District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Justice Department Settles with Orpheum Theater in Nebraska to Resolve ADA Discrimination ClaimsRead the Press Release
The Justice Department announced today it has reached an agreement with the Omaha Performing Arts Society (OPAS) resolving an Americans with Disabilities Act (ADA) complaint against the Orpheum Theater in Omaha, Nebraska.
The department alleged that OPAS failed to ensure that, to the maximum extent feasible, the theater provided access to individuals with disabilities as required after the theater underwent a renovation.
“The ADA requires that when doing renovations, public accommodations must ensure their facilities are readily accessible and fully usable by people with disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “We commend the Omaha Performing Arts Society for cooperating with the Justice Department and taking quick action to implement the necessary reforms.”
The ADA requires alterations of existing theaters to comply with certain ADA Standards for Accessible Design. Under the settlement agreement, OPAS will provide 20 wheelchair and companion seating locations and 20 designated aisle accessible seats dispersed throughout the theater. OPAS will also install a permanent lift to provide an accessible route from the orchestra floor to the stage floor and it will revise its ticketing and pricing policies to afford individuals with disabilities an equal opportunity to purchase accessible seats.
For more information about the ADA and today’s agreement, individuals may access the ADA web page at www.ada.gov.htm or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Omaha Performing Arts Society.
FDA Worker Pleads Guilty to Multimillion Dollar Tax Refund ConspiracyRead the Press Release
A Jamaica, New York, resident pleaded guilty today in the U.S. District Court for the Eastern District of New York to one count of conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Nafeesah Hines, 46, who worked at the U.S. Food and Drug Administration (FDA), admitted that between 2008 and 2012, she participated in a scheme to submit false tax returns seeking fraudulent income tax refunds in excess of $3.4 million to the Internal Revenue Service (IRS). According to the indictment, Hines worked with Rodney Chestnut, a retired New York City Department of Correction officer, and Clive Henry, a former IRS employee in the business of preparing tax returns, to recruit clients to this scheme, which involved using fraudulent IRS Forms 1099-OID to falsely claim refunds of taxes that were never paid over to the IRS. The indictment alleged that Hines, Chestnut, and Henry collected fees from clients based on a percentage of the refunds received, and supplied the clients with correspondence containing false and frivolous claims to send to the IRS in response to IRS warning letters regarding the false tax returns.
In 2013, a federal court permanently enjoined Hines from promoting a tax fraud scheme involving fraudulent Forms 1099-OID and from preparing tax returns for anyone other than herself.
U.S. District Judge Kiyo A. Matsumoto scheduled Hines’ sentencing for Oct. 11. She faces a statutory maximum sentence of five years in prison, a term of supervised release, and monetary penalties. Chestnut and Henry previously pleaded guilty to conspiracy to defraud the United States. Their sentencing hearings are pending.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Mark Kotila and Jeffrey A. McLellan of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Court Shuts Down Alabama Tax Return PreparerRead the Press Release
Preparer Who Allegedly Fabricated Business Losses, Claimed Fraudulent Credits and Misreported Self-Employment Income for Customers Ordered to Stop Preparing Returns
According to a lawsuit the United States filed in April, a Birmingham, Alabama, tax return preparer continually and repeatedly prepared federal income tax returns that understated her clients’ liabilities or overstated their refunds. Now a federal court in Birmingham has permanently barred her from preparing tax returns for others and it has ordered her to give the United States a list of her customers since 2014.
Jessica Leverett aka Jessica Harris, owns and operates a number of different tax return preparation businesses in and around Birmingham, including Tax Money Now, Dynamic Tax Services, Dynamic Tax Solutions and Express Money Tax, the civil complaint alleged. Leverett’s businesses prepared returns that fabricate Schedule C businesses and business losses to offset their customers’ taxable income from other sources or to increase the customers’ Earned Income Tax Credit, according to the complaint. The complaint also alleged that Leverett’s businesses prepare returns that claim education credits that Leverett’s customers are not entitled to receive and that misreport self-employment income as household employee wages in order to avoid the self-employment tax.
The Internal Revenue Service (IRS) examined 264 returns prepared by Leverett’s businesses and found that 206 understated the customer’s tax due, the complaint alleges. Altogether, Leverett’s activities may have caused the United States to lose over $2.5 million in understated taxes and/or fraudulent refunds, according to the complaint. Leverett did not file a response challenging the government’s allegations.
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.
Attorney General Loretta E. Lynch Statement on Attack in Nice, FranceRead the Press Release
Attorney General Loretta E. Lynch released the following statement regarding the attack in Nice, France:
“I join the President in condemning what appears to be a horrific terrorist attack in Nice, France. My thoughts and prayers are with the families and loved ones of those lost and wounded. The Department of Justice has reached out to our French counterparts to offer our assistance in the investigation.”
WWL to Pay $98.9 Million for Fixing Prices of Ocean Shipping Services for Cars and TrucksRead the Press Release
Company is Fourth Firm Charged in Conspiracy Among Major International Ocean Shipping Lines
Wallenius Wilhelmsen Logistics AS (WWL), a Norwegian corporation, has agreed to plead guilty and pay a $98.9 million criminal fine for its involvement in a conspiracy to fix prices of international ocean shipments of roll-on, roll-off cargo to and from the Port of Baltimore and other locations in the United States, the Department of Justice announced today.
According to the one-count felony charge filed today in the U.S. District Court for the District of Maryland, WWL conspired with other roll-on, roll-off ocean shipping lines from at least February 2000 until at least September 2012 to fix prices, rig bids, and allocate customers. Roll-on, roll-off cargo is non-containerized cargo that can be rolled onto and off of an ocean-going vessel. Examples of such cargo include new and used cars and trucks and mining, construction, and agricultural equipment.
“WWL and its co-conspirators cheated their customers for years by fixing the prices of ocean shipping services for cars, trucks, and other cargo essential to our nation’s economy,” said Principal Deputy Assistant Attorney General Renata B. Hesse, head of the Justice Department’s Antitrust Division. “The Antitrust Division, working together with our law enforcement colleagues, will continue to hold the ocean shipping companies and executives who perpetrated this scheme accountable for their crimes.”
“These charges brought today, and for the prior eight executives charged, outline a deceptive scheme to destabilize competition in the marketplace,” said Special Agent in Charge Kevin Perkins of the FBI’s Baltimore Division. “Those who engage in this type of criminal activity with the intent on corrupting our economy will be identified and brought to justice. To ensure we don’t erode the public’s trust in the competitive bidding process, the FBI will continue to work with the Antitrust Division to ensure the integrity of competition across all industries.”
WWL is the fourth company to agree to plead guilty in the investigation, which has resulted in over $230 million in agreed-upon fines. In addition, eight executives have been charged for their participation in the conspiracy. Four have already pleaded guilty and been sentenced to prison terms. The other four executives have been indicted, but remain fugitives from justice.
In addition to paying its fine, WWL has agreed to cooperate with the department’s ongoing antitrust investigation. The plea agreement is subject to court approval.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Baltimore Field Office at 410-265-8080.
Minnesota-Based Hospice Provider to Pay $18 Million for Alleged False Claims to Medicare for Patients Who Were Not Terminally IllRead the Press Release
Evercare Hospice and Palliative Care will pay $18 million to resolve False Claims Act allegations that it claimed Medicare reimbursement for hospice care for patients who were not eligible for such care because they were not terminally ill, the Justice Department announced today. Evercare, now known as Optum Palliative and Hospice Care, is a Minnesota-based provider of hospice care in Arizona, Colorado and other states across the United States.
Hospice care is special end-of-life care for terminally ill patients intended to comfort the dying. When a terminally ill Medicare patient elects hospice, Medicare no longer covers traditional medical care designed to improve or heal the patient. Only Medicare patients who have a life expectancy of six months or less are considered terminally ill and eligible for the Medicare hospice benefit.
“Today’s settlement reflects the Justice Department’s continuing efforts to combat health care fraud and protect the nation’s elderly and most vulnerable citizens,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Our seniors rely on the hospice program to provide them with quality care, dignity and respect when they are terminally ill and need end-of-life care. It is, therefore, critically important that we hold accountable those hospice providers that bill for medically unnecessary services in order to get higher reimbursements from the Medicare program. Such abuses threaten a vulnerable population and jeopardize this important benefit for others under the program. The Justice Department will continue to protect taxpayer dollars and ensure that this critical benefit is available for Medicare patients who truly need it.”
This settlement resolves a lawsuit brought by the government alleging that Evercare knowingly submitted or caused to be submitted false claims to Medicare for hospice care from Jan. 1, 2007, through Dec. 31, 2013, for Medicare patients who were not eligible for the Medicare hospice benefit because Evercare’s medical records did not support that they were terminally ill. The government’s complaint alleged that Evercare’s business practices were designed to maximize the number of patients for whom it could bill Medicare without regard to whether the patients were eligible for and needed hospice. These business practices allegedly included discouraging doctors from recommending that ineligible patients be discharged from hospice and failing to ensure that nurses accurately and completely documented patients’ conditions in the medical records.
The allegations resolved by this settlement arose from whistleblower lawsuits initially filed by former employees of Evercare under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. The Act allows the United States to intervene in the lawsuits, which it did in this case. The share to be awarded in this case has not yet been determined.
“The decision to put someone into hospice care is an emotionally wrenching one for the patient and the patient’s family,” said U.S. Attorney John Walsh for the District of Colorado. “When hospice companies exploit and overbill Medicare by having people in hospice when they do not belong there, it jeopardizes this important benefit for others. We will not tolerate such conduct. The District of Colorado and the Department of Justice’s Civil Fraud Section deserve substantial credit for achieving this result in this Evercare Hospice case.”
“Hospice care is only medically necessary and reimbursable by Medicare for terminally ill patients with a life expectancy of six months or less,” said Special Agent in Charge Steven Hanson of the Department of Health and Human Services’ Office of Inspector General (HHS-OIG). “We will continue to vigorously investigate health care companies that put their own profits above the medical needs of patients to ensure that companies bill Medicare only for reimbursable health care services.”
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.
This settlement is the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Colorado and HHS-OIG.
The lawsuits resolved by this settlement, which were consolidated in the District of Colorado, are captioned United States ex rel. Fowler and Towl v. Evercare Hospice, Inc., et al., No. 11-cv-00642 (D. Colo.) and United States ex rel. Rice v. Evercare Hospice, Inc., No. 14-cv-01647 (D. Colo.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Justice Department Requires Divestitures in Huntington Bancshares Incorporated’s Acquisition of FirstMerit CorporationRead the Press Release
Thirteen Branches in Northeast Ohio to Be Divested
The Department of Justice announced today that Huntington Bancshares Incorporated and FirstMerit Corporation have agreed to sell 13 branches in Northeast Ohio, with approximately $737.8 million in deposits, to resolve antitrust concerns that arose from Huntington’s planned acquisition of FirstMerit. As a result of the acquisition, Huntington will become the largest bank in Ohio based on deposits.
Under their agreement with the department, the companies have agreed to divest two branches in Ashtabula County and 11 branches in Stark County, Ohio. The divested assets will include the deposits and loans associated with the divested branches. The companies have also agreed to suspend existing, and not to enter into new, non-compete agreements with their branch managers and loan officers located in Ashtabula County and Stark County, Ohio, for a period of 180 days following the consummation of their merger. Further, the companies have agreed to sell or lease branches closed within two years of the consummation of the merger in Ashtabula County or Stark County, Ohio, to FDIC-insured depository institutions offering deposit and credit services to small businesses.
“Families and small businesses rely on banks in their communities to keep their money safe and provide them credit for important purchases and investments,” said Principal Deputy Assistant Attorney General Renata Hesse of the Justice Department’s Antitrust Division. “Today’s settlement protects banking customers in Ashtabula County and the Greater Canton area by ensuring that they continue to have access to competitively priced banking products.”
The proposed merger is subject to the final approval of the Board of Governors of the Federal Reserve System. The department said that it will advise the Federal Reserve Board that it will not challenge the merger provided that: the parties divest the branch offices, associated loans and deposits and the entire customer relationships associated with the divestiture branches; the parties commit to the Federal Reserve Board that they will comply with the agreement with the department; and the parties’ commitments to the department are included as a condition to any order the Federal Reserve Board enters allowing the transaction.
Huntington is the holding company of The Huntington National Bank, Columbus, Ohio, with approximately $73 billion in assets. Huntington operates more than 750 branches and 1,500 ATMs in Ohio, Indiana, Kentucky, Michigan, Pennsylvania and West Virginia. Huntington specializes in full-service commercial, small business, and consumer banking services, as well as services ranging from mortgage banking to equipment leasing.
FirstMerit is the holding company of FirstMerit Bank, N.A., Akron, Ohio, with approximately $26.1 billion in assets. With about 370 branches and 400 ATMs in Ohio, Illinois, Michigan, Pennsylvania and Wisconsin, FirstMerit provides a large range of banking and other financial services to consumers and businesses.
A list of the branches to be divested is attached.
Attachment A - Huntington FirstMerit Branches to be Divested
Virginia Electrician Pleads Guilty to Attempting to Obstruct the IRSRead the Press Release
A Cumberland, Virginia, resident pleaded guilty to one count of corruptly endeavoring to impair and impede the due administration of the internal revenue laws, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Richard Alex, a self-employed low-voltage electrician, admitted that he did not file a timely or valid tax return for more than a decade. For tax years 1998 and 2000 through 2003, Alex filed a tax return on which he falsely claimed that he had not earned any income. Alex failed to file any tax returns for the 2004 through 2013 tax years, despite receiving income above the filing threshold each year, as well as numerous warnings and notices from the Internal Revenue Service (IRS).
According to court documents, Alex attempted to conceal his assets and income to prevent the IRS from collecting his unpaid taxes. Starting in 2004, Alex used bank accounts held in the names of nominees to receive income he earned from dispatch companies for subcontract work. Alex also provided false information to a tax return preparer for the purpose of preparing federal tax returns for Alex’s nominee business, Cole Data Services.
Alex’s sentencing hearing is scheduled for Oct. 5. He faces a statutory maximum sentence of three years in prison. Alex also faces financial penalties and a term of supervised release.
Acting Assistant Attorney General Ciraolo commended special agents of IRS–Criminal Investigation, who investigated the case, and thanked the U.S. Attorney’s Office for the Western District of Virginia for their assistance, as well as Trial Attorney Sean Beaty of the Tax Division and Assistant U.S. Attorney C. Patrick Hogeboom, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division website.
Two Kentucky Women Sentenced to Prison for Tax Refund Fraud ConspiracyRead the Press Release
Two Kentucky residents were sentenced to prison today after pleading guilty in January to conspiring to defraud the United States with respect to claims, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky.
Patsy Carnes and Diana Hill were sentenced to 22 and 16 months in prison, respectively. According to court documents, during the years 2011 and 2012, Hill and Carnes worked at the Bailey Switch Pawn Shop in Knox County, Kentucky. There, they conspired with Billy Ray Hamilton and Brian Hamilton, to submit false federal tax returns, sometimes intentionally using personal identifying information without the permission of the named taxpayer.
To advance the conspiracy, Hill and Carnes received and collected taxpayer information, including personal identifying information and provided that information to Billy Ray Hamilton and Brian Hamilton for use in the preparation of false tax returns. Carnes received the fraudulently obtained tax refunds and opened as the sole signature authority of bank accounts into which she knew that some of the fraudulently obtained tax refunds would be deposited.
In addition to the prison terms, U.S. District Judge Amul R. Thupar of the Eastern District of Kentucky ordered Hill to serve three years of supervised release and pay restitution to the Internal Revenue Service (IRS) in the amount of $226,652.89. Judge Thupar ordered Carnes to serve three yearsof supervised release and pay restitution to the IRS in the amount of $226,652.89.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Harvey commended special agents of IRS–Criminal Investigation, who investigated the case and Assistant U.S. Attorney Neeraj Gupta of the Eastern District of Kentucky and Trial Attorney Abigail Burger Chingos of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Statements from Attorney General Loretta E. Lynch and Deputy Attorney General Sally Q. Yates on the Passing of Associate Deputy Attorney General David MargolisRead the Press Release
Attorney General Loretta E. Lynch and Deputy Attorney General Sally Q. Yates released the following statements today on the passing of Associate Deputy Attorney General David Margolis, senior-most career employee at the Department of Justice.
Statement by Attorney General Lynch:
“David Margolis was a dedicated law enforcement officer and a consummate public servant who served the Department of Justice – and the American people – with unmatched devotion, remarkable skill and evident pride for more than half a century. From his earliest days as a hard-charging young prosecutor with a singular sense of style to his long tenure as one of the department’s senior leaders, David took on our nation’s most pressing issues and navigated our government’s most complex challenges. To generations of Justice Department employees, he was a respected colleague, a trusted advisor and most importantly, a beloved friend. We are heartbroken at his loss and he will be deeply missed. My thoughts and prayers are with David’s family, his friends and all who loved him.”
Statement by Deputy Attorney General Yates:
“David Margolis was the personification of all that is good about the Department of Justice. His dedication to our mission knew no bounds, and his judgment, wisdom and tenacity made him the “go-to” guy for department leaders for over 50 years. David was a good and loyal friend to all of us, and his loss leaves a gaping hole in the department and in our hearts.”
Residents of Three States Charged with Unlawful Sale of Dietary SupplementsRead the Press Release
As part of the federal government’s ongoing efforts to address unlawful dietary supplements, the Department of Justice announced today criminal cases against three individuals for violations of the federal Food, Drug and Cosmetic Act (FDCA) related to purported disease cures. Each of the three individuals was also the subject of a civil case brought by the department, which they have now agreed to settle by entry of consent decrees of permanent injunction.
Each of the individuals and companies is alleged to have marketed and sold products as treatments for serious diseases including herpes, cancer, Alzheimer’s and AIDS, without obtaining approval from the U.S. Food and Drug Administration (FDA) to distribute such products as drugs.
“These enforcement actions highlight the department’s continued focus on unlawful dietary supplements, including unsupported cures for serious diseases such as cancer, Alzheimer’s, and herpes,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Consumers desperate for help, including Americans facing serious illnesses, sometimes turn to untested substances and forgo proven therapies. The Department of Justice is committed to seeking out those firms that risk public health in favor of profit.”
Guy Lyman and Flor Nutraceuticals LLC
Today, the United States filed a criminal information in the U.S. District Court for the Eastern District of Louisiana, charging Guy Lyman of New Orleans, Louisiana, with one misdemeanor count of introduction of an unapproved new drug into interstate commerce in violation of the FDCA. The information alleges that Lyman distributed the product Herpaflor as a herpes treatment, without receiving approval from FDA to distribute Herpaflor.
The United States simultaneously filed a civil complaint against Lyman and his company, Flor Nutraceuticals LLC, in the Eastern District of Louisiana. The civil complaint alleges that the defendants sold liquid and tablet drug and dietary supplement products named Herpaflor, which they intended as herpes treatments, but that the products were not approved by FDA. Lyman and Flor Nutraceuticals agreed to a consent decree of permanent injunction to prohibit the sale of Herpaflor as a treatment for herpes. The consent decree, which is subject to court approval, was also filed today.
James Hill
Today, the United States also filed a criminal information in the U.S. District Court for the Middle District of Florida, charging James Hill of Ocala, Florida, with one misdemeanor count of distributing an unapproved new drug in violation of the FDCA. The information alleges that Hill distributed the unapproved new drug Viruxo Immune Support (Viruxo) as a treatment for herpes.
The Justice Department previously announced the entry of a consent decree of permanent injunction against Hill on Feb. 26, to resolve a civil complaint filed against him in the Middle District of Florida. The injunction prohibits Hill from selling Viruxo as a herpes treatment.
Clifford Woods and Clifford Woods LLC
The Justice Department also announced today that Clifford Woods, of Los Angeles, California, pleaded guilty to a criminal charge for distribution of an unapproved new drug and agreed to entry of a consent decree. On May 9, Woods pleaded guilty in U.S. District Court for the Central District of California to a one-count information alleging that he promoted and distributed the product Taheebo Life Tea as a treatment for cancer, despite the fact that the product had not been approved as a drug by the FDA.
Woods, along with his company, Clifford Woods LLC, also agreed to a consent decree of permanent injunction to prohibit them from selling products as cures for a variety of diseases. The consent decree, which was entered by the Court on June 27, resolves a civil complaint that the department filed against Woods and Clifford Woods LLC in the Central District of California. The civil complaint alleged that the defendants, doing business as Vibrant Life, sold products that they promoted as treatments for cancer, type 2 diabetes, Alzheimer’s disease, HIV infection and AIDS. For instance, the complaint alleged that the defendants promoted certain products “as a treatment for cancer,” as having “shown results in tumor reduction,” and as being able to “change a cancer cell into a non-malignant cell.” The complaint further alleged that the defendants defrauded consumers by promoting certain products to cure, mitigate, treat, or prevent a disease despite the absence of well-controlled clinical studies or other credible scientific substantiation to support those claims.
Principal Deputy Assistant Attorney General Mizer thanked the Postal Inspection Service for its thorough investigation of these cases. The government is represented in the three criminal cases by Trial Attorney Ann Entwistle and in the three civil cases by Trial Attorney Daniel Zytnick, both of the Civil Division’s Consumer Protection Branch. The government is also represented in the civil case against Hill by Assistant U.S. Attorney Lacy R. Harwell Jr. of the U.S. Attorney’s Office for the Middle District of Florida. Deputy Chief Counsel Perham Gorji and Senior Counsel Claudia J. Zuckerman of the Department of Health and Human Services’ Office of General Counsel – Food and Drug Division provided assistance in these cases. Further assistance was provided by the U.S. Attorney’s Offices for the Eastern District of Louisiana, Middle District of Florida, and Central District of California.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
Justice Department Obtains Record Fine and Injunctive Relief against Activist Investor for Violating Premerger Notification RequirementsRead the Press Release
ValueAct to Pay $11 Million for Investing in Halliburton and Baker Hughes without Notifying Antitrust Authorities
The Department of Justice announced today that ValueAct has agreed to pay $11 million to settle allegations that certain ValueAct entities violated the reporting and waiting period requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “HSR Act”). As part of the settlement, ValueAct has also agreed to injunctive relief designed to prevent future violations.
On Nov. 17, 2014, Baker Hughes and Halliburton – two of the three largest providers of oilfield products and services in the world – announced their plan to merge in a deal valued at $35 billion. Thereafter, ValueAct, an activist investment firm, purchased over $2.5 billion of Halliburton and Baker Hughes voting shares without complying with the HSR Act’s notification requirements. According to a complaint filed on April 4, 2016 in the U.S. District Court for the Northern District of California, ValueAct purchased these shares with the intent to influence the companies’ business decisions – including decisions related to the merger – and therefore could not rely on the limited “investment-only” exemption to the HSR Act’s notification requirements. The complaint details how ValueAct used its access to senior executives of both Halliburton and Baker Hughes to attempt to influence the companies’ proposed merger and other aspects of their businesses. Halliburton and Baker Hughes abandoned their proposed merger on May 2, 2016 after the Antitrust Division sued to block it in U.S. District Court for the District of Delaware.
“ValueAct acquired substantial stakes in Halliburton and Baker Hughes in the midst of our antitrust review of the companies’ proposed merger, and used its position to try to influence the outcome of that process and certain other business decisions,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division. “ValueAct was not entitled to avoid the HSR requirements by claiming to be a passive investor, while at the same time injecting itself in this manner. The HSR notification requirements are the backbone of the government’s merger review process, and crucial to our ability to prevent anticompetitive mergers and acquisitions. Today’s record penalty and important injunctive relief demonstrate our continued commitment to vigorous enforcement of these important notification and waiting period requirements.”
The HSR Act imposes notification and waiting period requirements for transactions meeting certain size thresholds to ensure that such transactions undergo premerger antitrust review by the department and the Federal Trade Commission. The HSR Act has a narrow exemption for acquisitions of less than 10 percent of a company’s outstanding voting securities if the acquisition is made “solely for the purposes of investment” and the purchaser has no intention of participating in the company’s business decisions.
Federal courts can assess civil penalties for premerger notification violations under the HSR Act in lawsuits brought by the department. The current maximum civil penalty for an HSR violation is $16,000 per day; however, the maximum penalty will increase to $40,000 per day effective Aug. 1, 2016.
As part of the settlement, ValueAct agreed to pay a record $11 million. The highest fine previously paid for an HSR violation was $5.67 million. ValueAct is also enjoined from relying on the “investment-only” exemption when it intends to influence, or is considering influencing, certain basic business decisions, including those relating to merger and acquisition strategy, corporate restructuring, and the company’s pricing, production capacity, or production output.
ValueAct is an investment firm headquartered in San Francisco that manages over $16 billion on behalf of investors.
As required by the Tunney Act, the proposed settlement, along with the department’s competitive impact statement, will be published in The Federal Register. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Kathleen S. O’Neill, Chief, Transportation, Energy & Agriculture Section, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8000, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the U.S. District Court for the Northern District of California may enter the final judgment upon finding that it serves the public interest.
ValueAct Explanation
ValueAct Complaint
ValueAct CIS
ValueAct PFJ
ValueAct Stipulation with Proposed Order
Southern California Man Pleads Guilty for His Role as Sales Manager in Fraudulent Mortgage Modification SchemeRead the Press Release
More than 1,500 Victims of Fraud
The Department of Justice announced that an Orange County, California, man pleaded guilty in U.S. District Court in Santa Ana, California, for his role as the sales manager of a multi-million dollar fraudulent mortgage modification scheme.
Charles Wayne Farris, 55, of Aliso Viejo, California, pleaded guilty before U.S. District Court Judge David O. Carter for the Central District of California to one count of conspiracy to commit mail and wire fraud.
“This defendant supervised dozens of telemarketers who used lies and false promises to take money from struggling homeowners for a worthless service,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to prosecute all kinds of mass-marketing and telemarketing fraud schemes, especially those that prey on vulnerable victims.”
“This defendant managed an entire team of people whose sole job was to lure struggling home owners into the fraud scheme,” said U.S. Attorney Eileen Decker of the Central District of California. “It is because of Mr. Farris that so many people were victimized for so much money.”
Farris admitted that, between October 2008 and June 2009, he participated in a scheme to induce homeowners to pay between $3,500 and $5,500 for the services of the Rodis Law Group (RLG) and a successor entity, America’s Law Group (ALG). RLG and ALG advertised on radio stations nationwide, urging struggling homeowners to call a toll-free number and stating that the companies consisted of “a team of experienced attorneys” who were “highly skilled in negotiating lower interest rates and even lowering your principal balance.” In fact, RLG and ALG were telemarketing operations that never had teams of experienced attorneys. During much of the scheme, Ronald Rodis was the only attorney at RLG.
Farris supervised a sales force of dozens of telemarketers who fielded calls from struggling homeowners. At Farris’s direction and using scripts that he created, the telemarketers made numerous misrepresentations regarding the companies’ ability to negotiate loan modifications from the homeowners’ mortgage lenders. For example, the telemarketers stated that RLG and ALG had been in business for 11 years when in fact the company had only opened in October 2008. They falsely stated that RLG and ALG routinely obtained positive results for homeowners, including lower monthly payments, reductions in principal balance and lower interest rates. In fact, positive results were rarely achieved for any RLG or ALG clients. Telemarketers also falsely reiterated that homeowners would have a team of attorneys and real estate professionals assigned to their case.
“The defendants in this case preyed upon vulnerable homeowners facing the loss of their home and callously took advantage of what hope they had left,” said Assistant Director in Charge Deirdre L. Fike of the FBI’s Los Angeles Field Office. “Paid advertisements can lend a veneer of credibility to any scam, and I would encourage anyone considering paying fees up front for services to be skeptical before handing over hard earned money.”
In a plea agreement filed in federal court, Farris admitted that the RLG and ALG schemes fraudulently obtained approximately $9 million from more than 1,500 victims. His sentencing is on April 17, 2017.
Farris was charged along with two co-defendants, Bryan D’Antonio and Ronald Rodis. Rodis pleaded guilty to one count of conspiracy to commit mail and wire fraud on June 27. D’Antonio is charged with 23 felony counts. He is charged with nine counts of wire fraud and one count of conspiracy to commit wire fraud. Each of these counts carries a statutory maximum penalty of 20 years in prison. In addition, D’Antonio is charged with 13 counts of criminal contempt for violating a 2001 federal court order, which permanently banned D’Antonio from participating in future telemarketing operations. Criminal contempt of court has no statutory maximum penalty. D’Antonio is scheduled for trial beginning Sept. 20.
This case was investigated by the FBI and is being prosecuted by Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Joseph T. McNally of the Central District of California.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Central District of California, visit its website at https://www.justice.gov/usao-cdca.
Salesman Pleads Guilty to Defrauding Consumers Through Debt Relief FirmsRead the Press Release
A Newport Beach, California, man pleaded guilty today for his role as a salesman at fraudulent debt relief firms that offered to settle credit card debts but instead took victims’ payments as undisclosed up-front fees, the Justice Department and U.S. Postal Inspection Service announced.
John Vartanian, 57, pleaded guilty to one count of an indictment alleging conspiracy to commit mail fraud and wire fraud in connection with companies known as Nelson Gamble & Associates (Nelson Gamble) and Jackson Hunter Morris & Knight LLP (Jackson Hunter). According to the indictment, the conspirators portrayed the debt relief companies as law firms and attorney-based companies that would negotiate favorable settlements with creditors. Clients made monthly payments expecting the money to go toward settlements. The conspirators instead took at least 15 percent of the total debt as company fees, with the first six months of payments going almost entirely toward undisclosed up-front fees.
“These scams take advantage of vulnerable consumers trying to climb out of debt,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to prosecute fraudulent debt relief schemes.”
“We are gratified with today’s plea, not only on behalf of our postal inspectors who exposed these conspirators for the scammers they were, but for the many unsuspecting victims who were seeking to climb out from their debts but instead were thrown into even deeper financial holes,” said Inspector in Charge Regina L. Faulkerson of Criminal Investigations, U.S. Postal Inspection Service. “People who rely on the U.S. mail expect what they receive will be truthful, honest communication – free from false statements and from attempts to further victimize them. I appreciate the work of the Consumer Protection Branch in bringing the last of these fraudulent credit repair conspirators to justice.”
“This defendant preyed upon victims that were already burdened by significant debt,” said U.S. Attorney Eileen M. Decker for the Central District of California. “He gave them false hope while stealing the money that could have been used to reduce their obligations.”
The scheme ran from February 2010 to September 2012. Vartanian admitted that he did not tell customers during sales calls that the companies charged significant up-front fees. Additionally, he admitted that he falsely told customers that the companies were backed by a law group and that money would be refunded if customers were not satisfied. When his co-conspirators changed the name of the company from Nelson Gamble to Jackson Hunter in 2011 because of customer complaints, Vartanian continued to make the same pitch without disclosing that the new company was essentially the same as the old company. In speaking with unhappy customers, the conspirators at Jackson Hunter blamed past problems on Nelson Gamble and denied requests for refunds of money paid to Nelson Gamble.
Vartanian faces a statutory maximum sentence of 20 years in prison. The court set a sentencing date of Oct. 17 before U.S. District Judge Dale S. Fischer in Los Angeles. Four other defendants previously pleaded guilty in connection with the same scheme: Jeremy Nelson of Laguna Nigel, California, Elias Ponce of Santa Ana, California, Christopher Harati of Anaheim, California, and Athena Maldonado of Lake Forest, California. The defendants have not yet been sentenced.
In September 2012, the Federal Trade Commission brought a civil case against Nelson and the companies, alleging that the defendants misrepresented debt relief services offered to consumers. (See https://www.ftc.gov/enforcement/cases-proceedings/122-3030-x120048/nelson-gamble-associates-llc-et-al). The case was settled by entry of a consent decree in August 2013.
Principal Deputy Assistant Attorney General Mizer commended the Postal Inspection Service team assigned to the Civil Division’s Consumer Protection Branch for their investigative efforts and thanked the U.S. Attorney’s Office for the Central District of California for their contributions to the case. The case is being prosecuted by trial attorneys Alan Phelps and James Harlow of the Consumer Protection Branch.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
Subway Franchisee and Gas Station Owner Sentenced to Prison in Multi-Million Dollar Conspiracy to Defraud the Internal Revenue ServiceRead the Press Release
Defendant Failed to Report More Than $6 Million in Gross Receipts
A Subway franchisee and resident of Alexandria, Virginia, was sentenced to more than two years in prison today for conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente for the Eastern District of Virginia.
Obayedul Hoque, was sentenced to 30 months in prison followed by two years of supervised release by U.S. District Judge Liam O’Grady. Judge O’Grady ordered Hoque to pay a $20,000 fine and $2,022,106 in restitution to the Internal Revenue Service (IRS) for tax liabilities for the years 2008 through 2013.
According to court documents, Hoque owned and operated Skyhill Shell, a gas station in Alexandria and multiple Subway restaurant franchises in Washington, D.C., Arlington, Virginia, and Alexandria. Hoque admitted that between 2008 and 2014, he and his co-conspirators, who were managers of some of the Subway franchises and the gas station, conspired to defraud the United States for the purpose of obstructing the IRS in the ascertainment and collection of individual and corporate income taxes. Hoque and his co-conspirators did not deposit all of the gross receipts of the gas station or the Subway franchises into the corporate or partnership bank accounts. Instead, Hoque and the managers retained a portion of the gross receipts for their personal benefit and failed to report those funds to the IRS. For the Subway franchises that had no co-conspirator managers, Hoque retained all of the unreported gross receipts for himself.
For the period of 2008 through 2013, point of sales records for the Subway franchises reflected total sales of $20,805,667. However, Hoque and his co-conspirators provided false monthly sales figures to the accounting firm to prepare the Subway entities’ tax returns. As a result, Hoque and his co-conspirators caused false corporate and partnership tax returns to be filed for the Subway franchises which reported sales of only $14,377,696. Hoque and his co-conspirators also caused false corporate tax returns to be filed on behalf of Skyhill Shell. For some years, some of the entities did not file tax returns with the IRS. Additionally, Hoque filed false individual income tax returns with the IRS. Hoque admitted that his conduct caused a tax loss to the IRS of between $1.5 million and $3.5 million.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Boente thanked special agents of IRS-Criminal Investigation, who investigated the case and Assistant U.S. Attorney Uzo Asonye and Assistant Chief Caryn Finley and Trial Attorney Kimberly Shartar of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Chicago-Based Return Preparer Who Targeted City Employees in Fraudulent Tax Return Schemes Permanently Shut Down by Federal CourtRead the Press Release
According to a civil complaint the United States filed in 2014, a Chicago-based tax return preparer prepared returns that falsely claimed that recipients of discrimination awards related to a class-action lawsuit could claim large deductions on their federal tax returns and that falsely inflated the amount of wages that city of Chicago employees claimed were withheld from their paychecks. Now a federal court has completely barred this tax return preparer from preparing tax returns for others.
Victor M. Crown promoted two false and fraudulent schemes through which he claimed that his customers could obtain significant federal income tax refunds, the complaint alleged. In the first scheme, as set out in the complaint, Crown falsely inflated the amount of income tax that was withheld from his customers’ paychecks because the city of Chicago purportedly calculated an incorrect withholding amount. Taxpayers may not claim a withholding credit larger than the amount that was actually withheld from their wages. The second scheme is founded on the 1969 class-action lawsuit Shakman v. Democratic Organization of Cook County, et al., No. 69-cv-2145 (N.D. Ill.), according to the United States’ complaint. Shakman was a discrimination case against the city of Chicago that alleged that the city improperly used political patronage when hiring and promoting public officials. As part of an agreed Shakman settlement order, the city set up a $12 million fund to compensate claimants for violations of the federal district court’s orders. Claims were submitted to the court-appointed monitor, who was responsible for evaluating the claims and, if justified, assigning a monetary award amount. According to the United States’ complaint against Crown, Crown asserted that his customers who were Shakman award recipients were entitled to claim net operating loss deductions for the difference between their claim and the amount they actually received in their award. The federal tax law does not permit a deduction in the amount of a denied discrimination claim.
In explaining its reasons for enjoining Crown, the court noted that the scope of Crown’s misconduct involved “at least 2,900 fraudulent tax returns,” as well as his “failure to accept responsibility and cease his operations.” The court’s injunction order forbids Crown from preparing tax returns for others and from making false statements about securing any tax benefit by virtue of receiving or not receiving an award in the Shakman litigation. It also requires Crown to give the United States a list of all his tax-preparation customers since 2010.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
United States Returns $1.5 Million in Forfeited Proceeds from Sale of Property Purchased with Alleged Bribes Paid to Family of Former President of TaiwanRead the Press Release
The Department of Justice announced today that it is returning approximately $1.5 million to Taiwan, the proceeds of the sale of a forfeited New York condominium and a Virginia residence that the United States alleged in its complaint were purchased with the proceeds of bribes paid to the family of Taiwan’s former President Chen Shui-Bian.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI) made the announcement.
According to the civil forfeiture complaints filed in this case, Yuanta Securities Co. Ltd. paid a bribe of 200 million New Taiwan dollars (equivalent to approximately $6 million USD) to former First Lady Wu Shu-Jen in 2004, during former President Chen Shui-Bian’s administration. The bribe was allegedly paid to ensure that the president would use his power so that the Taiwan authorities would not oppose Yuanta’s bid to acquire a financial holding company. The former first family used Hong Kong and Swiss bank accounts, shell companies and a St. Kitts and Nevis trust to transfer the bribe proceeds needed to purchase the properties in Keswick, Virginia, and New York. The properties were owned by the former first family of Taiwan through two limited liability companies. In October 2012, U.S. District Courts in Virginia and in New York entered final forfeiture judgments against these two properties without opposition by the record owners. The United States then sold these two properties and obtained approximately $1.5 million in proceeds, which is being returned to Taiwan.
“The Kleptocracy Initiative was established to prevent corrupt leaders from using the United States as a safe haven for their ill-gotten gains,” said Assistant Attorney General Caldwell. “We are committed to rooting out foreign official corruption and preventing corrupt officials from enjoying their spoils in the United States. We appreciate the cooperation of Taiwan law enforcement in this matter.”
“After many years of collaborative work, we are happy to return these funds to their rightful owners,” said Executive Associate Director Edge. “This is part of an ongoing effort by HSI to identify and seize illegal assets in the United States obtained by corrupt foreign leaders who abuse our financial systems in order to conceal the illicit proceeds of their crimes. HSI special agents in our 62 offices in 43 countries will continue to work with our domestic offices and international law enforcement partners to hold these individuals accountable.”
ICE-HSI investigated the case, with assistance from the agency’s attaché in Hong Kong, HSI Miami's Foreign Corruption Investigation Group and the Taiwan Supreme Prosecutors Office’s Special Investigations Division. Trial Attorney Jennifer Wallis and former Deputy Chief Linda Samuel of the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS) prosecuted the case. The Criminal Division’s Office of International Affairs also provided valuable assistance.
The Justice Department’s Kleptocracy Asset Recovery Initiative is carried out by a dedicated team of prosecutors in AFMLS, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, return those proceeds to benefit those harmed. Individuals with information about possible proceeds of foreign corruption located in or laundered through institutions in the United States should contact federal law enforcement or send an email to [email protected].
HSI’s Foreign Corruption Investigations Group targets corrupt foreign officials around the world who attempt to utilize U.S. financial institutions to launder illicit funds. The group conducts investigations into the laundering of proceeds emanating from foreign public corruption, bribery or embezzlement. The objective is to prevent foreign derived ill-gotten gains from entering the U.S. financial infrastructure, to seize identified assets in the United States and repatriate these funds on behalf of those affected.
Ohio Psychiatrist Pleads Guilty to Tax EvasionRead the Press Release
An Oregon, Ohio, psychiatrist pleaded guilty to tax evasion today in the U.S. District Court for the Northern District of Ohio, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Sandra Vonderembse admitted that despite earning compensation in excess of $240,000 per year from 2009 through 2011 as a psychiatrist working for multiple businesses and the state of Ohio, she falsely claimed zero taxable income and zero tax owing for each of those years on federal tax returns. In tax years stretching back to 2005, Vonderembse failed to pay taxes due on her income and filed tax returns falsely claiming taxable income as “None.” From 2005 to 2011, she also had her earnings paid to nominee entities to conceal income from the Internal Revenue Service (IRS) and sent fake financial instruments to the IRS in purported payment of her taxes.
Vonderembse faces a statutory maximum sentence of five years in prison, as well as a term of supervised release. She has agreed to pay restitution to the IRS in the amount of $565,000.
Acting Assistant Attorney General Ciraolo commended special agents of IRS - Criminal Investigation, who investigated the case and Assistant U.S. Attorney Noah Hood and Trial Attorneys Jack Morgan and Jeffrey McLellan of the Justice Department’s Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division website.
Four Conspirators Indicted in Chicago-Based Stolen Identity Refund Fraud SchemeRead the Press Release
A federal grand jury sitting in Chicago, Illinois, returned an indictment, which was unsealed yesterday, charging four Chicago-area residents with conspiracy to commit theft of government money, wire fraud, theft of government money, aggravated identity theft and access device fraud, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.
The indictment charges Roxann Gist, Dominique King, Nellyvette Mojica and Rosa Alverio, with conspiracy to commit theft of government money. Gist and King also are charged with wire fraud, aggravated identity theft and access device fraud. Mojica and Alverio also are charged with theft of government money.
According to the indictment, Gist and King used the means of identification of other individuals without their knowledge and consent in order to prepare and file false tax returns that claimed large tax refunds. The refund checks were mailed to addresses in the Chicago area or electronically deposited into bank accounts controlled by the defendants and others. After Mojica and Alverio received a number of the fraudulent refund checks into accounts under their control, they split the proceeds with Gist and King. From 2012 to 2015, the defendants and others received in excess of $1.3 million in fraudulent tax refunds.
If convicted, the defendants each face a statutory maximum sentence of five years in prison for the conspiracy count. Gist and King also face a statutory maximum sentence of 20 years in prison for wire fraud, 10 years in prison for access device fraud and a mandatory minimum sentence of two years in prison for each count of aggravated identity theft, which must run consecutive to any other sentence imposed by the court. Mojica and Alverio also face a statutory maximum sentence of 10 years in prison for the theft of government money counts. In addition, the defendants face potential fines, forfeiture and restitution.
An indictment merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Ryan R. Raybould and Timothy M. Russo of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Former Rabobank Derivatives Trader Pleads Guilty for Scheme to Manipulate LIBOR BenchmarkRead the Press Release
A former Coöperatieve Centrale Raiffeisen-Boerenleebank B.A. (Rabobank) derivatives trader, who worked in Hong Kong and Singapore as the bank’s Head of Money Market and Derivatives Trading for Northeast Asia, pleaded guilty today to conspiracy to commit wire fraud and bank fraud for his role in a scheme to manipulate the London InterBank Offered Rate (LIBOR) to Rabobank’s advantage.
Assitant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antiturst Division and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office made the announcement.
Paul Thompson, 50, of Dalkeith, Western Australia, pleaded guilty before U.S. District Judge Jed S. Rakoff of the Southern District of New York, who set sentencing for Nov. 9, 2016.
“Confidence in the integrity of our financial markets is critical to the stability of the U.S. economy,” said Assistant Attorney General Caldwell. “Trillions of dollars in derivative contracts, loans, consumer debt and other financial products are linked to LIBOR, but Thompson schemed to manipulate this important benchmark to advantage his bank’s own trading positions. This case demonstrates that we will work with our partners around the world to bring to justice those whose crimes threaten our financial markets, wherever they reside.”
“The defendant conspired to manipulate LIBOR, putting his interests above those who depend on LIBOR as a reliable, impartial reference rate,” said Deputy Assistant Attorney General Snyder. “The Antitrust Division will continue to work with our colleagues in the Criminal Division and the FBI to ensure that individuals who conspire to cheat or manipulate markets are held accountable for their crimes.”
“In today’s plea, a former Rabobank executive admitted to his role in conspiring to manipulate the LIBOR interest rate to his bank’s advantage,” said Assistant Director in Charge Abbate. “This multi-year investigation represents the ongoing effort of the FBI and its domestic and international law enforcement and regulatory partners to identify and stop those who commit complex financial crimes effecting the United States, no matter where they operate or reside.”
Thompson is the fourth individual to plead guilty in this matter: Paul Robson, Lee Stewart and Takayuki Yagami, former Rabobank traders, pleaded guilty to one count of conspiracy in connection with their roles in the scheme. Another former Rabobank employee, Tetsuya Motomura, of Tokyo, has been charged and awaits trial.
LIBOR is an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if they borrowed from other banks. LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts tied to LIBOR were valued at approximately $450 trillion. At the time relevant to the charges, LIBOR was published by the British Bankers’ Association (BBA), a trade association based in London. LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities. The published LIBOR “fix” for Yen and U.S. Dollar (USD) LIBOR at a specific maturity is the result of a calculation based upon submissions from a panel of 16 banks, including Rabobank.
According to admissions made in connection with his plea, Thompson traded derivative products tied to the USD and Japanese Yen LIBOR rates. In an effort to increase the profitability of his derivative positions, Thompson entered into a scheme with several other Rabobank employees to influence the rate to Rabobank’s advantage, he admitted. Electronic communications offered at Allen and Conti’s trial showed that Thompson schemed with Paul Robson, a former Rabobank trader responsible for submitting Rabobank’s Yen LIBOR rate to the BBA, and others, to make LIBOR submissions calculated to increase the profitability of Thompson’s derivatives positions. For example, on May 19, 2006, Thompson informed Robson that his net exposure to the three-month duration of the Yen LIBOR rate was 125 billion Yen and asked Robson to “sneak your 3m libor down a cheeky 1 or 2 [basis points] because “it will make a bit of diff for me.” On Nov. 8, 2006, Thompson wrote to Robson, “Got a few big 3mth fixings in next 2 days, any chance you cud bump [LIBOR] up a couple?” And on May 10, 2006, Robson informed another Rabobank submitter that, “for info I’ve been asked by my Singapore man [Thompson] to help him out with a silly low 6m fixing today.”
On Nov. 5, 2015, a federal jury in the Southern District of New York convicted Anthony Allen, formerly Rabobank’s Global Head of Liquidity and Finance, and Anthony Conti, formerly Rabobank’s primary U.S. Dollar LIBOR submitter, for their roles in the scheme. They were sentenced to 24 months and 12 months and a day in prison, respectively. On Oct. 29, 2013, Rabobank entered into a deferred prosecution agreement with the department and agreed to pay a $325 million penalty to resolve violations arising from Rabobank’s LIBOR submissions.
The FBI’s Washington Field Office is conducting the investigation. Senior Litigation Counsel Carol L. Sipperly and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Trial Attorney Michael T. Koenig of the Antistrust Division are prosecuting the case. The Criminal Division’s Office of Internaional Affairs has provided assistance in this matter.
The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and abroad. The Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, has played a major role in the LIBOR investigation. The Securities and Exchange Commission has also played a significant role in the LIBOR series of investigations and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation. The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the Rabobank investigation. The department also thanked the Australian Attorney-General’s Department, the Australian Federal Police and the Western Australia Police for their assistance. Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit www.stopfraud.gov.
Virginia Man Sentenced to Prison for Role in Massive Identity Theft and Tax Fraud SchemeRead the Press Release
Conspired with Others to Seek Over $1.5 Million in Fraudulent Refunds
A federal district court judge sentenced a Virginia man today to 47 months in prison for his involvement in a far-reaching stolen identity refund fraud scheme in which he worked with others to seek over $1.5 million in income tax refunds through the filing of fraudulent federal income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Channing D. Phillips of the District of Columbia, Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service, Washington Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.
Bradley King, 35, of Fredericksburg, Virginia, is among approximately 20 participants in this scheme who have pleaded guilty to charges in the U.S. District Court for the District of Columbia. According to court documents, the overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million. King pleaded guilty earlier this year to one count of conspiracy to defraud the United States with respect to claims, one count of theft of public money and one count of aiding and abetting in fraud and related activity in connection with identification documents.
King was sentenced by U.S. District Judge Ellen S. Huvelle of the District of Columbia. In addition to the prison term, he must also pay $493,436 in restitution to the IRS and a forfeiture money judgment in the amount of $5,400. Following his prison term, King will be placed on three years of supervised release.
According to the government’s evidence, King participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. The refunds were sought for tax years 2005 through 2013, often in the names of people whose identities had been stolen, including the elderly, residents of assisted living facilities, drug addicts and incarcerated prisoners. Returns were also filed in the names of and refunds were issued to, people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.
According to documents filed with the court, King’s involvement in the scheme began in 2008 and continued through July 2015. Initially, he permitted co-conspirators to use his name, social security number and residential address for the creation and submission of fraudulent income tax returns. From March 2010 through July 2015, he recruited others to provide him with means of identification for use in preparing and filing fraudulent returns. He also recruited others to permit the use of their residential addresses on fraudulent returns that he prepared and filed. King split the proceeds of the fraudulently obtained U.S. Treasury checks with his co-conspirators. In addition, he and others used bank accounts for the negotiation of refund checks that were issued in the names of other persons. Finally, according to the court documents, he sold fraudulently obtained refund checks to another individual in June 2015.
Taking together the losses generated by the use of residential addresses and bank accounts under his control, including checks associated with his co-conspirators, King was responsible for the filing of approximately 444 fraudulent returns that sought more than $1.5 million. These actions led to a total actual loss of approximately $493,436 to the U.S. Treasury, based on the negotiation of a total of 153 U.S. Treasury checks listing addresses under his control and/or negotiated by his recruits.
In announcing the sentence, Acting Assistant Attorney General Ciraolo, U.S. Attorney Phillips, Special Agent in Charge Jankowski, Inspector in Charge Kelokates and Assistant Inspector General Phillips commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialists Donna Galindo and Julie Dailey. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender and Thomas F. Koelbl and former Trial Attorney Jessica Moran of the Tax Division, who prosecuted the case.
Statement from Attorney General Loretta E. Lynch Regarding State Department Email InvestigationRead the Press Release
Attorney General Loretta E. Lynch released the following statement today regarding the State Department email investigation:
“Late this afternoon, I met with FBI Director James Comey and career prosecutors and agents who conducted the investigation of Secretary Hillary Clinton’s use of a personal email system during her time as Secretary of State. I received and accepted their unanimous recommendation that the thorough, year-long investigation be closed and that no charges be brought against any individuals within the scope of the investigation.”
New Jersey Medical Device Manufacturer Admits Selling Contaminated Ultrasound Gel; Court Orders Permanent InjunctionRead the Press Release
Pharmaceutical Innovations Inc., based in Newark, New Jersey, pleaded guilty today to criminal charges and resolved a civil lawsuit arising from the company’s distribution of ultrasound gel contaminated with bacteria, the Department of Justice announced. The devices at issue are gels that doctors and hospitals use to take ultrasound scans, sonograms, EKGs and similar procedures.
Pharmaceutical Innovations Inc. pleaded guilty before U.S. District Court Judge Esther Salas in Newark federal court to an information charging it with two misdemeanor counts of introducing adulterated medical devices into interstate commerce. In addition to placing the company on two years of probation, Judge Salas ordered the company to pay a criminal fine of $50,000 and to forfeit an additional $50,000 – the approximate value of the adulterated gel.
In a related civil settlement, which was also resolved today, Pharmaceutical Innovations agreed to the forfeiture and destruction of particular gel products that tested exceptionally high for infectious bacteria and agreed to a permanent injunction that requires independent experts and auditors to conduct regular inspections and certifications at the company’s expense.
“The sale of adulterated medical devices puts patients at great risk,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Device manufacturers that fail to comply with good manufacturing practices, thereby threatening patient safety, will be held accountable.”
“Pharmaceutical Innovations shipped defective products that exposed hospital patients to dangerous bacterial contamination,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “Today’s plea agreement and civil settlement require Pharmaceutical Innovations to accept responsibility for the contamination and take the necessary steps to prevent it from happening again.”
According to documents filed in the case and statements made in court:
Doctors and hospitals use ultrasound gel to take ultrasound scans, sonograms, EKGs and similar procedures. In February 2012, a Michigan hospital reported that 16 surgical patients were infected with Pseudomonas aeruginosa, a bacterial pathogen. The hospital believed the infections were associated with a particular lot of Pharmaceutical Innovations ultrasound gel.
A sample of that lot then tested positive for Pseudomonas aeruginosa. A second lot was shipped in April 2012 and found to be contaminated with two types of bacteria, Pseudomonas aeruginosa and Klebsiella oxytoca, both at the Michigan hospital, and at the company’s Newark facility.
The U.S. Department of Justice filed suit in October 2014 against Pharmaceutical Innovations and its founder, owner, and longtime president, Gilbert Buchalter. (Gilbert Buchalter was later dropped from the case; his son, Charles Buchalter, became company president and was added to the case.) The civil complaint alleged that the company was selling medical devices that the U.S. Food and Drug Administration (FDA) had not approved or cleared, that it was violating current good manufacturing practices and that it failed to take required actions after receiving reports in February 2012 of serious injuries associated with its products.
The Consent Decree of Permanent Injunction requires Pharmaceutical Innovations to submit a detailed compliance plan to FDA within 20 days, and to have outside experts certify in writing by Oct. 31, that the company meets current good manufacturing practice requirements. The FDA will then conduct a follow-up inspection at the company’s expense. For the next three years, Pharmaceutical Innovations must hire outside auditors to conduct and submit detailed audit reports to FDA. In addition, the company will forfeit and pay for the destruction of contaminated “Other Sonic Gel” that the U.S. Marshals Service seized in April 2012 as part of a seizure and forfeiture case filed by the United States.
The criminal investigation in this matter was handled by special agents of the FDA’s Office of Criminal Investigations’ New York Field Office, under the direction of Acting Special Agent in Charge Jeffrey Ebersole.
The criminal prosecution was handled by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office for the District of New Jersey’s Health Care and Government Fraud Unit, with the assistance of Associate Chief Counsel Lynn M. Marshall of the Department of Health and Human Services’ Office of General Food-Food and Drug Division. The civil cases were handled by Trial Attorney Daniel K. Crane-Hirsch of the Civil Division’s Consumer Protection Branch and by Senior Counsel Michele Lee Svonkin and Associate Chief Counsel Julie A. Dohm of the Department of Health and Human Services’ Office of General Counsel–Food and Drug Division. Additional assistance in the civil cases was provided by Assistant U.S. Attorneys Lucy Muzzy, Marion Purcell, Peter Gaeta and Jacob Elberg of the U.S. Attorney’s Office for the District of New Jersey.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of New Jersey, visit its website at https://www.justice.gov/usao/district/nj.
Information Technology Companies to Pay $5.8 Million for Misrepresentations Relating to Small Business Status and Contract Fee PaymentsRead the Press Release
En Pointe Gov. Inc., En Pointe Technologies Inc., En Pointe Technologies Sales Inc., Dominguez East Holdings LLC and Din Global Corp., all of Gardena, California, have agreed to resolve allegations that they violated the False Claims Act by falsely certifying that En Pointe Gov. Inc. was a small business in order to obtain contracts set aside for small businesses and underreporting sales under a General Services Administration (GSA) contract to avoid the payment of fees, the Department of Justice announced today. Under the settlement agreement, the companies have agreed to pay slightly more than $5.8 million. En Pointe Gov. Inc. is now known as Modern Gov IT Inc.; En Pointe Technologies Sales Inc. is now known as Collab9 Inc.; and En Pointe Technologies Inc. is now known as Dinco Inc.
“Contractors who misrepresent their eligibility for government contracts, or fail to pay amounts owed under those contracts, undermine the integrity of the procurement process,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Justice Department will take action to fully protect taxpayer funds.”
“These companies defrauded the government in two ways, each of which cost taxpayers,” said U.S. Attorney Eileen M. Decker for the Central District of California. “Small businesses, in some cases, are eligible to receive a preference when government contracts are issued. Large companies that fraudulently solicit and obtain contracts under small business set-aside programs, like the companies in this case, not only abuse the system but also harm legitimate small businesses by taking those contracts away from them.”
The government alleged that, between 2011 and 2014, the defendants were liable for false representations that En Pointe Gov. Inc. met Small Business Administration (SBA) requirements to obtain work that was only available to small businesses. In particular, the government alleged that En Pointe Gov Inc.’s affiliation with the other defendants rendered it a non-small business and, thus, ineligible for the small business set-aside contracts it obtained.
The government also alleged that defendants caused En Pointe Gov. Inc. to file false quarterly reports with the GSA between 2008 and 2015 underreporting sales made under a GSA schedule contract that allowed other federal agencies to purchase from En Pointe. Under the terms of the contract, En Pointe was supposed to return to GSA a percentage of its sales receipts. By allegedly misrepresenting the amount of its sales, En Pointe underpaid the fees that it owed to GSA.
“GSA contractors must be forthright in their dealings with the United States,” said GSA Inspector General Carol Fortine Ochoa.
“Federal contracts set aside for small businesses are intended to grow the economic base of the nation,” said SBA Inspector General Peggy E. Gustafson. “The Office of Inspector General will aggressively investigate such misrepresentations to ensure only eligible businesses are awarded these contracts. I want to thank the U.S. Department of Justice for its dedication to pursuing justice in this case.”
“This case represents the cooperative effort of SBA and the Department of Justice to uncover and remedy fraud in federal contracting with small businesses,” said SBA General Counsel Melvin F. Williams, Jr. “Uncovering and pursuing fraud cases is one of SBA’s highest priorities.”
The settlements resolve allegations filed in a lawsuit by Minburn Technology Group, LLC (Minburn), a Virginia company that sells information technology products and services, and Anthony Colangelo, Minburn’s managing member. 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. The Act also allows the government to intervene and take over the action, as it did in this case. Minburn and Mr. Colangelo will receive approximately $1.4 million.
This settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Central District of California and the GSA and SBA Inspector General Offices.
The case is captioned United States ex rel. Colangelo et al. v. En Pointe Gov., Inc., et al., CV14-5865-RGK (JPRx) (C.D. Cal.). The claims resolved by the settlements are allegations only and there has been no determination of liability.
District Court Enters Permanent Injunction Against Alabama Seafood Manufacturer and Company’s Co-Owners to Prevent Distribution of Adulterated and Misbranded Seafood ProductsRead the Press Release
The U.S. District Court for the Southern District of Alabama entered a consent decree of permanent injunction against BEK Catering LLC dba Floppers Foods LLC of Daphne, Alabama, and its co-owners, Billy B. Stembridge and Kyle D. Huxen, to prevent the distribution of adulterated and misbranded seafood products, the Department of Justice announced today.
The Department filed a complaint in the Southern District of Alabama on July 1, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, BEK Catering prepares, processes, packs, holds, and distributes ready-to-eat seafood products, namely seafood soups sold under the names Shrimp Locksley and Mama’s Gumbo. The complaint alleged that the defendants caused food to become adulterated and misbranded.
“Adulterated and misbranded seafood products can create serious health risks for consumers,” 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 with the FDA to ensure a safe food supply.”
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction. As part of the settlement, the defendants represented that they are no longer engaged in the processing, packing, or holding of fish and fishery products from any location except for activities incidental to product transport and delivery. Under the permanent injunction, if the defendants intend to resume processing, packing, or holding fish or fishery products at or from any location, beyond activities incidental to transporting and delivering product, they must notify FDA in writing 90 days in advance, comply with specific remedial measures set forth in the injunction, and be subject to FDA inspection.
According to the complaint, Stembridge is a co-owner of BEK Catering and refers to himself as the firm’s “Managing Partner.” As alleged in the complaint, Stembridge has ultimate authority over all of the firm’s operations, including major financial expenditures, production processes, product distribution, and employee supervision. The complaint further alleged that Huxen is a co-owner of BEK Catering, responsible for BEK Catering’s compliance with FDA’s seafood processing regulations and training new employees, and shares responsibility with Stembridge for the firm’s operations.
As alleged in the complaint, the defendants caused the company’s food to become adulterated in that it was prepared, packed, or held under insanitary conditions whereby it may have become contaminated with filth, or whereby it may have been rendered injurious to health. For example, according to the complaint, during a 2015 inspection, FDA determined that the defendants failed to have adequate control over the risk of C. botulium and C. perfringens growth and toxin formation, failed to have adequate control over the risk of L. mono growth, and failed to have adequate control over the hazards posed by major food allergens and food additives.
C. botulinum is a bacterium that forms spores capable of producing a potent neurotoxin in food. People are susceptible to C. botulinum’s neurotoxin, and ingestion of even a small amount of the neurotoxin can cause botulism. Although the incidence of botulism is rare, the disease can cause paralysis and has a high mortality rate if treatment is not prompt and appropriate.
C. perfringen is a bacterium that causes foodborne illness. High doses of this bacterium can form a toxin in the digestive tract that results in illness. People can be sickened by C. perfringens’ toxin, which causes diarrhea and abdominal cramps and can produce more severe symptoms in the young and elderly.
L. mono. is the bacterium that causes listeriosis, a disease commonly contracted by eating food contaminated with L. mono. Listeriosis can be serious, even fatal, for vulnerable groups such as newborns and people with impaired immune systems. The most serious forms of listeriosis can result in meningitis and septicemia. Pregnant women may contract flu-like symptoms from listeriosis, and complications from the disease can result in miscarriage, or a life-threatening infection in the newborn.
As noted in the complaint, FDA has conducted five inspections of BEK Catering’s various manufacturing facilities dating back to 2011, and during each inspection, FDA found similar types of insanitary conditions and repeated violations of seafood Hazard Analysis and Critical Control Point regulations and current Good Manufacturing Practice regulations.
The government is represented by Counsel Melanie Singh of the Civil Division’s Consumer Protection Branch with the assistance of Senior Chief Counsel Claudia Zuckerman 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.
Three Georgia Real Estate Investors Plead Guilty to Bid Rigging and Bank Fraud at Public Home Foreclosure AuctionsRead the Press Release
Three Georgia real estate investors pleaded guilty today for their roles in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia, the Department of Justice announced today.
Jeffrey Wayne Brock, David Wallace “Chuck” Doughty, and Stanley Ralph Sullivan each admitted that they agreed to rig auctions of foreclosed homes in Cobb County from June 2007 until January 2012. According to court documents filed in the U.S. District Court for the Northern District of Georgia, Brock, Doughty, Sullivan and their 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 made payoffs to 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 owners of foreclosed homes.
“These defendants conspired to corrupt foreclosure auctions that should have benefited lenders and homeowners,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division. “The Antitrust Division will continue to work with our colleagues at the FBI to pursue those who took advantage of disruption caused by the financial crisis to line their own pockets.”
“Foreclosure auction fraud in Georgia remains a focus for the FBI investigators and federal prosecutors within the Antitrust Division of the U.S. Department of Justice,” said Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Division. “By the very nature of this criminal act, the bank, and more importantly, the home owner in financial distress, are the victims that these federal laws were created to protect. The FBI will continue to provide investigative assets toward these matters in order to keep the level playing field that the law intended regarding these auctions.”
Including the individuals pleading today, twenty defendants have been charged in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area. Eighteen of those have either pleaded guilty or agree 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 its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. 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.
Fresno Man Convicted on Two Counts of Receiving and Distributing Child PornographyRead the Press Release
FRESNO, Calif. — Late Wednesday afternoon, after a two–day trial, a federal jury found Alfonso Hernandez, 58, of Fresno, guilty of two counts of receiving and distributing child pornography, Acting United States Attorney Phillip A. Talbert announced.
According to evidence presented at trial, in January 2012, agents identified Hernandez’s computer making over 500 separate child pornography files publicly available online to other users within a peer-to-peer file sharing network. A search warrant was executed at Hernandez’s residence, and in a bedroom secured with a deadbolt lock, agents seized a computer and external hard drives that were found to contain child pornography. Ultimately, it was determined that Hernandez had downloaded and shared thousands of child pornography files onto these devices. Hernandez was arrested in September 2014 and has been in custody since that time.
This case is the product of an investigation by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Kings County District Attorney’s Office of Investigation, and the Fresno Police Department. Assistant United States Attorneys Brian W. Enos and Vincenza Rabenn are prosecuting the case.
“Defendants who distribute child pornography prey on innocent victims from behind their screens where they often think they cannot be found,” said Ryan L. Spradlin, special agent in charge of HSI San Francisco. “Together with our law enforcement partners, we remain vigilant in our tireless efforts to root out child predators from the shadows that they lurk.”
Hernandez is scheduled to be sentenced by United States District Judge Dale A. Drozd on October 17, 2016. Hernandez faces a mandatory minimum sentence of five years in prison, a maximum statutory penalty of 20 years in prison and a $250,000 fine regarding each count. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.
Nevada Dentist Sentenced to Prison for Tax FraudRead the Press Release
A Las Vegas-area dentist was sentenced today to 13 months in prison for tax evasion, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.
Leslie Kotler, 56, pleaded guilty in June 2014 to evading his taxes over a nine year period, causing a $600,000 tax loss and admitted to using a number of nominee bank accounts and bogus trusts to hide his income and assets from the Internal Revenue Service (IRS). Kotler also filed false income tax returns for the years 2008 through 2011 that materially understated his income and filed a false bankruptcy petition in an attempt to delay the IRS’s ongoing efforts to collect the large amount of taxes he owned.
“With today’s sentence, Mr. Kotler is held accountable and pays a heavy price for his egregious conduct in evading both the assessment and payment of taxes,” said Acting Assistant Attorney General Ciraolo. “The court’s sentence reflects the serious harm caused by those who fail to comply with our nation’s tax laws and will serve to deter other individuals contemplating similar criminal conduct.”
“Leslie Kotler’s attempt to evade taxes by hiding income and filing false tax returns was a theft from the American public,” said Acting Special Agent in Charge Michael Brock of the IRS-Criminal Investigation Las Vegas Field Office. “To build faith in our nation’s tax system, honest taxpayers need to be reassured that everyone is paying their fair share. The IRS-Criminal Investigation Division, along with the Department of Justice, will investigate and prosecute those who violate our tax system.”
In addition to the term of imprisonment, U.S. District Judge Andrew Gordon of the District of Nevada ordered Kotler to serve three years of supervised release and pay restitution in the amount of $712,280. Before his sentencing, Kotler paid a total of $450,429 in back taxes, interest and fraud penalties.
Acting Assistant Attorney General Ciraolo thanked special agents of IRS-Criminal Investigations, who investigated the case and Tax Division Trial Attorney Thomas W. Flynn, who is prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Maryland Tax Return Preparer Sentenced to Prison for Preparing and Filing False Tax ReturnsRead the Press Release
A Baltimore, Maryland, tax return preparer was sentenced today to serve 20 months in prison for aiding and assisting in the preparation of false tax returns for others, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
On February 8, following a five day trial, a federal jury convicted Charles Imariagbe of 15 counts of aiding and assisting in the preparation of false income tax returns. According to court documents and the evidence presented at trial, between 2008 and 2012, Imariagbe operated a tax preparation business in Baltimore called JC Tax Service Inc. During that time, Imariagbe prepared false individual income tax returns for at least seven clients for submission to the Internal Revenue Service (IRS). These tax returns claimed false and fraudulent income and expenses from Schedule C businesses and grossly inflated or wholly fictitious mileage expenses. The false items on these returns resulted in the clients receiving larger tax refunds than they were entitled to receive.
In addition to the prison term, U.S. District Judge Ellen L. Hollander ordered Imariagbe to serve three years of supervised release and pay restitution to the IRS in the amount of $151,927.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Andrew Kameros and Brittney Campbell of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Justice Department Partners with Republic of El Salvador to Combat Employment DiscriminationRead the Press Release
The Justice Department and the Republic of El Salvador established a formal partnership today to protect workers from discrimination based on citizenship, immigration status and national origin. Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and Salvadoran Ambassador Claudia Canjura De Centeno signed a memorandum of understanding (MOU) between the embassy and its consulates and the division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC).
As part of the MOU, OSC and the Salvadoran government will collaborate to educate workers about their employment rights and to provide them with the resources needed to protect those rights. Additionally, the MOU seeks to promote training for employers on their obligations under the anti-discrimination provision of the Immigration and Nationality Act (INA), which prohibits employment discrimination based on citizenship, immigration status and national origin. Specifically, the MOU provides that:
- OSC will train Salvadoran consular staff on the anti-discrimination provision of the INA, participate in events organized by Salvadoran consulates to educate workers and employers and distribute educational materials to the embassy and its consulates.
- The embassy will establish a system for referring discrimination claims from the embassy and consulates to OSC.
“We welcome our newest partner to help the Civil Rights Division combat unlawful discrimination against workers employed in the United States and we value the ability to work together to achieve this important goal,” said Principal Deputy Assistant Attorney General Gupta. “We hope that formalizing our partnership with El Salvador will send a clear message to workers that we are eager to assist them.”
Today’s agreement is particularly useful due to the large number of Salvadoran nationals with temporary protected status (TPS), who are eligible to live and work in the United States, but who sometimes encounter discrimination by employers either based on their immigration status or national origin. TPS is a temporary immigration status granted to eligible nationals of a country designated for TPS under the INA. During the TPS designation period, TPS beneficiaries are authorized to work in the United States.
OSC is responsible for enforcing the anti-discrimination provision of the INA. Among other things, this law prohibits citizenship status and national origin discrimination in hiring, firing or recruitment or referral for a fee; discrimination in the employment eligibility verification process; retaliation and intimidation. In addition to its enforcement work, OSC educates the public on rights and responsibilities under the INA’s anti-discrimination provision. More information on OSC is available at www.justice.gov/crt/about/osc.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email [email protected] or visit OSC’s website at www.justice.gov/crt/about/osc.
Georgia Man Pleads Guilty to Using Stolen Identities to File False Tax ReturnsRead the Press Release
A Marietta, Georgia, resident pleaded guilty in the U.S. District Court for the Northern District of Georgia today to one count of theft of public money and one count of aggravated identity theft, announced Acting 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.
Peter Isika, 46, admitted using stolen identities to file at least 50 false tax returns for tax years 2013 and 2014 claiming more than $500,000 in fraudulent refunds. Isika admitted that he purchased the stolen identities over the Internet and used those identities to obtain the fraudulent tax refunds. Isika directed the refunds to prepaid debit cards or bank accounts that he controlled.
A sentencing date has not been scheduled for Isika. He faces a statutory maximum sentence of 10 years in prison for the theft of public money charge and an additional statutory mandatory sentence of two years in prison for aggravated identity theft. He also faces a term of supervised release and monetary penalties.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Horn commended special agents of the Internal Revenue Service-Criminal Investigation and U.S. Treasury Inspector General for Tax Administration, who investigated the case and Trial Attorneys Jason Poole and Mara Strier of the Tax Division and Assistant U.S. Attorney Kamal Ghali, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Florida Cardiologist and His Practice Pay Millions and Agree to Three Years of Exclusion to Resolve Alleged False Billings for Unnecessary Procedures and Illegal KickbacksRead the Press Release
An Ocala, Florida, cardiologist, Dr. Asad Qamar, and his practice, the Institute of Cardiovascular Excellence (ICE), will pay $2 million, plus release any claim to $5.3 million in suspended Medicare funds, to resolve a lawsuit alleging that they improperly billed Medicare, Medicaid and TRICARE for medically unnecessary procedures, and paid kickbacks to patients by waiving Medicare copayments irrespective of financial hardship, the Justice Department announced today. Dr. Qamar also agreed to a three-year period of exclusion from participating in any federal health care program followed by a three-year Integrity Agreement with the Department of Health and Human Services Office of the Inspector General (HHS-OIG). The settlement relates to two consolidated lawsuits in which the United States intervened on Dec. 22, 2014.
“Billing federal health programs for medically unnecessary procedures is unacceptable – not only does it waste taxpayer funds, but it also puts patients at risk,” said Principal Deputy Assistant Attorney General, Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Today’s settlement evidences the Department of Justice’s firm commitment to protect public funds and to safeguard the well-being of federal health care program beneficiaries.”
The settlement resolves the government’s lawsuit claiming that Dr. Qamar and ICE billed Medicare, Medicaid and TRICARE for excessive, medically unnecessary and inadequately documented peripheral artery interventional services and related procedures. Many of the cardiovascular procedures for which Dr. Qamar and ICE billed Medicare and the other programs were not indicated by patients’ medical histories or records, or the severity of the patients’ symptoms.
The government also alleged that to help facilitate this false billing scheme, Dr. Qamar and ICE routinely and indiscriminately waived the 20 percent Medicare copayment, irrespective of the patient’s financial need. Medicare copayments assure that patients have an incentive to be smart healthcare consumers and avoid unnecessary procedures. By waiving the required copayments indiscriminately, Dr. Qamar and ICE induced patients to agree to unnecessary and invasive procedures and other services. Dr. Qamar’s and ICE’s illegal conduct made Dr. Qamar the highest paid Medicare cardiologist in the country in 2012 and 2013.
“Patient safety is of paramount importance,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida. “When a doctor performs medically unnecessary and invasive procedures on Medicare patients, federal healthcare programs are defrauded and, more importantly, patients’ lives and wellbeing are recklessly put at risk. This case shows our office’s steadfast commitment to holding medical providers personally responsible for their actions.”
“When medical professionals act on greed to perform unnecessary, invasive procedures on Medicare and Medicaid patients, both patient health and taxpayer funds are compromised,” said Special Agent in Charge Shimon R. Richmond of HHS-OIG. “Our agents and investigators will continue to work hard with our law enforcement partners to ensure that health care providers who engage in such illegal behavior are held accountable.”
The allegations resolved by today’s settlement were originally raised in two lawsuits filed pursuant to the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in these cases. The cases are captioned United States ex rel. Doe v. Institute of Cardiovasular Excellence, PLLC, ICE Holdings, PLLC, Dr. Asad Qamar, & Dr. Humera Qamar, Case No. 5:11-CV-406-OC-KRS (M.D. Fla.); United States ex rel. Taylor & the State of Florida v. Institute of Cardiovascular Excellence & Dr. Asad Qamar, Case No. 8:14-CV-1454-T-35-EAS (M.D. Fla.). The relators Dr. Robert A. Green and Ms. Holly A. Taylor will receive $1,327,721 as their share of 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 $29.9 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.
This case was handled by the Commercial Litigation Branch of the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Middle District of Florida, HHS-OIG, and the Defense Health Agency on behalf of the TRICARE program. The claims asserted by the government are allegations only, and there has been no determination of liability.
Federal Court Permanently Shuts Down South Florida Tax Return PreparerRead the Press Release
A federal court in Fort Lauderdale, Florida, has permanently barred a Broward County man from preparing federal tax returns for others, the Justice Department announced today.
The United States filed a civil complaint against Eli St. Phard of Oakland Park, Florida, in April. The complaint alleged that he prepared income tax returns that fraudulently understated his customers’ tax liabilities by falsely claiming deductions for business expenses his customers never incurred; fraudulently overstating his customers’ claims for refunds by falsely claiming education or fuel tax credits to which his customers were not entitled; or both. According to the complaint, the Internal Revenue Service (IRS) audited 340 of the returns St. Phard prepared and found that St. Phard understated the tax owed on all but five of the 340 returns—a total of more than $1.8 million in understatements. As a result of St. Phard’s fraudulent activities, many of his customers are now liable for significant tax deficiencies, penalties and interest, the complaint alleged.
In addition to barring St. Phard from preparing federal tax returns, the court ordered St. Phard to give the United States a list of his customers. St. Phard consented to entry of the order by the U.S. District Court for the Southern District of Florida. St. Phard admitted, for purposes of this case, that he had engaged in conduct subject to penalty under the federal tax laws, but he did not admit to civil or criminal wrongdoing or to the specific allegations in the complaint.
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.
El Departamento de Justicia Colabora con la República de El Salvador para Combatir la Discriminación en el EmpleoRead the Press Release
WASHINGTON – El Departamento de Justicia y la República de El Salvador establecieron hoy una asociación formal para proteger a trabajadores de la discriminación por motivos de su ciudadanía, estatus migratorio o nacionalidad de origen. La Secretaria de Justicia Auxiliar Adjunta Principal, Vanita Gupta, Directora de la División de Derechos Civiles del Departamento de Justicia y la embajadora salvadoreña, Claudia Canjura De Centeno, firmaron un memorando de entendimiento (MOU, por sus siglas en inglés) entre la embajada y sus consulados y la Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas con la Inmigración (OSC, por sus singlas en inglés), que pertenece a la División.
Como parte del MOU, la OSC y el gobierno salvadoreño se comprometen a colaborar para educar a los trabajadores acerca de sus derechos y brindarles los recursos necesarios para proteger tales derechos. Asimismo, el MOU promueve la capacitación para empleadores en cuanto a sus obligaciones al amparo de la ley de Inmigración y Nacionalidad (INA, por sus siglas en inglés), que prohíbe la discriminación en el empleo por motivos de ciudadanía, estatus migratorio o nacionalidad de origen. En concreto, el MOU dispone que:
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La OSC capacitará al personal consular salvadoreño en lo que se refiere a la disposición de la INA, participará en eventos organizados por los consulados salvadoreños para educar a los trabajadores y empleadores y distribuirá materiales educativos a la embajada y sus consulados.
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La embajada establecerá un sistema para referir denuncias de discriminación recibidas en la embajada y sus consulados a la OSC.
“Damos la bienvenida a este socio nuevo que ayudará a la División de Derechos Civiles a combatir la discriminación ilícita en contra de empleados que trabajan en los Estados Unidos y sinceramente apreciamos la oportunidad de alcanzar esta meta tan importante,” declaró la Secretaria de Justicia Auxiliar Adjunta Principal, Vanita Gupta. “Esperamos que la formalización de nuestra asociación con El Salvador mande un mensaje claro a los trabajadores de nuestras ganas de ayudarlos.”
El acuerdo de hoy resulta particularmente útil por el gran número de nacionales salvadoreños con el estatus de protección temporal (TPS, por sus siglas en inglés), los cuales son elegibles para vivir y trabajar en los Estados Unidos pero quienes a veces son discriminados por sus empleadores, ya sea por motivos de su estatus migratorio o por su nacionalidad de origen. El TPS es un estatus migratorio temporal que se extiende a nacionales elegibles de un país designado para el TPS al amparo de la INA. Durante el período de duración del TPS, los beneficiarios del TPS cuentan con autorización para trabajar en los Estados Unidos.
La OSC es responsable de aplicar la disposición antidiscriminatoria de la INA. Entre otras cosas, esta ley prohíbe la discriminación por motivos de estatus de ciudadanía o nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión; la discriminación en el proceso de verificación de la elegibilidad de empleo; las represalias y la intimidación. Además de sus esfuerzos por aplicar la ley, la OSC se dedica a educar al público en cuanto a los derechos y las responsabilidades al amparo de la disposición antidiscriminatoria de la INA. Si desea más información sobre la OSC, vaya a www.justice.gov/crt/about/osc.
Para más información sobre protecciones contra la discriminación en el empleo en virtud de las leyes migratorias, llame a la línea directa de la OSC para trabajadores al 1‑800‑255-7688 (1‑800-237-2515, TTY para personas con discapacidades auditivas); llame a la línea directa de la OSC para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidades auditivas); matricúlese para un seminario en línea gratuito en www.justice.gov/crt/about/osc/webinars.php; mande un correo electrónico a [email protected] o visite la página web de la OSC en www.justice.gov/crt/about/osc.
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Attorney General Lynch and Facebook to Host Community Policing Town Hall in Los AngelesRead the Press Release
*******MEDIA ADVISORY*******
Attorney General Loretta E. Lynch and Facebook will hold a Community Policing Town Hall on Facebook Live at Facebook’s Playa Vista Campus, today, THURSDAY, JUNE 30, 2016, at 11:30 a.m. PT/2:30 p.m. ET. The town hall will be moderated by actor Michael B. Jordan, star of Creed and Fruitvale Station, with participation from actress Yara Shahidi, star of ABC’s Blackish. The town hall discussion will be live-streamed on the official Facebook Live page and the Justice Department’s social media platforms.
“One of my top priorities as Attorney General is strengthening relationships between law enforcement officers and the communities we serve and protect,” said Attorney General Lynch. “We are here on this stop of the Community Policing Tour to show how social media can be used as a vital tool to provide both transparency and opportunity for meaningful interactions into law enforcement thought and policy.”
This conversation style town hall marks the last official stop on the Attorney General’s 12-city Community Policing Tour and will highlight the social media and technology pillar of the President’s Task Force on 21st Century Policing final report. The town hall audience will consist of local high school juniors, seniors, college students and LAPD “cadets” – young people who volunteer to work at the LAPD – and 15 officers from the Hollenbeck Police Activities League and LA Sheriff Department.
Attorney General Loretta E. Lynch will travel to Aspen, Colorado, on FRIDAY, JULY 1, 2016, to participate in a moderated arm chair conversation on 21st Century Policing, Civil Rights and Criminal Justice Reform with Jonathan Capehart of the Washington Post at the 2016 Aspen Ideas Festival.
FACEBOOK TOWN HALL
WHO: Attorney General Loretta E. Lynch
Michael B. Jordan
Yara Shahidi
WHEN: THURSDAY, JUNE 30, 2016
11:30 a.m. PDT
WHERE: Facebook Playa Vista Campus
12025 Waterfront Dr.
Los Angeles, CA 90094
POOLED PRESS: Network Pool KABC-ABC Affiliate
LIVE STREAMED ON: https://www.facebook.com/DOJ.
NOTE: Press inquiries regarding logistics should be directed to [email protected].
Background on the Community Policing Tour:
Including Los Angeles, the Attorney General visited six jurisdictions around the country during this second phase of the tour that have excelled in each of the six pillars discussed in the President’s Task Force on 21st Century Policing final report: (1) Building Trust and Legitimacy; (2) Policy and Oversight; (3) Technology and Social Media; (4) Community Policing and Crime Reduction; (5) Officer Training and Education; and (6) Officer Safety and Wellness. The trip to Los Angeles highlighted Pillar 3 – Technology and Social Media. Attorney General Lynch launched the tour in February in Miami Dade County, Florida, and she visited Portland, Oregon, in March as well as Indianapolis, Indiana, in April. The Attorney General visited Phoenix on Tuesday and is concluding the second phase of the tour with this last stop in Los Angeles.
COMMUNITY POLICING TOUR
- Pillar 1 – Miami/Doral, Florida – Building Trust and Legitimacy
- Pillar 2 – Fayetteville, North Carolina – Policy and Overnight
- Pillar 3 – Los Angeles, California – Technology and Social Media
- Pillar 4 – Portland, Oregon – Community Policing and Crime Reduction
- Pillar 5 – Phoenix, Arizona – Training and Education
- Pillar 6 – Indianapolis, Indiana – Officer Safety and Wellness
More information on the #CommunityPolicing tour is available at the following page: http://www.justice.gov/ag/community-policing-tour.
The Attorney General’s national Community Policing Tour builds on President Obama’s commitment to engage with law enforcement and other members of the community to implement key recommendations from the President’s Task Force on 21st Century Policing final report. The first phase of the tour launched on May 19, 2015, in Cincinnati, Ohio, and also included visits to Birmingham, Alabama; Pittsburgh, Pennsylvania; East Haven, Connecticut; Seattle, Washington; and Richmond, California.
Upstate New York Couple Indicted in Tax Fraud SchemeRead the Press Release
A federal grand jury yesterday returned a four count indictment in the Western District of New York charging two business owners with conspiracy to defraud the United States and filing a false tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney William J. Hochul Jr for the Western District of New York.
According to the indictment, Lizhong “Tony” Shen and Xiaojie “Lucy” Shun, jointly operated BTL International Company Ltd., a tour and travel service company located in Niagara Falls, New York, between April 2004 and November 2009. The defendants were married at the time but, in 2009, they separated and Shen stopped working for BTL International. In January 2011, Shun ceased operation of BTL International and began operating another tour and travel service company, Niagara Falls Universal Inc.
For the tax years 2008 and 2009, Shen and Shun failed to properly report income generated by BTL International to the IRS on both corporate and personal tax returns. Both defendants also signed their 2009 personal tax return knowing the return included incorrect information. Shen and Shun reported income in the amount of $22,880 but it is alleged they knowingly received a significantly higher income.
In addition, Shun is charged with corruptly endeavoring to obstruct the due administration of the internal revenue laws. The indictment charges that, from April 2010 through April 2013, Shun provided inaccurate information to the accounting firm preparing the 2011 tax return for Niagara Falls Universal, the 2010 and 2011 personal tax returns for the couple and the 2012 tax return for herself.
The defendants face a maximum prison term of five years on the charge of conspiracy to defraud the United States and three years for each charge of filing a false return. Shun faces an additional three year term in prison for the charge of corruptly endeavoring to obstruct the due administration of the internal revenue laws. Both defendants also face a term of supervised release and monetary penalties.
An indictment merely alleges that crimes have been committed. Defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Hochul commended special agents of the IRS- Criminal Investigation Division, under the direction of Special Agent in Charge Shantelle P. Kitchen, who are investigating the case, and Assistant U.S. Attorney Trini E. Ross and Thomas F. Koelbl of the Tax Division, who are prosecuting the case.
Two Georgia Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Home Foreclosure AuctionsRead the Press Release
Two Georgia real estate investors pleaded guilty today for their roles in bid-rigging and fraud conspiracies committed at public real estate foreclosure auctions in Georgia, the Department of Justice announced today.
Michael Stock and Jon Stovall Jr. each admitted that they agreed with other real estate investors to refrain from bidding against one another at public real estate foreclosure auctions in exchange for payoffs. Stock admitted to participating in the conspiracy in Fulton and DeKalb counties from as early as August 2009 until at least November 2011, and Stovall admitted to participating in Fulton County from as early as October 2008 until at least January 2012. Additionally, Stock and Stovall admitted to conspiring to use the mail to carry out a scheme to defraud homeowners and mortgage holders.
According to court documents filed today in the U.S. District Court for the Northern District of Georgia, the conspirators agreed not to compete against each other at public real estate foreclosure auctions, artificially suppressed the prices of properties sold at these auctions, and made and received payoffs from each other. As a result, the conspirators seized money that otherwise would have gone to pay off the mortgage and other secured debt holders, and, in some cases, to the previous owner of the foreclosed home.
“These defendants conspired to take money that rightfully belonged to homeowners and lenders,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division. “Those homeowners and lenders have a right to expect that the properties will be sold in free and competitive auctions. The Antitrust Division will continue to partner with our colleagues at the FBI to aggressively pursue conduct designed to disrupt that process.”
“Foreclosure auction fraud in Georgia remains a focus for the FBI investigators and federal prosecutors within the Antitrust Division of the U.S. Department of Justice. By the very nature of this criminal act, the bank, and more importantly, the home owner in financial distress, are the victims that these federal laws were created to protect. The FBI will continue to provide investigative assets toward these matters in order to keep the level playing field that the law intended regarding these auctions.”
Including the individuals pleading today, 20 defendants have been charged in connection with the department’s ongoing investigation into bid rigging and fraudulent schemes involving real estate foreclosure auctions in the Atlanta area. Eighteen 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 its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. 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.
Resident of Montana and Nevada Charged in Stolen Identity Tax Fraud SchemeRead the Press Release
A federal grand jury in the District of Montana returned an indictment on May 18, which was unsealed yesterday, charging a resident of Montana and Nevada with one count of corrupt interference with the internal revenue laws, 10 counts of theft of government money and six counts of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Michael W. Cotter of the District of Montana.
According to the indictment, from approximately April 2010 through at least September 2014, Steven D. Pjevach, filed false and fraudulent income tax returns using names and social security numbers that he obtained by posting false help-wanted advertisements on Craigslist. As part of his scheme, Pjevach opened and caused to be opened bank accounts in other individuals’ names to receive the fraudulently obtained tax refunds. Pjevach provided false information to these individuals about the reason why he was using their bank accounts and advised one of these individuals to disregard bank correspondence that advised this individual that his bank account was being used to obtain tax refunds.
If convicted, Pjevach faces a statutory maximum sentence of three years in prison on the charge of corrupt interference with the internal revenue laws, 10 years in prison for each count of theft of government money and a mandatory sentence of two years in prison for each count of aggravated identity theft, which will be in addition to any other term of imprisonment he receives. He also faces supervised release, a fine and restitution.
An indictment merely alleges that crimes have been committed. Defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Cotter commended special agents of Internal Revenue Service-Criminal Investigation, who investigated the case and Trial Attorney John T. Mulcahy of the Tax Division and Assistant U.S. Attorney Chad C. Spraker of the District of Montana, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Volkswagen to Spend up to $14.7 Billion to Settle Allegations of Cheating Emissions Tests and Deceiving Customers on 2.0 Liter Diesel VehiclesRead the Press Release
In two related settlements, one with the United States and the State of California, and one with the U.S. Federal Trade Commission (FTC), German automaker Volkswagen AG and related entities have agreed to spend up to $14.7 billion to settle allegations of cheating emissions tests and deceiving customers. Volkswagen will offer consumers a buyback and lease termination for nearly 500,000 model year 2009-2015 2.0 liter diesel vehicles sold or leased in the U.S., and spend up to $10.03 billion to compensate consumers under the program. In addition, the companies will spend $4.7 billion to mitigate the pollution from these cars and invest in green vehicle technology.
The settlements partially resolve allegations by the Environmental Protection Agency (EPA), as well as the California Attorney General’s Office and the California Air Resources Board (CARB) under the Clean Air Act, California Health and Safety Code, and California’s Unfair Competition Laws, relating to the vehicles’ use of “defeat devices” to cheat emissions tests. The settlements also resolve claims by the FTC that Volkswagen violated the FTC Act through the deceptive and unfair advertising and sale of its “clean diesel” vehicles. The settlements do not resolve pending claims for civil penalties or any claims concerning 3.0 liter diesel vehicles. Nor do they address any potential criminal liability.
The affected vehicles include 2009 through 2015 Volkswagen TDI diesel models of Jettas, Passats, Golfs and Beetles as well as the TDI Audi A3.
“By duping the regulators, Volkswagen turned nearly half a million American drivers into unwitting accomplices in an unprecedented assault on our environment,” said Deputy Attorney General Sally Q. Yates. “This partial settlement marks a significant first step towards holding Volkswagen accountable for what was a breach of its legal duties and a breach of the public’s trust. And while this announcement is an important step forward, let me be clear, it is by no means the last. We will continue to follow the facts wherever they go.”
“Today’s settlement restores clean air protections that Volkswagen so blatantly violated,” said EPA Administrator Gina McCarthy. “And it secures billions of dollars in investments to make our air and our auto industry even cleaner for generations of Americans to come. This agreement shows that EPA is committed to upholding standards to protect public health, enforce the law, and to find innovative ways to protect clean air.”
“Today’s announcement shows the high cost of violating our consumer protection and environmental laws,” said FTC Chairwoman Edith Ramirez. “Just as importantly, consumers who were cheated by Volkswagen’s deceptive advertising campaign will be able to get full and fair compensation, not only for the lost or diminished value of their car but also for the other harms that VW caused them.”
According to the civil complaint against Volkswagen filed by the Justice Department on behalf of EPA on January 4, 2016, Volkswagen allegedly equipped its 2.0 liter diesel vehicles with illegal software that detects when the car is being tested for compliance with EPA or California emissions standards and turns on full emissions controls only during that testing process. During normal driving conditions, the software renders certain emission control systems inoperative, greatly increasing emissions. This is known as a “defeat device.” Use of the defeat device results in cars that meet emissions standards in the laboratory, but emit harmful NOx at levels up to 40 times EPA-compliant levels during normal on-road driving conditions. The Clean Air Act requires manufacturers to certify to EPA that vehicles will meet federal emission standards. Vehicles with defeat devices cannot be certified.
The FTC sued Volkswagen in March, charging that the company deceived consumers with the advertising campaign it used to promote its supposedly “clean diesel” VWs and Audis, which falsely claimed that the cars were low-emission, environmentally friendly, met emissions standards and would maintain a high resale value.
The settlements use the authorities of both the EPA and the FTC as part of a coordinated plan that gets the high-polluting VW diesels off the road, makes the environment whole, and compensates consumers.
The settlements require Volkswagen to offer owners of any affected vehicle the option to have the company buy back the car and to offer lessees a lease cancellation at no cost. Volkswagen may also propose an emissions modification plan to EPA and CARB, and if approved, may also offer owners and lessees the option of having their vehicles modified to substantially reduce emissions in lieu of a buyback. Under the U.S./California settlement, Volkswagen must achieve an overall recall rate of at least 85% of affected 2.0 liter vehicles under these programs or pay additional sums into the mitigation trust fund. The FTC order requires Volkswagen to compensate consumers who elect either of these options.
Volkswagen must set aside and could spend up to $10.03 billion to pay consumers in connection with the buy back, lease termination, and emissions modification compensation program. The program has different potential options and provisions for affected Volkswagen diesel owners depending on their circumstances:
Buyback option: Volkswagen must offer to buy back any affected 2.0 liter vehicle at their retail value as of September 2015 -- just prior to the public disclosure of the emissions issue. Consumers who choose the buyback option will receive between $12,500 and $44,000, depending on their car’s model, year, mileage, and trim of the car, as well as the region of the country where it was purchased. In addition, because a straight buyback will not fully compensate consumers who owe more than their car is worth due to rapid depreciation, the FTC order provides these consumers with an option to have their loans forgiven by Volkswagen. Consumers who have third party loans have the option of having Volkswagen pay off those loans, up to 130 percent of the amount a consumer would be entitled to under the buyback (e.g., if the consumer is entitled to a $20,000 buyback, VW would pay off his/her loans up to a cap of $26,000).
EPA-approved modification to vehicle emissions system: The settlements also allow Volkswagen to apply to EPA and CARB for approval of an emissions modification on the affected vehicles, and, if approved, to offer consumers the option of keeping their cars and having them modified to comply with emissions standards. Under this option in accordance with the FTC order, consumers would also receive money from Volkswagen to redress the harm caused by VW’s deceptive advertising.
Consumers who leased the affected cars will have the option of terminating their leases (with no termination fee) or having their vehicles modified if a modification becomes available. In either case, under the FTC order, these consumers also will receive additional compensation from Volkswagen for the harm caused by VW’s deceptive advertising. Consumers who sold their TDI vehicles after the VW defeat device issue became public may be eligible for partial compensation, which will be split between them and the consumers who purchased the cars from them as set forth in the FTC order.
Eligible consumers will receive notice from VW after the orders are entered by the court this fall. Consumers will be able to see if they are eligible for compensation and if so, what options are available to them, at VWCourtSettlement.com and AudiCourtSettlement.com. They will also be able to use these websites to make claims, sign up for appointments at their local Volkswagen or Audi dealers and receive updates. Consumer payments will not be available until the settlements take effect if and when approved by the court, which may be as early as October 2016.
Emissions Reduction Program: The settlement of the company’s Clean Air Act violations also requires Volkswagen to pay $2.7 billion to fund projects across the country that will reduce emissions of NOx where the 2.0 liter vehicles were, are or will be operated. Volkswagen will place the funds into a mitigation trust over three years, which will be administered by an independent trustee. Beneficiaries, which may include states, Puerto Rico, the District of Columbia, and Indian tribes, may obtain funds for designated NOx reduction projects upon application to the Trustee. Funding for the designated projects is expected to fully mitigate the NOx these 2.0 liter vehicles have and will emit in excess of EPA and California standards.
The emissions reduction program will help reduce NOx pollution that contributes to the formation of harmful smog and soot, exposure to which is linked to a number of respiratory- and cardiovascular-related health effects as well as premature death. Children, older adults, people who are active outdoors (including outdoor workers), and people with heart or lung disease are particularly at risk for health effects related to smog or soot exposure. NO2 formed by NOx emissions can aggravate respiratory diseases, particularly asthma, and may also contribute to asthma development in children.
Zero Emissions Technology Investments: The Clean Air Act settlement also requires VW to invest $2 billion toward improving infrastructure, access and education to support and advance zero emission vehicles. The investments will be made over 10 years, with $1.2 billion directed toward a national EPA-approved investment plan and $800 million directed toward a California-specific investment plan that will be approved by CARB. As part of developing the national plan, Volkswagen will solicit and consider input from interested states, cities, Indian tribes and federal agencies. This investment is intended to address the adverse environmental impacts from consumers’ purchases of the 2.0 liter vehicles, which the governments contend were purchased under the mistaken belief that they were lower emitting vehicles.
FTC’s Injunctive Relief: The FTC settlement includes injunctive provisions to protect consumers from deceptive claims in the future. These provisions prohibit Volkswagen from making any misrepresentations that would deceive consumers about the environmental benefits or value of its vehicles or services, and the order specifically bans VW from employing any device that could be used to cheat on emissions tests.
The provisions of the U.S./California settlement are contained in a proposed consent decree filed today in the U.S. District Court for the Northern District of California, as part of the ongoing multi-district litigation, and will be subject to public comment period of 30 days, which will be announced in the Federal Register in the coming days. The provisions of the FTC settlement are contained in a proposed Stipulated Final Federal Court Order filed today in the same court.
To view the consent decree, visit: www.justice.gov/enrd/consent-decrees
To view the FTC proposed order, visit: https://www.ftc.gov/enforcement/cases-proceedings/162-3006/volkswagen-group-america-inc.
Consumer Fact Sheet
VW Partial 2L CD and Appendices
VW Notice of Lodging
Texas Woman Sentenced to Prison for Tax FraudRead the Press Release
Manager of North Carolina Tax Preparation Business Underreported Net Profits
A Fulshear, Texas, woman was sentenced to 40 months in prison today following her conviction on three counts of filing false federal tax returns and one count of corruptly endeavoring to obstruct and impede the due administration of the internal revenue laws, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Tamny Denise Westbrooks, 53, was convicted in November 2015 after a four-day jury trial in the U.S. District Court for the Southern District of Texas. According to the evidence at trial and court documents, Westbrooks was the day-to-day manager of JATS Tax Service, a tax preparation business located in Charlotte, North Carolina. Westbrooks, who worked for JATS as an independent contractor, underreported her net profits by inflating her business expenses for tax years 2007, 2008 and 2009. She also obstructed and impeded the Internal Revenue Service (IRS) by filing false tax returns for herself and others and by paying workers in cash while failing to file the required W-2 or 1099 forms reporting their compensation.
In addition to her term of imprisonment, Westbrooks was ordered to serve one year of supervised release and to pay restitution in the amount of $273,460 to the IRS.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Sean Beaty and Mara Strier of the Justice Department’s Tax Division, who prosecuted the case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office of the Southern District of Texas for their substantial assistance.
Justice Department Settles Immigration-Related Discrimination Claim Against Seed CompanyRead the Press Release
The Justice Department reached an agreement today with Crookham Company to resolve the department’s allegations that the company discriminated against work-authorized non-U.S. citizens, in violation of the Immigration and Nationality Act (INA). Crookham, which is based in Caldwell, Idaho, is a seed company that produces hybrid sweet corn, popcorn and onions.
The department’s investigation found that Crookham discriminated against non-U.S. citizens by requiring them to produce either a permanent resident card or employment authorization card to prove their work authorization, whereas U.S. citizens were permitted to choose whichever valid documentation they wanted to present to prove their work authorization. Under the INA, all workers, including non-U.S. citizens, can choose whichever valid documentation they would like to present from the lists of acceptable documents to prove their work authorization. It is unlawful for an employer to limit employees’ choice of documentation because of their citizenship or immigration status.
“We commend Crookham Company for its cooperation throughout the investigation and for its quick action to remove any unnecessary and unlawful barriers to employment for work-authorized non-citizens,” said Principal Deputy Assistant Attorney General Vanity Gupta, head of the Justice Department’s Civil Rights Division. “The company’s approach and this settlement serve as a model for partnerships between the Justice Department and employers who want to do the right thing.”
Under the settlement agreement, Crookham will pay $200,000 in civil penalties to the United States and be subject to monitoring for a three-year period. Prior to the settlement, Crookham proactively underwent department-provided training on the anti-discrimination provision of the INA and voluntarily implemented other measures to ensure future compliance.
The Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits, among other things, citizenship status and national origin discrimination in hiring, firing or recruitment or referral for a fee; document abuse; retaliation and intimidation. The investigation was handled by Senior Equal Opportunity Specialist Alexandra A. Vince of OSC.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email [email protected] or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they were subjected to: different documentary requirements based on their citizenship status, immigration status or national origin; or discrimination based on their citizenship status, immigration status or national origin in hiring, firing or recruitment or referral, should contact the worker hotline above for assistance.
Crookham Company Settlement Agreement
Justice Department Reaches Agreement with Kentucky Courts to Ensure Equal Access for Non-English SpeakersRead the Press Release
The Justice Department announced today that it has reached an agreement with the Kentucky Administrative Office of the Courts to resolve its review of the provision of language assistance service to limited English proficient (LEP) state court users.
The department began working with the Kentucky Administrative Office of the Courts after receiving a complaint alleging national origin discrimination under Title VI of the Civil Rights Act of 1964, following a state court judge’s failure to provide interpreter services to LEP parties. Title VI requires recipients of federal financial assistance, such as courts, to provide competent language services to LEP individuals in all court proceedings and operations.
During the course of the department’s review, the Kentucky Administrative Office of the Courts has strengthened its language access programming. Such efforts include creating and implementing a language services complaint system to be translated into a dozen non-English languages, training court staff on the importance of providing appropriate language services and developing systems to improve the efficiency and quality of interpreter services and translations.
As a condition of the agreement, the Kentucky Administrative Office of the Courts has agreed to a 12-month monitoring phase, during which it will provide quarterly updates to the department regarding any developments related to providing language services, as well as any new complaints alleging failure to provide appropriate language assistance services.
“I commend the Kentucky Administrative Office of the Courts for committing to ensure that all individuals, regardless of the language they speak, can fully and fairly access court services and proceedings,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “We look forward to working collaboratively to continue these critical efforts and ensure equal access to justice for all.”
The case was handled by Attorney Dylan Nicole de Kervor of the Civil Rights Division’s Federal Coordination and Compliance (FCS) Section.
The complaint was resolved as part of the FCS court initiative to ensure that state courts comply with Title VI’s language access requirements. No LEP individual should be denied justice because a court fails to provide language services. The FCS courts team provides policy guidance and technical assistance to state court systems and undertakes enforcement actions across the country.
For further information about FCS and Title VI, please visit https://www.justice.gov/crt/fcs. For additional LEP-related resources, please visit http://www.lep.gov/index.htm.
Kentucky Courts
Former Attorney Pleads Guilty to Participating in Fraudulent Mortgage Modification SchemeRead the Press Release
The Department of Justice announced that a former California licensed attorney pleaded guilty in U.S. District Court in Santa Ana, California, for his role in a multi-million dollar fraudulent mortgage modification scheme.
Ronald Rodis, 51, of Irvine, California, pleaded guilty before U.S. District Court Judge David O. Carter for the Central District of California to one count of conspiracy to commit mail and wire fraud.
“At the height of the mortgage crisis, this defendant and his co-conspirators preyed on desperate homeowners with a series of lies and false promises,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to prosecute individuals who target vulnerable victims for profit.”
“This defendant posed as an accomplished attorney who could provide quality legal services – and hope – to struggling homeowners,” said U.S. Attorney Eileen Decker of the Central District of California. “But the promises were bogus. Rodis Law Group made few efforts to assist homeowners, who paid thousands of dollars in last-ditch attempts to keep their homes, many of which entered foreclosure.”
Rodis admitted that, between October 2008 and June 2009, he participated in a scheme with Bryan D’Antonio, Charles Wayne Farris, and others to induce homeowners to pay between $3,500 and $5,500 for the services of the Rodis Law Group (RLG). Rodis and his co-conspirators made numerous misrepresentations regarding the RLG’s ability to negotiate loan modifications from the homeowners’ mortgage lenders. Rodis recorded radio advertisements encouraging struggling homeowners to call RLG. In the radio ads, Rodis falsely claimed that RLG consisted of “a team of experienced attorneys” who were “highly skilled in negotiating lower interest rates and even lowering your principal balance.” In fact, RLG was a telemarketing operation that never had a team of experienced attorneys. During much of the scheme, Rodis was the only attorney at RLG.
When homeowners called RLG, telemarketers made further misrepresentations to convince the homeowners to hire RLG. Telemarketers stated that RLG had been in business for 11 years when in fact it had only opened in October 2008. They falsely stated that RLG routinely obtained positive results for homeowners, including lower monthly payments, reductions in principal balance and lower interest rates. In fact, positive results were rarely achieved for any RLG clients. Telemarketers also falsely reiterated that homeowners would have a team of attorneys and real estate professionals assigned to their case.
“It is an unfortunate truth that people often take advantage of a crisis for personal gain,” said Assistant Director in Charge Deirdre Fike of the FBI’s Los Angeles Field Office. “The Rodis Law Group was among the worst type of scammers, trying to take advantage of homeowners already experiencing profund heartache in the face of potential foreclosure. The FBI will not tolerate this kind of criminal behavior. I truly hope that when the next financial crisis arises, members of the public take a moment to look into claims that sound too good to be true, even if those claims are made by attorneys, before would-be clients become victims.”
Rodis’s co-defendants, Bryan D’Antonio and Charles Wayne Farris, are each charged with 10 felony counts – nine counts of wire fraud and one count of conspiracy. Each of these counts carries a statutory maximum penalty of 20 years in prison. In addition, D’Antonio is charged with 13 counts of criminal contempt for violating a 2001 federal court order, which permanently banned D’Antonio from participating in future telemarketing operations. Criminal contempt of court has no statutory maximum penalty. D’Antonio and Farris are scheduled for trial beginning Sept. 20.
This case was investigated by the FBI and is being prosecuted by Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Joseph T. McNally of the Central District of California.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Central District of California, visit its website at https://www.justice.gov/usao-cdca.
El Departamento de Justicia Realiza un Acuerdo con los Tribunales de Kentucky A Fin de Garantizar el Acceso Igualitario para Todas las Personas Que No Hablen InglésRead the Press Release
WASHINGTON, D.C. – El Departamento de Justicia anunció hoy que ha realizado un acuerdo con la Oficina Administrativa de Tribunales de Kentucky (en inglés) para resolver su revisión del suministro de servicios de apoyo lingüístico a usuarios del sistema judicial con conocimientos limitados del inglés [Limited English Proficient (LEP)].
El Departamento comenzó a trabajar con la Oficina Administrativa de Tribunales de Kentucky después de recibir una queja que alegaba discriminación por motivos de nacionalidad de origen al amparo el Título VI de la ley de Derechos Civiles de 1964, después de que un juez estatal dejara de brindar servicios de interpretación a partes LEP. El Título VI exige que los beneficiarios de asistencia financiera federal, tales como los tribunales, brinden servicios idiomáticos competentes a personas LEP en todos los procesos y trámites judiciales.
Durante la revisión realizada por el Departamento, la Oficina Administrativa de Tribunales de Kentucky ha fortalecido su programación de acceso lingüístico. Dicha iniciativa incluye la creación e implementación de un sistema de quejas relacionadas con los servicios lingüísticos, a ser traducido a una decena de idiomas que no sean el inglés, la capacitación del personal judicial en cuanto a la importancia de proveer servicios lingüísticos adecuados y el desarrollo sistemas que mejoren la eficiencia y calidad de los servicios de interpretación y las traducciones.
Como condición de la resolución, la Oficina Administrativa de Tribunales de Kentucky se ha comprometido a una fase de monitoreo de 12 meses de duración, durante la cual proveerá actualizaciones trimestrales al Departamento acerca de cualquier novedad asociada con la provisión de servicios lingüísticos, así como cualquier queja nueva que alegue que se dejaron de brindar servicios de apoyo lingüístico adecuados.
“Felicito a la Oficina Administrativa de Tribunales de Kentucky por comprometerse a asegurar que todas las personas, sin importar el idioma que hablen, puedan tener acceso integral y justo a servicios y procesos judiciales,” señaló la Secretaria de Justicia Auxiliar Adjunta Principal Vanita Gupta, Jefa de la División de Derechos Civiles del Departamento de Justicia. “Nos complacerá trabajar en conjunto para continuar con esta labor esencial y garantizar el acceso igualitario a la justicia para todos.”
Estuvo a cargo del caso el Abogado Dylan Nicole de Kervor de la Sección de Coordinación y Cumplimiento Federal [Federal Coordination and Compliance (FCS)] de la División de Derechos Civiles.
La queja fue resuelta como parte de la iniciativa judicial de la FCS para garantizar que los tribunales estatales cumplan con las exigencias de acceso lingüístico del Título VI. No se le debe negar la justicia a ninguna persona LEP porque el tribunal deje de proveer servicios lingüísticos. El equipo judicial de la FCS (en inglés) provee orientación sobre políticas y apoyo técnico a sistemas judiciales estatales e implementa acciones de aplicación de la ley en todo el país.
Para más información sobre la FCS y el Título VI, visite www.justice.gov/crt/fcs (en inglés). Para recursos adicionales relacionados con las personas LEP, visite www.lep.gov/index.htm (en inglés).
EOIR Swears in 15 Immigration JudgesRead the Press Release
FALLS CHURCH, VA – The Executive Office for Immigration Review (EOIR) today announced the investiture of 15 immigration judges. Acting Chief Immigration Judge Michael C. McGoings presided over the investiture during a ceremony held June 17, 2016, at the U.S. Court of Appeals for the Armed Forces in Washington, D.C.
After a thorough application process, Attorney General Loretta E. Lynch appointed Nathan N. Aina, John B. Carle, Barbara J. Cigarroa, John G. Crews II, John P. Ellington, Justin W. Howard, Alison R. Kane, James M. Left, Clay N. Martin, Donald C. O’Hare, Jeannette L. Park, Ana L. Partida, Georgina M. Picos, Jayme Salinardi, and Sandra J. Santos-Garcia to their new positions.
“We are pleased to welcome these 15 appointees to the immigration judge corps,” said McGoings. “Their arrival brings our immigration judge corps to 273 adjudicators, our highest level to date.”
Biographical information follows.
Nathan N. Aina, Immigration Judge, Los Angeles Immigration Court
Attorney General Loretta E. Lynch appointed Nathan N. Aina to begin hearing cases in June 2016. Judge Aina earned a Bachelor of Science degree in 1997, and a Master of Public Administration and a Juris Doctor in 2001, all from Brigham Young University. From 2002 to May 2016, Judge Aina served as an assistant chief counsel for Immigration and Customs Enforcement, Department of Homeland Security, entering on duty through the Attorney General’s Honors Program. Judge Aina is a member of the Utah State Bar.
John B. Carle, Immigration Judge, Philadelphia Immigration Court
Attorney General Loretta E. Lynch appointed John B. Carle to begin hearing cases in June 2016. Judge Carle earned a Bachelor of Arts degree in 1990 from the State University of New York at Binghamton and a Juris Doctor in 1993 from the State University of New York at Buffalo Law School. From 2007 to May 2016, Judge Carle served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security. From 2000 through 2007, Judge Carle served as an assistant district attorney for the City of Philadelphia District Attorney’s Office. From 1995 through 2000, Judge Carle served as an assistant district attorney for the Erie County District Attorney’s Office, in Buffalo, N.Y. From 1993 through 1995, Judge Carle served as an associate attorney for Magner, Love & Morris PC, in Buffalo, N.Y. In 2013, Judge Carle joined the faculty of the Villanova University School of Law where he serves as an adjunct professor. Judge Carle is a member of the Pennsylvania Bar.
Barbara Cigarroa, Immigration Judge, Port Isabel Immigration Court
Attorney General Loretta E. Lynch appointed Barbara Cigarroa to begin hearing cases in June 2016. Judge Cigarroa earned a Bachelor of Arts degree in 1978 from Harvard University, a Master of Social Work degree in 1993 from Washington University, and a Juris Doctor in 1993 from the Washington University School of Law. From 2008 to May 2016, Judge Cigarroa served as a senior attorney for Immigration and Customs Enforcement (ICE), Department of Homeland Security (DHS). From 2003 through 2008, Judge Cigarroa served as an assistant chief counsel for ICE, DHS. From 1993 through 2003, Judge Cigarroa served as a trial attorney for the former Immigration and Naturalization Service, Department of Justice, entering on duty through the Attorney General’s Honors Program. Judge Cigarroa is a member of the State Bar of Texas.
John G. Crews II, Immigration Judge, Port Isabel Immigration Court
Attorney General Loretta E. Lynch appointed John G. Crews II to begin hearing cases in June 2016. Judge Crews earned a Bachelor of Liberal Studies degree in 1981 from Boston University and a Juris Doctor in 1985 from Southern Methodist University. From 1997 to May 2016, Judge Crews served as an assistant U.S. attorney for the District of New Mexico, U.S. Attorney’s Office, Department of Justice (DOJ). From 1987 through 1997, Judge Crews served as an assistant U.S. attorney for the Southern District of Texas, U.S. Attorney’s Office, DOJ. From 1985 through 1987, Judge Crews served as a judicial law clerk for the late-Honorable Sam B. Hall Jr., U.S. District Court, Eastern District of Texas. Judge Crews is a member of the State Bar of New Mexico.
John P. Ellington, Immigration Judge, York Immigration Court
Attorney General Loretta E. Lynch appointed John P. Ellington to begin hearing cases in June 2016. Judge Ellington earned a Bachelor of Science degree in 1990 from Georgia State University, a Juris Doctor in 1993 from the Dickinson School of Law, and a Master of Liberal Arts degree in 2014 from the University of Pennsylvania. From 2014 to May 2016, Judge Ellington served as general counsel and from 2002 to 2014 as government trial counsel, for Immigration and Customs Enforcement, Department of Homeland Security. From 2000 through 2002, Judge Ellington served as deputy attorney general for the Fraud Section, Pennsylvania Office of the Attorney General, in Norristown, Pa. From 1997 through 2000, Judge Ellington served as an assistant district attorney for the Office of the Berks County District Attorney, in Reading, Pa. Since 1991, Judge Ellington has served in various capacities for the U.S. Navy Judge Advocate General’s Corps, including: from 2014 through 2018, as a military judge; from 2012 through 2014, as senior judge advocate for investigations and inspections; and from 2009 through 2012, and previously from 2003 through 2006, as a staff judge advocate. Judge Ellington is a member of the Pennsylvania Bar.
Justin W. Howard, Immigration Judge, Kansas City Immigration Court
Attorney General Loretta E. Lynch appointed Justin W. Howard to begin hearing cases in June 2016. Judge Howard earned a Bachelor of Arts degree in 1998 from Kansas State University and a Juris Doctor in 2002 from American University, Washington College of Law. From 2008 to May 2016, Judge Howard served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security. From 2006 through 2008, Judge Howard served as an associate attorney for Shook, Hardy & Bacon LLP, in Kansas City. From 2002 through 2005, Judge Howard served as an assistant state’s attorney for the Miami-Dade Office of the State Attorney, in Miami. Judge Howard is a member of the Florida, Kansas and Missouri Bars.
Alison R. Kane, Immigration Judge, Denver Immigration Court
Attorney General Loretta E. Lynch appointed Alison R. Kane to begin hearing cases in June 2016. Judge Kane earned a Bachelor of Arts degree in 1997 from Syracuse University and a Juris Doctor in 2003 from the Boston College Law School. From 2010 to May 2016, Judge Kane served as an assistant chief counsel for Immigration and Customs Enforcement, Department of Homeland Security. From January 2010 through June 2010, and previously from 2005 through 2007, Judge Kane served as an associate for Fragomen, Del Rey, Bernsen & Loewy LLP, in New York City and Philadelphia. From 2003 through 2005, Judge Kane served as an attorney advisor for the Executive Office for Immigration Review, Department of Justice, entering on duty through the Attorney General’s Honors Program. From 1997 through 1999, Judge Kane served in the Peace Corps, in Guinea, Africa. Judge Kane is a member of the New York State Bar.
James M. Left, Immigration Judge, Adelanto Immigration Court
Attorney General Loretta E. Lynch appointed James M. Left to begin hearing cases in June 2016. Judge Left earned a Bachelor of Arts degree in 1988 from Pacific Lutheran University and a Juris Doctor in 1994 from the Pepperdine University School of Law. From 2013 to May 2016, and previously from 2008 through 2009, Judge Left served as a senior attorney for Immigration and Customs Enforcement (ICE), Department of Homeland Security (DHS). From 2009 through 2013, and previously from 2007 through 2008, Judge Left served as a special assistant U.S. attorney for the U.S. Attorney’s Office, in Los Angeles. From 2004 through 2007, Judge Left served as an assistant chief counsel for ICE, DHS. From 2002 through 2004, Judge Left served as an associate legal advisor for the National Security Law Division, ICE, DHS. From 1997 through 2002, Judge Left served as an assistant district counsel for the former Immigration and Naturalization Service, Department of Justice. Judge Left is a member of the State Bar of California.
Clay N. Martin, Immigration Judge, Pearsall Immigration Court
Attorney General Loretta E. Lynch appointed Clay N. Martin to begin hearing cases in June 2016. Judge Martin earned a Bachelor of Arts degree in 1984 from Hendrix College and a Juris Doctor in 1987 from the St. Mary’s University School of Law. From 2008 through May 2016, Judge Martin served as a senior attorney for the Office of the Chief Counsel (OCC), Immigration and Customs Enforcement (ICE), Department of Homeland Security (DHS). From 2002 through 2007, Judge Martin served as an assistant chief counsel for OCC, ICE, DHS. From 1995 through 2002, Judge Martin served as chief deputy prosecuting attorney for the 18th West Judicial District Prosecuting Attorney’s Office, in Polk and Montgomery counties, Ark. From 1992 through 1995, Judge Martin served as an assistant district attorney for the Bexar County District Attorney’s Office, in San Antonio. From 1989 through 1991, Judge Martin served as an attorney for Riddle and Brown, in Dallas. From 1988 through 1989, Judge Martin served as an attorney for Soules and Wallace, in San Antonio. From 1987 through 1988, Judge Martin served as an attorney for Hill, Heard, Oneal, Gilstrap & Goetz, in Arlington, Texas. Judge Martin is a member of the Arkansas Bar and the State Bar of Texas.
Donald C. O’Hare, Immigration Judge, Denver Immigration Court
Attorney General Loretta E. Lynch appointed Donald C. O’Hare to begin hearing cases in June 2016. Judge O’Hare earned a Bachelor of Arts degree in 1984 from Macalester College, a Master of Arts degree in 1987 from the University of Minnesota, a Juris Doctor in 1992 from the California Western School of Law, and a Master of Laws degree in 1994 from the University of Virginia School of Law. From 2003 to May 2016, Judge O’Hare served in several capacities, including as deputy chief counsel, assistant chief counsel, and a senior attorney for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security. From 1997 through 2003, Judge O’Hare served as an assistant district counsel for the former Immigration and Naturalization Service, Department of Justice. From 1992 through 1993, Judge O’Hare was a staff attorney for the Pension Benefit Guaranty Corp., in Washington, D.C. Judge O’Hare is a member of the State Bar of California.
Jeannette L. Park, Immigration Judge, Los Angeles Immigration Court
Attorney General Loretta E. Lynch appointed Jeannette L. Park to begin hearing cases in June 2016. Judge Park earned a Bachelor of Arts degree in 1996 from the University of California, Berkeley, and a Juris Doctor in 2000 from the Boston College Law School. From 2003 to May 2016, Judge Park served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security. From 2000 through 2003, Judge Park served as an assistant district counsel for the former Immigration and Naturalization Service, Department of Justice. Judge Park is a member of the State Bar of California.
Ana L. Partida, Immigration Judge, Los Angeles Immigration Court
Attorney General Loretta E. Lynch appointed Ana L. Partida to begin hearing cases in June 2016. Judge Partida earned a Bachelor of Arts degree in 1996 from San Diego State University, a Master of Forensic Sciences degree in 1998 from National University, and a Juris Doctor in 2002 from the New England School of Law. From 2003 to May 2016, Judge Partida served as an assistant chief counsel for the Office of the Chief Counsel (OCC), Immigration and Customs Enforcement (ICE), Department of Homeland Security (DHS). From 2002 through 2003, Judge Partida served as an assistant district counsel for the former Immigration and Naturalization Service, Department of Justice. Judge Partida is a member of the New Jersey State Bar.
Georgina M. Picos, Immigration Judge, Houston Immigration Court
Attorney General Loretta E. Lynch appointed Georgina M. Picos to begin hearing cases in June 2016. Judge Picos earned a Bachelor of Business Administration degree in 1987 from Florida International University and a Juris Doctor in 1991 from St. Thomas University School of Law. From 1994 to May 2016, Judge Picos served as an assistant chief counsel for the Office of the Chief Counsel, Immigration and Customs Enforcement, Department of Homeland Security. From 1992 through 1994, Judge Picos served as an associate attorney for the Law Offices of Magda Montiel Davis PA, in Miami. From 1991 through 1992, Judge Picos served as a judicial law clerk for the Miami Immigration Court, Executive Office for Immigration Review, Department of Justice, entering on duty through the Attorney General’s Honors Program. Judge Picos is a member of the Florida Bar.
Jayme Salinardi, Immigration Judge, Kansas City Immigration Court
Attorney General Loretta E. Lynch appointed Jayme Salinardi to begin hearing cases in June 2016. Judge Salinardi earned a Bachelor of Arts degree in 1994 from the University of Missouri-Columbia and a Juris Doctor in 1999 from the University of Missouri-Columbia. From 2012 to May 2016, Judge Salinardi served as deputy chief counsel for the Office of the Chief Counsel (OCC), Immigration and Customs Enforcement (ICE), Department of Homeland Security (DHS). From 2003 through 2012, Judge Salinardi served as assistant chief counsel and senior attorney for OCC, ICE, DHS. From 2000 through 2003, Judge Salinardi served as an immigration attorney for Fallon, Bixby, Cheng & Lee, in San Francisco. In 2011, Judge Salinardi joined the faculty of the University of Missouri School of Law where he serves as an adjunct professor of law. Judge Salinardi is a member of the State Bar of California.
Sandra J. Santos-Garcia, Immigration Judge, Adelanto Immigration Court
Attorney General Loretta E. Lynch appointed Sandra J. Santos-Garcia to begin hearing cases in June 2016. Judge Santos-Garcia earned a Bachelor of Arts degree in 1998 and a Juris Doctor in 2001, both from the University of California, Berkeley. From 2010 through 2016, Judge Santos-Garcia served as a senior attorney for the Office of the Chief Counsel (OCC), Immigration and Customs Enforcement (ICE), Department of Homeland Security (DHS). From 2001 through 2010, Judge Santos-Garcia served as assistant chief counsel for OCC, ICE, DHS. Judge Santos-Garcia is a member of the State Bars of Arizona and California.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR's immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR's Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
District Court Enters Permanent Injunction Against Sacramento Tofu Company and Senior Officers to Stop Distribution of Adulterated and Misbranded ProductsRead the Press Release
The U.S. District Court for the Eastern District of California entered a consent decree of permanent injunction against Wa Heng Dou-Fu & Soy Sauce Corporation doing business as Wa Heng Dou-Fu & Soy Sauce International Enterprises (Wa Heng) and the firm’s co-owners, Peng Xiang “Martin” Lin and Yuexiao “Opal” Lin, to prevent the distribution of adulterated and misbranded soy products, the Department of Justice announced today.
The Department filed a complaint in the Eastern District of California on June 17, at the request of the U.S. Food and Drug Administration (FDA). The complaint alleged that the defendants violated the Food, Drug and Cosmetic Act by causing food that is held for sale after shipment of one or more of its components in interstate commerce to become adulterated and misbranded. According to the complaint, the defendants have an extensive history of operating their food manufacturing facility under insanitary conditions, failing to follow current good manufacturing practice requirements and misbranding their food products.
“The American public deserves to be assured that companies and individuals preparing and distributing food subject to the Food, Drug and Cosmetic Act are complying with federal law,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division. “The Department of Justice will continue to work aggressively with the FDA to ensure a safe food supply.”
As detailed in the complaint, the company receives, prepares, processes, manufactures, packs, labels, holds and distributes soy products including fried tofu, firm tofu, seasoned tofu and soy drinks. The complaint alleged that Martin Lin’s responsibilities include the firm’s daily operations, raw material purchases, facility and equipment maintenance and production schedule and that Opal Lin’s responsibilities include training employees and overseeing employee performance.
In conjunction with the filing of the complaint, the defendants agreed to settle the case and to be bound by a permanent injunction that requires Wa Heng to cease all food preparation, manufacturing and distribution. If the defendants seek to resume preparing, manufacturing and distributing food, they must implement remedial measures set forth in the injunction, notify FDA of the measures taken, and receive written notification from FDA that they appear to be in compliance with the remedial requirements set forth in the injunction and the Food, Drug and Cosmetic Act.
According to the complaint, the defendants had a history of repeated violations. A 2015 inspection by FDA documented that the defendants failed to take reasonable precautions to ensure that production procedures do not contribute to contamination from any source. For example, as alleged in the complaint, FDA observed at least three employees spraying pressurized water from a water hose onto the production area floor, where FDA isolated Salmonella Havana, causing water to splash from the floor onto uncovered tofu and onto food contact surfaces, such as tofu presses and a filtration table. This was a repeat observation from the FDA’s 2012 inspection. In addition, FDA observed employees touching the bottoms of buckets and crates that had been on the floor and then touching tofu. The hand wash sink in the production room had no hot water because the valve had been turned off and the sink was inaccessible due to crates in front of it. This was also a repeat observation from the 2012 inspection.
According to the complaint, the most recent inspection also found that the defendants failed to maintain equipment and utensils in an acceptable fashion through appropriate cleaning and sanitizing. FDA observed spray hose nozzles, air valves, water valves and light switches that contained heavy residue, as well as a tofu cutting knife that was placed on top of a tofu press with greenish-brown buildup and then used to slice tofu.
Further, the complaint alleged that during the 2015 inspection, FDA conducted environmental sampling of the facility and five subsamples tested positive for pathogenic Salmonella Havana. According to the complaint, the positive samples were taken from, among other places, a floor drain near a cooking tank, a caster wheel on a cart carrying tofu and the floor between the packing and processing rooms. As noted in the complaint, FDA isolated a nearly identical strain of Salmonella Havana during its 2011 and 2012 inspections.
During the 2015 inspection, FDA also collected samples of the defendants’ product labeling. The complaint alleges that the defendants’ products are misbranded because, among other things, some of the firm’s soy products fail to include a label containing an accurate statement of the quantity of the contents in terms of weight, measure, or numerical count.
“Firms and individuals that violate federal food safety regulations pose a danger to public health,” said Acting U.S. Attorney Phillip A. Talbert of the Eastern District of California. “The Department will not hesitate to hold companies and individuals accountable in order to protect the American people from adulterated food.”
The government is represented by Trial Attorney Raquel Toledo of the Civil Division’s Consumer Protection Branch, with the assistance of Assistant U.S. Attorney Colleen Kennedy of the Eastern District of California and Associate Chief Counsel for Enforcement Charlotte Hinkle of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
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 Eastern District of California, visit its website at https://www.justice.gov/usao-edca.
Department of Justice Announces New Department-Wide Implicit Bias Training for PersonnelRead the Press Release
The Department of Justice announced today that it will train all of its law enforcement agents and prosecutors to recognize and address implicit bias as part of its regular training curricula. The new training, based on the latest social science research and best practices in law enforcement, will begin across the department in the next few weeks. Deputy Attorney General Sally Q. Yates sent a memo to all law enforcement agents and prosecutors today informing them of the new Implicit Bias Training Program and its importance to a strong and fair criminal justice system.
“Our officers are more effective and our communities are more secure when law enforcement has the tools and training they need to address today’s public safety challenges,” said Attorney General Loretta E. Lynch. “At the Department of Justice, we are committed to ensuring that our own personnel are well trained in the core principles and best practices of community policing. Today’s announcement is an important step in our ongoing efforts to promote fairness, eliminate bias and build the stronger, safer, more just society that all Americans deserve.”
“The Department of Justice has a responsibility to do everything we can to ensure that our criminal justice system is fair and impartial,” said Deputy Attorney General Yates. “Given that the research is clear that most people experience some degree of unconscious bias, and that the effects of that bias can be countered by acknowledging its existence and utilizing response strategies, it is essential that we provide implicit bias training to all of our prosecutors and law enforcement agents. Along with the heads of our law enforcement agencies, I’m looking forward to participating in DOJ’s very first training session tomorrow morning.”
Through the new training, over 28,000 department employees will learn how to recognize and address their own implicit bias, which are the unconscious or subtle associations that individuals make between groups of people and stereotypes about those groups. Implicit bias can affect interactions and decisions due to race, ethnicity, gender, sexual orientation, religion and socio-economic status, as well as other factors. Social science has shown that all individuals experience some form of implicit bias but that the effects of those biases can be countered through training.
In the coming weeks, the department will begin rolling out the training to the more than 23,000 agents employed by the FBI, Drug Enforcement Administration (DEA), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and U.S. Marshals Service (USMS), as well as the approximately 5,800 attorneys working in the 94 U.S. Attorney’s Offices across the country. As the project continues, the department will expand training to other personnel, including prosecutors in the department’s litigating components and agents of the Office of the Inspector General.
Since 2010, the department’s Office of Community Oriented Policing Services has worked with state and local law enforcement to train over 2,600 law enforcement officers at both the line and supervisor level in its implicit bias program known as Fair and Impartial Policing. For the department’s new internal training, curricula have been created to address the work of prosecutors and federal law enforcement and the different missions of the law enforcement components. Each law enforcement component’s curriculum includes three levels of training based on how implicit bias may affect the duties for line personnel, supervisors and managers, and executive personnel.
In order to lead by example, on Tuesday, Deputy Attorney General Yates will be joined by the leadership of FBI, ATF, DEA and USMS to participate in the first part of the executive training under the new curricula. Over the coming months, training will begin with executive personnel, followed by supervisors and managers, and later line personnel, including agents and attorneys.
Attorney General Loretta E. Lynch Statement on the U.S. Supreme Court Ruling in Whole Woman’s Health V. HellerstedtRead the Press Release
Attorney General Loretta E. Lynch released the following statement today on the U.S. Supreme Court ruling in Whole Woman’s Health v. Hellerstedt:
"For many years, the Supreme Court has maintained that regulations with the purpose or effect of presenting a substantial obstacle to a woman seeking an abortion constitute an undue burden on women trying to exercise their reproductive freedom, and are contrary to principles enshrined in the Constitution. I am pleased that the Supreme Court has reaffirmed this longstanding principle in its decision today.
"When we filed a brief in this case, the Department of Justice made clear that we believe laws like the one at issue here unfairly restrict women's rights, negatively impact women's health, and undermine the state's interest in protecting the safety and welfare of its people. In the days ahead, the Department of Justice will continue fighting against laws like this one. And we will continue to defend the constitutional rights of women across America - including the right to reproductive freedom."
Two Florida Men Plead Guilty to Multi-State Biodiesel Fraud SchemeRead the Press Release
Thomas Davanzo, of Estero, Florida, and Robert Fedyna, of Naples, Florida, pleaded guilty today for their participation in a multi-state scheme to defraud biodiesel buyers and U.S. taxpayers by fraudulently selling biodiesel credits and fraudulently claiming tax credits, announced Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division and U.S. Attorney A. Lee Bentley III of the Middle District of Florida.
Davanzo and Fedyna operated several shell companies that were used to facilitate the scheme. As part of the scheme, Davanzo and Fedyna operated entities that purported to purchase renewable fuel, on which credits had been claimed and which was ineligible for additional credits, produced by their co-conspirators at Gen-X Energy Group (Gen-X), headquartered in Pasco, Washington, and its subsidiary, Southern Resources and Commodities (SRC), located in Dublin, Georgia. They then used a series of false transactions to transform the fuel back into feedstock needed for the production of renewable fuel, and sold it back to Gen-X or SRC, allowing credits to be claimed again. This cycle was repeated multiple times.
In addition, both Davanzo and Fedyna laundered the proceeds of the scheme through various shell entities. Davanzo and Fedyna established bank accounts in the names of shell entities. Funds were cycled through these shell companies’ bank accounts to perpetuate the fraud scheme and conceal its proceeds.
Davanzo and Fedyna also directed and participated in the generation of false paperwork designed to create the façade that the renewable identification number (or RIN, a serial number used to track biodiesel credits) created and claimed by co-conspirators were legitimate. The paperwork included false invoices from Gen-X or SRC to shell entities, which purported to show sales of renewable fuel, false invoices from shell entities to Gen-X and SRC, which purported to show the purchase of feedstock and false bills of lading, which purported to show the transportation of fuel and feedstock by tanker truck.
From March 2013 to March 2014, the co-conspirators generated at least 60 million RINs that were based on fuel that was either never produced or was merely re-processed at the Gen-X or SRC facilities. The co-conspirators received at least $42 million from the sale of these fraudulent RINs to third parties. In addition, Gen-X received approximately $4,360,724.50 in false tax credits for this fuel.
This case was investigated by the U.S. Secret Service, the Environmental Protection Agency -Criminal Investigation Division, and the Internal Revenue Service-Criminal Investigation. It was prosecuted by Assistant United States Attorneys Sara C. Sweeney and Megan Kistler and Trial Attorney Adam Cullman of the Environment and Natural Resources Division of the Department of Justice.
INTERPOL Washington Partners with ICE, USMS in Operation Project Red IIRead the Press Release
INTERPOL Washington has been highlighted in a U.S. Immigration and Customs Enforcement (ICE) press release for providing investigative support with identifying the targets in Operation Project Red II. Forty-five of the fugitives have been arrested by the U.S. Marshals and ICE’s Enforcement and Removal Operations . The fugitives with Interpol Red Notices were wanted for crimes in 22 different countries for various crimes. Please view the entire press release at the link provided below.
ICE PRESS RELEASE