District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
EOIR Swears in Eight Immigration JudgesRead the Press Release
FALLS CHURCH, VA – The Executive Office for Immigration Review (EOIR) today announced the investiture of eight immigration judges. Acting Chief Immigration Judge Print Maggard presided over the investiture during a ceremony held March 11, 2016, at the U.S. Court of Appeals for the Armed Forces in Washington, D.C.
After a thorough application process, Attorney General Loretta E. Lynch appointed Raisa Cohen, Evalyn P. Douchy, D’Anna H. Freeman, Rebecca B. Jamil, Elise M. Manuel, R. Reid McKee, Vernon B. Miles, and Morris I. Onyewuchi to their new positions.
“We are pleased to welcome these appointees to the immigration judge corps,” said Maggard. “We look forward to continuing to hire more qualified people to fill these important positions in public service.”
Biographical information follows.
Raisa Cohen, Immigration Judge, New York City Immigration Court
Attorney General Loretta E. Lynch appointed Judge Raisa Cohen to begin hearing cases in March 2016. Judge Cohen earned a Bachelor of Business Administration in 2002 from Baruch College, City University of New York Zicklin School of Business, and a Juris Doctor in 2007 from St. John’s University School of Law. From September 2015 to February 2016, and previously from April 2009 to September 2014, Judge Cohen served as assistant chief counsel for U.S. Immigration and Customs Enforcement, U.S. Department of Homeland Security, in New York. From October 2014 to September 2015, Judge Cohen was an attorney at Cohen & Cohen Law Group PC, in New York. From 2007 through 2009, Judge Cohen was an immigration attorney at the Law Firm of Ted Sofer, in New York. Judge Cohen is a member of the New York State Bar.
Evalyn P. Douchy, Immigration Judge, New York City Immigration Court
Attorney General Loretta E. Lynch appointed Judge Evalyn P. Douchy to begin hearing cases in March 2016. Judge Douchy earned a Bachelor of Arts degree in 1992 from Binghamton University and a Juris Doctor in 1995 from New York Law School. From 1997 to February 2016, she served as assistant chief counsel for U.S. Immigration and Customs Enforcement, U.S. Department of Homeland Security, in New York. From 1996 through 1997, she was an associate at the Law Offices of Anil Jethmalani & Timothy Herrick, in New York. From 1995 through 1996, she was a lawyer at the Law Office of Mark S. Drucker in Jackson Heights, N.Y. Judge Douchy is a member of the New York State Bar.
D’Anna H. Freeman, Immigration Judge, Pearsall Immigration Court
Attorney General Loretta E. Lynch appointed Judge D’Anna H. Freeman to begin hearing cases in March 2016. Judge Freeman earned a Bachelor of Science degree in 1988 from Baylor University, a Master of Public Health in 1995 from the University of Texas Health Science Center, and Juris Doctor in 2004 from the University of Houston Law Center. From 2007 to February 2016, Judge Freeman served in various capacities for U.S. Immigration and Customs Enforcement, U.S. Department of Homeland Security, including: as assistant chief counsel from 2013 to 2016, in Dallas; as senior attorney from 2010 through 2013, in Livingston, Texas; and as assistant chief counsel from 2007 through 2010, in Eloy, Ariz. From 2006 through 2007, she was a partner at Forrest & Harrison LLC, in Houston. From 2005 through 2006, she served as an attorney at Dunbar, Harden & Benson LLP, in Houston. From 2004 through 2005, she operated the Law Office of D’Anna Harrison, in Houston. Judge Freeman is a member of the State Bar of Texas.
Rebecca B. Jamil, Immigration Judge, San Francisco Immigration Court
Attorney General Loretta E. Lynch appointed Judge Rebecca B. Jamil to begin hearing cases in March 2016. Judge Jamil earned a Bachelor of Arts degree in 1998 from Stanford University and a Juris Doctor in 2006 from the University of Washington Law School. From 2011 to February 2016, Judge Jamil served as assistant chief counsel for U.S. Immigration and Customs Enforcement, U.S. Department of Homeland Security, in San Francisco. From 2006 to 2011, she served as staff attorney in the Research Unit, Ninth Circuit Court of Appeals, in San Francisco. Judge Jamil is a member of the Washington State Bar.
Elise M. Manuel, Immigration Judge, Newark Immigration Court
Attorney General Loretta E. Lynch appointed Judge Elise M. Manuel to begin hearing cases in March 2016. Judge Manuel earned a Bachelor of Arts degree in 1983 from Northwestern University and a Juris Doctor in 1987 from Georgetown University Law Center. From 1991 to February 2016, Judge Manuel served in various capacities on the Board of Immigration Appeals, Executive Office for Immigration Review, U.S. Department of Justice, including: as a temporary board member from 2012 to 2016; as an attorney-advisor from 2008 through 2012, from 1998 through 2005, and 1991 through 1995; as a team leader from 2005 through 2008; and as a senior panel attorney from 1995 through 1998. From 1987 through 1991, she was a staff attorney for the Legal Assistance Foundation of Chicago. Judge Manuel is a member of the Illinois State Bar.
R. Reid McKee, Immigration Judge, Pearsall Immigration Court
Attorney General Loretta E. Lynch appointed Judge R. Reid McKee to begin hearing cases in March 2016. Judge McKee earned a Bachelor of Arts degree in 1997 from the University of Alabama, a Master of Arts in Social Sciences in 1998 from the University of Chicago, and a Juris Doctor in 2003 from the University of Mississippi School of Law. From 2010 to February 2016, Judge McKee served as assistant chief counsel for U.S. Immigration and Customs Enforcement, U.S. Department of Homeland Security. From 2009 through 2010, he was the manager of R. Reid McKee PLLC, in Madison, Miss. From 2003 through 2009, he was an associate at Watkins and Eager PLLC, in Jackson, Miss. Judge McKee is a member of the Mississippi and Tennessee Bars.
Vernon B. Miles, Immigration Judge, San Antonio Immigration Court
Attorney General Loretta E. Lynch appointed Judge Vernon B. Miles to begin hearing cases in March 2016. Judge Miles earned a Bachelor of Arts degree in 1980 from the University of Mississippi, a Juris Doctor in 1983 from Howard University School of Law, and a Master of Laws degree in 1992 from the U.S. Army Judge Advocate General’s School. From 1995 to February 2016, Judge Miles served in various capacities for the U.S. Department of Justice, including: as a trial attorney in the Narcotic and Dangerous Drug Section, Criminal Division, from 2014 to February 2016, in Washington, D.C.; as an assistant U.S. attorney in the Office of the U.S. Attorney from 2003 through 2014, in San Juan, Puerto Rico; as an assistant U.S. attorney in the Office of the U.S. Attorney from 1998 through 2003, in Oxford, Miss.; and as a civil appellate trial attorney in the Office of Immigration Litigation from 1995 through 1998, in Washington, D.C. From 1985 through 1994, he served in various capacities in the U.S. Marine Corps, including: as assistant officer-in-charge, defense attorney and prosecuting attorney in the Naval Legal Service Office Detachment from 1992 through 1994, in Roosevelt Roads, Puerto Rico; as deputy staff judge advocate, chief defense counsel and chief legal assistance officer in the 3d Force Service Support Group from 1989 through 1991, in Okinawa, Japan; and as prosecuting attorney, defense attorney and chief legal assistance attorney in the 2d Force Service Support Group from 1985 through 1989, in Cherry Point, N.C. From 1983 to 1985, he served in various capacities for the North Mississippi Rural Legal Services, including as managing attorney and staff attorney. Judge Miles is a member of the Mississippi Bar.
Morris I. Onyewuchi, Immigration Judge, Port Isabel Immigration Court
Attorney General Loretta E. Lynch appointed Judge Morris I. Onyewuchi to begin hearing cases in March 2016. Judge Onyewuchi earned a Bachelor of Arts degree in 1990 from Georgia State University, a Juris Doctor in 2002 from the Thurgood Marshall School of Law, Texas Southern University, and a Master of Studies in International Human Rights Law in 2010 from the University of Oxford in Oxford, U.K. From 2002 to February 2016, Judge Onyewuchi served as assistant chief counsel and trial attorney for U.S. Immigration and Customs Enforcement, U.S. Department of Homeland Security. Judge Onyewuchi is a member of the State Bar of Texas.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR's immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR's Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Department of Justice Releases Report on Understanding Firearms Assaults Against Law EnforcementRead the Press Release
The Department of Justice’s Office of Community Oriented Policing Services (COPS Office) today announced the release of a new publication addressing officer safety.
Understanding Firearms Assaults against Law Enforcement Officers, produced by the Justice Department’s Officer Safety and Wellness Group, addresses two primary safety concerns in law enforcement, injuries and deaths among officers and premeditated and unprovoked ambushes of officers. It examines the differential risks thought to influence the use of deadly force against police officers in the United States through a literature review and survey analysis.
This publication is a joint COPS Office, Bureau of Justice Assistance and Major Cities Chiefs Association publication, and was informed with input from the Justice Department’s Officer Safety and Wellness Group.
“Every day, law enforcement officers courageously serve this nation by protecting our values and keeping our communities safe,” said Attorney General Loretta E. Lynch. “This report will serve as a critical resource as we honor their service and sacrifice and take the necessary steps to improve officer safety.”
The Department of Justice established the Officer Safety and Wellness Group in 2011 to encourage the adoption of cultures of safety and wellness among the nation’s law enforcement agencies. The working group includes more than 40 participants representing federal, state and local law enforcement; national associations; unions; and researchers who discuss and develop the research.
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 127,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about the COPS Office, please visit www.cops.usdoj.gov.
Attorney General Loretta E. Lynch Statement on Fatal Shooting of Police Officer in Prince George’s County, MarylandRead the Press Release
Attorney General Loretta E. Lynch released the following statement regarding yesterday’s shooting at Prince George’s County Police Department:
“The attack on the Prince George’s County Police Department last night was a heinous act of violence and a cowardly crime. The Department of Justice stands in solidarity with our brothers and sisters in law enforcement around the country to condemn this horrific attack, to support the Prince George’s County community, and to grieve the loss of Officer Jacai Colson.
“Officer Colson was a consummate public servant and a proud defender of the law – a young guardian raised in the tradition of service to his community. His tragic loss is a reminder of the threats that public safety officers face every day, and the dangers that they bravely confront, in every jurisdiction across the country. The Department of Justice will offer any possible aid to the Prince George’s County community as they investigate this terrible crime, and we will continue to do all that we can to protect and support our officers and hold wrongdoers accountable.”
Subway Franchise Managers and Gas Station Manager Plead Guilty to Filing False Tax ReturnsRead the Press Release
Two Subway franchise managers and a gas station manager, all residents of Virginia, pleaded guilty today to aiding and assisting in the filing of false tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
According to court documents, Mohammed Ali, 54, of Herndon, Virginia, owned and operated multiple Subway restaurant franchises in Washington, D.C. and Arlington, Virginia, with Obdayel Hoque, 49, of Alexandria, Virginia. Ali ran the day-to-day operations of the Subway franchises located on 10th Street North, Arlington, and Pennsylvania Avenue, SE, Washington, D.C. These franchises were operated under the name Subway Sandwich & Salad, Inc. Mohammed Rahman, 43, of Alexandria and Arlington, was a working partner with Ali and Hoque and the day-to-day manager of a Subway franchise located on 7th Street, NW, Washington, D.C. This Subway franchise was operated under the name 7th Street Sub Shop LLC. Mohammed Siddique, 53, of Alexandria, was a working partner with Hoque and the day-to-day manager of a gas station in Alexandria called Skyhill Shell.
“Today’s guilty pleas send a clear message that business owners and operators who seek to evade their tax obligations and avoid paying their fair share will be held accountable,” said Acting Assistant Attorney General Ciraolo. “Individuals engaged in this criminal conduct will face prosecution and substantial penalties, including incarceration.”
“Individuals who provide false information for the preparation of fraudulent corporate tax returns will be caught and held responsible,” said U.S. Attorney Boente. “The guilty pleas today represent exactly that. My thanks to our partners at IRS-Criminal Investigations for their efforts on this case.”
As part of their guilty pleas, Ali, Rahman and Siddique admitted that at Hoque’s direction they did not deposit all of the Subway franchises’ or the gas station’s gross receipts into the corporate or partnership bank accounts. Instead, Hoque, Ali, Rahman and Siddique retained a portion of the gross receipts for their personal benefit. Ali, Rahman and Siddique maintained detailed records of the Subway franchises’ and gas station’s total sales, the amounts deposited into the bank accounts and the amounts distributed to each of them for their personal benefit. Ali and Rahman admitted that, at Hoque’s direction, they destroyed these records.
Ali, Rhaman and Siddique further admitted that they were directed by Hoque to provide false information about the Subway franchises’ and gas station’s gross receipts to the accounting firm that prepared corporate and partnership tax returns for the businesses. For the period of 2008 through 2013, point of sales records for the Subway Sandwich and Salad franchises reflected total sales of $6,439,832. However, Ali provided false monthly sales figures to the accounting firm to prepare Subway Sandwich and Salad’s corporate tax returns. As a result, Ali caused false corporate tax returns to be filed with the Internal Revenue Service (IRS) for Subway Sandwich and Salad, which reported sales of only $3,749,142. For the period of 2008 through 2013, point of sales records for the 7th Street Sub Shop franchise reflected total sales of $4,949,266. However, Rahman provided false monthly sales figures to the accounting firm to prepare 7th Street Sub Shop’s partnership tax returns. As a result, Rahman caused false partnership tax returns to be filed for 7th Street Sub Shop, which reported sales of only $3,193,212. For the period 2008 through 2012, Siddique provided false monthly sales figures to the accounting firm to prepare Skyhill Shell’s corporate tax returns. As a result, Siddique caused false corporate tax returns to be filed for Skyhill Shell for 2008 and 2009, which failed to report at least $572,000 of net income from the business. Skyhill Shell failed to file corporate tax returns for 2010, 2011, and 2012.
Ali, Rahman and Siddique admitted that they failed to report to the IRS on their individual income tax returns their receipt of unreported gross receipts. Ali admitted that his conduct caused a tax loss of more than $550,000 but less than $1.5 million. Rahman admitted that his conduct caused a tax loss of more than $250,000 but less than $550,000. Siddique admitted that his conduct caused a tax loss of more than $100,000 but less than $250,000.
Hoque pleaded guilty on Jan. 27 to conspiracy to defraud the United States and admitted that his conduct caused a tax loss to the IRS of between $1.5 million and $3.5 million. Hoque is scheduled to be sentenced on May 13.
Rahman, Ali and Siddique each face a statutory maximum sentence of three years in prison and a $250,000 fine. As part of their plea agreements, Rahman, Ali and Siddique agreed to pay restitution to the IRS for their personal tax liabilities. U.S. District Judge Liam O’Grady set sentencing for July 15.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Boente thanked special agents of IRS-Criminal Investigation, who investigated the case and Assistant Chief Caryn Finley and Trial Attorney Kimberly Shartar of the Tax Division, and Assistant U.S. Attorney Uzo Asonye of the Eastern District of Virginia, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
United States Files Suit Against California Telemarketer to Halt Unlawful Robocalls Promoting Solar Panel SalesRead the Press Release
The Department of Justice filed a civil complaint in the U.S. District Court for the Central District of California, to halt a telemarketing campaign that allegedly resulted in over a million illegal phone calls to consumers who had placed their phone numbers on the Do Not Call Registry, the Department of Justice announced today.
The complaint charges that KFJ Marketing, Sunlight Solar Leads LLC, Go Green Education and the owner of those companies, Francisco Salvat, violated the Telemarketing Sales Rule by operating a telemarketing campaign that delivered pre-recorded “robocall” messages warning consumers about a purported looming “14 percent increase” in their energy bill. The calls invited consumers to “press one” to lower their electric bill. Consumers who did were connected with one of the defendants’ employees, who asked about the consumer’s interest in solar panels.
If the consumer expressed interest in solar panels, the telemarketer scheduled an appointment with a private solar installation company and sold the consumer’s information to that company as a customer lead. When consumers asked the defendants not to call them again, the complaint alleges their requests were often ignored.
The complaint alleges that the defendants violated federal law by placing 1.3 million calls to phone numbers on the Do Not Call Registry and by failing to transmit accurate caller ID information.
“Federal law protects the privacy interests of American consumers by prohibiting calls made to numbers on the national Do Not Call Registry and otherwise limiting calls made by telemarketers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work with the Federal Trade Commission (FTC) to ensure entities like those named in today’s lawsuit are penalized when they make unwanted and unlawful phone calls.”
“Mr. Salvat’s companies ignored the Do Not Call Registry and made illegal robocalls,” said Jessica Rich, Director of the FTC’s Bureau of Consumer Protection. “Breaking the law isn’t a great way for a company to introduce itself to potential customers.”
The matter was investigated by the FTC and referred to the Department of Justice’s Consumer Protection Branch after the FTC determined it had reason to believe the defendants’ conduct was violating the law and that a proceeding would be in the public interest. The complaint seeks civil penalties as well as injunctive relief.
The matter is being handled by Trial Attorney Jacqueline Blaesi-Freed of the Civil Division’s Consumer Protection Branch, with assistance from Sarah Schroeder and Sylvia Kundig from the FTC.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by preponderance of the evidence.
Two Former Rabobank Traders Sentenced to Prison for Manipulating U.S. Dollar and Japanese Yen LIBOR Interest RatesRead the Press Release
Two former derivatives traders at Rabobank Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) – including the bank’s former global head of liquidity and finance in London – were sentenced to prison today for manipulating the London Interbank Offered Rates (LIBOR) for the U.S. Dollar (USD) and Japanese Yen (JPY), benchmark interest rates to which trillions of dollars in interest rate contracts were tied.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office made the announcement.
Anthony Allen, 44, of Hertsfordshire, England, the bank’s former global head of liquidity and finance in London, was sentenced to 24 months in prison by U.S. District Judge Jed S. Rakoff of the Southern District of New York. Anthony Conti, 46, of Essex, England, a former senior trader on the bank’s money markets desk in London, was sentenced to 12 months and one day in prison. A federal jury convicted the defendants on Nov. 5, 2015, after a four-week trial. Allen was found guilty of one count of conspiracy to commit wire fraud and bank fraud and 18 counts of wire fraud. Conti was found guilty of one count of conspiracy to commit wire fraud and bank fraud and eight counts of wire fraud.
“Allen and Conti were entrusted to set LIBOR, a critically important interest rate benchmark,” said Assistant Attorney General Caldwell. “Their scheme to manipulate this rate to increase their bank's profits undermined the integrity of our financial markets and the public's confidence in the fairness of the financial system. This case demonstrates our commitment to work with domestic and foreign law enforcement authorities and regulators to hold financial criminals responsible for their crimes and ensure the integrity of the marketplace for investors worldwide.”
“Large banks, like other companies, only conspire and commit fraud through their executives,” said Assistant Attorney General Baer. “The Department of Justice will continue to hold those executives accountable for their role in corporate wrongdoing. Working with our partners at the Criminal Division and FBI, the Antitrust Division will continue to target fraud and collusion to ensure that markets function as they should – freely, fairly and competitively.”
“The prison sentences imposed today underscore the serious nature and extent of manipulation that Conti and Allen undertook as part of their scheme to defraud financial institutions and investors,” said Assistant Director in Charge Abbate. “The investigative and prosecutorial team that investigated and tried this case in court are to be commended for their dedicated and tireless work in furtherance of uncovering the LIBOR-related fraud and holding accountable those who committed these crimes.”
LIBOR is the primary benchmark for short term interest rates for several currencies around the world and is used as a reference rate for many financial products, including interest rate contracts, mortgages, credit cards and student loans. At the time relevant to the charges, LIBOR was calculated for 10 currencies at 15 maturities, ranging from overnight to one year, and was published by the British Bankers’ Association (BBA), a London-based trade association, based on submissions from a panel of 16 banks, including Rabobank.
The evidence at trial showed that the defendants actively participated in a scheme to rig the USD and JPY LIBORs to benefit their own trading positions, as well as those of their colleagues. Specifically, between 2005 and 2009, the evidence showed that Allen oversaw a system in which Rabobank employees who traded LIBOR-linked derivatives made improper requests to the employees who submitted Rabobank’s LIBOR contributions to the BBA. Conti was the primary USD LIBOR submitter and Paul Robson, who previously pleaded guilty to the conspiracy charge, was the primary JPY LIBOR submitter.
In addition to Allen, Conti and Robson, two other former Rabobank employees have been convicted in the Rabobank LIBOR investigation. Lee Stewart and Takayuki Yagami each pleaded guilty to one count of conspiracy in connection with their roles in the scheme. Two other former Rabobank employees, Tetsuya Motomura, 43, of Tokyo, and Paul Thompson, 50, of Dalkeith, Australia, have also been charged and are awaiting trial. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Rabobank entered into a deferred prosecution agreement with the department on Oct. 29, 2013, and agreed to pay a $325 million penalty to resolve violations arising from Rabobank’s LIBOR submissions.
The FBI investigated the case. Senior Litigation Counsel Carol Sipperly and Assistant Chief Brian Young of the Criminal Division’s Fraud Section and Trial Attorney Michael T. Koenig of the Antitrust Division prosecuted the case. The Criminal Division’s Office of International Affairs and Deputy Chief Daniel Braun and Assistant Chief Brent Wible of the Criminal Division’s Fraud Section are thanked for their substantial assistance in this matter.
The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and abroad. The Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, played a major role in the LIBOR investigation. The Securities and Exchange Commission also played a significant role in the LIBOR series of investigations, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation. The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the investigation of Rabobank. Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.
Today’s conviction is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Mo Money Tax Return Preparers Plead Guilty to Conspiracy to Defraud the United States and Filing False Tax ReturnsRead the Press Release
Two tax return preparers pleaded guilty to one count of conspiracy to defraud the United States and one count of aiding and assisting in the preparation of a false tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Dana Boente of the Eastern District of Virginia.
According to court documents, Jeremy Blanchard, 35, and Erik Pittman, 35, both of Memphis, Tennessee, and others prepared numerous false tax returns for the 2011 tax year for customers of their tax return preparation business. Blanchard, who pleaded guilty yesterday, and Pittman, who pleaded guilty today, were preparers in Mo Money Taxes, which operated three locations in the Richmond, Virginia area. Blanchard and Pittman admitted that they created and inflated fictitious and fraudulent tax credits, including the Earned Income Credit and the American Opportunity credit, to claim tax refunds that customers were not entitled to receive. As part of their guilty pleas, Blanchard and Pittman admitted that their conduct caused a loss to the Internal Revenue (IRS) of more than $250,000, but less than $550,000.
“Fraudulent tax return preparers, like Mr. Blanchard and Mr. Pittman, are facilitating the theft of funds from the American people by preparing false tax returns for customers,” said Acting Assistant Attorney General Ciraolo. “The department will continue to pursue and prosecute these offenders to the fullest extent of the law.”
Blanchard and Pittman each face a statutory maximum sentence of five years in prison and a $250,000 fine on the conspiracy charge and three years in prison and a $250,000 fine on the charge of aiding and assisting in the preparation of false tax returns. U.S. District Judge John A. Gibney for the Eastern District of Virginia set sentencing for June 8, 2016.
Another participant in this scheme, Corey Taylor, 25, of Richmond, pleaded guilty in October 2015 to one count of conspiracy to defraud the United States and one count of aiding and assisting in the preparation of a false tax return. He is awaiting sentencing.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Boente thanked special agents of IRS-Criminal Investigation, the FBI, and the U.S. Postal Inspection Service, who investigated the case and Trial Attorneys Kevin F. Sweeney and Todd Kostyshak of the Tax Division and Assistant U.S. Attorney Stephen Miller of the Eastern District of Virginia, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Former Healthcare Employee Indicted for Involvement in Stolen Identity Tax Refund Fraud Scheme and Unauthorized Disclosure of Patient InformationRead the Press Release
A Montgomery, Alabama resident self-surrendered earlier today after she was indicted March 3 on one count of multi-object conspiracy to commit identity theft and wire fraud, two counts of possessing 15 or more unauthorized access devices, two counts of aggravated identity theft and one count of wrongful disclosure of personally identifiable health information, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr., of the Middle District of Alabama.
According to court documents, Alana Wells worked at a healthcare company from June 2011 through August 2013, where she had access to patient information protected from disclosure under the Health Insurance Portability and Accountability Act of 1996. She is alleged to have stolen the names, dates of birth and social security numbers of patients from her employer’s database and provided these identities to Fredrick Hill. Hill then provided the stolen personal identification information to Christopher Davis, who, along with others, used it to file fraudulent federal tax returns with the Internal Revenue Service (IRS) requesting tax refunds.
If convicted, Wells faces a statutory maximum sentence of five years in prison on the conspiracy charge, 10 years in prison for each count of access device fraud, one year in prison for the charge of wrongful disclosure of personally identifiable health information, and a mandatory minimum sentence of two years in prison for each count of aggravated identity theft, which will be in addition to any other term of imprisonment she receives. She also faces substantial monetary penalties 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 Beck commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Jason H. Poole, Kathryn A. Kimball and Michael C. Boteler of the Tax Division and Assistant U.S. Attorney Jonathan S. Ross of the Middle District of Alabama, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Defendant Sean Anthony Lizama Sentenced to Ninety Six Months IncarcerationRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that on March 7, 2016, Defendant SEAN ANTHONY LIZAMA was sentenced by the Honorable Frances Tydingco-Gatewood, Chief Judge, District Court of Guam. Defendant was sentenced to serve 96 months incarceration followed by three years of supervised release, with credit for time served.
Defendant LIZAMA pled guilty on January 15, 2015, to Attempted Possession of Methamphetamine with Intent to Distribute, in violation of Title 21 U.S.C. Section 846(a)(1) and (b)(1)(C). Defendant LIZAMA attempted to receive 214.9 grams of methamphetamine hydrochloride on October 16, 2013. The Drug Enforcement Administration Forensic Laboratory determined that the methamphetamine had a purity level of 100%.
The investigation was conducted by U.S. Postal Inspectors and Special Agents from the Department of Homeland Security, Homeland Security Investigations.
U.S. Attorney Limtiaco notes that this prosecution is part of the U.S. Department of Justice’s Project Safe Neighborhood (PSN) Initiative, a nationwide commitment to aggressively prosecute defendants who illegally possess firearms, engage in violent crimes, drug distribution and gang involvement.
The case was handled by Assistant U.S. Attorney Rosetta San Nicolas.
British Man Indicted for Wire Fraud, Identity Theft and Money Laundering That Victimized Hundreds of Thousands Across United StatesRead the Press Release
A British man living in Las Vegas, Nevada, was indicted by a Nevada grand jury for withdrawing money from the bank accounts of hundreds of thousands of victims without authorization, Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division and Acting Inspector in Charge Daniel Brubaker of the U.S. Postal Inspection Service– Criminal Investigations announced today.
Gareth David Long, 37, is charged in a 39-count indictment with wire fraud, aggravated identity theft and money laundering. The indictment alleges that Long, operating through his company, V Internet Corp LLC, deposited unsigned remotely created checks (RCCs aka demand drafts) drawn on the accounts of hundreds of thousands of unwitting account holders. Although Long had no authorization to charge the accounts, he represented to his victims’ banks that the victims had authorized the debits. Long used the proceeds of his fraud scheme to purchase airplanes, vehicles, farm equipment and other property.
“Gareth David Long abused the sensitive personal and financial information of hundreds of thousands of Americans in a brazen scheme to steal millions of dollars from unwitting account holders,” said Principal Deputy Assistant Attorney General Mizer. “As this case makes clear, we will investigate and pursue charges against individuals who abuse the financial information of American consumers.”
“American consumers expect e-commerce providers will protect their sensitive financial information,” said Acting Inspector in Charge Brubaker. “Mr. Long betrayed that trust for his own self-interest. With this case, Postal Inspectors continue their long history of protecting consumers by demonstrating our protection of e-commerce transitions extend beyond the stamp.”
According to the indictment, from 2008 through 2013, Long operated a third-party payment processing company, V Internet Corp, which also did business as “Altcharge” and “Check Process.” As a payment processor, Long specialized in the creation and deposit of RCCs. A RCC is a check created not by the account holder but by the third-party payee. In place of a signature, a RCC contains a typed statement claiming that the check was authorized by the account holder. On behalf of his merchant clients, Long created and deposited RCCs drawn on the bank accounts of American consumers. Because of this payment processing activity, Long possessed the personal and financial information of hundreds of thousands of consumers whose accounts had been debited by Long’s merchants.
In January 2013, Long allegedly created the facade that he was operating an Internet merchant business matching consumers with online payday loans. He registered the websites www.fastloanfast.com, www.loan4utoday.com and www.fastloan4me.com, which purported to help consumers find online payday loans. From January through July 2013, Long allegedly deposited hundreds of thousands of RCCs, each for $30 and each of which stated that the account holder had authorized a payment to Long’s company.
The indictment alleges that, in reality, Long simply debited the accounts of victims who had never visited his websites, never requested any service and never authorized any payment. Long obtained the personal and financial information of his victims from two sources. First, he allegedly purchased large spreadsheets, referred to as “lead lists,” each of which contained detailed personal and financial information of thousands of American consumers. Second, Long used the data stored in his payment processing system to debit more than a hundred thousand accounts that had previously been debited by Long’s prior merchants. When he ran out of unique accounts to charge, Long allegedly created and deposited hundreds of thousands of additional, repeat charges against accounts he had already charged.
By the time Long’s scheme ended in July 2013, he allegedly had created and deposited more than 750,000 RCCs totaling more than $22 million. Approximately 50 percent of the RCCs were returned by account holders’ banks. Many RCCs were returned because the account holder saw the debit and realized that an unauthorized charge was being imposed on his or her account. Other RCCs were returned because they were drawn on accounts that were nonexistent, closed or did not contain sufficient funds to cover the debit. As alleged in the indictment, many victims did not notice the charge and therefore did not dispute it.
The Department of Justice’s Consumer Protection Branch uncovered Long’s fraudulent activity in connection with an investigation of Long’s bank, CommerceWest Bank. Based upon its conduct in processing unauthorized transactions for Long, CommerceWest Bank entered into a civil and criminal settlement with the Department of Justice.
The U.S. Postal Inspection Service seized more than $2.9 million from V Internet’s accounts at CommerceWest Bank. Postal Inspectors also seized property that Long purchased with the proceeds of his fraudulent activity, including five airplanes, a Land Rover, a Dodge Charger, multiple tractors, five all-terrain vehicles and a fire truck. In addition, the criminal indictment seeks forfeiture of a house and other property Long purchased in Cedar Hill, Texas.
The case is being handled by Trial Attorney John W. Burke and Ehren Reynolds of the Civil Division’s Consumer Protection Branch in coordination with Assistant U.S. Attorneys Crane M. Pomerantz and Daniel D. Hollingsworth of the U.S. Attorney’s Office for the District of Nevada and with substantial investigative support from the U.S. Postal Inspection Service.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch.
Two Cayman Island Financial Institutions Plead Guilty in Manhattan Federal Court to Conspiring to Hide More Than $130 Million in Cayman Bank AccountsRead the Press Release
Cayman Companies Admit to Helping U.S. Taxpayer-Clients Hide Assets in Offshore Accounts, and Agree to Produce Account Files of Non-Compliant U.S. Taxpayers
First Conviction of Non-Swiss Financial Institution For Tax Evasion Conspiracy
U.S. Attorney Preet Bharara for the Southern District of New York, Acting Deputy Assistant Attorney General Stuart Goldberg of the Justice Department’s Tax Division, and Chief Richard Weber for the Internal Revenue Service – Criminal Investigation, (IRS-CI), announced today the guilty pleas of Cayman National Securities Ltd. (CNS) and Cayman National Trust Co. Ltd. (CNT), two Cayman Island affiliates of Cayman National Corporation, which provided investment brokerage and trust management services to individuals and entities within and outside the Cayman Islands, including citizens and residents of the United States (U.S. taxpayers). CNS and CNT pleaded guilty to a criminal Information charging them with conspiring with many of their U.S. taxpayer-clients to hide more than $130 million in offshore accounts from the U.S. Internal Revenue Service (IRS) and to evade U.S. taxes on the income earned in those accounts. CNS and CNT entered their guilty pleas pursuant to plea agreements requiring the companies to, among other things, produce through the treaty process account files of non-compliant U.S. taxpayers who maintained accounts at CNS and CNT, and pay a total of $6 million in financial penalties. The plea proceeding took place today before the Honorable U.S. District Judge Thomas P. Griesa for the Southern District of New York.
“The guilty pleas of these two Cayman Island companies today represent the first convictions of financial institutions outside Switzerland for conspiring with U.S. taxpayers to evade their lawful and legitimate taxes,” said U.S. Attorney Bharara. “The plea agreements require these Cayman entities to provide this office with the client files, because we are committed to finding and prosecuting not only banks that help U.S. taxpayers evade taxes, but also individual taxpayers who find criminal ways not to pay their fair share. We will follow them no matter how far they go to hide their accounts, whether it is Switzerland, the Cayman Islands, or some other tax haven.”
“Today’s convictions make clear that our focus is not on any one bank, insurance company or asset management firm, or even any one country,” said Acting Deputy Assistant Attorney General Goldberg of the Justice Department’s Tax Division. “The Department and IRS are following the money across the globe – there are no safe havens for U.S. citizens engaged in tax evasion or those actively assisting them.”
“The veil of secrecy has been lifted from what was once a common place for criminals to hide their money offshore,” said Chief Weber. “The IRS and DOJ work aggressively to require banks to follow the laws and not turn a blind eye to criminal activity. When individuals and entities hide behind shell corporations and numbered bank accounts, they are not only cheating the U.S. government, they are cheating the honest taxpaying citizens who are obeying the law and doing the right thing.”
According to the information, statements made during the proceedings today and other documents filed in Manhattan federal court, including the statement of facts to the plea agreements:
From at least 2001 through 2011, CNS and CNT, which are both located in Grand Cayman and organized under the laws of the Cayman Islands, assisted certain U.S. taxpayers in evading their U.S. tax obligations to the IRS and otherwise hiding accounts held at CNS and CNT from the IRS (hereinafter, undeclared accounts). CNS and CNT did so by knowingly opening and maintaining undeclared accounts for U.S. taxpayers at CNS and CNT. Specifically, and among other things, in furtherance of a scheme to help U.S. taxpayers hide assets from the IRS and evade taxes:
- CNS and CNT opened, and/or encouraged many U.S. taxpayer-clients to open accounts held in the name of sham Caymanian companies and trusts (collectively, structures), thereby helping U.S. taxpayers conceal their beneficial ownership of the accounts.
- CNS and CNT treated these sham Caymanian structures as the account holders and allowed the U.S. beneficial owners of the accounts to trade in U.S. securities.
- CNS failed to disclose to the IRS the identities of the U.S. beneficial owners who were trading in U.S. securities, in contravention of CNS’s obligations under its Qualified Intermediary Agreement (QI) with the IRS.
- After learning about the investigation of Swiss bank UBS AG (UBS), in or about 2008, for assisting U.S. taxpayers to evade their U.S. tax obligations, CNS and CNT continued to knowingly maintain undeclared accounts for U.S. taxpayer-clients and did not begin to engage in any significant remedial efforts with respect to those accounts until 2011 and 2012.
The sham Caymanian structures that CNT set up for U.S. taxpayer-clients included trusts, which were nominally controlled by CNT trust officers, but which in fact were controlled by the U.S. taxpayer-clients; managed companies, for which CNT ostensibly provided direction and management services, but which in truth were shell companies that served only to hold the assets of the U.S. taxpayer-clients; and registered office companies, which were shell companies for which CNT simply supplied a Caymanian mailing address. CNS treated these sham Caymanian structures as the account holders and then permitted the U.S. taxpayer-clients to trade in U.S. securities, without requiring them to submit Form W-9s, which are IRS forms that identify individuals as U.S. taxpayers, as CNS was obligated to do under its QI obligations for accounts held by U.S. persons that held U.S. securities. CNS and CNT agreed to maintain these structures for U.S. taxpayer-clients after many of them expressed concern that their accounts would be detected by the IRS.
In or about April 2008, it became publicly known that the U.S. Department of Justice was investigating UBS for assisting U.S. taxpayers to evade their U.S. tax obligations. Thereafter, despite the public disclosure of the UBS case, and CNS’s awareness of it, CNS continued to assist U.S. taxpayer-clients in concealing their accounts from the IRS by, among other things, failing to require them to complete Form W-9s. Likewise, up through at least 2010, CNT continued to rely on account opening documentation that, rather than barring the creation of non-tax compliant structures, simply assigned higher “risk” points to such structures. In or about June 2011, CNT hired a new president, who spearheaded a review of CNT’s files. In the course of that review, not a single file was found to be complete and without tax or other issues. Moreover, with respect to the structures that had U.S. beneficial owners, CNT’s files contained little, if any, evidence of tax compliance.
At their high-water mark in 2009, CNS and CNT had approximately $137 million in assets under management relating to undeclared accounts held by U.S. taxpayer-clients. From 2001 through 2011, CNS and CNT earned more than $3.4 million in gross revenues from the undeclared U.S. taxpayer accounts that they maintained.
As part of their plea agreements with the U.S. Attorney’s Office for the Southern District of New York (the office), CNS and CNT have agreed to cooperate fully with the office’s investigation of the companies’ criminal conduct. To date, CNS and CNT have already made substantial efforts to cooperate with that investigation, including by: (1) facilitating interviews that the office conducted of CNS and CNT employees, including top level executives; (2) voluntarily producing documents in response to the office’s requests; (3) providing, in response to a treaty request, unredacted client files for approximately 20 percent of the U.S. taxpayer-clients who maintained accounts at CNS and CNT; and (4) committing to assist in responding to a treaty request that is expected to result in the production of unredacted client files for approximately 90 to 95 percent of the U.S. taxpayer-clients who maintained accounts at CNS and CNT.
In connection with their guilty pleas, CNS and CNT have agreed to pay the United States a total of $6 million, which consists of the forfeiture of gross proceeds of their illegal conduct, restitution of the outstanding unpaid taxes from U.S. taxpayers who held undeclared accounts at CNS and CNT, and a fine.
U.S. Attorney Bharara praised the outstanding investigative work of IRS-CI and thanked the Justice Department’s Tax Division for their assistance in the investigation.
This case is being handled by the office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Sarah E. Paul and Niketh Velamoor for the Southern District of New York are in charge of the prosecution.
Senior Auction Official at Beverly Hills Gallery Pleads Guilty in Connection with $1 Million Wildlife Smuggling ConspiracyRead the Press Release
Joseph Chait, the senior auction administrator of a Beverly Hills, California, gallery and auction house, pleaded guilty to conspiring to smuggle wildlife products made from rhinoceros horn, elephant ivory and coral with a market value of at least approximately $1 million, announced Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division, U.S. Attorney Preet Bharara for the Southern District of New York and Director Dan Ashe for the U.S. Fish & Wildlife Service (FWS). Chait, 38, of Beverly Hills, pleaded guilty to a two-count information before U.S. District Judge J. Paul Oetken for the Southern District of New York.
“Rhinos and elephants have been on earth for millennia but are now at grave risk due to the illegal wildlife trade,” said John C. Cruden, Assistant Attorney General for the Environment and Natural Resources Division. “The United States and other destination markets have a special responsibility to help save these beloved creatures from extinction. Those in the auction industry need to be responsible and not turn a blind eye to the fact that trade in protected animal parts is highly regulated. Illegal wildlife trafficking takes many forms and those who deliberately break the rules and engage in smuggling will be prosecuted to the full extent of the law.”
“Joseph Chait and his co-conspirators trafficked in wildlife worth a market value of at least $1 million, deliberately flouting laws put in place to protect endangered species such as rhinoceros,” said U.S. Attorney Bharara. “We are grateful for the outstanding work of the FWS in this investigation, which is ongoing.”
“This case demonstrates the insidious nature of wildlife trafficking, showing how these activities permeate our society in many social, economic and cultural areas,” said Director Ashe. “One criminal at a time. One guilty plea at a time. Federal prosecutors, our devoted team of law enforcement officers, and their colleagues around the globe are helping reduce trade in illegal wildlife products that is decimating populations of some of our most cherished species.”
According to allegations contained in the Information and statements made in court filings and proceedings:
Chait and his co-conspirators engaged in illegal trafficking of wildlife with a market value of at least $1 million. Chait personally falsified customs forms by stating that rhinoceros horn and elephant ivory items were made of bone, wood or plastic. For example, during Asia Week in New York City in or about March 2011, Chait was approached about the potential sale of a carving of Guanyin, an East Asian spiritual figure made from rhinoceros horn (the Rhino Carving). Despite knowing that it was not a genuine antique, Chait and his co-conspirators accepted the Rhino Carving for consignment, advertised the sale to foreign clients in China and put the Rhino Carving on the cover of Auction House-1’s catalogue in connection with an auction of Asian art and antiques. After the Rhino Carving sold at auction for $230,000, Chait offered to make a false document for the buyer to help the buyer smuggle the item out of the country. The fake invoice falsely stated that the item cost $108.75 and was made of plastic.
Chait and his co-conspirators also sold ivory carvings to another foreign customer and provided those carvings to that customer’s courier, even after learning that the customer had been arrested in China for smuggling ivory purchased from Chait’s auction house.
In addition to falsifying customs forms by stating that rhinoceros horn and elephant ivory items were made of bone, wood or plastic, Chait and his co-conspirators conspired to aid smuggling in other ways:
- Wildlife items were shipped to or picked up by third party shippers, who then re-shipped the items out of the country to foreign buyers without the required declaration or permits.
- Members of the conspiracy provided packing materials to foreign wildlife buyers to assist them in hand carrying the wildlife out of the country.
- Foreign wildlife buyers where not charged a state sales tax if they showed a foreign passport and itinerary for an international flight as proof the item would be leaving the country which Chait and his co-conspirators knew was insufficient time to obtain an export permit.
- Protected wildlife was smuggled into the United States without declaration or permits and then sold at auction.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. The trade in rhinoceros horn and elephant ivory has been restricted since 1976 under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 170 countries around the world. Trade in protected wildlife such as rhinoceros horn and elephant ivory has been significantly restricted in the last two years as the result of a Presidential Executive Order except for those instances where sellers can prove that the item is a genuine antique that is more than 100 years of age.
* * *
Chait faces a maximum of five years in prison for conspiring to smuggle wildlife products and a maximum of five years in prison for violating the Lacey Act. These statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentence imposed on the defendant will be determined by the judge.
Chait’s sentencing is scheduled for June 22, 2016, in front of Judge Oetken.
This matter is part of Operation Crash, a continuing investigation by the Department of the Interior’s Fish and Wildlife Service, in coordination with the Department of Justice. A “crash” is the term for a herd of rhinoceros. Operation Crash is an ongoing effort to detect, deter, and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns.
Assistant Attorney General Cruden and U.S. Attorney Bharara thanked the U.S. Fish and Wildlife Service for its outstanding work in this investigation as well as the U.S. Attorney’s Office for the District of New Jersey for its assistance on this matter. This case is being prosecuted by the U.S. Attorney Office’s Complex Frauds and Cybercrime Unit and the Environmental Crimes Section of the Department of Justice. Assistant U.S. Attorneys Jennifer Gachiri and Elizabeth Hanft and Senior Litigation Counsel Richard A. Udell with the Environmental Crimes Section are in charge of the prosecution.
- Wildlife items were shipped to or picked up by third party shippers, who then re-shipped the items out of the country to foreign buyers without the required declaration or permits.
United States Settles False Claims Act Allegations Against 21st Century Oncology for $34.7 MillionRead the Press Release
21st Century Oncology Inc., the nation’s largest physician led integrated cancer care provider and its wholly owned subsidiary South Florida Radiation Oncology LLC, have agreed to settle allegations that they performed and billed for procedures that were not medically necessary, the Department of Justice announced today. 21st Century is headquartered in Fort Myers, Florida, and has offices in 16 states.
The settlement relates to defendants use of a medical procedure – called the Gamma function – to measure the exit dose of radiation from a patient after receiving radiation treatment. The United States alleged that the defendants knowingly and improperly billed for this procedure under circumstances where the procedure served no medically appropriate purpose. For example, the government alleged that the procedure was performed by physicians and physicists at 21st Century Oncology locations who were not properly trained to interpret and utilize the Gamma function results. The government also alleged that the defendants billed for this procedure when no physician reviewed the Gamma function results until seven or more days after the last day patients received radiation treatment therapy. Finally, the government alleged that the defendants billed for the procedure when no Gamma result was available due to technical failures in the imaging equipment.
“Today’s settlement demonstrates our unwavering commitment to protect the Medicare trust fund against unscrupulous providers,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Providers who waste taxpayer dollars by billing for unnecessary services, including services that are not used or improperly performed, will face serious consequences.”
“The U.S. Attorney’s Office is committed to taking the steps necessary to protect Medicare, TRICARE, and other federal health care programs from fraud,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida. “Healthcare providers may bill for new technologies only when they have been proven to be useful and when individual physicians and staff have been trained to use them properly.”
This lawsuit was originally filed under the qui tam or whistleblower provisions of the False Claims Act by Joseph Ting, a former physicist at South Florida Radiation Oncology. Under those provisions, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. Ting will receive more than $7 million.
“The waste of health care program dollars will not be tolerated,” said Special Agent in Charge Shimon R. Richmond for the Health and Human Services (HHS) Office of the Inspector General. “Providers at 21st Century Oncology have agreed to settle claims that in some instances they performed tests that were not only medically unnecessary, but that no one had been trained to properly interpret, thereby allegedly causing the taxpayers to pay for useless tests.”
This past December, 21st Century Oncology LLC, a wholly owned subsidiary of 21st Century Oncology Inc., paid $19.75 million to settle allegations that it violated the False Claims Act by billing for medically unnecessary laboratory urine tests and for encouraging physicians to order these tests by offering bonuses based in part on the number of tests the physicians referred to its laboratory.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $27.4 billion through False Claims Act cases, with more than $17.4 billion of that amount recovered in cases involving fraud against federal health care programs.
“This settlement highlights the commitment of the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of TRICARE, the Department of Defense health care program that serves our warfighters, their family members, and military retirees,” said Special Agent in Charge John F. Khin of DCIS Southeast Field Office. “With DoD’s limited resources and budgets, DCIS must continue to aggressively investigate fraud, waste and abuse to preserve and recover precious taxpayer dollars for our most vulnerable programs.”
This matter was handled by the U.S. Attorney’s Office for the Middle District of Florida, with assistance from the Civil Division’s Commercial Litigation Branch, the Department of Health and Human Services Office of Inspector General (HHS/OIG) and the Defense Criminal Investigative Service (DCIS).
The claims resolved by this settlement are allegations only, and there has been no determination of liability. The lawsuit against the defendants was filed in the U.S. District Court for the Middle District of Florida and is captioned United States ex rel. Ting v. 21st Century Oncology and South Florida Radiation Oncology.
Justice Department Announces New Interagency Initiative to Combat Religious DiscriminationRead the Press Release
The Justice Department announced the launch of “Combating Religious Discrimination Today,” a new interagency community engagement initiative designed to promote religious freedom, challenge religious discrimination and enhance enforcement of religion-based hate crimes. The Justice Department’s Civil Rights Division, in partnership with other federal agencies, will host a series of community roundtables across the country that focus on protecting people and places of worship from religion-based hate crimes; combating religious discrimination, including bullying, in education and employment; and addressing unlawful barriers that interfere with the construction of places of worship.
The inaugural roundtable, which is taking place today in Newark, New Jersey, will focus on addressing bullying and religious discrimination in schools. It will examine how students encounter bullying and harassment based on their actual or perceived religion, as well as discrimination based on religious clothing, holidays and expression.
Subsequent roundtables will focus on a variety of related topics, including a discussion in Dallas that will center on preventing and prosecuting religion-based hate crimes targeting individuals and houses of worship; a meeting in Birmingham, Alabama, that will examine religious discrimination in employment; and a convening in Detroit that will address discrimination by local zoning officials against congregants seeking to build places of worship. The final roundtable will also concentrate on bullying and religious discrimination in schools and will take place in Palo Alto, California.
“Hate-motivated violence, harassment and discrimination violate America’s laws and threaten our founding vision of a free and tolerant society that welcomes people from every creed and walk of life,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Robust community engagement and meaningful dialogue can help our country fulfill its promise of religious freedom, and we look forward to tackling this challenging work with creative solutions in the months ahead.”
Agencies participating in the new initiative include the Departments of Education, Homeland Security (DHS) and Labor (DOL); the Equal Employment Opportunity Commission (EEOC); and within the Justice Department, the Civil Rights Division, FBI, Office of Justice Programs, Executive Office for U.S. Attorneys and Community Relations Service. Agency officials will facilitate the roundtable discussions to help identify key priorities and lead robust dialogue with community members and civil rights advocates.
“We are eager to continue partnering with our federal colleagues to address bias and discrimination in our nation’s schools, and to continue our strong enforcement of federal civil rights laws to ensure that all students can learn in safe school environments,” said Catherine E. Lhamon, Assistant Secretary for Civil Rights at the Department of Education.
“Since DHS was established, we have worked closely with communities across the country to combat intolerance and ensure safety at houses of worship,” said Officer Megan H. Mack of the DHS Office for Civil Rights and Civil Liberties. “Ensuring the protection of uniquely American rights and liberties is a fundamental part of DHS’s mission to build safe and resilient communities. We look forward to expanding our already extensive engagement with communities by working closely with our federal partners on this effort.”
“A diverse and inclusive workplace reflects the strength and richness of America and its history,” said Director Patricia Shiu of the DOL Office of Federal Contract Compliance Programs. “Built by immigrants from every corner of the world, our nation’s greatness must not be diminished by unlawful religious discrimination. The Department of Labor welcomes the opportunity to collaborate with our federal partners on this important issue.”
“Our nation was founded on the principles of freedom and equality,” said Jenny R. Yang, EEOC Chair. “Working with our federal and community partners enables EEOC to better understand and address religious discrimination in the workplace, and to inform affected communities of protections under federal law.”
The new initiative supplements the department’s long-standing criminal and civil enforcement efforts to prevent religious discrimination and religion-motivated hate crimes. Since the 9/11 terrorists attacks, the department has investigated more than 1,000 incidents involving acts of violence, threats, assaults, vandalism and arson targeting diverse religious and ethnic groups, prosecuting dozens of these cases to the fullest extent of the law. The Civil Rights Division, often in close partnership with other federal agencies, also utilizes civil enforcement to combat religious discrimination and protect religious freedom. This includes preventing religious discrimination in education, through Title IV of the Civil Rights Act of 1964, and in employment, through Title VII of the Civil Rights Act of 1964. In addition, the division enforces the Religious Land Use and Institutionalized Persons Act, which protects individuals, houses of worship and other religious institutions from discrimination in zoning and landmarking laws. For more information about the new initiative, please email [email protected]. Additionally, EEOC is posting a ‘What You Should Know’ document today on its homepage, www.eeoc.gov, compiling EEOC’s resources regarding religious and national origin-based discrimination.
Attorney General Lynch Discusses Department's Efforts to Protect Consumers from Unsafe Dietary SupplementsRead the Press Release
As part of National Consumer Protection Week, Attorney General Loretta E. Lynch recorded a video to talk about the department’s work protecting the health and safety of consumers from unsafe dietary supplements.
“At the Department of Justice, we are committed to working with our partners across the federal government to protect the health and safety of all Americans,” said Attorney General Lynch. “Recently, we announced a nationwide operation targeting unlawful dietary supplements. We are bringing civil and criminal cases against more than 100 makers and marketers of supplements who were violating federal law by misrepresenting ingredients; by making unsupported health claims; or even by lacing products with undeclared substances.”
The complete text of the Attorney General’s video message is below:
“Hello. As part of National Consumer Protection Week, I want to take a moment to talk to you about dietary supplements, which are used by millions of Americans every day. What many Americans don’t know is that dietary supplements are not subject to testing by the Food and Drug Administration before they reach store shelves – meaning that every day, millions of Americans are ingesting substances whose safety and efficacy are not guaranteed.
“Some of these supplements are simply a waste of money, promising results they can’t deliver or advertising ingredients that they don’t contain. And too often, these supplements don’t just abuse consumer trust – they also endanger public health. Some contain harmful ingredients, causing consumers to fall ill. Others falsely claim to cure illness and disease, leading patients to use them as a substitute for the proven therapies they need. But whether these supplements are deceptive or dangerous, the fact remains that too many companies are making a profit by misleading – and in some cases harming – American consumers.
“At the Department of Justice, we are committed to working with our partners across the federal government to protect the health and safety of all Americans. Recently, we announced a nationwide operation targeting unlawful dietary supplements. We are bringing civil and criminal cases against more than 100 makers and marketers of supplements who were violating federal law by misrepresenting ingredients; by making unsupported health claims; or even by lacing products with undeclared substances.
“In one case, for example, the Justice Department brought criminal charges against high-ranking executives at USPlabs, a company that sold workout and weight loss supplements. As we alleged, they claimed that their products were made from natural plant extracts, when in fact, they were made from untested synthetic chemicals from China. In several cases, consumers suffered severe liver damage. And although the company was allegedly aware of the risks their product posed, they continued to sell it to consumers, compromising the health and well-being of thousands of Americans.
“The Justice Department is determined to hold bad actors in the dietary supplement industry accountable for their actions. But consumers need to do their part to protect themselves. I urge consumers to be cautious when choosing to take dietary supplements. Visit the FDA and the Federal Trade Commission websites, where you can find useful information about dietary supplements. Use tools developed by the Department of Defense and the U.S. Anti-Doping Agency, including a smartphone app, to help you make informed choices. And above all, if you are considering taking a dietary supplement, talk to a doctor first. Should you and your health care provider decide that dietary supplements are right for you, know that the Department of Justice is working tirelessly to ensure that the products you choose are safely manufactured, accurately labeled, and honestly marketed – because the American people deserve nothing less.”
The full video of the Attorney General’s message is available at https://www.justice.gov/opa/video/national-consumer-protection-week.
For more information about the department’s Consumer Protection Branch, visit http://www.justice.gov/civil/consumer-protection-branch.
Virginia Man Pleads Guilty to Federal Charges for Role in Massive Identity Theft and Tax Fraud SchemeRead the Press Release
Worked With Others to Seek Over $1.5 Million in Fraudulent Refunds
A federal district court judge accepted a Virginia man’s plea of guilty today for his involvement in a far-reaching stolen identity refund fraud scheme in which he conspired with others to seek over $1.5 million in income tax refunds through the filing of fraudulent federal income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Channing D. Phillips of the District of Columbia, Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Inspector in Charge Maria L. Kelokates of the U.S. Postal Inspection Service’s Washington Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.
Bradley King, 35, of Fredericksburg, Virginia, is among approximately 19 participants in this scheme who have pleaded guilty to charges in the U.S. District Court for the District of Columbia. According to court documents, the overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $42 million. King pleaded guilty to one count of conspiracy to defraud the United States with respect to claims, one count of theft of public money and one count of aiding and abetting in fraud and related activity in connection with identification documents.
The charges carry a total statutory maximum prison term of 35 years. As part of the plea agreement, King agreed to pay $493,436 in restitution to the IRS. King also is subject to a forfeiture money judgment in the amount of $5,400. Sentencing is set for May 18 before U.S. District Judge Ellen S. Huvelle.
According to the government’s evidence, King participated in a massive and sophisticated stolen identity refund fraud scheme that involved an extensive network of more than 130 people, many of whom were receiving public assistance. The refunds were sought for tax years 2005 through 2013, often in the names of individuals whose identities had been stolen, including the elderly, residents of assisted living facilities, drug addicts and incarcerated prisoners. Returns were also filed in the names of and refunds were issued to, people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.
According to documents filed with the court, King’s involvement in the scheme began in 2008 and continued through July 2015. Initially, he permitted co-conspirators to use his name, social security number and residential address for the creation and submission of fraudulent income tax returns. From March 2010 through July 2015, he recruited others to provide him with means of identification for use in preparing and filing fraudulent returns. He also recruited others to permit the use of their residential addresses on fraudulent returns that he prepared and filed. King split the proceeds of the fraudulently obtained U.S. Treasury checks with his co-conspirators. In addition, he and others used bank accounts for the negotiation of refund checks that were issued in the names of other persons. Finally, according to the court documents, King sold fraudulently obtained refund checks to another individual in June 2015.
Taking together the losses generated by the use of residential addresses and bank accounts under his control, including checks associated with his co-conspirators, King was responsible for the filing of approximately 444 fraudulent returns that sought more than $1.5 million in tax refunds. King’s actions led to a total actual loss of approximately $493,436 to the U.S. Treasury, based on the negotiation of 153 U.S. Treasury checks listing addresses under his control and/or negotiated by his recruits.
In announcing the plea, Acting Assistant Attorney General Ciraolo, U.S. Attorney Phillips, Special Agent in Charge Jankowski, Inspector in Charge Kelokates and Assistant Inspector General Phillips commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialists Donna Galindo and Julie Dailey. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jeffrey B. Bender and Thomas F. Koelbl and former Trial Attorney Jessica Moran of the Tax Division, who prosecuted the case.
Supreme Court Rejects Apple's Request to Review E-Books Antitrust Conspiracy FindingsRead the Press Release
The U.S. Supreme Court today denied Apple’s petition for certiorari in United States v. Apple Inc., making final lower court decisions that Apple orchestrated a price-fixing conspiracy with five major e-book publishers and substantially raised e-book prices.
The Supreme Court’s action triggers Apple’s obligation to pay $400 million to e-book purchasers under Apple’s July 2014 agreement to settle damages actions brought by the attorneys general of 33 states and territories and a private class of e-book purchasers. Most e-book purchasers will receive reimbursement for the higher prices Apple’s conduct caused them to pay through automatic credits at their e-book retailers. They will be able to apply these credits to future purchases. With the $166 million previously paid by the conspiring publishers to settle claims against them, Apple’s payment will bring to $566 million the amount repaid to e-book purchasers overcharged as a result of Apple’s and the publishers’ illegal conspiracy.
“Apple’s liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “And consumers will be made whole. The outstanding work of the Department of Justice team – working with our steadfast state attorney general partners – exposed this cynical misconduct by Apple and its book publisher co-conspirators and ensured that justice was done.”
On April 11, 2012, the department filed its civil antitrust lawsuit challenging Apple’s orchestration of a price-fixing conspiracy with five e-book publishers: Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC (which does business as Macmillan), Penguin Group (USA) Inc. and Simon & Schuster Inc. The lawsuit, brought in the U.S. District Court for the Southern District of New York, alleged that Apple and the defendant publishers conspired to fix prices and end e-book retailers’ freedom to compete on price, and that they succeeded in substantially increasing the prices that consumers paid for e-books. The department reached settlements with the defendant publishers before trial and, along with the plaintiff states, proceeded to trial against Apple before U.S. District Judge Denise L. Cote of the Southern District of New York on June 3, 2013. Judge Cote issued her opinion and order on July 10, 2013, finding Apple liable for orchestrating a conspiracy with the publishers. On June 30, 2015, the U.S. Court of Appeals for the Second Circuit affirmed Judge Cote’s decision.
Justice Department Wins Religious Discrimination Lawsuit Against Colorado City, Arizona, and Hildale, UtahRead the Press Release
A federal jury in Phoenix returned a verdict today finding that the towns of Colorado City, Arizona, and Hildale, Utah, and their joint water company systematically discriminated against individuals who are not members of the Fundamentalist Church of Jesus Christ of Latter-day Saints (FLDS) in the provision of housing, utility and policing services in violation of the Fair Housing Act. Prior to the jury verdict, the parties reached an agreement that the defendants will pay $1.6 million to resolve the monetary claim under the Fair Housing Act.
The jury also issued an advisory verdict on the Department of Justice’s claims under Section 14141 of the Violent Crime Control and Law Enforcement Act. Because this statute (in contrast to the Fair Housing Act) does not include a right to a jury trial, the jury’s verdict as to the Section 14141 claim is advisory and may be considered by the court, but is not binding. In its advisory verdict, the jury found that the Colorado City Marshal’s Office, the cities’ joint police department, operated as an arm of the FLDS church in violation of the establishment clause of the First Amendment; engaged in discriminatory policing in violation of the equal protection clause of the 14th Amendment and the establishment clause; and subjected individuals to unlawful stops, seizures and arrests in violation of the Fourth Amendment. Because these advisory findings are not binding, the Department of Justice’s Section 14141 claim remains under consideration by the district court judge, who will issue a ruling on whether the defendants engaged in these constitutional violations, and if so, what relief is appropriate.
“Today’s verdict reaffirms that America guarantees all people equal protection and fair treatment, regardless of their religious beliefs,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “When communities deny their residents critical services simply because of where they worship, they violate our laws and threaten the defining values of religious freedom and tolerance that are the foundation of our country.”
This was the department’s first lawsuit to include claims under both the Fair Housing Act and Section 14141, the federal statute that allows the Attorney General to address patterns or practices of police misconduct.
This matter was litigated by attorneys from the Civil Rights Division’s Housing and Civil Enforcement Section and the Special Litigation Section. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.
Houston Man Sentenced to More Than 10 Years in Prison for Biodiesel Fraud SchemeRead the Press Release
Philip Joseph Rivkin, aka Felipe Poitan Arriaga, was sentenced today in Houston, Texas, to 121 months in prison, three years of supervised release and to pay more than $87 million in restitution and was ordered to forfeit $51 million for generating and selling fraudulent biodiesel credits in the federal renewable fuel program, the Justice Department’s Environment and Natural Resources Division announced.
In June 2015, Rivkin pleaded guilty to one count of mail fraud and one count of making a false statement under the Clean Air Act.
"Rivkin’s abuse of the biodiesel program, a program designed to further our nation’s energy independence and combat climate change, was an abuse against the American people,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “This sentence should send a strong message that those committing fraud in the bio-diesel program will be vigorously prosecuted and sent to prison.”
“Today we take another big step toward upholding the integrity of an important program that reduces greenhouse gas emissions and promotes energy independence,” said Assistant Administrator Cynthia Giles for the Environmental Protection Agency’s (EPA) for Enforcement and Compliance Assurance. “After years of persistence by EPA and our partners, we’ve brought a serious offender to justice for environmental crimes. This sentence deters would-be violators and helps protect responsible companies that follow the rules.”
The Energy Independence and Security Act of 2007 created or extended several federally-funded programs that created monetary incentives for the production of renewable fuels, including biodiesel and to encourage the use of such fuels in the United States. Authorized biodiesel producers and importers could generate and attach credits—known as renewable identification numbers (RINs)—to biodiesel they produced or imported. Because certain companies need RINs to comply with regulatory obligations, RINs have significant market value.
As admitted in the plea agreement, beginning around February of 2009, Rivkin operated and controlled several companies in the fuel and biodiesel industries, including Green Diesel LLC, Fuel Streamers Inc. and Petro Constructors LLC, all based in Houston. Rivkin claimed to produce millions of gallons of biodiesel at the Green Diesel’s Houston facility and then generated and sold RINs based upon this claim. In reality, no biodiesel was ever produced at the Green Diesel facility. This scheme allowed the defendant to generate over 60 million RINs that were fraudulent, which were then sold to companies that needed to obtain them and resulted in millions of dollars in sales. Rivkin created false records and made false statements to conceal his fraudulent claims of biodiesel production, importation and RIN generation.
The collaborative investigation that led to today’s sentence was the result of work by Environmental Protection Agency’s Criminal Investigation Division, the United States Secret Service, Internal Revenue Service-Criminal Investigation, Homeland Security Investigations and the Guatemalan Special Investigations Unit, which worked with federal investigators to uncover the fraudulent nature of Rivkin’s Guatemalan citizenship, which led to his deportation back to the United States.
The case is being prosecuted by Trial Attorney Leslie E. Lehnert of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Defense Contractor Armorsource LLC Agrees to Pay $3 Million to Settle False Claims Act AllegationsRead the Press Release
ArmorSource, LLC has agreed to pay $3 million to resolve False Claims Act allegations in connection with a contract to provide combat helmets to the U.S. Army, the Department of Justice announced today. ArmorSource, a Delaware Limited Liability Company headquartered in Hebron, Ohio, designs, develops and manufactures ballistic helmets for military and law enforcement personnel worldwide.
In 2006, the Army contracted with ArmorSource to manufacture the Advanced Combat Helmet or ACH for use by soldiers in combat. ACH helmets are made of Kevlar, an armored material, and are worn to provide ballistic protection for the soldier. The United States alleged that from 2006 to 2009, ArmorSource delivered ACH helmets to the Army that were manufactured and tested using methods that did not conform to contract requirements and that failed to meet contract performance standards. In May 2010, the Army began recalling the helmets after several lots failed ballistic safety tests.
“The U.S. government relies on contractors to manufacture equipment that is critical to the safety of our men and women in uniform, and equipment that fails to meet performance standards not only cheats taxpayers, but can put lives at risk,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates our commitment to ensuring our military receives products that meet its requirements and for which it has paid.”
“Today’s settlement in this important case is a reminder to all government contractors that they must deliver on their promises, especially when the safety and security of our troops is on the line,” said Special Agent in Charge Monte A. Cason of the Department of Justice Office of the Inspector General’s Dallas Field Office.
“Not conforming to contract requirements, failing to meet performance standards, and failing to pass ballistic safety tests for the helmets that protect the very heads and lives of our young men and women who serve this nation is incredibly unconscionable,” said Director Frank Robey of the U.S. Army Criminal Investigation Commands Major Procurement. “Thanks to the efforts of our special agents and our other law enforcement partners, today’s settlement is possible.”
ArmorSource subcontracted the manufacturing to Federal Prison Industries, Inc., which operates under the trade name UNICOR. This settlement resolves a lawsuit filed by whistleblowers Melessa Ponzio and Sharon Clubb, FPI employees, under the qui tam or whistleblower provisions of the False Claims Act. The Act permits private individuals to sue on behalf of the government those who falsely claim federal funds and to receive a share of any recovery. Ms. Ponzio and Ms. Clubb will receive $450,000.
This settlement was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Eastern District of Texas. The investigation was conducted by the Department of Justice Office of the Inspector General, the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service and the U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit.
The case is captioned U.S. ex rel. Ponzio, et al. v. Rabintex Industries Ltd., et al., Case No. 1:10-CV-588 (E.D. Tex.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Business Manager and Secretary-Treasurer of Iron Workers Local 201 Charged with Taking Kickbacks from the Wages of Public Works EmployeesRead the Press Release
The business manager and secretary-treasurer of Local 201 of the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers Union AFL-CIO (Iron Workers) based in Washington, D.C., was charged with taking kickbacks from public works employees at the Blue Plains Wastewater Treatment Plant of the District of Columbia Water and Sewer Authority (Blue Plains).
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting Special Agent in Charge John J. Dolce of the Department of Labor Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations Washington, D.C., Regional Office and District Director Mark Wheeler of the Department of Labor’s Office of Labor Management Standards Washington, D.C., District Office made the announcement.
Juan Carlos Recinos, 40, of Upper Marlboro, Maryland, the business manager and secretary-treasurer of Iron Workers Local 201, was charged by a grand jury in the District of Columbia with seven counts of taking kickbacks from public works employees. Recinos is scheduled to have his initial appearance at 1:30 p.m. EST before U.S. Magistrate Judge G. Michael Harvey of the District of Columbia.
The Iron Workers Local 201 represents workers known as “rodmen” who set rebar into concrete forms at construction sites in Washington, D.C., and adjacent counties. Prior to being elected business manager and secretary-treasurer of Local 201 in 2014, Recinos served as an organizer for Local 201.
The indictment alleges that, on seven instances between April and September 2013, Recinos knowingly induced rodmen who had received back pay awards from their employment at Blue Plains to give him part of their award, ranging from $500 to $3,800 in cash, by falsely representing that the rodmen owed money to an unnamed attorney. Recinos allegedly pocketed the money, in violation of the Copeland Anti-Kickback Act, which ensures that employees on public works projects receive all the wages to which they are entitled.
The charges and allegations contained in an indictment are merely accusations. The defendant is presumed innocent until and unless proven guilty.
The U.S. Department of Labor is investigating the case. Trial Attorney Vincent Falvo of the Criminal Division’s Organized Crime and Gang Section is prosecuting the case.
Woman Indicted for Impersonating FBI Agent in Connection with Lottery Fraud Scheme Based in JamaicaRead the Press Release
A federal grand jury in the Southern District of Georgia indicted a woman for impersonating an FBI special agent in connection with an international lottery fraud scheme based in Jamaica, the Department of Justice announced today.
Vania Lee Allen, 30, was charged with one count of conspiracy to commit wire fraud and falsely impersonating an employee of the United States, one count of wire fraud and one count of falsely impersonating an employee of the United States.
According to the indictment, Allen and a co-conspirator in Jamaica sought to unlawfully enrich themselves through a fraudulent lottery scheme targeting an elderly resident of Evans, Georgia. Allen’s co-conspirator falsely informed the victim by phone that the victim had won money in a lottery and instructed the victim to make payments to various people in order to collect the purported lottery winnings. As alleged in the indictment, in order to gain the trust of the victim and induce him to continue to make payments, Allen traveled from Jamaica to the United States and falsely portrayed herself to the victim as an FBI agent.
“Fraud schemes operating from other countries and targeting Americans often cannot fully succeed without assistance from a co-conspirator in the United States,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Scammers use many different tactics in an effort to gain the trust of their victims. The Justice Department will actively pursue and charge those who participate in such criminal activity.”
“The U.S. Attorney’s Office for the Southern District of Georgia is committed to vigorously prosecuting fraud schemes of all kinds,” said U.S. Attorney Edward J. Tarver of the Southern District of Georgia. “Those who perpetrate scams upon the vulnerable should know that federal law enforcement will work tirelessly to shut down fraud schemes and prosecute those responsible.”
According to the indictment, Allen traveled from Jamaica to the United States in early May 2015. The indictment alleges that Allen sent a number of text messages to her co-conspirator in Jamaica discussing the plan to impersonate an FBI agent, including a text that attached an image of a law enforcement style badge with an “FBI” logo and the words “Federal Bureau of Investigation” on the face of the badge. The indictment further alleges that on May 7, 2015, Allen traveled to the victim’s home in Evans, Georgia, falsely portrayed herself to the victim as a FBI special agent and provided the victim with a cellphone and directed him to speak with the person on the line, who was her co-conspirator in Jamaica.
“These lottery scammers prey on elderly Americans, and convince them to send significant amounts of money based on false promises,” said U.S. Postal Inspector in Charge David W. Bosch of the Philadelphia Division. “The Postal Inspection Service is committed to investigating and combating these international lottery schemes.”
This prosecution is part of the Department of Justice’s effort to work with federal and local law enforcement to combat fraudulent lottery schemes in Jamaica that prey on American citizens. According to the U.S. Postal Inspection Service, Americans have lost tens of millions of dollars to fraudulent foreign lotteries.
If convicted, Allen faces a statutory maximum sentence of up to 20 years in prison for the wire fraud count, as well as up to five years for the conspiracy count and up to three years for the false impersonation count.
The case is being prosecuted by Trial Attorney Clint Narver of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney C. Troy Clark of the Southern District of Georgia. The case was investigated by the U.S. Postal Inspection Service and the Columbia County Georgia Sherriff’s Office.
An indictment is merely an allegation and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
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 Southern District of Georgia, visit its website at http://www.justice.gov/usao-sdga.
North Carolina Couple Indicted for Tax Fraud and Bank Fraud Related to Their Online BusinessRead the Press Release
A federal grand jury in the Middle District of North Carolina returned an indictment March 1 charging a Greensboro, North Carolina couple, who operated an online sales business with tax fraud as well as bank and wire fraud, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Ripley Rand of the Middle District of North Carolina. The defendants were arrested earlier today and had their initial court appearances this afternoon.
Daniel Balson and Renee Balson were charged with one count of conspiracy to defraud the United States and to commit bank fraud, one count of bank fraud and five counts of wire fraud. Daniel Balson was additionally charged with three counts of filing false tax returns for 2009 through 2011 and Renee Balson was charged with one count of filing a false tax return for 2009.
According to the indictment, Daniel Balson owned and operated Southern Sales Online (SSO), an online retail business that sold a variety of merchandise through eBay and Amazon, including scrapbooking and art materials, books, inspirational DVDs, pet supplies and tools. It is alleged that although SSO earned more than $1 million in gross receipts during 2005 through 2011, the Balsons failed to report gross receipts for SSO on their tax returns filed with the Internal Revenue Service (IRS). The Balsons also failed to report income from SSO on a bank application for a mortgage loan modification in 2011. The indictment also alleges that the Balsons stole merchandise from LifeWay Christian Stores and Hobby Lobby and then knowingly sold the stolen merchandise through SSO at prices less than retail value.
If convicted, Daniel Balson and Renee Balson each face a statutory maximum sentence of five years in prison for the conspiracy count, 30 years in prison for the bank fraud count, 20 years in prison for each wire fraud count and three years in prison for each false tax return count. The Balsons also face substantial monetary penalties and restitution.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceeding.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rand commended special agents of IRS-Criminal Investigation, who investigated the case, and Assistant Chief Todd A. Ellinwood and Trial Attorney Mara Strier of the Tax Division, who are prosecuting the case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office of the Middle District of North Carolina for their assistance.
Department of Justice Statement on Immigration ProceedingsRead the Press Release
Department of Justice Spokesman Kevin Lewis released the following statement on the department’s measures to increases access to counsel for individuals facing removal proceedings in immigration court:
“As the Justice Department works to safeguard American security, we are equally committed to upholding American values, including the protection of vulnerable populations.
“The Department of Justice recognizes that immigration court proceedings are more effective and efficient when individuals are represented. To that end, the department has taken a number of measures to increase access to counsel for individuals facing removal proceedings, and children in particular. For example, in 2014 the Justice Department and the Corporation for National and Community Service (CNCS) announced justice AmeriCorps, a strategic partnership, now in its second year, to enhance the effective and efficient adjudication of immigration proceedings involving certain unaccompanied children.
“The Administration continues to urge Congress to help improve the efficiency of our immigration court system by supporting needed Immigration Judge Teams and Board of Immigration Appeals attorneys, by supporting the successful Legal Orientation Program, and by supporting legal representation for unaccompanied children.
“The Assistant Chief Immigration Judge was speaking in a personal capacity when he made that statement. The assistant chief judge’s statement does not necessarily represent the views of the Department of Justice.”
Colorado Tax Return Preparer Incarcerated Until He Complies with Permanent InjunctionRead the Press Release
A federal judge in Colorado has ordered a tax return preparer to be held in custody until he closes his tax preparation business. At the conclusion of a hearing today, Senior District Court Judge John L. Kane for the District of Colorado found Gerardo Herrera in contempt for violating an earlier order that permanently barred him from the tax preparation business and immediately remanded him to the U.S. Marshal’s Service.
The United States filed a complaint on Sept. 1, 2015, alleging that for at least three years, Herrera and his firm had systematically and repeatedly submitted false income tax returns by reporting extra dependents, claiming bogus deductions, and using improper tactics to understate tax liability. On Jan. 7, Judge Kane issued an order of permanent injunction against Herrera prohibiting him from preparing tax returns.
The injunction also directed Herrera to provide a list of his customers to the United States, notify his customers of the injunction and file a sworn statement attesting that he had complied within 45 days of the injunction. The United States asked the court to hold Herrera in contempt for his failure to comply with these provisions and alleged that he continued to operate two tax preparation offices and/or assist others in operating the offices. After hearing testimony from two Internal Revenue Service (IRS) witnesses who had visited Herrera’s offices, Judge Kane found Herrera in contempt and ordered that he be held in custody until he purges his contempt by, among other things, notifying all his prior customers of the permanent injunction, providing a list of his customers to the United States, surrendering his Preparer Tax Identification Number (PTIN) and posting a copy of the injunction in his place of business.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division thanks the revenue agents and revenue officers for their assistance in this civil case.
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.
Wildlife Trafficking Task Force Releases First Annual Progress ReportRead the Press Release
The Presidential Task Force on Wildlife Trafficking released today, World Wildlife Day, its first Annual Progress Assessment. The report details accomplishments of the Task Force in implementing the U.S. National Strategy for Combating Wildlife Trafficking, as well as future efforts in the fight against this pernicious trade.
Last year was a turning point in the global effort to counter wildlife trafficking. Task Force agencies vigorously carried out the three main objectives of the National Strategy: strengthening enforcement, reducing demand and expanding international cooperation. One multi-year initiative known as “Operation Crash” has led to prosecutions against more than 30 individuals and businesses in U.S. courts, leading to prison terms as long as 70 months and forfeitures as high as $4.5 million.
“The Department of Justice is firmly committed to vigorously prosecuting illegal wildlife trafficking, one of my personal goals,” said Assistant Attorney General John C. Cruden of the Department of Justice’s Environment and Natural Resources Division. “Each illegally-traded horn or tusk represents not simply an object but a dead animal. We must take the profit out of wildlife trafficking to stop the criminals who are robbing from our children and grandchildren the great diversity of life on our planet.”
Task Force agencies last year trained more than 2,000 enforcement officials around the globe. In countering demand, Task Force campaigns in 2015 reached tens of millions of people in the United States and major markets throughout Asia to dissuade consumers from buying illegal wildlife or wildlife products. A major accomplishment in international cooperation was the September commitment by President Obama and Chinese President Xi Jinping to take timely and significant steps to halt the domestic commercial trade of ivory.
President Obama created the Task Force in 2013, bringing together 17 federal departments and offices in a whole-of-government approach to halt illegal activities that threaten the survival of elephants, rhinos and other iconic species. The Task Force is co-chaired by the Secretaries of State and the Interior and the Attorney General and it is charged with implementing the national strategy issued by President Obama in 2014 and detailed in an implementation plan in 2015.
For a copy of the 2015 Progress Assessment, click here.
Un Contrabandista De Inmigrantes Es Acusado De Secuestrar A Personas Que Buscaban Entrar En Los Estados Unidos Y De Defraudar A Sus Familias En Los Estados UnidosRead the Press Release
FRESNO, Calif. – Un gran jurado federal dictó una acusación formal de 10 cargos hoy contra Martín Carranza-Sánchez, 45 años de edad, y residente de México, acusándolo de secuestrar ciudadanos mexicanos que solicitaban asistencia para entrar en los Estados Unidos sin la documentación necesaria, y que además tenía planeado defraudar a las familias de las personas que buscaban entrar en el país, anunció el Procurador Federal Benjamín B. Wagner. Carranza-Sánchez está acusado de conspiración en la toma de rehenes, de conspiración para cometer el fraude de telegrama y fraude de telegrama, de comunicaciones interestatales para obtener un rescate o una recompensa, y de llevar un arma de fuego durante un crimen violento. Fue arrestado en la frontera el 21 de enero de 2016 y actualmente está bajo custodia federal en Fresno debido a una denuncia previa emitida en este caso.
En la acusación formal se alega que Carranza-Sánchez y otros individuos conspiraron para obtener retribuciones de personas que residen en los Estados Unidos a través de varios medios, incluso el de tomar como rehenes a inmigrantes indocumentados miembros de sus familias y amigos que estaban buscando entrar en los Estados Unidos, y de manifestar falsamente a los residentes americanos que sus parientes habían sido pasados de contrabando a los Estados Unidos. En cinco instancias entre las fechas de diciembre de 2010 y noviembre de 2015, e implicando a seis víctimas, la acusación formal alega que Carranza-Sánchez sostuvo de rehén a los inmigrantes indocumentados en México, que les amenazó de hacerles daño y que en alguna ocasión les hizo daño. Él, presuntamente, les dijo a los residentes americanos que si no le pagaban inmediatamente, les haría daño o mataría a los inmigrantes. Además se le acusa de fraude a Carranza-Sánchez por manifestar falsamente a los residentes americanos que liberaría a los inmigrantes indocumentados y los entregaría en los Estados Unidos después de recibir el pago por parte de los residentes americanos.
“El secuestro y el fraude son crímenes federales serios a pesar del estado legal de las víctimas en este país,” declaró el Procurador Federal Wagner. “El abuso y la explotación de inmigrantes indocumentados es inaceptable y continuaremos a investigar y a procesar a aquellos que se inmiscuyan en tales conductas criminales.”
Este caso fue el producto de una investigación por parte de los Servicios del Orden Público de Inmigración y Aduanas de los Estados Unidos (ICE) y de las Investigaciones para la Seguridad Nacional (HSI). La Procuradora Federal Auxiliar Ángela L. Scott está procesando el caso. La investigación sigue pendiente.
En la actualidad, Carranza-Sánchez está siendo detenido en el Distrito Este de California. Si es condenado, Carranza-Sánchez se enfrenta a una pena máxima establecida por la ley de cadena perpetua. No obstante, cualquier sentencia sería determinada a la discreción del tribunal después de la consideración de cualquier factor establecido por la ley aplicable y de las Normas Federales para Sentenciar que toman en cuenta un número de variables. Los cargos son solo alegaciones, el demandado es presunto inocente hasta y a menos que sea comprobado culpable sin duda razonable.
District Court Enters Permanent Injunction Against Virginia-Based Sprout Producer and its Owner to Prevent Distribution of Adulterated FoodRead the Press Release
The U.S. District Court for the Eastern District of Virginia entered a consent decree of permanent injunction against Henry’s Farm Inc., of Woodford, Virginia, and its owner, Soo C. Park, to prevent the distribution of adulterated food, the Department of Justice announced today. Henry’s Farm manufactured and distributed a variety of soybean sprouts and repackaged and distributed mungbean sprouts.
The department filed a complaint in the U.S. District Court for the Eastern District of Virginia at the request of the U.S. Food and Drug Administration (FDA), alleging that the company and its owner have a history of processing food products under insanitary conditions.
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction. Under the consent decree, defendants cannot process or distribute food until they report to FDA the actions they have taken to bring their operations into compliance with the federal Food, Drug and Cosmetic Act (FDCA), including cleaning and sanitizing the facility and equipment therein, and FDA notifies the defendants that they appear to be in compliance with specific remedial actions set forth in the decree and the FDCA.
“Insanitary conditions at food processing facilities can pose well-known risks to consumers, but such risks can be effectively mitigated if companies handling food take proper precautions,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to work aggressively with the FDA to combat and deter conduct that leads to the distribution of adulterated food to consumers.”
“It’s the FDA’s responsibility to protect consumers from potentially harmful food entering the food supply,” said FDA’s Associate Commissioner Melinda K. Plaisier for regulatory affairs. “When a company continues to produce food that presents a risk for consumers, the FDA will take whatever steps necessary to protect public health.”
According to the complaint, in December 2014, FDA investigators inspected Henry’s Farm’s manufacturing facility at 5500 Fair Oaks Lane in Woodford and found numerous insanitary conditions, including: standing water in the sprout production room; sprout debris at various places along the packaging line and floor; three dead insects and a live spider on packing material in the processing room and three dead insects in the seed storage area.
As alleged in the complaint, FDA investigators discovered the presence of L. mono at the facility, including samples taken from food contact surfaces and a sample of finished sprout product collected in May 2012. L. mono is food-borne bacteria that can cause serious illness or even death in consumers. Eating food contaminated with L. mono poses the greatest risk to populations with impaired or weaker immune systems, including pregnant women, infants and the elderly.
According to the complaint, the FDA inspected Henry’s Farm’s facility three times before the December 2014 inspection — in June 2014, December 2013 and May 2012. As alleged in the complaint, in each prior inspection, FDA investigators found inadequate sanitation practices including: standing water in sprout production areas; sprout debris on food contact surfaces; failure to maintain cleaning logs; rodent activity in the sprout production area and failure to use any antimicrobial treatment to reduce the hazard of pathogens that may be present on seed for sprouting. As alleged in the complaint, FDA repeatedly warned defendants that further action could be taken if the insanitary conditions persisted.
The government is represented by Trial Attorney Arturo DeCastro of the Civil Division’s Consumer Protection Branch, with the assistance of Associate Chief Counsel Tara Boland of the Department of Health and Human Services’ Office of General Counsel – Food and Drug Division.
Henry's Farm Consent Decree of Permanent Injunction
Department of Justice Announces New Attorney General’s Award for Distinguished Service in Community PolicingRead the Press Release
Attorney General Loretta E. Lynch announced a new Award for Distinguished Service in Community Policing at a roundtable during her Community Policing Tour stop in Portland, Oregon.
The Attorney General’s Award recognizes individual state, local or tribal sworn police officers and deputies for exceptional efforts in community policing. The winning officer(s) or deputy and/or deputies will have demonstrated active engagement with the community in one of three areas: criminal investigations, field operations or innovations in community policing.
“I have made building trust between law enforcement officers and the communities we serve a top priority for the Department of Justice,” said Attorney General Lynch. “Honoring the outstanding work of our rank and file is a significant part of that effort. This award will represent and uplift the often unsung work being done every day by law enforcement officers throughout the nation.”
Within each category an award will be given to law enforcement agencies serving small, medium and large jurisdictions including:
- Agencies serving populations fewer than 50,000
- Agencies serving populations 50,000 to 250,000
- Agencies serving populations over 250,000
By distinguishing and rewarding these efforts, the Department of Justice strives to promote and sustain its national commitment to community policing and to advance policing practices that are fair, impartial and procedurally just.
With the Attorney General’s Award for Distinguished Service in Community Policing, the Office of the Attorney General recognizes that within and across the various law enforcement agencies that make up the more than 18,000 units across the country, individual officers can have a transformational impact on their agencies and the communities they serve by embracing the philosophy of community policing and incorporating it into their daily work.
The application for nominees will be posted next week at https://www.justice.gov/ag/community-policing-award.
Delaware Cheese Company Pleads Guilty to Food Adulteration ChargeRead the Press Release
U.S. District Court Also Issues Permanent Injunction Against Company and Two Principals
Roos Foods Inc., a Delaware company, pleaded guilty to a misdemeanor violation of the Federal Food, Drug and Cosmetic Act (FDCA), in the U.S. District Court for the District of Delaware, the Department of Justice announced today. U.S. Magistrate Judge Sherry R. Fallon accepted the company’s guilty plea and sentenced Roos Foods to pay a fine of $100,000.
In addition to the company’s guilty plea, Roos, and its principals, Ana A. Roos and Virginia Mejia, agreed to a consent decree of permanent injunction. The consent decree of permanent injunction was entered by U.S. District Court Judge Richard G. Andrews on Jan. 26.
Roos Foods distributed several varieties of ready-to-eat cheese, including ricotta, queso fresco and fresh cheese curd and sold and distributed its products to wholesale customers in Maryland, New Jersey, Virginia and Washington D.C., according to the criminal information filed on Jan. 22. A civil complaint along with the proposed consent decree was also filed on that same date. The criminal charge and civil complaint allege that Roos distributed cheese connected to a 2014 outbreak of Listeria monocytogenes (L. mono).
“The Department of Justice will use all of the tools available to us – criminal and civil – to ensure that the food we buy is free from dangerous bacteria and is safe to eat,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to work aggressively with the Food and Drug Administration (FDA) to combat and deter conduct leading to the distribution of adulterated food to consumers.”
“The criminal and civil cases demonstrate the need for the government to protect consumers from adulterated food,” said U.S. Attorney Charles M. Oberly III for the District of Delaware. “Manufacturers of our nation’s food supplies, such as Roos, must comply with the law and when violators are found they should expect to be prosecuted and, if necessary, put out of business.”
The criminal information alleged that on Feb. 21, 2014, the Centers for Disease Control and Prevention (CDC) reported that a total of eight people (five adults and three newborns) in Maryland and California were infected with L. mono. According to the CDC, several of the Maryland patients reported having eaten soft or semi-soft cheeses in the month before becoming ill.
L. mono is the bacterium that causes the disease listeriosis. Listeriosis is most commonly contracted by eating food contaminated with L. mono. Listeriosis can be serious, even fatal, for high-risk groups such as unborn babies, newborns and those with impaired immune systems.
Unlike many other foodborne microbes, L. mono bacteria are capable of adapting and growing even at refrigerator temperatures. Thus, the presence of L. mono in ready-to-eat foods is a particularly significant public health risk.
As alleged in the information, following a report that L. mono had been isolated from cheese manufactured by Roos Foods, the FDA inspected the firm’s Kenton, Delaware facility and established that ready-to-eat cheese products were adulterated in that they had been prepared, packed or held under insanitary conditions whereby they may have become contaminated with filth or rendered injurious to health. As alleged, FDA found numerous failures to implement effective monitoring and sanitation controls in accordance with current Good Manufacturing Practices.
The information alleged that the FDA inspection revealed significant sanitation deficiencies, such as widespread roof leaks in the manufacturing area, including over open manufacturing equipment; rust flakes on the manufacturing equipment from corroded roof trusses and metal roofing; un-cleanable surfaces on walls, floors and ceilings and product residue on equipment that had purportedly been cleaned. In addition, as alleged in the information, FDA collected environmental samples and found L. mono on 12 surfaces in the facility.
On March 11, 2014, the FDA suspended the food facility registration of Roos Foods after determining there was a reasonable probability that food manufactured, processed, packed, or held by Roos Foods would cause serious adverse health consequences or death to humans. A company without a food facility registration cannot distribute any food products. Roos Foods has not reopened.
“Consumers rely on the FDA to help ensure that their food is safe and wholesome,” said Deputy Commissioner Howard Sklamberg of FDA’s Global Regulatory Operations and Policy. “When companies put themselves above the law and produce food that puts the public's health at risk, we will see that they are brought to justice.”
The civil complaint alleged that Roos Foods and the two individual defendants violated the FDCA by, among other things, introducing or delivering for introduction into interstate commerce articles of food that were adulterated in that the food was prepared, packed or held under insanitary conditions whereby it may have become contaminated with filth or rendered injurious to health.
As part of the consent decree, defendants represented to the court that, at the time of entry of the consent decree, they were not engaged in receiving, preparing, processing, packing, holding, or distributing any type of food at or from any location. The permanent injunction requires the defendants to notify the FDA if they intend to resume such operations. In addition, the defendants must take a series of safety related steps under the permanent injunction before they can resume such operations.
Principal Deputy Assistant Attorney General Mizer and U.S. Attorney Oberly commended the investigative efforts of the FDA’s Office of Criminal Investigation. The criminal case is being prosecuted by Trial Attorney Heide L. Herrmann of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorneys Jennifer Welsh and Edmond Falgowski of the District of Delaware. They were assisted by Associate Chief Counsel Laura Pawloski of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services.
The government is represented in the civil case by Trial Attorney Megan Englehart of the Justice Department’s Consumer Protection Branch and Assistant U.S. Attorney Patricia Hannigan of the District of Delaware, with the assistance of Associate Chief Counsel Shannon M. Singleton of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of Delaware, visit its website at https://www.justice.gov/usao-de.
Chicago-Area Resident Indicted in Stolen Identity Refund Fraud Scheme Involving Victims from the U.S. Air ForceRead the Press Release
A federal grand jury sitting in Chicago, Illinois returned an indictment on Feb. 11 against a resident of a Chicago suburb, charging him with 10 counts of wire fraud, 10 counts of aggravated identity theft and one count of access device fraud, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Zachary T. Fardon of the Northern District of Illinois. The defendant had his initial court appearance earlier today.
Jonathan Herring aka Byron Taylor, Marco Brown and Quang Dang of Harvey, Illinois, participated in a stolen identity refund fraud scheme, according to allegations in the indictment. Herring obtained the means of identification of actual individuals, including their names and social security numbers and used this information to prepare false tax returns. Herring is alleged to have obtained stolen identities of members of the U.S. Air Force, among others. Herring used the stolen identities to electronically file false income tax returns seeking tax refunds with the Internal Revenue Service (IRS). Herring is alleged to have received the fraudulently obtained tax refunds in the form of direct deposits into various bank accounts that he controlled.
If convicted, Herring faces a statutory maximum sentence of 20 years in prison for each count of wire fraud, 10 years in prison for one count of access device fraud and a mandatory sentence of two years in prison for aggravated identity theft, which will run consecutive to any other prison term he receives. Herring also faces substantial monetary penalties, supervised release, and restitution.
An indictment merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo commended special agents of IRS Criminal Investigation, who investigated the case and Trial Attorneys Michael C. Boteler and Timothy M. Russo of the Tax Division, who are prosecuting this case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Former Owner of Florida Home Health Care Companies Agrees to Pay $1.75 Million to Resolve Kickback and False Claims Act AllegationsRead the Press Release
Mark T. Conklin, the former owner, operator and sole shareholder of Recovery Home Care Inc. and Recovery Home Care Services Inc. (collectively RHC) has agreed to pay $1.75 million to resolve a lawsuit alleging that he violated the False Claims Act by causing RHC to pay illegal kickbacks to doctors who agreed to refer Medicare patients to RHC for home health care services, the Department of Justice announced today. Conklin sold the RHC companies to National Home Care Holdings LLC, on Oct. 9, 2012.
“Individuals who seek to increase their profits by providing physicians with illegal inducements will be held personally accountable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to identify, investigate and, where appropriate, sue individuals and corporations that misuse funds meant to provide critical medical services for beneficiaries of federal health care programs.”
From 2009 through 2012, Conklin spearheaded a scheme whereby RHC, headquartered in West Palm Beach, Florida, allegedly paid dozens of physicians thousands of dollars per month to serve as sham medical directors who supposedly conducted quality reviews of RHC patient charts. According to the government’s lawsuit, the physicians in many instances performed little or no work, but nevertheless received thousands of dollars from RHC. The government’s complaint contended that these payments were, in fact, kickbacks intended to induce the physicians to refer their patients to RHC, in violation of the Anti-Kickback Statute and the Stark Law.
These laws are intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare. The Stark Law forbids a home health care provider from billing Medicare for certain services referred by physicians who have a financial relationship with the entity. A person who knowingly submits, or causes the submission, to Medicare of claims that violate either the Anti-Kickback Statute or the Stark Law is also liable for treble damages and penalties under the False Claims Act.
“Inducements of the type at issue in this case are designed to improperly influence a physician’s independent medical judgment,” said U.S. Attorney A. Lee Bentley, III for the Middle District of Florida. “This lawsuit and today’s settlement evidence our office’s ongoing efforts to safeguard federal health care program beneficiaries from the effects of such illegal conduct.”
“Home health agency owners who seek to boost profits by paying kickbacks to physicians in exchange for patient referrals will instead pay for their improper conduct at the settlement table,” said Special Agent in Charge Shimon R. Richmond of U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “We will continue to crack down on such illegal, wasteful kickback schemes, which can undermine impartial medical judgment and corrode the public’s trust in the health care system.”
The United States previously reached a settlement with RHC’s purchaser, National Home Care Holdings, on March 9, 2015, for $1.1 million.
The settlement with Conklin, which is subject to approval by the Bankruptcy Court for the Southern District of Florida, concludes a lawsuit originally filed by Gregory Simony, a former RHC employee, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The act also allows the government to intervene and take over the action, as it did in part in this case. Simony will receive up to $315,000 of the proceeds of the Conklin settlement.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $27.4 billion through False Claims Act cases, with more than $17.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorneys’ Offices for the Middle District of Florida and the Southern District of Florida and the HHS-OIG.
The case is captioned United States ex rel. Simony v. Recovery Home Care, et al., Case No. 8-12-cv-2495-T-36TBM (M.D. Fla.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
Principal of Dietary Ingredient Companies Pleads Guilty to Multi-Million Dollar Fraud and Meth Precursor SchemeRead the Press Release
The principal of a series of dietary ingredient companies in New Jersey pleaded guilty today in connection with the sale of methamphetamine precursor chemicals, a separate scheme to defraud purchasers of dietary supplements and money laundering, the Department of Justice announced.
“The Department of Justice has increased its enforcement efforts against unlawful dietary supplements in recent years,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This case underlines the need for both consumers and the government to be vigilant in investigating what the American public is ingesting in the guise of weight loss or health enhancement supplements.”
David Romeo, 46, of Washington Township, New Jersey, pleaded guilty to a four-count Information charging him with conspiracy to distribute three kilograms or more of meth precursors, money laundering, mail fraud and introduction of misbranded food into interstate commerce with intent to defraud or mislead. As part of his plea agreement, Romeo has agreed to forfeit more than $1.2 million in money derived from his crimes.
In pleading guilty, Romeo admitted that he was a principal of Global Nutrients, Stella Labs and Nutraceuticals, all of which were New Jersey-based entities engaged in the sale of dietary ingredients intended for use in dietary supplements sold to consumers. Starting at least as early as 2003, Romeo directed his employees to use cheaper substitutes in place of the dietary ingredients that had actually been ordered by customers, most of whom were companies engaged in production of dietary supplements. These substitutes were sent in many instances without the customer’s consent or knowledge. As alleged in charging documents, Romeo and his associates referred to the substitution of cheaper ingredients as “SOP,” meaning “standard operating procedure.”
Romeo admitted that, as part of the scheme, his businesses purported to sell a weight-loss ingredient called “hoodia.” Stella Labs and Nutraceuticals represented to consumers that they were selling hoodia that had been sourced from a rare South African plant, Hoodia gordonii. As alleged in the charging document, the substance being sold by Romeo’s business entities was manufactured at a facility in China. As part of his plea agreement, Romeo agreed that the fraud scheme caused a loss of more than $7 million.
Special agents of the Food & Drug Administration (FDA)’s Office of Criminal Investigations investigated the false supplement allegations of the case.
“Manufacturing and selling misbranded dietary supplements puts American consumers at risk,” said Director George M. Karavetsos of FDA Office of Criminal Investigations. “Our office is fully committed to working with the Department of Justice to protect consumers from public health risks and fraud.”
The mail fraud charge carries a statutory maximum sentence of 20 years in prison and a maximum $250,000 fine, or twice the gain or loss caused by the offense. The misbranding charge carries a statutory maximum sentence of three years in prison. Sentencing is scheduled for May 18, 2016.
Romeo and his companies were the subject of a prior action by the Federal Trade Commission (FTC) seeking a court order to prevent the sale of bogus dietary ingredients. The case was resolved by a court order barring Romeo from making weight loss claims about supplements he sold. FTC v. Stella Labs, 09-cv-1262 (D.N.J.).
Acting Principal Deputy Assistant Attorney General Mizer thanked the FDA’s Office of Criminal Investigations and Office of Chief Counsel, the Drug Enforcement Agency and the U.S. Postal Inspection Service for their investigative support of the case. The case is being prosecuted by Trial Attorney Patrick Runkle of the Civil Division’s Consumer Protection Branch, Paul Laymon of the Justice Department’s Narcotics and Dangerous Drugs Section and Assistant U.S. Attorney Zach Intrater of the U.S. Attorney’s Office for the District of New Jersey.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the District of New Jersey, visit its website at http://www.justice.gov/usao-nj.
New Orleans, St. Louis, and Milwaukee Join Justice Department's Violence Reduction NetworkRead the Press Release
Deputy Attorney General Sally Q. Yates and Assistant Attorney General Karol V. Mason of the Office of Justice Programs (OJP) today announced that New Orleans, Louisiana, St. Louis, Missouri, and Milwaukee, Wisconsin, will join 10 existing sites which have adopted crime-fighting strategies as part of the Violence Reduction Network (VRN). The initiative is a comprehensive approach to reducing violent crime that complements the Attorney General’s Smart on Crime Initiative and leverages existing Justice Department resources in communities around the country.
“It has been only a year-and-a-half since we launched the first Violence Reduction Network,” said Deputy Attorney General Yates. “In just that short period of time, the partnerships we have built through VRN have helped to reduce crime rates. These results could only have happened through the kind of creative collaboration promoted through the VRN.”
Today’s announcement was made before an audience of U.S. Attorneys, police chiefs, local leaders from the new and existing VRN sites and department officials. Through VRN, the Justice Department enlists tactical and operational expertise available from the Bureau of Justice Assistance, the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the United States Marshals Service, the Drug Enforcement Administration, the Executive Office of the United States Attorneys, the Office of Community Oriented Policing Services and the Office on Violence Against Women.
In addition to the announcement about the three new VRN sites, the Deputy Attorney General also announced the Police-Prosecutor Partnership, which is soliciting proposals to encourage out-of-the-box collaborations between law enforcement agencies and prosecutors’ offices. This grant solicitation encourages proposals that build on evidence-based crime-fighting models – focusing on reducing violence, sharing intelligence, and engaging the community –by merging and maximizing the expertise of law enforcement officers and prosecutors. The new solicitation is posted at www.bja.gov/funding.aspx.
In 2014, VRN was launched in Camden, Chicago, Detroit, Wilmington, and Oakland and Richmond, California. In September 2015, VRN was expanded to Compton, California; Flint, Michigan; Little Rock and West Memphis, Arkansas; and Newark, New Jersey.
VRN’s core components include customized training and technical assistance; a strategic site liaison to guide the coordination of Justice Department resources; tools to enhance information sharing, including peer-to-peer exchanges; community practice collaboration among existing sites and an annual summit in September.
Medical Equipment Company Will Pay $646 Million for Making Illegal Payments to Doctors and Hospitals in United States and Latin AmericaRead the Press Release
Olympus Corp. of the Americas, Nation’s Largest Distributor of Endoscopes, Also Agrees to Reforms and Subsidiary Admits to Foreign Bribery
The United States’ largest distributor of endoscopes and related equipment will pay $623.2 million to resolve criminal charges and civil claims relating to a scheme to pay kickbacks to doctors and hospitals, U.S. Attorney Paul J. Fishman of the District of New Jersey and Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division announced today. U.S. Attorney Fishman and Principal Deputy Assistant Attorney General David Bitkower of the Justice Department’s Criminal Division also announced that a subsidiary of the distributor will pay $22.8 million to resolve criminal charges relating to the Foreign Corrupt Practices Act (FCPA) in Latin America.
Anti-Kickback Statute Violations
Olympus Corp. of the Americas (OCA) was charged in a criminal complaint filed today in Newark, New Jersey, federal court with conspiracy to violate the Anti-Kickback Statute (AKS), which prohibits payments to induce purchases paid for by federal health care programs. OCA has entered into a three-year deferred prosecution agreement (DPA) that will allow it to avoid conviction if it complies with the reform and compliance requirements outlined in the agreement.
“For years, Olympus Corporation of the Americas and Olympus Latin America dropped the compliance ball and failed to have in place policies and practices that would have prevented the substantial kickbacks and bribes they paid,” said U.S. Attorney Fishman. “It is appropriate that they be punished for that. At the same time, the deferred prosecution agreement takes into account the companies’ cooperation and commitment to fully functional corporate compliance.”
As a result of the conduct outlined in the government’s criminal complaint and DPA, OCA has agreed to pay a $312.4 million criminal penalty and an additional $310.8 million to settle civil claims under the federal and various state False Claims Acts, the largest total amount paid in U.S. history for violations involving the AKS by a medical device company.
“The Department of Justice has longstanding concerns about improper financial relationships between medical device manufacturers and the health care providers who prescribe or use their products,” said Principal Deputy Assistant Attorney General Mizer. “Such relationships can improperly influence a provider’s judgment about a patient’s health care needs, result in the use of inferior or overpriced equipment, and drive up health care costs for everybody. In addition to yielding a substantial recovery for taxpayers, this settlement should send a clear message that we will not tolerate these types of abusive arrangements, and the pernicious effects they can have on our health care system.”
In a separate DPA, Olympus Latin America Inc. (OLA), a subsidiary of OCA, will pay a $22.8 million criminal penalty for violations of the FCPA.
The criminal complaint against OCA, which OCA agrees is true, charges that OCA won new business and rewarded sales by giving doctors and hospitals kickbacks, including consulting payments, foreign travel, lavish meals, millions of dollars in grants and free endoscopes. For example:
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OCA gave a hospital a $5,000 grant to facilitate a $750,000 sale;
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OCA held up a $50,000 research grant until a second hospital signed a deal to purchase Olympus equipment;
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OCA paid for a trip for three doctors to travel to Japan in 2007 as a quid pro quo for their hospital’s decision to switch from a competitor to Olympus; and
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a doctor with a major role in a New York medical center’s buying decisions received free use of $400,000 in equipment for his private practice.
These and other kickbacks helped OCA obtain more than $600 million in sales and realize gross profits of more than $230 million.
The criminal complaint alleges that the improper payments happened while Olympus lacked training and compliance programs. Unlike other medical and surgical products companies, Olympus did not create the position of compliance officer until 2009 and did not hire an experienced compliance professional until August 2010.
The DPA requires OCA to adopt several compliance measures to remedy its problems:
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OCA must enhance its compliance training and maintain an effective compliance program;
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OCA must maintain a confidential hotline and website for OCA employees and customers to report wrongdoing;
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OCA’s chief executive officer and board of directors must certify annually that the program is effective; and
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OCA must adopt an executive financial recoupment program requiring executives who engage in misconduct or fail to promote compliance to forfeit up to three years of performance pay.
Larry Mackey, a former federal prosecutor best known for trying the Oklahoma City bombing cases, has been selected as an independent monitor to evaluate and oversee Olympus’ compliance with the DPA. He was selected by U.S. Attorney Fishman under department guidelines and approved by the Deputy Attorney General. The DPA and monitor will remain in place for three years and can be extended for another two years if Olympus violates the DPA.
In the civil settlement, Olympus agrees to pay $310.8 million to the federal government and the states to resolve claims that Olympus’s payment of kickbacks caused false claims to be submitted to federal health care programs Medicare, Medicaid and TRICARE, and thus violated not only the AKS but also the federal and various state False Claims Acts. The federal share of the civil settlement is $267,288,323, and Olympus will pay $43,512,053 million to participating states that contributed to the falsely claimed Medicaid payments at issue.
The civil settlement resolves a lawsuit filed by John Slowik, the former chief compliance officer of OCA, in the District of New Jersey, under the federal and various state False Claims Acts. The acts permit whistleblowers to file suit for false claims against the government entities and to share in any recovery. Mr. Slowik will receive $44,102, 573 million from the federal share and $7 million from the state share of the civil settlement amount.
FCPA Violations
In a separate criminal complaint filed today in Newark federal court, OCA’s Miami-based subsidiary OLA was charged with FCPA violations in connection with improper payments to health officials in Central and South America, and OLA entered into a separate three-year DPA. According to court documents, from 2006 until August 2011, OLA implemented a plan to increase medical equipment sales in Central and South America by providing payments to health care practitioners at government-owned health care facilities. These payments included cash, money transfers, personal grants, personal travel and free or heavily discounted equipment. The primary method to deliver these illicit benefits was through “training centers,” nominally set up to educate and train doctors, but which OLA used to provide benefits to pre-selected practitioners. OLA and its conspirators paid nearly $3 million to practitioners to induce the purchase of Olympus products and recognized more than $7.5 million in profits as a result.
“Olympus Latin America admitted to bribing publicly employed health care providers and hospital officials across Central and South America so that it could illegally win business and sell its products,” said Principal Deputy Assistant Attorney General Bitkower. “OLA’s illegal tactics in Central and South America mirrored Olympus’s conduct in the United States. The FCPA resolution announced today demonstrates the department’s commitment to ensuring the integrity of the health-care equipment market, regardless whether the illegal bribes occur in the U.S. or abroad.”
OLA entered into the DPA with the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the District of New Jersey. The agreement requires OLA to pay a criminal penalty of $22.8 million, retain the same compliance monitor as for OLA (Mr. Mackey) for a period of three years and implement a number of compliance measures. The department reached this resolution based on a number of factors, including that OLA did not voluntarily disclose the misconduct in a timely manner, but OLA did receive credit of a 20 percent reduction on its penalty for its cooperation, including its extensive internal investigation, translation of numerous foreign language documents and collecting, analyzing and organizing voluminous evidence.
Corporate Integrity Agreement
In addition to the criminal and civil resolutions, Olympus executed a corporate integrity agreement (CIA) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG). The CIA details the compliance program OCA must maintain, which must include:
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compliance responsibilities for OCA management and the board of directors;
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a health care compliance code of conduct that includes certain standards;
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training and education that includes specified standards;
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requirements for consulting arrangements, grants and charitable contributions, management of field assets and review of travel expenses;
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risk assessment and mitigation process; and
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review procedures for testing the compliance program.
“Olympus Corp. of the Americas’ and its subsidiaries’ greed-fueled kickback scheme threatened the impartiality of medical decision-making and the financial integrity of Medicare and Medicaid,” said Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Working with our law enforcement partners, we remain vigilant and committed to protecting beneficiaries and taxpayers from those seeking to unlawfully enrich themselves.”
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The U.S. Attorney’s Office of the District of New Jersey prosecuted the criminal case under the AKS against Olympus and, with the Civil Division’s Commercial Litigation Branch, reached the civil settlement. The U.S. Attorney’s Office of the District of New Jersey and the Criminal Division’s Fraud Section prosecuted the criminal case under the FCPA against OLA. The HHS Office of Counsel to the Inspector General, the FBI, HHS-OIG Office of Criminal Investigations and the National Association of Medicaid Fraud Control Units provided assistance.
The FBI’s Newark Field Office, HHS-OIG and the FBI Allentown, Pennsylvania, Field Office investigated the case.
Assistant U.S. Attorneys R. David Walk Jr. and Deborah J. Gannett of the District of New Jersey’s Health Care and Government Fraud Unit in Newark represented the government in the AKS criminal prosecution. Assistant U.S. Attorney David E. Dauenheimer of the District of New Jersey and Senior Trial Counsel David T. Cohen of the Civil Division’s Commercial Litigation Branch represented the government in the prosecution of the civil case. Mary Riordan and Nicole Caucci of the HHS-OIG negotiated the CIA.
Fraud Section Trial Attorney James P. McDonald and Assistant U.S. Attorneys Walk and Gannett prosecuted the FCPA case. The Criminal Division’s Office of International Affairs provided significant assistance in this matter.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office of the District of New Jersey, including creating a stand-alone Health Care and Government Fraud Unit, which handles both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $1.29 billion in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $27.4 billion through False Claims Act cases, with more than $17.4 billion of that amount recovered in cases involving fraud against federal health care programs.
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Former CEO Indicted for Masterminding Conspiracy Not to Compete for Oil and Natural Gas LeasesRead the Press Release
Aubrey K. McClendon has been charged by a federal grand jury with conspiring to rig bids for the purchase of oil and natural gas leases in northwest Oklahoma, the Department of Justice announced today.
The indictment alleges that McClendon orchestrated a conspiracy between two large oil and gas companies to not bid against each other for the purchase of certain oil and natural gas leases in northwest Oklahoma. During this conspiracy, which ran from December 2007 to March 2012, the conspirators would decide ahead of time who would win the leases. The winning bidder would then allocate an interest in the leases to the other company. McClendon instructed his subordinates to execute the conspiratorial agreement, which included, among other things, withdrawing bids for certain leases and agreeing on the allocation of interests in the leases between the conspiring companies.
“While serving as CEO of a major oil and gas company, the defendant formed and led a conspiracy to suppress prices paid to leaseholders in northwest Oklahoma,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “His actions put company profits ahead of the interests of leaseholders entitled to competitive bids for oil and gas rights on their land. Executives who abuse their positions as leaders of major corporations to organize criminal activity must be held accountable for their actions.”
“The FBI is committed to investigating individuals who engage in corrupt criminal conduct,” said Special Agent in Charge Scott L. Cruse of the FBI’s Oklahoma City Division. “We will continue to work with the DOJ Antitrust Division to target those who devise schemes which create an unfair competitive advantage by way of bid rigging or other illegal means.”
The indictment, filed today in the U.S. District Court for the Western District of Oklahoma, alleges that McClendon’s conspiracy affected certain bids for leasehold interests and producing properties in northwest Oklahoma. Leasehold interests give a lessee the right to develop the land and to extract oil and natural gas from the land for a time period typically lasting three to five years. Producing properties are tracts of land where the existing lessee has drilled wells on the land and the wells are producing a stream of oil and/or natural gas. Purchasing a producing property includes not just the underlying leasehold interests to drill on the land, but also the producing wells and infrastructure already on the land.
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.
The charges contained in the indictment are allegations and not evidence of guilt. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This is the first case resulting from an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the oil and natural gas industry. This investigation is being conducted by the Antitrust Division’s Chicago Office and the FBI’s Oklahoma City Field Office, with assistance from the U.S. Attorney’s Office of the Western District of Oklahoma. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Chicago Office at 312-984-7200, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Oklahoma City Field Office at 405-290-7770.
Brief Filed in United States v. State of TexasRead the Press Release
PDF version of the brief recently filed in United States v. State of Texas.
Restitution Ordered in Jackson, Mississippi, Hate Crime Case Involving Death of James Craig AndersonRead the Press Release
The Justice Department announced today that U.S. District Judge Carlton Reeves of the Southern District of Mississippi ordered restitution in the amount of $840,000 to be paid the estate of James Craig Anderson in the cases of defendants Deryl Paul Dedmon, 23; John Aaron Rice, 23; Dylan Wade Butler, 24; and William Kirk Montgomery, 26.
In 2012, Dedmon, Rice, Butler and Montgomery were convicted of violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act for their participation in the conspiracy and racially-motivated attack on Anderson that resulted in his death. The assault of Anderson was the last in a series of violent attacks by the defendants and their six co-conspirators, in which they physically assaulted vulnerable African-Americans in and around Jackson, Mississippi. The defendants and six other co-conspirators specifically targeted African Americans they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less resistant and less likely to report an assault.
On June 26, 2011, Dedmon, Rice, Butler, Montgomery and three of their co-conspirators targeted Anderson, who was alone and defenseless in the parking lot of the Metro Inn Motel in Jackson. Rice and Dedmon beat Anderson, and then Dedmon used his Ford F-250 truck to fatally strike Anderson.
Judge Reeves previously sentenced Dedmon to serve 50 years in prison, Montgomery to serve over 19 years in prison, Rice to serve over 18 years in prison and Butler to serve seven years in prison. The amount of restitution imposed accounts for the estimated lost future wages that Anderson would have accumulated and used to support his family had he not been killed in 2011.
“When these defendants committed this brutal hate crime they not only took a man’s life, they also hurt a family,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “Although no amount of money will ever be able to account for the true value of James Craig Anderson’s life, we hope that this restitution will help ease the burden on his family.”
This case was investigated by the FBI’s Jackson Division. It is being prosecuted by Trial Attorney Sheldon L. Beer and Acting Chief Paige Fitzgerald of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Glenda R. Haynes of the Southern District of Mississippi.
Lockheed Martin Agrees to Pay $5 Million to Settle Alleged Violations of the False Claims Act and the Resource Conservation and Recovery ActRead the Press Release
Lockheed Martin Corporation and subsidiaries Lockheed Martin Energy Systems and Lockheed Martin Utility Services (collectively, Lockheed Martin) have agreed to pay the United States $5 million to resolve allegations that they violated the Resource Conservation and Recovery Act (RCRA) and, in misrepresenting their compliance with RCRA to the Department of Energy (DOE), knowingly submitted false claims for payment under their contracts with DOE to operate the Paducah Gaseous Diffusion Plant in Paducah, Kentucky, the Justice Department announced today. Headquartered in Bethesda, Maryland, Lockheed Martin is a global security, aerospace, and information technology company that provides energy, environmental, and other services to government and commercial customers.
“We depend on the private sector to provide services critical to the government’s energy needs and to provide those services by means that are environmentally sound,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “As the settlement announced today demonstrates, the department will vigorously pursue all appropriate remedies to ensure that those who provide these vital services do so honestly and safely and in accordance with the law.”
“This settlement reflects our commitment to pursuing companies that violate the hazardous waste laws, and to securing a fair recovery of civil penalties for the people of the United States,” said Assistant Attorney General John Cruden, head of the Justice Department’s Environment and Natural Resources Division. “The $1 million in RCRA civil penalties that the defendants are paying under this settlement is significant and is appropriate for the violations the United States has alleged.”
The government’s lawsuit alleged that Lockheed Martin violated RCRA, the statute that establishes how hazardous wastes must be managed, by failing to identify and report hazardous waste produced and stored at the facility, and failing to properly handle and dispose of the waste. The government further alleged that this conduct resulted in false claims for payment under Lockheed Martin’s contracts with the Department of Energy.
Of the $5 million settlement amount, Lockheed Martin will pay $4 million to resolve the government’s False Claims Act allegations and its subsidiaries (Lockheed Martin Energy Systems and Lockheed Martin Utility Services) will each pay $500,000 – $1 million total – in RCRA civil penalties.
“Government contractors are required to follow the same federal laws that apply to everyone else,” said U.S. Attorney John E. Kuhn, Jr. for the Western District of Kentucky. “These companies do not get a pass on compliance, especially when their responsibilities include managing and disposing of hazardous waste. Today’s settlement should serve as a reminder that my office and the Department of Justice will pursue all credible allegations of false claims and of environmental regulatory violations.”
“Managing hazardous waste is important, and this case makes clear EPA’s commitment to upholding laws that protect communities where waste is disposed,” said EPA Regional Administrator Heather McTeer Toney of EPA Region 4, the Southeast region.
Lockheed Martin operated the Paducah Gaseous Diffusion Plant under contracts with the Department of Energy and a government corporation, the U.S. Enrichment Corporation, from 1984 to 1999. During that time, Lockheed Martin was responsible for the facility’s uranium enrichment operations. Enriching uranium increases the proportion of uranium atoms that can be used to produce nuclear fuel for weapons and civilian energy production. As the name of the plant suggests, the process used was called “gaseous diffusion.”
In addition to uranium enrichment, Lockheed Martin was responsible for environmental restoration, waste management, and custodial care at the site, which occupies 3,500 acres in McCracken County, Kentucky. Uranium enrichment operations ceased at the plant in 2013. The government is working with other contractors to remediate contamination at and near the site consistent with the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
The settlement resolves two lawsuits filed under the qui tam, or whistleblower, provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The lawsuits were filed by the Natural Resources Defense Council, Inc. and several former employees of Lockheed Martin who worked at the Paducah facility. The United States partially intervened in the lawsuits, which were then consolidated into one action. The whistleblowers will collectively receive $920,000 from the United States’ portion of the settlement.
The case was a coordinated effort of the U.S. Attorney’s Office for the Western District of Kentucky, the Civil Division’s Commercial Litigation Branch, the Environment and Natural Resources Division’s Environmental Enforcement Section, the U.S. Environmental Protection Agency, the Department of Energy, and the Department of Energy Office of Inspector General.
The case is captioned United States, ex rel. John David Tillson, Natural Resources Defense Council, Inc., et al. v. Lockheed Martin Corp., et al., Civil Action No. 5:99CV00170-GNS (W.D. Ky.). The claims resolved by this settlement are allegations only; there has been no determination of liability.
U.S. District Court Issues Final Order of Forfeiture Against Hong Kong Entertainment (Overseas) Investments, Ltd, D/B/A Tinian Dynasty Hotel & Casino in the Amount of 2.5 MillionRead the Press Release
Saipan, CNMI - ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced the successful forfeiture of $2,500,000 from Hong Kong Entertainment (Overseas) Investments Ltd., d/b/a Tinian Dynasty Hotel & Casino (“TDHC”). The forfeiture comes months after the United States Attorney’s Office and TDHC entered into a Non Prosecution Agreement which required the casino to forfeit millions in proceeds traceable to criminal violations. Specifically, the agreement required THDC to administratively forfeit $536,969.12 as well as the $2,500,000.00 contemplated in the U.S. District Court’s Final Order of Forfeiture. Together, these sums represent the largest forfeiture by the United States in NMI history. The Agreement also obligates TDHC to fully cooperate with the United States in ongoing criminal investigations and to comply with federal reporting and other regulatory requirements. The United States — in its sole discretion — can rescind the Agreement and initiate criminal proceedings should the Government determine that TDHC has failed to comply with any provision of the Agreement.
In her Final Order of Forfeiture, U.S. District Court Chief Judge Ramona V. Manglona ordered that the casino’s rights, title, and interest in the $2,500,000 are now vested with the United States of America. U.S. Attorney Limtiaco stated, “This forfeiture is the culmination of a year-long investigation. The persistent and dedicated efforts of IRS Criminal Investigators were instrumental in recovering these funds. The IRS Criminal Investigation, the U.S. Attorney’s Office, and the Department of Justice will continue to partner together to ensure casinos, financial institutions, and businesses comply with the requirements of federal law and other financial regulations.”
“The Bank Secrecy laws were enacted to curtail the movement of ill-gotten gains through our financial institutions. When one of those entities shirks their duty and fails to comply with the law requiring the examining and reporting of certain financial transactions, it creates an entry point for would-be criminals to circumvent rules intended to frustrate and detect their criminal enterprises. Together with the U.S. Attorney’s Office, we will continue to monitor the gaming industry to ensure the integrity of our financial markets,” stated Special Agent in Charge Teri Alexander of IRS Criminal Investigation.
Federal law known as the Bank Secrecy Act (BSA) requires that financial institutions and certain businesses, including casinos with annual gaming revenue in excess of $1 million, be vigilant in detecting and reporting activity that may indicate that money laundering, or other financial crimes, are being committed, and that the casino implement and maintain an effective anti-money laundering program. The BSA requires casinos to file a “Currency Transaction Report for Casinos” (CTR-C) for transactions that involve more than $10,000 in cash. Cash includes the coins and currency of the United States and foreign countries. The law requires that casinos and businesses report transactions when customers use cash in a single transaction or a related transaction occurring within a 24-hour period.
On November 20, 2014, a federal grand jury returned a Second Superseding Indictment that charged TDHC with one count of conspiracy to fail to file CTRs in violation of 18 U.S.C. § 371 and 31 U.S.C. §§ 5313(a), 5322(b) and 5324(a)(1) and (d)(2); 155 counts of failure to file CTRs in violation of 31 U.S.C. §§ 5313(a) and 5322(b); one count of failure to file a SAR in violation of 31 U.S.C. §§ 5313(a), and 5322(b); and one count of failure to maintain an effective anti-money laundering program in violation of 31 U.S.C. §§ 5318(h) and 5322(b).
According to filings with the Court, TDHC did not fully identify and disclose all individuals whose gambling activities should have legally triggered a BSA report. From October 1, 2009 through April 25, 2013, TDHC failed to document over $138 million in reportable cash transactions. It is estimated that TDHC failed to report 3,640 separate cash transactions during this same time period.
Justice Department Sues to Stop Florida Tax Return PreparerRead the Press Release
West Palm Beach Return Preparer Allegedly Overstated Refunds through Fabricated and Inflated Deductions and Credits
The United States has asked a federal court in West Palm Beach, Florida, to stop Renel Herard and his companies, Herard Tax Services aka Herard Security & Training and Herard Multi Services Inc., from preparing federal income tax returns for others, the Justice Department announced today.
The complaint alleges that Herard has been preparing tax returns since approximately 2009 and has prepared more than 4,000 tax returns for customers since 2011. The complaint alleges also that Herard prepares returns that unlawfully understate income tax liabilities and overstate refunds by fabricating and/or exaggerating deductions and tax credits his clients are not eligible to take. Herard’s practices include fabricating Schedule C losses for non-existent businesses, and falsely claiming fuel tax, child care and education credits for ineligible taxpayers who did not incur qualified expenses according to the complaint.
The complaint further alleges that beginning with returns he prepared for the 2014 tax year, Herard falsely claimed the Premium Tax Credit, a refundable tax credit designed to help eligible individuals and families with low or moderate income afford health insurance purchased through the Health Insurance Marketplace, also known as the Exchange, by claiming it for customers who did not purchase health insurance through the Exchange.
Altogether, the government complaint alleges that loss to the U.S. Treasury from the defendants’ activities may be in the millions of dollars.
Return preparer fraud is one of the Internal Revenue Service’s (IRS) Dirty Dozen Tax Scams for 2016. The IRS has some tips on their website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department 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.
Federal Court Permanently Enjoins Eastern Washington Dental Care Provider and Its Owners from Accruing Payroll Tax LiabilitiesRead the Press Release
A federal court in Spokane, Washington has ordered that James Hood, a dentist, and Karen Hood, his wife, ensure that their businesses timely file payroll tax returns and pay payroll taxes, the Department of Justice announced today.
U.S. District Court Judge Rosanna Malouf Peterson for the Eastern District of Washington entered a permanent injunction requiring Dental Care Associates of Spokane Valley, P.S.; Dr. James G. Hood Family Dentistry, aka Spokane Valley Dental Care, aka James G. Hood Family Dentistry, P.S.; Dr. James G. Hood, D.D.S., M.A., P.S., aka James G. Hood D.D.S., P.S., aka James G. Hood D.D.S., M.A., P.S.; Dr. James G. Hood, D.D.S., P.S.; Karen Jean Matsko Hood as Trustee of the Hood Family Trust; Whispering Pine Press, Inc.; James G. Hood and Karen J. Hood, to timely file payroll tax returns and pay any payroll taxes that accrue. Additionally, James and Karen Hood must notify the Internal Revenue Service (IRS) if they start to operate a new business.
According to the United States’ amended civil complaint, the various entities have repeatedly failed to timely file payroll tax returns or pay payroll taxes. Moreover, James and Karen Hood have frustrated payroll tax enforcement by continually abandoning old entities and creating new ones. The district court held that James and Karen Hood had admitted the facts in the complaint by failing to file an answer after the court ordered them to do so. 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 Tax Division thanked the revenue officer of IRS Field Collection for investigating and preparing the civil case.
Additional information about the Tax Division and its enforcement efforts may be found on the Division’s website.
Fact Sheet: The Health Care Fraud and Abuse Control Program Protects Conusmers and Taxpayers by Combating Health Care FraudRead the Press Release
The Affordable Care Act Has Helped the Government Fight Fraud, Strengthen Health Insurance Programs, Protect Consumers, and Save Taxpayer Dollars
The Obama Administration is committed to reducing fraud, waste, and abuse across the government. Since 2010, the U.S. Department of Health & Human Services, Office of Inspector General (HHS OIG), the Centers for Medicare & Medicaid Services (CMS), and the U.S. Department of Justice (DOJ) have been using powerful, new anti-fraud tools to protect Medicare and Medicaid by shifting from a “pay and chase” approach toward fraud prevention. Through the groundbreaking Healthcare Fraud Prevention Partnership, stronger relationships have been built between the government and the private sector to help protect all consumers.
These focused efforts are successful. In Fiscal Year (FY) 2015, the government recovered $2.4 billion as a result of health care fraud judgements, settlements and additional administrative impositions in health care fraud cases and proceedings. Since its inception in 1997, the Health Care Fraud and Abuse Control (HCFAC) Program has returned more than $29.4 billion to the Medicare Trust Funds. In this past fiscal year, the HCFAC program has returned $6.10 for each dollar invested.
The Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint initiative between HHS, OIG, and DOJ, has played a critical role in the fight against health care fraud.
A key component of HEAT is the Medicare Fraud Strike Force – an interagency task force teams comprised of OIG and DOJ analysts, investigators, and prosecutors who target emerging or migrating fraud schemes, including fraud by criminals masquerading as health care providers or suppliers.
Since 2007, the Medicare Fraud Strike Force has charged over 2,536 individuals involved in more than $8 billion in fraud. Many of these charges have resulted from coordinated, multi-district national takedowns. In June 2015, the Medicare Fraud Strike Force conducted its largest ever nationwide health care fraud takedown, which, for the first time, involved non-Strike Force participants and resulted in charges against a record 243 individuals for approximately $712 million in false Medicare and Medicaid billing. Since its inception, the Medicare Fraud Strike Force has maintained a conviction rate of approximately 95 percent and an average term of incarceration of more than four years.
Another powerful tool in the effort to combat health care fraud is the federal False Claims Act. In 2015, DOJ obtained over $1.9 billion in settlements and judgments from civil cases involving fraud and false claims against federal health care programs such as Medicare and Medicaid. Since January 2009, DOJ has recovered more than $17.1 billion for the federal government in cases involving health care fraud. In many of these cases, the department was instrumental in recovering additional billions of dollars for state health care programs.
Other steps the administration has taken to fight fraud include:
State-of-the-Art Fraud Detection Technology: HCFAC funding also supported HHS OIG’s continued enhancement of data analysis capabilities for detecting health care fraud. HHS OIG continues to use data analysis, predictive analytics, trend evaluation, and modeling approaches to better analyze and target oversight of HHS programs. Analysis teams use data to examine Medicare claims for known fraud patterns, identify suspected fraud trends, and calculate ratios of allowed services as compared to national averages; new analytic tools and methods are being developed to perform more innovative and complex data analytics. Combining the expertise of HHS OIG agents, auditors, and evaluators, as well as our HEAT partners, with data analytics and traditional investigative skills has fostered a highly effective model for fighting health care fraud.
Since June 2011, CMS uses the Fraud Prevention System (FPS) on all Medicare fee-for-service claims on a streaming, national basis. Similar to the fraud detection technology used by credit card companies, FPS applies predictive analytics to claims before making payments in order to identify aberrant and suspicious billing patterns. CMS uses leads generated by FPS to trigger actions that can be implemented swiftly. Early results from FPS show significant promise. Since 2011 the FPS identified savings (certified by HHS OIG) associated with these prevention and detection actions were $820 million.[1] This resulted in more than a 10-to-1 return on investment for the first three years of implementation.
Enhanced Provider Screening and Enrollment Requirements: Provider enrollment is the gateway to billing the Medicare program, and CMS implemented new critical safeguards in efforts to better screen providers enrolling in the Medicare program. The Affordable Care Act required CMS to revalidate all existing 1.6 million Medicare suppliers and providers under new risk-based screening requirements. As a result of revalidation and other proactive initiatives, CMS deactivated more than 500,000 enrollments meaning, billing privileges were stopped for these providers but may be restored upon the submission and approval of an updated enrollment application. CMS also revoked more than 34,000 enrollments meaning, these providers were barred from re-entering the Medicare program for one to three years. These enhanced screening and enrollment requirements have led to more than $2.4 billion in estimated Medicare savings since 2010.
In May 2014, CMS issued a final rule that requires prescribers of Part D drugs to enroll in Medicare and undergo screening. In December 2014, CMS issued a final rule that provides additional authority to remove bad actors from the Medicare program, including providers affiliated with outstanding Medicare debts and providers that have a pattern or practice of abusive billing.
Health Care Fraud Prevention Partnership (HFPP): The Obama Administration has joined with private insurers, states, and associations in the HFPP to prevent health care fraud on a national scale. To detect and prevent payment of fraudulent billings, HFPP participants exchange information and best practices across the public and private sectors. Since 2013, the HFPP has conducted eight studies that enabled partners, including DOJ, HHS-OIG, FBI, and CMS, states, private plans, and associations to take substantive actions, such as payment system edits, revocations, and payment suspensions to stop fraudulent payments and improve the government’s collective forces against fraud, waste, and abuse.
Senior Medicare Patrols: The Obama Administration has expanded funding for Senior Medicare Patrols (SMP) – groups of volunteers who educate and empower their peers to identify, prevent, and report health care fraud. In 2014, the SMP projects had a total of 5,249 active volunteers. These volunteers conducted 202,862 one-on-one counseling sessions and 14,692 group education sessions. In total, 452,714 beneficiaries attended these group education sessions. The projects also reported conducting 110,615 media airings (e.g., print, radio, television, or electronic) to provide education about fraud and the services of the project. Additionally, the projects reported conducting 12,417 community outreach education events. Local SMP offices provide assistance when issues are identified, ensuring that mistakes are corrected and suspected fraud is referred to the appropriate authorities. Since the program’s inception 18 years ago, $122 million in total estimated savings to Medicare and Medicaid is attributable to SMP projects.
[1] Note that a portion of the total FPS savings is comprised of payments prevented due to provider revocations. This amount is a subset of the $2.4 billion total prevented payments from revocations reported in section 'Enhanced Provider Screening and Enrollment Requirements' of this report. Therefore, comparison of these two metrics may result in double-counting.
District Court Enters Permanent Injunction to Prevent Florida Man from Distributing Unapproved Herpes CureRead the Press Release
The U.S. District Court for the Middle District of Florida entered a consent decree of permanent injunction against James R. Hill, of Ocala, Florida, to prevent the distribution of unapproved drugs masquerading as a cure for the herpes virus, the Department of Justice announced today.
The department filed a complaint in the U.S. District Court for the Middle District of Florida alleging that Hill sold a product, Viruxo Immune Support (Viruxo), that he marketed as a “natural herpes medicine” that can “Stop Herpes Outbreaks.” Although labeled as a dietary supplement, Viruxo qualifies as an unapproved and misbranded drug, according to the complaint, because of Hill’s claims that it could treat the herpes virus despite the absence of approval from the Food and Drug Administration (FDA) that it was safe and effective for such a use.
The complaint further alleged that Hill defrauded consumers by promoting Viruxo to cure, mitigate, treat, or prevent a disease despite the absence of well-controlled clinical studies or other credible scientific substantiation to support those claims. Hill made his misleading claims about Viruxo despite having received a warning letter from FDA and the Federal Trade Commission advising him that his product is an unapproved drug and was misbranded.
“Unfortunately, many dietary supplements cannot do what their sellers claim they can do,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “In some instances, consumers might be choosing supplements over other proven therapies for serious conditions under the mistaken belief that these products can help. The Department of Justice will continue to work aggressively with FDA to prevent the distribution of unapproved drugs.”
“Consumers should exercise extreme caution when purchasing supplements online,” warned U.S. Attorney A. Lee Bentley, III for the Middle District of Florida. “Viruxo was marketed to consumers as a ‘medicine’ for herpes, even though this product was not approved by the FDA and there were no well-controlled clinical studies to support the therapeutic claims.”
“Products being sold as treatments for which they have not been studied or approved defrauds consumers and can cause harm if proper treatment is delayed,” said Associate Commissioner Melinda Plaisier for FDA regulatory affairs. “When a company refuses to comply with regulations, we will take enforcement action to protect the public.”
Hill agreed to settle the case and be bound by a consent decree of permanent injunction. Although he has ceased selling Viruxo, the consent decree requires him to notify FDA and receive its permission before resuming sale of Viruxo or distribution of any food, including a dietary supplement, or drug. To obtain permission from FDA, FDA must first determine that Hill’s practices comply with the Federal Food, Drug and Cosmetic Act.
The government is represented by Trial Attorney Daniel E. Zytnick of the Civil Division’s Consumer Protection Branch and Lacy R. Harwell Jr. of the U.S. Attorney’s Office for the Middle District of Florida, with the assistance of Senior Counsel Claudia J. Zuckerman of the Department of Health and Human Services’ Office of General Counsel – Food and Drug Division.
For more information about the Consumer Protection Branch, visit its website at http://www.justice.gov/civil/consumer-protection-branch. For more information about the U.S. Attorney’s Office for the Middle District of Florida, visit its website at http://www.justice.gov/usao-mdfl.
Attorney General Loretta E. Lynch Appoints Three New Board Members to the Board of Immigration AppealsRead the Press Release
FALLS CHURCH, Va. – The Executive Office for Immigration Review (EOIR) today announced that Attorney General Loretta E. Lynch has appointed Molly Kendall Clark, Ellen Liebowitz, and Blair T. O’Connor as board members to the Board of Immigration Appeals (BIA). The BIA is responsible for hearing appeals from certain decisions rendered by immigration judges and by district directors of the Department of Homeland Security. It is the highest administrative body for interpreting and applying federal immigration laws.
Biographical information follows.
Molly Kendall Clark, Board Member
Attorney General Loretta E. Lynch appointed Board Member Kendall Clark to begin hearing cases in February 2016. Board Member Kendall Clark received a Bachelor of Arts degree in 1974 from Colorado College and a Juris Doctor in 1978 from Suffolk University. From 1995 to 2016, she has served as a senior legal advisor to the chairman, Board of Immigration Appeals (BIA). From 1983 to 1991, and previously from 1978 to 1981, she was an attorney advisor for the BIA. From 1981 to 1982, Board Member Kendall Clark worked in the General Counsel’s Office of the former Immigration and Naturalization Service. Board Member Kendall Clark is a member of the District of Columbia Bar.
Ellen Liebowitz, Board Member
Attorney General Loretta E. Lynch appointed Board Member Liebowitz to begin hearing cases in February 2016. Board Member Liebowitz received a Bachelor of Arts degree in 1987 from the University of Delaware and a Juris Doctor in 1990 from the University of Maryland. From 2008 to January 2016, Board Member Liebowitz served as a senior legal advisor to the chairman, Board of Immigration Appeals (BIA). From 2007 to 2008, she was a senior counsel to the chairman, BIA, and from 1991 to 2007, as an attorney advisor for the BIA. Prior to joining the board, she clerked for the Circuit Court for Harford County, Maryland. Board Member Liebowitz is a member of the Maryland Bar.
Blair T. O’Connor, Board Member
Attorney General Loretta E. Lynch appointed Board Member O’Connor to begin hearing cases in February 2016. Board Member O’Connor received a Bachelor of Business Administration degree in 1992 from the University of Notre Dame and a Juris Doctor in 1995 from the Valparaiso University School of Law. From 2002 to 2016, he served as an assistant director, senior litigation counsel, and trial attorney at the Office of Immigration Litigation, Civil Division, Department of Justice. From 1996 to 2002, he served on active duty in various capacities in the Army’s Judge Advocate General Corps including as legal assistance and claims attorney, prosecutor, appellate defense attorney, and as a law clerk to the U.S. Army Court of Criminal Appeals. Board Member O’Connor is a member of the Illinois Bar.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR's immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR's Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Texas Tax Return Preparer Indicted for Preparing False Income Tax ReturnsRead the Press Release
A Houston, Texas, income tax return preparer was indicted by a federal grand jury today in the Southern District of Texas on 18 counts of aiding and assisting in the preparation of false federal income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
The indictment alleges that Felix Martin prepared false and fraudulent individual income tax returns for others for the tax years 2009 and 2010. It is alleged that these tax returns included false education and American Opportunity credits, as well as false statements regarding business income.
If convicted, Martin faces a statutory maximum sentence of three years in prison for each count of aiding and assisting in the preparation of false tax returns, as well as potential fines and restitution to the Internal Revenue Service (IRS).
An indictment merely alleges that crimes have been committed and defendants are presumed innocent until proven guilty beyond a reasonable doubt.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Michael Hatzimichalis and Mara Strier of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Statement by Attorney General Loretta E. Lynch on the Departure of Kelly T. Currie from the U.S. Attorney’s Office for Eastern District of New YorkRead the Press Release
Attorney General Loretta E. Lynch released the following statement on the departure of Kelly T. Currie of the Eastern District of New York:
“Kelly Currie is a consummate public servant: dedicated, selfless, and fair. As a senior advisor to former U.S. Senator George Mitchell, Kelly played a crucial role in achieving the Good Friday Agreement, which brought lasting peace to the people of Northern Ireland and the United Kingdom. During two stints as an attorney in the Eastern District of New York – including his tenure as my Chief Assistant during my time there as U.S. Attorney – he was instrumental to the office’s prosecution of cases involving corruption, securities fraud and terrorism. And when I became Attorney General last April, Kelly graciously served as Acting U.S. Attorney – a role he filled with characteristic skill, energy and integrity. Through these and many other contributions, Kelly has helped to make our country – and our world – safer and more just. I want to thank him for his outstanding work, and I wish him the best as he begins a new chapter in his career.”
Justice Department Reaches Agreement with a Texas YMCA to Ensure Equal Opportunities for Children with DiabetesRead the Press Release
The Justice Department reached a settlement agreement today with the Arlington-Mansfield Area YMCA, a local Texas affiliate of the YMCA, to resolve allegations that it violated the Americans with Disabilities Act (ADA) by denying a child the opportunity to participate in a summer day camp program because of his diabetes. YMCA refused to provide daily insulin injections to the child, which left him unable to attend the summer day camp program.
Title III of the ADA prohibits discrimination on the basis of disability by private camps and child care programs. Under the ADA, such entities must make reasonable modifications to their policies, practices or procedures when necessary to provide equal access to a child with a disability, unless a modification would fundamentally alter the nature of the goods and services. Absent a showing of fundamental alteration, where a parent and a child’s physician determine that it is appropriate for a non-nurse to assist a child with diabetes care, allowing a trained layperson to do so is a reasonable modification under the ADA.
“After-school and camp programs provide a critical place for all children to socialize with their friends and learn from their peers,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division. “The Department of Justice will continue to aggressively fight all forms of discrimination that seek to deny children with disabilities the protections the ADA guarantees and the opportunities they deserve.”
Under the terms of the two-year agreement, the YMCA will designate an ADA compliance officer who will be responsible for monitoring compliance with the terms of the agreement. The ADA compliance officer will also be responsible for ensuring that the YMCA updates its application materials and implements the policies and procedures required by the agreement, including a non-discrimination policy. The YMCA will designate an individual at each branch who is authorized to receive and review requests for reasonable modifications; inform parents and guardians about how to request reasonable modifications; and train its staff on the ADA, including information on diabetes management. The ADA compliance officer will also review all denials of reasonable modification requests and any decision to exclude a child with a disability from enrollment.
The YMCA will also pay $10,000 to the family to compensate them for the denial of an opportunity to participate in the YMCA program. The department will actively monitor the YMCA’s compliance with terms of the agreement.
One of the largest childcare providers of school-aged children in the region, the Arlington-Mansfield Area YMCA serves the Arlington and Mansfield communities near Dallas and Ft. Worth, Texas. Nearly 900 children participate in the local YMCA’s before and after-school programs and nearly 450 children participate in its summer camp program.
ADA enforcement is a top priority of the Justice Department’s Civil Rights Division. Those interested in finding out more about this settlement or the obligations of camps and child care programs under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov. ADA complaints may be filed online at http://www.ada.gov/complaint/.
Arkansas Man Sentenced to Prison for Failure to File Tax ReturnsRead the Press Release
A Fayetteville, Arkansas, man was sentenced to 14 months in prison today following his plea of guilty to four counts of willfully failing to file individual income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney Kenneth Elser of the Western District of Arkansas.
According to court documents, Randall Acton West, a former real estate appraiser, failed to file federal income tax returns with the Internal Revenue Service (IRS) for the years 2007 through 2010 despite earning gross income in excess of the tax return filing threshold. According to court documents, West’s conduct resulted in a tax loss to the government of $95,825.56.
In addition to the prison term, U.S. District Judge Timothy L. Brooks of the Western District of Arkansas ordered West to serve one year of supervised release and pay restitution to the IRS in the amount of $95,825.56.
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Elser commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Robert Kemins and David Zisserson, of the Tax Division and Assistant U.S. Attorney Kimberly Davis of the Western District of Arkansas, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts can be found on the division’s website.
Alabama Resident and Former U.S. Postal Worker Sentenced to Prison for Involvement in Stolen Identity Tax Fraud RingRead the Press Release
Stole Identities of Individuals on Her Mail Route for Use in Filing False Tax Returns
A Seale, Alabama, resident and former U.S. Postal Service employee was sentenced today to serve more than five years in prison for her role in a stolen identity refund fraud (SIRF) conspiracy, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck, Jr. of the Middle District of Alabama announced.
According to court documents and evidence presented at the sentencing hearing, between June 2012 and December 2013, Elizabeth Grant aka Elizabeth Williams Grant and Ann Grant, 52, conspired with others, including Tracy Mitchell of Phenix City, Alabama, and Keshia Lanier of Seale to obtain fraudulent income tax refunds by filing false federal income tax returns using stolen identities. For a fee, Grant provided co-conspirators with addresses along her mail delivery route to use in filing false tax returns. Grant then retrieved the fraudulent tax refund checks from the mail and delivered the checks to her co-conspirators. The scheme resulted in the filing of more than 700 false returns claiming more than $1.5 million in tax refunds.
Grant pleaded guilty in November 2015 to conspiracy to defraud the United States with respect to claims, aggravated identity theft and embezzling mail. Several co-conspirators, including Mitchell and Lanier, have already pleaded guilty and were sentenced for their roles in this scheme. On Aug. 7, 2015, Mitchell was sentenced to 159 months in prison. On Sept. 25, 2015, Lanier was sentenced to 180 months in prison. In addition to the term of imprisonment, Grant was also ordered to serve three years of supervised release and pay restitution in the amount of $978,468.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck commended special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorneys Michael C. Boteler, Gregory P. Bailey and Robert J. Boudreau of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.