerings in 2012 and $1.2 billion following another bond offering in 2013. As further detailed in the complaints, the stolen funds were laundered into the United States and used by the co-conspirators to acquire and invest in various assets. These assets allegedly included high-end real estate and hotel properties in New York and Los Angeles, a $35 million jet aircraft, works of art by Vincent Van Gogh and Claude Monet, an interest in the music publishing rights of EMI Music and the production of the 2013 film The Wolf of Wall Street.
The FBI’s International Corruption Unit and the IRS-CI investigated the case. Deputy Chief Woo S. Lee and Trial Attorney Kyle R. Freeny of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorneys John Kucera and Christen Sproule of the Central District of California prosecuted the case. The Criminal Division’s Office of International Affairs provided additional assistance.
The Kleptocracy Asset Recovery Initiative is led by a team of dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered asset to benefit the people harmed by these acts of corruption and abuse of office. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected] or https://tips.fbi.gov/.
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Documents: Documents and Resources from the July 20, 2016 Press Conference Announcing Significant Kleptocracy Enforcement Action to Recover More Than $1 Billion Obtained from Corruption Involving Malaysian Sovereign Wealth Fund
Video: Attorney General Lynch Announces a Kleptocracy Enforcement Action to Recover More Than $1 Billion Obtained from Corruption Involving Malaysian Sovereign Wealth Fund
Texas Woman Charged with Tax Return Preparation FraudRead the Press Release
A Greenville, Texas, resident was indicted today on 21 counts of aiding and assisting in the preparation of false tax returns, one count of mail fraud and one count of aggravated identity theft, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to the indictment, Lourdes Ramirez assisted in the preparation of fraudulent federal income tax returns for years 2011 through 2013 containing false material matters such as false education credits and Schedule C expenses. Ramirez is also charged with using the U.S. Postal Service to submit her own fraudulent 2011 federal income tax return to the Internal Revenue Service (IRS) which falsely claimed an individual as Ramirez’s dependent without that individual’s knowledge.
If convicted, Ramirez faces a statutory maximum sentence of three years in prison for each count of aiding and assisting in the preparation of a false tax return, a statutory maximum sentence of 20 years in prison for the mail fraud charge and a mandatory term of two years in prison for the aggravated identity theft charge. She also faces monetary penalties, supervised release and restitution.
An indictment merely alleges that crimes have been committed. The defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Principal Deputy Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Alexander Effendi and Melanie Smith of the Tax Division, who are prosecuting this case with assistance from the U.S. Attorney’s Office of the Northern District of Texas.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Nishikawa Agrees to Plead Guilty and Pay $130 Million Criminal Fine for Fixing Prices of Automotive PartsRead the Press Release
Nishikawa Rubber Co. Ltd. (Nishikawa) has agreed to plead guilty and pay a $130 million criminal fine for its role in a conspiracy to fix the prices of and rig the bids for automotive body sealing products installed in cars sold to U.S. consumers, the Justice Department announced today.
According to charges filed today in U.S. District Court for the Eastern District of Kentucky, Nishikawa conspired from at least as early as January 2000 until at least September 2012 to fix the prices and rig bids of automotive body sealing products sold to Honda Motor Company Ltd., Toyota Motor Corporation, Fuji Heavy Industries Ltd. (Subaru) and certain of their subsidiaries and affiliates in the United States and elsewhere. Automotive body sealing products consist of body-side opening seals, door-side weather-stripping, glass-run channels, trunk lids and other smaller seals, which are installed into automobiles to keep the interior dry from rain and free from wind and exterior noises. Nishikawa agreed to cooperate in the department’s ongoing investigation. The plea agreement will be subject to court approval.
“Nishikawa has agreed to pay a steep price for its participation in a conspiracy that victimized consumers in both the United States and Canada,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “However, Nishikawa deserves credit for acknowledging their conduct, accepting responsibility and charting a new path toward compliance and remediation.”
“The FBI is committed to aggressively investigating companies and individuals who engage in criminal conduct that corrupts the global marketplace,” said Special Agent in Charge Howard S. Marshall of the FBI’s Louisville office. “We will continue our work with the Department of Justice Antitrust Division to uncover schemes aimed at creating an unfair competitive advantage by way of price fixing, bid rigging or other illegal means.”
The division worked closely with the Competition Bureau of Canada throughout this investigation pursuant to the Agreement Between the Government of Canada and the Government of the United States of America Regarding the Application of their Competition and Deceptive Marketing Practices Laws. In part through that cooperation, the Antitrust Division and the Canadian Competition Bureau were able to identify affected sales of automotive body sealing products manufactured in the United States and then shipped to Canada for assembly into automobiles that were imported into the United States. These sales were included as affected commerce for purposes of calculating Nishikawa’s fine. Because of the particular facts of this case, including that Nishikawa’s conduct primarily targeted the United States and because the fine imposed today is an effective remedy in the United States and Canada, once final judgment is entered in this case, the Commissioner of the Competition Bureau of Canada will exercise his discretion to not pursue further enforcement action against Nishikawa in Canada for this conduct.
“Today’s resolution is only the most recent and visible example of cooperation that routinely occurs between the Competition Bureau and U.S. Department of Justice,” said Deputy Assistant Attorney General Snyder. “We greatly appreciate and value the working relationship our two agencies have developed over many years of pursuing a shared mission to protect competition in our markets and the consumers who benefit from it.”
“Strong cooperation among law enforcers is crucial to detect and deter cartel activities that span beyond our borders,” said Senior Deputy Commissioner Matthew Boswellof the Cartels and Deceptive Marketing Practices Branch of the Competition Bureau of Canada. “We achieved great results through cooperation with our US partners in this international investigation into bid-rigging in the auto parts industry. The Bureau continues to work closely with partners, in the US and elsewhere, to crack down on cartels.”
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. Including Nishikawa, 45 companies and 64 executives have been charged in the division’s ongoing investigation and have agreed to pay a total of more than $2.8 billion in criminal fines. Nishikawa is being prosecuted by the Antitrust Division’s Chicago Office and the FBI’s Louisville Field Office, Covington Resident Agency, with assistance from the U.S. Attorney’s Office of the Eastern District of Kentucky. Anyone with information on market allocation, price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Louisville Field Office at 502-263-6000.
Justice Department Requires Anheuser-Busch InBev to Divest Stake in MillerCoors and Alter Beer Distributor Practices as Part of SABMiller AcquisitionRead the Press Release
Settlement Maintains Competition between Bud and Miller Beers, Prohibits ABI from Disadvantaging Rivals with Distributors and Provides for Review of Future ABI Craft Beer Acquisitions
The Department of Justice announced today that it has agreed to a settlement with Anheuser-Busch InBev (ABI) that will permit ABI to proceed with its acquisition of SABMiller. The settlement requires ABI to divest SABMiller’s entire U.S. business – including SABMiller’s ownership interest in MillerCoors, the right to brew and sell certain SABMiller beers in the United States and the worldwide Miller beer brand rights. This settlement will prevent any increase in concentration in the U.S. beer industry.
The settlement also prohibits ABI from instituting or continuing practices and programs that limit the ability and incentives of independent beer distributors to sell and promote the beers of ABI’s rivals, including high-end craft and import beers. Moreover, the settlement precludes ABI from acquiring beer distributors or brewers – including non-HSR reportable craft brewer acquisitions – without allowing for department review of the acquisition’s likely competitive effects.
“The remedy we secured will help preserve and promote competition in the multi-billion dollar U.S. beer industry,” said Deputy Assistant Attorney General Sonia Pfaffenroth of the Justice Department’s Antitrust Division. “The two largest U.S. brewers – ABI and MillerCoors – will now remain independent competitors after the deal. The settlement also preserves the ability of smaller brewers – including brewers of craft and import beers – to compete against ABI by protecting their access to important distribution networks. Independent distributors that sell ABI’s beer will have the freedom to sell and promote the variety of beers that many Americans drink.”
The department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the $107 billion transaction, along with a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit. The department’s complaint alleges that the proposed transaction would substantially lessen competition in the national market for the sale of beer in the United States and in at least 58 local markets in the United States.
According to the department’s complaint, through its acquisition of SABMiller, ABI would gain a majority interest in MillerCoors. ABI and MillerCoors jointly account for approximately 70 percent of beer sold in the United States. The acquisition would create many highly concentrated local geographic markets, with some combined shares in excess of 90 percent. As a result, under the terms of the proposed settlement, the companies are required to divest SABMiller’s entire ownership stake in MillerCoors. The companies will also divest the right to brew and sell all SABMiller beer brands currently imported or licensed for sale in the United States. Finally, the companies will divest all rights to SABMiller’s Miller-branded beer worldwide.
According to a Competitive Impact Statement (CIS) also filed by the department, the divesture of SABMiller’s interest in MillerCoors to Molson Coors alone was insufficient to remedy the competitive harm arising from the transaction. As explained in the CIS, Molson Coors and ABI have interactions outside the United States which present opportunities to facilitate coordination in the United States – opportunities that MillerCoors does not presently have. To address this competitive concern, the settlement provides additional relief aimed at protecting the competitive constraint that other brewers provide – in particular, brewers of high-end craft and import beers – on ABI’s and Molson Coors’ ability to raise prices, either unilaterally or through coordination, on their beers. Among other things, the settlement prohibits ABI from instituting or continuing practices and programs that disincentivize distributors from selling and promoting the beers of ABI’s high-end and other rivals.
In conducting its investigation, the department cooperated with its counterparts in a number of jurisdictions that also reviewed the transaction. “We thank our enforcement partners around the world, especially from the European Commission, Canada and China, for their close and constructive collaboration on this matter,” added Deputy Assistant Attorney General Pfaffenroth.
ABI is a corporation organized and existing under the laws of Belgium, with its headquarters in Leuven, Belgium. ABI owns and operates 19 breweries in the United States. ABI owns more than 40 major beer brands sold in the United States, including Bud Light – the top-selling beer brand in the United States – and other popular beer brands, such as Budweiser, Busch, Michelob, Natural Light, Stella Artois, Shock Top, Goose Island and Beck’s.
SABMiller is a corporation organized and existing under the laws of the United Kingdom, with its headquarters in London, England. SABMiller operates in the United States through its 58 percent ownership interest in the MillerCoors joint venture.
MillerCoors is a limited liability company organized and existing under the laws of the State of Delaware, with its principal place of business in Chicago. Under MillerCoors’ corporate governance structure, SABMiller and Molson Coors, through their designated representatives, have an equal right to govern MillerCoors. MillerCoors owns and operates 12 breweries in the United States. MillerCoors has the sole right to produce and sell in the United States more than 40 major brands of beer, including Coors Light and Miller Lite—the second- and fourth-highest selling beer brands in the United States. MillerCoors also has the right to produce and sell in the United States other popular beer brands, such as Miller Genuine Draft, Coors Banquet and Blue Moon. In addition, MillerCoors has the exclusive right to import into and sell in the United States certain beer brands owned by SABMiller, including Peroni, Grolsch and Pilsner Urquell.
The proposed settlement, along with the department’s CIS, will be published in the Federal Register, consistent with the requirements of the Antitrust Procedures and Penalties Act. At such time, any person may submit written comments concerning the proposed settlement during a 60-day comment period to Peter J. Mucchetti, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 4100, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may enter the proposed settlement upon finding that it is in the public interest.
Anheuser-Busch CIS
Anheuser-Busch Complaint
Anhueser-Busch Explanation
Anheuser-Busch Hold Separate
Anheuser-Busch PFJ
Former Healthcare Employee Pleads Guilty to Participating in Stolen Identity Tax Refund Fraud Conspiracy Using Patient InformationRead the Press Release
A Montgomery, Alabama, resident pleaded guilty today to one count of a multi-object conspiracy to commit identity theft and wire fraud and one count of aggravated identity theft, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.
According to court documents, Alana Wells worked at a healthcare company where she had access to patient information protected from disclosure under the Health Insurance Portability and Accountability Act of 1996. Wells admitted that she stole the names, dates of birth and social security numbers of patients from her employer’s database and provided these identities to co-conspirator Fredrick Hill. Hill then provided the stolen personal identification information to another co-conspirator, Christopher Davis, who, along with others, used it to file fraudulent federal tax returns with the Internal Revenue Service (IRS) requesting tax refunds. Hill and Davis were previously prosecuted and sentenced to 74 months and 60 months in prison, respectively.
A date for Wells’ sentencing hearing has not yet been set. She faces a maximum sentence of five years in prison for conspiracy and a mandatory two-year prison sentence for aggravated identity theft, as well as a term of supervised release and monetary penalties.
Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Beck commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Jason H. Poole and Kathryn A. Kimball of the Tax Division and Assistant U.S. Attorney Jonathan S. Ross of the Middle District of Alabama, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Court Shuts Down Houston-Area Tax Return PreparerRead the Press Release
Houston Man Allegedly Falsely Overstated Customers’ Itemized Deductions
A Houston, Texas, tax return preparer fraudulently lowered his clients’ federal income taxes by overstating the deductions they claimed on Schedule A (Itemized Deductions), according to a lawsuit filed by the Justice Department in May. Now a federal court has barred the defendant in that case from preparing tax returns for others.
Charles Lee Harrison admitted to the allegations in the government’s complaint, including that he prevented his clients from realizing that their returns contained false items by not reviewing the returns with his clients and by sometimes not showing his clients the Schedule A that contained he false deductions. Harrison also occasionally prepared returns that contained false credits and false Schedule F (Profit or Loss from Farming) losses. Harrison did business under the names Harrison and Harrison Services and Harrison Tax & Legal Services in Grimes County and Harris County, Texas. In 2014, Harrison pleaded guilty to willfully aiding and assisting in the preparation and presentation of a false tax return.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Attorney General Loretta E. Lynch Statement on Court of Appeals Ruling in Texas Voter ID CaseRead the Press Release
Attorney General Loretta E. Lynch released the following statement today after the Fifth Circuit Court of Appeals ruled against Texas’s voter ID law:
“I am pleased with today’s decision by the full U.S. Court of Appeals for the Fifth Circuit holding that Texas’s 2011 photographic voter identification law violates Section 2 of the Voting Rights Act. This decision affirms our position that Texas’s highly restrictive voter ID law abridges the right to vote on account of race or color, and orders appropriate relief before yet another election passes.”
Nevada Man Sentenced to 25 Years in Prison for Perpetrating a Nationwide Multimillion-Dollar Fraud SchemeRead the Press Release
Defendant Defrauded Investors in a Nigerian Oil Scheme and Made False Claims to the Department of Veterans Affairs
A Las Vegas resident was sentenced to 25 years in jail today on multiple fraud charges, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Anton Paul Drago, formerly known as Evan Fogarty, 65, was convicted in March 2016 of all 10 counts of the indictment after an eight-day jury trial. The jury found him guilty of one count of conspiracy to commit wire fraud, two counts of wire fraud, three counts of submitting false claims to the U.S. Department of Veterans Affairs (VA), one count of theft of government funds, one count of passing a fictitious financial instrument, one count of making false statements to federal agents and one count of failing to file a federal income tax return.
“Today’s sentence reflects the serious nature of Mr. Drago’s crimes and the substantial harm he inflicted on his investors and the U.S. government,” said Principal Deputy Assistant Attorney General Ciraolo. “When confronted with his extensive fraudulent conduct by federal agents, rather than come clean, Mr. Drago chose to double down on his lies and continue the scheme that funded his extravagant lifestyle. Today, he paid the heavy price for his illegal activities.”
“We are pleased with today’s sentencing of Anton Drago for his crimes against the U.S. government and innocent taxpayers and shareholders,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “Everything about Mr. Drago’s business was a fraud and he made the costly mistake of failing to file his income tax return. That mistake brought him to the attention of the IRS and the scrutiny of CI special agents. Fortunately for the victims of his fraud, the resulting investigation revealed the depth of his fraudulent dealings.”
“Our joint investigation with the IRS’s Criminal Investigation resulted in the conviction of a veteran who defrauded the government by claiming monetary benefits he wasn’t entitled to,” said Special Agent in Charge Douglas J. Carver VA-Office of Inspector General’s Western Field Office. “The money he stole would have benefited other eligible disabled veterans. We are pleased that this sentence reflects the seriousness of his crimes and believe this conviction will serve as a deterrent to others who might consider defrauding the Department of Veterans Affairs and our country’s veterans.”
The evidence presented at trial established that Drago orchestrated a large-scale Nigerian oil investment fraud scheme. From at least 2004 through 2012, Drago told investors that money they invested would be used for legal fees and business expenses to fund the production, refinement and shipment of crude oil from Nigeria to the Bahamas. Along with co-conspirator Joseph Rizzuti, formerly of Palm City, Florida, Drago also told investors that the money they invested would fund the purchase of an oil refinery in the Bahamas. Drago lied to investors about his background, falsely claiming that he was an engineer and an expert in the oil industry with over 30 years of experience working worldwide. He also falsely told some investors that he was the grandson of the Shell Oil founder and heir to a $500 million trust which he invested in the Nigerian oil investment deal. None of these claims were true.
The government also presented evidence to establish that Drago and Rizzuti contracted with investors, promising them a short-term turnaround on their investment in just 60 days with a return of up to 400 percent. Unwitting investors gave the conspirators more than $2 million. Instead of investing in a Nigerian oil deal as promised, Drago and Rizzuti used most of the investors’ money for personal expenses. Specifically, Drago spent the money on rent; groceries; memberships at the Tournament Players Club Summerlin golf course and an exclusive activity club in Turnberry Towers, both in Las Vegas; maintenance on his Mercedes Benz; jewelry; travel; and luxury purchases at stores such as Louis Vuitton, Nordstrom and Sharper Image. In addition, nearly $1 million of the investors’ money was transferred to unknown bank accounts in China. Despite Drago’s receipt of income from this fraudulent scheme, he failed to file his 2007 federal income tax return in a timely manner.
After spending the investors’ money, Drago continued to lie to the investors about other elaborate oil-related schemes that would make them whole. He attempted to negotiate a fictitious financial instrument purporting to be an International Bill of Exchange worth $10 million at a Wells Fargo Bank branch in Las Vegas. He also lied to federal agents of the IRS, who were investigating him when he told them that every penny of investor money went to Nigeria.
At the same time he was perpetrating the fraudulent Nigerian oil investment scheme, Drago also falsely claimed individual unemployability compensation benefits from the VA. Drago served in the U.S. Marine Corps. The evidence at trial established that for decades, Drago falsely claimed to have a debilitating military service-related knee injury and was totally unable to work in any capacity, when in fact he was self-employed and running several businesses. The evidence showed that Drago was active and an avid golfer, spending more than $100,000 on golf-related expenses between 2005 and 2008. Based upon his false claims to the VA, he received thousands of dollars in monthly VA benefits to which he was not entitled.
Rizzuti, who testified at Drago’s trial, previously pleaded guilty to a wire fraud conspiracy and an unrelated charge of obstructing the internal revenue laws and was sentenced in May 2013 to 80 months in prison.
In addition to the term of imprisonment, Drago was sentenced to pay $2.3 million in restitution and to serve five years of supervised release following his prison term.
Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS–CI and the VA-Office of Inspector General, who investigated the case, and Trial Attorneys Charles M. Edgar Jr. and Sean Beaty of the Tax Division, who prosecuted the case. Principal Deputy Assistant Attorney General Ciraolo also thanked litigation technical support specialist John L. Kost, who provided trial support, and the U.S. Attorney’s Office of the District of Nevada, who provided invaluable assistance to the Tax Division.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Oil Refiners to Reduce Air Pollution at Six Refineries Under Settlement with EPA and Department of JusticeRead the Press Release
The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a $425 million settlement with subsidiaries of Tesoro Corp., and Par Hawaii Refining that resolves alleged Clean Air Act violations and protects public health by reducing air pollution at six refineries. Under the settlement, the two companies will spend about $403 million to install and operate pollution control equipment, and Tesoro will spend about $12 million to fund environmental projects in local communities previously impacted by pollution. Tesoro will also pay a $10.45 million civil penalty.
“This settlement, achieved in partnership with states, will benefit the air quality in communities across the Western United States,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “It uses cutting edge technology to address global environmental issues like climate change by controlling flaring and provides important reductions of harmful air pollution in communities facing environmental and health challenges.”
“The advanced technologies Tesoro and Par are required to implement are the future for protecting people from toxic air emissions,” said Assistant Administrator Cynthia Giles for EPA’s Enforcement and Compliance Assurance. “This settlement puts new enforcement ideas to work that will dramatically cut pollution and protect communities.”
Today’s settlement, a consent decree lodged in U.S. District Court for the Western District of Texas, includes provisions that resolves ongoing Clean Air Act violations at refineries in Kenai, Alaska; Martinez, California; Kapolei, Hawaii; Mandan, North Dakota; Salt Lake City, Utah; and Anacortes, Washington. Of the $10.45 million civil penalty that Tesoro will pay, the United States will receive $8,050,000, and co-plaintiffs including the states of Alaska and Hawaii, and the Northwest Clean Air Agency will share $2.4 million.
Once the companies install the pollution controls required by the settlement, annual emissions reductions at the six refineries will total an estimated 773 tons of sulfur dioxide, 407 tons of nitrogen oxides, 1,140 tons of volatile organic compounds, 27 tons of hazardous air pollutants, 20 tons of hydrogen sulfide and the equivalent of 47,034 tons of carbon dioxide, which is a greenhouse gas. A large number of the emissions reductions will occur in areas with impaired air quality and protect populations at risk for respiratory illnesses. In particular, this settlement will reduce greenhouse gas emissions from flaring at the subject refineries by over 60 percent.
The settlement addresses a range of alleged leak detection and repair and flaring violations under the Clean Air Act at all six refineries as well as violations of the Act’s Prevention of Significant Deterioration, Non-Attainment New Source Review, New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants at certain refineries. The settlement also addresses various violations of state clean air laws, programs and permits.
Refineries process crude oil into products like gasoline, diesel fuel, kerosene, jet fuel, asphalt and liquefied petroleum gas and emit pollutants from a number of different sources. At the refineries subject to this settlement, fluid catalytic cracking units, sulfuric acid plants, heaters, boilers and sulfur recovery units, are substantial emitters of nitrogen oxides (NOx) and sulfur dioxide (SO2). Flaring results in emissions of SO2, greenhouse gases and toxic air pollutants, including volatile organic compounds (VOCs) and hazardous air pollutants. Fugitive emissions of VOCs result from leaking valves and pumps and can result in numerous health effects, including eye, nose and throat irritation, headaches, loss of coordination, nausea and damage to liver, kidney and the central nervous system, among other effects.
Leaks, flares, and excess emissions from refineries emit hazardous air pollutants, or air toxics, that are known or suspected to cause cancer, birth defects, and seriously impact the environment. SO2 and NOx have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze. Refineries also emit greenhouse gases that contribute to climate change, as well as fugitive VOCs.
The settlement incorporates the latest technological approaches to reducing flaring and making the flaring that does occur as efficient as possible. And in addition to installing pollution control equipment, the settlement requires Tesoro to use a series of state-of-the-art Next Generation Compliance tools to monitor pollution. Tesoro will use infrared gas-imaging cameras at four refineries to supplement the company’s enhanced leak detection and repair program. These cameras are able to locate fugitive VOC emissions that may not be otherwise detected and to address these fugitive emissions and in doing so protect refinery employees from them. Tesoro will also pay for third-party auditing of compliance with the enhanced leak detection and repair requirements at all six facilities. EPA’s Next Generation Compliance strategy works to advance the use of state-of-the-art technology to identify and reduce pollution
Under the settlement, Tesoro will also spend about $12.2 million to fund three pollution mitigation projects. In addition to installing infrared cameras, Tesoro will install ultra-low NOx burners on a furnace at its Salt Lake City refinery. Tesoro estimates that the cost of this mitigation project is $10.8 million and is expected to result in significant quantifiable reductions in NOX emissions. Tesoro will also contribute $1 million to fund the replacement of old diesel school buses in Contra Costa County, California, with new compressed natural gas (CNG) school buses. Replacing existing school buses that run on diesel with vehicles that are powered by CNG decreases emissions of NOX, SO2, PM, greenhouse gases and other air pollutants.
This settlement is part of EPA’s National Enforcement Initiative to control harmful emissions from large sources of pollution, which includes refineries, under the Clean Air Act’s Prevention of Significant Deterioration requirements. The total combined SO2 and NOx emission reductions secured from all settlements under this initiative will exceed 2 million tons each year once all the required pollution controls have been installed and implemented.
Tesoro Corp., is headquartered in San Antonio, Texas, and its subsidiaries, Tesoro Alaska Company LLC, Tesoro Logistics L.P. and Tesoro Refining & Marketing Company LLC operate five of the refineries covered by this settlement. Par Pacific Holdings, Inc., formerly known as Par Petroleum Corp. and a parent corporation of Par Hawaii Refining, purchased the Kapolei refinery from Tesoro in 2013.
There will be a 30 day public comment period on the consent decree lodged today. Information on how to comment on the consent decree will be available in the Federal Register and on the Department of Justice’s website: www.justice.gov/enrd/consent-decrees.
For more information on the settlement or to read the consent decree, go to
https://www.epa.gov/enforcement/tesoro-and-par-clean-air-act-settlement
Attorney General Loretta E. Lynch Statement on Baton Rouge, Louisiana, ShootingRead the Press Release
Attorney General Loretta E. Lynch released the following statement regarding the shooting in Baton Rouge, Louisiana:
“I have been briefed on the ongoing situation in Baton Rouge, Louisiana, and I will continue to monitor events throughout the day. Although information about this morning's incident is still coming in, we do know that at least three officers are feared dead and several others are wounded. Agents from the FBI and ATF are on the scene, and the Department of Justice will make available victim services and federal funding support, and will provide investigative assistance to the fullest extent possible.
“For the second time in two weeks, multiple law enforcement officers have been killed in the line of duty. There is no place in the United States for such appalling violence, and I condemn these acts in the strongest possible terms. I pledge the full support of the Department of Justice as the investigation unfolds. Our hearts and prayers are with the fallen and wounded officers, their families, and the entire Baton Rouge community in this extraordinarily difficult time.”
The United States and the Navajo Nation Agree to Second Phase of Work to Address Abandoned Uranium MinesRead the Press Release
Today, in a settlement agreement with the Navajo Nation, the United States agreed to provide funding necessary to continue clean-up work at abandoned uranium mines on the Navajo Nation. Specifically, the United States will fund environmental response trusts to clean up 16 priority abandoned uranium mines located across the Navajo Nation. The agreement also provides for evaluations of 30 more abandoned uranium mines, and for studies of two abandoned uranium mines to determine if groundwater or surface waters have been affected by those mines.
The work to be conducted is subject to the joint oversight and approval of the Navajo Nation Environmental Protection Agency and the United States Environmental Protection Agency (EPA). The United States previously provided funding for evaluations at the 16 priority mines in a “Phase 1” settlement executed in 2015.
“This second phase agreement takes the next step in ensuring the cleanup of abandoned mines that pose the most significant risks to people’s health and initiates the evaluations of additional mines for future cleanup,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “Addressing the legacy of uranium mining on Navajo lands reflects the commitment of the Justice Department and the Obama Administration to fairly and honorably resolve the historic grievances of American Indian tribes and build a healthier future for their people.”
“We’re very pleased to continue this vital work to address the legacy of uranium mining on the Navajo Nation,” said Acting Regional Administrator Alexis Strauss for the EPA’s Pacific Southwest office. “In the last decade, the EPA has remediated 47 homes, provided safe drinking water to 3,013 families in partnership with the Indian Health Service and conducted field screening at all 523 mines.”
The Navajo Nation encompasses more than 27,000 square miles within Utah, New Mexico and Arizona in the Four Corners area. The unique geology of the region makes the Navajo Nation rich in uranium, a radioactive ore in high demand after the development of atomic power and weapons at the close of World War II. Approximately four million tons of uranium ore were extracted during mining operations within the Navajo Nation from 1944 to 1986. The federal government, through the Atomic Energy Commission (AEC), was the sole purchaser of uranium until 1966, when commercial sales of uranium began. The AEC continued to purchase ore until 1970. The last uranium mine on the Navajo Nation shut down in 1986.
Many Navajo people worked in and near the mines, often living and raising families in close proximity to the mines and mills. Since 2008, federal agencies including EPA, the Department of Energy, the Bureau of Indian Affairs, the Department of the Interior, the Nuclear Regulatory Commission and the Indian Health Service have collaborated to address uranium contamination on the Navajo Nation. The federal government has invested more than $100 million to address abandoned uranium mines on Navajo lands. EPA has also compiled a list of 46 “priority mines” for cleanup and performed stabilization or cleanup work at 9 mines. Further, EPA work cleaning up mines has generated 94 jobs for Navajo workers.
This settlement agreement resolves the claims of the Navajo Nation pertaining to costs of engineering evaluations and cost analyses, and cleanups, at the 16 priority mines for which no viable responsible private party has been identified, as well as the costs of evaluations at another 30 such mines, two water studies, and modest costs for pre-assessment of natural resources damages. In April 2014, the Justice Department and EPA announced in a separate matter that approximately $985 million of a multi-billion dollar settlement of litigation against subsidiaries of Anadarko Petroleum Corp. will be paid to EPA to fund the clean-up of approximately 50 abandoned uranium mines in and around the Navajo Nation, where radioactive waste remains from Kerr-McGee mining operations. EPA commenced field work with the proceeds from this settlement earlier this year.
Liberian Ship Management Company, Corporate Vessel Owner, and Three Engineering Officers Indicted for Environmental Crimes and ConspiracyRead the Press Release
A federal grand jury in Charleston, South Carolina, returned an indictment today charging Aegean Shipping Management S.A. and Aegeansun Gamma Inc. with obstruction of an agency proceeding, conspiracy and failing to keep accurate pollution control records, the Justice Department announced. Three engineering officers were charged with related offenses.
The charges stem from the 2015 falsification of records and obstruction designed to cover up overboard discharges of oily mixtures and machinery space bilge water from the Liberian-flagged chemical tanker, T/V Green Sky. The vessel’s management company, Aegean Shipping Management of Liberia and the vessel’s owner, Aegeansun Gamma of the Republic of the Marshall Islands, are charged with failing to maintain an accurate oil record book as required by the Act to Prevent Pollution from Ships (APPS), a U.S. law which implements the International Convention for the Prevention of Pollution from Ships, commonly known as “MARPOL.” The companies were also charged with falsification of records, obstruction and conspiracy.
The individuals, Panagiotis Koutoukakis and Herbert Julian, both former Chief Engineers of the T/V Green Sky and Nikolaos Bounovas, the former Second Engineer onboard the vessel, were charged with aiding and abetting the failure to maintain an accurate oil record book, falsification of federal records and conspiracy. Julian is facing an additional obstruction charge.
The investigation into illegal activity onboard the vessel began in late August 2015 when the vessel arrived in the Port of North Charleston, South Carolina and members of the engine room staff told the U.S. Coast Guard that they had been ordered to bypass the ship’s oil water separator on multiple occasions. In a related case, on Feb. 18, the former captain of the T/V Green Sky, Genaro Anciano, pleaded guilty to one count of obstruction for knowingly making false and misleading oral and written statements in an effort to impede the Coast Guard’s investigation of the bypass allegations.
The defendants are scheduled to be arraigned in Charleston on July 26. An indictment is merely an accusation and defendants are presumed innocent unless and until proven guilty in a court of law.
The case was investigated by agents of the Coast Guard Investigative Service. The case is being prosecuted by Christopher Hale of the Justice Department’s Environmental Crimes Section and Assistant U.S. Attorney Matt Austin of the U.S. Attorney’s Office for the District of South Carolina.
District Court Enters Permanent Injunction Against Minnesota Food Manufacturer and Company’s Managers to Prevent Distribution of Adulterated Food ProductsRead the Press Release
The U.S. District Court for the District of Minnesota entered a consent decree of permanent injunction against Kwong Tung Foods Inc. (Kwong Tung Foods) doing business as Canton Foods; the firm’s president and owner, Vieta C. Wang; and vice president, Juney H. Wang, to prevent the distribution of adulterated noodles and sprouts, the Department of Justice announced today.
The Department filed a complaint on July 14, in the U.S. District Court for Minnesota at the request of the U.S. Food and Drug Administration (FDA). The complaint alleged that Kwong Tung Foods violated the federal Food, Drug and Cosmetic Act by causing noodles and sprouts to be adulterated in that they have been prepared, packed and/or held under insanitary conditions whereby the food may have become contaminated with filth or have been rendered injurious to health. According to the complaint, the insanitary conditions included failure to exclude pests and rodents from the facility, failure to maintain equipment and failure to ensure adequate employee sanitation.
“Kwong Tung Foods was repeatedly warned about the insanitary conditions at its Minneapolis food facility,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work aggressively to protect consumers from adulterated food and enforce our nation’s food safety laws.”
In conjunction with the filing of the complaint, the defendants agreed to be bound by a permanent injunction. As part of the settlement, the defendants represented that they have ceased receiving, preparing, processing, packing, holding, or distributing any type of food at or from any location. Under the permanent injunction, if the defendants seek to resume such activity, they must take specific steps to improve the firm’s manufacturing practices, and then receive written approval from FDA.
According to the complaint, in October 2015, FDA inspected Kwong Tung Foods’ facility, located at 1840 E. 38th Street in Minneapolis, and observed numerous insanitary practices, including the defendants’ failure to take necessary precautions to protect against contamination and maintain buildings in good repair. Specifically, according to the complaint, FDA observed evidence of live and dead pests and rodents in production rooms, a black mold-like substance and debris on production equipment, inadequate employee sanitation practices, and potential cross-contamination with major allergens. In addition, FDA observed condensate dripping onto finished bean sprouts, according to the complaint.
FDA inspected Kwong Tung Foods’ facility twice in 2014. As alleged in the complaint, FDA also observed failures to exclude pests from the facility and to adequately maintain equipment and employee sanitation practices.
Under federal law, food processors are required to comply with current good manufacturing practices provided by FDA regulation. The complaint alleged that the defendants violated the law by causing food to become adulterated while it was held for sale after shipment of one or more of its components in interstate commerce.
The government is represented by Trial Attorney Alistair Reader of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Bahram Samie of the U.S. Attorney’s Office for the District of Minnesota, with the assistance of Associate Chief Counsel for Enforcement Jennifer Kang of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of Minnesota, visit its website at http://www.justice.gov/usao-mn.
Department of Justice to Conduct After-Action Review of Police Response to Orlando Nightclub Mass ShootingRead the Press Release
The Department of Justice, Office of Community Oriented Policing Services (COPS Office) today announced it will conduct a comprehensive after-action assessment of the Orlando Police Department’s (OPD) response to the mass shooting that took place on June 12 at the Pulse nightclub in Orlando, Florida.
“I commend Orlando Police Chief John Mina for his leadership in asking for this assessment,” said COPS Office Director Ronald Davis. “The lessons learned from this independent, objective and critical review of such a high-profile incident will benefit not only the Orlando Police Department and its community; it will also serve to provide all law enforcement critical guidance and recommendations for responding to future such incidents.”
“Chief Mina has proven to be a tremendous leader of the Orlando Police Department,” said U.S. Attorney A. Lee Bentley, III of the Middle District of Florida. “His decision to seek an independent review of the law enforcement response to the Pulse nightclub shootings is another example of his effective leadership. The results of this review should help not only the Orlando Police Department, but also other law enforcement agencies forced to deal with terrorist attacks.”
Through its Critical Response Technical Assistance program, the COPS Office will bring in a technical assistance provider and use subject matter experts to assess OPD’s preparation and response to the mass shooting, strategies and tactics used during the incident, and how the department is managing the aftermath of the mass casualty event.
The Critical Response Technical Assistance program was designed to provide targeted technical assistance to law enforcement agencies dealing with high-profile events, major incidents or sensitive issues of varying need. The program has been used in a number of other cities, including Minneapolis, Minnesota; San Bernardino, California; Ferguson, Missouri; Tampa, Florida; and Pasco, Washington. Previous after-action assessments have provided valuable guidance on lessons learned and serve as an important tool to help the law enforcement profession advance and grow.
The COPS Office, headed by Director Ronald Davis, is a federal agency responsible for advancing community policing nationwide. Since 1995, COPS has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local, and tribal law enforcement agencies to fund the hiring and redeployment of more than 127,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance. For additional information about COPS, please visit www.cops.usdoj.gov.
Tullett Prebon and ICAP Restructure Transaction after Justice Department Expresses Concerns about Interlocking DirectoratesRead the Press Release
The Department of Justice announced today that the restructuring of the $1.5 billion transaction between Tullett Prebon Group Ltd. (Tullett Prebon) and ICAP plc addresses the Department’s concerns that the transaction would violate Section 8 of the Clayton Act by creating an interlocking directorate. An interlocking directorate is where one person – or an agent of one person or company – sits on the board of directors of two competitors.
As originally structured, the transaction would have resulted in ICAP owning 19.9 percent of Tullett Prebon and having the right to nominate one member of Tullett Prebon’s board of directors. Given that ICAP and Tullett Prebon would continue to compete after the transaction, the department had serious concerns that ICAP’s ability to nominate a Tullett Prebon board member would create an interlocking directorate in violation of Section 8 of the Clayton Act. The revised agreement will provide that ICAP will not own any part of Tullett Prebon after the transaction and will have no right to nominate a member of Tullett Prebon’s board of directors.
“Robust competition depends on competitors being actually independent of each other – that’s what Section 8 requires,” said Principal Deputy Assistant Attorney General Renata Hesse of the department’s Antitrust Division. “As originally proposed, this deal would have violated that core principle – creating a cozy relationship among competitors.”
Section 8 of the Clayton Act was enacted to provide a bright line rule prohibiting interlocking directorates which could otherwise facilitate coordination among competitors. Section 8 serves a prophylactic purpose “to nip in the bud incipient violations of the antitrust laws by removing the opportunity or temptation to such violations through interlocking directorates,” according to United States v. Sears, Roebuck & Co., 111 F. Supp. 614, 616 (S.D.N.Y. 1953).
During the investigation, the division cooperated with the United Kingdom’s Competition and Markets Authority, the Australian Competition and Consumer Commission and the Competition Commission of Singapore.
Tullett Prebon, a publicly-held British corporation headquartered in London, United Kingdom, and operating in the United States, is a leading provider of voice, hybrid and purely electronic brokerage services across asset classes. Tullett Prebon reported 2015 annual revenues of $1.18 billion.
ICAP is also headquartered in London and operates in the United States. After the transaction, the company will be called NEX Group Ltd. and will focus on providing electronic trading platforms for numerous asset classes and associated market data and services. ICAP reported annual revenues of $1.78 billion for its fiscal year ending March 2016.
Stevenson, Alabama, Police Chief Convicted of Civil Rights Offenses for Assaulting and Failing to Protect ArresteeRead the Press Release
The Justice Department announced today that a federal jury convicted the Chief of Police of Stevenson, Alabama, Daniel Winters, 56, of two counts of deprivation of civil rights under color of law: one count for beating an arrestee, identified as D.F., and one count for failing to protect the victim from harm.
According to evidence presented at trial, on March 22, 2015, Winters and a civilian friend went to a residence to investigate suspicions that property had been stolen from the friend’s business and was located at the residence. Upon arrival, Winters and his friend entered the residence without a search warrant and encountered the victim, D.F. Winters and his friend then began to beat D.F. The beating moved outside where Winters and his friend continued to strike and kick the victim in front of the residence. Over the course of approximately five minutes, Winters not only participated in the beating, but stood by watching his friend beat D.F. and did nothing to stop it. A passing motorist called 911 to report the beating. D.F. was left bloody with wounds to his face, chest and back and was taken to the jail at the Stevenson Police Department. While at the jail, D.F. began to spit up blood. A jailor requested Winters’ permission to call an ambulance, but Winters refused the request. Eventually, the jailor received permission from another supervisor and D.F. was transported to a hospital where he received medical attention.
“This police chief abused his authority, broke the law and violated the public trust,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “When law enforcement leaders engage in egregious, unlawful conduct – as this defendant did here – they do a disservice to the thousands of hard-working officers who perform their difficult, demanding jobs each day with integrity and distinction.”
“Civil rights enforcement is a priority of our office and the trial team on this case did an excellent job of putting the evidence together and presenting it to the jury,” said U.S. Attorney Joyce White Vance of the Northern District of Alabama.
Winters faces a statutory maximum sentence of 20 years in prison for the civil rights charges. Sentencing is scheduled for Oct. 27, 2016, before U.S. District Judge Madeline H. Haikala of the Northern District of Alabama.
This case is being investigated by the FBI and Alabama’s State Bureau of Investigation. The matter is being prosecuted by Deputy Chief Laura Hodge of the Northern District of Alabama and Trial Attorney Samantha Trepel of the Civil Rights Division’s Criminal Section.
Officials from U.S. and Japan Participate in 35th Bilateral Meeting in Washington to Discuss Antitrust EnforcementRead the Press Release
The heads of the antitrust agencies of the United States and Japan met today in Washington for their 35th Bilateral Competition Consultation. Principal Deputy Assistant Attorney General Renata Hesse of the U.S. Department of Justice’s Antitrust Division and Federal Trade Commission Chairwoman Edith Ramirez participated in high level meetings with senior officials from Japan’s Fair Trade Commission (JFTC), including JFTC Chairman Kazuyuki Sugimoto.
The discussions covered a wide range of topics, including recent enforcement developments, antitrust policy and enforcement involving intellectual property and technology and international enforcement cooperation. The purpose of the meeting is to reinforce ties of cooperation and share knowledge in light of the increasing internationalization of antitrust enforcement.
“The fact that this is our 35th bilateral meeting is a testament to the depth and strength of our relationship,” said Principal Deputy Assistant Attorney General Hesse. “Given the importance of our economic ties and our shared interests in antitrust, we are incredibly fortunate to have such a close and productive relationship with the JFTC.”
“We value our longstanding and productive relationship with the JFTC,” said Chairwoman Ramirez. “The opportunity to exchange views on both current enforcement efforts as well as cutting edge policy issues such as intellectual property and the sharing economy helps to advance enforcement cooperation and the development of sound competition policies globally.”
The United States-Japan bilateral competition consultations date back to 1976, making them the U.S. antitrust agencies’ longest-running annual consultations with any foreign antitrust agency.