District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Justice Department Reaches Agreement with Milwaukee to Ensure Civic Access for People with DisabilitiesRead the Press Release
The Justice Department reached an agreement today with the city of Milwaukee to improve access to all aspects of civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA).
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The agreement requires the actions to be completed within three years and the department will actively monitor compliance with the agreement throughout this timeframe.
“Cities and towns must comply with the ADA so that people with disabilities can use public entities and participate fully in their community – from enjoying parks and libraries, to accessing polling places and courthouses,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “We applaud Milwaukee’s commitment to ensuring that its entire population can access the city’s public resources and look forward to seeing these critical reforms become a reality.”
The agreement requires the city to modify facilities surveyed by the department so that they are accessible and to retain an independent licensed architect to survey facilities and programs that were not surveyed by the department. The agreement also requires that Milwaukee certify that all remedial actions are compliant with the ADA, provide auxiliary aids and services necessary to ensure effective communication, ensure accessibility of polling places, provide accessible curb ramps throughout the city and ensure that the city’s website will conform with the Website Content Accessibility Guidelines Level 2.0 Level AA.
PCA ensures that people with disabilities have an equal opportunity to participate in civic life. As part of PCA, Justice Department staff survey state and local government facilities, services and programs in communities across the country to identify changes needed in order to comply with the ADA. The agreements detail the actions that a public entity must take to improve access.
People interested in finding out more about the ADA, this agreement with Milwaukee, PCA or the ADA Best Practices Tool Kit for State and Local Governments may access the ADA web page at www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Milwaukee Settlement Agreement
North Carolina Man Sentenced in Tax Refund Fraud SchemeRead the Press Release
A Raleigh, North Carolina, man was sentenced to 71 months in prison today after pleading guilty in February to one count of conspiracy to commit theft of public money and one count of theft of public money, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Wilfredo Acosta Hidalgo, 47, in 2011 and 2012, conspired with check cashers to cash U.S. Treasury refund checks issued as a result of fraudulently-filed tax returns, according to court documents. Hidalgo provided the check cashers with U.S. Treasury checks issued to third parties in whose name the fraudulent returns were filed. The check cashers deposited the U.S. Treasury checks into their business bank accounts and provided Hidalgo with cash equal to the value of the U.S. Treasury checks, less a check-cashing fee. The third-party payees were not present when the checks were cashed.
In addition to the prison term, Hidalgo was ordered to serve three years of supervised release and pay $4,280,871 in restitution to the Internal Revenue Service (IRS).
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Lauren Castaldi and Nathan Brooks of the Tax Division, who prosecuted this case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Fourth Ocean Shipping Executive Indicted for Price Fixing and Bid RiggingRead the Press Release
An ocean freight executive has been indicted for his participation in a long-running conspiracy to restrain trade in international ocean shipments of roll-on, roll-off cargo to and from the Port of Baltimore and elsewhere in the United States, the Department of Justice announced today.
A grand jury in the District of Maryland returned the indictment. Mauricio Javier Garrido Garcia (Garrido), an executive of Compañia Sudamericana de Vapores S.A. (CSAV) and resident of Chile, is charged with allocating customers and routes, rigging bids and fixing prices for international ocean shipments of roll-on, roll-off cargo, including cars, trucks and construction and agriculture equipment. Garrido is accused of participating in the conspiracy from as early as 2000 until at least September 2012. An indictment is a formal charging document, and the defendant is presumed innocent until proven guilty in a court of law.
Garrido is the eighth executive to be charged in the investigation to date. Four individuals have already pleaded guilty and been sentenced to prison and three others have been indicted but remain fugitives from justice. CSAV and two other companies have also pleaded guilty and paid over $136 million in criminal fines.
“This long-running conspiracy restrained trade in one of the main channels of international commerce – the oceans,” said Principal Deputy Assistant Attorney General Renata B. Hesse, head of the Department of Justice’s Antitrust Division. “Today’s indictment further demonstrates the division’s commitment to holding accountable ocean-shipping executives who participated in this scheme.”
“These charges brought today, and for the prior seven 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.”
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 Division, 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 Division at 410-265-8080.
Garrido Indictment
USNCB Makes COPS' Dispatch HeadlinesRead the Press Release
"For almost a decade, INTERPOL Washington, the United States National Central Bureau (USNCB), has empowered the nation’s law enforcement to use both national and INTERPOL criminal indices. The process of linking states together to use INTERPOL systems, known as federation, will assist officers across the country in making determinations about persons or items they encounter in the field: suspected fugitives, victims, stolen vehicles, stolen travel documents, etc."
The Office of Community Oriented Policing Services (COPS) puts the USNCB Federation initiative in its DISPATCH Headlines for the June issue of the e-newsletter.
Please see the below link for the full story.
http://cops.usdoj.gov/html/dispatch/06-2016/international_systems.asp
Pharmaceutical Companies to Pay $67 Million to Resolve False Claims Act Allegations Relating to TarcevaRead the Press Release
Pharmaceutical companies Genentech Inc. and OSI Pharmaceuticals LLC will pay $67 million to resolve False Claims Act allegations that they made misleading statements about the effectiveness of the drug Tarceva to treat non-small cell lung cancer, the Department of Justice announced today. Genentech, located in South San Francisco, California, and OSI Pharmaceuticals, located in Farmingdale, New York, co-promote Tarceva, which is approved to treat certain patients with non-small cell lung cancer or pancreatic cancer. OSI Pharmaceuticals LLC is the successor to OSI Pharmaceuticals Inc., which was acquired by Astellas Holding US Inc. in 2010 and converted to a limited liability company in 2011.
“Pharmaceutical companies have a responsibility to provide accurate information to patients and health care providers about their prescription drugs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will hold those companies accountable that mislead the public about the efficacy of their products.”
The settlement resolves allegations that, between January 2006 and December 2011, Genentech and OSI Pharmaceuticals made misleading representations to physicians and other health care providers about the effectiveness of Tarceva to treat certain patients with non-small cell lung cancer, when there was little evidence to show that Tarceva was effective to treat those patients unless they also had never smoked or had a mutation in their epidermal growth factor receptor, which is a protein involved in the growth and spread of cancer cells.
As a result of today’s $67 million settlement, the federal government will receive $62.6 million and state Medicaid programs will receive $4.4 million. The Medicaid program is funded jointly by the state and federal governments.
“This settlement demonstrates the government’s unwavering commitment to pursue violations of the False Claims Act and recover taxpayer dollars spent as a result of misleading marketing campaigns,” said U.S. Attorney Brian Stretch for the Northern District of California.
“Pharmaceutical companies that make misleading or unsubstantiated statements about their products can put patients at risk,” said Deputy Commissioner Howard R. Sklamberg for FDA’s global regulatory operations and policy. “The FDA will continue to work to protect the public's health by ensuring that companies do not mislead healthcare providers about their products.”
“Drug manufacturers that make misleading claims about their product’s effectiveness can jeopardize the health of patients – in this case, cancer patients,” said Special Agent in Charge Steven J. Ryan for the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Our agency will continue to protect both patients and taxpayers by holding those who engage in such practices accountable for their actions.”
The settlement resolves allegations filed in a lawsuit by former Genentech employee Brian Shields, in federal court in San Francisco. 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. Shields will receive approximately $10 million.
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 $29.8 billion through False Claims Act cases, with more than $18.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement is the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Northern District of California, with assistance from the HHS-OIG, the HHS Office of Counsel to the Inspector General, the HHS Office of the General Counsel-CMS Division, the FDA’s Office Chief Counsel, the FDA’s Office of Criminal Investigations, the Office of the Inspector General for the Office of Personnel Management, the FBI, the Department of Defense Office of the Inspector General, the Office of the General Counsel for the Defense Health Agency and the National Association of Medicaid Fraud Control Units.
The case is captioned United States ex rel. Shields v. Genentech, Inc., et al., Case No. CV 11 0822 MEJ (N.D. Ca.). The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Kansas Tax Return Preparer Pleads Guilty to Stealing More than $2 Million in Government FundsRead the Press Release
A Stillwell, Kansas, man pleaded guilty today to one count of aggravated identity theft and one count of theft of government funds, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney Tom Beall of the District of Kansas.
Richard Drake, 60, admitted that he obtained more than $2 million from the Internal Revenue Service (IRS) by filing false tax returns in the names of his clients. Those false returns claimed refunds that Drake directed into accounts he controlled. In his plea agreement, Drake admitted that he used the identities of his clients to perpetrate his fraud without their knowledge. The tax returns that Drake filed caused the U.S. Department of the Treasury to issue large income tax refunds that Drake then converted to his own use.
As part of his plea agreement, Drake has agreed to serve 48 months in prison and to pay $2,432,147 in restitution to the IRS. The sentencing hearing date has not yet been determined.
Acting Assistant Attorney General and Acting U.S. Attorney Beall commended special agents of IRS–Criminal Investigation, who investigated the case, and Trial Attorney Ryan Raybould of the Tax Division and Assistant U.S. Attorney Tris Hunt of the District of Kansas, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Attorney General Loretta E. Lynch Returns Ancient Artifacts to IndiaRead the Press Release
Over 200 artifacts were returned to the government of India today by Attorney General Loretta E. Lynch during a ceremony with Prime Minister Narendra Modi. The items were recovered as a result of an investigation conducted by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) and the work of the United States Attorneys’ Offices in the Eastern and Southern Districts of New York, the Manhattan District Attorney’s Office, and the Department of Justice’s Office of International Affairs.
“The United States is committed to ensuring that no nation is robbed of the objects that inform its identity, shape its traditions and inspire its citizens,” said Attorney General Lynch. “Today, as part of that ongoing commitment, more than 200 antiquities and cultural artifacts that speak to India’s astounding history and beautiful culture are beginning their journey home. It is my hope – and the hope of the American people – that this repatriation will serve as a sign of our great respect for India’s culture; our deep admiration for its people; and our sincere appreciation for the ties between our nations. I want to commend the men and women of the Department of Justice, the Department of Homeland Security and the Manhattan District Attorney’s Office for recovering these priceless objects and I want to thank our Indian counterparts for their continued cooperation in our shared efforts to protect and preserve the cultural heritage of both of our nations.”
Items returned included religious statues, bronzes and terra cotta pieces, some dating back 2,000 years, looted from some of India’s most treasured religious sites. Among the pieces returned is a statue of Saint Manikkavichavakar, a Hindu mystic and poet from the Chola period (circa 850 AD to 1250 AD) stolen from the Sivan Temple in Chennai, India, which is valued at $1.5 million. Also included in the collection is a bronze sculpture of the Hindu god Ganesh estimated to be 1,000 years old.
“Protecting the cultural heritage of our global community is important work and we are committed to identifying and returning these priceless items to their countries of origin and rightful owners,” said Secretary of Homeland Security Jeh Johnson. “It’s the responsibility of law enforcement worldwide to ensure criminal smuggling organizations do not profit from the theft of these culturally and historically valuable items.”
The majority of the pieces repatriated in the ceremony were seized during Operation Hidden Idol, an investigation that began in 2007 after HSI special agents received a tip about a shipment of seven crates destined for the United States manifested as “marble garden table sets.” Examination of the shipment in question revealed numerous antiquities. This shipment was imported by Subhash Kapoor, owner of Art of the Past Gallery, who awaits trial in India.
HSI’s Operation Hidden Idol focused on the activities of former New York-based art dealer Kapoor, currently in custody in India awaiting trial for allegedly looting tens of millions of dollars’ worth of rare antiquities from several nations. Artifacts were also found in the Honolulu Museum and Peabody Essex, who promptly partnered with HSI to surrender illicit cultural property stemming from Kapoor. HSI special agents have executed a series of search warrants targeting Kapoor’s New York City gallery, along with warehouses and storage facilities linked to the dealer. Additionally, five individuals have been arrested in the United States for their role in the scheme. The estimated value of the artifacts seized so far in the case exceeds $100 million.
HSI plays a leading role in criminal investigations that involve illegally importing and distributing cultural property, including illicit trafficking of cultural property, especially objects that have been reported lost or stolen. HSI International Operations, through its 64 attaché offices in 46 countries, works closely with foreign governments to conduct joint investigations. Since 2007, more than 7,500 artifacts have been returned to 30 countries, including paintings from France, Germany, Poland and Austria; 15th to 18th century manuscripts from Italy and Peru; as well as cultural artifacts from China, Cambodia and Iraq.
Learn more about HSI cultural property, art and antiquities investigations. Members of the public who have information about suspected stolen cultural property are urged to call the toll-free HSI tip line at 1-866-DHS-2-ICE or to complete its online tip form.
NCMEC CEO Visits the USNCBRead the Press Release
On Tuesday, May 31, 2016, Director Shank met with NCMEC CEO John Clark to discuss continued collaboration between the two organizations. Mr. Clark is the former Director of the U.S. Marshals Service.
Justice Department Issues Draft Guidance Regarding Expert Testimony and Lab Reports in Forensic ScienceRead the Press Release
The Justice Department announced today the release of draft guidance documents governing the testimony and reports of the department’s forensic experts. These documents, available for public comment through July 8, are designed to ensure that department forensic experts only make statements in the courtroom and in laboratory reports that are supported by sound science.
The drafting of these proposed documents arose out of the department’s ongoing, multi-year effort to strengthen the practice of forensic science. Once finalized and adopted, these documents, known as the Uniform Language for Testimony and Reports, will apply to all department personnel who issue forensic reports or provide expert forensic testimony, including forensic experts at the FBI, Drug Enforcement Administration (DEA) and Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
“Forensic science is a critical component of our criminal justice system, both for identifying the perpetrator of a crime and for clearing the innocent,” said Deputy Attorney General Sally Q. Yates. “Once finalized and adopted, these guidance documents will clarify what scientific statements our forensic experts may – and may not – use when testifying in court and in drafting reports, in turn strengthening the integrity of our system overall.”
The proposed uniform language documents released today cover seven forensic science disciplines: body fluid testing (serology), drug and chemical analysis (general chemistry), fibers, foot prints/tire treads, glass, latent fingerprints and toxicology. This summer, the department will release a second round of proposed documents for public comment, which will include draft guidance relating to DNA, explosive devices, hair analysis and handwriting. The department expects to adopt final versions of these documents later this year.
Once finalized and adopted, the uniform language documents will only apply to department personnel, but the department decided to release the proposed documents for public comment in an effort to promote transparency and to solicit feedback from the broader forensic science community. As today’s proposed documents make clear, the uniform language documents are not intended to serve as precedent for other forensic laboratories and do not imply that statements by other laboratories are incorrect, indefensible or erroneous.
Copies of the proposed uniform language documents are available for review at https://justice.gov/forensics. Public comments may be submitted through www.regulations.gov.
Fourth Individual Charged in Ongoing New York Power Authority Procurement Fraud InvestigationRead the Press Release
The Department of Justice, the Internal Revenue Service (IRS) and the New York State Inspector General, which are all conducting a joint federal and state investigation into bid-rigging, fraud and tax-related offenses in the award of contracts at the New York Power Authority (NYPA), announced today that a Westchester County, New York, resident pleaded guilty today to aiding and assisting in the filing of a false tax return.
According to the one-count felony charge filed in the U.S. District Court for the Southern District of New York, in White Plains, New York, John Simonlacaj caused another individual to file a Form 1040 for the tax year 2010 that substantially understated that individual’s taxable income. Simonlacaj pleaded guilty to aiding and assisting in the filing of a false tax return, which carries a maximum penalty of three years in prison and a $250,000 fine.
“Our investigation into bid rigging and fraud by companies supplying the New York Power Authority has uncovered a variety of criminal activity,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division. “Filing a false tax return is a serious offense and we are pleased to have worked with our partners in law enforcement to prosecute the criminal violation.”
“We say many times the FBI won’t stop until we find everyone responsible for their roles in a criminal investigation,” said Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office. “These charges prove our tenacity in digging until we hit the bottom of the pile and uncover anyone who had a part in criminal wrongdoing.”
"Today’s plea marks yet another defendant admitting guilt following a bid rigging investigation that began at the state level. My office and those of my federal law enforcement partners, will continue to follow the evidence wherever it may lead," said New York State Inspector General Catherine Leahy Scott.
“Mr. Simonlacaj is now held accountable for his role in filing a false tax return,” said Special Agent in Charge Shantelle P. Kitchen of the IRS Criminal Investigation New York Field Office. “Towards pursuing its goal of ensuring that that everyone pays their fair share of taxes, IRS Criminal Investigation remains committed to this ongoing investigation.”
The investigation is being conducted by the Antitrust Division’s New York Office with the assistance of the FBI, IRS Criminal Investigation and the New York State Office of the Inspector General. NYPA is cooperating with the investigation. Anyone with information on bid rigging or other anticompetitive conducted related to the award or performance of municipal and state contracts should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258 or visit http://www.justice.gov/atr/contact/newcase.html.
Four Charged with Defrauding more than $900,000 from Clifton-Based Trucking CompanyRead the Press Release
NEWARK, N.J. – Four people have been arrested and charged with stealing more than $900,000 from a New Jersey-based trucking company, U.S. Attorney Paul J. Fishman announced today.
Lisa Popewiny, 53, of Clifton, New Jersey, and brothers Angel D. Vidal, 24, and Angel Gabriel Vidal, 22, of Paterson, New Jersey, and Miguel Vidal, 22, of Jersey City, New Jersey, are each charged by complaint with one count of wire fraud. Federal authorities arrested Popewiny, Angel D. Vidal and Angel Gabriel Vidal on June 2, 2016. Miguel Vidal was arrested today. All four defendants appeared before U.S. Magistrate Judge Stephen C. Mannion in Newark federal court; Miguel Vidal appeared today and the remaining defendants appeared yesterday.
According to the complaint:
Popewiny was the payroll clerk at Clifford B. Finkle Jr. Inc, a Clifton company that provided transportation and freight services to various public and private entities located in New Jersey, New York, and elsewhere. From June 2012 to April 2015, Popewiny, Angel D. Vidal, Angel Gabriel Vidal, and Miguel Vidal – a former truck driver for the Company – allegedly engaged in a scheme to defraud the company out of $920,380.
Popewiny falsified payroll records in order to generate fraudulent paychecks payable to non-existent employees. Angel D. Vidal, Angel Gabriel Vidal, and Miguel Vidal then converted the paychecks, many of which were deposited into their bank accounts and then funneled out in cash. The scheme came to light when owners of the company, in an effort to investigate suspected fraud, distributed the payroll checks to employees – a task normally completed by Popewiny. After all of the payroll checks had been distributed, six paychecks remained that turned out to be fraudulently issued. Further investigation revealed that Popewiny input false hours for at least 12 different individuals.
The count of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.
U.S. Attorney Fishman credited criminal investigators in the U.S. Attorney’s Office, postal inspectors from the U.S. Postal Inspection Service, under the direction of Acting Inspector in Charge Cynthia Shoffner, and members of the U.S. Marshals’ Fugitive Task Force, under the direction of U.S. Marshal Juan Mattos Jr., with the investigation leading to the arrests and charges.
The charge and allegations contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The government is represented by Assistant U.S. Attorney Cari Fais of the Special Prosecution Division in Newark. finkle_trucking_complaint.pdf
Deputy Attorney General Sally Q. Yates Statement on the President's Recent Clemency DecisionsRead the Press Release
Deputy Attorney General Sally Q. Yates released the following statement following President Obama’s clemency announcement today:
"Our responsibility at the Department of Justice is to seek justice and that includes rectifying disproportionately long sentences for certain drug offenders sentenced under outdated laws. The President has used his clemency authority today to give more individuals a second chance to live law abiding lives and we are confident that there will be many more commutations in the months
USNCB Meets with Chinese CounterpartsRead the Press Release
On June 1st, officials from NCB Beijing and Chinese Embassy visited the USNCB. Director Shank, Chief of Staff Graham, and General Counsel Smith met with them to discuss the valuable relationship between our NCBs, and their ability to promote cooperation.
Two Former Deutsche Bank Employees Indicted on Fraud Charges in Connection with Long-Running Manipulation of LiborRead the Press Release
Note: The court entered judgments of acquittal as to Matthew Connolly and Gavin Campbell Black on all counts alleged in the indictment.
Two former Deutsche Bank AG (Deutsche Bank) traders—the bank’s supervisor of the Pool Trading Desk in New York and a derivatives trader in London—were indicted for their alleged roles in a scheme to manipulate the U.S. Dollar (USD) London InterBank Offered Rate (LIBOR), a benchmark interest rate to which trillions of dollars in interest rate contracts were tied.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office made the announcement after the indictment was unsealed today.
On May 31, a federal grand jury in the Southern District of New York returned a 10-count indictment charging Matthew Connolly, 51, of Basking Ridge, New Jersey, and Gavin Campbell Black, 46, of London, with one count of conspiracy to commit wire fraud and bank fraud and nine counts of wire fraud for their participation in a scheme to manipulate the USD LIBOR rate in a manner that benefited their own or Deutsche Bank’s financial positions in derivatives that were linked to those benchmarks. Connolly was taken into custody today and is expected to make his initial appearance this afternoon. The case has been assigned to Chief U.S. District Judge Colleen McMahon of the Southern District of New York.
Michael Curtler, 43, of London, a former Deutsche Bank derivatives trader and manager of the London Money Market Derivatives (MMD) Desk in London, pleaded guilty in October 2015 to one count of conspiracy to commit wire and bank fraud in connection with his role in the scheme.
“This indictment charges two senior traders with manipulating LIBOR to gain an illegal advantage in the market,” said Assistant Attorney General Caldwell. “Millions of people around the world rely on LIBOR and other global financial benchmarks as accurate and honestly-reported rates. Manipulation of these rates undermines the integrity of our financial system and the Justice Department will continue to hold accountable both the financial institutions and the individuals responsible for this conduct.”
“Healthy financial markets are crucial to a successful economy,” said Deputy Assistant Attorney General Snyder. “By corrupting this important benchmark rate, the defendants undermined the integrity of financial markets here and around the world. The department is committed to holding individuals accountable for the roles they play in committing complex financial crimes.”
“These federal charges outline the alleged criminal actions perpetrated by two banking insiders to manipulate the LIBOR interest rate, which is used to set interest rates for consumer loan products, including mortgages and credit cards,” said Assistant Director in Charge Abbate. “This indictment comes as a result of the dedicated and tireless efforts of agents, analysts and prosecutors committed to holding accountable those who deliberately compromise the integrity of our financial markets for personal gain.”
According to the indictment, LIBOR was an average interest rate, calculated based on submissions from leading banks around the world, reflecting the honest and unbiased rates those banks believed they would be charged if borrowing from other banks. LIBOR was published by the British Bankers’ Association, a trade association based in London. The published LIBOR “fix” for USD currency was the result of a calculation based upon submissions from a panel of 16 banks, including Deutsche Bank.
According to allegations in the indictment, Connolly was Deutsche Bank’s director of the Pool Trading Desk in New York, where he supervised traders who traded USD LIBOR-based derivative products. Black was a director on Deutsche Bank’s MMD Desk in London, who also traded USD LIBOR-based derivative products. In order to increase Deutsche Bank’s profits on derivatives contracts tied to the USD LIBOR, Connolly allegedly directed his subordinates, and Black allegedly asked Curtler and others at Deutsche Bank, to submit false and fraudulent LIBOR contributions consistent with the traders’ or the bank’s financial interests rather than the honest and unbiased costs of borrowing.
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
In April 2015, Deutsche Bank entered into a deferred prosecution agreement to resolve wire fraud and antitrust charges and Deutsche Bank Group Services (UK) Limited pleaded guilty to one count of wire fraud, collectively agreeing to pay a $775 million fine, for the bank’s role in engaging in a scheme to defraud counterparties to interest rate derivatives trades by secretly manipulating USD LIBOR and other currencies submissions.
The Justice Department has previously announced resolutions with five other banks for their roles in manipulation of benchmark interest rates, including Barclays Bank PLC, UBS AG, The Royal Bank of Scotland plc, Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. and Lloyds Banking Group plc. The department has also charged 13 individuals as a result of this investigation. Three of those individuals have pleaded guilty, two have been convicted at trial, and the charges against the others are pending.
Special agents, forensic accountants and intelligence analysts of the FBI’s Washington Field Office are conducting the investigation. Senior Trial Attorney Carol L. Sipperly and Trial Attorneys Alison L. Anderson and Richard A. Powers of the Criminal Division’s Fraud Section and Trial Attorney Daniel M. Tracer of the Antitrust Division’s New York Office are prosecuting the case. Fraud Section Deputy Chief Benjamin D. Singer and Assistant Chief Jennifer L. Saulino have also provided valuable assistance in this matter.
The investigation leading to this case has required, and has greatly benefited from, a diligent and wide-ranging assistance among various enforcement agencies both in the United States and abroad. In particular, the department acknowledges and expresses its appreciation for this assistance from the Commodity Futures Trading Commission’s Division of Enforcement, the U.K. Financial Conduct Authority and the U.K. Serious Fraud Office. More than 20 individuals have been charged by the U.K. Serious Fraud Office for their roles in engaging in benchmark rate manipulation.
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.
North Carolina Man Sentenced for Tax Evasion and Serving as a Pilot without a LicenseRead the Press Release
A North Carolina man was sentenced yesterday to 21 months in prison for tax evasion and four counts of serving as a pilot without an airman’s certificate, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Ripley Rand for the Middle District of North Carolina.
Paul Douglas Tharp, from 2012 through 2014, attempted to evade payment of an outstanding federal income tax debt by filing false documents, including false tax returns, with the Internal Revenue Service (IRS), according to court documents. After Tharp failed to file tax returns for the years 2003 through 2006, the IRS assessed federal income taxes for those years. In 2014, Tharp provided a false Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, signed under penalty of perjury, on which Tharp failed to report that he owned an airport and an investment firm and concealed his business bank accounts and rental income. In 2012 and 2014, Tharp also filed tax returns for the 2011 through 2013 tax years on which he omitted significant income that he received from his airport and rental properties.
As part of his plea, Tharp also admitted that he served as a pilot without the required certification on four different occasions in 2012. Tharp surrendered his pilot certificate on Aug. 2, 2012. After that date, Tharp flew four flights in and out of Davidson County Airport in Lexington, North Carolina, without valid registration and while his pilot certificate was suspended.
In addition to his prison term, Tharp was ordered to pay restitution in the amount of $285,028.47 to the IRS.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of IRS-Criminal Investigation, who investigated the case and Assistant U.S. Attorney Anand Ramaswamy of the Middle District of North Carolina and Trial Attorney Nathan Brooks 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.
Long Island Fisherman Pleads Guilty to Falsifying Documents and Lying to Federal InvestigatorsRead the Press Release
James Kaminsky, a fisherman from Mattituck, New York, pleaded guilty today in federal court in Central Islip, New York, to federal felonies stemming from his role in systematically covering up the landing and sale of illegal fluke (summer flounder), scup and black sea bass that were overharvested in violation of New York state quotas and the federal Research Set-Aside (RSA) Program, the Justice Department’s Environment and Natural Resources Division announced.
Kaminsky pleaded guilty to one count of aiding and abetting false documents and one count of oral false statements in connection with a scheme that ran from May through August 2011. During this period, Kaminsky utilized the RSA Program as a mask for unlawful quota overages. He then sold his illegal catch to Mark Parente, a federal fish dealer and a defendant in a related case. Federal fish dealers are required to accurately report their purchases to the National Oceanic and Atmospheric Administration (NOAA), regardless of whether the fish originated from a state or federal fishery. NOAA utilizes these reports to assess fish stocks and to set quotas in conjunction with regional fisheries councils. False information inputted into fisheries statistical models reduces their effectiveness and could result in unexpected, corrective quota reductions years after the illegal catch because actual fishing effort had been undercounted by the models. Such quota reductions can have negative effects on the legitimate fishing fleet.
In order to cover up the illegal harvest and transactions, Kaminsky and Parente agreed to falsify government documents. As such Kaminsky falsified approximately 30 fishing vessel trip reports and Parente falsified a corresponding number of dealer reports. To further obscure the illicit conduct, almost all of the payments were made in cash, with Parente and Kaminsky meeting at a pre-determined spot off the Long Island Expressway in Nassau or Suffolk Counties. The scheme omitted or misidentified approximately 6,900 pounds of fluke, 50,000 pounds of scup and 12,000 pounds of black sea bass. The wholesale value of the fish was stipulated as $78,000. The second charge stems from material, false statements that Kaminsky made to NOAA criminal investigators during a November 2014 proffer session with a federal prosecutor.
As part of the plea deal, the defendant agreed to pay a total financial penalty of $150,000. He also agreed to five years of probation and six months of home detention. Agreed-upon probation terms include relinquishment of commercial fishing permits, ban from the RSA Program and divestiture and ban from any interest in a commercial fishing vessel. Kaminsky’s sentencing is scheduled for Nov. 2.
Kaminsky is “Fisherman Y,” as that term is used in the related Mark Parente case. Kaminsky is the tenth defendant to be prosecuted as part of NOAA’s ongoing Long Island RSA Fraud Investigation. The case was investigated by agents of NOAA’s National Marine Fisheries Service. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environmental Crimes Section, Environment and Natural Resources Division.
Justice Department and Dutch Authorities Announce Simultaneous Enforcement Actions Against International Mass-Mailing Fraud Schemes Targeting the ElderlyRead the Press Release
Thousands of U.S. Victims Defrauded Out of Over $18 Million Annually
The United States filed a civil complaint in the U.S. District Court for the Eastern District of New York against an individual and two Dutch companies that allegedly engaged in multiple international mail fraud schemes that have defrauded elderly and vulnerable U.S. victims out of tens of millions of dollars, the Department of Justice announced. The Department sought a temporary restraining order, which was entered by the court yesterday, as well as preliminary and permanent injunctions to prevent the defendants from further victimizing U.S. consumers.
According to the complaint, U.S. residents received fraudulent direct mail solicitations that falsely claimed that the individual recipient had won, or would soon win cash or valuable prizes or otherwise come into great fortune. Victims sent payments through the U.S. and international mail systems to defendants Trends Service in Kommunikatie B.V. (Trends) and Kommunikatie Service Buitenland B.V. (KSB), both in Utrecht, Netherlands, and both owned and operated by defendant Erik Dekker, 54, of Langbroek, Netherlands.
At the same time that the Justice Department took this law enforcement action, Dutch law enforcement agents executed search warrants on the business address used by both companies and on Dekker’s home address. The Dutch authorities also took control of the Dutch P.O. boxes used by the defendants to receive victim funds. The coordinated U.S. and Dutch enforcement actions seek to immediately stop the use of Dutch P.O. boxes to receive payments from fraud victims and to immediately stop the defendants from continuing to victimize the elderly. Learn more about the actions taken by Dutch authorities at: https://www.om.nl/actueel/nieuwsberichten/@94702/fiod-and-us-doj/
“Schemes targeting elderly victims are increasingly international in scope, but geographic distance will not prevent us from seeking justice and holding bad actors accountable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Dutch authorities have done a great service to U.S. residents and elderly victims worldwide by addressing fraud facilitated within their borders. The Justice Department will continue to work with our international law enforcement partners to put a stop to fraud schemes that exploit vulnerable Americans.”
“As alleged in the complaint, defendants act as the clearinghouses for multiple international mail fraud schemes, taking money from thousands of elderly and vulnerable victims not only in this district but also throughout the United States,” said U.S. Attorney Robert L. Capers for the Eastern District of New York. “Together with the U.S. Postal Inspection Service and our international partner, the Fiscal Intelligence and Investigation Division of the Netherlands, we will track down, and stop, the schemes wherever they lead.”
“No one should ever be told they must pay a fee, or make a worthless purchase, to collect a prize,” said Inspector in Charge Regina L. Faulkerson of the U.S. Postal Inspection Service’s Criminal Investigation Group. “When that happens, it’s fraud - plain and simple - and Postal Inspectors work to keep those falsehoods out of the U.S. mail.”
The complaint filed June 1 in U.S. federal court in the Eastern District of New York alleges that, since at least 2012, Trends, KSB and Dekker have used P.O. boxes in the Netherlands to receive payments from various predatory mass-mailing fraud schemes. Solicitations are mailed from locations around the globe to residents in the United States. The solicitations purport to be personalized to each individual recipient, even though they are form letters mailed to hundreds of thousands of potential victims. Some solicitations instruct recipients to pay a processing fee in order to receive lottery winnings or other prizes; other solicitations urge recipients to purchase goods or services based on false promises that they will guarantee future lottery wins.
As alleged in the complaint, victims responded to the solicitations by completing a form and submitting a payment, usually around $15 to $55, via U.S. mail. The solicitations contain pre-addressed envelopes in which victims send payments. The envelopes are addressed to P.O. boxes in the Netherlands. Trends and KSB operate more than 50 of these P.O. boxes. Like other so-called “caging services,” Trends and KSB open the payment envelopes, remove the contents, enter payment and other personal information from the victims into a database and handle victim payments. The U.S. government estimates that U.S. victims mail more than $18 million annually to the defendants’ P.O. boxes.
The government is seeking an injunction under the Anti-Fraud Injunction Statute immediately shutting down the defendants’ role in the fraudulent schemes in order to protect U.S. victims from further harm. The injunctions sought by the United States would enjoin the defendants from using the U.S. mail or causing the U.S. mail to be used, to distribute the fraudulent solicitations or to collect victim payments, and from selling lists of American victims who have responded to the solicitations. If granted, a permanent injunction would allow the U.S. Postal Service to intercept mail heading to the defendants, and return that mail—along with any money being sent to the defendants—to U.S. victims.
U.S. District Court Judge I. Leo Glasser for the Eastern District of New York set a hearing on the preliminary injunction on July 18 at 10 a.m.
The Justice Department’s case is being handled by Trial Attorney Kerala Thie Cowart of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney John Vagelatos of the U.S. Attorney’s Office in the Eastern District of New York and Postal Inspector Joseph R. Bizzarro of the U.S. Postal Inspection Service.
The claims made in the complaints are allegations only, and there has been no determination of liability.
A copy of the complaint, case # 16-CV-2770, can be found here: https://www.justice.gov/opa/file/863501/download
More information on fraud against the elderly is available here: https://www.justice.gov/elderjustice/.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.
Joint EU-U.S. Press Statement Following the EU-U.S. Justice and Home Affairs Ministerial MeetingRead the Press Release
Today the EU-U.S. Ministerial Meeting on Justice and Home Affairs, hosted by the Netherlands Presidency of the Council of the European Union, took place in Amsterdam. This meeting is held usually twice a year, to evaluate and advance Trans-Atlantic cooperation in the areas of freedom, security and justice.
Attorney General Loretta E. Lynch joined Dutch Minister of Security and Justice Ard van der Steur, U.S. Deputy Secretary of Homeland Security Alejandro Mayorkas, and Commissioner for Migration, Home Affairs and Citizenship, Dimitris Avramopoulos and Commissioner for Justice, Consumers and Gender Equality, Věra Jourová, representing the European Union.
In this Ministerial meeting, the EU and the United States reaffirmed their commitment to closer cooperation, especially in the context of evolving and shared challenges that affect the security and rights of citizens on both sides of the Atlantic.
Today’s signing of the "Umbrella" agreement[1] represented a major step forward in EU-U.S. relations. The agreement sets high standards for the protection of personal data transferred by law-enforcement authorities. It also strengthens legal certainty and enhances the rights of citizens which in turn will facilitate EU-U.S. cooperation to combat crime, including terrorism. The EU and the U.S. are committed to work together in the implementation of this agreement to ensure that it benefits both citizens and law enforcement cooperation. The next step will be to seek approval by the European Parliament.
During the ministerial meeting, the delegations focused on ways to address the migration crisis, on their respective visa policies, and on information sharing in the context of security, on counterterrorism policies and terrorist financing, on money laundering, data protection and on practical cooperation to tackle transnational organised crime. The exchange of views covered issues including the protection of refugees, global resettlement efforts, effective border management and dismantling organised criminal migrant smuggling networks.
The EU and the U.S. first discussed ways to address global migration by developing safe, regular and orderly migration processes whilst ensuring international protection for those who need it. The discussion focused on opportunities to mutually reinforce and coordinate their actions in this respect while also establishing high security standards. They agreed that the current migration and refugee challenges require global solutions through increased international cooperation and regional action. In this respect they reaffirmed their commitment to work together in the lead-up to the upcoming United Nations General Assembly high level meeting addressing large movements of refugees and migrants and to the U.S. hosted Leader-Level Refugee Summit, to be held in September 2016 in New York.
The EU and U.S. exchanged views on visa issues and the respective legal frameworks. They agreed to maintain their constructive dialogue at all levels to achieve mutually beneficial solutions.
The EU and the U.S. discussed initiatives to improve counterterrorism efforts, including border security, screening of travellers and information sharing, as well as cooperation to better identify terrorist and foreign fighter travel. They also agreed to reinforce their dialogue on chemical, biological, radioactive and nuclear material and on its possible use by terrorist networks. They discussed legislative initiatives to improve information sharing, and to streamline efforts to combat terrorist financing and money laundering.
They also discussed a five year review of the 2010 EU-U.S. Mutual Legal Assistance Treaty, a key mechanism for transatlantic criminal justice cooperation. The EU and the U.S. confirmed that the treaty is working effectively and identified areas for further practical improvement. The U.S. and the EU committed to implementing those recommendations. These recommendations include enhancing training and specialisation of practitioners, improving the way joint investigation teams work together, using technology to avoid delays, and making it easier to track criminal proceeds by identifying bank accounts. Facilitating access to electronic evidence is a particular concern of the review, and the participants committed to improving their practices through which they obtain such evidence.
Following up to the commitment made at the EU–U.S. Summit in March 2014, the EU and the U.S. reiterated their desire to tackle jointly the issue of transnational child sex offenders, acknowledging the operational conclusions of an EU–U.S. expert meeting held in September 2015. The EU and the U.S. recognized the importance of improving operational cooperation to protect children from transnational sex offenders.
Concluding the discussions, Europol and the U.S. jointly presented the results of a successful EU–U.S. operation that brought together law enforcement authorities from across Europe and the US to dismantle an important drug trafficking network and seize the proceeds of their crimes.
The EU and the U.S. committed to continuing their regular dialogue and to hold another ministerial meeting in the second half of 2016.
[1] Agreement between the European Union and the United States of America on the protection of personal data when transferred and processed for the purpose of preventing, investigating, detecting or prosecuting criminal offences, including terrorism
Attorney General Loretta E. Lynch Statement on Planned Departure of Solicitor General Donald B. Verrilli Jr.Read the Press Release
Attorney General Loretta E. Lynch released the following statement on the departure, effective June 24, of Solicitor General Donald B. Verrilli Jr. Attorney General Lynch also announced that Principal Deputy Solicitor General Ian Gershengorn will serve as Acting Solicitor General effective June 25.
Attorney General statement on the departure of Solicitor General Verrilli:
“Don Verrilli is a brilliant lawyer, a devoted public servant and one of the most consequential Solicitors General in American history,” said Attorney General Loretta Lynch. “Since he began his service in the Obama Administration in February of 2009, Don has been at the center of the foremost legal challenges of our time, most notably through his arguments in a series of groundbreaking cases before the Supreme Court. He led the case against the Defense of Marriage Act and for the Fourteenth Amendment’s guarantee of marriage equality, breaking down barriers that had divided us from one another and extending the reach of America’s promise. He secured a landmark victory in Arizona v. United States, helping to strike down harsh anti-immigration laws and prevent the separation of countless families looking for a better life. And he successfully defended the constitutionality of the Affordable Care Act, preserving a law that has helped millions of Americans obtain health insurance.
“Through these and many other cases – and through his thoughtful counsel and principled advocacy – Don has built a legacy of inclusion, expanding opportunities and civil rights for all Americans and moving our country forward. I could not be more proud to call him a colleague and a friend. I thank him for his extraordinary service to the Department of Justice and to the nation and I wish him well in all of his future endeavors.”
Attorney General Lynch statement on Ian Gershengorn assuming the position of Acting Solicitor General:
“In his two tours of duty with the Department of Justice, Ian Gershengorn has earned a reputation as an exceptionally talented attorney and a gifted defender of the Constitution,” said Attorney General Loretta Lynch. “From his service in the Clinton Administration as a special assistant and counsel to the Deputy Attorney General under Attorney General Janet Reno, to his work over the course of this administration since 2009, Ian has displayed his unwavering dedication to public service and his irreproachable commitment to the rule of law. He has played a key role in some of our most high-profile cases, including as head of the Federal Programs Branch of the department’s Civil Division, where he personally argued in defense of the Affordable Care Act during district court challenges. I have no doubt that Ian is well-equipped to build on departing Solicitor General Don Verrilli’s extraordinary record. I am confident that he will advance a trailblazing legacy of excellence and accomplishment. And I am certain that as Acting Solicitor General, he will expand and extend the vital work of the Obama Administration and the American people.”
Nine People Charged in Multi-State Dog Fighting ConspiracyRead the Press Release
Six New Jersey residents were among nine individuals charged today in four states for their alleged roles in an interstate dog-fighting network spanning from New Mexico to New Jersey, announced Assistant Attorney General John Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Paul Fishman for the District of New Jersey.
The federal Animal Welfare Act makes it a felony punishable by up to five years in prison to fight dogs or to possess, train, sell, buy, deliver, receive or transport dogs intended for use in dog fighting.
Criminal complaints filed in New Jersey named the following individuals, eight of whom were arrested:
- Anthony “Monte” Gaines, 35, of Vineland, New Jersey (already in state custody on unrelated charges)
- Justin Love, 36, of Westville, New Jersey
- Lydell Harris, 30, of Vineland
- Mario Atkinson, 40, of Asbury Park, New Jersey
- Frank Nichols, 39, of Millville, New Jersey
- Tiffany Burt, 34, of Vineland
- Dajwan Ware, 43, of Fort Wayne, Indiana
- Pedro Cuellar, 46, of Willow Springs, Illinois
- Robert Arellano, 62, of Albuquerque, New Mexico
According to documents filed in this case and statements made in court:
The three criminal complaints charge residents of New Jersey and out-of-state residents for their alleged involvement in a multi-state dog fighting network. The charges include alleged criminal acts related to transporting, delivering, buying, selling, receiving and possessing pit bull-type dogs for dog fighting ventures and conspiring to commit these acts in New Jersey and elsewhere throughout the United States.
From October 2015 through the present, the defendants and their associates participated in dog-fighting ventures in which pit bull-type dogs were set up for matches to maul and attack each other and fight – often until one or both dogs die – and facilitated these ventures by transporting and delivering dogs between dog fighters in various states. The federal undercover investigation revealed that the defendants discussed graphic accounts of prior dog fights they and their associates staged and furthered their dog-fighting ventures through the exchange of information concerning dog-fighting bloodlines, training methods, fighting techniques and the market for buying and selling dogs.
Federal agents found and saw evidence of the dog-fighting ventures on some of the defendants’ properties. This included scarred dogs and dogs stacked in crates; dog fighting paraphernalia, such as dog treadmills, “flirt” poles used to build jaw strength and increase aggression and animal pelts. Also found and seen were surgical instruments, syringes and other tools used to mend dogs in lieu of seeking veterinary attention.
This case is part of Operation Grand Champion, a coordinated effort across numerous federal judicial districts to combat organized dog fighting. The phrase “Grand Champion” is used by dog fighters to refer to a dog with more than five dog-fighting “victories.”
“Dog fighting is truly an organized criminal activity, as well as a deplorable trade in the suffering of animals,” said Assistant Attorney General Cruden. “This case marks the beginning of a coordinated effort at the Department of Justice to meet organized dog fighting head-on with a strategic, aggressive federal response.”
“There is no place in New Jersey – or anywhere else, for that matter – for a vicious blood sport like dog fighting,” said U.S. Attorney Fishman. “Not only is it unspeakably cruel to the animals that are raised to participate in dog fighting, but animals trained in this way can be extremely dangerous to the public.”
Operation Grand Champion is a continuing investigation by the U.S. Department of Agriculture, Office of the Inspector General, under the direction of Special Agent in Charge William G. Squires; Department of Homeland Security, Homeland Security Investigations, under the direction of Special Agent in Charge Terence S. Opiola; and the FBI, under the direction of Special Agent in Charge Timothy Gallagher, in coordination with the Department of Justice.
The government is represented by Justice Department’s Environmental Crimes Section Trial Attorneys Ethan Eddy and Shennie Patel and Assistant U.S. Attorneys Jihee Suh and Kathleen O’Leary of the District of New Jersey and the, with the assistance of the U.S. Attorney’s Offices in the District of New Mexico, Northern District of Illinois and Northern District of Indiana.
The Humane Society of the United States is assisting with the care of the dogs seized by federal law enforcement.
A criminal complaint is an allegation based upon a finding of probable cause by a magistrate judge. A defendant is presumed innocent unless and until convicted. If convicted, each defendant faces up to five years in prison and a $250,000 fine per count of animal fighting charges. The investigation is ongoing.
Justice Department Reaches Agreement to Protect the Rights of Spanish-Speaking Voters in Napa County, CaliforniaRead the Press Release
The Justice Department announced today that it has reached an agreement with Napa County, California, to ensure compliance with provisions of the Voting Rights Act that require the county to provide bilingual election materials and information in Spanish to voters.
The Voting Rights Act requires that jurisdictions determined by the Census Bureau to have a substantial population of minority-language citizens with limited English proficiency, such as Napa County, provide voting materials and assistance in the minority language as well as in English.
“The right to vote forms the foundation of our democracy, and language barriers should never keep eligible voters from accessing that right,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This agreement ensures that Napa County’s eligible Spanish-speaking voters can access the election process and participate in our democracy by casting effective ballots. The Justice Department commends Napa County for resolving the issue quickly and cooperatively.”
The agreement with Napa County requires implementation of a comprehensive Spanish language elections program for the county’s Spanish-speaking limited English proficient voters. Under the terms of the agreement, the county will disseminate bilingual election-related information, materials and announcements. Napa County will also ensure that Spanish-language assistance is available at all locations where election-related transactions are conducted, including polling places and voter assistance centers.
Napa County already has hired a bilingual elections coordinator to assist in implementing the Spanish language elections program. The county has also established an advisory group of interested community members and organizations to assist the county in determining how to most effectively provide election information and assistance to Spanish-speaking voters. To assist in ensuring the effectiveness of the agreement’s bilingual assistance procedures, the agreement provides that Justice Department election monitors may monitor during training and early voting as well as on Election Day.
To file complaints about discriminatory voting practices, voters may contact the Voting Section of the Civil Rights Division at 1-800-253-3931 or at [email protected]. Complaints can also be filed online here.
More information about the Voting Rights Act and other federal voting rights laws are available on the Justice Department’s website at www.justice.gov/crt/about/vot/.
Napa County Memorandum of Agreement
District Court Enters Permanent Injunction Against Kansas Food Manufacturer and Company’s Managers to Stop Distribution of Adulterated Food ProductsRead the Press Release
The U.S. District Court for the District of Kansas entered a consent decree of permanent injunction against Native American Enterprises LLC (NAE), of Wichita, Kansas; its vice president and part-owner, William N. McGreevy; and its production manager, Robert C. Conner, to stop the distribution of adulterated food, the Department of Justice announced today.
The department filed a complaint in the District of Kansas on March 21, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, NAE manufactures and distributes ready-to-eat (RTE) refried beans and sauces. The complaint alleged that the company’s RTE refried beans and sauces are adulterated in that they have been prepared, packed and/or held under insanitary conditions whereby the food may have become contaminated with filth or have been rendered injurious to health. According to the complaint, the insanitary conditions include the presence of Listeria Monocytogenes (L. mono) in NAE’s facility and insanitary employee practices.
“Listeria Monocytogenes is a very dangerous bacteria, and its presence in a food production facility is of great concern,” 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.”
On May 27, the parties filed a consent decree of permanent injunction, by which the defendants agreed to resolve the litigation. The consent decree of permanent injunction, entered by the district court, requires the defendants to cease all manufacture or distribution of food (including RTE refried beans and sauces) other than meat products. Meat products are regulated separately by the U.S. Department of Agriculture (USDA). In the event that defendants intend to resume the manufacture or distribution of food other than meat products, they will only be allowed to do so with FDA approval and under strict supervision. The defendants will also be required to destroy, under FDA’s supervision, any such products already in existence.
With respect to meat products, USDA’s Food Safety Inspection Service (FSIS) conducts daily on-site operations inspections at all firms manufacturing USDA FSIS regulated products pursuant to the Federal Meat Inspection Act, the Poultry Products Inspection Act and the Egg Products Inspection Act.
According to the complaint filed in this matter, FDA inspected NAE’s facility, located at 230 N. West Street in Wichita, in August 2015, collected environmental samples, and observed numerous insanitary practices, including the defendants’ failure to manufacture and package food under conditions necessary to minimize microorganism growth, take necessary precautions to protect against contamination and maintain buildings in good repair. Specifically, according to the complaint, FDA observed rain water leaking through the roof in the packaging room, directly above where NAE employees packaged RTE refried beans. In addition, FDA observed cracks and holes in the walls and floor junctures that allow water and debris to collect, prohibit adequate cleaning and could harbor Listeria, according to the complaint.
FDA inspected NAE’s facility twice in 2014. As alleged in the complaint, FDA collected environmental samples during RTE refried beans production during each of the 2014 inspections and found Listeria in the facility. In addition, as alleged in the complaint, FDA also observed a failure to maintain equipment in an acceptable condition through appropriate cleaning and sanitizing.
As alleged in the complaint, L. mono thrives in moist environments, such as food-manufacturing environments. Unless proper precautions are taken, L. mono may become established and grow and it is difficult to eliminate once it becomes established in a food-manufacturing environment. It is capable of surviving and growing at refrigerated temperatures and in high-salt environments. The complaint alleges that L. mono is a significant public health risk in RTE refried beans and sauces.
The government is represented by Trial Attorney Heide L. Herrmann of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Emily Metzger of the U.S. Attorney’s Office for the District of Kansas, with the assistance of Associate Chief Counsel for Enforcement Sonia W. Nath of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of Kansas, visit its website at https://www.justice.gov/usao-ks.
Virginia Couple Sentenced to Prison in Tax Fraud SchemeRead the Press Release
Defendants Submitted False Information to the IRS and Social Security Administration
Two Bedford, Virginia, residents were sentenced to prison today for criminal offenses arising out of a four-year scheme to defraud the Internal Revenue Service (IRS) and the Social Security Administration, announced Acting Assistant Attorney General Caroline D. Ciraolo and U.S. Attorney John P. Fishwick Jr. of the Western District of Virginia.
Edgar Foxx, 50, and Contina Foxx, 42, were sentenced to prison terms of 41 months and 30 months, respectively, by U.S. District Judge Norman K. Moon of the Western District of Virginia following their convictions by a Lynchburg, Virginia, jury for criminal tax offenses. Judge Moon also ordered the defendants to pay $147,708 in restitution and serve three years of supervised release following their release from prison.
“Our nation’s tax system relies upon citizens to truthfully, accurately and timely report their income to the IRS,” said Acting Assistant Attorney General Ciraolo. “When people like Mr. Foxx fail to file their income tax returns or file false tax returns and fail to pay the taxes they owe, and when individuals like Mrs. Foxx submit false information to government agencies in order to obtain benefits, they take advantage of, and plane an undue burden on, honest taxpayers who pay their fair share. The Justice Department stands ready to prosecute these offenders and hold them accountable for their crimes.”
“Every year, millions of Americans file their taxes and fulfill their civic obligation,” said U.S. Attorney Fishwick. “They must be able to do this knowing the process is safe and reliable. When individuals fail to pay their obligations the entire system suffers. We are proud to work with the Tax Division on holding accountable those who attempt to defraud the tax system.”
“Federal income tax compliance should be equally shared among all Americans,” said Special Agent in Charge Thomas Jankowski for IRS-Criminal Investigation’s (IRS-CI) Washington DC Field Office. “IRS-CI will continue focusing investigative efforts on individuals who contribute to the tax gap and do not comply with the law. Today’s sentencing is a reminder that there are detrimental consequences for this type of criminal behavior.”
Edgar and Contina Foxx were convicted on Nov. 6, 2015, following a four-day trial before Judge Moon. Edgar Foxx was convicted of filing a false 2008 income tax return, failing to file his 2009 through 2011 tax returns and theft of government money. Contina Foxx was also convicted of theft of government money as well as providing a false statement for health care benefits. According to evidence introduced at trial and witness testimony, the Foxxes, who are married to one another, owned and operated a metal recycling business between 2008 and 2012. They gathered scrap metal materials including junk cars and old appliances and sold them to recycling facilities in Southwest Virginia and Tennessee. During the 2008 through 2011 time period, the Foxxes received over $500,000 in payments from several metal recycling companies, and failed to report any of this income on their 2008 through 2011 individual income tax returns. At the same time, Contina Foxx provided false information to the Social Security Administration by failing to disclose the income earned from the metal recycling business. As a result, the Foxxes unlawfully received approximately $80,000 in Medicaid benefits between 2010 and 2012.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Fishwick commended special agents of IRS-Criminal Investigation, the Office of Inspector General for the Social Security Administration, the Office of Inspector General for the Department of Health and Human Services, the Bedford Department of Social Services and the Bedford County Sheriff’s Office, who investigated the case and Assistant U.S. Attorneys Patrick Hogeboom and Charlene Day of the Western District of Virginia and Trial Attorney Joseph M. Giannullo of the Tax Division, who prosecuted the case.
More information about the Tax Division and its enforcement efforts can be found on the Division’s website.
Virginia Business Owner Sentenced to Prison for Employment Tax FraudRead the Press Release
An Ashland, Virginia, man was sentenced to prison today in the U.S. District Court for the Eastern District of Virginia for failing to collect, account for and pay over employment taxes to the Internal Revenue Service (IRS), announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
Michael Manning, 52, was sentenced to serve 18 months in prison, followed by two years of supervised release. Manning pleaded guilty on Feb. 23, to failing to collect, account for and pay over employment taxes for his masonry contractor construction companies. Manning was ordered to pay restitution to the IRS in the amount of $677,350.39.
“Mr. Manning chose to withhold employment tax from his employees, and use those funds for his personal benefit, inflicting substantial harm on the U.S. Treasury and gaining a competitive advantage over his law-abiding competitors,” said Acting Assistant Attorney General Ciraolo. “The Tax Division has made it clear that employers like Mr. Manning, who willfully fail to collect, account for, and pay over employment taxes to the IRS, are engaged in criminal conduct and will be held accountable. Today’s sentence reflects this priority and the seriousness of such crimes.”
“Investigating employment tax crimes remains one of IRS Criminal Investigation’s (IRS-CI) highest priorities and today’s sentencing of Michael Manning reflects the serious nature of that crime,” said Chief Richard Weber of IRS-CI. “Failure to collect, account for and pay employment taxes is a crime and it hurts not only federal, state, and local governments, but also employees. We expect all taxpayers to follow the law—whether you are a business owner or an individual—we all must play by the same rules.”
According to court documents, Manning was the President of Manning Construction and Manning-Carhen Construction. Manning controlled the businesses’ finances and was responsible for collecting, accounting and paying over employment taxes for both businesses. For the third and fourth quarters of 2014, Manning willfully failed to comply with his legal obligation to pay over more than $700,000 in employment taxes to the IRS. In addition to failing to pay over the withheld taxes, Manning instructed his bookkeeper to create false financial statements for submission to financial institutions in order to comply with existing loan covenants, to encourage banks to lend new funds to the company, or to enable the renewal of existing loans. Manning and his bookkeeper openly referred to these false accounting entries as “Bernie entries,” in reference to the accounting techniques of Bernie Madoff and “ghost entries,” when reallocating negative financial results within the companies’ QuickBooks files so that these negative results would not be discovered by third parties. Moreover, Manning used these same accounting techniques to conceal his use of over $500,000 in corporate funds for various personal expenses, including paying off a lien on his lake property.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Boente commended special agents of IRS-CI, who investigated the case and Trial Attorney Melanie Smith of the Tax Division and Assistant U.S. Attorney Thomas Garnett of the Eastern District of Virginia, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Justice Department Settles Immigration-Related Discrimination Claim Against California Skilled Nursing FacilityRead the Press Release
The Justice Department reached a settlement agreement today with Villa Rancho Bernardo Care Center (VRB), a skilled nursing facility in San Diego. The agreement resolves the department’s investigation of VRB for discrimination against work-authorized non-U.S. citizens in violation of the Immigration and Nationality Act (INA).
The department’s investigation found that VRB discriminated against lawful permanent residents by requiring them to produce specific documents to prove their work authorization, while permitting U.S. citizens to show any valid work authorization documentation they chose. Specifically, during the interview and hiring processes, including in certain online job postings, VRB requested that lawful permanent residents produce a permanent resident card (often known as a “green card”). Lawful permanent residents are not required to show employers their permanent resident cards to work; like all workers, they can present their choice of valid documentation from the Department of Homeland Security’s lists of acceptable documents to establish their identity and work authorization. For example, lawful permanent residents can establish their work authorization by presenting a state or federal identification document and an unrestricted Social Security card.
Under the settlement agreement, VRB will pay $24,000 in civil penalties to the United States, undergo department-provided training on the anti-discrimination provision of the INA and be subject to monitoring requirements.
“The Civil Rights Division is committed to ensuring that individuals who are authorized to work in the United States do not face unlawful, discriminatory barriers,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department's Civil Rights Division. “It is essential that employers review their employment eligibility verification practices to make sure they are in compliance with the law.”
The 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, immigration status and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices in employment eligibility verification; retaliation; and intimidation.
To learn more about the 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 have been 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 OSC’s worker hotline for assistance.
El Departamento de Justicia Resuelve una Denuncia de Discriminación Relacionada con la Inmigración contra un Centro de Ancianos y Rehabilitación en CaliforniaRead the Press Release
WASHINGTON, D.C. – El Departamento de Justicia llegó hoy a un acuerdo con Villa Rancho Bernardo Care Center (VRB, por sus siglas en inglés), un centro de ancianos y rehabilitación en San Diego. El acuerdo resuelve la investigación de VRB liderada por el Departamento de Justicia en cuanto a su discriminación contra individuos que no son ciudadanos de los EE. UU. pero que sí cuentan con autorización para trabajar, lo cual representa una vulneración de la ley de Inmigración y Nacionalidad (INA, por sus siglas en inglés).
La investigación del departamento encontró que VRB había discriminado a residentes permanentes legales al requerir que presentaran documentos específicos para demostrar su autorización para trabajar, mientras que permitía a ciudadanos estadounidenses que presentaran cualquier documento válido de autorización para trabajar que quisieran. En concreto, durante los procesos de entrevista y contratación, incluyendo en ciertos anuncios de trabajo virtuales, VRB exigió a residentes permanentes legales que presentaran una tarjeta de residencia permanente (a la que se suele llamar “tarjeta verde”). Los residentes permanentes legales no están obligados a enseñar sus tarjetas de residencia permanentes a empleadores para poder trabajar. Como todo trabajador, pueden presentar los documentos válidos de su libre elección de las listas de documentos aceptables del Departamento de Seguridad Nacional para establecer su identidad y autorización para trabajar. Por ejemplo, los residentes permanentes legales pueden establecer su autorización para trabajar al presentar un documento de identificación estatal o federal y una tarjeta de seguro social sin restricciones.
En virtud del acuerdo de resolución, VRB pagará $24,000 en sanciones civiles a los Estados Unidos, participará en la capacitación sobre la disposición antidiscriminatoria de la INA brindada por el departamento y se someterá a los requisitos de supervisión.
“La División de Derechos Civiles se compromete a asegurar que los individuos con autorización para trabajar en los Estados Unidos no se enfrenten a barreras ilícitas o discriminatorias,” declaró la Secretaria de Justicia Auxiliar Adjunta Principal, Vanita Gupta, Directora de la División de Derechos Civiles. “Es esencial que los empleadores revisen sus prácticas de verificación de la elegibilidad para trabajar para asegurarse de que éstas cumplan con la Ley.”
La Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas con la Inmigración (OSC, por sus siglas en inglés) es responsable de aplicar la disposición antidiscriminatoria de la INA. Entre otras cosas, esta ley prohíbe la discriminación por motivos de estatus de ciudadanía, estatus migratorio y 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.
Para más información sobre protecciones contra la discriminación en el empleo en virtud de las leyes migratorias federales, 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 virtual 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.
Los aspirantes o empleados que creen haber sido víctimas de: requisitos documentales diferentes por motivos de su estatus de ciudadanía, estatus migratorio o nacionalidad de origen; o discriminación por motivos de su estatus de ciudadanía, estatus migratorio o nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión deben comunicarse con la línea directa de la OSC para trabajadores para pedir ayuda.
Deloitte Consulting LLP Agrees to Pay $11 Million for Alleged False Claims Related to General Services Administration ContractRead the Press Release
The Department of Justice announced today that Deloitte Consulting LLP (Deloitte) has agreed to pay $11.38 million to resolve allegations under the False Claims Act that it submitted false claims under a General Services Administration (GSA) contract. Deloitte is a nationwide consulting company headquartered in New York City.
“Contractors are expected to deal fairly with federal agencies when receiving taxpayer funds,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “As this settlement demonstrates, we will take action against those who knowingly fail to live up to the terms of their government contracts.”
In 2000, GSA awarded Deloitte a contract for the provision of information technology services. The contract required Deloitte to reduce the prices it charged the government if it offered lower prices to specific commercial customers during the course of the contract. This settlement resolves allegations that between 2006 and 2012, Deloitte failed to comply with the price reductions clause in its contract, resulting in government customers paying more for Deloitte’s services than comparable commercial customers.
“American taxpayers deserve fair deals and prices from GSA contractors,” said GSA Inspector General Carol Fortine Ochoa. “I appreciate the hard work and dedication that led to this significant recovery.”
This case was handled by the Civil Division’s Commercial Litigation Branch and the GSA Office of Inspector General.
The claims resolved by the settlement are allegations only; there has been no determination of liability.
Member of Al Qaeda in the Arabian Peninsula Sentenced to 40 Years in Prison for Terrorism ChargesRead the Press Release
Minh Quang Pham, aka Amin, 33, was sentenced to 40 years in prison today in the Southern District of New York for terrorism charges based on Pham’s efforts in support of al Qaeda in the Arabian Peninsula (AQAP), a designated foreign terrorist organization. On Jan. 8, 2016, Pham pleaded guilty to one count of providing material support to AQAP, one count of conspiring to receive military training from AQAP and one count of possessing and using a machine gun in furtherance of crimes of violence.
The sentence was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Preet Bharara of the Southern District of New York and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office.
“This sentence holds Minh Quang Pham accountable for his terrorist activities, including providing material support to al Qaeda in the Arabian Peninsula and receiving explosives training from Anwar al-Aulaqi in Yemen for the purpose of committing an attack in the United Kingdom,” said Assistant Attorney General Carlin. “Counterterrorism is the National Security Division’s highest priority, and we will continue to bring justice to those who seek to aid designated foreign terrorist organizations in their efforts to commit violent attacks against the United States and our allies.”
“Minh Quang Pham committed himself to the violent mission of al Qaeda in the Arabian Peninsula, a terrorist organization that has claimed responsibility for deadly attacks around the world, including the 2015 Charlie Hebdo attack in Paris,” said U.S. Attorney Bharara. “Pham went to Yemen to receive military training from AQAP and contributed to Inspire magazine, a recruitment tool and ‘how-to’ guide for would-be terrorists around the world. This prosecution and today’s sentencing show that terrorists and those who support them will continue to be brought to justice in American courts, thanks to the continuing resolve of the Department of Justice, this Office and our global law enforcement partners.”
"Minh Pham traveled to Yemen, where he received military-style training from al Qaeda in the Arabian Peninsula, including learning to build explosive devices, with the intent to commit harm against the United States and our allies," said Assistant Director in Charge Abbate. "Pham also contributed to terrorist propaganda in order to promote acts of violence and hate across the globe. This sentence sends a strong message that the FBI and our law enforcement partners can and will track down dangerous terrorists anywhere in the world and return them to face justice for their crimes.”
According to the indictment, extradition materials, court filings and statements made at related court proceedings, including today’s sentencing:
In December 2010, after informing others that he planned to travel to Ireland, Pham traveled from London, where he resided, to Yemen, the principal base of operations for AQAP. Pham traveled to Yemen in order to join AQAP, to wage jihad on behalf of AQAP and to martyr himself for AQAP’s cause. After arriving in Yemen, he swore an oath of loyalty to AQAP in the presence of an AQAP commander.
While in Yemen in 2010 and 2011, Pham provided assistance to and received training from Anwar al-Aulaqi, a U.S.-born senior leader of AQAP. Al-Aulaqi advised Pham to return to the United Kingdom for the purpose of finding and making contact with individuals who, like Pham, wanted to travel to Yemen to join AQAP. Al-Aulaqi also provided Pham with money, as well as a telephone number and e-mail address that Pham was to use to contact al-Aulaqi upon his return to the United Kingdom. In addition, Pham exchanged his laptop computer with al-Aulaqi, who provided him with a new “clean” laptop to take with him when he returned to the United Kingdom so that the authorities would not find anything if they searched his computer.
In or about June 2011, prior to his departure from Yemen, Pham approached al-Aulaqi about conducting a suicide attack whereby he would “sacrifice” himself on behalf of AQAP. Al-Aulaqi personally taught Pham how to create a lethal explosive device using household chemicals and directed Pham to detonate such an explosive device at the arrivals area of London’s Heathrow International Airport following Pham’s return to the United Kingdom in 2011. Al-Aulaqi instructed Pham to carry an explosive in a concealed backpack and target the area where flights arrived from the United States or Israel.
During his time in Yemen, Pham also assisted with the preparation and dissemination of AQAP’s propaganda magazine, Inspire. Pham worked directly with now-deceased U.S. citizen Samir Khan, who was a prominent member of AQAP responsible for editing and publishing Inspire. Pham, who has college degrees in both graphic design and animation, received training in the various types of software used for Inspire and worked closely with Khan, contributing to the magazine in numerous ways. Pham used graphic design software to edit videos and photos that would be used as propaganda in Inspire; recorded television programs that Khan might find useful to the magazine; and offered his camera to be used for the taking of numerous photos used for Inspire. Pham also posed in photographs that accompanied Inspire articles and provided instructions to its followers. Among those were a series of photographs accompanying an article with instructions on disassembling and cleaning a Kalashnikov assault rifle. In another photograph, accompanying an article entitled, “Why Did I Choose Al Qaeda,” which was written by al-Aulaqi, Pham and three other men were shown wielding automatic Kalashnikov assault rifles. In addition, AQAP trained Pham in the use of a Kalashnikov assault rifle and provided him such a rifle, which he used in furtherance of his activities on behalf of AQAP in Yemen.
On July 27, 2011, Pham returned to the United Kingdom. Upon his arrival at London’s Heathrow International Airport, U.K. authorities detained Pham, searched him and recovered various materials from him, including various electronic media that contained computer files forensically identical to those possessed by a cooperating witness who had previously reported sharing electronic documents with Pham while they were in Yemen with AQAP. In addition, Pham was found to be in possession of a live round of .762 caliber armor-piercing ammunition, which is consistent with ammunition that is used in a Kalashnikov assault rifle.
Pham was arrested in the United Kingdom on June 29, 2012, and extradited to the United States in February 2015.
In addition to the 40 year prison sentence, U.S. District Judge Alison J. Nathan of the Southern District of New York also imposed a life term of supervised release and a $300 special assessment. On Jan. 8, 2016, Judge Nathan issued an order that Pham be removed from the United States to the United Kingdom upon completion of his sentence.
Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the extraordinary investigative work of the FBI’s Washington Field Office. They also expressed their gratitude to the New York Joint Terrorism Task Force for the critical role it played in the investigation and prosecution. Assistant Attorney General Carlin and U.S. Attorney Bharara also thanked the Department of Justice’s Office of International Affairs for their significant assistance, as well as the Metropolitan Police Service/SO 15 Counter Terrorism Command at New Scotland Yard and the Crown Prosecution Service for their cooperation in the investigation and prosecution.
This case is being prosecuted by Assistant U.S. Attorneys Anna M. Skotko, Sean S. Buckley, Shane T. Stansbury and Ian McGinley of the Southern District of New York, with assistance from Trial Attorney Rebecca Magnone of the National Security Division’s Counterterrorism Section.
Asian American and Pacific Islander Heritage MonthRead the Press Release
In commemoration of the month of May as Asian American and Pacific Islander Heritage Month, our office participated in the 12th Festival of Pacific Arts (FestPac) as Guam hosted 28 Island Nations and Territories from across the Pacific in what is called the “Olympics of Pacific Arts” and the largest cultural event to take place in Guam's history, from May 22 – June 4, 2016. The theme for FestPac 2016 was “Håfa Iyo-ta, Håfa Guinahå-ta, Håfa Ta Påtte, Dinanña’ Sunidu Siha Giya Pasifiku,” which translates to “What we own, what we have, what we share – United Voices of the Pacific.”
Our office extended a warm Hafa Adai welcome and presented Certificates of Appreciation to the Delegations of the Pacific Island Nations and Territories at the Hagatna Paseo de Susana Park. First Lady and Honorary Chairwoman of the 12th Festival of Pacific Arts, Christine Calvo, was present with representatives from the Delegations. Our staff was invited to celebrate Asian American and Pacific Islander Heritage Month by also wearing traditional cultural attire or island wear to the presentation, and participating in the FestPac events after the presentation. The FestPac events included traditional performances, arts and crafts displays and demonstrations, and music and story-telling.
According to various publications, "The Festival of the Pacific Arts is held every four years since 1972, and brings together artists and cultural practitioners from around the Pacific region for two weeks of festivity. It is recognized as a major regional cultural event, and is the largest gathering in which Pacific peoples unite to enhance their respect and appreciation of one another.
The idea of a Festival of Pacific Arts was conceived by the Conference of the South Pacific Commission (now the Secretariat of the Pacific Community (SPC) in an attempt to combat the erosion of traditional customary practices. Since 1972, delegations from 27 Pacific Island Nations and Territories have come together to share and exchange their cultures at each Pacific Arts Festival. A delegation of 2,500 performers, artists and cultural practitioners were expected, in addition to thousands of visitors from Asia and festival followers who see to it they are part of the festival every four years.”
The 28 Pacific Island Nations and Territories that participated in FestPac were: American Samoa, Australia, Cook Islands, the Federated States of Micronesia (Yap, Chuuk, Pohnpei and Kosrae), Fiji Islands, French Polynesia, Guam (2016 Host), Hawaii, Kiribati, Marshall Islands, Nauru, New Caledonia, New Zealand, Norfolk Island, Niue, Northern Mariana Islands, Palau, Papua New Guinea, Pitcairn Islands, Rapa Nui, Republic of China (Taiwan), Samoa, Solomon Islands, Tokelau, Tonga, Tuvalu, Vanuatu, and Wallis and Futuna.
FestPac officially started with the launching of proas from several island nations, including Guam. The seafaring group from Guam paddled just offshore to welcome visiting seafarers who traveled from their islands by proas.
The grand opening of the Guam Museum also coincided with the opening of FestPac.
Attached are photos taken at the presentation of Certificates of Appreciation to the Delegations participating at FestPac on Guam and other photos taken of some of the visiting Pacific Island Nations and Territories, participating in traditional performances, arts and crafts displays and demonstrations, and music and story-telling.
U.S. Attorney Alicia Limtiaco and USAO Staff with First Lady of Guam Christine Calvo and FestPac Delegation representatives at USAO Presentation of Certificates of Appreciation The official opening of FestPac began with the launching and sailing of proas from several island nations U.S. Attorney Alicia Limtiaco and USAO Staff visiting with Guam Museum Director Clifford Guzman and staff in front of the newly opened Guam Museum Samoa Delegation Yap Delegation New Zealand Delegation Rapa Nui Delegation Marshall Islands Delegation Northern Mariana Islands Delegation Guam DelegationUnited States, Mexico and Canada Join Forces to Improve Amber Alert SystemRead the Press Release
The U.S. Department of Justice’s Office of Prosecutorial Development, Assistance and Training (OPDAT) and Mexico’s Office of the Attorney General (PGR) sponsored a Trinational Forum yesterday and today in Mexico City, bringing together Amber Alert Coordinators from Mexico, the United States and Canada. The forum aimed to create mechanisms for the international coordination of Amber Alerts in order to better respond to potential cross-border cases of missing children.
Opening the forum, Mexican Attorney General Arely Gomez highlighted the importance of international cooperation in the identification of missing children, noting that the Amber Alert program “breaks the barriers of communication, time and distance,” and highlighted that the “neutralization and disruption of criminal groups and their operations cannot depend on limits created by borders or national identities.”
The importance of the Amber Alert system also was recognized by U.S. Attorney General Loretta E. Lynch in her remarks yesterday at the annual National Missing Children’s Day Ceremony in Washington, D.C., where she noted the Trinational Event in Mexico City and said, “and our commitment to rescuing missing children does not stop at the border. I am proud to say that our Department of Justice has collaborated with the Attorney General of Mexico on the development of Mexico’s AMBER Alert System, which has already resulted in the rescue of hundreds of Mexican children.”
OPDAT Senior Resident Legal Advisor Ray Gattinella told Amber Alert coordinators in Mexico City, “we currently have 75 open abduction cases from the United States to Mexico and 183 open cases from Mexico to the United States. So it makes sense that our countries would continue the collaboration on Amber Alert we started four years ago and begin coordinating on potential cross-border and interstate missing children cases.”
OPDAT assisted PGR in the creation and implementation of Amber Alert Mexico based on the U.S. program in May 2012. Since that time, Amber Alert has led to the rescue of over 350 children in Mexico. The program has also become a central piece of OPDAT’s programming in Mexico under the Merida Initiative. The United States immensely values the cooperation and collaboration from both Mexico and Canada in this critical area.
Portland Area Strip Club Operators Found Guilty of ConspiracyRead the Press Release
A federal jury sitting in Portland, Oregon found three family members who ran two strip clubs in the Portland area guilty of conspiracy to defraud the United States and charges relating to the filing of false tax returns after a six day trial, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Billy J. Williams of the District of Oregon announced.
David G. Kiraz, his father George D. Kiraz, and David’s brother Daniel Kiraz, ran two Portland-area strip clubs – Cabaret Lounge I at 503 W Burnside Street and Cabaret Lounge II at 17544 SE Stark Street – and engaged in a scheme to defraud the United States by filing false federal income tax returns with the Internal Revenue Service (IRS), according to the evidence presented at trial. In addition to finding the three guilty of conspiracy to defraud the United States, the jury found David Kiraz guilty of three counts of filing false tax returns, George Kiraz guilty of three counts of aiding and assisting in the preparation and filing of false tax returns, and Daniel Kiraz guilty of one count of aiding and assisting in the preparation and filing of false tax returns.
“The Kirazes engaged in a long-running conspiracy to defraud the U.S. Treasury and today, a jury held them accountable for their crimes,” said Acting Assistant Attorney General Ciraolo. “The department is committed to investigating and prosecuting individuals and entities who violate our nation’s tax laws and will seek incarceration, fines and restitution to send a clear message to other potential offenders.”
The evidence at trial showed that from 2007 through mid-2011, the strip clubs collected cash through both cover charges from customers and stage fees from dancers. In addition to stage fees, the dancers were routinely required to pay fines for various etiquette infractions. The defendants maintained a set of books at the Cabaret clubs which recorded the sales, lottery and ATM fees but not the stage and door fees. The defendants maintained a second set of books, which tracked all of the cash receipts including the stage and door fees, at the home of David Kiraz. A video played in court showed a 2010 meeting between George Kiraz and an undercover IRS agent posing as a prospective buyer of the strip clubs. The IRS undercover agent was given a copy of the Kirazes’ second set of books, including the stage and door fees, at that meeting.
Further evidence presented to the jury proved that the business activity of the strip clubs was reported each year on the individual income tax return of David Kiraz. The defendants gave their tax return preparers the false financial records maintained at the strip clubs, intentionally causing the return preparers to create tax returns for David Kiraz that did not report substantial amounts of cash obtained through cover charges, stage fees and fines. Their actions resulted in underreporting of taxable income of more than $1.5 million and caused a tax loss of more than $500,000 for tax years 2007 through 2010.
The date for the sentencing hearing before U.S. District Judge Robert E. Jones for the District of Oregon in Portland has not yet been set. Each defendant faces a statutory maximum sentence of five years in prison on the charge of conspiracy to defraud the United States and three years in prison on the charges of filing false tax returns or aiding and assisting in the preparation and filing of false tax returns. They also face supervised release and a maximum fine of $250,000 on each count.
This case was investigated by special agents with IRS-Criminal Investigations and prosecuted by Trial Attorney Leslie Goemaat of the Justice Department’s Tax Division and Assistant U.S. Attorneys Seth Uram and Quinn P. Harrington for the District of Oregon.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Justice Department Settles Housing Discrimination Lawsuit Against Owners of Carson City, Nevada, Rental PropertiesRead the Press Release
The Justice Department announced today that Carson City, Nevada, rental property owners Betty Brinson and Hughston Brinson have agreed to pay $36,000 to resolve allegations that they discriminated against families with children in violation of the Fair Housing Act (FHA).
The lawsuit alleged that the Brinsons discriminated against families with children by placing a series of advertisements for a single-family rental home in the local newspaper that indicated a preference for adult tenants and refusing to rent the home to a family with three children because they did not want children living at the property. The complaint also alleged that Betty Brinson placed discriminatory advertisements for another property she owns – a 36-unit apartment complex in Carson City – that indicated a preference for adult tenants. The lawsuit arose as a result of a complaint filed with the Department of Housing and Urban Development (HUD) by the family, who alleged that they were refused the opportunity to rent the single-family home.
Under the proposed consent order, which still must be approved by the U.S. District Court for the District of Nevada, the defendants will pay $14,000 to the HUD complainants, $10,000 into a victim fund to compensate other aggrieved families and $12,000 to the United States as a civil penalty. In addition, the proposed consent decree prohibits the defendants from discriminating in the future against families with children and requires the defendants to receive training on the requirements of the FHA and provide periodic reports to the department.
“Families should not face discrimination because of the presence of children when looking for a home,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Justice Department will continue to vigorously enforce the Fair Housing Act and its protections for families as they navigate the housing market.”
“A family’s search for housing that fits their needs shouldn’t be limited by discriminatory practices that violate the Fair Housing Act,” said Gustavo Velasquez, Assistant Secretary for HUD’s Fair Housing and Equal Opportunity Office. “Today’s settlement is a victory for families with children and reaffirms HUD and the Justice Department’s commitment to ensuring that the owners or rental properties understand their obligations under the law and take steps to meet that obligation.”
Anyone who believes that they or individuals they know may have been discriminated against by the Brinsons based on their familial status should contact the Civil Rights Division’s Housing and Civil Enforcement Section at 1-800-896-7743, mailbox number 991, or by sending an email to [email protected].
Fighting illegal housing discrimination is a top priority of the Department of Justice. The FHA prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt/.
Brinson Consent Order
Former Employee of Virginia DMV Contractor Pleads Guilty to Participating in Odometer Fraud SchemeRead the Press Release
A Virginia Beach, Virginia, man pleaded guilty for his role in issuing dozens of fraudulent motor vehicle titles, the Department of Justice announced today.
Steven Bazemore, 33, of Virginia Beach, a former employee of the Norfolk Commissioner of Revenue, pleaded guilty on May 26, in U.S. District Court in Norfolk, Virginia, to one count of conspiracy to commit securities fraud. The Norfolk Commissioner of Revenue’s office is a contractor of the Department of Motor Vehicles to conduct select DMV services included titling. Bazemore faces a statutory maximum sentence of five years in prison at his sentencing on Aug. 31.
“This defendant abused his public position to assist a large odometer tampering scheme by issuing fraudulent vehicle titles,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to prosecute individuals who commit and assist others in committing odometer fraud.”
Bazemore admitted that, while employed as a clerk at a DMV Select facility in Norfolk, he knowingly created at least 76 Virginia motor vehicle titles with false, low mileage readings for a co-conspirator who was a licensed salvage dealer. Bazemore issued titles with any false, low mileage reading requested by his co-conspirator, even when the reading was inconsistent with a higher mileage reading on a prior title or in the DMV computer system. Bazemore’s co-conspirator then used the fraudulent titles to sell many of the vehicles for inflated prices.
In exchange for issuing the fraudulent titles, Bazemore received cash payments from his co-conspirator. Bazemore also took steps to hide the odometer fraud scheme. In many instances, Bazemore returned the documents used to procure the fraudulent titles to his co-conspirator rather than retaining the documents in the DMV file system.
This case was investigated by special agents of the Virginia DMV and the National Highway Traffic Safety Administration Office of Odometer Fraud Investigation (NHTSA). NHTSA estimates that odometer fraud in the United States results in consumer losses of more than $1 billion annually and has established a special hotline to handle odometer fraud complaints. Individuals having information relating to odometer tampering should call (800) 424-9393 or (202) 366-4761.
This case is being prosecuted by Trial Attorneys John W. Burke and Jacqueline Blaesi-Freed of the Civil Division’s Consumer Protection Branch with assistance from Assistant U.S. Attorney Alan Salsbury of the U.S. Attorney’s Office for the Eastern District of Virginia.
More information on odometer fraud is available on the NHTSA’s website and tips on detecting and avoiding odometer fraud are available at this page. For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
Department of Justice and Federal Trade Commission Sign Cooperation Agreement with Peru’s Antitrust AgencyRead the Press Release
The Department of Justice and the Federal Trade Commission (FTC) signed an antitrust cooperation agreement today with Peru’s National Institute for the Defense of Competition and the Protection of Intellectual Property (INDECOPI). The agreement will promote increased cooperation and communication among the competition agencies in both countries. The agreement was signed in Washington, D.C., by Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division, Chairwoman Edith Ramirez of the FTC, and Chairman Hebert Tassano of INDECOPI, and went into effect upon signature.
“Markets in the United States and Peru, and throughout the Americas, are increasingly linked,” said Principal Deputy Assistant Attorney General Hesse. “In this environment, international cooperation on antitrust enforcement is vital to protecting our economies against threats to competition. We have longstanding ties to competition enforcers in Peru, and this agreement strengthens the tools we have to work together to provide our businesses and consumers with the benefits of open and competitive markets.”
“We have been partners with INDECOPI since its inception and are delighted to further enhance our already strong relationship through this agreement,” Chairwoman Ramirez said. “This agreement embodies the commitment to cooperation that has existed between the U.S. agencies and INDECOPI, and will facilitate cooperation to protect the competitive marketplaces that benefit consumers in both of our countries as well as in this hemisphere.”
Highlights of the new agreement include the following:
- mutual acknowledgment of the importance of antitrust cooperation, including potential coordination when pursuing enforcement activities on related matters;
- an agreement to consider the important interests of the other country’s competition authority throughout all phases of their enforcement activities;
- establishment of a framework for communication, consultation and technical assistance among the agencies; and
- a commitment to maintain the confidentiality of any information provided by the other agency.
The U.S. antitrust agencies and INDECOPI have developed a strong working relationship since INDECOPI’s inception in 1993, exchanging views on antitrust policy and, as appropriate, cooperating on investigations. Today’s agreement will further enhance these relations.
The agreement with INDECOPI is the U.S. antitrust agencies’ fifth antitrust cooperation arrangement in Latin America, following those reached with Brazil (1999), Mexico (2000), Chile (2011), and Colombia (2014).
West Virginia Business Owners Indicted for Failing to Pay Employment TaxesRead the Press Release
A federal grand jury sitting in Charleston, West Virginia returned an indictment on May 25, charging two West Virginia business owners with federal employment tax violations, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney Carol A. Casto for the Southern District of West Virginia announced today.
The indictment charges Michael Taylor and Jeanette Taylor, a married couple who reside in Wayne, West Virginia, with one count of conspiracy to defraud the United States by impeding the Internal Revenue Service (IRS) in the collection of employment taxes withheld from the wages of the employees of their businesses, Taylor Contracting/Taylor Ready-Mix LLC and Bluegrass Aggregates LLC, which were in the business of transporting steel and the sale of gravel and concrete. The couple is also charged with one count of willfully failing to truthfully account for and pay over employment tax withheld for their employees at Taylor Contracting/Taylor Ready-Mix LLC.
According to the indictment, both Michael Taylor and Jeanette Taylor had the responsibility to collect, truthfully account for and pay over to the IRS federal income, social security and Medicare taxes withheld from the wages of their employees. From the quarter ending Sept. 30, 2007, through the quarter ending Dec. 31, 2009, the Taylors withheld approximately $1,002,392 in payroll taxes from employees’ paychecks at Taylor Contracting/Taylor Ready-Mix LLC and during the 2010 calendar year, they withheld approximately $161,218 in payroll taxes from employees’ paychecks at Bluegrass Aggregates LLC. However, the Taylors failed to fully pay over these taxes to the IRS and instead used the money to make expenditures for their personal benefit, such as making payments towards their personal credit cards and a horse farm.
If convicted, the Taylors face a statutory maximum sentence of five years in prison and a maximum fine of $250,000 for each count. They also face a term of supervised release and an order of restitution.
An indictment merely alleges that crimes have been committed. The defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Casto commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Mara Strier and Alexander Effendi 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.
United States Intervenes in False Claims Act Lawsuit Against Prime Healthcare Services Inc. and its CEO Alleging Unnecessary Inpatient Admissions from Emergency RoomsRead the Press Release
The United States has intervened in a lawsuit against Prime Healthcare Services Inc. (Prime); the company’s founder and chief executive officer, Dr. Prem Reddy; and 14 Prime hospitals in California that alleges Emergency Departments at Prime facilities improperly admitted patients to the hospitals and submitted false claims to Medicare, the Justice Department announced today.
The lawsuit alleges that Dr. Reddy directed the corporate practice of pressuring Prime’s Emergency Department physicians and hospital administrators to raise inpatient admission rates, regardless of whether it was medically necessary to admit the patients. The lawsuit alleges that Prime’s corporate officers, at Reddy’s direction, exerted immense pressure on doctors in the Emergency Departments to admit patients who could have been placed in observation, treated as outpatients or discharged. As a result of these medically unnecessary admissions from the Emergency Departments, Prime hospitals allegedly submitted false claims to federal health care programs, such as Medicare.
“The Department of Justice is committed to ensuring that health care providers do not inappropriately seek to profit at the expense of federal health care programs,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Schemes such as this one can contribute significantly to the rising cost of health care delivery and create needless patient risk.”
“Fraudulent billing practices, such as those alleged in this civil lawsuit, harm taxpayers who fund health care programs, such as Medicare,” said U.S. Attorney Eileen M. Decker for the Central District of California. “The Justice Department works collaboratively with law enforcement agencies, regulators and, in some cases, private citizens to ensure the integrity of a system that provides healthcare to millions of Americans.”
“Charging for medically unnecessary services, as alleged in this case, raises costs in government health programs and remorselessly passes that bill along to taxpayers,” said Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “Our investigation into the allegations in this case, along with our law enforcement partners, led to the government’s decision to intervene.”
The lawsuit, United States ex rel. Berntsen v. Prime Healthcare Services, et al., CV11-8214-PJW (MG), was filed in the U.S. District Court in Los Angeles by relator Karin Bernsten, who worked at one of the Prime hospitals where the allegedly improper inpatient admissions allegedly took place. The lawsuit was filed under the qui tam provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery. The False Claims Act permits the government to intervene in such a lawsuit, as it has done in a portion of this case.
The government’s intervention in this matter illustrates its 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 billion through False Claims Act cases, with more than $17.5 billion of that amount recovered in cases involving fraud against federal health care programs.
These matters were investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Central District of California, HHS-OIG and the FBI.
The claims asserted against Prime and Dr. Reddy are allegations only, and there has been no determination of liability.
Texas Tax Return Preparer Indicted for Aiding and Assisting in the Preparation of False Tax ReturnsRead the Press Release
A DeSoto, Texas, resident was indicted on 29 counts of aiding and assisting in the preparation of false income tax returns and three counts of willfully failing to file income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney John R. Parker of the Northern District of Texas.
According to court documents, Vicki Louise Walker, was a tax preparer doing business under the name Vicki Walker Tax Services LLC in Dallas, Texas. Walker is alleged to have prepared numerous tax returns for tax years 2010 through 2013 on which she reported false items, including false filing status, false business expenses, false capital losses and false charitable donations. It is further alleged that Walker willfully failed to file her own tax returns with the Internal Revenue Service (IRS) for tax years 2011 through 2013.
If convicted, Walker faces a statutory maximum sentence of three years in prison for each count of aiding and assisting in the preparation of false tax returns and a statutory maximum sentence of one year in prison for each count of failing to file her own tax returns. She also faces monetary penalties and restitution.
An indictment merely alleges that crimes have been committed and the defendant is presumed innocent until proved guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Parker commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Christopher Stokes of the Northern District of Texas, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
INTERPOL Washington's Media Outreach Event 2016Read the Press Release
On May 24, 2016, INTERPOL Washington Director Geoffrey S. Shank held a media briefing where correspondents from the national news networks received information regarding INTERPOL Washington. The correspondents were given the opportunity to field questions regarding INTERPOL and INTERPOL Washington, and the event concluded with the correspondents receiving a tour of the INTERPOL Operations and Command Center.
To hear the interview conducted by NPR with Director Shank, please click here
Former NBA Player Indicted on Charity Fraud SchemeRead the Press Release
A federal grand jury sitting in Kansas City, Missouri, returned an indictment Monday, which was unsealed this morning, against a former professional basketball player and representative for the National Basketball Players Association (NBPA), charging him with corruptly interfering with the internal revenue laws, conspiracy to commit wire fraud, obstruction of justice and aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Tammy Dickinson of the Western District of Missouri.
The indictment alleges that Kermit Alan Washington, 64, used a charity he founded and operated, Project Contact Africa (PCA), to defraud donors, eBay and PayPal and the Internal Revenue Service (IRS). In order to induce individuals, including former professional athletes, to make donations to PCA, Washington falsely represented that 100 percent of the donations would go to Africa. However, Washington diverted charitable donations from PCA to buy gifts and pay personal expenses, including rent, vacations, jewelry and entertainment.
“Individuals who use charitable organizations to defraud donors and evade tax obligations inflict substantial harm on every U.S. taxpayer and cause untold damage to well-intentioned charitable endeavors,” said Acting Assistant Attorney General Ciraolo. “The Department is committed to identifying those engaged in such criminal conduct and holding them accountable.”
“The federal indictment alleges this former NBA player used his celebrity status to exploit the good intentions of those who donated to a charity he founded, called Project Contact Africa,” said U.S. Attorney Dickinson. “According to the indictment, Washington profited by diverting hundreds of thousands of dollars in donations that was supposed to benefit a clinic in Africa for needy families and children, but instead bankrolled his own personal spending.”
It is alleged that Washington referred professional athletes to Ron Mix, a former professional football player and an attorney licensed in the state of California, whose practice focused on the filing of workers’ compensation claims on behalf of former professional athletes. In exchange for the referrals, Mix made payments to PCA and claimed those amounts as charitable deductions on his personal tax returns. Upon receipt of these payments, Washington diverted the funds for his own personal benefit. Washington filed false individual income tax returns for 2010 through 2013, failing to report the funds he diverted from PCA and false Forms 990-EZ on behalf of PCA. Washington also falsified PCA’s corporate minutes to obstruct the investigation and used the identity of another individual to perpetrate this scheme.
It is further alleged that Washington conspired with others to defraud eBay and PayPal, customers and donors of PCA by allowing the co-conspirators to use PCA’s name, tax-exempt status and IRS Employee Identification Number (EIN) with eBay and PayPal so the co-conspirators could avoid substantial listing and registration fees incurred in operating online, for-profit businesses. Moreover, customers who made purchases falsely believed that 100 percent of the proceeds from the co-conspirators’ online eBay sales benefited PCA. In exchange for allowing the co-conspirators to use PCA’s tax-exempt status, Washington received payments from the co-conspirators.
Washington was arrested yesterday in Los Angeles and had his initial appearance in U.S. District Court in the Central District of California. Washington was ordered to surrender his passport and released on bond and must wear a location monitoring device. Washington’s next court date is tentatively scheduled on June 16 before U.S. Magistrate Judge John T. Maughmer in the Western District of Missouri.
If convicted, Washington faces a statutory maximum sentence of three years in prison on the charge of corrupt interference with the internal revenue laws, 20 years in prison on the charge of conspiring to commit wire fraud, 20 years in prison on the charge of obstruction and a mandatory sentence of two years in prison for the charge of aggravated identity theft, which will be in addition to any other term of imprisonment he receives. He also faces supervised release, a maximum fine of $250,000 on each count and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Dickinson commended special agents of IRS-Criminal Investigation, Immigration and Customs Enforcement’s Homeland Security Investigations, who investigated the case and Assistant U.S. Attorneys Patrick Daly and Curt Bohling of the Western District of Missouri, and Trial Attorney Ryan Raybould 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.
Five Individuals Charged with Burglary from Rosebud Dialysis CenterRead the Press Release
United States Attorney Randolph J. Seiler announced that three Rosebud, South Dakota men, one Rosebud, South Dakota woman, and one Mission, South Dakota woman have been indicted by a federal grand jury for Third Degree Burglary.
Jonathan Anthony Jones, a/k/a DJ Jones, age 36; Robert Pomani, age 24; Seryl Leroy Pomani, Jr., a/k/a Leroy Pomani, age 28; Alicia Good Shield, age 30; and Michelle Iron Cloud, age 30 were all indicted for Third Degree Burglary. They all appeared before United States Magistrate Judge Mark A. Moreno and pled not guilty to the Indictment.
The maximum penalty upon conviction is up to five years in custody and/or a $250,000 fine, three years of supervised release, and $100 to the Federal Crime Victims Fund. Restitution may also be ordered.
It is alleged that on January 23, 2016, Jones, Robert Pomani, Leroy Pomani, Good Shield and Iron Cloud unlawfully entered the DaVita Dialysis Center with the intent to commit larceny and aided and abetted each other in doing so.
The charge is merely an accusation and all individuals are presumed innocent until and unless proven guilty.
The investigation is being conducted by the Rosebud Sioux Tribe Law Enforcement Services. Assistant U.S. Attorney Kirk W. Albertson is prosecuting the case.
Iron Cloud, Leroy Pomani, Robert Pomani and Jones were remanded to the custody of the U.S. Marshals Service pending trial. Good Shield was released on bond. A trial date has not been set.
Delaware Repeat Offender Sentenced to 15 Years in Prison for Receiving Child PornographyRead the Press Release
A Delaware man was sentenced today to 180 months in prison for receipt of child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Charles M. Oberly III of the District of Delaware.
Eric Aldrich, 25, of Milford, Delaware, previously pleaded guilty to one count of receipt of child pornography. U.S. District Judge Leonard P. Stark of the District of Delaware presided over today’s sentencing.
At sentencing, the court found that Aldrich has a prior conviction in Delaware for dealing in child pornography and as part of his federal offense, he possessed over 600 images of child pornography, including material involving prepubescent minors and sadistic or masochistic conduct.
U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the Delaware Internet Crimes Against Children Task Force investigated this case. Trial Attorney Leslie Williams Fisher of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Edmond Falgowski of the District of Delaware prosecuted this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Attorney General Loretta E. Lynch Statement on the Case of Dylann RoofRead the Press Release
Attorney General Loretta E. Lynch today released the following statement regarding the United States v. Dylann Roof:
“Following the department’s rigorous review process to thoroughly consider all relevant factual and legal issues, I have determined that the Justice Department will seek the death penalty. The nature of the alleged crime and the resulting harm compelled this decision.”
NFL Hall of Famer, Practicing California Attorney Pleads Guilty to Filing a False Tax ReturnRead the Press Release
A San Diego, California, workers’ compensation attorney pleaded guilty today in the Western District of Missouri to one count of filing a false tax return, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Tammy Dickinson of the Western District of Missouri announced.
According to court documents, Ron Mix, 78, entered into an arrangement where he received professional athlete referrals from a non-attorney so Mix and his law firm, the Law Offices of Ron Mix, could file workers’ compensation claims in California on the former athletes’ behalf. After receiving these referrals, Mix agreed to make donations to Project Contact Africa (PCA), as directed by the non-attorney. Mix admitted that between 2010 and 2013, he made approximately $155,000 in donations to PCA and that these payments represented illegal referral payments that he falsely claimed on his personal income tax return as charitable deductions.
U.S. District Court Judge Greg Kays for the Western District of Missouri has not yet scheduled Mix’s sentencing. Mix faces a statutory maximum sentence of three years in prison and a maximum fine of $250,000.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Dickinson commended special agents of Internal Revenue Service-Criminal Investigation and Homeland Security Investigations, who investigated the case and Assistant U.S. Attorneys Patrick Daly and Curt Bohling of the Western District of Missouri and Trial Attorney Ryan Raybould 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.
Oregon Woman Pleads Guilty in $1.2 Million Federal Income Tax Refund Fraud SchemeRead the Press Release
Conspired with Others to Prepare and File at Least 224 False Income Tax Returns
An Oregon woman pleaded guilty today to one count of conspiracy to defraud the government with respect to claims, one count of wire fraud and one count of aggravated identity theft for running a federal income tax refund fraud scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Billy J. Williams of the District of Oregon and Special Agent in Charge Teri Alexander of the Internal Revenue Service – Criminal Investigation (IRS-CI).
Danyelle Calcagno, 41, admitted to filing at least 224 false federal income tax returns that fraudulently claimed a total of $1,220,246 in tax refunds, generally between $3,500 and $7,000 per return. Calcagno filed the fraudulent tax returns using Internet access at Portland-area hotels to disguise the source of filing. Calcagno filed the false tax returns using the names and social security numbers of other individuals obtained directly and through recruiters, including Latisha L. Simmons, 36, of Phoenix, Arizona.
Calcagno directed the IRS to deposit the income tax refunds into bank accounts and onto stored value debit cards that she could access and control in order to divide the proceeds of the fraud and make it more difficult for law enforcement to identify Calcagno as the filer of the false tax returns. Calcagno received at least $25,000 in fraudulently obtained income tax refunds into her own bank accounts.
Calcagno faces a statutory maximum sentence of 10 years in prison on the conspiracy charge, 20 years in prison on the wire fraud charge and a mandatory term of two years in prison on the aggravated identity theft charge, which will be in addition to any other term of imprisonment she receives. Calcagno also faces financial penalties and a term of supervised release. As part of her plea agreement, Calcagno agreed to pay restitution to the IRS in the amount of $742,754.
In October 2015, Simmons was sentenced to 39 months in prison after pleading guilty to one count of wire fraud, one count of false claims against the government and one count of aggravated identity theft. According to her plea agreement, Simmons filed more than 50 false tax returns with the IRS that fraudulently claimed more than $400,000 in refunds.
Acting Assistant Attorney General Ciraolo, U.S. Attorney Williams and Special Agent in Charge Alexander thanked special agents of IRS-CI, who investigated this case and Trial Attorney Leslie A. Goemaat of the Tax Division and Assistant U.S. Attorney Quinn P. Harrington of the District of Oregon, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Officials from the U.S., Canada and Mexico Participate in 2016 Trilateral Meeting in Toronto to Discuss Antitrust EnforcementRead the Press Release
The heads of the antitrust agencies of the United States, Canada and Mexico met today in Toronto to discuss their ongoing work to ensure effective antitrust enforcement cooperation in our increasingly interconnected markets.
The meetings were held among Principal Deputy Assistant Attorney General Renata Hesse of the Department of Justice’s Antitrust Division, Chairwoman Edith Ramirez of the Federal Trade Commission, Canadian Commissioner of Competition John Pecman and President Alejandra Palacios Prieto of the Mexican Federal Economic Competition Commission.
The discussions covered a wide range of topics, including recent developments, effective agency litigation, disruptive innovation, cooperation between agencies and technical assistance.
“We are very fortunate to have such strong relationships with our partners in Canada and Mexico,” said Principal Deputy Assistant Attorney General Hesse. “In this increasingly globalized economy, close cooperation with our North American colleagues is important to protecting the competitiveness of our markets. These meetings are a useful part of our ongoing enforcement collaboration, and they provide a great opportunity to discuss our shared competition policy challenges.”
“The antitrust relationship among the United States, Canada and Mexico is one of the most advanced in the world,” said Chairwoman Ramirez. “We work together on cross-border cases to ensure effective and compatible enforcement and on policy matters to promote convergence toward best practices. Our meeting enables us to strengthen our cooperation to enhance competition and benefit our consumers.”
The meetings build on the foundations laid by the 1995 antitrust cooperation agreement between the United States and Canada, the 1999 agreement between the United States and Mexico and the 2001 agreement between Canada and Mexico. The agreements commit the antitrust agencies to cooperate and coordinate with each other to make their antitrust policies and enforcement as consistent and effective as possible.
The four agency heads also spoke at an enforcers’ roundtable at the spring conference of the Canadian Bar Association’s Competition Law Section, which included exchanges among the four agency heads on international cooperation, disruptive innovation and merger remedies.
United States Files Lawsuit Alleging That Guild Mortgage Improperly Originated and Underwrote FHA-Insured Mortgage LoansRead the Press Release
The United States has filed a complaint in the U.S. District Court for the District of Columbia against Guild Mortgage Company (Guild) under the False Claims Act for improperly originating and underwriting mortgages insured by the Federal Housing Administration (FHA), the Justice Department announced today. Guild is a mortgage lender headquartered in San Diego, California.
“This case is another example of the Justice Department’s continued efforts to ensure that lenders that participate in the FHA mortgage insurance program act in good faith and conduct appropriate due diligence when committing the United States to insure home loans,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “To protect the housing market and the FHA fund, we will continue to hold responsible lenders that knowingly violate the rules.”
Guild participated in the FHA insurance program as a direct endorsement (DE) lender. As a DE lender, Guild had the authority to originate, underwrite and certify mortgages for FHA insurance. If a DE lender such as Guild approves a mortgage loan for FHA insurance and the loan later defaults, the U.S. Department of Housing and Urban Development (HUD), FHA’s parent agency, is responsible for the losses resulting from the defaulted loan. Under the DE lender program, neither the FHA nor HUD reviews the underwriting of a loan before it is endorsed for FHA insurance. HUD therefore relies on DE lenders to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance and DE lenders must certify that every loan endorsed for FHA insurance is underwritten according to the applicable FHA standards.
The government’s complaint alleges that, from January 2006 through December 2011, Guild knowingly submitted, or caused the submission of, claims for hundreds of improperly underwritten FHA-insured loans. The complaint further alleges that Guild grew its FHA lending business by ignoring FHA rules and falsely certifying compliance with underwriting requirements in order to reap the profits from FHA-insured mortgages. For example, Guild allegedly allowed underwriters to waive compliance with FHA requirements when underwriting a loan. Additionally, Guild used unqualified junior-underwriters who did not have a DE certification to waive mandatory conditions on higher risk loans where HUD required underwriting only by highly trained DE underwriters.
The government’s complaint further alleges that Guild’s senior management focused on growth and profits and ignored quality. From 2006 to 2012, Guild conducted at least 125 branch audits in which almost 40 percent resulted in either a qualified rating or unsatisfactory rating. A qualified rating was defined as having a “significant number of findings, and/or findings noted that have more serious impact or risk to Guild,” or “Knowledge of procedures and controls; however, they appear to be inefficient.” An unsatisfactory rating was defined as one where “serious concerns were noted: lack of knowledge, procedures, and/or controls in branch.” The complaint alleges that, through Guild’s quality control reviews, significant defects were found in over 20 percent of the FHA loans reviewed between 2006 and 2011 and over half the loans had either significant or moderate defects. Significant defects included fraud, misrepresentation and other serious findings while moderate defects included not following guidelines. However, Guild did not calculate or distribute any error rate during the relevant time period, thus management was not presented with these findings. Additionally, for many of the quarters from 2006 through 2009, Guild did not even distribute any of the quality control findings to management. As a result, Guild management often did not review or remediate findings from quality control audits during these years. In the quarters where Guild management actually did review quality control findings, it did so almost a year after the loans closed and failed to timely remediate any identified problems. In 2013, when Guild finally began addressing the quality of its FHA underwriting, Guild’s head of quality control pointed out the ineffectiveness of its past efforts at addressing loan quality: “I’m not optimistic about training reminders and individual follow-ups being all that effective.”
The government’s complaint alleges that as a result of Guild’s knowingly deficient mortgage underwriting practices, HUD has already paid tens of millions of dollars of insurance claims on loans improperly underwritten by Guild, and that there are many additional loans improperly underwritten by Guild that are currently in default and could result in further insurance claims on HUD. For example, the government’s complaint identifies a mortgage loan that was improperly underwritten in violation of HUD requirements, causing the borrower to default and HUD to pay the loss on the loan. Specifically, Guild failed to verify the borrower’s prior rental payments, overstated the borrower’s income, failed to develop a credit history for the borrower who had no credit score, exceeded FHA’s qualifying debt to income ratio without determining whether certain compensating factors were present, and failed to identify the source of a large deposit made to the borrower’s account. The underwriter at Guild improperly waived multiple conditions and allowed an unauthorized junior underwriter to do the same for other conditions. In sworn testimony, the Guild underwriter admitted the loan failed to comply with FHA underwriting requirements.
“The Federal Housing Administration’s insurance program is meant to encourage lenders to expand opportunity for homeownership by providing financing to prospective buyers who otherwise might not be able to enter the housing market,” said U.S. Attorney Channing D. Phillips for the District of Columbia. “To ensure that prospective homebuyers realize the dream of long term homeownership, the program has strict rules and is not a license for lenders to carelessly subject federal dollars to risk. This lawsuit is designed to help the FHA – and American taxpayers -- recoup tens of millions of dollars in losses attributable to a lender accused of improperly underwriting FHA-insured mortgages and committing the government’s guarantee to mortgages that failed to comply with program rules.”
“The decision to intervene in this matter should serve as a reminder of the priority given to pursuing lenders that violate HUD program rules in order to hold them accountable and the value of private citizen participation, including whistleblowers, in pursuing lenders that violate the rules,” said HUD Inspector General David A. Montoya.
“FHA relies on the honesty and integrity of those lenders participating in our program,” said HUD’s General Counsel Helen R. Kanovsky. “The action we take today should send a clear message that we will not tolerate the abuse of our programs or of the families who should benefit from them.”
The lawsuit was brought under the qui tam, or whistleblower, provisions of the False Claims Act by a former employee of Guild. Under the act, a private party may bring suit on behalf of the United States and share in any recovery. The government may intervene in the case, as it has done here. The False Claims Act allows the government to recover treble damages and penalties from those who violate it.
The investigation of this matter was a coordinated effort among HUD, its Office of Inspector General, and the U.S. Attorney’s Office for the District of Columbia and the Civil Division’s Commercial Litigation Branch.
The action is captioned United States ex rel. Dougherty v. Guild Mortgage Company (D.D.C.). The claims asserted in the complaint are allegations only and there has been no determination of liability.
Justice Department Reaches Agreement with Philadelphia-Area YMCA to Ensure Equal Opportunities for Children with DiabetesRead the Press Release
The Justice Department reached a settlement agreement today with the Philadelphia Freedom Valley YMCA – Rocky Run Branch to resolve allegations that it violated the Americans with Disabilities Act (ADA) by denying a child the opportunity to participate in after-school and summer camp programs because of her type 1 diabetes.
Title III of the ADA prohibits discrimination on the basis of disability by public accommodations, including private camps and childcare programs. Under the ADA, such entities must make reasonable modifications to their policies, practices or procedures when necessary to provide equal access to a child with a disability, unless a modification would fundamentally alter the nature of the goods and services. When a parent and a child’s physician determine that it is appropriate for a trained layperson to assist a child with diabetes care, a camp or childcare program must provide this as a reasonable modification under the ADA, unless doing so would fundamentally alter the program.
The Philadelphia Freedom Valley YMCA – Rocky Run Branch refused to perform diabetes related tasks, including administering glucagon in the event of a low blood glucose level emergency and supervising the child to self-administer insulin. YMCA also limited the child’s participation in the after-school program by allowing her to attend only until 4:00 p.m., even though the program ran until 6:00 p.m. Finally, YMCA asked the child’s parents to supply an aide to monitor the child in the summer day camp program.
“After-school and camp programs enable children to learn and socialize with their friends, and enable parents to ensure that their children are well-cared for, and YMCAs are one of the key providers parents turn to for that care,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Such providers may not exclude children with disabilities, and the Department of Justice will continue to aggressively fight all forms of discrimination that deny children with disabilities the protections and opportunities they deserve.”
Under the terms of the agreement, the YMCA will:
• adopt a non-discrimination policy;
• develop a sample diabetes medical management plan;
• remove unnecessary inquiries from its application materials that tend to screen out individuals with disabilities;
• train its staff on the ADA and diabetes management;
• provide information for parents on how to request modifications for children with disabilities;
•designate an ADA compliance officer who will monitor compliance with the agreement and review requests for reasonable modifications, among other duties; and
• report annually to the United States on its compliance.
ADA enforcement is a top priority of the Justice Department’s Civil Rights Division. Those interested in finding out more about this settlement or the obligations of camps and child care programs under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed online at http://www.ada.gov/complaint/.
Philadelphia Freedom Valley YMCA – Rocky Run Branch
U.S. Attorneys Neronha and Huber Appointed to Attorney General’s Advisory CommitteeRead the Press Release
Attorney General Loretta E. Lynch announced today the appointments of Peter F. Neronha, U.S. Attorney for the District of Rhode Island, and John Huber, U.S. Attorney for the District of Utah, to the Attorney General’s Advisory Committee (AGAC), effective immediately.
“The Attorney General’s Advisory Committee plays a crucial role in shaping the Justice Department’s approach to fighting crime, countering national security threats and securing equal justice under the law and I am pleased to welcome two new members to its ranks,” said Attorney General Lynch. “U.S. Attorneys John Huber and Peter Neronha have spent their careers tackling some of the most high-profile and difficult challenges we face, from political corruption and terrorism to gun violence and organized crime. I have come to know them both as outstanding law enforcement officers and devoted public servants and I look forward to drawing upon their insight and expertise in the months to come as we continue our work to create a stronger, safer, and more equal nation for all Americans.”
U.S. Attorney Neronha will fill the seat vacated by former U.S. Attorney for the Northern District of Ohio, Steven Dettelbach, who resigned on Feb. 5.
U.S. Attorney Huber will fill the seat vacated by former U.S. Attorney for the District of Kansas, Barry Grissom, who resigned on April 15.
U.S. Attorney Neronha was nominated by President Barack Obama on July 31, 2009, and confirmed by the U.S. Senate on Sept. 15, 2009, as the U.S. Attorney for the District of Rhode Island. In 2002, U.S. Attorney Neronha joined the U.S. Attorney’s Office for the District of Rhode Island. As an Assistant U.S. Attorney, he prosecuted criminal cases involving political corruption, white collar crime, drug and firearm offenses. When he joined the U.S. Attorney’s Office, he was named coordinator of the District’s Project Safe Neighborhoods, a Department of Justice initiative against gun crimes. Prior to being named U.S. Attorney, he was Chief of the District’s Organized Crime Strike Force. U.S. Attorney Neronha previously served on the AGAC during 2009-2011.
U.S. Attorney Huber was nominated by President Barack Obama on Feb. 4, 2015, and confirmed by the U.S. Senate on June 10, 2015, as U.S. Attorney for Utah. Prior to confirmation as the U.S. Attorney, U.S. Attorney Huber prosecuted a number of high profile federal cases and coordinated task forces that focused on violent crime and counter-terrorism. He also served as chief of the National Security Section in the U.S. Attorney’s Office before being asked to serve as the Executive Assistant U.S. Attorney, a member of the office’s executive management team.
The AGAC was created in 1973 to serve as the voice of the U.S. Attorneys and to advise the attorney general on policy, management and operational issues impacting the offices of the U.S. Attorneys.
Department of Justice and Federal Trade Commission Encourage Puerto Rico to Consider Expanding the Scope of Practice of OptometristsRead the Press Release
Agencies Submit Joint Statement Regarding Proposed Legislation Addressing the Authority of Optometrists to Utilize and Prescribe Medications for Treatment and Diagnosis in Puerto Rico
The Department of Justice’s Antitrust Division and the staff of the Federal Trade Commission (FTC) have issued a joint statement encouraging the Puerto Rican legislature to consider expanding the services that optometrists can provide. The statement describes the potential benefits to patients of enhanced competition among vision care providers, including greater access to timely and cost competitive care. It recommends that the legislature only maintain restrictions on optometrists to utilize and prescribe medications for treatment and diagnosis that are necessary to ensure patient health and safety.
The joint statement is in response to a request from Puerto Rico Representative Jose L. Báez Rivera, Chair of the Public Safety Committee in the Puerto Rico House of Representatives. The request asked for views on the possible competitive effects of Puerto Rico Senate Bill 991 (SB 991), which would expand the scope of practice for optometrists in Puerto Rico and permit them to use and prescribe medications to diagnose and treat diseases of the eye.
“According to the Centers for Disease Control and Prevention, Puerto Rico has the highest percentage of adults in the United States and its territories with blindness or severe difficulty seeing,” said Principal Deputy Assistant Attorney General Renata Hesse, head of the Justice Department’s Antitrust Division. “As our statement explains, increasing competition among eye care providers in Puerto Rico by allowing optometrists to perform more eye care services can help expand access to cost effective and timely care. Whenever it is consistent with patient safety, competition should play a key role in controlling health care costs.”
The agencies’ comments are limited to SB 991’s effect on the authority of optometrists to use and prescribe medications and its competitive effects. SB 991 would provide optometrists in Puerto Rico – like optometrists in all states, the District of Columbia, and other U.S. territories – with the authority to prescribe at least some medications for the diagnosis and treatment of eye diseases. Providing optometrists a pharmacological role in the care they provide, with conditions the legislature finds appropriate to ensure patient safety, has the potential to bring the benefits of competition to Puerto Rican health care consumers.
Comments on S.B. 8991 - Optometry Letter
B. Braun Medical Inc. Agrees to Resolve Criminal Liability Relating to its Sale of Contaminated SyringesRead the Press Release
The Contaminated Syringes That Infected Patients Were the Subject of a Recall
Drug and medical device company B. Braun Medical Inc. (B. Braun) has agreed to pay $4.8 million in penalties and forfeiture and up to an additional $3 million in restitution to resolve its criminal liability for selling contaminated B. Braun pre-filled saline flush syringes in 2007, the Department of Justice announced today.
The B. Braun saline syringes had a B. Braun label but were manufactured by another company. Today’s resolution includes a non-prosecution agreement that requires B. Braun to implement additional practices designed to increase its oversight of its product suppliers to prevent future sales of contaminated products. B. Braun, a medical device manufacturer, has global headquarters in Melsungen, Germany, and corporate headquarters in Bethlehem, Pennsylvania, with primary manufacturing facilities in Allentown, Pennsylvania, and Irvine, California.
“The Federal Food, Drug and Cosmetic Act (FDCA) prohibits companies from selling contaminated products, even when the company did not make the product itself,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Companies must take reasonable steps to ensure that their suppliers are making quality products that help rather than harm patients. Today’s settlement shows that the government will continue to hold companies accountable for failing to fulfill this critically important responsibility.”
“Patients were infected by adulterated syringes distributed by B. Braun,” said Acting U.S. Attorney John Stuart Bruce for the Eastern District of North Carolina. “This agreement helps to provide justice for the victims and to deter such future conduct by distributors of medical devices.”
According to the agreed upon statement of facts that accompany the non-prosecution agreement, in March 2006, B. Braun started buying B. Braun saline syringes from AM2PAT, Inc. (AM2PAT), which manufactured the syringes at a small facility in North Carolina. The saline solution in pre-filled saline flush syringes must be sterile because it can enter a patient’s bloodstream when the syringes are used to flush out or clean medical devices that provide access to a patient’s veins, such as central lines, ports and short peripheral catheters.
As noted in the statement of facts, B. Braun was aware of manufacturing problems at AM2PAT, even before it began purchasing syringes from AM2PAT. In separate audits, both the U.S. Food and Drug Administration (FDA) and B. Braun had found that AM2PAT was having problems complying with current good manufacturing practices. Although AM2PAT addressed some of these initial problems, additional problems persisted. In the spring of 2007, AM2PAT notified B. Braun that AM2PAT intended to move to a new manufacturing facility and change the company that would sterilize the B. Braun saline syringes through a new radiation sterilization process. Sterilization, a vital step in the manufacture of these syringes, can be complex. Before B. Braun’s quality department approved either of these changes, B. Braun began selling B. Braun saline syringes made at AM2PAT’s new facility and sterilized by the new sterilization company. B. Braun later approved both of these changes even though B. Braun had already received complaints about the syringes changing colors and information from AM2PAT that it was making changes to its radiation process to avoid “overcooking” the syringes. B. Braun approved AM2PAT’s facility move without ever seeing AM2PAT’s operations at its new facility or confirming AM2PAT’s representations that it had properly validated its clean room and equipment after the move.
Less than two months after B. Braun started selling syringes that AM2PAT made at its new facility with the new sterilization company, B. Braun recalled all of them because the radiation sterilization process caused dangerous white particles to develop in the saline inside the syringes.
After the recall, AM2PAT told B. Braun that it gave B. Braun incorrect information about its new radiation sterilization process. It also sent B. Braun information showing that AM2PAT moved manufacturing equipment to its new facility without validating that the equipment worked as expected after the move. As explained in the statement of facts, even with this new information, B. Braun resumed buying B. Braun saline syringes from AM2PAT without going to AM2PAT’s new facility.
Less than a month after B. Braun resumed buying syringes from AM2PAT, AM2PAT manufactured B. Braun saline syringes contaminated with Serratia marcescens bacteria. S. marcescens can cause blood infections. These contaminated syringes infected patients in California, Texas, New York and Nebraska. The syringes were recalled.
In the government’s non-prosecution agreement with B. Braun, B. Braun admits that it distributed B. Braun-labeled syringes that were adulterated under the FDCA. Under the terms of the agreement, B. Braun will increase oversight of its product suppliers by conducting on-site audits of companies that design and make finished products that bear the B. Braun name on the label or logo and testing such products for sterility, identity and purity, as appropriate, on a periodic basis. B. Braun will also be monitored by an independent compliance auditor during the term of the agreement. The auditor will assess B. Braun’s implementation and maintenance of the enhanced compliance measures through on-site audits of B. Braun. B. Braun’s chief executive officer and board of directors will also review and certify B. Braun’s compliance efforts on an annual basis.
“Americans expect and deserve medical devices that are safe, effective, and that meet appropriate standards for quality,” said Director George M. Karavetsos of FDA’s Office of Criminal Investigations. “Today’s announcement should serve as a reminder of the FDA’s continued focus on companies that put profits ahead of the public health.”
Today’s settlement with B. Braun follows the earlier, related prosecution in the Eastern District of North Carolina of AM2PAT and three individuals who worked at AM2PAT. In 2008, Ravindra Kumar Sharma, AM2PAT’s quality control director and Aniruddha Patel, AM2PAT’s plant manager, both pleaded guilty to criminal informations charging conspiracy to commit a number of federal offenses including felony violations of the FDCA. Both were sentenced in 2009 to 54 months in prison. AM2PAT and its former president, Dushyant Patel, were indicted on similar charges in 2009. Patel fled the country and is currently on FDA’s Office of Criminal Investigations’ “Most Wanted” list.
Principal Deputy Assistant Attorney General Mizer and Acting U.S. Attorney Bruce commended the efforts of the FDA’s Office of Criminal Investigations and its Special Agent Paul Pierce for their work on this matter. The matter was also handled by Assistant U.S. Attorney Evan Rikhye of the U.S. Attorney’s Office for the Eastern District of North Carolina and Senior Litigation Counsel Allan Gordus and Trial Attorney Shannon Pedersen of the Department’s Consumer Protection Branch.
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 Eastern District of North Carolina, visit its website at https://www.justice.gov/usao-ednc.