District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Two Brothers Sentenced to Prison for Filing Fraudulent Tax Returns Seeking Refunds of over $224 MillionRead the Press Release
Defendants Received $16 Million in Refunds After Filing Bogus Tax Returns
Two brothers were sentenced to prison today in the U.S. District Court for the District of Maryland after pleading guilty in January for perpetrating a scheme in which they filed 46 fraudulent income tax returns seeking refunds in excess of $224 million, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Washington, D.C. Field Office.
Sean Aude Gallman, 39, of Upper Marlboro, Maryland, was sentenced to serve 132 months in prison, followed by three years of supervised release. His brother Eric Maurice Gallman, 42, of Huntersville, North Carolina, was sentenced to serve 48 months in prison, followed by three years of supervised release. The Gallmans pleaded guilty on Jan. 19 to conspiracy to commit mail and wire fraud, mail fraud and conspiracy to commit money laundering. Sean Gallman also pleaded guilty to aggravated identity theft and money laundering charges. Sean and Eric Gallman were each ordered to pay restitution to the IRS in the amount of $16,512,492.
“The Gallman brothers engaged in a willful and deliberate scheme to steal from the U.S. Treasury and in turn, U.S. taxpayers,” said Acting Assistant Attorney General Ciraolo. “The Department will continue to aggressively investigate and prosecute individuals and entities engaged in this criminal conduct, and will seek substantial prison terms, fines and full restitution to hold defendants accountable and send a strong message to potential offenders.”
“These two criminals filed bogus tax returns claiming ‘refunds’ that were not owed, and stole over $16 million from the IRS,” said U.S. Attorney Rosenstein. “Federal agents and prosecutors have a duty to pursue perpetrators of such fraud schemes and try to recover money stolen from the U.S. Treasury.”
“Using the U.S. Treasury as a personal piggy bank to obtain millions of dollars in fraudulent refunds, the Gallmans not only showed their blatant disregard of the law, but also for the American taxpayer,” said Special Agent in Charge Jankowski. “Today’s sentencings emphasize that such greed based criminal behavior comes with a cost.”
According to evidence presented by the government, the Gallmans established trusts and business entities and used mailboxes at numerous private commercial postal carrier stores in Maryland and North Carolina as the addresses for the trusts and business entities. The defendants, acting as trustees and agents, mailed fraudulent tax returns to the IRS in the names of the trusts and businesses requesting refunds.
For example, in January 2013, Sean Gallman mailed to the IRS a fraudulent 2012 tax return in the name of the Gallman Charitable Trust, requesting a refund of $8,218,930. Also around this time, the defendants mailed to the IRS a fraudulent 2012 tax return in the name of LEA Group Holdings Trust, requesting a refund of $8,293,562. The defendants knew that the trusts were not entitled to the tax refunds. After receiving refund checks in these amounts, on Feb. 15 and March 11, 2013, the defendants deposited the funds into bank accounts they controlled. To hide their receipt of these refunds, the defendants used cashier’s checks and other financial instruments to transfer a portion of the money to third parties and other bank accounts.
Altogether, the Gallman brothers filed a total of approximately 46 fraudulent tax returns seeking refunds totaling $224,676,998, for which the IRS paid two refunds totaling $16,512,492.
In addition to the prison terms, U.S. District Judge Paul W. Grimm of the District of Maryland ordered the Gallmans to forfeit the amount of the refunds paid by the IRS, including $11,529,954 seized from numerous bank accounts; foreign currency and gold and silver coins seized from a residence in Upper Marlboro; nine residential properties located in Upper Marlboro and Laurel, Maryland, North Carolina and South Carolina; and two Mercedes-Benz vehicles and a Hyundai vehicle.
Acting Assistant Attorney General Ciraolo, U.S. Attorney Rosenstein and Special Agent in Charge Jankowski thanked special agents of IRS-CI, who investigated the case and Assistant U.S. Attorney Thomas P. Windom of the District of Maryland and Trial Attorney Erin Pulice of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Nevada Police Officer Indicted for Using Excessive Force Against Student and School Staff MemberRead the Press Release
The Justice Department announced today that a federal grand jury in Las Vegas returned a five-count indictment charging Clark County School District Police Officer James Lescinsky, 45, with unlawfully assaulting two people at the Jeffrey Behavior School on May 21, 2015, and then attempting to cover it up.
Lescinsky allegedly violated the right of the school staff member, identified only as T.R., not to be deprived of liberty without due process of law and the right of the student, identified only as A.N., to be free from unreasonable seizure. The indictment alleges that Lescinsky unlawfully assaulted T.R. by striking her with a dangerous weapon, his police-issued baton, which caused bodily injury. Lescinsky also allegedly unlawfully assaulted A.N. by striking her with the baton and slamming her into a hallway wall and floor at the school.
Lescinsky is also charged with witness tampering for making false representations to a supervisor and with falsifying official reports. After the incident, Lescinsky informed his supervisor that the assault occurred because T.R. and A.N. were wrestling, when he knew that to be false. He similarly falsified an official incident report and use of force report.
The maximum sentence for deprivation of rights under color of law is 10 years in prison. The maximum sentence for witness tampering and false reporting is 20 years in prison. An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
This case is being investigated by the FBI’s Las Vegas Division. It is being prosecuted by Trial Attorneys Adam Harris and Dana Mulhauser of the Civil Rights Division’s Criminal Section.
Lescinsky Indictment
Federal Court Orders Justice Department Desegregation Plan for Cleveland, Mississippi, SchoolsRead the Press Release
Ruling Comes Nearly 60 Years After the Supreme Court’s Decision in Brown v. Board of Education
Late Friday, following a five-decade-long legal battle to desegregate schools in Cleveland, Mississippi, the U.S. District Court for the Northern District of Mississippi ordered the Cleveland School District to consolidate its secondary schools. The court rejected as unconstitutional two alternatives proposed by the school district, agreeing with the Justice Department that the only way to achieve desegregation is by consolidating Cleveland’s high schools and middle schools.
“Six decades after the Supreme Court in Brown v. Board of Education declared that ‘separate but equal has no place’ in public schools, this decision serves as a reminder to districts that delaying desegregation obligations is both unacceptable and unconstitutional,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This victory creates new opportunities for the children of Cleveland to learn, play and thrive together. The court’s ruling will result in the immediate and effective desegregation of the district’s middle school and high school program for the first time in the district’s more than century-long history.”
In the 96-page opinion, the court made clear that the school district operated an inadequate dual system and failed to achieve the greatest degree of desegregation possible given the circumstances. The court concluded the opinion by noting that “the delay in desegregation has deprived generations of students of the constitutionally-guaranteed right of an integrated education. Although no court order can right these wrongs, it is the duty of the[d]istrict to ensure that not one more student suffers under this burden.”
Under the Justice Department’s plan approved by the court – which was developed in consultation with experts in school desegregation, school facilities, school financing and parent and community engagement – the district will consolidate the virtually all-black D.M. Smith Middle School with the historically white Margaret Green Junior High School. The district will also consolidate the virtually all-black East Side High School with the historically white Cleveland High School. Further, the district will review its existing educational programs and identify new programs for the consolidated schools, address staffing considerations and perform necessary maintenance and upgrades to facilities.
The ruling follows years of collaborative work with the local community and private plaintiffs in this case. Community members – from parents and faith leaders, to former teachers and coaches – testified in court in 2012 and 2015. They described the stigma long associated with the district’s black schools and the sense among black children in the community that white children attended better schools. During last May’s hearing, they testified that consolidation was the only way to bridge the divide and expressed a willingness to take the steps, however difficult, to secure equal educational opportunities for their children and grandchildren. Parents of all racial backgrounds testified that they want their children to learn in a diverse environment to prepare them to encounter the world today.
The approved plan commits the district to a path of full engagement with students, parents, educators and community stakeholders in implementing consolidation. Cleveland is a small Mississippi-Delta city of 12,000 residents, divided by railroad tracks that separate east from west as well as black from white. As one community member testified, “[w]e can break down this wall of racism that divides us and keeps us separated, and we could create a new culture in our school system that’s going to unite us and unite our whole city.” The Justice Department shares the sentiments of the court that “the[d]istrict’s commitment to the education of its children will no doubt ensure that the gem that is Cleveland, along with its surrounding areas, only shine brighter as the shadows of segregation recede.”
The Civil Rights Division works to enforce desegregation orders in school districts formerly segregated by law, which have not yet fulfilled their legal obligation to eliminate segregation “root and branch.” The division continues to prioritize enforcement of court orders addressing segregation in our nation’s schools to ensure that all children can access the building blocks of educational success.
Additional information about the Civil Rights Division of the Justice Department is available on its website at www.justice.gov/crt.
Northern District of Mississippi Opinion and Order in Cleveland Case
Corning International Kabushiki Kaisha to Pay $66.5 Million for Fixing Prices of Automotive PartsRead the Press Release
Corning International Kabushiki Kaisha (Corning International K.K.) has agreed to plead guilty and pay a $66.5 million criminal fine for conspiring to fix prices, rig bids and allocate the market for ceramic substrates sold in the United States and elsewhere, and used in catalytic converters supplied to automobile manufacturers in the United States and elsewhere, the Justice Department announced today.
According to the felony charge filed today in U.S. District Court for the Eastern District of Michigan, Corning International K.K., based in Tokyo, conspired to fix prices, rig bids and allocate the market for ceramic substrates, from at least as early as July 1999 until on or about July 2011. The products were installed in automotive emissions control systems and supplied to automobile manufacturers including Ford Motor Company, General Motors LLC, Honda Motor Company Ltd., and certain of their subsidiaries, affiliates, and suppliers in the United States and elsewhere. Corning International K.K. agreed to cooperate in the department’s ongoing investigation. The plea agreement will be subject to court approval.
“Corning International K.K. – and Nobuhiko Niwa, its former executive, who was indicted last week – spent more than a decade colluding on sales of an important component of emissions systems for use in cars made and sold in the United States and elsewhere,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “But they have now been held accountable for the competitive harm they caused.”
“Corning International K.K.'s conspiracy to rig bids and fix prices brought the company increased revenues at a cost to auto manufacturers, suppliers, and ultimately, consumers,” said Special Agent in Charge David P. Gelios of the FBI’s Detroit Division. “Attempts to thwart the free market system are damaging to our economy, and thereby its consumers, and will be actively investigated and prosecuted.”
Including Corning International K.K., 40 companies have been charged in connection with this investigation and have agreed to pay more than $2.7 billion in criminal fines. In addition, 59 individuals have been charged, including a former executive of Corning International K.K. On May 11, 2016, a federal grand jury in the Eastern District of Michigan returned an indictment against Nobuhiko Niwa, a Japanese national, for his role in the conspiracy. Niwa was charged with participating in the conspiracy from at least as early as July 1999 until on or about July 2011.
This charge results from an ongoing investigation conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Division with the assistance of the FBI Headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit http://www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.
U.S. Departments of Justice and Education Release Joint Guidance to Help Schools Ensure the Civil Rights of Transgender StudentsRead the Press Release
The U.S. Departments of Justice and Education released joint guidance today to help provide educators the information they need to ensure that all students, including transgender students, can attend school in an environment free from discrimination based on sex.
Recently, questions have arisen from school districts, colleges and universities, and others about transgender students and how to best ensure these students, and non-transgender students, can all enjoy a safe and discrimination-free environment.
Under Title IX of the Education Amendments of 1972, schools receiving federal money may not discriminate based on a student’s sex, including a student’s transgender status. The guidance makes clear that both federal agencies treat a student’s gender identity as the student’s sex for purposes of enforcing Title IX.
“There is no room in our schools for discrimination of any kind, including discrimination against transgender students on the basis of their sex,” said Attorney General Loretta E. Lynch. “This guidance gives administrators, teachers and parents the tools they need to protect transgender students from peer harassment and to identify and address unjust school policies. I look forward to continuing our work with the Department of Education – and with schools across the country – to create classroom environments that are safe, nurturing, and inclusive for all of our young people.”
“No student should ever have to go through the experience of feeling unwelcome at school or on a college campus,” said U.S. Secretary of Education John B. King Jr. “This guidance further clarifies what we’ve said repeatedly – that gender identity is protected under Title IX. Educators want to do the right thing for students, and many have reached out to us for guidance on how to follow the law. We must ensure that our young people know that whoever they are or wherever they come from, they have the opportunity to get a great education in an environment free from discrimination, harassment and violence.”
“Every child deserves to attend school in a safe, supportive environment that allows them to thrive and grow. And we know that teachers and administrators care deeply about all of their students and want them to succeed in school and life,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Our guidance sends a clear message to transgender students across the country: here in America, you are safe, you are protected and you belong – just as you are. We look forward to working with school officials to make the promise of equal opportunity a reality for all of our children.”
“Our federal civil rights law guarantees all students, including transgender students, the opportunity to participate equally in school programs and activities without sex discrimination as a core civil right,” said Department of Education Assistant Secretary for Civil Rights Catherine E. Lhamon. “This guidance answers questions schools have been asking, with a goal to ensure that all students are treated equally consistent with their gender identity. We look forward to continuing to work with schools and school communities to satisfy Congress’ promise of equality for all.”
The guidance explains that when students or their parents, as appropriate, notify a school that a student is transgender, the school must treat the student consistent with the student’s gender identity. A school may not require transgender students to have a medical diagnosis, undergo any medical treatment, or produce a birth certificate or other identification document before treating them consistent with their gender identity.
The guidance also explains schools’ obligations to:
- Respond promptly and effectively to sex-based harassment of all students, including harassment based on a student’s actual or perceived gender identity, transgender status or gender transition;
- Treat students consistent with their gender identity even if their school records or identification documents indicate a different sex;
- Allow students to participate in sex-segregated activities and access sex-segregated facilities consistent with their gender identity; and
- Protect students’ privacy related to their transgender status under Title IX and the Family Educational Rights and Privacy Act.
At the same time, the guidance makes clear that schools can provide additional privacy options to any student for any reason. The guidance does not require any student to use shared bathrooms or changing spaces, when, for example, there are other appropriate options available; and schools can also take steps to increase privacy within shared facilities.
In addition to the departments’ joint Title IX guidance, the Department of Education’s Office of Elementary and Secondary Education also released Examples of Policies and Emerging Practices for Supporting Transgender Students, a compilation of policies and practices that schools across the country are already using to support transgender students. The document shares some common questions on topics such as school records, privacy and terminology, and then explains how some state and school district policies have answered these questions, which may be useful for other states and school districts that are considering these issues. In this document, the Department of Education does not endorse any particular policy, but offers examples from actual policies to help educators develop policies and practices for their own schools.
Many parents, schools and districts have raised questions about this area of civil rights law. Together, these documents will help navigate what may be a new terrain for some.
The Department of Justice’s Civil Rights Division, created in 1957 by the enactment of the Civil Rights Act of 1957, works to uphold the civil and constitutional rights of all Americans, particularly some of the most vulnerable members of our society. The division enforces federal statutes prohibiting discrimination on the basis of race, color, sex, disability, religion, familial status and national origin. Additional information about the Civil Rights Division of the Justice Department is available here.
The mission of the Department of Education’s Office for Civil Rights (OCR) is to ensure equal access to education and promote educational excellence throughout the nation through the vigorous enforcement of civil rights. OCR is responsible for enforcing federal civil rights laws that prohibit discrimination by educational institutions on the basis of race, color, national origin, disability, sex and age, as well as the Boy Scouts of America Equal Access Act of 2001. Additional information about OCR is available here.
The mission of the Department of Education’s Office of Elementary and Secondary Education (OESE) is to promote academic excellence, enhance educational opportunities and equity for all of America's children and families and to improve the quality of teaching and learning by providing leadership, technical assistance and financial support. Additional information about OESE is available here.
Dear Colleague Letter on Transgender Students
Examples of Policies and Emerging Practices for Supporting Transgender Students
Tennessee Man Convicted for Romney Tax Return Fraud and Extortion SchemeRead the Press Release
Michael Mancil Brown was found guilty late yesterday by a federal jury sitting in Nashville for engaging in an extortion and wire fraud scheme involving former Presidential candidate Mitt Romney’s tax returns, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant United States Attorney Jack Smith of the U.S. Attorney’s Office for the Middle District of Tennessee and Special Agent in Charge Todd Hudson of the U.S. Secret Service’s Nashville Field Office.
Brown, 37, of Franklin, Tennessee, was convicted of six counts of wire fraud and six counts of using facilities of interstate commerce to commit extortion.
According to testimony at trial, evidence recovered from a computer seized from the home of Brown in 2012 implicated Brown in a scheme to defraud Romney, the accounting firm of PricewaterhouseCoopers LLP and others by falsely claiming that he had gained access to the PricewaterhouseCoopers internal computer network and had stolen tax documents for Romney and his wife, Ann D. Romney, for tax years prior to 2010.
Brown was found guilty of participating in the scheme in which a letter delivered in August 2012 to the offices of PricewaterhouseCoopers in Franklin demanded that $1 million worth of the digital currency Bitcoin be deposited to a specific Bitcoin account to prevent the release of the purportedly stolen Romney tax returns. The letter also invited interested parties who wanted the allegedly stolen Romney tax documents to be released to contribute $1 million to another Bitcoin account.
As part of that scheme, similar letters were delivered to the offices of the Democratic and Republican parties in Franklin and caused similar statements to be posted to Pastebin.com.
A sentencing hearing will be scheduled for a date likely in August. The defendant faces up to twenty years in prison on the charges of wire fraud, up to five years in prison on the charges of extortion, fines of up to $250,000, and orders of restitution to victims.
This case was investigated by the U.S. Secret Service’s Nashville Field Office with assistance from the FBI’s Nashville Division. The case is being prosecuted by U.S. Department of Justice Senior Counsel Anthony V. Teelucksingh and Assistant U.S. Attorney Byron Jones of the Middle District of Tennessee.
Massachusetts Man Pleads Guilty to Tax Fraud for Failing to Report IncomeRead the Press Release
A West Bridgewater, Massachusetts, man pleaded guilty today to one count of filing a false individual income tax return, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.
According to court documents, Keith Eaton, 51, did not file federal individual income tax returns with the Internal Revenue Service (IRS) for the years 1998 through 2003. In 2004, the IRS assessed Eaton more than $280,000 in taxes, interest and penalties for the years 1998 through 2001.
From November 2004 to April 2008, Eaton was employed at a heating and air conditioning company in Brockton, Massachusetts. Each year, the company provided Eaton with Forms 1099 reflecting his compensation. Despite receiving these Forms 1099 reporting significant earnings, Eaton did not file timely individual income tax returns with the IRS for years 2004 through 2008. In November and December 2009, Eaton filed Forms 1040 for himself for the years 2000 through 2008 in which he falsely reported receiving no income for any of those years.
In or about November 2008, Eaton began operating Eaton Mechanical LLC, a heating and air conditioning business. In an attempt to thwart the IRS’s effort to collect his back taxes, Eaton caused checks from the business bank account to be made payable to himself and then cashed the checks. Eaton used the cash to pay his personal expenses, including his mortgage. Finally, despite having sufficient income from the operation of his business to require him to file income tax returns, Eaton failed to file individual income tax returns for the years 2009 through 2012.
U.S. District Court Judge William Young for the District of Massachusetts scheduled Eaton’s sentencing for Sept. 14. Eaton faces a statutory maximum sentence of three years in prison and a maximum fine of $250,000. Under the terms of the plea agreement, Eaton is required to pay restitution for his unpaid tax liabilities for the years 1998 through 2012.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation who investigated the case and Trial Attorneys Brittney Campbell and Kenneth Vert of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
M&T Bank Agrees to Pay $64 Million to Resolve Alleged False Claims Act Liability Arising from FHA-Insured Mortgage LendingRead the Press Release
M&T Bank Corp. (M&T Bank) has agreed to pay the United States $64 million to resolve allegations that it violated the False Claims Act by knowingly originating and underwriting mortgage loans insured by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration (FHA) that did not meet applicable requirements, the Justice Department announced today. M&T Bank is headquartered in Buffalo, New York.
“Mortgage lenders that fail to follow FHA program rules put taxpayer funds at risk and increase the chances of borrowers losing their homes,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to hold lenders accountable for knowingly submitting ineligible loans for FHA insurance.”
“M&T Bank bypassed its responsibility to originate and underwrite mortgages in accordance with the standards required by the FHA,” said First Assistant U.S. Attorney James P. Kennedy Jr. for the Western District of New York. “This case demonstrates that when a financial institution takes such a detour, we will work to ensure that it does not bypass the consequences of that conduct.”
During the time period covered by the settlement, M&T Bank participated as a direct endorsement lender (DEL) in the FHA insurance program. A DEL has the authority to originate, underwrite and endorse mortgages for FHA insurance. If a DEL approves a mortgage loan for FHA insurance and the loan later defaults, the holder of the loan may submit an insurance claim to HUD, FHA’s parent agency, for the losses resulting from the defaulted loan. Under the DEL program, the FHA does not review a loan for compliance with FHA requirements before it is endorsed for FHA insurance. DELs are therefore required to follow program rules designed to ensure that they are properly underwriting and certifying mortgages for FHA insurance, to maintain a quality control program that can prevent and correct deficiencies in their underwriting practices, and to self-report any deficient loans identified by their quality control program.
The settlement announced today resolves allegations that M&T Bank failed to comply with certain FHA origination, underwriting and quality control requirements. As part of the settlement, M&T Bank admitted to the following facts: Between Jan. 1, 2006, and Dec. 31, 2011, it certified for FHA insurance mortgage loans that did not meet HUD underwriting requirements and did not adhere to FHA’s quality control requirements. Prior to 2010, M&T Bank failed to review all Early Payment Default (EPD) loans, which are loans that become 60 days past due within the first six months of repayment. Between 2006 and 2011, M&T also failed to review an adequate sample of FHA loans, as required by HUD.
Additionally, M&T created a quality control process that allowed it to produce preliminary major error rates that were significantly lower (sometimes below one percent) than what the rate would have been if M&T had calculated its preliminary major error rate by dividing the number of loans with preliminary major errors by the number of loans reviewed to determine what percent of loans contained a preliminary major error.
M&T Bank also failed to adhere to HUD’s self-reporting requirements. While M&T Bank identified numerous FHA insured loans with “major errors” between 2006 and 2011, M&T Bank did not report a single loan to HUD until 2008, and thereafter self-reported only seven loans to HUD. As a result of M&T’s conduct and omissions, HUD insured hundreds of loans approved by M&T that were not eligible for FHA mortgage insurance under the Direct Endorsement program and that HUD would not otherwise have insured. HUD subsequently incurred substantial losses when it paid insurance claims on those loans.
* * *
“This recovery on behalf of the Federal Housing Administration should serve as a reminder of the potential consequences of not following HUD program rules and the value of private citizen assistance, including whistleblowers, in pursuing lenders that violate the rules,” said Inspector General David A. Montoya of the Department of Housing and Urban Development.
“It is critically important that FHA-approved lenders comply with HUD’s underwriting standards and originate mortgages that borrowers can sustain,” said HUD General Counsel Helen Kanovsky. “We are pleased M&T Bank worked with the Department of Justice and HUD to arrive at an agreeable settlement that protects FHA’s insurance fund.”
The allegations resolved by this settlement arose from a whistleblower lawsuit filed under the False Claims Act by a former employee of M&T Bank, Keisha Kelschenbach. Under the False Claims Act, private citizens can sue on behalf of the government and share in any recovery. The share to be awarded in this case has not yet been determined.
The settlement was the result of a joint investigation conducted by HUD, HUD’s Office of Inspector General, the Civil Division and the U.S. Attorney’s Office for the Western District of New York.
The lawsuit is captioned U.S. ex rel. Kelschenbach v. M&T Bank Corp, 13-CV-0280(S) (W.D.N.Y.).
Justice Department Settles Immigration-Related Discrimination Claim Against Netjets ServicesRead the Press Release
The Justice Department announced today that it has reached an agreement with NetJets Services Inc. (NetJets), a business that provides private aviation services based out of Columbus, Ohio. The agreement resolves allegations that NetJets violated the anti-discrimination provision of the Immigration and Nationality Act (INA) by discriminating against work-authorized immigrants.
The Justice Department’s investigation found that NetJets improperly required newly hired, work-authorized non-U.S. citizens to present specific documents to prove their employment eligibility that they did not require of similarly-situated U.S. citizens. The investigation further found that existing employees who were legal permanent residents were subjected to unnecessary post-employment reverification of their employment eligibility because of their immigration status and that employees who had become naturalized U.S. citizens after they were hired were required to present more and different documents than necessary to establish their citizenship status. The INA’s anti-discrimination provision prohibits employers from discriminating based on citizenship, immigration status, or national origin when verifying an employee’s employment authorization.
Under the settlement agreement, NetJets must pay a $41,480 civil penalty, train its human resources staff on the anti-discrimination provision of the INA and be subject to monitoring by the Justice Department for a period of two years.
“It is the responsibility of each employer to ensure that its human resources staff understand and implement proper hiring practices to avoid violating anti-discrimination laws,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Civil Rights Division commends NetJets for its cooperation during the investigation and its commitment to implement remedial measures.”
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. The case was handled by Trial Attorney Pablo A. Godoy of the Civil Rights Division’s OSC.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they 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.
NetJets Settlement Agreement
El Departamento de Justicia Resulve una Denuncia Relacionada con la Inmigración Contra Netjet ServicesRead the Press Release
El Departamento de Justicia anunció hoy que ha llegado a un acuerdo con NetJets Services Inc. (NetJets), una empresa con sede en Columbus, Ohio, que brinda servicios privados de aviación. El acuerdo resuelve las alegaciones de que NetJets había vulnerado la disposición antidiscriminatoria de la ley de Inmigración y Nacionalidad (INA, por sus siglas en inglés) al discriminar a inmigrantes con autorización para trabajar.
La investigación del Departamento de Justicia encontró que NetJets requirió, de forma ilícita, que todo empleado nuevo que no fuera ciudadano de los EE. UU. presentase documentos específicos para demostrar su elegibilidad para trabajar, pero no solicitaron lo mismo de individuos que estaban en una posición igual y que sí eran ciudadanos de los EE. UU. Más aún, la investigación encontró que empleados actuales eran son residentes permanentes legales fueron sometidos a una reverificación innecesaria de su elegibilidad para trabajar tras ser contratados, por motivos de su estatus migratorio y que empleados que se habían convertido en ciudadanos estadounidenses naturalizados tras ser contratados tuvieron que presentar documentos diferentes y adicionales a los que se necesitan para establecer su estatus de ciudadanía. La disposición antidiscriminatoria de la INA prohíbe que los empleadores discriminen por motivos de estatus de ciudadanía, estatus migratorio o nacionalidad de origen al verificar la autorización para trabajar del empleado.
En virtud del acuerdo de resolución, NetJets deberá pagar 41.480 $ en sanciones civiles, capacitar a su personal de recursos humanos en cuanto a la disposición antidiscriminatoria de la INA y someterse a la supervisión del Departamento de Justicia durante un período de dos años.
“Es la responsabilidad de cada empleador asegurar que su personal de recursos humanos entienda e implemente las prácticas de contratación correctas para evitar que se vulneren las leyes antidiscriminatorias,” declaró la Secretaria de Justicia Auxiliar Adjunta Principal, Vanita Gupta, Directora de la División de Derechos Civiles del Departamento de Justicia. “La División de Derechos Civiles aplaude a NetJets por su colaboración durante la investigación y su compromiso con la implementación de medidas correctivas.”
La Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a 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 o nacionalidad de origen en los procesos de contratación, despido o reclutamiento o recomendación por comisión las prácticas documentales injustas; las represalias y la intimidación. El caso lo gestionó el Abogado Litigante Pablo A. Godoy de la OSC de la División de Derechos Civiles.
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 en línea gratuito en www.justice.gov/crt/about/osc/webinars.php; mande un correo electrónico a [email protected] o visite la página web de la OSC en www.justice.gov/crt/about/osc.
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 deben comunicarse con la línea directa de la OSC para trabajadores referenciada para pedir ayuda.
Netjets Settlement Agreement
District Court Enters Permanent Injunction Against Michigan Sandwich Manufacturer and its Owner to Prevent Distribution of Adulterated SandwichesRead the Press Release
The U.S. District Court for the Eastern District of Michigan entered a permanent injunction against Scotty’s Incorporated (Scotty’s), of Detroit, Michigan, and its co-owner and manager, Sandra J. Jackson, to prevent the distribution of adulterated ready-to-eat sandwiches, the Department of Justice announced today.
The department filed a complaint on Nov. 21, 2014, at the request of the U.S. Food and Drug Administration (FDA). According to the complaint, Scotty’s, which does business as Bruce Enterprises and Bruce’s Fresh Products, prepares and distributes ready-to-eat (RTE) sandwiches, including RTE tuna salad sandwiches. According to the complaint, the company’s sandwiches have been prepared, packed or held under insanitary conditions and the company failed to follow the Hazard Analysis and Critical Control Point (HACCP) regulations for their tuna processing. The complaint alleged that the company’s RTE sandwiches are primarily sold to local police departments and retail customers, such as convenience stores and gas stations, in Michigan and Ohio.
The permanent injunction followed a March 28, decision by the district court that Scotty’s had violated the Federal Food, Drug and Cosmetic Act (FDCA), including a finding that the company’s sandwiches were adulterated.
“The American public needs to have the confidence that food in the marketplace is safe to eat,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division. “Insanitary conditions at food processing facilities can pose well-known risks to consumers, but those risks can be effectively mitigated if companies preparing food take proper precautions.”
The district court’s March 28 decision concluded that FDA documented multiple violations of current good manufacturing practices at the company, including: mold-covered ceiling tiles in the walk-in cooler where defendants stored sandwiches; employees touching non-food contact surfaces, including those near the trash, before handling food products without washing their hands; and placing plastic bakery racks holding bread buns directly on the floor and in an alley near the trash and then moving the racks to a production table without being cleaned.
The district court also found that defendants did not have a HACCP plan in place. Federal regulations require processors of fish and fishery products, such as the company here, to conduct or have conducted for it a hazard analysis to determine whether there are food safety hazards that are reasonably likely to occur for each kind of fish and fishery product processed and to identify the preventive measures that the processor can take to control these hazards. Whenever such an analysis reveals one or more food safety hazards that are likely to occur, a processor is required to have and implement a written HACCP plan.
Under the permanent injunction, defendants cannot receive, prepare, process, pack, hold and distribute RTE sandwiches until they take a number of remedial steps. These steps include, among other things, submitting a written sanitation program covering all of their operations to ensure that they comply with the FDCA. Defendants must also submit a written HACCP plan for each type of seafood received, prepared, packed, held, or distributed by them for which food safety hazards are identified. In addition, defendants must submit employee training programs on all foodborne hazards, including the sanitation control program and a plan to destroy all finished and in-process RTE sandwiches in their custody, control or possession. Defendants must also wait until FDA notifies them that the defendants appear to be in compliance with specific remedial actions set forth above, the FDCA and its implementing regulations.
The government is represented by Trial Attorney Ann Entwistle, of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel Jennifer Kang, of the U.S. Department of Health and Human Services’ Office of General Counsel-Food and Drug Division and Assistant U.S. Attorney Peter Caplan of the Eastern District of Michigan.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of Michigan, visit its website at https://www.justice.gov/usao-edmi.
Justice Department Settles Civil Contempt Claim against ASCAP for Entering into 150 Exclusive Contracts with Songwriters and Music PublishersRead the Press Release
ASCAP to Pay $1.75 Million and Reform its Licensing Practices
The Department of Justice announced today that the American Society of Composers, Authors and Publishers (ASCAP) has agreed to pay $1.75 million and reform certain practices to settle allegations that ASCAP violated a court-ordered consent decree designed to prevent anticompetitive effects arising from its collective licensing of music performance rights. Despite provisions in that court order prohibiting ASCAP from interfering with its members’ ability to directly license their songs, ASCAP entered into approximately 150 contracts with songwriter and publisher members that made ASCAP the exclusive licensor of their performance rights. As part of the settlement, ASCAP has also promised not to enter into further exclusive contracts and agreed to reform its licensing practices to remove music publishers from overseeing ASCAP’s licensing.
The Department of Justice’s Antitrust Division today filed a petition in the U.S. District Court for the Southern District of New York to have ASCAP held in civil contempt for violating the consent decree. At the same time, the department filed a proposed settlement agreement and order that, if approved by the court, would resolve the department’s concerns.
“By blocking members’ ability to license their songs themselves, ASCAP undermined a critical protection of competition contained in the consent decree,” said Principal Deputy Assistant Attorney General Renata B. Hesse, head of the Justice Department’s Antitrust Division. “The Supreme Court said that ASCAP’s consent decree is supposed to provide music users with a ‘real choice’ in how they can access the millions of songs in ASCAP’s repertory – through ASCAP’s blanket license or through direct negotiations with individual songwriters and publishers. Today’s settlement restores that choice and thereby promotes competition among the songwriters, the publishers and ASCAP. This settlement also sends an important message to ASCAP and others subject to antitrust consent decrees that they must abide by the terms of the decrees or face significant consequences.”
ASCAP is a performing rights organization that licenses public performance rights in compositions held by its hundreds of thousands of songwriter and publisher members. Since 1941, when the United States originally brought a civil antitrust lawsuit against ASCAP for price fixing, ASCAP has been subject to a consent decree, amended twice since then, that imposes a number of restrictions on ASCAP designed to prevent its anticompetitive exercise of market power. Among its restrictions, the consent decree prohibits ASCAP from entering into exclusive contracts with songwriters or music publishers or otherwise impeding direct licensing so that music users retain the ability to seek licenses directly from songwriters or music publishers.
The department’s investigation into ASCAP’s decree violation also revealed the existence of a conflict in the interests of the music publishers that serve on ASCAP’s board of directors. Those publisher board members are customers of ASCAP when ASCAP licenses their performance rights and competitors of ASCAP when they seek to license their rights directly. To ensure that this conflict does not prevent ASCAP and its publisher board members from competing with each other in licensing, ASCAP has agreed in the proposed settlement to cease publisher board members’ involvement in ASCAP’s licensing activities.
The proposed settlement also requires ASCAP to adopt an improved compliance program in order to minimize the likelihood of future consent decree violations.
ASCAP Declaration
ASCAP Declaration Exhibit A
ASCAP Declaration Exhibit B
ASCAP Memorandum
ASCAP Proposed Order
ASCAP Petition
Former Certified Public Accountant Sentenced to Prison for Tax FraudRead the Press Release
A former certified public accountant in Georgia was sentenced to seven months in prison today after pleading guilty in February to one count of filing a false tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney John A. Horn for the Northern District of Georgia.
According to court documents and information presented in court, Thomas D. Ziff was a licensed certified public accountant. From approximately January 2006 through December 2010, Ziff operated a tax return preparation and accounting business. During that time, Ziff was the trustee of a trust that was associated with the last will and testament of another individual. As the trustee of the trust, Ziff opened a bank account in the name of the trust at Wachovia Bank over which he had sole signatory authority. While serving as trustee of the trust, Ziff embezzled and caused to be transferred approximately $300,000 from the trust bank account to other bank accounts that he controlled and used the funds for his personal use. Ziff failed to report the embezzled funds as income on his federal income tax returns for the years 2008, 2009 and 2010.
In addition to the prison term, U.S. District Judge Steve C. Jones of the Northern District of Georgia ordered Ziff to serve one year of supervised release and pay restitution to the Internal Revenue Service (IRS) in the amount of $47,539.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Horn commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney Christopher J. Maietta of the Tax Division and Assistant U.S. Attorney Steven D. Grimberg of the Northern District of Georgia, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Former Bank Teller and Check Casher Indicted for Cashing Fraudulently Obtained Tax Refund ChecksRead the Press Release
A federal grand jury sitting in Macon, Georgia, returned two indictments today against residents of Columbus, Georgia, charging crimes related to several stolen identity tax refund fraud schemes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney G.F. Peterman, III, for the Middle District of Georgia.
Tonya Alexander is charged with one count of conspiracy to commit theft of public money and ten counts of theft of public money. The indictment alleges that, between June 2012 and December 2013, Alexander worked as a bank teller at SunTrust Bank in Columbus. Alexander was allegedly approached by several co-conspirators who wanted her to cash fraudulently obtained tax refund checks in exchange for a fee. The income tax refunds were generated by tax returns filed using stolen identities. It is further alleged that Alexander recruited another bank teller to assist her in cashing the fraudulent tax refund checks. In total, Alexander and her co-conspirators are alleged to have cashed over 500 tax refund checks that fraudulently claimed over $1 million in tax refunds.
George Rowell is charged with one count of conspiracy to commit theft of public money, seven counts of theft of public money and two counts of passing forged U.S. Treasury checks. The indictment alleges that between January 2013 and December 2013, Rowell owned and operated Big O’s Package Store located in Columbus. Rowell offered check cashing services at his store. Rowell was allegedly approached by several co-conspirators who wanted him to cash fraudulently obtained tax refund checks in exchange for a fee. The tax refunds were generated by tax returns filed using stolen identities. Rowell allegedly charged his co-conspirators 10 percent of the check’s face value and permitted at least one co-conspirator to forge the endorsement on the checks in his presence. In total, Rowell and his co-conspirators are alleged to have cashed over 250 tax refund checks worth more than $600,000.
If convicted, Alexander and Rowell each face a statutory maximum sentence of five years in prison for the conspiracy counts and 10 years in prison for each count of theft of public money. Rowell also faces a statutory maximum sentence of 10 years in prison for each count of passing a forged U.S. Treasury check. Both defendants also face monetary penalties, supervised release and 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 Peterman commended special agents of Internal Revenue Service-Criminal Investigation and the U.S. Secret Service, who investigated the cases and Trial Attorney Michael C. Boteler of the Tax Division and Assistant U.S. Attorney Crawford L. Seals of the Middle District of Georgia, who are prosecuting the cases.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Federal Court Permanently Enjoins Chicago Medical Services Business and its Owner from Accruing Payroll Tax LiabilitiesRead the Press Release
A federal court in Chicago has ordered that Mauricio Consalter, a doctor, ensure that his business timely file payroll tax returns and pay payroll taxes, the Department of Justice announced today.
U.S. District Court Judge John Robert Blakey for the Northern District of Illinois entered a permanent injunction requiring Medici Health Care Providers SC and Consalter to timely file payroll tax returns and pay any payroll taxes that accrue. Additionally, Consalter must notify the Internal Revenue Service (IRS) if he starts to operate a new business in the next five years. The defendants agreed to entry of the injunction, but did not admit the factual allegations in the civil complaint.
According to the United States’ complaint, Medici Health Care Providers SC has repeatedly failed to timely file payroll tax returns or pay payroll taxes. The permanent injunction entered by the court requires the defendants to stay current on their federal employment tax obligations.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division thanked the revenue officer in IRS Field Collection for investigating and preparing the civil case.
Additional information about the Tax Division and its efforts to combat unpaid employment taxes may be found on the division’s Employment Tax Enforcement webpage.
Nevada Dry Cleaner Owner Indicted for Filing False Tax Returns and Obstructing the Internal Revenue LawsRead the Press Release
A federal grand jury in the District of Nevada returned a superseding indictment on May 10 charging a Las Vegas woman with two counts of filing false tax returns with the Internal Revenue Service (IRS) and one count of corruptly endeavoring to impair and impede the due administration of the internal revenue laws, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Daniel Bogden of the District of Nevada.
According to the superseding indictment, from at least 2005 through at least 2009, Judith Woodward, then known as Judith Atwell, was the 99 percent owner and joint operator of a dry cleaning business, Canyon Gate Cleaners, in Las Vegas, Nevada, which she held in the name of a partnership called Canyon Enterprises LLC. Woodward is alleged to have underreported the gross receipts of Canyon Gate Cleaners on the partnership’s 2005 through 2009 tax returns. She is also alleged to have underreported her personal income on her 2005 through 2009 individual income tax returns.
According to the superseding indictment, between at least 2005 and 2009, Woodward concealed the true gross receipts of the business by depositing hundreds of thousands of dollars of cash receipts into personal bank accounts she controlled or by not depositing the cash receipts into any bank account. The superseding indictment alleges that Woodward fraudulently withheld information regarding the business’s gross receipts and her personal income from the individual who prepared the business’s partnership tax returns and her individual income tax returns for the years 2005 through 2009. Woodward is alleged to have used tens of thousands of dollars of unreported cash business receipts for personal expenditures, including the purchase of luxury vehicles. Woodward is also alleged to have made false and misleading statements to special agents of IRS-Criminal Investigation (IRS-CI) during an interview in June 2010.
If convicted, Atwell faces a statutory maximum sentence of three years in prison and a $250,000 fine on each count of the superseding indictment. She also faces supervised release and restitution.
An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Bogden thanked special agents of IRS-CI, who are investigating the case and Trial Attorneys Christopher S. Strauss and Eric C. Schmale of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Louisiana Woman Indicted for Preparing False Tax Returns, Contempt of Court, Forging a Federal Judge’s Signature and Bank Fraud Related to the BP Deepwater Horizon Oil SpillRead the Press Release
A federal grand jury sitting in New Orleans, Louisiana, returned an indictment on May 6, which was unsealed today, against a LaPlace, Louisiana, woman charging her with 37 counts of aiding and assisting in the preparation of false tax returns, eight counts of contempt of court, one count of bank fraud and one count of forgery of a judge’s signature, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division and U.S. Attorney Kenneth Allen Polite Jr. of the Eastern District of Louisiana.
According to the indictment, Shawanda Nevers aka Shawanda Hawkins and Shawanda Bryant, operated a tax return preparation business under several names and at various locations in the LaPlace area. It is alleged that between 2011 and 2016, Nevers filed 37 false tax returns for clients that claimed a variety of fraudulent losses and deductions, including false Schedule C businesses and false unreimbursed employee expenses. In September 2014, a federal judge permanently enjoined Nevers from preparing federal tax returns. Nevers is charged with contempt of court for violating that injunction by preparing eight federal income tax returns in 2015 and 2016.
Nevers also is charged with forging the signature of a federal bankruptcy judge on a false document purporting to be an order reinstating a bankruptcy petition and with bank fraud for submitting a fraudulent claim for losses supposedly caused by the BP Deepwater Horizon oil spill in 2010.
If convicted, Nevers faces a statutory maximum sentence of three years in prison for each count of aiding and assisting in the preparation of false tax returns, 30 years in prison for the bank fraud charge and five years in prison for the charge of forging the signature of a federal judge. There is no statutory maximum sentence for the contempt of court charges. She also faces substantial monetary penalties, supervised release and restitution.
An indictment merely alleges that crimes have been committed. Defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of Internal Revenue Service-Criminal Investigation, who investigated the case and Assistant U. S. Attorneys Hayden Brockett and Mimi Nguyen of the Eastern District of Louisiana, and Trial Attorney Grace Albinson of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Former Executive Indicted for Role in Automotive Parts ConspiracyRead the Press Release
A federal grand jury in the U.S. District Court for the Eastern District of Michigan returned an indictment against Nobuhiko Niwa, a former automotive parts executive, for his alleged participation in a conspiracy to fix prices, rig bids and allocate the market for ceramic substrates sold in the United States and elsewhere, and used in catalytic converters supplied to automobile manufacturers in the United States and elsewhere, announced the Justice Department today.
The one-count indictment, filed today in Detroit, charges Niwa, a Japanese national, with conspiring to fix prices, rig bids and allocate the market for ceramic substrates used in automotive emissions control systems to reduce pollution. Automotive emissions control systems containing affected substrates were supplied to automobile manufacturers including General Motors, Ford, Chrysler and Honda, and certain of their subsidiaries, affiliates and suppliers in the U.S. and elsewhere.
“Those who corrupt the competitive process must be held accountable,” said Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division. “Today’s indictment reaffirms our commitment to vigorously prosecute corporate executives who scheme to harm their customers, such as those in the U.S. auto industry.”
“Mr. Niwa’s role in rigging bids and fixing prices to increase revenues subverted the free market structure of our economy,” said Special Agent in Charge David P. Gelios of the FBI’s Detroit Division. “The scheme came at a cost to auto manufacturers, suppliers, and ultimately, consumers. Criminal acts that negatively impact consumers and damage our economy will be actively investigated and prosecuted.”
Niwa is charged with participating in the conspiracy from July 1999 to July 2011, when he served as Director and Senior Director of the mobile emissions division of a Japanese subsidiary of a Fortune 500 company based in Corning, New York. The U.S. company manufactures substrates in the United States and sells those products in the United States and elsewhere. Its Japanese subsidiary, which employed Niwa, markets and manages sales of substrates manufactured in the United States. Some of the affected substrates were installed in catalytic converters for vehicles sold to U.S. consumers.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. Including Niwa, a total of 59 individuals and 39 companies have been charged and have agreed to pay more than $2.6 billion in criminal fines.
This indictment was brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Division with the assistance of the FBI’s International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit http://www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.
Niwa Indictment
Federal Court Shuts Down South Florida Tax Return PreparerRead the Press Release
Return Preparer Allegedly Claimed Fraudulent Credits and Deductions
A federal court has ordered West Palm Beach-area tax return preparer Paul Jean not to prepare federal tax returns for anyone except himself, the Justice Department announced today. The order was entered after Jean failed to respond to the United States’ civil complaint.
According to the complaint, Jean has operated under the business names Whiz Tax and Rejoice Tax Services. The complaint alleges he has prepared returns that claim fabricated or inflated tax credits including claiming improper earned income tax credits, education credits, or fuel credits. In addition, Jean allegedly prepared returns that report false or inflated deductions on Schedule A (Itemized Deductions), such as deductions for mortgage interest paid or charitable contributions, or on Schedule C (Profit or Loss From Business), such as expenditures for supplies or office expenses.
The Internal Revenue Service (IRS) estimates that Jean, directly or indirectly, has prepared and filed more than 3,000 tax returns since 2012, according to the complaint, and that the harm Jean’s conduct has inflicted on the U.S. Treasury may be in the millions of dollars.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Southern California Man Pleads Guilty to Making Illegal Contributions to His Son’s Congressional CampaignsRead the Press Release
A southern California man pleaded guilty today to making excessive campaign contributions and making campaign contributions in the name of another.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Phillip A. Talbert of the Eastern District of California made the announcement.
Babulal Bera, 83, of La Palma, California, pleaded guilty in Sacramento before U.S. District Judge Troy L. Nunley in the Eastern District of California. He is scheduled to be sentenced by Judge Nunley on Aug. 4.
In connection with his pleas, Bera admitted that, in 2010 and 2012, he made the maximum allowable individual contributions to his son’s congressional campaigns in California’s District 3 (2010) and District 7 (2012). He further admitted that he solicited friends, family members and acquaintances to make contributions, which he then reimbursed with his own funds to make campaign contributions in excess of the contribution limits established by federal law. The government has identified over 130 improper campaign contributions involving approximately 90 contributors in the two elections. To date, the government has identified over $220,000 in reimbursed contributions relating to the 2010 campaign and over $40,000 in reimbursed contributions relating to the 2012 campaign.
This case was investigated by the FBI. Trial Attorney Richard Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys John Vincent and Philip Ferrari are prosecuting the case.
Pennsylvania State Senator and Pennsylvania Democratic Party Official Charged in Vote Buying SchemeRead the Press Release
A Pennsylvania State Senator and a Pennsylvania Democratic Party Official were charged in a federal indictment for their involvement in a bribery and fraud scheme related to the 2011 election for Democratic Ward Leader for Philadelphia’s Eighth Ward.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division made the announcement.
Lawrence “Larry” Farnese, 47, and Ellen Chapman, 62, both of Philadelphia, were charged with conspiracy, mail fraud, wire fraud, and violations of the Travel Act. According to the indictment, at the time of the alleged illegal conduct, Farnese was a Pennsylvania State Senator and a candidate for Democratic Ward Leader of the Eighth Ward and Chapman was a member of the Eighth Ward Democratic Committee.
The indictment alleges that from May to December 2011, Farnese and Chapman devised a bribe scheme in which Farnese paid $6,000 to a college study-abroad program for Chapman’s daughter in exchange for Chapman’s agreement to use her position with the Eighth Ward Democratic Committee to support Farnese in the upcoming ward leader election. According to the indictment, Chapman had originally intended to support a different candidate in the ward leader election. The indictment also alleges that Farnese made the $6,000 payment using campaign funds and disguised the true purpose of the payment by falsely listing it as a “donation” on the campaign’s finance report.
The charges and allegations in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This case was investigated by the FBI and is being prosecuted by Trial Attorneys Jonathan Kravis and Peter Halpern of the Criminal Division’s Public Integrity Section.
Kentucky Tax Return Preparer Pleads Guilty to Federal Tax CrimesRead the Press Release
A Kentucky man pleaded guilty in the U.S. District Court for the Eastern District of Kentucky today to one count of conspiracy to defraud the United States with respect to claims, one count of wire fraud and one count of aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky.
Brian Hamilton admitted that during the years 2011 and 2012 he conspired with others, including his brother, Billy Ray Hamilton, Patsy Carnes and Diana Hill to file false tax returns from the Bailey Switch Pawn Shop in Knox County, Kentucky. According to the plea agreement, the Hamiltons prepared and electronically filed with the Internal Revenue Service (IRS) at least 31 tax returns that contained false and fraudulent information regarding wages, self-employment income, expenses, filing statuses and dependents. The Hamiltons did not list their names as return preparers on these tax returns. In some cases, the Hamiltons filed false tax returns without the knowledge or permission of the taxpayers named on the returns. To aid in the preparing and filing of false tax returns, Hill obtained personal identifying information and Carnes was responsible for keeping files of that information and providing it to the Hamiltons.
He faces a statutory maximum sentence of 10 years in prison for the conspiracy charge and 20 years in prison for the wire fraud charge. He also faces a mandatory two year prison term for the aggravated identity theft charge, which will be in addition to any other term of imprisonment he receives. Hamilton also faces financial penalties, supervised release and restitution.
In January, Carnes and Hill each pleaded guilty to one count of conspiracy to defraud the United States with respect to claims. On April 20, Billy Ray Hamilton, pleaded guilty to conspiracy to defraud the United States, wire fraud and aggravated identity theft for his role in the scheme. He is scheduled to be sentenced on Aug. 2.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Harvey commended special agents of IRS – Criminal Investigation, who investigated the case and Assistant U.S. Attorney Neeraj Gupta of the Eastern District of Kentucky and Trial Attorney Abigail Burger Chingos of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Federal Court Bars Tennessee Tax PreparerRead the Press Release
A federal court has barred a Nashville-area tax return preparer from preparing returns for others, the Justice Department announced today. The court’s injunction forbids LaVergne, Tennessee, resident Michelle Cole Theus, aka Michelle Cole, and Cole Tax Services from preparing federal tax returns or operating a return-preparation business. It also requires Theus to turn over a complete list of her customers to the government. Theus agreed to entry of the injunction without admitting or denying the factual allegations in the United States’ civil complaint.
According to the United States’ civil complaint in the case, Theus initially prepared accurate returns for her customers, then fraudulently increased the returns’ claimed refund—for example, by adding fictitious dependents or false education credits. Theus then caused the fraudulently inflated portion of the refund, or sometimes the entire refund, to be deposited to her own bank account, the complaint alleges. The Internal Revenue Service (IRS) estimates that Theus has claimed at least $788,220 in fraudulent refunds, according to the complaint.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Texas Man Pleads Guilty to Theft of Public Money for Role in Stolen Identity Refund Fraud Scheme Involving IRS “Get Transcript” DatabaseRead the Press Release
A Houston, Texas, man pleaded guilty today in the U.S. District Court for the Southern District of Texas in Houston to one count of theft of public money, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
An indictment returned on Nov. 10, 2015, charged Denzel Roberts, 24, with participating in a scheme that used stolen personal identification information to file false federal income tax returns for tax year 2014. The indictment alleged that participants in the scheme obtained means of identification of actual individuals, including their names and social security numbers, and used this information to access the Internal Revenue Service’s (IRS) “Get Transcript” database. Using the stolen identities and information obtained from the Get Transcript database, other members of the scheme prepared and filed false tax returns fraudulently requesting refunds. According to the plea agreement, Roberts used a fraudulent passport to open several bank accounts into which the refunds were deposited. Roberts withdrew the illicit proceeds, retaining a portion of the money as a fee and providing the remainder of the funds to others.
Roberts faces a statutory maximum sentence of 10 years in prison and a maximum fine of $250,000. As part of his plea agreement, Roberts agreed to pay restitution to the IRS in the amount of $74,341.39. U.S. District Judge Lynn Hughes of the Southern District of Texas set sentencing for Aug. 8.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Magidson thanked special agents of IRS-Criminal Investigation and the FBI Houston Area Cyber Crime Task Force, who investigated the case and Trial Attorneys Michael Boteler and Grace Albinson of the Tax Division, who are prosecuting this case with assistance from Assistant U.S. Attorney Jimmy Sledge of the Southern District of Texas.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Office on Violence Against Women Announces New Program to Support Tribal Governments Exercise Special Domestic Violence Criminal JurisdictionRead the Press Release
The Justice Department’s Office on Violence Against Women (OVW) today released a grant solicitation launching the new Grants to Tribal Governments to Exercise Special Domestic Violence Criminal Jurisdiction Program (Tribal Jurisdiction Program). This new program was authorized in the Violence Against Women Reauthorization Act of 2013 (VAWA 2013) and received its first appropriation in fiscal year 2016.
VAWA 2013 recognizes tribes’ inherent power to exercise “special domestic violence criminal jurisdiction” (SDVCJ) over certain defendants, regardless of their Indian or non-Indian status, who commit acts of domestic violence or dating violence or violate certain protection orders in Indian country. Specifically, tribes can investigate, prosecute, convict and sentence Indians and non-Indians who assault Indian spouses or dating partners or violate a protection order in Indian country.
“VAWA 2013 closed jurisdictional gaps that had long compromised American Indian and Alaska Native women’s safety and access to justice,” said Principal Deputy Director Bea Hanson for OVW. “And this new grant program is another step in the department’s ongoing effort to help tribes across the country make full use of the SDVCJ authority.”
The Tribal Jurisdiction Program encourages the coordinated involvement of the entire tribal criminal justice system and victim service providers to incorporate systemic change that ensures victim safety and offender accountability. Funds from the Tribal Jurisdiction Program can be used to:
- strengthen tribal criminal justice systems to assist Indian tribes in exercising SDVCJ;
- provide indigent criminal defendants with the effective assistance of licensed defense counsel, at no cost to the defendant, in criminal proceedings in which a participating tribe prosecutes a crime of domestic violence or dating violence or a criminal violation of a protection order;
- ensure that, in criminal proceedings in which a participating tribe exercises SDVCJ, jurors are summoned, selected and instructed in a manner consistent with all applicable requirements; and
- accord victims of domestic violence, dating violence and violations of protection orders rights that are similar to the rights of a crime victim described the federal Crime Victims’ Rights Act, consistent with tribal law and custom.
OVW anticipates making 36-month awards in the range of $300,000 to $450,000. Applications are due by 11:59 p.m. Eastern Time (E.T.) on June 20.
OVW will conduct a pre-application webinar on Wednesday, May 25, 4:00 – 5:00 p.m. E.T. During this webinar, OVW staff will review the FY 2016 Tribal Jurisdiction Program solicitation and grant requirements followed by a brief question and answer session. To register, e-mail [email protected] no later than Monday, May 23.
All OVW open solicitations are posted at www.justice.gov/ovw/open-solicitations.
OCDETF District Specific TrainingRead the Press Release
U.S. Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands (NMI), announced that Organized Crime Drug Enforcement Task Force (OCDETF) trainers provided training to law enforcement partners on Guam and in Saipan, NMI. The OCDETF training was conducted by Lela Johnson, Attorney Advisor from the OCDETF Executive Office in Washington, D.C.; Mark Sweeting, Deputy United States Marshal from Chicago, Illinois; Oscar F. Hagelsieb, Deputy Director, OCDETF Fusion Center in Fairfax, Virginia; Karen D. Beausey, Assistant U.S. Attorney’s Office in Boston, Massachusetts; Jamie Harrison, Special Agent with the IRS in San Diego, California; and Joseph (Josh) Green, Deputy Chief, Criminal Enterprises Section of the U.S. Attorney’s Office in San Diego, California. The training was held at the U.S. Attorney’s Office in Guam on May 4, 2016, and in Saipan on May 5, 2016. The training was attended by approximately 60 local and federal law enforcement officers in Guam and Saipan.
The training topics included Developing a Financial Case; OCDETF Resources; Information Sources for Financial Investigations; OCDETF Fusion Center; Exploiting Financial Evidence and Charges to Improve the Drug Case; Traditional and Alternative Money Laundering Charges; Obtaining Foreign Records; Preparing and Presenting Financial Evidence at Trial; Plea Agreements; Search and Seizure Warrants; and Case Study of a Successful Investigation.
The OCDETF Program was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF Program is the centerpiece of the United States Attorney General's drug strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations and money laundering organizations and related criminal enterprises.
OCDETF investigations involve a focused multi-agency, multi-jurisdictional task force that investigates and prosecutes the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
An OCDETF investigation involves federal agents and local law enforcement officers of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the Drug Enforcement Administration (DEA), the Federal Bureau of Investigations (FBI), the Internal Revenue Service–Criminal Investigations (IRS-CI), the U.S. Coast Guard Criminal Investigative Service (CGIS), the U.S. Department of Homeland Security Investigations (HSI), the U.S. National Oceanic Atmosphere Administration (NOAA), the U.S. Marshal’s Service, the U.S. Postal Inspection Service (USPIS), the Guam Police Department (GPD), Guam Customs and Quarantine Agency (GCQA), the CNMI Department of Public Safety, the CNMI Division of Customs, and other law enforcement partners.
Participants at the OCDETF Training held in Guam
U.S. Attorney Alicia Limtiaco shows appreciation to the trainers for their roles in the OCDETF Training held in Guam and Saipan, NMI
Participants at the OCDETF Training held in Saipan, NMIJustice Department Permanently Shuts Down International “Psychic” Mail Fraud SchemeRead the Press Release
Fraudsters Allegedly Scammed Victims Out of More Than $180 Million
The U.S. District Court for the Eastern District of New York entered a consent decree on Friday that permanently barred eight individuals and entities from operating an alleged international multi-million dollar mail-fraud scheme in the name of alleged psychics Maria Duval and Patrick Guerin. Pursuant to the consent decree entered, the defendants are barred from using the U.S. mail to distribute any advertisements, solicitations or promotional materials on behalf of any psychics, clairvoyants or astrologers. The consent decree also enjoined the defendants from using the U.S. mail to distribute materials representing that services or items offered for purchase will increase the recipient’s odds of winning a lottery, will bring the recipient good luck or will entitle the recipient to receive an inheritance. The consent decree also authorized the U.S. Postal Inspection Service to return any money or personal checks sent to the defendants and detained by the Postal Inspection Service.
The following eight international defendants agreed to be bound by a permanent injunction in order to resolve the United States’ civil suit against them: Canadian company 9097-9394 Québec Inc. dba Infogest Direct Marketing (Infogest); Infogest employees Mary Thanos, Daniel Sousse and Philip Lett, all of Quebec, Canada; Hong Kong corporation Destiny Research Center Ltd.; Destiny Research Center President Martin Dettling of Zurich, Switzerland; Patrick Guerin of France and Maria Duval of France.
In an amended complaint filed in November 2015, the United States alleges that the defendants operated a mail fraud scheme in which they sent letters purporting to be written by psychics Maria Duval and Patrick Guerin to American consumers through the U.S. mail. The letters claim that the psychics have had a specific, personalized vision or psychic reading revealing that the recipient of the letter has the opportunity to achieve great wealth, including claims of winning millions in the lottery. The solicitations urge victims to purchase various products and services in order to ensure that the foreseen good fortune comes to pass. In reality, the solicitations are identical, mass produced form letters sent to tens of thousands of recipients throughout the United States every month. Many of the customers who receive the solicitations are vulnerable victims, including the desperate, elderly and infirm.
The United States alleges that the fraud scheme victimized more than one million Americans, who sent the defendants payments totaling more than $180 million.
“This widespread scam targeted more than one million Americans, many of whom were elderly or in financial distress,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Justice Department is committed to stopping such fraud and pursuing all those responsible for lying to vulnerable consumers for their own financial gain.”
“To line their own pockets, the defendants preyed upon the superstition and desperation of millions of vulnerable Americans,” said U.S. Attorney Robert L. Capers for the Eastern District of New York. “We will use every means at our disposal to protect our citizens from fraudulent schemes like this, that target the lonely, the ill, and the elderly.”
The defendants have all agreed to settle the case and be bound by a permanent injunction. The permanent injunction also bars the defendants from making various claims in advertisements sent through the U.S. mail, including claims that products offered for sale will increase the recipient’s odds of winning the lottery or bring the recipient luck or good fortune. The permanent injunction further bars the defendants from using or selling lists of consumers who have responded to the Duval and Guerin solicitations.
The United States’ case is being handled by Trial Attorney Ann F. Entwistle of the Civil Division’s Consumer Protection Branch, and Chief of Affirmative Civil Enforcement John Vagelatos for the U.S. Attorney’s Office of the Eastern District of New York, in coordination with the U.S. Postal Inspection Service.
Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.
Justice Department Files Complaint Against the State of North Carolina to Stop Discrimination Against Transgender IndividualsRead the Press Release
Attorney General Loretta E. Lynch announced today that the Justice Department has filed a complaint against the state of North Carolina, the University of North Carolina (UNC) and the North Carolina Department of Public Safety (DPS) alleging that they are discriminating against transgender individuals in violation of federal law as a result of the state’s compliance with and implementation of House Bill 2 (H.B. 2). H.B. 2 requires public agencies to treat transgender individuals, whose gender identity does not match the sex they were assigned at birth, differently from similarly situated non-transgender individuals.
The complaint, filed in the Middle District of North Carolina, follows the department’s notice to the defendants on May 4, 2016, that they are in violation of Title VII of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972 and the Violence Against Women Reauthorization Act of 2013 (VAWA).
“This action is about a great deal more than just bathrooms,” said Attorney General Lynch. “This is about the dignity and respect we accord our fellow citizens, and the laws that we, as a people and as a country, have enacted to protect them – indeed, to protect all of us. It’s about the founding ideals that have led this country – haltingly but inexorably – in the direction of fairness, inclusion, and equality for all Americans. This is not a time to act out of fear. This is a time to summon our national virtues of inclusivity, diversity, compassion, and open-mindedness. What we must not do – what we must never do – is turn on our neighbors, our family members, our fellow Americans, for something they cannot control, and deny what makes them human.”
The complaint alleges that the defendants, as a result of compliance with and implementation of the bathroom and changing facility provisions of H.B. 2, are engaging in a pattern or practice of discrimination against transgender public employees and applicants in violation of Title VII, which prohibits discrimination in employment on the basis of sex. Access to restrooms is an important, basic condition of employment and denying transgender individuals access to restrooms and changing facilities consistent with their gender identity constitutes unlawful sex discrimination.
The complaint also alleges that, as a result of these same provisions in H.B. 2, UNC and DPS are violating the non-discrimination provision of VAWA, which prohibits discrimination on the basis of sex and gender identity. Additionally, the complaint alleges that UNC is violating Title IX, which prohibits discrimination on the basis of sex. These laws apply to recipients of federal funding.
“H.B. 2 violates the laws that govern our nation and the values that define us as a people,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Transgender men are men – they live, work and study as men. Transgender women are women – they live, work and study as women. America protects the rights of all people to be who they are, to express their true selves and to live with dignity.”
The complaint is being handled by the Civil Rights Division which enforces the non-discrimination provisions of Title VII, Title IX and VAWA.
North Carolina Complaint
California Man Convicted of Drug and Money Laundering Charges Relating to Methamphetamine Deliveries to OregonRead the Press Release
A California man was convicted late Friday by a federal jury in the U.S. District Court for the District of Oregon.
Assistant Attorney General Leslie R. Caldwell of the Criminal Division; Assistant Special Agent in Charge Cam B. Strahm of the Drug Enforcement Administration’s Portland District Office; Special Agent in Charge Gregory Bretzing of the FBI‘s Portland Division; and Chief Lawrence P. O’Dea III of the Portland Police Bureau, made the announcement today following the jury’s verdict.
Fulgencio Arias Jr., 43, of Whittier, California, was convicted of conspiracy to distribute and possess with the intent to distribute 500 grams or more of a mixture and substance containing methamphetamine, conspiracy to commit money laundering, distribution of 500 grams or more of a mixture and substance containing methamphetamine, and attempted distribution of 500 grams or more of a mixture and substance containing methamphetamine.
The defendant was charged in an indictment on Dec 15, 2011. The evidence at trial showed that the defendant was the leader of a drug trafficking organization from approximately January 2008 until Dec 15, 2011. The defendant sent large quantities of methamphetamine from the Los Angeles area to Oregon and other states in the Pacific Northwest through the use of couriers. One of the defendant’s Oregon-based co-conspirators received the methamphetamine for distribution in Oregon. In turn, co-conspirators returned proceeds from the distribution to the defendant using hidden bulk cash shipments and nominee bank accounts.
Sentencing is scheduled for Aug 30, 2016. The defendant faces a maximum penalty of life in prison.
The case was prosecuted by Trial Attorneys Clayton O’Conner and Michael Lang, respectively, of the Criminal Division’s Human Rights and Special Prosecutions Section and Narcotic and Dangerous Drug Section. The case was investigated by the DEA, FBI, the Portland Metro Gang Task Force, Portland Police Bureau, Tigard Police Department, Medford Police Department, Marion County Sheriff’s Office, Oregon State Police Forensic Laboratory with assistance from the Multnomah County Sheriff’s Office and Los Angeles Sheriff’s Department.
United States Files Complaint Against City of Española, New Mexico to Redress Alleged Trespass on Lands of the Pueblo of Santa ClaraRead the Press Release
The United States today filed a civil complaint on its own behalf and for the benefit of the Pueblo of Santa Clara in federal court in Albuquerque, New Mexico, against the city of Española, New Mexico. The complaint alleges that the city lacks valid rights-of-way for portions of its public water and sanitary sewer lines located on the Pueblo’s lands and is therefore trespassing on those lands. With the Pueblo’s consent, the city obtained rights-of-way in the early 1980s for the water and sewer lines under the Indian Right-of-Way Act and its implementing regulations, which authorize grants of easement across Indian lands. Those rights-of-way expired in 1994 and 2002. The complaint seeks to compel the city to comply with the Indian Right-of-Way Act by renewing its rights of way and compensating the Pueblo for the unauthorized use of the Pueblo’s property.
The Pueblo of Santa Clara and Española engaged in negotiations for almost a decade, seeking to resolve these expired rights-of-way. Those negotiations proved unsuccessful and on Nov. 13, 2013, the Bureau of Indian Affairs sent the city a Notice to Show Cause concerning trespass arising out of the expired rights-of-way.
On July 21, 2014, U.S. Attorney Damon P. Martinez for the District of New Mexico, sent a follow-up letter to the city, reporting that the city’s “Response to the Notice to Show Cause” fails to provide evidence or argument to establish a legal basis for the city’s presence on Pueblo property or otherwise establish that it is not in trespass.” The city disagreed.
In response to that letter, the city stated that no trespass has taken place and no compensation is due. On April 7, U.S. Attorney Martinez met with Española’s mayor, Alice Lucero and the city’s attorney to determine whether this dispute could be resolved through settlement without filing suit. The city stressed that its position on the trespass issue had not changed.
Española’s continuing denial of trespass on lands for which it previously paid and acquired valid rights-of-way and its refusal to comply with federal law precipitated today’s filing.
“The United States takes seriously enforcement of the rule of law, particularly as it affects Indian Country,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “Compliance with the Indian Right-of-Way Act and other federal statutes is not optional, but a legal requirement that ensures Indian tribes retain control of their lands and resources.”
“The filing of today’s complaint is intended to bring the city of Española into compliance with federal law,” said U.S. Attorney Martinez. “The complaint was filed only after all other options for resolving this dispute had been exhausted. While previous discussions among the parties have failed to resolve this dispute, we are hopeful that meaningful discussions will be possible while the federal court action proceeds.”
Trial Attorney Samuel D. Gollis of the Indian Resources Section of the Justice Department’s Environment and Natural Resources Division and Assistant U.S. Attorney Howard R. Thomas of the U.S. Attorney’s Office for the District of New Mexico are representing the United States in this litigation.
U.S. Attorney’s Office Participates in Law Week EventsRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced the U.S. Attorney’s Office participation in various events for Law Week.
The U.S. Attorney’s Office was invited to participate in the annual Law Week Law Fair held on April 30, 2016, at the Judiciary of Guam, at which members of the law community were encouraged to disseminate materials relating to their respective organizations to the public and to answer questions about their organization’s mission and purpose.
This year's Law Day theme was "Miranda: More than Words." The theme highlighted the procedural protections afforded to all by the U.S. Constitution; how these rights are safeguarded by the courts; and why the preservation of these principles is essential to our liberty. In addition to the Law Day theme, Law Week activities sought to educate about the legal system and the rule of law, with events focused on teaching students and the general public about court proceedings and the justice system. Law Week activities allowed the community to obtain first-hand information of the different aspects of the law from our justice system partners.
On May 6, 2016, U.S. Attorney Limtiaco participated in a Conversatorio panel on “Miranda: More than Words” at the U.S. District Court of Guam and spoke with Criminal Justice students from Guam Community College and the University of Guam about Miranda and related U.S. Constitution and justice system issues. Also present were U.S. District Court of Guam Chief Judge Frances Tydingco-Gatewood, U.S. District Court of Guam Magistrate Judge Joaquin Manibusan, Supreme Court of Guam Associate Justice F. Philip Carbullido, Supreme Court of Guam Associate Justice Katherine Maraman, Federal Public Defender John Gorman, Judge Advocates from all military branches, and Federal Law Enforcement Officers/Deputies/Agents.
See the following photos taken at the events.
Student Clerk Jack Ruane and his daughter, with U.S. Attorney Alicia Limtiaco and Legal Assistant Roxanne Ferrer at the U.S. Attorney’s Office’s exhibit at the Law Fair held at the Judiciary of Guam U.S. Attorney Alicia Limtiaco, second from left, responds to a question from visitors receiving handouts from the U.S. Attorney’s Office U.S. Attorney Alicia Limtiaco is pictured here in the U.S. District Court of Guam for Law Week U.S. Attorney Alicia Limtiaco with Federal Public Defender John Gorman during their discussion on Miranda Rights at the U.S. District Court of GuamLiberty Reserve Founder Sentenced to 20 Years for Laundering Hundreds of Millions of DollarsRead the Press Release
Arthur Budovsky, 42, was sentenced today in the Southern District of New York to 20 years imprisonment for running a massive money laundering enterprise through his company Liberty Reserve S.A. (“Liberty Reserve”), a virtual currency once used by cybercriminals around the world to launder the proceeds of their illegal activity.
Assistant Attorney General Leslie R. Caldwell for the Justice Department’s Criminal Division and U.S. Attorney Preet Bharara for the Southern District of New York made the announcement.
In January, Budovsky pleaded guilty to one count of conspiring to commit money laundering. In imposing sentence, the court noted that Budovsky ran an “extraordinarily successful” and “large-scale international money laundering operation.” U.S. District Judge Denise L. Cote also ordered Budovsky to pay a $500,000 fine.
“The significant sentence handed down today shows that money laundering through the use of virtual currencies is still money laundering, and that online crime is still crime,” said Assistant Attorney General Caldwell. “Together with our American and international law enforcement partners, we will protect the public even when criminals use modern technology to break the law.”
“Liberty Reserve founder Arthur Budovsky ran a digital currency empire built expressly to facilitate money laundering on a massive scale for criminals around the globe,” said Manhattan U.S. Attorney Bharara. “Despite all his efforts to evade prosecution, including taking his operations offshore and renouncing his citizenship, Budovsky has now been held to account for his brazen violations of U.S. criminal laws.”
According to the indictment, Liberty Reserve billed itself as the Internet’s “largest payment processor and money transfer system” and allowed people all over the world to send and receive payments using virtual currency. At all relevant times, Budovsky directed and supervised Liberty Reserve’s operations, finances, and business strategy and was aware that digital currencies were used by other online criminals, such as credit card traffickers and identity thieves.
Liberty Reserve grew into a financial hub for cybercriminals around the world, trafficking the criminal proceeds of Ponzi schemes, credit card trafficking, stolen identity information and computer hacking. By May 2013, when the government shut it down, Liberty Reserve had more than 5.5 million user accounts worldwide and had processed more than 78 million financial transactions with a combined value of more than $8 billion. United States users accounted for the largest segment of Liberty Reserve’s total transactional volume – between $1 billion and $1.8 billion – and the largest number of user accounts – over 600,000.
Four co-defendants, Vladimir Kats, Azzeddine El Amine, Mark Marmilev and Maxim Chukharev, have already pleaded guilty. Marmilev and Chukharev were sentenced to five years and three years in prison, respectively. Judge Cote is expected to sentence Kats and El Amine May 13. Charges remain pending against Liberty Reserve and two individual defendants who are fugitives.
The U.S. Secret Service, the Internal Revenue Service-Criminal Investigation and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations investigated this case as part of the Global Illicit Financial Team. The U.S. Secret Service’s New York Electronic Crimes Task Force assisted with the investigation. The Judicial Investigation Organization in Costa Rica, Interpol, the National High Tech Crime Unit in the Netherlands, the Spanish National Police’s Financial and Economic Crime Unit, the Cyber Crime Unit at the Swedish National Bureau of Investigation and the Swiss Federal Prosecutor’s Office also provided assistance.
Trial Attorney Kevin Mosley of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorneys Christian Everdell, Christine Magdo and Andrew Goldstein of the Southern District of New York are prosecuting the case. The Criminal Division’s Office of International Affairs and Computer Crime and Intellectual Property Section provided substantial assistance.
Used Motor Vehicle Dealer and Former State Employee Arrested in Georgia for Odometer Tampering SchemeRead the Press Release
Two Atlanta, Georgia, residents were arrested this week by a team of federal and Georgia state agents, the Department of Justice announced.
Rojen Burnett, 33, and Amber McLaughlin, 32, were charged in a 25-count indictment with securities fraud, making false odometer statements and conspiracy to commit these offenses. Burnett owned and operated Lifestyle Auto Broker LLC, a Georgia corporation that bought and sold used motor vehicles. McLaughlin was a customer service specialist at the Motor Vehicle Department (MVD) of the Georgia Department of Revenue, the indictment alleges.
According to the indictment, as early as February 2012 and through at least May 2013, the defendants devised a scheme to defraud buyers of used motor vehicles by rolling back the vehicles’ odometers and causing consumers to pay more for the vehicles than they would have paid if they had known the vehicles’ actual miles.
As part of the scheme, the indictment charges that Burnett purchased high-mileage, used motor vehicles from auctions in Maryland and Virginia. Burnett then caused the odometers in these vehicles to be altered to reflect false, lower mileage, according to the charges. The indictment also alleges that Burnett caused the existing titles associated with these vehicles to be altered to reflect the false, lower mileages. McLaughlin provided him with newly issued, clean Georgia titles reflecting the false, lower mileages, according to the charges.
Using these new Georgia titles, Burnett subsequently sold the motor vehicles to other dealers through an auto auction, the indictment alleges.
“Individuals who buy and sell used vehicles cannot alter odometers and the associated paperwork to increase their value,” said Principal Deputy Assistant Attorney General Benjamin J. Mizer, head of the Justice Department’s Civil Division. “Consumers who purchase used vehicles need accurate mileage information to assess the value and safety of a potential vehicle purchase. We take seriously our obligation to prosecute those who violate these statutes and prey upon unsuspecting consumers.”
If convicted, each defendant faces up to 10 years in prison on the most serious of the charges.
This case was investigated by the Auto Crimes Title Fraud Unit of the Georgia Department of Revenue and the U.S. Department of Transportation, National Highway Traffic Safety Administration. It is being prosecuted by Trial Attorneys Kerala Thie Cowart and David Sullivan of the Civil Division’s Consumer Protection Branch.
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.
These charges are only allegations and the defendants are presumed innocent unless and until proven guilty.
Three Members of 2012 Presidential Campaign Staff Guilty of Concealing Campaign Expenditures to State SenatorRead the Press Release
Three members of a 2012 presidential campaign committee were convicted by a federal jury in Des Moines, Iowa, on all counts of an indictment charging the concealment of campaign expenditures made to secure the endorsement of an Iowa State Senator.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office made the announcement.
“Concealing and falsely reporting campaign expenditures undermines the integrity and transparency of the federal election process,” said Assistant Attorney General Caldwell. “When political operatives secretly buy an elected official’s political support, it undermines public confidence in our entire political system.”
“Violating campaign finance transparency laws by falsifying expenditure records and reports deceives the public and facilitates corruption,” said Assistant Director in Charge Abbate. “The FBI will aggressively investigate those who corrupt the integrity of our democratic process. I want to thank the special agents, analysts and prosecutors who worked diligently to see this case through to today’s result.”
Jesse R. Benton, 38, of Louisville, Kentucky, and John M. Tate, 53, of Warrenton, Virginia, were convicted of conspiracy, causing false records to obstruct a contemplated investigation, causing the submission of false campaign expenditure reports to the Federal Election Commission (FEC) and engaging in a scheme to make false statements to the FEC. Dimitrios N. Kesari, 50, of Leesburg, Virginia, was convicted of the same offenses, except causing false campaign expenditure reports, for which he was previously convicted by a jury in a separate trial in October 2015.
Chief Judge John A. Jarvey of the Southern District of Iowa noted that he would schedule sentencing for a later date.
The defendants were the senior leadership of a campaign for a candidate in the 2012 presidential election. According to the indictment, former Iowa State Senator Kent Sorenson initially supported one candidate in the 2012 presidential election, but between October and December 2011, negotiated with the defendants to switch his support to their candidate in exchange for money. On December 28, 2011, at a political event in Des Moines, Iowa, Sorenson publicly announced his switch of support.
Evidence at trial proved that the campaign expenditures to Sorenson were made in monthly installments of approximately $8,000 each and ultimately amounted to over $70,000. The defendants concealed the payments by causing them to be recorded – both in campaign accounting records and in FEC filings – as campaign-related audio-visual expenditures, and by causing them to be transmitted to a film production company and then to a second company that was controlled by Sorenson. The conspirators concealed their campaign’s payments to Sorenson from their candidate and also from the FEC, the FBI, and the public.
Trial evidence showed that in response to criticism of Sorenson’s change of support from one candidate to the other, the conspirators arranged for Sorenson to issue public statements denying allegations that he was offered money for his endorsement and noting that the campaign committee’s FEC filings would show that it made no payments to Sorenson.
On August 27, 2014, Sorenson pled guilty to causing a campaign committee to falsely report its expenditures to the FEC and to obstruction of justice. He has not yet been sentenced.
The case is being investigated by the FBI’s Washington Field Office, with assistance from the Omaha, Nebraska, Field Office and the Des Moines Resident Agency. The case is being prosecuted by Director Richard C. Pilger of the Criminal Division’s Public Integrity Section’s Election Crimes Branch, Deputy Chief J.P. Cooney, and Trial Attorney Jonathan I. Kravis.
President Obama Grants CommutationsRead the Press Release
Today, President Barack Obama granted commutation of sentence to the following 58 individuals:
- Jasmine Allen – Bunnell, FL
Offense: Conspiracy to distribute 50 grams or more of cocaine base; manage or control a residence for the purpose of unlawfully manufacturing, storing and distributing a controlled substance; distribution of five grams or more of cocaine base; Middle District of Florida
Sentence: 235 months' imprisonment; five years' supervised release (November 5, 2008); amended to 188 months' imprisonment (February 29, 2016)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Timothy Antjuan Augustus – Hampton, VA
Offense: Conspiracy to possess with intent to distribute and to distribute cocaine base and cocaine; Eastern District of Virginia
Sentence: 210 months' imprisonment; five years' supervised release (March 1, 2007)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Shannon Lee Blake – Phoenix, AZ
Offense: Conspiracy to possess with intent to distribute and to distribute methamphetamine; possession with intent to distribute methamphetamine; District of Wyoming
Sentence: 240 months' imprisonment; 10 years' supervised release; $1,000 fine (July 2, 2007)
Commutation Grant: Prison sentence commuted to expire on May 5, 2018.
- Steven Bernard Boyd – Augusta, GA
Offense: Conspiracy to distribute and to possess cocaine and cocaine base with intent to distribute; distribution of cocaine hydrochloride (three counts); possession of cocaine and cocaine base with intent to distribute; Southern District of Georgia
Sentence: Life imprisonment; 10 years' supervised release (September 29, 1998)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Donald Brooks – West Point, GA
Offense: Conspiracy to possess with intent to distribute at least five kilograms of cocaine and at least 50 grams of cocaine base; Northern District of Georgia
Sentence: Life imprisonment; 10 years' supervised release (October 18, 2002)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Eddie Brown – Washington, DC
Offense: Unlawful possession with intent to distribute 50 grams of cocaine base; District of Columbia
Sentence: Life imprisonment; (September 20, 1990)
Commutation Grant: Prison sentence commuted to expire on May 5, 2017.
- Charles C. Brown – Providence, RI
Offense: Conspiracy to distribute and possess with intent to distribute more than 50 grams of cocaine base; possession with intent to distribute more than 50 grams of cocaine base, aiding and abetting; possession with intent to distribute more than five grams of cocaine base; District of Rhode Island
Sentence: Life imprisonment; 10 years' supervised release (May 20, 2004)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Aundra Coats – Cleveland, OH
Offense: Distribution of cocaine base; Northern District of Ohio
Sentence: 240 months' imprisonment; 10 years' supervised release (June 21, 2005)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Jacob George Colbert – Richmond, CA
Offense: Conspiracy to possess with intent to distribute in excess of 50 grams of cocaine base; District of Minnesota
Sentence: 235 months' imprisonment; five years' supervised release (December 8, 2005)
Commutation Grant: Prison sentence commuted to expire on May 5, 2018.
- Dwayne Berman Cooper – Miami, FL
Offense: Conspiracy to possess cocaine with intent to manufacture cocaine base; possession with intent to distribute cocaine base; possession of cocaine with intent to manufacture cocaine base; Middle District of Florida
Sentence: Life imprisonment; 10 years' supervised release (August 27, 1996)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Marion Clarence Cooper – Miami, FL
Offense: Possession with intent to distribute a controlled substance and aiding and abetting; District of South Carolina
Sentence: Life imprisonment; 10 years' supervised release (November 12, 1996)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Vernon Copeland – Smyrna, GA
Offense: Conspiracy to distribute cocaine; laundering of monetary instruments (three counts); Northern District of Georgia
Sentence: 360 months' imprisonment; five years' supervised release (May 19, 1992)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Wade Cutchen – Newport News, VA
Offense: Conspiracy to possess with intent to distribute and distribute heroin and cocaine; possession with intent to distribute heroin; Eastern District of Virginia
Sentence: 324 months' imprisonment; five years' supervised release (September 15, 2000); amended to 262 months' imprisonment (May 19, 2015)
Commutation Grant: Prison sentence commuted to expire on February 2, 2017.
- Roberto Antonio Davila – San Antonio, TX
Offense: Conspiracy to possess with intent to distribute marijuana; distribution of marijuana and aiding and abetting said offense; Western District of Texas
Sentence: Life imprisonment; three years' supervised release (February 28, 1995)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Efrem Rahoman Douglas – Knoxville, TN
Offense: Possession with intent to distribute 50 grams or more of cocaine base; Eastern District of Tennessee
Sentence: 300 months' imprisonment; 10 years' supervised release (September 19, 2005)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Thomas Farmer – Cincinnati, OH
Offense: Possession with intent to distribute cocaine base; Eastern District of Kentucky
Sentence: Life imprisonment; (December 7, 1995)
Commutation Grant: Prison sentence commuted to expire on May 5, 2017.
- Roy Geer – Tavanier, FL
Offense: Conspiracy to import cocaine; attempt to import cocaine; conspiracy to possess with intent to distribute cocaine; attempt to possess with intent to distribute cocaine; Southern District of Florida
Sentence: 252 months' imprisonment; 10 years' supervised release, $8,500 fine (May 24, 2004)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Christopher Gulley – Pensacola, FL
Offense: Conspiracy to possess with intent to distribute cocaine and cocaine base; Northern District of Florida
Sentence: Life imprisonment; 10 years' supervised release (June 12, 1996)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Jamal Hanson – Temple Hills, MD
Offense: 1. Distribution of 50 grams or more of cocaine base; District of Columbia
2. Possession of contraband in federal prison; District of New Jersey
Sentence: 1. 262 months' imprisonment; five years' supervised release (August 2, 2002)
2. Eight months’ imprisonment (July 16, 2004)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Antonio Nicholas Hill – Taylors, SC
Offense: Possession with intent to distribute 50 grams or more of cocaine base; District of South Carolina
Sentence: 240 months' imprisonment; 10 years' supervised release (June 15, 2006)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Carla Yvette Holte – Largo, FL
Offense: Conspiracy to distribute 50 grams or more of cocaine base; conspiracy to possess with intent to distribute five kilograms or more of cocaine; distribution of five grams or more of cocaine base (two counts); possession with intent to distribute 500 grams or more of cocaine; Middle District of Florida
Sentence: 262 months' imprisonment; five years' supervised release (November 2, 2001)
Commutation Grant: Prison sentence commuted to expire on May 5, 2018.
- Corey D. Howard – Indianapolis, IN
Offense: Conspiracy to possess with intent to distribute and to distribute in excess of five kilograms of cocaine (mixture); Southern District of Indiana
Sentence: 240 months' imprisonment; 10 years' supervised release; $2,000 fine (February 9, 2005)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- George Howard Jones – Raleigh, NC
Offense: Conspiracy to possess with intent to distribute and distribute cocaine base and cocaine; Eastern District of North Carolina
Sentence: Life imprisonment; 10 years' supervised release (August 22, 1996)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Joseph John Jones – Tarpon Springs, FL
Offense: Conspiracy to possess with intent to distribute five kilograms or more of a mixture containing cocaine and 50 grams or more of cocaine base; Middle District of Florida
Sentence: 240 months' imprisonment; 10 years' supervised release (August 6, 2007)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Twaine Jones – Washington Park, IL
Offense: Possession with intent to distribute cocaine; possession with intent to distribute cocaine hydrochloride; possession with intent to distribute marijuana; Southern District of Illinois
Sentence: 360 months' imprisonment; five years' supervised release, $5,000 fine (November 6, 2000); amended to 324 months' imprisonment (October 29, 2008)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Abbas Rauf Kareem – Daytona Beach, FL
Offense: Possession with intent to distribute cocaine base; Middle District of Florida
Sentence: 240 months' imprisonment; 10 years' supervised release (June 12, 2008)
Commutation Grant: Prison sentence commuted to expire on May 5, 2018.
- Kenneth W. Kemp – Guttenberg, NJ
Offense: Conspiracy to distribute and possession with intent to distribute cocaine and cocaine base; distribution of cocaine base (three counts); did cause interstate travel in aid of racketeering (two counts); possession with intent to distribute cocaine; distribution of cocaine; Eastern District of Virginia
Sentence: Life imprisonment; five years' supervised release (April 11, 1994)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Tomma Jean Kent – Des Moines, IA
Offense: Conspiracy to distribute methamphetamine; Southern District of Iowa
Sentence: 240 months' imprisonment; 10 years' supervised release (September 21, 2007)
Commutation Grant: Prison sentence commuted to expire on May 5, 2018.
- Rick Lee Lamere – Bellingham, WA
Offense: Conspiracy to possess methamphetamine with intent to distribute; District of Montana
Sentence: 460 months' imprisonment; 10 years' supervised release (January 13, 2005); amended to 320 months' imprisonment, 10 years' supervised release (January 11, 2007)
Commutation Grant: Prison sentence commuted to expire on May 5, 2018.
- Ohara Linear Laws – Houston, TX
Offense: Possession with intent to distribute 50 grams or more of cocaine base; Southern District of Texas
Sentence: 282 months' imprisonment; 10 years' supervised release (September 19, 2003); amended to 240 months' imprisonment (May 8, 2008)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Larry Lewis – Pensacola, FL
Offense: Conspiracy to possess with intent to distribute cocaine and cocaine base; possession with intent to distribute cocaine; possession with intent to distribute cocaine base; Northern District of Florida
Sentence: 360 months' imprisonment; 10 years' supervised release; $1,000 fine (October 20, 1999); amended to 324 months’ imprisonment (June 18, 2006); amended to 262 months' imprisonment (July 2, 2015)
Commutation Grant: Prison sentence commuted to expire on May 5, 2017.
- Trevis Love – Harriman, TN
Offense: Conspiracy to distribute and possession with the intent to distribute five kilograms or more of cocaine; Eastern District of Tennessee
Sentence: 240 months' imprisonment; 10 years' supervised release (June 27, 2005)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Leonard Mason – Claymont, DE
Offense: Conspiracy to distribute five kilograms or more of cocaine; distribution and possession with intent to distribute cocaine; Eastern District of Pennsylvania
Sentence: 240 months' imprisonment; 10 years' supervised release; $2,500 fine (February 2, 2011)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Christopher Dale Masters – Broken Bow, OK
Offense: Maintaining a place for purpose of manufacturing, distributing, and using methamphetamine; Eastern District of Oklahoma
Sentence: 240 months' imprisonment; three years' supervised release (March 10, 2005); amended to 235 months' imprisonment (February 29, 2016)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Stanford Mathis – Valdosta, GA
Offense: Distribution of more than 50 grams of cocaine base; Middle District of Georgia
Sentence: 240 months' imprisonment; 10 years' supervised release (December 18, 2003)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Maurice Matthews – Katy, TX
Offense: Distribution of 50 grams or more of cocaine base; Eastern District of Louisiana
Sentence: 240 months' imprisonment; 10 years' supervised release (April 29, 2009)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Michael Tyree Mays – North Las Vegas, NV
Offense: Possession with intent to distribute cocaine; Central District of California
Sentence: 360 months' imprisonment; eight years' supervised release (May 13, 1999)
Commutation Grant: Prison sentence commuted to expire on May 5, 2018.
- Javier Mendoza – Pharr, TX
Offense: Conspiracy to possess with intent to distribute more than five kilograms of cocaine; possession with intent to distribute 1,264 kilograms of cocaine; Southern District of Texas
Sentence: Life imprisonment; 10 years' supervised release (August 25, 1998)
Commutation Grant: Prison sentence commuted to expire on May 5, 2018.
- Jerome Lee Menefee – Montgomery, AL
Offense: Possession with intent to distribute cocaine base; Central District of California
Sentence: 240 months' imprisonment; 10 years' supervised release (October 24, 2005)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Michelle Miles – Brooklyn, NY
Offense: Conspiracy to distribute and possess with intent to distribute heroin and cocaine base; distribute and possess with intent to distribute cocaine base; Eastern District of New York
Sentence: 360 months' imprisonment; five years' supervised release (March 24, 2000)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Troy Lamar Morton – Iron Station, NC
Offense: Conspiracy to possess with intent to distribute cocaine, methamphetamine, and marijuana; Western District of North Carolina
Sentence: 240 months' imprisonment; 10 years' supervised release (November 18, 2003)
Commutation Grant: Prison sentence commuted to expire on May 5, 2018.
- Cintheia Denise Parra – Memphis, TN
Offense: Possess with intent to distribute in excess of 500 grams of methamphetamine; Northern District of Mississippi
Sentence: 235 months' imprisonment; five years' supervised release (September 21, 2006); amended to 188 months' imprisonment (March 18, 2015)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Gerardo Gilberto Rivera – Brownsville, TX
Offense: Possession with intent to distribute 11.02 kilograms of methamphetamine; Southern District of Texas
Sentence: 235 months' imprisonment; five years' supervised release (June 8, 2005)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Jessie Lee Robinson – Jefferson City, MO
Offense: Distribution of cocaine base (two counts); possession with intent to distribute cocaine base; Western District of Missouri
Sentence: Life imprisonment; 10 years' supervised release (November 15, 2005)
Commutation Grant: Prison sentence commuted to expire on May 5, 2018.
- Alberto A. Rosales, Sr. – Miami, FL
Offense: Continuing criminal enterprise; importation of marijuana; attempted importation of marijuana; possession with intent to distribute heroin (three counts); Southern District of Florida
Sentence: 85 years' imprisonment; three years' special parole (March 29, 1989); amended to 70 years' imprisonment (October 28, 1992)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Artrez Nyroby Seymour – Chicago Heights, IL
Offense: Narcotics conspiracy; Northern District of Illinois
Sentence: 300 months' imprisonment; 10 years' supervised release (September 21, 2005); amended to 240 months' imprisonment (March 3, 2016)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Larry Simmons – Savannah, GA
Offense: Conspiracy to possess with intent to distribute and to distribute more than 50 grams of crack cocaine; distribution of more than 5 grams of crack cocaine (two counts); Southern District of Georgia
Sentence: Life imprisonment; 10 years' supervised release (April 21, 2003)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Lavelle Span – Milwaukee, WI
Offense: Conspiracy to distribute cocaine base; distribution of cocaine base (two counts); Western District of Wisconson
Sentence: 372 months' imprisonment; five years' supervised release (May 26, 1999)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Jerome Clarence Sumral – Los Angeles, CA
Offense: Conspiracy to possess with intent to distribute 50 grams or more of methamphetamine; District of Hawaii
Sentence: 20 years' imprisonment; 10 years' supervised release (June 20, 2005)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Golden Sutton – Henderson, KY
Offense: Conspiracy to manufacture, possess with intent to distribute in excess of 50 grams of cocaine base; possession of cocaine with intent to distribute; Southern District of Indiana
Sentence: 300 months' imprisonment; 10 years' supervised release (October 28, 2002)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- John Herbert Talley – Chattanooga, TN
Offense: Conspiracy to possess with the intent to distribute and distribute cocaine base; use of a communications facility to wit: the telephone, to facilitate the commission a felony (two counts); Eastern District of Tennessee
Sentence: Life imprisonment; 10 years' supervised release (December 4, 1995)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Derrick Terry – Chicago, IL
Offense: Possession with intent to distribute cocaine base; Northern District of Illinois
Sentence: 262 months' imprisonment; five years' supervised release (January 29, 2003)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- David Anthony Trotter – Pensacola, FL
Offense: Conspiracy to possess with intent to distribute cocaine base; Northern District of Florida
Sentence: Life imprisonment; 10 years' supervised release (October 15, 1993)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Jedrek W. Underwood – Houston, TX
Offense: Possession with intent to distribute 50 grams or more of cocaine base and aiding and abetting; conspiracy to possess with intent to distribute 50 grams or more of cocaine base; Southern District of Texas
Sentence: 240 months' imprisonment; 10 years' supervised release (March 8, 2004)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Chela H. Urbina – Boynton Beach, FL
Offense: 1. Conspiracy to import cocaine; importation of cocaine; possession with intent to distribute cocaine; possession with intent to distribute a mixture containing cocaine (Southern District of Florida)
2. Conspiracy to possess with intent to distribute narcotics (Southern District of New York)
Sentence: 1. 360 months’ imprisonment; five years’ supervised release (November 14, 1995)
2. 27 months’ imprisonment (concurrent); three years’ supervised release (May 1, 1997)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Fulton Leroy Washington – Compton, CA
Offense: Conspiracy to manufacture phencyclidine; possession of piperidinocyclohexane-carbonitrile with intent to manufacture PCP; attempt to manufacture PCP; Central District of California
Sentence: Life imprisonment; five years' supervised release (October 10, 1997)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Bill Westcott – Candler, NC
Offense: Conspiracy to distribute and possess with intent to distribute five kilograms or more of cocaine; Middle District of Florida
Sentence: Life imprisonment; 10 years' supervised release (December 19, 1991)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Wayland Thomas Wilson – Dallas, TX
Offense: Conspiracy; use of a communication facility (three counts); money laundering and aiding and abetting; Northern District of Texas
Sentence: 444 months' imprisonment; three years' supervised release; $25,000 fine (November 12, 1993)
Commutation Grant: Prison sentence commuted to expire on September 2, 2016.
- Jasmine Allen – Bunnell, FL
Justice Department Proposes Legislation to Advance Anti-Corruption EffortsRead the Press Release
The Department of Justice has an unparalleled commitment to, and record of, fighting corruption through law enforcement action. These efforts are currently reflected through six anti-corruption programs aimed at public integrity prosecutions, bribery prosecutions, prosecutions of taxpayers who seek to conceal foreign accounts, money laundering prosecutions, our Kleptocracy Initiative and finally, our assistance to foreign counterparts to fight corruption.
In order to advance those efforts and provide additional tools to advance our anti-corruption work, the department will submit to Congress proposals for legislative amendments in two areas: first, regarding the illegal proceeds of transnational corruption; and second, regarding substantive corruption offenses. Details of those proposals are below.
PROPOSALS REGARDING THE ILLEGAL PROCEEDS OF TRANSNATIONAL CORRUPTION
1. EXPAND FOREIGN MONEY LAUNDERING PREDICATES TO INCLUDE ANY VIOLATION OF FOREIGN LAW THAT WOULD BE A MONEY LAUNDERING PREDICATE IF COMMITTED IN THE UNITED STATES.
Currently, U.S. prosecutors can charge money laundering cases and file asset recovery actions for specific acts of foreign corruption and these actions can capture, without specifically charging violations of foreign law relating to conduct occurring in another country, most of the foreign corruption predicate acts. The proposed amendment will allow prosecutors to directly pursue kleptocracy cases and prosecute for money laundering the use of proceeds from the full range of foreign corruption activities criminalized pursuant to the 2003 U.N. Convention Against Corruption. Adopting this amendment will complement the ability of U.S. prosecutors to charge money launderers and recover kleptocracy proceeds while also enhancing the stature of the United States in promoting an anti-corruption and anti-organized crime agenda worldwide.
2. ALLOW ADMINISTRATIVE SUBPOENAS FOR MONEY LAUNDERING INVESTIGATIONS.
Adopting the proposed amendment will enhance the ability of investigators to obtain records in money laundering investigations. In criminal money laundering investigations, such records are often obtained through the issuance of grand jury subpoenas, but law enforcement occasionally needs the speed and flexibility to subpoena administratively.
3. ENHANCE LAW ENFORCEMENT’S AUTHORITY TO ACCESS FOREIGN BANK OR BUSINESS RECORDS BY SERVING BRANCHES LOCATED IN THE UNITED STATES.
Current law permits U.S. law enforcement to obtain bank records located abroad by serving subpoenas on branches of the bank located in the United States. However, obtaining such records as legally admissible evidence can still result in protracted negotiation and litigation. This can ultimately result in law enforcement not being able to obtain those records. Adopting this amendment will enhance the ability of U.S. investigators to obtain overseas records as a form of legally admissible evidence.
4. CREATE A MECHANISM TO USE AND PROTECT CLASSIFIED INFORMATION IN CIVIL ASSET RECOVERY CASES.
Because kleptocracy investigations typically involve high-ranking foreign government officials, the cases may increasingly involve classified information. In criminal cases, the Classified Information Procedures Act (CIPA) provides a framework for utilizing and disclosing such information. Currently, if litigation over classified information arises in a civil kleptocracy case, there are no CIPA-type procedures in place. This amendment creates a framework for the use of classified information in kleptocracy-related civil asset recovery cases.
5. MAKE THE TIME PERIOD IN WHICH THE U.S. CAN RESTRAIN PROPERTY BASED ON A REQUEST FROM A FOREIGN COUNTRY, CURRENTLY 30 DAYS, PARALLEL TO THE DOMESTIC RESTRAINT PERIOD, WHICH IS 90 DAYS; AND EXTEND THE PROCEDURES TO AUTHENTICATE FOREIGN RECORDS OF REGULARLY CONDUCTED ACTIVITY IN CRIMINAL CASES TO CIVIL ASSET RECOVERY CASES.
Multilateral cooperation in kleptocracy cases is essential for sharing evidence and determining which authorities are best positioned to seize particular assets. There are several impediments, however, to effective parallel work. First, there is a discrepancy between the time limits imposed in domestic and foreign asset recovery cases. In a case initiated by U.S. authorities, the government has 90 days from the time of seizure to initiate a forfeiture proceeding – but the government has only 30 days from seizure based on a request from a foreign government. This amendment extends the 90 day period to requests from a foreign country. Second, in these cases U.S. prosecutors may seek to use foreign business records. In a criminal case, foreign business records are admissible if there is a certificate attesting that the document meets the business records test. This amendment extends the certificate process to civil asset recovery cases.
PROPOSALS REGARDING SUBSTANTIVE CORRUPTION OFFENSES
- AMEND 18 U.S.C. § 666 (THEFT OR BRIBERY CONCERNING PROGRAMS RECEIVING FEDERAL FUNDS) TO EXPRESSLY CRIMINALIZE THE CORRUPT OFFER OR ACCEPTANCE OF PAYMENTS TO “REWARD” OFFICIAL ACTION AS WELL AS THOSE INTENDED TO “INFLUENCE” OFFICIAL ACTION.
- AMEND 18 U.S.C. § 666 (THEFT OR BRIBERY CONCERNING PROGRAMS RECEIVING FEDERAL FUNDS) TO CORRECT A DRAFTING ERROR REGARDING BONA FIDE SALARY and TO LOWER THE DOLLAR THRESHOLD FROM $5,000 TO $1,000.
The two proposed amendments to 18 U.S.C. § 666 are intended to give full effect to the language that Congress initially enacted and clarify Congress’s intent. The first proposed amendment will resolve a conflict among Federal circuit courts on the issue of whether after-the-fact gratuities are covered by Section 666 and would also be consistent with the interpretations of six of eight Circuit Courts of Appeals which have addressed this issue, finding that the plain language of the statute criminalizes the corrupt offer or acceptance of rewards. The second proposed amendment will correct a drafting error regarding bona fide salary and lower the dollar threshold to address those cases where the dollar amount involved may be low but the threat to the integrity of a government function is high.
The department has transmitted these proposals to Congress and encourages review and approval in order to further advance the U.S. government’s anti-corruption tools and efforts.
District of Columbia Man Indicted for Environmental CrimesRead the Press Release
James Powers, 59, of Washington, D.C., was indicted today for violating the Clean Air Act and for fraud stemming from a scheme to improperly remove asbestos from a historic building in the District of Columbia.
The seven-count indictment, returned by a grand jury in the U.S. District Court for the District of Columbia, was announced by Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division, U.S. Attorney Channing D. Phillips for the District of Columbia, and Jennifer Lynn, Acting Special Agent in Charge of the Environmental Protection Agency’s (EPA) criminal enforcement program in the Mid-Atlantic States. It charges Powers with violations of the Clean Air Act, wire fraud and first-degree fraud, which is a District of Columbia offense. The indictment also includes a forfeiture allegation seeking all proceeds that can be traced to the fraud scheme.
According to the indictment, asbestos, a once-popular fireproofing insulation, is now known to cause lung cancer, asbestosis and mesothelioma in people who inhale the fibers released when asbestos is disturbed. Congress has determined that there is no safe level of exposure to asbestos. The Clean Air Act requires that renovation in asbestos-containing properties follow specific protocols designed to safely remove asbestos from the property prior to any renovation or demolition activity, so as not to expose workers to the risk of deadly respiratory diseases.
“The Clean Air Act asbestos standards exist to protect the public, especially demolition and renovation workers, from harmful and potentially fatal exposure to asbestos,” said Assistant Attorney General Cruden. “The Justice Department and the EPA will fully investigate and prosecute those individuals who skirt the law and put workers in danger.”
“This businessman is accused of endangering his own work crew by not taking the proper steps to renovate a building containing asbestos,” said U.S. Attorney Phillips. “The indictment in this case reflects our determination to enforce the federal Clean Air Act and other laws that protect the health and safety of workers and citizens of the District of Columbia.”
“Asbestos must be removed and disposed of safely and legally,” said Acting Special Agent in Charge Lynn. “The federal Clean Air Act helps protect not only workers’ health and safety, but that of the entire community. Today’s charges demonstrate that EPA and its partner agencies are committed to enforcing important environmental and public health protection laws.”
The development project at issue involved renovating the historic Friendship House, located at 619 D Street SE in Washington, D.C., into condominiums, a development known as the Maples. The indictment alleges that, in March 2010, Powers formed a partnership with a local real estate development firm to purchase and renovate the property. According to the indictment, an asbestos survey of the property documented asbestos throughout the property, including in floor tiles, wall board, and pipe insulation. After the survey, the partnership received bids from licensed professional asbestos abatement and renovation firms in the area. The indictment alleges that, despite receiving those bids and despite knowing that the building contained asbestos, Powers hired Larry Miller, 58, of Palmetto, Georgia, a general contractor from Atlanta with no training, certification, or experience in asbestos abatement, to conduct interior demolition and renovation of the building. Powers represented to his partners that a qualified entity would conduct appropriate asbestos abatement at the property and emailed them a proposed contract, but the contract was with a corporation that, unbeknownst to his partners, was an alter-ego for Powers.
The indictment further alleges that Miller and his crew of workers conducted interior demolition at the Maples during September and October 2011, without any asbestos abatement having occurred. Even after an inspection by local environmental authorities revealed asbestos in the building, Powers had the workers continue demolition. Over the course of the project, the workers disturbed substantial quantities of asbestos, exposing themselves to a substantial risk of serious illness later in life.
Miller pleaded guilty on Nov. 19, 2015, to one count of negligent endangerment under the Clean Air Act. He is awaiting sentencing by the Honorable Amy Berman Jackson in the U.S. District Court for the District of Columbia. The charge carries a maximum sentence of not more than one year of imprisonment, a fine of up to $100,000, and a term of supervised release and/or probation.
If convicted, Powers faces up to five years in prison and a fine of up to $250,000 or twice the gross gain or loss to victims under the Clean Air Act, and a maximum of 20 years in prison and a fine of up to $250,000 or twice the gross gain or loss to victims under the wire fraud statute.
After the acts described in this Indictment, a licensed asbestos abatement firm conducted abatement at the Maples. The District of Columbia Department of the Environment subsequently conducted inspections and found the property to be free of all asbestos-containing materials.
An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
In announcing the charges, Assistant Attorney General Cruden, U.S. Attorney Phillips, and Acting Special Agent in Charge Lynn expressed appreciation for the work performed by Special Agents from EPA and the Department of Transportation. They also acknowledged the efforts of Trial Attorney Cassandra J. Barnum, Senior Trial Attorney Lana Pettus and Paralegal Specialist Cynthia Longmire of the Environmental Crimes Section and those working at the U.S. Attorney’s Office, including Paralegal Specialists Kaitlyn Krueger, John Lowell, and former Paralegal Specialist Krishawn Graham and Assistant U.S. Attorneys Jonathan Hooks and Zia Faruqui.
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:
“As a result of the President’s actions today, 58 more individuals, 18 of whom had been sentenced to life in prison, have been granted a second chance to lead productive and law-abiding lives. Our clemency work is continuing as part of our broader efforts to effectuate criminal justice reform and ensure fairness and proportionality in sentencing. That includes supporting the bipartisan efforts in Congress to pass criminal justice reform legislation, working with the U.S. Sentencing Commission, and continuing the department’s successful Smart on Crime initiative.”
California Man Sentenced to over 16 Years in Prison for Producing Child PornographyRead the Press Release
A California man was sentenced today to 16 years and three months in prison for producing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Phillip A. Talbert of the Eastern District of California, Special Agent in Charge Ryan Spradlin of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) San Francisco Field Division and Chief of Police Robert D. Landon of the Yuba City, California, Police Department.
Nathan Penner, 26, of Yuba City, California, pleaded guilty on Nov. 5, 2015, to one count of production of child pornography. U.S. District Judge Troy L. Nunley of the Eastern District of California sentenced Penner today and also ordered him to serve a lifetime term of supervised release.
In connection with his plea, Penner admitted to producing sexually explicit images and videos of a five-year old minor in September and October of 2012. Evidence revealed that Penner shared hundreds of files of child pornography located on his computer and distributed such material using an online chat messaging service.
This case was investigated by HSI and the Yuba City Police Department. Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Special Assistant U.S. Attorney Josh F. Sigal of the Eastern District of California prosecuted the case. CEOS’ High Technology Investigative Unit assisted with computer forensic analysis for the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by the 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.projectsafechildhood.gov.
New York Business Owner Pleads Guilty to Filing False Tax ReturnsRead the Press Release
Failed to Report More than $650,000 in Income from Online Sales of Sunglasses and Eyeglasses
A Brooklyn, New York, business owner pleaded guilty today to two counts of filing false tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to court documents and information presented in court, Michael Stern, 48, was the founder and operator of Prestige Optical, a retailer of sunglasses and eyeglasses. For the 2006 and 2007 tax years, Stern filed false federal income tax returns with the Internal Revenue Service (IRS) on which he failed to report approximately $656,780 of income from online retail sales.
U.S. District Judge Nicholas G. Garaufis of the Eastern District of New York set sentencing for Sept. 9. Stern faces a statutory maximum sentence of three years in prison and a fine of $250,000 for each count of filing a false tax return. As part of his plea agreement, Stern also agreed to pay restitution to the IRS in the amount of $190,781.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Mark Kotila and Jack Morgan of the Tax Division, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Forty-Eight Alleged Members of Gangster Disciples Indicted on Federal Racketeering ChargesRead the Press Release
Forty-eight alleged members of the violent Gangster Disciples Gang – including the top leaders in Tennessee and Georgia – have been charged in two indictments and accused of conspiring to participate in a racketeering enterprise that included multiple murders, attempted murder and drug crimes.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John A. Horn of the Northern District of Georgia, U.S. Attorney Edward L. Stanton III of the Western District of Tennessee, Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Division and Special Agent in Charge A. Todd McCall of the FBI’s Memphis Division made the announcement.
A 12-count indictment was returned by a grand jury on April 27, and unsealed today in the U.S. District Court of the Northern District of Georgia. Thirty individuals were taken into custody today and two remain at large. A 16-count indictment was returned by a grand jury on April 22, and unsealed today in the U.S. District Court of the Western District of Tennessee. Fifteen individuals were taken into custody today and one remains at large.
“It is the very of core of law enforcement’s mission to ensure that everyone feels safe in their homes and neighborhoods, and it is a hard reality that many people across our country simply do not enjoy this basic sense of security because of gangs like the Gangster Disciples,” said Assistant Attorney General Caldwell. “That is why it is so significant that today’s indictments charge top leaders within the Gangster Disciples. There are a lot of people out there willing to join gangs, and eager to get easy money from criminal activity. But there are far fewer people with the wherewithal to lead organizations like the Gangster Disciples. These are the people who keep gangs like the Gangster Disciples alive, year in and year out, generation after generation. Cases like these make a difference, and I want to thank all the law enforcement and U.S. Attorney Office and Organized Crime and Gang Section prosecutors who worked so hard to build this case.”
“Atlanta has historically been resistant to the incursion of these national gangs, but unfortunately today’s indictment shows how this landscape has changed in just the last few years, as the Gangster Disciples are only one of several gangs that now boast a strong foothold,” said U.S. Attorney John Horn. “These charges show how a national gang like Gangster Disciples can wreak havoc here and in communities across the country, with crimes that run the gamut from murder to drug trafficking to credit card fraud. Within Georgia, the leadership of the Gangster Disciples resided mostly in metro Atlanta, yet the reach of the crimes committed extended into far south and west Georgia. We hope this indictment warns the leaders of these gangs that Atlanta is not a good place to do business.”
“As the indictment alleges, the Gangster Disciples flooded communities throughout the southeast and beyond with large amounts of drugs, and ruthlessly used fear, intimidation, and even murder to promote and protect their nationwide criminal enterprise,” said U.S. Attorney Stanton. “We will continue to work with our law enforcement partners to eliminate the terror gang members inflict upon our communities, and will exhaust every available resource, including the federal RICO statute, to bring them to justice. Dismantling violent gangs at the highest levels remains a priority for the U.S. Attorney's Office.”
“Today's Gangster Disciple arrests across nine states merely marks the first wave of the FBI’s strategic campaign to dismantle this violent criminal organization,” said Special Agent in Charge Johnson. “The Gangster Disciples are a highly organized and ruthless gang that recognizes no geographical boundaries, and its members have far too long indiscriminately preyed upon and infected the good people of our communities like a cancer. The FBI’s Safe Streets Gang Task Forces recognize no boundaries either, and we are committed to identifying, disrupting and dismantling the most violent gangs that seek to harm our communities. The FBI, along with our law enforcement partners, are committed to seeing this campaign through, and once and for all putting an end to the Gangster Disciples' reign of violence.”
According to court documents, the Gangster Disciples is a national gang active in more than 24 states with a highly organized structure including board members and governor-of-governors who each controlled geographic regions; governors, assistant governors, chief enforcers and chiefs of security for each state or regions within the state where the Gangster Disciples were active; and coordinators and leaders within each local group. To enforce discipline among Gangster Disciples and adherence to the strict rules and structure, members and associates were routinely fined, beaten and even murdered for failing to follow the gang’s rules.
The scope of the Gangster Disciples’ crimes is wide-ranging and consistent throughout the national operation. The RICO conspiracies charged here include attempted murder, narcotics trafficking, extortion, firearms crimes, obstruction of justice and other crimes in furtherance of the Gangster Disciples enterprise and to raise funds for the gang. In Georgia, for example, the Gangster Disciples brought money into the gang through, among other things, drug trafficking, robbery, carjacking, extortion, wire fraud, credit card fraud, insurance fraud and bank fraud.
The gang protected its power and operation through threats, intimidation and violence, including murder, attempted murder, assault and obstruction of justice. It also promoted the Gangster Disciples enterprise through member-only activities, including conference calls, birthday celebrations of the gang’s founder, the annual Gangster Ball, award ceremonies and other events.
The gang also provided financial and other support to members charged with or incarcerated for gang-related offenses and members who were fugitives from law enforcement were provided “safe houses” in which to hide from police. To introduce the criminal nature of the Gangster Disciples to a new member, older members and leaders in the various local groups ordered newer members to commit crimes, including murder, robbery and drug trafficking. Further, Gangster Disciples members would teach other members how to commit certain crimes, including frauds and would provide drugs on discount to other Gangster Disciples members for resale.
The Atlanta RICO conspiracy indictment names the following defendants and their alleged roles within the Gangster Disciples:
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Shauntay Craig, 37, of Birmingham, held the rank of Gangster Disciples board member;
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Alonzo Walton, 47, of Atlanta, held at different relevant times the positions of governor of Georgia and governor of governors, the latter position controlling Georgia, Florida, Texas, Indiana and South Carolina;
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Kevin Clayton, 43, of Decatur, Georgia, was the chief enforcer for the state of Georgia;
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Donald Glass, 26, of Decatur, served as a first coordinator of the eastside group of the Gangster Disciples;
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Lewis Mobely, 38, of Atlanta, was an enforcer;
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Vertious Wall, 40, of Marietta, was a first coordinator for the Macon Gangster Disciples group;
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Adrian Jackson, 37, of San Jose, California, was the national treasurer for the Gangster Disciples;
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Terrence Summers, 45, of Birmingham, held at different relevant times the positions of governor of Alabama and governor of governors for Georgia, Alabama, South Carolina and Florida;
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Markell White, 43, of Atlanta, was a regional leader in Macon;
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Ronald McMorris, 34, of Atlanta, was first coordinator of the Atlanta group;
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Perry Green, 29, of Decatur, was a member of the Gangster Disciples and acted as enforcer of a Gangster Disciples group;
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Dereck Taylor, 29, of Macon, was a member of the Gangster Disciples and acted as security for a Macon group;
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Alvis O’Neal, 37,of Denver, was a senior member of and money launderer for the Gangster Disciples;
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Jeremiah Covington, 32, of Valdosta, Georgia, was a first coordinator for the Valdosta region;
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Antonio Ahmad, 33, of Atlanta, was the chief of security for the state of Georgia;
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Eric Manney, 39, of Atlanta, was a member of the Gangster Disciples and stored multiple guns at his house;
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Quiana Franklin, 33, of Birmingham, served as treasurer for the state of Alabama;
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Frederick Johnson, 37, of Marietta, was a chief enforcer for a Gangster Disciples group;
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Charles Wingate,25, of Conyers, Georgia, was chief of security for a Covington, Georgia group;
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Vancito Gumbs, 25, of Stone Mountain, Georgia, was a member of the Gangster Disciples while at the same time serving as a police officer with the DeKalb County Police Department;
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Thomas Pasby, 42, of Cochran, Georgia, was a member of the Gangster Disciples;
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Denise Carter, 41, of Detroit, was a member of the Gangster Disciples;
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Carlton King Jr., 25, of Cochran, was a member of the Gangster Disciples;
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Kelvin Sneed, 26, of Cochran, was a member of the Gangster Disciples;
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Arrie Freeney, 32, of Detroit, was a member of the Gangster Disciples;
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Myrick Stevens, 26, of Madison, Wisconsin, was a member of the Gangster Disciples;
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Curtis Thomas, 45, of Cochran, was a member of the Gangster Disciples;
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Yohori Epps, 36,of Marietta, was a member of the Gangster Disciples; and
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Michael Drummound, 49, of Marietta, was a member of the Gangster Disciples.
In addition to the RICO conspiracy, Glass and Mobely are each charged with committing or attempting to commit murder in aid of racketeering and using firearms during those crimes. Mobely, Glass, Craig, O’Neal, Covington and Travis Riley, 35, of Wichita, Kansas are also charged with various drug distribution crimes and Mobely and Glass are further charged with related firearms crimes. Walton, Ahmad and Laderris Dickerson, 45, of Chicago, are also charged with carjacking and Walton and Dickerson are charged with a related firearms offense.
The Memphis RICO conspiracy indictment names the following defendants and their alleged roles within the Gangster Disciples:
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Byron Montrail Purdy, aka “Lil B” or “Ghetto,” 37, of Jackson, Tennessee, served as Gangster Disciples leader in Tennessee;
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Derrick Kennedy Crumpton, aka “38,” 32, of Memphis, served as Gangster Disciples leader in Tennessee;
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Demarcus Deon Crawford, aka “Trip,” 32, of Jackson, served as leader of security in Tennessee;
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Henry Curtis Cooper, aka “Big Hen,” 36, of Memphis, served as leader of security in Tennessee;
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Rico Terrell Harris, aka “Big Brim,” 43, of Memphis, served as leader of security in Tennessee;
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Shamar Anthony James, aka “Lionheart,” 37, of Memphis, held the rank of governor of a region in Memphis;
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Demario Demont Sprouse, aka “Taco,” 35, of Memphis, held the rank of chief of security of a region in Memphis;
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Robert Elliott Jones, aka “Lil Rob” or “Mac Rob,” 36, of Memphis, held the rank of governor of a region in Memphis;
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Denton Suggs, aka “Denny Mo” or “Diddy Mo,”40, of Memphis, held the rank of chief of security in a section of Memphis;
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Santiago Megale Shaw, aka “Mac-T,” 23, of Jackson, was a member of the security team or blackout squad in Jackson;
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Tarius Montez Taylor, aka “T,” 26, of Jackson, was a member of the security team or blackout squad in Jackson;
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Tommy Earl Champion Jr., aka “Duct Tape,” 27, of Jackson, held the rank of chief of security of Jackson;
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Cory Dewayne Bowers, aka “Bear Wayne,” 32, of Jackson, was associated with the Gangster Disciples and acted as a member of the security team in Jackson;
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Gerald Eugene Hampton, aka “G30,” 30, of Jackson, held the rank of assistant chief of security and was a member of the security team’s blackout squad in Jackson;
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Daniel Lee Cole, aka “D-Money,” 37, of Jackson, acted as assistant governor and assistant education coordinator for the Gangster Disciples in Jackson; and
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Tommy Lee Wilkins (Holloway), aka “Tommy Gunz,” 28, of Memphis, was a member of the security team in Memphis.
In addition to the RICO conspiracy, all 16 defendants are charged with a cocaine-distribution conspiracy, and Crawford, Shaw, Taylor, Champion and Bowers are charged with seven counts of attempted murder in aid of racketeering and using a firearm during the commission of those offenses.
The charges and allegations in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The Atlanta case is being investigated by the FBI Atlanta's Safe Streets Gang Task Force (composed of members of the FBI, Alpharetta Police Department (PD), Atlanta PD, Clayton County PD, DeKalb PD, Forest Park PD, GA Dept. of Community Supervision, GA Dept. of Corrections, Gwinnett County PD, and Marietta PD), Internal Revenue Service Criminal Investigation, United States Marshal's Service and United States Postal Inspection Services. The Atlanta case is being prosecuted by Trial Attorney Hans B. Miller of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Kim S. Dammers, Ryan K. Buchanan and Stephanie Gabay-Smith of the Northern District of Georgia.
The Memphis case is being investigated by a multi-agency task force consisting of the FBI; the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Memphis Multi-Agency Gang Unit; the Memphis PD; the Shelby County, Tennessee Sheriff’s Office; the Jackson PD Gang Enforcement Team; the Tennessee Bureau of Investigation; the Madison County, Tennessee Sheriff’s Department; the 28th District West Tennessee Drug Task Force; the Tipton County, Tennessee, Sheriff's Office; the 26th Judicial District Attorney General’s Office; the 25th Judicial District Attorney General’s Office; the Atascosa County, Tennessee District Attorney’s Office; and the Shelby County District Attorney General’s Office. The Memphis case is being prosecuted by David N. Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Jerry Kitchen, Samuel Stringfellow, Beth Boswell, and Michelle Parks of the U.S. Attorney’s Office for the Western District of Tennessee.
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Maryland Man Sentenced to Prison for Role in Massive Identity Theft and Tax Fraud SchemeRead the Press Release
Stole Identities from D.C. Government Agency for Use in Filing False Tax Returns
A resident of Bowie, Maryland, was sentenced today to four years in prison after pleading guilty in January for his involvement in a far-reaching identity theft and tax fraud scheme in which he assisted in the filing of fraudulent federal income tax returns seeking more than $4.4 million in refunds, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Channing D. Phillips of the District of Columbia, Special Agent in Charge Thomas Jankowski of Internal Revenue Service-Criminal Investigation (IRS-CI), Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service’s Washington Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.
Marc A. Bell, 49, a former employee of the District of Columbia’s Department of Youth Rehabilitation Services (DYRS), admitted taking part in a massive and sophisticated identity theft and false tax return scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. According to court documents, the scheme involved the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million from the U.S. Treasury. The false tax returns sought refunds for tax years 2005 through 2013 and were often filed in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated individuals. Refunds also were sent to people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.
According to documents filed with the court, from 2005 to 2013, Bell was employed as a program manager, program officer or placement expeditor at the District of Columbia’s Department of Youth Rehabilitation Services (DYRS). The agency is responsible for the supervision, custody and care of young people charged with a delinquent act in the District of Columbia and either detained in a DYRS facility while awaiting adjudication or committed to DYRS by a District of Columbia Family Court judge following adjudication. In his various capacities at DYRS, Bell had access to the agency’s database system, which contained the personal identifying information of DYRS youth, including their names and social security numbers. Bell admitted that between approximately May 2010 and April 2013, he used his computer access to obtain the personal identifying information of at least 645 then-current and former DYRS youth. Bell admitted that he provided this information to other scheme participants, who used the names and social security numbers to file at least 1,160 fraudulent federal income tax returns that claimed refunds of approximately $4,441,194. The IRS issued approximately 700 U.S. Treasury checks, totaling approximately $2,422,211, in the names of the DYRS youth in whose names the tax returns were filed. Bell received financial compensation from co-conspirators for providing the stolen identities.
Bell is one of approximately 20 participants in this scheme who have pleaded guilty to federal charges in the U.S. District Court for the District of Columbia. Bell pleaded guilty in January to one count of conspiracy to defraud the government with respect to claims, one count of aiding and abetting in the filing of fictitious or false claims and one count aiding and abetting fraud and related activity in connection with identification documents. In addition to the prison term, U.S. District Judge Ellen S. Huvelle ordered Bell to serve three years of supervised release and pay restitution to the IRS in the amount of $1,972,710.
This morning, Lakisha Jackson, 40, of District Heights, Maryland, pleaded guilty to one count of conspiracy to commit theft of public money for her role in the scheme. As part of her plea, she admitted that between September 2010 and May 2012 she allowed her residential address to be used to file approximately 70 fraudulent federal income tax returns seeking refunds of approximately $229,199 and to receive 61 fraudulently-procured U.S. Treasury checks totaling approximately $193,977. Jackson faces a statutory maximum sentence of five years in prison and a $250,000 fine. She has agreed to pay restitution to the IRS in the amount of $175,953. Jackson is scheduled to be sentenced on July 13.
Acting Assistant Attorney General Ciraolo, U.S. Attorney Phillips, Special Agent in Charge Jankowski, Inspector in Charge Kelokates and Assistant Inspector General Phillips commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office for the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein, Paralegal Specialists Donna Galindo, Corinne Kleinman and Julie Dailey and Legal Assistant Angela Lawrence. Finally, they thanked Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender and Thomas F. Koelbl and former Trial Attorney Jessica Moran of the Tax Division, who prosecuted the case.
Justice Department Reaches Settlement with Columbia, South Carolina, Police Department to Ensure Communication Access for Persons with Hearing DisabilitiesRead the Press Release
The Justice Department announced today a settlement with the Columbia, South Carolina, Police Department (CPD) to ensure that persons who are deaf or hard of hearing receive sign language interpreters and other services necessary for effective communication when interacting with CPD police officers, whether on the road or at a precinct.
Title II of the Americans with Disabilities Act (ADA) requires public entities such as police officers, firefighters and correctional officers to ensure that their communications with people with hearing disabilities are as effective as their communications with people without disabilities.
CPD, under the leadership of Chief W.H. “Skip” Holbrook, serves the largest city in the state of South Carolina with more than 133,000 residents. After the department completed an investigation that found that CPD was not providing the required services to allow for effective communication with persons who are deaf or hard of hearing, CPD worked cooperatively to reach an agreement to ensure effective communication with individuals with disabilities. Under the settlement agreement, CPD will:
- Provide auxiliary aids and services free of charge, including sign language interpreters, to people who are deaf or hard of hearing, within proscribed time frames;
- Modify handcuffing policies to handcuff deaf individuals in front, safety permitting, to enable the person to communicate using sign language or writing;
- Designate an ADA coordinator for law enforcement;
- Develop and utilize a communication card to communicate with persons who are deaf or hard of hearing during routine interactions in the field;
- Develop a communication assessment form to assess, in consultation with an arrestee, what auxiliary aids or services are necessary, and the timing, duration and frequency with which they will be provided;
- Provide at least one TTY and one videophone at each CPD station and sub-station;
- Conduct annual ADA training for CPD personnel and;
- Adopt and publish grievance procedures providing for prompt and equitable resolution of complaints against CPD alleging any action that would be prohibited by Title II or the agreement.
“Our first responders play a critical role in protecting the safety of our communities, and we must ensure they can communicate effectively with all people, including those with hearing disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “This settlement will ensure that the Columbia Police Department complies with federal law, protects the civil rights of all its residents and more effectively advances public safety.”
The Justice Department has a number of publications available to assist entities to comply with the ADA, including Effective Communication, which provides guidance on the department’s regulations relating to communicating effectively with people who have vision, hearing or speech disabilities. For more information on the ADA and to access these publications, visit www.ada.gov. Those interested in learning more about this settlement or the obligations of public accommodations 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 by email to [email protected].
CPD Settlement Agreement
Departments of Justice and Education Reach Settlement with Arizona Department of Education to Meet the Needs of English Language Learner StudentsRead the Press Release
The Departments of Justice and Education entered into a voluntary settlement agreement late yesterday with the Arizona Department of Education (ADE) under the Equal Educational Opportunities Act and Title VI of the Civil Rights Act of 1964. The agreement requires ADE to raise its English proficiency criteria to properly identify English language learner (ELL) students in grades three through 12 and to properly determine when those students no longer need language services. The agreement also requires ADE to ensure that Arizona public schools offer language support services to thousands of students who were prematurely moved out of language services or incorrectly identified as initially fluent English proficient from the 2012-13 school year to the present.
The agreement follows a separate settlement agreement with the United States on April 22, 2016, that requires ADE to raise its proficiency criteria for identifying ELL students in kindergarten and to offer language services to ELL students incorrectly identified as English proficient in kindergarten. That agreement also requires ADE to ensure that ELL students who opt out of ELL services have their English language proficiency assessed every year until they are proficient in English.
“We commend Arizona’s Superintendent of Public Instruction and ADE for voluntarily agreeing to take these important steps to ensure that ELL students are timely identified and receive language services critical to their academic success,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division.
“Today’s agreement recommits the State of Arizona to fully serve all Arizona ELL students so they will receive the services they need to be college and career ready,” said Assistant Secretary Catherine E. Lhamon for the Department of Education’s Office for Civil Rights. “We are thrilled for the thousands of students every year who will benefit from this critically important agreement.”
These agreements arise out of the departments’ monitoring of a 2012 settlement agreement with ADE that aimed to resolve the departments’ findings that ADE had under-identified and prematurely removed from ELL status and ELL services tens of thousands of ELL students between 2006 and 2012. As contemplated in that 2012 settlement agreement, the departments and ADE resolved issues that arose during monitoring with the agreements announced today.
The Equal Educational Opportunities Act requires state and local education agencies to take appropriate action to overcome language barriers that impede students’ equal participation in instructional programs, and Title VI of the Civil Rights Act of 1964 bans discrimination on the basis of race and national origin by schools that receive federal funds. Enforcing these laws is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt. Enforcement of Title VI is also a top priority of the Department of Education’s Office for Civil Rights. Additional information about the Department of Education’s Office for Civil Rights is available on its website at www.ed.gov/ocr/.
ADE Kindergarten Settlement Agreement
ADE Grades 3-12 Settlement Agreement
Nuestra Familia Leader and Associates Sentenced on Racketeering ChargesRead the Press Release
The last of three defendants charged with racketeering offenses was sentenced today by the Honorable Lawrence J. O’Neill. Gary Anthony Romero, 50, of Stockton, California, was sentenced on April 11, to 20 years imprisonment for racketeering conspiracy. Today, Judge O’Neill sentenced Joe Anthony Felix, 36, of Modesto, California, to 151 months imprisonment for racketeering conspiracy, and Jesus Gomez Felix, 32, of Modesto, to 30 months imprisonment for Assault With a Deadly Weapon in Aid of Racketeering Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Phillip Talbert of the Eastern District of California announced.
According to court documents, Nuestra Familia is a prison gang that originally formed in the California state prison system in the 1960s. Nuestra Familia leaders control and direct the gang’s criminal activities both inside and outside of the prison system.
According to court documents, Romero has been a member of Nuestra Familia for about 20 years and has reached one of the highest levels of authority in Nuestra Familia. He ordered various crimes to be committed for the benefit of the gang in Stanislaus County, including aggravated assaults, robberies and drug dealing. Romero ordered a home invasion robbery in Turlock in which the robbers wielded firearms and made off with a vehicle and several other items. While Romero was in custody at the Stanislaus County Jail, he ordered the “removal” of several Nortenos who had violated Nuestra Familia rules. A “removal” involved assaulting the individuals with homemade weapons, as well as fists and feet. Several of the victims suffered stab wounds. Romero also directed a gang member to set up subsets of the gang throughout Stanislaus County, to collect money from the members, including from their drug trafficking activities and to put the funds on Romero’s books at Stanislaus County Jail.
Joe Felix was a Norteno, a gang under the Nuestra Familia umbrella, who was in charge of Stanislaus County and provided direction to other Nortenos to commit various crimes, including attempted murder and drug trafficking in Modesto. Joe Felix participated in an assault of two individuals who had dropped out of the gang. As a result of the attack, one of the victims suffered a fractured orbital bone and injury to his eye. Joe Felix also provided direction to other Nortenos regarding the sales of methamphetamine, and profited from the drug trafficking operation.
Jesus Felix went armed to the assault of the two gang drop-outs. He exchanged gunfire with someone from the opposing side during the incident. No one was shot.
“I would like to thank the United States Department of Justice and the hard work of the federal prosecutors who prosecuted this case,” said District Attorney Birgit Fladager for Stanislaus County. “We will remain committed to working collaboratively with our federal partners to pursue criminal gang members who commit violent crimes and pose a threat to the citizens of Stanislaus County.”
In addition to the prison term, Joe Felix is to serve 60 months of supervised release on the instant matter, and nine months imprisonment consecutive on a supervised release violation on a 2004 case. Jesus Felix is to serve three years of supervised release.
This case was investigated by the Central Valley Gang Impact Task Force under the FBI’s Safe Streets Initiative, with the assistance of the Stanislaus County District Attorney’s Office, Stanislaus County Sheriff’s Office, Modesto Police Department, Ceres Police Department, the California Highway Patrol, the California Department of Corrections and Rehabilitation, the Bureau of Prisons and the Stanislaus County Probation Department.
The case was prosecuted by Trial Attorneys Louis A. Crisostomo and Kelly Pearson of the Criminal Division’s Organized Crime and Gang Section and Assistant United States Attorneys Kimberly A. Sanchez and Laurel J. Montoya of the Eastern District of California.
New Orleans Jury Convicts Company Owner for Directing $3 Million Fraud and Kickback SchemeRead the Press Release
On Saturday, a jury in New Orleans convicted the owner of a health care company for her role in a $3.2 million Medicare fraud scheme operating in and around New Orleans.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Jeffrey S. Sallet of the FBI’s New Orleans Division and Special Agent in Charge CJ Porter of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG)’s Dallas Regional Office made the announcement.
Tracy Richardson Brown, 46, of New Orleans, was convicted of 18 counts after a five-day trial before U.S. District Judge Stanwood R. Duval Jr. of the Eastern District of Louisiana. Brown was convicted of one count of conspiracy to commit health care fraud, nine counts of health care fraud, one count of conspiracy to pay illegal kickbacks and seven counts of paying illegal kickbacks. Brown’s sentencing hearing is scheduled for Aug. 10, 2016.
Evidence introduced at trial showed that Brown owned and operated Psalms 23 DME LLC (Psalms) and caused Psalms to bill Medicare for durable medical equipment and orthotics that were not needed and/or were not provided. Brown paid patient recruiters for the names and Medicare numbers of Medicare recipients in and around New Orleans and then used these Medicare numbers to bill Medicare, claiming that Psalms provided them power wheelchairs, accessories and orthotics. Trial evidence showed that a vast majority of these patients did not need and often did not receive, or even want, the equipment. Evidence also revealed that Brown engaged in “upcoding,” billing Medicare as if she provided these patients with high-cost back and knee braces, when she in fact provided them much cheaper versions of these braces. Brown caused Psalms to bill Medicare for more than $3.2 million in claims, a large number of which were fraudulent. Medicare paid Psalms approximately $1.9 million on these claims.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Louisiana. This case was prosecuted by Assistant U.S. Attorney Patrice Sullivan of the Eastern District of Louisiana and Trial Attorney William Kanellis of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
National Prescription Drug Take Back Day, April 30, 2016Read the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), together with Drug Enforcement Administration (DEA) Resident Agent in Charge Michael Puralewski, announced that the National Prescription Drug Take Back Day was held on Saturday, April 30, 2016.
The first National Prescription Drug Take-Back Day event was held nationwide in September 2010. Guam and the NMI have participated every year since. The purpose of the National Drug Take-Back Initiative is to help prevent increased pill abuse and theft, to encourage the public to rid their household of unused prescription drugs that pose a safety hazard and can contribute to prescription drug abuse, and to provide a venue for persons who want to dispose of unwanted and unused prescription drugs for safe disposal by DEA.
The following sites in Guam and in the NMI were designated to receive unused prescription drugs:
- Naval Base Guam (Navy Exchange Food Court)
- Agana Shopping Center (Across Vitamin World)
- Agat Village Mayor's Office
- Andersen Air Force Base (Exchange & Commissary)
- Dededo Village Mayor’s Office
- Rota Health Center
- Saipan Commonwealth Health Center
- Tinian Health Center
Take-back programs are the best way to dispose of old drugs. Unused or expired prescription medications are a public safety issue, leading to accidental poisoning, overdose, and abuse. Pharmaceutical drugs can be just as dangerous as street drugs when taken without a prescription or a doctor’s supervision. The majority of teenagers abusing prescription drugs get them from family and friends – and the home medicine cabinet.
The non-medical use of prescription drugs ranks second only to marijuana as the most common form of drug abuse in America. Unused prescription drugs thrown in the trash can be retrieved and abused or illegally sold. Unused drugs that are flushed contaminate the water supply. Proper disposal of unused drugs saves lives and protects the environment.
For more information on prescription drug abuse, go to: www.dea.gov, www.getsmartaboutdrugs.com, or www.justthinktwice.com.
Former FBI Special Agent Pleads Guilty to Embezzlement of Drug Proceeds and Obstruction of JusticeRead the Press Release
A former FBI special agent pleaded guilty today for stealing over $136,000 of drug proceeds seized during the execution of search warrants in 2014 and falsifying reports and tampering with a witness.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Angel D. Gunn of the Department of Justice Office of the Inspector General Los Angeles Field Office made the announcement.
Scott M. Bowman, 45, of Moreno Valley, California, pleaded guilty to one count of conversion of property by a federal employee, one count of obstruction of justice, one count of falsification of records and one count of witness tampering before U.S. District Judge Jesus G. Bernal of the Central District of California. Sentencing is set for Aug. 15.
In connection with his plea, Bowman admitted that he misappropriated drug proceeds seized during the execution of three search warrants in June and August 2014, after they were transferred to his custody in his official capacity as a federal law enforcement officer. Bowman then spent the stolen money for his own personal use, including by spending $43,850 to purchase a 2012 Dodge Challenger coupe, $27,500 to purchase a 2013 Toyota Scion FR-S coupe and $26,612 to outfit these vehicles with new speakers, rims, tires and other equipment. Bowman also admitted that he used $15,000 of the misappropriated cash to pay for cosmetic surgery for his spouse and opened a new checking account into which he deposited $10,665 of the stolen funds.
In order to conceal his embezzlement, Bowman falsified official FBI reports, submitted a receipt with a forged signature and asked a local police detective to provide false information to law enforcement officers if asked about Bowman’s activities with respect to the drug proceeds. Specifically, Bowman sent emails to the local police detective in October 2014 containing a detailed cover story that the detective was instructed to provide and a copy of the receipt with the forged signature, so that the detective could falsely claim the forged signature as his own.
“When the FBI became aware of allegations of misconduct by defendant Bowman, FBI management took immediate action by contacting the Justice Department’s Office of Inspector General,” said Acting Assistant Director in Charge James Struyk of the FBI’s Los Angeles Field Office. “As Mr. Bowman takes responsibility for his actions by pleading guilty, the public should be reminded that FBI personnel are held to the highest standards and misconduct of any kind is taken very seriously.”
This case was investigated by the Department of Justice Office of the Inspector General and is being prosecuted by Trial Attorneys Lauren Bell and Robert J. Heberle of the Criminal Division’s Public Integrity Section.
Conspirators in Two Android Mobile Device App Piracy Groups Plead GuiltyRead the Press Release
Convictions Part of First-Ever Prosecution of Mobile App Piracy Groups
A leading member of an online piracy group pleaded guilty today and a co-conspirator pleaded guilty in January for their roles in a scheme to distribute more than four million pirated copies of copyrighted Android apps with a total retail value of more than $17 million.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John A. Horn of the Northern District of Georgia and Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office made the announcement.
Aaron Blake Buckley, 22, of Moss Point, Mississippi, pleaded guilty today to one count of conspiracy to commit criminal copyright infringement and to one count of criminal copyright infringement before U.S. District Judge Timothy C. Batten Sr. of the Northern District of Georgia. Gary Edwin Sharp II, 29, of Uxbridge, Massachusetts, a co-conspirator, pleaded guilty to one count of conspiracy to commit criminal copyright infringement on Jan. 13. The defendants are scheduled to be sentenced on Aug. 1.
According to statements made in court, the conspirators identified themselves as members of the Applanet Group. From May 2010 through August 2012, they conspired to reproduce and distribute more than four million copies of copyrighted Android apps through the Applanet alternative online market without permission from the victim copyright owners, who would otherwise sell copies of the apps on legitimate online markets for a fee. On Aug. 21, 2012, the FBI seized the Applanet website, which marked the first seizure of the domain name for a website involving a mobile device app marketplace.
Sharp also pleaded guilty for his role in conspiring to commit criminal copyright infringement as the leader of another online piracy group, the SnappzMarket Group. Sharp admitted that he and two other members of the SnappzMarket Group conspired to distribute more than one million pirated copies of copyrighted Android apps with a total retail value of more than $1.7 million through the group’s website, which was also seized on Aug. 21, 2012.
The FBI investigated the case. Assistant Deputy Chief John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher Bly of the Northern District of Georgia are prosecuting the case. The CCIPS Cybercrime Lab and the Criminal Division’s Office of International Affairs provided significant assistance.
Halliburton and Baker Hughes Abandon Merger After Department of Justice Sued to Block DealRead the Press Release
The Department of Justice announced today that Halliburton and Baker Hughes have abandoned their planned merger, originally valued at $34 billion. The department filed suit on April 6, 2016, to block the merger, alleging that the transaction would unlawfully eliminate significant head-to-head competition between the companies in at least 23 markets crucial to the exploration and production of oil and natural gas in the United States.
“The companies’ decision to abandon this transaction – which would have left many oilfield service markets in the hands of a duopoly – is a victory for the U.S. economy and for all Americans,” said Attorney General Loretta E. Lynch. “This case serves as a stark reminder that no merger is too big or too complex to be challenged, and that the hardworking men and women of the department’s Antitrust Division stand ready, willing and able to vigorously enforce the nation’s antitrust laws when companies propose deals that would enhance shareholder value at the expense of consumer interests. I am proud of the lawyers, economists, and others at the Justice Department whose work on this multi-year investigation and litigation made this result possible.”
“Very few things are as important to our economy as oil and gas,” said Deputy Assistant Attorney General David I. Gelfand of the Justice Department’s Antitrust Division. “But the merger of Halliburton and Baker Hughes would have raised prices, decreased output and lessened innovation in at least 23 oilfield products and services critical to the nation’s energy supply. We achieved the only result that could adequately protect American consumers – an abandonment of this unlawful merger. We thank our enforcement partners around the world, especially from the European Commission, Australia, Brazil and Mexico, for their close and constructive collaboration on this matter.”
Before the lawsuit was filed, Halliburton had offered to divest certain assets in an effort to address the department’s competitive concerns. According to the complaint, however, the proposal was inadequate because it did not include full business units, withheld many critical assets and personnel, involved numerous ongoing entanglements between the merged company and the divestiture buyer and generally failed to replicate the robust competition between the parties that exists today.
Halliburton is a Delaware corporation headquartered in Houston. Founded in 1919, Halliburton is the largest provider of services and products to the oil and gas industry in the United States. It has operations in approximately 80 countries and earned revenue of $23.6 billion in 2015.
Baker Hughes is a Delaware corporation headquartered in Houston. It was formed in 1987 with the merger of Baker International and Hughes Tool Company, both founded over 100 years ago. The third-largest provider of oilfield services in the world, Baker Hughes operates in more than 80 countries and earned revenue of $15.7 billion in 2015.