District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Two Miami Residents Plead Guilty for Involvement in Stolen Identity Tax Refund Fraud RingRead the Press Release
Defendants Stole Identities of Prisoners and Deceased Individuals
Two Miami residents pleaded guilty for their role in a stolen identity tax refund fraud conspiracy, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Wifredo Ferrer of the Southern District of Florida announced today.
Jim Joseph and Roland Alexis pleaded guilty to one count of a multi-object conspiracy to defraud the Internal Revenue Service (IRS), commit wire fraud and commit aggravated identity theft and one count of aggravated identity theft. Joseph pleaded guilty on Nov. 9 and Alexis pleaded guilty Nov. 5. According to court documents, between 2007 and July 2014, Joseph, Alexis and others conspired to defraud the United States by filing false federal income tax returns using stolen identities. Joseph and Alexis obtained the personal identification information of actual individuals, some deceased, including names, social security numbers, addresses and dates of birth, without the individuals’ authorization. The stolen personal identification information belonged to prisoners and deceased individuals. Joseph, Alexis and others recruited knowing co-conspirators and unknowing victims to put Electronic Filing Identification Numbers (EFINs) in their names through which fraudulent income tax returns would be filed.
In late 2009, Alexis formed Worldwide Income Tax Multi-Services LLC and North Miami Income Tax Services. The companies were created with the intended purpose of filing fraudulent tax returns using stolen identities. Worldwide Income Tax Multi-Services was located in Miramar, Florida, and listed Alexis as President and Joseph as Vice-President. North Miami Income Tax Services was set up in Miami and listed Alexis as Registered Agent. Joseph, Alexis and others then used the stolen identities and EFINs to electronically file more than 860 fraudulent tax returns. Alexis’s conduct resulted in a tax loss of $1.8 million and Joseph’s conduct resulted in a tax loss of $1.2 million.
Both individuals face a statutory maximum sentence of five years in prison and three years of supervised release for the conspiracy charge and a statutory mandatory sentence of two years in prison and one year of supervised release for the aggravated identity theft charge. Joseph and Alexis must serve the two-year sentence for aggravated identity theft in addition to any sentence the court imposes on the conspiracy charge. Both charges carry a statutory maximum fine of $250,000.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Ferrer commended special agents of the IRS-Criminal Investigation and Homeland Security Investigations, who investigated the case, and Assistant Chief Gregory E. Tortella of the Tax Division and Assistant U.S. Attorney Neil Karadbil of the Southern District of Florida, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Tres Hombres Sentenciados Hoy Por Tráfico de Droga en el Condado de KernRead the Press Release
FRESNO, California – Hoy, el Juez del Distrito de los Estados Unidos Lawrence J. O´Neill dictó sentencia a tres demandados en dos casos por traficar con metanfetamina, anunció el Procurador de los Estados Unidos Benjamín B. Wagner.
En el primer caso, José Mojarro Cruz, alias Shyboy, de 28 años de edad, y residente de Bakersfield fue condenado a 15 años y nueve meses a la prisión por conspirar para distribuir y poseer con intento de distribuir metanfetamina y heroína. Se declaró culpable de los hechos el 21 de abril del 2015. El co-demandado Arnoldo Delgado García (Delgado), alias Fabricio Rene Delgado-Perea, de 35 años de edad, y ciudadano de México fue condenado a 11 años y cuatro meses a la prisión. El 11 de mayo del 2015 se declaró culpable de conspirar para distribuir y poseer con intento de distribuir metanfetamina y heroína.
Según documentos del tribunal, los demandados distribuían, regularmente, metanfetamina y heroína a varios comerciantes de droga y consumidores del Condado de Kern desde mayo del 2013 hasta enero del 2014. Los demandados reconocieron haber distribuido entre 15 y 45 kilos de metanfetamina y más de 1.000 gramos de heroína. El co-demandado Erik Gesus Rivera, de 28 años de edad, y residente de Bakersfield se declaró culpable de posesión con intento de distribuir metanfetamina, y el 21 de septiembre del 2015 fue condenado a dos años de prisión.
Este caso fue el producto de una investigación por el Destacamento Especial para la Lucha Contra las Drogas y el Crimen Organizado (Organized Crime Drug Enforcement Task Force u OCDETF) a través de las Aplicaciones de Ley de Inmigración y Aduanas de los Estados Unidos (U.S. Immigration and Customs Enforcement o ICE), las Investigaciones de la Seguridad de la Patria (Homeland Security Investigations o HSI), la Agencia Antidrogas de Estados Unidos (Drug Enforcement Administration o DEA), la Oficina del Sheriff del Condado de Kern y el Destacamento Especial para las Áreas de Tráfico de Droga de Alta Intensidad del Tri-Condado del Sur (Southern Tri-County High Intensity Drug Trafficking Area Task Force o HIDTA). El Procurador Auxiliar de los Estados Unidos Brian K. Delaney procesó el caso.
Caso nº 1:14-cr-048 LJO
En el segundo caso, el Juez O´Neill, condenó a Juan Lascano Jr., de 32 años de edad, y residente de Bakersfield, a 10 años de prisión. El 27 de julio del 2015, Lascano se declaró culpable de distribución de metanfetamina.
Según documentos del tribunal, Lascano y sus co-demandados conspiraron para distribuir metanfetamina en cantidades de una libra por el área de Bakersfield. El 21 de septiembre del 2015, el co-demandado Guillermo Magallanes, de 36 años de edad, y residente de Bakersfield, se declaró culpable de conspiración para distribuir metanfetamina y el co-demandado Pascual Gonzales Magallanes, de 44 años de edad, y residente de Bakersfield, se declaró culpable de distribución de metanfetamina.
La audiencia para dictar sentencia de los dos co-demandados está programada para el 14 de diciembre del 2015. Guillermo Magallanes se enfrenta a una pena máxima establecida por la ley de cadena perpetua y una multa de 5 millones de dólares, y Pascual Gonzales Magallanes se enfrenta a una pena máxima establecida por la ley de 40 años en prisión y una multa de 2 millones de dólares. El tribunal, no obstante, se reserva la decisión sobre las sentencias propiamente dichas hasta que todos los factores aplicables establecidos por la ley y por las Directrices Federales para Dictar Sentencia sean consideradas, tomando en cuenta un número determinado de variables.
Además de los cargos criminales, los Estados Unidos está pidiendo la incautación de 31,242 de dólares, un Lexus IS250 F Sport del 2014, y un Acura TL sedán del 2012, efectos de la actividad del tráfico ilegal de droga.
Este caso es el producto del Destacamento Especial de Lucha Contra las Drogas y el Crimen Organizado (Organized Crime Drug Enforcement Task Force u OCDETF) a través de la Agencia Antidrogas de Estados Unidos (Drug Enforcement Administration o DEA), la Oficina Federal de Investigación (FBI), la Oficina del Sheriff del Condado de Kern y el Departamento de Policía de Bakersfield. El Procurador Auxiliar de los Estados Unidos Brian K. Delaney está procesando el caso. 1:15
Sentenciado un Antiguo Residente De Roseville por Estafa de Modificaciones de Préstamos y Rescates de Embargos Inmobiliarios Orientada a la Comunidad de Habla HispanaRead the Press Release
SACRAMENTO, California – Martin Wayne Flanders, de 51 años de edad, y antiguo residente de Roseville, fue sentenciado hoy por el Juez del Distrito de los Estados Unidos Troy L. Nunley a seis años y cinco meses de prisión por una trama que se dirigía a propietarios de viviendas que se encontraban en dificultades económicas, anunció el Procurador de los Estados Unidos Benjamín B. Wagner.
En febrero del 2015, Flanders y su esposa Ligia Sandoval Spafford (Sandoval), de 48 años de edad, y residente de Roseville, se declararon culpables de fraude por correo en su participación en la trama fraudulenta.
Según documentos del tribunal, entre los años 2008 y 2010, Flanders cobró tarifas por adelantado a sus clientes por un número de servicios financieros que incluían modificaciones de préstamos, revisiones de préstamos hipotecarios, recuperación de crédito, liberación de deuda, peticiones de bancarrota y un programa para vender casas a “inversionistas” que las alquilaban con la opción a compra. Flanders y Sandoval comerciaban estos servicios con aquellos propietarios de viviendas que se encontraban en dificultades económicas, y en particular con énfasis a personas de habla hispana. Durante un programa de radio que se emitía dos veces por semana en la zona del “Bay Area” por Radio Luz, una emisora de radio Cristiana en español, Sandoval promovía los servicios que ella y Flanders ofrecían. Flanders también hacía publicidad en Univisión, un canal de televisión en español, y revistas en español. Cerca de un 98 por ciento de los clientes de los demandados eran de descendencia hispana; algunos hablaban nada o poco inglés. Sandoval habla español, pero Flanders no lo habla.
Tanto Flanders como Sandoval dieron testimonios falsos a los inversores sobre el éxito de los planes que se ofrecían o, en el caso, de las devoluciones que estaban disponibles si los planes no prosperaban. En el intento de retrasar el proceso de embargo de las viviendas, Flanders y Sandoval se servían de ofertas ficticias llamadas “ofertas fantasma” para comprar las viviendas de las víctimas a precio reducido, un proceso llamado “short sale,” como también de fingidas peticiones de bancarrota que eran rápidamente desestimadas por el tribunal de bancarrotas llamadas “bancarrotas de esqueleto.” Al menos, entre 25 a 30 individuos pagaron por los servicios que nunca recibieron o no recibieron las devoluciones cuando los planes no cumplieron con lo prometido. Como mínimo, las pérdidas totales para las víctimas fueron de $125,000 dólares. Algunos propietarios que no pudieron recibir subsidios fueron embargados por sus entidades de credito.
“Al dirigirse a personas en situaciones de dificultades económicas y con un dominio limitado del inglés, Flanders buscaba enriquecerse estando sobre las espaldas de aquellos que menos podían permitírselo,” declaró el Procurador de los Estados Unidos Wagner. “Estamos agradecidos de la sentencia impuesta por el tribunal, y continuaremos a enfocar nuestros esfuerzos en el procesamiento de tramas depredadoras y fraudulentas.”
Este caso es un producto de una investigación por la Oficina Federal de Investigación (FBI). Los Procuradores Auxiliares de los Estados Unidos Todd A. Pickles y Shelley Weger están procesando el caso.
Flanders está en detención desde su arresto en octubre del 2012. Sandoval está actualmente en libertad. Sandoval está programada para ser sentenciada por el Juez Nunley el 3 de marzo del 2016. Ella se enfrenta a una pena máxima establecida por la ley de 20 años en prisión y una multa de $250,000 dólares. El tribunal, no obstante, se reserva la decisión sobre la sentencia, propiamente dicha, y hasta que todos los factores aplicables establecidos por la ley y por las Directrices Federales para Dictar Sentencia sean considerados, tomando en cuenta un número determinado de variables.
Norwegian Shipping Company and Engineering Officers Convicted of Environmental Crimes and Obstruction of JusticeRead the Press Release
A federal jury in Mobile, Alabama, has convicted Det Stavangerske Dampskibsselskab AS (DSD Shipping) and three employees with obstructing justice, violating the Act to Prevent Pollution from Ships (APPS), witness tampering and conspiracy, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Kenyen R. Brown of the Southern District of Alabama. DSD Shipping is a Norwegian-based shipping company that operates crude oil tankers, including the M/T Stavanger Blossom. Also convicted at trial were three senior engineering officers, Bo Gao, Xiaobing Chen and Xin Zhong, employed by DSD Shipping to work aboard the vessel. A fourth employee, Daniel Paul Dancu, pleaded guilty in October.
The operation of marine vessels, like the M/T Stavanger Blossom, generates large quantities of waste oil and oil-contaminated waste water. International and U.S. law requires that these vessels use pollution prevention equipment, known as an oily-water separator, to preclude the discharge of these materials. Should any overboard discharges occur, they must be documented in an oil record book, a log that is regularly inspected by the U.S. Coast Guard.
“We will not tolerate the continued use of the world’s oceans as a dumping ground for contaminated waste,” said Assistant Attorney General Cruden. “These defendants deliberately and egregiously violated the law and fouled the marine environment by dumping waste, then tried to cover it up with false records. We hope this conviction sends a strong message to shippers worldwide that this activity must end, and we will vigorously prosecute those who continue this criminal behavior.”
“I am pleased with the record of this office in pursuing environmental crimes,” said U.S. Attorney Brown. “We will continue to prosecute corporations and individuals to protect our resources here along the Gulf Coast as well as around the World. We need to ensure that all foreign vessels and corporations comply with U.S. Coast Guard Examinations to ensure these resources are protected.”
“The oceans cannot be used as dumping grounds,” said Acting Special Agent in Charge Andy Castro of the Environmental Protection Agency’s (EPA) criminal enforcement program in Alabama. “The defendants in this case falsified entries in their vessel’s log books to hide the true nature of its open water discharges. Today’s guilty verdict by a jury should serve as a warning to would-be violators that the American people will not allow the flagrant violation of U.S. laws.”
“This case shows the importance of interagency cooperation and how working together can keep our nation's waterways cleaner and safer for all,” said U.S. Coast Guard Admiral David R. Callahan. “I commend the U.S. Attorney's Office, the Department of Justice, as well as Customs and Border Protection for their diligence in this case. This case is a prime example of the Act to Prevent Pollution from Ships working as it was intended. The Coast Guard is committed to working with our partners to enforce regulations and hold any violators accountable.”
“CGIS is dedicated to holding those individuals and Corporations accountable who violate United States and International law,” said Resident Agent in Charge John Allen with the U.S. Coast Guard Investigative Service (CGIS). “CGIS will vigorously prosecute anyone who presents false documents to the U.S. Coast Guard or obstructs vessel examinations performed by the U.S. Coast Guard.”
The evidence presented during the two-week trial demonstrated that in January 2010, DSD Shipping knew that the oily-water separator aboard the M/T Stavanger Blossom was inoperable. In an internal corporate memo, DSD Shipping noted that the device could not properly filter oil-contaminated waste water and stated that individuals “could get caught for polluting” if the problem was not addressed. Rather than repair or replace the oily-water separator, however, DSD Shipping used various methods to bypass the device and force the discharge of oily-wastes into the ocean. During the last months of the vessel’s operation prior to its arrival in the Port of Mobile, the M/T Stavanger Blossom discharged approximately 20,000 gallons of oil-contaminated waste water.
The evidence at trial also established that DSD Shipping employees intentionally discharged fuel oil sludge directly into the ocean. Specifically, crewmembers cleaned the vessel’s fuel oil sludge tank, removed approximately 264 gallons of sludge and placed the waste oil into plastic garbage bags. After hiding the sludge bags aboard the ship from port authorities in Mexico, defendants Chen and Zhong ordered crewmembers to move as many as 100 sludge bags to the deck of the vessel. There, Zhong threw the sludge bags overboard directly into the ocean.
DSD Shipping, Dancu, Gao, Chen and Zhong, all attempted to hide these discharges from the U.S. Coast Guard by making false and fictitious entries in the vessel’s oil record book and garbage record book. Further, after arriving in Mobile, Chen and Zhong lied to the U.S. Coast Guard about the discharge of sludge and ordered lower ranking crewmembers to do the same.
At the conclusion of trial, DSD Shipping was convicted of one count of conspiracy, three counts of violating APPS, three counts of obstruction of justice and one count of witness tampering. Defendant Gao was convicted of one count of conspiracy and two counts of obstruction of justice. Defendant Chen was convicted of one count of violating APPS, three counts of obstruction of justice and one count of witness tampering. Finally, Zhong was convicted of two counts of violating APPS, two counts of obstruction of justice and one count of witness tampering. DSD Shipping could be fined up to $500,000 per count, in addition to other possible penalties. Gao, Chen and Zhong face a maximum penalty of 20 years in prison for the obstruction of justice charges
This case was investigated by the U.S. Coast Guard Sector Mobile, U.S. Coast Guard District Eight, CGIS and the EPA, Criminal Investigations Division. Assistant U.S. Attorney Michael D. Anderson, with the U.S. Attorney’s Office for the Southern District of Alabama, and the Department of Justice’s Environmental Crimes Section Trial Attorney Shane N. Waller prosecuted the case.
Maryland Man Convicted in Scheme to Obtain More Than $7 Million of Fraudulent Tax RefundsRead the Press Release
Caused 13 False Tax Returns to be Filed in Just Four Months Claiming $7,470,065 in Refunds
A federal jury convicted Charles W. Parker Jr., 49, of College Park, Maryland, today of one count of conspiring to defraud the United States and six counts of filing false income tax returns.
The conviction was announced by Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Washington, D.C. Field Office.
According to evidence presented during the trial, from March to June 2009, Parker recruited clients for co-conspirator Penny Jones, a tax return preparer in Idaho, who prepared tax returns falsely reporting the amount of taxes withheld and purportedly paid to the IRS. Parker collected financial information from clients and provided it to Jones for the preparation of the false tax returns. Parker paid Jones to prepare false tax returns for Parker and others. Parker mailed the false tax returns to the IRS for the years 2005 to 2008, claiming large tax refunds to which the clients were not entitled.
On May 26, 2009, after Parker paid Jones to prepare a false tax return for two co-conspirators who were residents of Atlanta, Georgia, caused the IRS to issue a tax refund to the co-conspirators of $1,723,693. On June 3, 2009, Parker emailed the co-conspirators directing them to wire funds to Parker’s bank account. The next day, the co-conspirators transferred $182,370 into Parker’s account.
The tax returns filed by Parker and his co-conspirators requested fraudulent refunds totaling $7,470,065. As a result of these false returns, the IRS issued fraudulent tax refunds to Parker and his coconspirators totaling $2,007,568. In 2013, Jones was sentenced to 120 months in prison for her role in a scheme to help individuals obtain fraudulent tax refunds from the IRS.
Parker faces a statutory maximum sentence of 10 years in prison for the conspiracy, and a maximum sentence of five years in prison for each of the six counts of filing a false tax return. U.S. District Judge Roger W. Titus has scheduled sentencing for March 28, 2016 at 11:00 a.m.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rosenstein praised the Tax Division and IRS-CI for their work in the investigation. Acting Assistant Attorney General Ciraolo and U.S. Attorney Rosenstein thanked Assistant U.S. Attorney Leah Jo Bressack and Trial Attorney Erin Pulice of the Justice Department’s Tax Division, who are prosecuting the case.
Justice Department Files Antitrust Lawsuit to Block United's Monopolization of Takeoff and Landing Slots at Newark AirportRead the Press Release
Transaction Would Entrench United’s Dominant Position at Newark, New Jersey, Airport – Eliminating Competition and Resulting in Higher Fares and Fewer Choices for Consumers
The Department of Justice today filed a civil antitrust lawsuit seeking to block a proposed transaction between United Continental Holdings Inc. and Delta Air Lines Inc. in order to preserve competition at Newark Liberty International Airport.
The Antitrust Division’s lawsuit, filed in the U.S. District Court for the District of New Jersey in Newark, New Jersey, alleges that United’s planned acquisition of 24 takeoff and landing slots at Newark would increase United’s already dominant position at the airport, and would strengthen a barrier that diminishes the ability of other airlines to challenge United at the airport. As a result, the 35 million air passengers who fly into and out of Newark every year likely would face higher fares and fewer choices.
“A slot is essentially a license to compete at Newark,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “United already holds most of them, and as a result, competition at Newark is in critically short supply. United is already extracting a ‘Newark premium.’ Airfares at Newark are among the highest in the country while United’s service at Newark ranks among the worst. Allowing United to acquire even more slots at Newark would fortify United’s monopoly position, and weaken rivals’ ability to challenge that dominance, leaving consumers to pay the price.”
To manage congestion at Newark, the Federal Aviation Administration (FAA) allocates takeoff and landing authorizations, or slots, in order to limit the number of flights that can service Newark during the majority of the hours of the day. Slots are a scarce resource, and airlines seeking to initiate or expand service at Newark face significant challenges obtaining them in order to support new service.
According to the department’s complaint, United already controls 73 percent of the slots the FAA has allocated to carriers at the airport – over 10 times more slots than its closest competitor. No other airline has more than 70 slots:
The complaint also alleges that United “grounds” as many as 82 slots each day at Newark, depriving Newark passengers of flight options that would exist if the slots were flown.
The complaint also details how consumers benefit when slots are held by United’s airline rivals. In response to the department’s concerns expressed during its review of the United/Continental merger in 2010, United divested its 36 slots at Newark to Southwest Airlines. United’s then-CEO, Jeff Smisek, lauded the settlement as a “fair solution that would allow Continental and United to create an airline that will provide customers with an unparalleled global network and top-quality products and services, while enhancing domestic competition at Newark.” Nevertheless, as alleged in the complaint, United’s proposed acquisition of slots from Delta is United’s third attempt to reverse the benefits of the 2010 divestiture by buying slots from its competitors at Newark.
According to the department’s complaint, the acquisition of Newark slots by rivals, such as Southwest Airlines, Jet Blue, and Virgin America, has forced United to compete, resulting in lower ticket prices and greater choice for consumers. For example, Southwest’s acquisition of 36 slots from United allowed it to introduce new low-fare competition to United on five routes resulting in substantially lowered fares and increased service on five routes into and out of Newark:
Route
Year-over-year Percentage Decrease in Average Fare
Year-over-year Percentage Increase in Number of Passengers
Newark-St. Louis
-27 percent
66 percent
Newark-Houston
-15 percent
53 percent
Newark-Phoenix
-14 percent
57 percent
Newark-Chicago
-11 percent
35 percent
Newark-Denver
-5 percent
49 percent
Similarly, when Virgin acquired slots at Newark in 2012 after several years of trying unsuccessfully to obtain slots, it introduced competing nonstop service to Los Angeles and San Francisco, and fares on these routes dropped precipitously. United later calculated that competing on these routes in response to Virgin’s entry cost it approximately $66 million in annual revenue.
United Continental Holdings Inc. is a Delaware corporation headquartered in Chicago. Last year United, the third largest airline in the world in terms of revenues, flew over 138 million passengers to over 352 destinations throughout the world.
Delta Air Lines Inc. is a Delaware corporation headquartered in Atlanta. Last year Delta, the second largest airline in the world in terms of revenues, flew over 170 million passengers to 316 destinations throughout the world.
US v United Complaint (236.24 KB)
Former Maryland Businessman Sentenced to Prison for Fraudulent $7 Million Bond Scheme and Filing a False TaxRead the Press Release
A Hampton Bays, New York man was sentenced today to 63 months in prison followed by three years of supervised release, for securities fraud and filing a false tax return.
Wilfred T. Azar, III, 54, formerly of Queenstown, Maryland, was sentenced by U.S. District Judge William D. Quarles Jr, who also entered an order that Azar must perform 100 hours of community service while on supervised release, and pay restitution in the amount of $7,219,362 to the victim investors and $469,936 to the IRS.
The sentence was announced by Acting Deputy Assistant Attorney General Bruce M. Salad of the Department of Justice’s Tax Division; U.S. Attorney Rod J. Rosenstein of the District of Maryland; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service-Criminal Investigation (IRS-CI), Washington, D.C. Field Office and Special Agent in Charge Kevin Perkins of the FBI’s Baltimore Division.
In 1999, Azar became president and majority owner of Empire Corporation and exercised complete control over the operations of Empire. Empire Corporation owned Empire Towers Corporation. Empire Towers Corporation’s primary asset was Empire Towers, a 10-story office building in Glen Burnie, Maryland.
According to Azar’s plea agreement and court documents, by January 2006, Empire Corporation could no longer pay its expenses and was effectively insolvent. By 2007, Empire Towers Corporation had exhausted its lines of credit from lending institutions.
From January 2006 to April 2010, Azar caused Empire Corporation to sell bonds to 64 individual investors for more than $7 million. While many of the bonds were titled “registered,” the bonds were not registered with either the U.S. Securities and Exchange Commission (SEC) or the state of Maryland. In addition, Azar falsely told investors that Empire Corporation was in good financial health and that the company generated enough revenue to pay the promised 10 percent annual rate of return. Azar falsely represented that the money invested would be used for a specific renovation project or other capital improvement at the Empire Towers office building. Azar failed to inform investors that he used most of the money raised from previous bond sales for his own personal purposes. Although the bonds were issued by Empire Corporation, Azar diverted millions of dollars of proceeds from the bond sales to his own bank account and the bank accounts of other companies that he controlled.
During the period of the fraud, Azar misappropriated approximately $7,219,362 in investor proceeds raised through the sale of bonds. Azar used the bond proceeds: to purchase a $100,000 Aston Martin luxury automobile, to pay the $3,000 monthly mortgage on his primary residence, to pay $51,000 to an Azar trust, to purchase Baltimore Ravens season tickets for $17,298 and to pay $25,389 in country club dues. In addition, Azar charged over $420,000 to a credit card paid by Empire Management Services, including daily living expenses, lavish vacations and university tuition for one of his children. Azar also diverted more than $1.07 million in Empire funds as “loans” to other unrelated businesses he controlled which were never repaid and another $3.31 million to make lulling payments.
Finally, Azar failed to report approximately $1,959,250 of embezzled income on his 2009 tax return, thereby avoiding $469,936 in federal income taxes.
The SEC has also filed a complaint against Azar and another individual in connection with the scheme and that case is pending.
Today’s announcement 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’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, visit www.stopfraud.gov.
Acting Deputy Assistant Attorney General Salad and U.S. Attorney Rosenstein praised the IRS-CI, FBI and SEC for their work in the investigation. Acting Deputy Assistant Attorney General Salad and U.S. Attorney Rosenstein thanked Assistant U.S. Attorney Martin J. Clarke and Trial Attorney Kenneth C. Vert of the Justice Department’s Tax Division, who prosecuted the case.
DC Man Pleads Guilty to Federal Charges for Role in Massive Identity Theft and Tax Fraud SchemeRead the Press Release
A District of Columbia resident pleaded guilty today to a charge stemming from his involvement in a far-reaching stolen identity refund fraud scheme in which he and others working with him obtained more than $315,000 through the filing of fraudulent federal income tax returns seeking refunds, the Justice Department announced.
Ezekiel Raspberry, 39, is the second defendant to plead guilty to federal charges in recent weeks. Approximately 14 people 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 $40 million from the U.S. Treasury.
The guilty plea was announced by 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 David G. Bowers, U.S. Postal Inspection Service, Washington Division and Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of the Treasury.
Raspberry pleaded guilty to conspiracy to defraud the United States with respect to claims. Under federal sentencing guidelines, Raspberry faces at his Jan. 15, 2016 sentencing, an advisory guideline range of 24 to 30 months in prison and a fine of up to $50,000 at his sentencing before the Honorable U.S. District Judge Ellen S. Huvelle of the District of Columbia. In addition, as part of his plea agreement, Raspberry must pay $315,076 in restitution to the IRS.
According to the government’s evidence, Raspberry 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 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. In other cases, the refunds were sent to people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses located in the District of Columbia, Maryland and Virginia.
According to documents filed with the court, from September 2008 through November 2010, Raspberry and others conspired to defraud the IRS of approximately $315,076 through the filing of 145 fraudulent federal income tax returns. Raspberry received refund checks from a co-conspirator and deposited them into his bank account. He would then withdraw the funds and provide them to the co-conspirator, keeping a portion of the proceeds for himself.
The refund checks were generated by filing false U.S. federal income tax returns, attaching the Schedule C or C-EZ Net Profit From Business, which falsely claimed that each “taxpayer” operated a business as a sole proprietorship, including a “barber” or “childcare.” The returns falsely stated that the “taxpayer” had gross receipts and two or more dependent children, when, in fact, the “taxpayer” was either a victim of identity theft, was misled into providing his or her identifying information, or was a willing participant in the scheme. No such business had been operated by the “taxpayer” and the “taxpayer” had no such dependents.
In a related action, Bernard Rankin, 43, of Glenarden, Maryland, pleaded guilty on Nov. 4, to conspiracy to defraud the United States with respect to claims. Rankin admitted permitting the use of his residential address and bank account in the scheme and recruiting another individual to deposit fraudulently obtained tax refund checks into that individual’s bank account as well.
In announcing the pleas, Acting Assistant Attorney General Ciraolo, U.S. Attorney Phillips, Special Agent in Charge Jankowski, Inspector in Charge Bowers 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 Specialist Donna Galindo. 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.
U.S. Attorney Alicia Limtiaco Attends 2015 Ninth Circuit Corrections SummitRead the Press Release
ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to attend the 2015 Ninth Circuit Corrections Summit, which was held on November 4-6, 2015, in Sacramento, California.
The U.S. District Court Judges from Guam and the Northern Mariana Islands, together with other Federal judges and court staff, U.S. Attorneys, members of the bar, state and federal corrections officials, and deputy state attorneys general participated in the summit. The summit was held in an effort to more effectively manage prisoner litigation within states in the Ninth Circuit, including Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon and Washington, Guam and the Northern Mariana Islands.
Some of the topics covered at the summit were segregated housing, health care delivery, prison grievance procedures, strategies for prisoner cases filed in federal court, and class action litigation.
In a press release announcing the summit, Chief Judge Sidney R. Thomas of the Ninth Circuit Court of Appeals stated that "[t]he challenges of prisoner litigation have never been greater, and we need fresh perspectives and initiatives to address these critical issues.” He further stated that “[t]he summit allows all of the stakeholders to share perspectives, gain understanding and discuss how to more effectively manage inmate litigation, from the initial grievance to trial and beyond.”
Ohio-Based Tax Return Preparation Business Executive Pleads Guilty to Obstructing the IRSRead the Press Release
A Liberty Township, Ohio, resident pleaded guilty to one count of obstructing and impeding the Internal Revenue Code, announced Acting Deputy Assistant Attorney General Bruce M. Salad of the Justice Department’s Tax Division.
According to court documents, Kyle Wade, 44, was the former vice-president of franchising for Instant Tax Service (ITS), a tax preparation business that claimed to have over 1,100 franchise locations throughout the United States in 2009. Wade formerly owned multiple ITS franchises.
From Jan. 1, 2004 through Nov. 1, 2012, Wade and another individual executed a scheme to obstruct the Internal Revenue Service (IRS), wherein numerous ITS franchises filed false federal income tax returns without the permission of their taxpayer clients and without receiving a valid W-2 form from each client. The false returns included false and inflated sole proprietorship Schedule C income in an attempt to increase the Earned Income Tax Credit refund. Wade and another individual also created and presented false documents with the IRS, such as phony W-2 forms that were created by ITS employees using tax preparation software and various other false IRS forms containing forged signatures.
At his sentencing on a date to be determined later, Wade faces a statutory maximum sentence of three years in prison and a fine of $250,000.
The Tax Division commended the efforts of special agents of IRS – Criminal Investigation, who investigated the case and Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald of the Tax Division, and Assistant U.S. Attorney Jessica Knight of the Southern District of Ohio, who are prosecuting the case.
Executive Office for Immigration Review Swears in Two Immigration JudgesRead the Press Release
FALLS CHURCH, VA – The Executive Office for Immigration Review (EOIR) today announced the investiture of two immigration judges. Acting Chief Immigration Judge Print Maggard presided over the investiture during a ceremony held Nov. 6, 2015, at the U.S. Court of Appeals for the Armed Forces in Washington D.C.
After a thorough application process, then-Attorney General Eric H. Holder Jr. appointed Daniel J. Daugherty to his new position, and Attorney General Loretta E. Lynch appointed Jonathan S. Simpson to his new position.
“We are committed to an effective and efficient immigration court process and we are happy that Congress has given us the funding to hire additional immigration judges, as well as the support staff they need,” said Maggard. “These new immigration judges, along with their 19 colleagues who were invested in June, strengthen our immigration judge corps and will help our agency work towards decreasing our current backlog of more than 450,000 pending cases.”
Daniel J. Daugherty, Immigration Judge, Las Vegas Immigration Court
Attorney General Eric H. Holder Jr. appointed Judge Daugherty to begin hearing cases in November 2015. Judge Daugherty received a Bachelor of Science degree in 1984 from Defiance College and a Juris Doctor in 1987 from the University of Toledo, College of Law. From 2008 through 2015 and 2002 through 2005, Judge Daugherty was a member of the Navy-Marine Corps Trial Judiciary, serving in capacities including chief trial judge and circuit judge. Prior to 2008, and when not serving as a member of the Navy-Marine Corps Trial Judiciary, Judge Daugherty served in the Marine Corps in various capacities including deputy staff judge advocate, chief trial counsel (prosecution), prosecutor, senior defense counsel, defense counsel, and special assistant U.S. attorney. Judge Daugherty also has provided legal services in a number of other positions within the Marine Corps and has served as an assistant county prosecutor. Judge Daugherty is a member of the Ohio Bar.
Jonathan S. Simpson, Immigration Judge, San Francisco Immigration Court
Attorney General Loretta E. Lynch appointed Judge Simpson to begin hearing cases in November 2015. Judge Simpson received a Bachelor of Arts degree in 1995 from Wabash College and a Juris Doctor in 1998 from Seton Hall University. From 2006 through September 2015, Judge Simpson served as assistant chief counsel, U.S. Immigration and Customs Enforcement, Department of Homeland Security, in Los Angeles and San Diego, Calif. From 1997 through 2006, both domestically and abroad, Judge Simpson served in various capacities as a member of the U.S. Navy’s Judge Advocate General’s Corps, including branch chief, officer in charge, and attorney. Judge Simpson is a member of the New Jersey 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.
Attorney General Loretta E. Lynch Announces Return of Forfeited Public Corruption Assets to Korean Minister of Justice Kim Hyun-WoongRead the Press Release
The Department of Justice returned $1,126,951.45 in forfeited assets to the government of the Republic of Korea today. The forfeited assets were the profits of a public corruption scheme orchestrated by former Korean President Chun Doo Hwan in the 1990s, and were laundered to the United States by Chun’s family members and associates. The assets were forfeited in two recent United States civil forfeiture actions as part of the Department of Justice’s Kleptocracy Asset Recovery Initiative, which is coordinated by the department’s Asset Forfeiture and Money Laundering Section.
“The return of these assets is a powerful vindication of the rule of law, and an important victory for the people of the Republic of Korea,” said Attorney General Loretta E. Lynch. “Since it was established in 2010, the Kleptocracy Asset Recovery Initiative has been an effective tool in our ongoing efforts to curb high-level public corruption around the world. As we move forward, the Department of Justice will remain committed to using all the resources at its disposal to ensure that government funds go to their lawful purposes; that stolen assets are returned to state coffers; and that corrupt officials are held fully accountable for abusing their positions.”
Immigration and Customs Enforcement-Homeland Security Investigations (ICE-HSI) and the FBI investigated the cases leading to the U.S. forfeiture of the assets being returned to Korea and served as the seizing agencies.
“The FBI is committed to tracing, seizing and forfeiting the assets of corrupt foreign politicians who have abused their power to enrich themselves and use the United States financial markets to launder their ill-gotten gains,” said Assistant Director Joseph Campbell of the FBI’s Criminal Investigative Division. “The funds returned represent a successful and important collaboration between the United States and the Republic of Korea.”
“I commend the men and women of our Homeland Security Investigations Regional Attaché Office in Korea and the Special Agent in Charge Office in Philadelphia who worked tirelessly to bring this foreign corruption case to fruition,” said Director Sarah R. Saldaña of ICE. “Let this case be a message that corruption on all levels will be investigated and that the United States will work multilaterally with countries throughout the world to protect citizens from the wrongs caused by public servants motivated by greed.”
In 1997, a criminal court in Korea convicted former President Chun of accepting more than $200 million in bribes from Korean corporations and ordered him to pay approximately $212 million in criminal penalties. In 2013, the Anti-Corruption Division of the Korean Supreme Prosecutor’s Office opened a money laundering investigation regarding the potential laundering of the bribery proceeds into the United States by Chun and his associates through the acquisition of U.S. real estate and opening of U.S. bank accounts.
Prosecutors assigned to the Kleptocracy Asset Recovery Initiative initiated their own investigation, aided by agents from ICE-HSI and the FBI. In January 2014, FBI investigators in the Central District of California seized $726,951.45 held in a California escrow account, which was traced to the sale of real estate property acquired by Chun’s son and his girlfriend in 2005 in Orange County, California. In February 2015, Kleptocracy prosecutors filed a second civil forfeiture action in the Eastern District of Pennsylvania seeking to forfeit a secured investment worth approximately $500,000 in a Pennsylvania company, which also was traced to Chun’s corruption scheme. On March 4, 2015, the department reached a settlement agreement of its civil forfeiture actions, resulting in the forfeiture of a total of $1,126,951.
The investigation was conducted jointly by ICE-HSI’s Philadelphia Office, ICE-HSI’s Regional Attaché Office for Korea and Japan at the U.S. Embassy in Seoul, the FBI Los Angeles Division’s West Covina Resident Agency and the Criminal Division’s International Corruption Unit-FBI Kleptocracy Program. Kleptocracy prosecutors worked closely with Korean law enforcement authorities, principally through the Seoul Central District Prosecutor’s Office, the Supreme Prosecutor’s Office and the Ministry of Justice. The cases were prosecuted by Assistant Deputy Chief Woo S. Lee and Trial Attorney Della Sentilles of the Criminal Division’s Asset Forfeiture and Money Laundering Section, Assistant U.S. Attorneys Katharine Schonbachler and Steven R. Welk of the Central District of California and Assistant U.S. Attorneys Joseph Minni and Alvin Stout of the Eastern District of Pennsylvania. The Criminal Division’s Office of International Affairs provided substantial support.
This case was brought under the Kleptocracy Asset Recovery Initiative by a team of dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, return those proceeds to benefit the people harmed by these acts of corruption and abuse of office.
Virginia Couple Convicted of Conspiracy, Tax Crimes and FraudRead the Press Release
A Bedford, Virginia couple was convicted today in the U.S. District Court for the Western District of Virginia of theft of government funds and other federal crimes, announced Acting Deputy Assistant Attorney General Larry J. Wszalek of the Justice Department’s Tax Division and U.S. Attorney Anthony P. Giorno of the Western District of Virginia.
Edgar and Contina Foxx were convicted by a federal jury after a four-day trial. In addition to the theft of government funds charge, Edgar Foxx was convicted of one count of making a false 2008 tax return and three counts of failure to file a tax return and Contina Foxx was convicted of one count of providing false statements for federal health care program benefits.
According to the indictment, during the years 2008, 2009, 2010 and 2011, Edgar Foxx transported and sold scrap metal which resulted in gross receipts in excess of $500,000. The jury found that Edgar Foxx filed a false 2008 joint individual income tax return, which failed to report to the Internal Revenue Service (IRS) significant amounts of income he earned that year. For the tax years 2009 through 2011, Edgar Foxx did not file any individual income tax returns. The jury found as charged in the indictment that Edgar and Contina Foxx misrepresented or failed to report income to the Social Security Administration (SSA) in order to qualify to receive Medicaid benefits which resulted in their unlawful receipt of social security benefits for the years 2010 through 2012. Contina Foxx was further convicted of making false statements to the Department of Health and Human Services in the application for benefits involving Medicaid by underrepresenting her total household income.
Sentencing is scheduled on Feb. 23, 2016, before U.S. District Judge Norman K. Moon of the Western District of Virginia, who presided over the trial. Edgar and Contina Foxx face a statutory maximum sentence of 10 years in prison and a fine of up to $250,000 for the theft of government funds charge. Edgar Foxx also faces a statutory maximum of one year in prison and a fine of up to $100,000 for each failure to file charge and three years in prison and a fine of up to $250,000 for the false return charge. Contina Foxx faces a statutory maximum of five years in prison and a fine of up to $250,000 for the false statements for federal health care program benefits charge.
Acting Deputy Assistant Attorney General Wszalek and U.S. Attorney Giorno commended special agents of IRS-Criminal Investigation, special agents of the Office of Inspector General for SSA and special agents of the Office of Inspector General for the Department of Health and Human Services, who investigated the case and Assistant U.S. Attorneys Patrick Hogeboom and Charlene Day of the Western District of Virginia and Trial Attorney Joseph M. Giannullo of the Tax Division, who prosecuted the case.
UOG’s MAED Class Invites U.S. Attorney’s Office to Speak on Bullying and CyberbullyingRead the Press Release
ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was invited to speak at the University of Guam’s (UOG) School of Education Masters Class (MAED) on October 26, 2015, at the University of Guam.
U.S. Attorney Limtiaco gave a presentation on cybercrime, including child pornography, child sexual exploitation, sexting and cyberbullying, and shared resources and safety tips.
The U.S. Attorney’s Office is often invited by elementary, middle and high schools to make presentations on bullying and cyberbullying. Bullying and cyberbullying are prevalent issues in today’s youth and are priorities of the U.S. Attorney’s Office.
Photo of U.S. Attorney Alicia Limtiaco taken at UOG’s MAED Class:Six Convicted on Business Opportunity Fraud ChargesRead the Press Release
Verdict Brings Total of 22 Individuals Convicted in Scheme
A jury in Central Islip, New York, convicted six men yesterday on felony charges of conspiracy and fraud in the sale of candy vending machine business opportunities, the Department of Justice announced.
Edward Morris “Ned” Weaver, 42, of Perrysburg, Ohio, and Lawrence A. Kaplan, 57, of Brooklyn, New York, were convicted of conspiracy, six counts of fraud and one count each of making false statements to federal agents during a related criminal investigation. Scott M. Doumas, 43, of East Setauket, New York, was convicted of one count of conspiracy and one count of mail fraud. Richard R. Goldberg, 43, of Bay Shore, New York, and Richard Linick, 73, of Coram, New York, were each convicted of conspiracy and one count of wire fraud. Paul E. Raia, 64, of Brookhaven, New York, was convicted of conspiracy and two counts of wire fraud.
The convictions followed a six-week trial before U.S. District Court Judge Joan M. Azrack in federal court in the Eastern District of New York. Each of the defendants faces a statutory maximum sentence of 10 years in prison on the conspiracy count and 25 years in prison on the fraud counts. Weaver and Kaplan face a statutory maximum sentence of five years in prison on the false statements charges.
“These defendants promised their victims the American dream, but knew that what they in fact were offering was a worthless business opportunity,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department of Justice will continue to prosecute those who seek to scam out of everyday Americans the hard-earned money in their retirement accounts and life savings.”
According to evidence presented at trial, managers, sales representatives and operators of “locating companies” associated with Multivend LLC, d/b/a Vendstar, made material misrepresentations about the profits customers would make from bulk candy vending machines. During the telemarketing calls, Vendstar’s sales representatives falsely claimed to operate their own profitable vending machine businesses.
Additional evidence at trial described how Vendstar advertised nationwide in newspapers and on the Internet. Vendstar sales representatives promised to provide consumers with everything they needed to operate a successful business, including vending machines, an initial supply of candy, assistance in finding locations for the vending machines, training and ongoing customer assistance. The locating companies who worked with Vendstar to close deals had no special skills, tools or expertise in finding locations and generally placed consumers’ machines wherever they could as quickly as they could, often in businesses that had not consented to housing the machines and that soon demanded that the machines be removed. The vending machines generated little business and Vendstar’s customers lost all or nearly all of their investments. The typical customer paid about $10,000 for the business opportunity.
Prior to this trial, 16 other Vendstar managers, Vendstar sales representatives and locating company operators pleaded guilty to federal felony charges for related conduct at Vendstar. Evidence presented at trial established that from 2005 to 2010, the Vendstar scheme cost consumers $60 million.
Principal Deputy Assistant Attorney General Mizer commended the U.S. Postal Inspection Service for their investigative efforts. The case was prosecuted by Trial Attorneys Patrick Jasperse and Alan Phelps of the Civil Division’s Consumer Protection Branch.
Owner of Los Angeles Medical Supply Company Convicted in $4 Million Medicare Fraud SchemeRead the Press Release
A federal jury in Los Angeles convicted a Los Angeles man and owner of a medical supply company today for his role in a $4 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Eileen M. Decker of the Central District of California, Special Agent in Charge Christian J. Schrank of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Los Angeles Region and Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office made the announcement.
According to evidence presented at trial, Valery Bogomolny, 43, used his company, Royal Medical Supply, to bill Medicare $4 million between January 2006 and October 2009 for power wheelchairs (PWCs), back braces and knee braces that were medically unnecessary, not provided to beneficiaries or both. The evidence further showed that Bogomolny created false documentation to support his false billing claims, including creating fake reports of home assessments that never occurred. Bogomolny personally delivered PWCs to beneficiaries who were able to walk without assistance and signed documents stating that he had delivered equipment when the equipment was not actually delivered. Bogomolny ultimately received $2.7 million from Medicare on these false claims.
A sentencing hearing is scheduled for Feb. 29, 2016, before U.S. District Judge S. James Otero of the Central District of California, who presided over the trial.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section. Trial Attorneys Fred Medick and Ritesh Srivastava of the Criminal Division’s Fraud Section are prosecuting this case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Former Colombian Paramilitary Leader Sentenced to More than 16 Years in Prison for International Drug TraffickingRead the Press Release
A former high-ranking paramilitary leader in the Autodefensas Unidas de Colombia (AUC or the United Self Defense Forces of Colombia) was sentenced to 198 months in U.S. federal prison today for conspiring to import into the United States and distribute ton-quantities of cocaine, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting Administrator Chuck Rosenberg of the U.S. Drug Enforcement Administration (DEA).
“Rodrigo Tovar-Pupo funded his violent and dangerous paramilitary organization by reaping the profits of manufacturing and shipping thousands of kilograms of cocaine into the United States,” said Assistant Attorney General Caldwell. “His actions did untold damage to the United States and Colombia. This case demonstrates our continued commitment to work closely with our international partners to stem the flow of the international drug trade.”
“The sentence reflects our unwavering commitment to bring to justice leaders of the AUC and other narco-terrorist organizations throughout the world,” said Acting Administrator Rosenberg. “Many terror regimes use drug trafficking profits to expand their global influence. As a top-level AUC commander, Tovar-Pupo led a huge drug trafficking enterprise, overseeing maritime cocaine shipments destined for the United States and other parts of the world. I am proud of the dedicated men and women throughout DEA who have worked tirelessly to bring him to justice.”
Rodrigo Tovar-Pupo, also known as “Jorge 40,” 54, formerly of Barranquilla, Colombia, pleaded guilty in July 2009 to one count of conspiracy to distribute five kilograms or more of cocaine, knowing and intending that it would be imported into the United States, and was sentenced today by U.S. District Judge Reggie B. Walton of the District of Columbia. Tovar-Pupo was also ordered to pay a $25,000 fine and to five years of supervised release following his prison sentence.
According to court documents and proceedings, including admissions in connection with his guilty plea and additional testimony, Tovar-Pupo became a member of a paramilitary group in 1996 that later merged with other Colombian paramilitary groups to form the AUC. The AUC was designated a foreign terrorist organization by the U.S. Department of State in September 2001. The AUC was removed from the State Department’s list of foreign terrorist organizations in July 2014. In May 2003, the AUC was placed on the Significant Foreign Narcotics Traffickers list by order of the president, pursuant to the Foreign Narcotics Kingpin Designation Act. Court documents reflect that the AUC was organized into blocs (or regions) with each bloc having a commander who controlled large areas in Colombia where cocaine was produced.
According to admissions made in connection with his plea agreement and during other court proceedings, Tovar-Pupo quickly became a top-level commander in the AUC, and his forces controlled all aspects of cocaine production and transportation in his region, which included the north coast of Colombia. Tovar-Pupo’s organization and its operations were funded through “taxes” he imposed on cocaine manufacturers and traffickers in his region. In exchange, Tovar-Pupo provided protection and security for the manufacturers and traffickers, including securing coastal areas where cocaine was loaded onto vessels for shipment to the United States and elsewhere. Tovar-Pupo knew that shipments of large quantities of cocaine, amounting to more than 1,500 kilograms, were manufactured in and transited through his region, and that much of the cocaine was transported to the United States.
Tovar-Pupo was arrested in Colombia based on a provisional arrest warrant and extradited to the United States on May 13, 2008, along with 13 other fugitives.
Today’s sentence for violations of U.S. drug trafficking laws does not account for any violations of Colombian human rights-related laws allegedly committed by Tovar-Pupo in Colombia, which are being addressed in Colombia through the Justice and Peace process—a legal framework enacted in Colombia in 2005 to facilitate the demobilization of its paramilitary organizations—and the Colombian criminal justice system.
The case was investigated by the Department of Justice’s Organized Crime Drug Trafficking Task Forces program, led by DEA’s Bogotá and Cartagena, Colombia, Country Offices, and the DEA Special Operations Division. The DEA worked in partnership with the Judicial Police of the Prosecutor General’s Office in Colombia and the Colombian National Police.
The case is being prosecuted by Trial Attorney Paul W. Laymon of the Criminal Division’s Narcotic and Dangerous Drug Section (NDDS), with significant assistance from NDDS’ Judicial Attachés in Bogotá, Colombia, the Criminal Division’s Office of International Affairs, and the Prosecutor General’s Office of the Republic of Colombia (Fiscalia), including the Fiscalia’s Transitional Justice program.
Former CEO of $3 Billion TierOne Bank Convicted for Orchestrating Scheme to Hide More than $100 Million in Losses from Shareholders and RegulatorsRead the Press Release
The former CEO of TierOne Bank, a $3 billion publicly traded commercial bank formerly headquartered in Lincoln, Nebraska, was convicted by a federal jury today for orchestrating a scheme to defraud TierOne’s shareholders and to mislead regulators by concealing more than $100 million in losses on loans and declining real estate.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Thomas R. Metz of the FBI’s Omaha, Nebraska, Division and Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Goldsmith Romero made the announcement.
After a two-week trial, a jury in the District of Nebraska found the former CEO, Gilbert G. Lundstrom, 74, of Lincoln, guilty on 12 of 13 counts, including charges of conspiracy to commit wire fraud and securities fraud, conspiracy to falsify bank entries, wire fraud, securities fraud and falsifying bank entries. In 2014, co-conspirators James Laphen, TierOne’s former president and chief operating officer, and Don Langford, TierOne’s former chief credit officer, pleaded guilty to multiple felonies in connection with their participation in the scheme.
Evidence at trial showed that Lundstrom was the architect of an aggressive strategy to expand the bank’s portfolio beyond traditional lending in Nebraska to riskier areas like commercial real estate in Las Vegas. Once the financial crisis hit, Lundstrom’s bet on real estate in riskier areas decimated the bank. Lundstrom and his co-conspirators then intentionally concealed massive losses – more than $100 million – in TierOne’s loan and real estate portfolio from investors and regulators and provided inflated figures in its required reports to the U.S. Securities and Exchange Commission (SEC) and the Office of Thrift Supervision (OTS). In April 2009, Lundstrom and his co-conspirators learned that TierOne needed to increase its reserves and Loan Loss Allowance by between $34 million and $114 million, but concealed this information from shareholders and regulators in TierOne’s financial statements. In addition, during TierOne’s annual shareholder meeting held on May 21, 2009, the evidence showed that Lundstrom misrepresented the state of TierOne’s capital ratios and reserves and whether TierOne had applied for TARP funding.
In June 2010, following TierOne’s ultimate disclosure of $120 million in loan losses and its subsequent delisting from the NASDAQ exchange, TierOne was shut down by the Federal Deposit Insurance Corporation. At the time of the closure, TierOne had more than 750 employees working at TierOne’s headquarters in Lincoln and at its 69 branch offices located in Nebraska, Iowa and Kansas.
The case was investigated by the FBI’s Omaha Division and SIGTARP. The SEC also provided substantial assistance in the investigation. The case was prosecuted by Trial Attorneys Henry P. Van Dyck and L. Rush Atkinson and Senior Deputy Chief Sandra Moser of the Criminal Division’s Fraud Section.
Federal Officials Close the Investigation into the Death of Anastasio Hernandez-RojasRead the Press Release
The Justice Department announced today that following a comprehensive investigation it will not pursue federal criminal civil rights or other federal charges against the federal agents involved in the in-custody altercation that resulted in the death of Mexican national Anastasio Hernandez-Rojas.
Officials from the Department of Justice’s Civil Rights Division, the FBI and the Department of Homeland Security’s Office of the Inspector General (DHS-OIG) met today with Hernandez-Rojas’ family members and their representatives to inform them of this determination. The department’s decision is based on the facts developed during an independent and comprehensive investigation into this matter.
The department devoted significant time and resources to investigating the events surrounding Hernandez-Rojas’ death on May 31, 2010, three days after he was taken into custody at the San Ysidro Port of Entry in San Diego, California. A team of experienced federal prosecutors reviewed hundreds of pages of evidence generated by San Diego Police Department Homicide investigators. Federal agents and the Civil Rights Division then initiated an independent federal investigation into the incident, which included numerous witness interviews and visits to the scene. The evidence generated during the federal investigation included videos of the incident, federal law enforcement witness accounts, Mexican law enforcement witness accounts, civilian witness accounts, medical personnel accounts, medical records, autopsy reports, official use of force training materials and forensic evidence.
The evidence developed during the investigation indicated that when Hernandez-Rojas’ handcuffs were removed at the San Ysidro Port of Entry, Hernandez-Rojas began grappling with the two U.S. Border Patrol (USBP) agents and then resisted their efforts to restrain him. Two Immigration and Customs Enforcement (ICE) agents, as well as another USBP agent, joined the struggle and struck Hernandez-Rojas several times with their asp batons. The agents again secured Hernandez-Rojas in handcuffs, but he continued to struggle and kick at the agents. The agents called for backup and a transport vehicle to take Hernandez-Rojas for processing since he was no longer eligible for voluntary return due to the struggle. As agents attempted to place Hernandez-Rojas in the transport van to take him back to the station, he again physically resisted and attempted to kick the agents. A number of Customs and Border Protection (CBP) officers responded to the scene, one of whom shocked Hernandez-Rojas with a taser. Hernandez-Rojas stopped resisting and the agents restrained his legs. Shortly thereafter, Hernandez-Rojas’ breathing slowed and he became unresponsive. The CBP officers administered CPR until medical personnel arrived at the scene. Hernandez-Rojas was pronounced dead two days later after being removed from life support.
Subsequent autopsies concluded that Hernandez-Rojas died of an acute myocardial infarction (heart attack) while being restrained. Acute methamphetamine intoxication, pre-existing heart disease, the level of physical exertion during the struggle, the electro-shocks from the taser and positional restraint were stated as contributory factors in Hernandez-Rojas’ death. The medical examiner stated further that Hernandez-Rojas would not have died had there not been methamphetamine intoxication.
After a careful and thorough review, a team of experienced federal prosecutors determined that the evidence was insufficient to pursue federal criminal civil rights charges. Under the applicable federal criminal civil rights law, prosecutors must establish, beyond a reasonable doubt, that an official willfully deprived an individual of a constitutional right, meaning that the official acted with the deliberate and specific intent to do something the law forbids. This is the highest standard of intent imposed by the law. Neither accident, mistake, fear, negligence nor bad judgment is sufficient to establish a federal criminal civil rights violation. In the present matter, the federal government could not prove beyond a reasonable doubt that the subjects acted willfully, that is with the specific intent to deprive the victim of a constitutional right. Specifically, the federal government cannot disprove the agents’ claim that they used reasonable force in an attempt to subdue and restrain a combative detainee so that he could be placed inside a transport vehicle.
The federal government is also unable to prove, beyond a reasonable doubt, that the subjects violated the federal homicide statutes within the Special Maritime and Territorial Jurisdiction of the United States. Although positional restraint of Hernandez-Rojas and electro-shocks from the taser were contributory factors in his death, there is no evidence that any of the federal agents deployed the taser or restrained Hernandez-Rojas with malice. Nor is there sufficient evidence to establish that the federal agents’ conduct violated the federal manslaughter statute, which does not require malice but requires that the federal agents committed a lawful act in an unlawful manner, or without due caution and circumspection, that might produce death. Rather, the federal agents’ restraint and deployment of the taser against Hernandez-Rojas when he was non-compliant and physically assaultive was not unlawful and, based on the evidence gathered relating to the federal agents’ use of force training, the federal agents’ action were not done without due caution and circumspection.
While the loss of life is regrettable, the facts of this matter do not support a federal prosecution. Accordingly, the investigation into this incident has been closed.
Autoridades Federales Cierran la Investigación de la Muerte de Anastasio Hernández-RojasRead the Press Release
Washington – El Departamento de Justicia anunció hoy que, después de una investigación exhaustiva, no presentará cargos penales federales de violación de los derechos civiles u otros cargos federales contra los agentes federales involucrados en el altercado asociado a la detención que resultó en el fallecimiento del ciudadano mexicano Anastasio Hernández-Rojas.
Autoridades de la División de Derechos Civiles del Departamento de Justicia, el Buró Federal de Investigación [Federal Bureau of Investigation (FBI)] y la Oficina del Inspector General del Departamento de Seguridad Nacional [Department of Homeland Security - Office of the Inspector General (DHS-OIG)] se reunieron hoy con miembros de la familia de Hernández-Rojas y sus representantes para informarlos de esta determinación. La decisión del departamento se basó en hechos ocurridos durante una investigación independiente y exhaustiva del asunto.
El departamento le dedicó una importante cantidad de tiempo y recursos a investigar los hechos asociados a la muerte de Hernández-Rojas el 31 de mayo de 2010, tres días después de haber sido detenido en el Puerto de Entrada de San Ysidro en San Diego, California. Un equipo de fiscales federales experimentados examinaron cientos de páginas de evidencia generados por investigadores del Departamento de Homicidios del Departamento de Policía de San Diego. Agentes federales y la División de Derechos Civiles luego iniciaron una investigación federal independiente del hecho, la que incluyó a numerosas entrevistas con testigos y visitas al lugar del hecho. Las pruebas recabadas durante la investigación federal incluyeron videos del incidente, relatos de testigos de oficiales federales, relatos de testigos de policía mexicana, relatos de testigos civiles, relatos de personal médico, registros médicos, informes de autopsia, materiales de capacitación sobre el uso de fuerza oficial y pruebas forenses.
Las pruebas desarrolladas durante la investigación indicaron que, cuando se le retiraron las esposas a Hernández-Rojas en el Puerto de Entrada de San Ysidro, Hernández-Rojas empezó a luchar con dos agentes de la Patrulla Fronteriza de EE.UU. [U.S. Border Patrol (USBP)] y luego se resistió a sus esfuerzos por contenerlo. Dos agentes del Servicio de Inmigración y Control de Aduanas [Immigration and Customs Enforcement (ICE)], y un otro agente de la USBP, se unieron al altercado y golpearon a Herández-Rojas varias veces con sus bastones telescópicos. Los agentes esposaron a Hernández-Rojas otra vez, pero el mismo siguió debatiéndose y pateando a los agentes. Los agentes pidieron refuerzo y un vehículo de transporte para detener a Hernández-Rojas, ya que había dejado de ser elegible para regreso voluntario a Mexico porque forcejearse. A medida que los agentes intentaban colocar a Hernández-Roja en la camioneta que lo llevaría a la comisaría, nuevamente se resistió e intentó patear a los agentes. Una serie de agentes de La Oficina de Aduanas y Protección Fronteriza [Customs and Border Protection (CBP)] respondieron al lugar de los hechos, uno de los cuales acertó a Hernández-Rojas con una pistolaTaser. Hernández-Rojas dejó de resistirse y los agentes le inmovilizaron las piernas. Poco después, la respiración de Hernández-Rojas se volvió más lenta y Hernández-Rojas dejó de reaccionar. Los agentes de CBP le practicaron resucitación cardiopulmonar hasta que llegó personal médico al lugar. Hernández-Rojas fue pronunciado muerto dos días después de haber sido desconectado del equipo de auxilio respiratorio.
Las autopsias que siguieron concluyeron que Hernández-Rojas falleció debido a infarto de miocardio agudo (ataque al corazón) durante su inmovilización. Se indicó que intoxicación aguda con metanfetamina, enfermedad cardíaca preexistente, el nivel de esfuerzo físico durante la resistencia física y las descargas eléctricas de la pistola Taser y la inmovilización fueron factores que contribuyeron a la muerte de Hernández-Rojas. Asimismo, el médico forense indicó que Hernández-Rojas no hubiera fallecido si no hubiera existido la intoxicación por metanfetamina.
Después de un análisis cuidadoso y exhaustivo, un equipo de fiscales federales experimentados determinaron que no existían pruebas suficientes para la presentación de cargos federales penales de derechos civiles.
De acuerdo con las leyes federales penales de derechos civiles aplicables, los fiscales deben establecer, más allá de la duda razonable, que un oficial federal privó intencionalmente a una persona de un derecho constitucional, o sea, que el oficial actuó con intención deliberada y específica de hacer algo prohibido por la ley. Este es el más alto estándar de determinación impuesto por la ley. Accidente, error, temor, negligencia o falta de criterio no son suficientes para establecer un violación penal federal de los derechos civiles. En este caso, el gobierno federal no logró probar más allá de la duda razonable, que los sujetos actuaron de manera deliberada, o sea, con la intención específica de privar a la víctima de un derecho constitucional. Específicamente, el gobierno federal no logró refutar el alegato de los agentes de que utilizaron fuerza razonable con la intención de dominar y restringir a un detenido combativo, de modo que se lo pudiera colocar dentro de un vehículo de transporte.
El gobierno federal no podría probar, más allá de la duda razonable, que los sujetos violaron las leyes federales de homicidio dentro del ámbito de la Jurisdicción Especial Marítima y Territorial de los Estados Unidos. Si bien la inmovilización de Hernández-Rojas y las descargas eléctricas de la pistola Taser fueron factores que contribuyeron para su muerte, no existen indicios de que cualquiera de los agentes federales utilizó la pistola Taser o inmovilizó a Hernández-Rojas con malicia. Ni existen pruebas suficientes para establecer que la conducta de los agentes federales violó la ley federal de homicidio involuntario, la que no requiere malicia, pero sí requiere que los agentes federales hayan cometido un acto legal de manera ilegal, o sin el cuidado y la circunspección debidas, lo que podría producir la muerte. Al contrario, la inmovilización y el uso de la pistola Taser por los agentes federales contra Hernández-Rojas, durante su resistencia y cuando se encontraba en estado agresivo, no fue ilegal y, según pruebas reunidas relacionadas con la capacitación acerca de uso de la fuerza de los agentes federales, las acciones de los agentes federales no fueron llevadas a cabo sin el debido cuidado y circunspección.
Mientras la pérdida de una vida es lamentable, los hechos asociados a este caso no justifican un enjuiciamiento federal. En consecuencia, la investigación de este incidente ha sido cerrada.
U.S. Trustee Program Reaches $81.6 Million Settlement with Wells Fargo Bank N.A. to Protect Homeowners in BankruptcyRead the Press Release
Settlement Addresses the Bank’s Errors Affecting Nearly 68,000 Accounts of Homeowners in Bankruptcy
The Department of Justice’s U.S. Trustee Program has entered into a national settlement agreement with Wells Fargo Bank N.A. (Wells Fargo) requiring Wells Fargo to pay $81.6 million in remediation for its repeated failure to provide homeowners with legally required notices, thereby denying homeowners the opportunity to challenge the accuracy of mortgage payment increases. These failures violated federal bankruptcy rules that took effect in December 2011 and imposed more detailed disclosure requirements to ensure proper accounting of fees and charges on homeowners in bankruptcy.
Bankruptcy Rule 3002.1 requires mortgage creditors to file and serve a notice 21 days before adjusting a Chapter 13 debtor’s monthly mortgage payment. Wells Fargo acknowledges that it failed to timely file more than 100,000 payment change notices (PCNs) and failed to timely perform more than 18,000 escrow analyses in cases involving nearly 68,000 accounts of homeowners in bankruptcy between Dec. 1, 2011, and March 31, 2015. Under the settlement, Wells Fargo also will change internal operations and submit to oversight by an independent compliance reviewer. The proposed settlement has been filed in the U.S. Bankruptcy Court for the District of Maryland, where it is subject to court approval.
“I am pleased that Wells Fargo has acted responsibly by accepting accountability for its deficient bankruptcy practices, agreed to compensate affected homeowners for those deficiencies and committed to making necessary improvements in its bankruptcy operations,” said Director Cliff White of the U.S. Trustee Program. “When creditors fail to comply with the bankruptcy laws and rules, they compromise the integrity of the bankruptcy system and must be held accountable. Transparency in the process is of paramount importance. Homeowners in bankruptcy have the right to proper and timely notices, particularly when they are being asked to pay more. The U.S. Trustee Program remains diligent in its effort to hold financial institutions that disregard the law accountable for their actions.”
Settlement Terms
Wells Fargo agrees to pay a total of $81.6 million to homeowners who were in bankruptcy between Dec. 1, 2011, and March 31, 2015, and who were affected by Wells Fargo’s failure to timely file PCNs and escrow statements, including:
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$53.6 million will be paid to more than 42,000 homeowners whose payments increased as to which Wells Fargo failed to timely file a PCN with the court. The payment will be in the form of a credit to the homeowner’s mortgage account in a lump sum amount, which averages $1,254 per homeowner and varies depending on the homeowner’s mortgage balance. More than 70 percent of the total payments will go to homeowners who have mortgage balances under $300,000. These payments will be made regardless of whether homeowners actually paid the increased amount.
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An estimated $10 million will be paid by crediting homeowners’ accounts at the end of their bankruptcy cases if, upon a detailed review of the accounts, it is determined the homeowners were not fully compensated through the initial crediting process described above. Wells Fargo estimates that 15 to 20 percent of homeowners who receive the initial payments will be due additional amounts at case closing.
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$1.5 million will be refunded in cash to about 3,000 homeowners where notices of decreases in monthly payments were not timely provided and the homeowners paid more than the actual amount due.
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$1 million will be refunded in cash to about 2,400 homeowners who satisfied escrow shortages by making a lump sum payment, but whose monthly payments did not decrease to account for the lump sum payment.
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$4.5 million will be paid by crediting the mortgage escrow accounts of about 6,000 homeowners who did not receive timely escrow statements. Wells Fargo will credit the amount of any increase in escrow shortage that was incurred between the time Wells Fargo should have performed the analysis and the time it actually did perform the analysis. As a result, homeowners will not be responsible for any increase in the escrow shortage stemming from Wells Fargo’s failure to timely perform the escrow analysis.
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$4 million will be paid to about 12,000 homeowners by crediting mortgage accounts in the amount of $333, where Wells Fargo failed to timely perform an escrow analysis that would have resulted in a PCN being filed and the homeowner is not already receiving remediation for a missed or untimely PCN.
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$4 million will be refunded in cash to about 6,000 homeowners who did not receive timely escrow statements and whose escrow accounts contained surpluses that Wells Fargo had not refunded or credited toward the next year’s escrow payment.
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$3 million in remediation to about 8,000 homeowners has already been completed by Wells Fargo for certain violations.
In addition to the monetary remediation, Wells Fargo will make changes to internal procedures to prevent recurrence of the violations. These changes include improvements to its computer platform, improvements to employee training and oversight and implementation of quality control processes to ensure the accuracy and timeliness of PCNs and escrow statements.
The settlement resolves any actions that could be brought by the U.S. Trustee Program for the covered conduct, but does not limit the rights of any homeowner or other third party to take action against Wells Fargo.
Wells Fargo and the U. S. Trustee Program have selected Lucy Morris of Hudson Cook LLP, to serve as an independent reviewer who will verify that Wells Fargo complies with the settlement order. The independent reviewer will file periodic public reports with the bankruptcy court. Wells Fargo will pay all costs associated with the compliance review, including the compensation of the independent reviewer.
Homeowners with questions about the settlement may contact Wells Fargo at 1-800-274-7025.
Director White commended the U.S. Trustee Program team who expertly investigated, litigated and settled this matter, including Deputy Director and General Counsel Ramona Elliott, Senior Trial Attorney Diarmuid Gorham, National Creditor Enforcement Coordinator Gail Geiger, Assistant U.S. Trustee Catherine Stavlas and Trial Attorney Kelley Callard.
The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The U.S. Trustee Program has 21 regions and 93 field office locations.
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Two Former Rabobank Traders Convicted for Manipulating U.S. Dollar, Yen LIBOR Interest RatesRead the Press Release
A federal jury convicted two former Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) derivative traders – including the bank’s former Global Head of Liquidity & Finance in London – today for manipulating the London InterBank Offered Rates (LIBOR) for the U.S. Dollar (USD) and the Yen, benchmark interest rates to which trillions of dollars in interest rate contracts were tied. Five former Rabobank employees have now been convicted in the Rabobank LIBOR investigation.
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 Abbate of the FBI’s Washington Field Office made the announcement.
“Today’s verdicts illustrate the department’s successful efforts to hold accountable bank executives responsible for this global fraud scheme,” said Assistant Attorney General Caldwell. “This investigation—which also resulted in the recent conviction of a bank executive in the U.K.—exemplifies the department’s work with our international partners to protect our global markets from fraud. The verdicts also demonstrate the department’s ongoing efforts to hold individuals who use their corporate positions to commit fraud personally responsible for their actions.”
“The department will continue to pursue aggressively those involved in illegal schemes that undermine the integrity of financial markets,” said Assistant Attorney General Baer. “And we will hold individuals criminally accountable for directing illegal corporate behavior.”
“These convictions make clear that bank executives and traders will be held accountable for manipulating world interest rates for their own personal benefit,” said Assistant Director in Charge Abbate. “Today’s verdict is a testament to the dedication of the special agents, analysts and prosecutors who worked tirelessly to uncover manipulation and fraud in the global financial system.”
After a four-week trial, a jury in the Southern District of New York found Anthony Allen, 44, of Hertsfordshire, England, and Anthony Conti, 46, of Essex, England, guilty of conspiracy to commit wire and bank fraud and substantive counts of wire fraud.
As the trial evidence showed, LIBOR is an average interest rate, calculated based upon submissions from leading banks around the world and reflecting the rates those banks believe they would be charged if borrowing from other banks. 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. Allen, Conti and Paul Robson, who previously pleaded guilty to the conspiracy charge, each determined Rabobank’s LIBOR submissions on various occasions.
LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products. Rabobank invested in various derivatives contracts that were directly affected by the relevant LIBOR rates on a certain dates. If the relevant LIBOR moved in the direction favorable to the defendants’ positions, Rabobank and the defendants benefitted at the expense of the counterparties. When LIBOR moved in the opposite direction, the defendants and Rabobank stood to lose money to their counterparties.
Evidence at trial established that Allen, who was Rabobank’s global head of liquidity and finance and the manager of the company’s money market desk in London, oversaw a system in which Rabobank employees who traded in these LIBOR-linked derivative products influenced the employees who submitted Rabobank’s LIBOR contributions to the BBA. These traders asked Allen, Conti, Robson and others to submit LIBOR contributions that would benefit the traders’ or the banks’ trading positions.
Sentencing is scheduled for March 10, 2016.
In addition to Allen and Conti, three other former Rabobank employees have been convicted in the Rabobank LIBOR investigation. Robson, 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, 42, of Tokyo, and Paul Thompson, 48, of Dalkeith, Australia, have also been charged. 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 case was investigated by special agents, forensic accountants and intelligence analysts in the FBI’s Washington Field Office. The prosecution is being handled by Senior Litigation Counsel Carol L. Sipperly and Assistant Chief Brian R. Young of the Criminal Division’s Fraud Section and Trial Attorney Michael T. Koenig of the Antitrust Division. 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.
This prosecution is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov.
Justice Department Asks Federal Court to Stop Maryland Tax Preparer from Promoting Tax Fraud SchemeRead the Press Release
The United States filed a complaint seeking to permanently bar an Aberdeen, Maryland, woman and the tax preparation business she operates from preparing federal tax returns and promoting a frivolous tax avoidance scheme, the Justice Department announced today.
The complaint against Charese Johnson, doing business as Prodigy Accounting Services, was filed in the U.S. District Court for the District of Maryland. According to the complaint, Johnson prepares income tax returns for customers that fraudulently overstate the refunds due by claiming false withholdings or credits.
The complaint alleges that Johnson promotes a tax avoidance scheme based upon the bogus “redemption” theory, in which individuals assert that the federal government maintains secret accounts for U.S. citizens that can be accessed by issuing various forms to the Internal Revenue Service (IRS). According to the complaint, Johnson prepares fraudulent IRS Forms 1099-A (Acquisition or Abandonment of Secured Property) and 8281 (Information Return for Publicly Offered Original Issue Discount Instruments) for her customers and files them with the IRS in order to claim enormous tax refunds on their behalf. The IRS and the courts have repeatedly made clear that the theories Johnson uses in filing the refund claims are frivolous and pure fiction, according to the complaint. The complaint further alleges that Johnson’s dozens of customers have sought millions of dollars in bogus refunds as a result of Johnson’s conduct.
Return preparer fraud, inflated refund claims and frivolous tax arguments are all among the IRS’ Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax return preparer and has launched a free directory of federal tax return preparers. In the past decade, the Justice Department’s Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Former Contracting Officer Sentenced for Bribery in Connection with Awarding of U.S. Postal Service ContractsRead the Press Release
A Glenn Dale, Maryland, man and former U.S. Postal Service contracting officer was sentenced today to 15 months in prison for receiving bribes in connection with the awarding of mail delivery contracts.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Paul L. Bowman of the U.S. Postal Service’s Office of Inspector General made the announcement.
In May 2015, Gregory Cooper, 59, pleaded guilty to accepting more than $25,000 in bribes from a co-defendant who owned two companies that bid on and secured transportation contracts with the Postal Service for mail delivery. Those bribes came in a variety of forms, ranging from fitness equipment delivered to Cooper’s Maryland home to a semester’s worth of college tuition for Cooper’s daughter, in addition to $15,900 in cash. Cooper admitted that in exchange for these payments, he gave favorable consideration to his co-defendant’s companies in the bidding process for nine Postal Service contracts, all of which were awarded to the co-defendant’s companies.
In addition to his prison sentence, U.S. District Judge George J. Hazel of the District of Maryland ordered Cooper to forfeit the amount of the bribes, $25,931.76, and to serve three years of supervised release following his prison sentence.
This case was prosecuted by Trial Attorneys Mark J. Cipolletti and Monique Abrishami of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys David Salem and Arun G. Rao of the District of Maryland. The case was investigated by special agents from the U.S. Postal Service Office of Inspector General.
Department of Justice Announces 10 Tribes to Participate in Initial Phase of Tribal Access Program to Improve Exchange of National Crime InformationRead the Press Release
The Department of Justice announced today the first 10 tribes to participate in an initial User Feedback Phase of the Tribal Access Program for National Crime Information (TAP), a program to provide federally recognized tribes the ability to access and exchange data with national crime information databases for both civil and criminal purposes.
The User Feedback Phase will grant access to national crime information databases and technical support to the following tribes: the Cherokee Nation of Oklahoma, the Eastern Band of Cherokee Indians of North Carolina, the Keweenaw Bay Indian Community of Michigan, the Oneida Indian Nation of New York, the Pascua Yaqui Tribe of Arizona, the Suquamish Indian Tribe of the Port Madison Reservation of Washington, the Shoshone-Bannock Tribes of the Fort Hall Reservation of Idaho, the Tulalip Tribes of Washington, the Confederated Tribes of the Umatilla of Oregon and the White Mountain Apache Tribe of the Fort Apache Reservation of Arizona.
“This innovative program will allow an unprecedented sharing of critical information between tribal, state and federal governments, information that could help solve a crime or even save someone’s life,” said Deputy Attorney General Sally Quillian Yates. “This initial phase of TAP will help us understand the information gaps and the best ways to use this service to strengthen public safety in Indian country. The TAP program is a reflection of the Justice Department’s commitment to the government-to-government relationship, to overcoming barriers, and building strong partnerships with American Indian and Alaska Native people. The department will continue to work with Congress for additional funding to more broadly deploy the program.”
TAP will support tribes in analyzing their needs for national crime information and help provide appropriate solutions, including a state-of-the-art biometric/biographic computer workstation with capabilities to process finger and palm prints, take mugshots and submit records to national databases, as well as the ability to access the FBI’s Criminal Justice Information Service (CJIS) systems for criminal and civil purposes through the Department of Justice. TAP will also provide specialized training and assistance for participating tribes.
This initial phase, funded by the Office of Justice Programs’ Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking (SMART) and supported with technical assistance from the Office of the Chief Information Officer, will focus on assisting tribes that have law enforcement agencies. In the future, the department will seek to address the needs of the remaining tribes and find a long-term solution.
While in the Tribal Law and Order Act of 2010 Congress required the Attorney General to ensure that tribal officials that meet applicable requirements be permitted access to national crime information databases, the ability of tribes to fully participate in national criminal justice information sharing via state networks has been dependent upon various regulations, statutes and policies of the states in which a tribe’s land is located. Therefore, improving access for tribal law enforcement to federal crime information databases has been a departmental focus for several years. In 2010, the department instituted two pilot projects, one biometric and one biographic, to improve informational access for tribes. The biographic pilot continues to serve more than 20 tribal law enforcement agencies.
Departments of Justice and Interior Working Group
In 2014, the Departments of Justice and the Interior (DOI) formed a working group to assess the impact of the pilots and identify long-term sustainable solutions that address both criminal and civil needs of tribes. The outcome of this collaboration was the TAP, as well as an additional program by the DOI’s Bureau of Indian Affairs (BIA) that provides tribes with national crime information prior to making child placement decisions in emergency circumstances. Under the BIA Purpose Code X Program, social service agencies of federally recognized tribes will be able to view criminal history information accessed through BIA’s Office of Justice Services, which will conduct name-based checks in situations where parents are unable to care for their children.
For more information on TAP, visit: www.justice.gov/tribal/tribal-access-program-tap.
For more information about the Justice Department’s work on tribal justice and public safety issues, visit: www.justice.gov/tribal.
For more information about the Department of the Interior’s Bureau of Indian Affairs, visit: www.indianaffairs.gov/
California Man Pleads Guilty to Producing Child PornographyRead the Press Release
A Yuba City, California, man pleaded guilty today to producing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Benjamin B. Wagner of the Eastern District of California, Special Agent in Charge Ryan Spradlin of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) San Francisco Field Division and Chief of Police Robert D. Landon of the Yuba City, California, Police Department.
Nathan Penner, 25, pleaded guilty today before U.S. District Judge Troy L. Nunley of the Eastern District of California to one count of production of child pornography. The sentencing hearing is set for Jan. 21, 2016.
In connection with his plea, Penner admitted that he produced sexually explicit photos and videos of a five-year-old girl in September and October of 2012. Penner further acknowledged that he had downloaded child pornography. Subsequent forensic analysis of Penner’s computer and digital media revealed both the child pornography that he produced and hundreds of other child pornography files.
This case is being investigated by HSI and the Yuba City Police Department. This case is being prosecuted by Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Special Assistant U.S. Attorney Josh F. Sigal of the Eastern District of California. CEOS’ High Technology Investigative Unit assisted with computer forensic analysis for the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by the U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
2015 Red Ribbon EventsRead the Press Release
Each year communities nationwide join together to raise awareness about the dangers of drug abuse by wearing a red ribbon from October 23 to October 31, which is the National Red Ribbon Week. The first Red Ribbon celebration was organized in 1986 by a grassroots organization of parents concerned about the destruction caused by alcohol and drug abuse. The red ribbon was adopted as a symbol of the movement in honor of Enrique “Kiki” Camarena, an agent with the U.S. Drug Enforcement Administration who was kidnapped and killed while investigating drug traffickers. The Campaign has reached millions of children and has been recognized by the U.S. Congress for its efforts and achievements. In Guam and the NMI, Red Ribbon Week is an opportunity to be visible and vocal in our desire for a drug-free community. Research shows that children are less likely to abuse alcohol and other drugs when parents and other role models are clear and consistent in their opposition to substance use and abuse. The Campaign provides communities with a forum to bring together parents, schools and businesses to find new and innovative ways to keep kids drug free.
The Red Ribbon Committees in Guam and the NMI consist of local and federal agencies and private and non-profit organizations that have partnered to increase awareness of the National Red Ribbon Campaign’s significance and promote a drug-free community. On Guam, the observance of the Red Ribbon Week is extended beyond one week, with events occurring throughout the month of October. Simon Sanchez High School was last year’s Gate/Wall Decorating Contest Winner. The Red Ribbon Campaign kicked off with a Proclamation Signing on September 28, 2015, at Simon Sanchez High School in Yigo. This event was attended by Lt. Governor Raymond Tenorio, other dignitaries and Red Ribbon Committee members.
U.S. Attorney Limtiaco made presentations at Dandan Middle School in Saipan, NMI, together with personnel from the U.S. Probation Office. Assistant U.S. Attorney Rosetta San Nicolas and Red Ribbon Guam Coalition members also made a presentation at Okkudo High School in Guam. Other Red Ribbon Committee members made presentations at many other elementary, middle and high schools on Guam. Students learned about the dangers of drugs and were encouraged to be drug and alcohol free.
In addition to the school outreaches, the following activities were also held in celebration of the Red Ribbon Campaign 2015 in Guam: National Prescription Drug Take Back Day; Drawing Contest and School Gate Decorating Contest; Community Outreach at the Micronesia Mall, which included the distribution of free gunlocks; Wear Red Day; Red Ribbon Wave in Hagatna; Say “Boo” to Drugs at the Agana Shopping Center; Drawing Contest and School Gate Decorating Contest Winners Award Presentation; and various TV and radio appearances.
The following are photos taken at the various events.
Dignitaries awaiting the start of the Red Ribbon events at Simon Sanchez High School in Guam. From left: Principal Carla Masnayan, Senator Frank Aguon, Jr., Lt. Governor Raymond Tenorio, Acting DEA Resident Agent in Charge Dave Stubbs, Supreme Court of Guam Chief Justice Robert Torres, and Lt. Yin of the Guam Army National Guard U.S. Attorney Alicia Limtiaco looks on as students take the pledge on gun safety, which was also being promoted at the Red Ribbon Campaign
Members of the Red Ribbon Committee with students of the Guam Community College’s sign language class who performed several numbers at the Red Ribbon Campaign Outreach at the Micronesia Mall in Guam Some of the students who joined the Red Ribbon Campaign WAVE in Hagatna, Guam Police Recruits supporting the Red Ribbon Campaign WAVE in Hagatna, Guam AUSAs Rosetta San Nicolas and Stephen Leon Guerrero participated at the school outreach at Machanaonao Elementary School in Guam U.S. Attorney Alicia Limtiaco at the school outreach at Dandan Elementary School in Saipan, NMI Say “Boo” To Drugs event at the Agana Shopping Center in Guam An aerial view of the Say “Boo” to Drugs event at the Agana Shopping Center in Guam U.S. Attorney Alicia Limtiaco and Red Ribbon Committee members at the Say “Boo” To Drugs event at the Agana Shopping Center in GuamTwo Members of Illegal International Gambling Enterprise Convicted of Racketeering ConspiracyRead the Press Release
A federal jury in Oklahoma City convicted two individuals today for their participation in a scheme involving illegal gambling, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Sanford C. Coats of the Western District of Oklahoma.
Kelly Dorn, 53, of Oklahoma City, and Kory Koralewski, 45, of Parker, Colorado, were found guilty of racketeering conspiracy. Dorn was additionally convicted of conducting an illegal gambling business. A sentencing hearing has not yet been set.
According to the trial evidence, from 2003 to 2013, Dorn and Koralewski conspired with others to operate Legendz Sports, an international criminal enterprise that ran Internet and telephone gambling services from Panama City. Legendz Sports took more than $1 billon in illegal wagers, almost exclusively from gamblers in the United States betting on American sporting events. Dorn worked as a bookie in Oklahoma who illegally solicited and accepted sports wagers as well as settled gambling debts. Koralewski facilitated the movement of illegal gambling proceeds from the United States to Panama.
The case was investigated by the FBI and Internal Revenue Service-Criminal Investigation, with the assistance of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations and the U.S. Marshals Service.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Special Assistant U.S. Attorney Robin L. Summer and Assistant U.S. Attorney Travis D. Smith of the Western District of Oklahoma.
Former Department of Defense Contractor Pleads Guilty to Soliciting and Receiving Kickback Proceeds Related to U.S. Government ContractRead the Press Release
The former director of operations of a Department of Defense contracting company in Washington, D.C., pleaded guilty today to soliciting and receiving $193,665 in kickback proceeds in return for steering U.S. government subcontracts to a U.K. company, announced Assistant Attorney General Leslie R. Caldwell of the Criminal Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia.
Robert W. Gannon, 54, of Bangkok, pleaded guilty to a one-count criminal information charging him with conspiracy to solicit and accept kickbacks. Gannon will be sentenced on Jan. 28, 2016.
According to his plea agreement, Gannon’s job responsibilities included identifying, evaluating and monitoring subcontracts. Gannon admitted that he used his position to arrange with executives of a U.K.-based company that they would make kickback payments to Gannon in return for a series of purchase orders Gannon’s company awarded in August 2009 with a total value of nearly $6 million. Those orders called for the provision of explosive ordinance disposal equipment to U.S. and NATO forces in Afghanistan. In return for his efforts, Gannon admitted that the U.K. company wired funds with a total value of almost $200,000 from bank accounts in the United Kingdom to Gannon’s account in Singapore.
The case is being investigated by the FBI, the Defense Criminal Investigative Service and the Special Inspector General for Afghanistan Reconstruction. The Criminal Division’s Office of International Affairs and the City of London Police provided significant assistance. The case is being prosecuted by Trial Attorney Wade Weems of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark Lytle of the Eastern District of Virginia.
Florida Investment Advisor Sentenced to 18 Months in Prison for Orchestrating $9 Million Investment Fraud SchemeRead the Press Release
A Tampa, Florida, area investment advisor was sentenced to 18 months in prison today for perpetrating a $9 million investment fraud scheme involving Facebook stock.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office and Inspector in Charge Ronald J. Verrochio of the U.S. Postal Inspection Service (USPIS) Miami Division made the announcement.
Gignesh Movalia, 40, a registered investment advisor, was also ordered by Chief U.S. District Judge Steven D. Merryday of the Middle District of Florida to pay $5,394,419 in restitution and to three years of supervised release following his prison sentence. Movalia pleaded guilty on Aug. 13, 2015, to one count of investment advisor fraud.
In connection with his guilty plea, Movalia admitted that he founded OM Global Investment Fund LLC in 2009 and subsequently used the fund to defraud investors. Specifically, in 2011 and 2012, Movalia raised more than $9 million from 130 investors by falsely claiming to have access to pre-initial public offering shares of Facebook Inc. Rather than using this money to buy Facebook shares as promised, however, Movalia invested the money in other securities and concealed that fact from investors. By September 2013 when it went into receivership, the OM Global Fund lost approximately $9 million, with $6 million of those losses as a result of the fraud scheme.
The case was investigated by the FBI and USPIS, with assistance provided by the U.S. Securities and Exchange Commission’s Miami Regional Office. The case was prosecuted by Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section.
Departments of Justice, Housing and Urban Development, and Health and Human Services Establish $2.3 Million Domestic Violence and Housing Technical Assistance InitiativeRead the Press Release
The Department of Justice, the Department of Housing and Urban Development (HUD) and the Department of Health and Human Services (HHS) today announced the launch of a federal Domestic Violence and Housing Technical Assistance Consortium to better address the critical housing needs of victims of domestic violence and their children. The three federal agencies are awarding a total of $2.3 million in grant funding to four organizations who will form this national consortium in order to foster increased collaboration among domestic violence and homeless service providers and provide national training, technical assistance and resource development on domestic violence and housing.
“The limited availability of shelters and the difficulties in accessing safe, affordable housing options too often leave domestic violence survivors homeless, or send them back to abusive partners and unsafe homes,” said Attorney General Loretta E. Lynch. “The Department of Justice is committed to providing trauma-informed guidance, resources and training across the country to combat this critical challenge, and I am proud to stand with my federal partners as we work to establish a comprehensive federal response to address the unique housing needs and safety concerns of domestic violence survivors.”
“Escaping domestic violence should not increase a person’s chances of becoming homeless,” said HUD Secretary Julián Castro. “Unfortunately that is too often the case for survivors and their children, which is why I’m proud to join this interagency effort to develop more comprehensive efforts to protect and serve survivors of domestic violence.”
According to the National Intimate Partner and Sexual Violence Survey (NISVS) report, nearly 10 million people in the U.S. experienced physical violence by an intimate partner in 2010. According to the U.S. Conference of Mayors, in 2008, 28 percent of U.S. families were homeless because of domestic violence and 39 percent of U.S. cities cited domestic violence as the primary cause of family homelessness. The U.S. Interagency Council on Homelessness (USICH) has established the goal of preventing and ending homelessness among families, youth, and children by 2020.
“Domestic violence is a primary cause of family homelessness because many victims leave their homes to pursue safety,” said Commissioner Rafael López of HHS’ Administration on Children, Youth and Families. “Victims of domestic violence need housing options that meet their immediate and long-term needs. This interagency consortium will help us marshal federal resources to address domestic violence.”
As a result of this interagency collaboration, grant funds are being provided to the following organizations:
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District Alliance for Safe Housing (Washington, D.C.)
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National Network to End Domestic Violence (Washington, D.C.)
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National Resource Center for Domestic Violence (Harrisburg, Pennsylvania):
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Training Development Associates (Laurinburg, North Carolina)/Collaborative Solutions, Inc. (Birmingham, Alabama)
The four grant recipients will form the Domestic Violence and Housing Technical Assistance Consortium and will work with domestic violence providers and homeless service providers nationwide to improve policies, identify promising practices and strengthen collaborations necessary to improve housing options for survivors of domestic violence and their children in order to enhance safety, stability, and well-being. The Department of Justice’s Office for Victims of Crime and Office on Violence Against Women; HUD’s Office of Special Needs Assistance Programs and HHS’s Administration for Children and Families, Family and Youth Services Bureau, Division of Family Violence Prevention and Services have worked together to increase capacity, resources and guidance to adequately address the housing needs of domestic violence survivors and their children, as leading members of the Domestic Violence Committee of the USICH.
About the Department of Justice’s Office on Violence Against Women
Created in 1995, the Office on Violence Against Women (OVW) provides federal leadership in developing the Nation’s capacity to reduce violence against women through the implementation of the Violence Against Women Act (VAWA) and subsequent legislation. OVW administers financial and technical assistance to communities across the country that are developing programs, policies and practices aimed at ending domestic violence, dating violence, sexual assault and stalking. To learn more, visit www.justice.gov/ovw.
About the Department of Justice’s Office for Victims of Crime
The Office for Victims of Crime (OVC) is committed to enhancing the Nation’s capacity to assist crime victims and to providing leadership in changing attitudes, policies, and practices to promote justice and healing for all victims of crime. Established in 1988 through an amendment to the Victims of Crime Act (VOCA) of 1984, OVC is charged by Congress with administering the Crime Victims Fund (the Fund). Through OVC, the Fund supports a broad array of programs and services that focus on helping victims in the immediate aftermath of crime and continuing to support them as they rebuild their lives. Millions of dollars are invested annually in victim compensation and assistance in every U.S. state and territory, as well as for training, technical assistance, and other capacity-building programs designed to enhance service providers’ ability to support victims of crime in communities across the Nation. To learn more, visit www.ovc.gov/.
About the Department of Housing and Urban Development’s Office of Special Needs Assistance Programs
The Office of Special Needs Assistance Programs (SNAPS) supports the nationwide commitment to ending homelessness by providing funding opportunities to nonprofit organizations and State and local governments to quickly rehouse homeless individuals and families. Through these opportunities, SNAPS advocates self-sufficiency and promotes the effective utilization of mainstream resources available to individuals and families experiencing homelessness. https://www.hudexchange.info/homelessness-assistance/.
About the Department of Health and Human Services’ Family Violence Prevention and Services Program
The Family Violence Prevention and Services Program is the primary federal funder of domestic violence emergency shelter and other supportive services in all 50 States, the District of Columbia, 5 Territories and 274 Tribes. For more facts on the Family Violence Prevention and Services Program, visit http://www.acf.hhs.gov/fvpsa.
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Alaska Plastic Surgeon Convicted of Wire Fraud and Tax EvasionRead the Press Release
Doctor Hid Millions in Secret Accounts in Panama
An Alaskan plastic surgeon was convicted today of four counts of wire fraud and three counts of tax evasion by a federal jury sitting in Anchorage, Alaska, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Karen Loeffler of the District of Alaska.
Dr. Michael Brandner, 67, was convicted following a seven-day jury trial before U.S. District Judge Sharon Gleason of the District of Alaska. According to the indictment and evidence introduced at trial, in late 2007, shortly after Brandner’s wife filed for divorce, he collected millions of dollars in marital assets and secretly drove from Tacoma, Washington, to Costa Rica in Central America. In Costa Rica, he opened two bank accounts into which he deposited more than $350,000 in cash and hid a thousand ounces of gold in a safe deposit box. He then traveled to Panama where he opened an account under the name of a sham corporation and in 2008, deposited $4.6 million into the account.
Dr. Brandner concealed both the existence of the bank accounts and the interest he earned on those accounts from the court in the divorce proceedings and from the Internal Revenue Service (IRS). Dr. Brandner owed the IRS $600,000 in additional taxes for the 2008 through 2010 tax years. He presented the divorce court with a fabricated promissory note to mislead the court into believing he had invested more than $3 million in the foreign corporation.
In 2011, once the divorce was final, Dr. Brandner repatriated more than $4.6 million, only to have the funds seized by Homeland Security Investigations agents. He then lied to federal agents about his control of the funds.
At his March 7, 2016 sentencing, Dr. Brandner faces a statutory maximum penalty of 20 years in prison for each count of wire fraud and five years for each count of tax evasion and a fine of up to $250,000, or twice the gain or loss caused by the offense, on each of the seven counts of conviction.
Acting Assistant Attorney General Ciraolo thanked the special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney Ignacio Perez de la Cruz of the Tax Division and Assistant U.S. Attorney Bryan Schroder of the District of Alaska, who prosecuted the case.
US Attorney General highlights need for ‘rule of law’ in address to INTERPOL General AssemblyRead the Press Release
Image Courtesy of IPSG
KIGALI, Rwanda – US Attorney General Loretta Lynch has told delegates at the INTERPOL General Assembly that upholding the rule of law is a government’s foremost responsibility.
Delivering the keynote speech at the international gathering of some 640 police chiefs and senior law enforcement officials, Attorney General Lynch said INTERPOL ‘stands as an invaluable conduit for mutual assistance between law enforcement agencies across the world and a critical facilitator for international cooperation in matters of security, opportunity and human rights.’
Pointing to the issue of human trafficking as one of her highest priorities as Attorney General, Ms Lynch said it remained one of the foremost challenges to the international community.
“With its ties to organized crime, its preying on flows of migrants and its complex financing schemes, human trafficking is a truly global problem that demands a truly global response,” said Attorney General Lynch.
“The international community has come a long way in the last 15 years, but the fact that millions of individuals remain in forced labour reminds us of how far we have to go. We must find ways to work even more closely together in order to end this affront to our values and stop this crime against humanity,” added the Attorney General pointing to the FBI’s annual Operation Cross Country initiative against individuals trafficking children for sexual exploitation which this year resulted in the arrest of hundreds of sex traffickers.
In addition to highlighting INTERPOL’s role at the forefront of the global crusade against human trafficking, Attorney General Lynch said the world police body’s work involved action against some of the most important and complex law enforcement challenges.
In combating the threat of foreign terrorist fighters, Attorney General Lynch said INTERPOL’s network to coordinate global counter-terrorism activities was an invaluable resource in stemming the illicit travel of individuals moving to and from conflict zones.
Attorney General Lynch praised INTERPOL for driving innovation and fuelling advancements to expand international capabilities to identify crimes and pursue wrongdoers through its global police information systems, round-the-clock support and operational assistance.
In concluding her remarks, the Attorney General encouraged delegates to continue to play their part in upholding the rule of law and urged all countries to ‘continue, every day, to pursue our mission of a safer world, to advance our vision of a more just society and to hold close our hope of a brighter future for all.’
The General Assembly is INTERPOL’s supreme governing body, which meets once a year. Discussions at this year’s session in Kigali are addressing some of most pressing cross-border challenges faced by police today, including counter-terrorism and foreign terrorist fighters, the organized criminal groups behind drug trafficking and people smuggling, and the different facets of cybercrime.
U.S. EPA Requires Asarco to Cut Toxic Emissions at 103-Year-Old Arizona Copper SmelterRead the Press Release
Today, the Department of Justice and the Environmental Protection Agency (EPA) announced a settlement with ASARCO requiring the company to spend $150 million to install new equipment and pollution control technology to reduce emissions of toxic heavy metals at a large smelter located in Hayden, Arizona. The company will also fund local environmental projects valued at $8 million, replace a diesel locomotive with a cleaner model for $1 million, and pay a $4.5 million civil penalty.
The federal enforcement action targeted hazardous air pollutants, including lead and arsenic, and particulate matter (PM). With the controls in place, the hazardous air pollutants should be reduced by at least 8.5 tons per year, and PM emissions are expected to be reduced by 3,500 tons per year. The new equipment and controls will also slash the facility’s sulfur dioxide (SO2) emissions by 19,000 tons per year, a reduction of more than 90 percent, according to EPA estimates. Currently, the ASARCO smelter is the largest source of SO2 emissions in Arizona.
“This settlement will bring tremendous benefits to public health and the environment in Arizona for generations to come through dramatic cuts to harmful air emissions,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “The requirements of this consent decree will not only bring ASARCO into compliance with the nation’s clean air law, but will also result in testing for lead contamination in area homes and improvements to nearby roads to further improve air quality.”
“Big enforcement actions like this result in big returns for American communities,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “The upgraded pollution controls and advanced monitoring technologies ASARCO will install are key to a modern compliance program that cuts pollution around industrial plants.”
“The communities living near this century-old smelter will breathe cleaner air as a result of this landmark enforcement action,” said Regional Administrator Jared Blumenfeld for EPA’s Pacific Southwest Region. “As one of only three major copper smelters in the nation, it is critically important that the facility operate in a way that complies with federal law, minimizes harmful pollutants and safeguards public health and the environment.”
EPA’s investigation found the company violated federal Clean Air Act standards by failing to adequately control emissions of hazardous air pollutants, such as arsenic and lead, from the Hayden smelter. Under the settlement announced today, ASARCO will install new and upgraded ventilation hoods to capture hot flue gases from its furnaces to better capture the PM, which includes the hazardous air pollutants and SO2. The company will also replace an aging electrostatic precipitator with a new, cleaner baghouse and inject high performance lime to reduce SO2 emissions.
To reduce wind-blown dust from the facility, which contains varying levels of heavy metals, the company will implement an improved dust control plan, including the use of wind fences, upgraded water sprayers and the installation of concrete pads. In addition, ASARCO will operate five ambient air monitors in and around the Hayden and Winkelman communities to track levels of pollutants, including arsenic, lead and PM and will make additional improvements to dust controls if levels are high.
The settlement requires ASARCO to spend $8 million to fund two environmental mitigation projects. Of this, $6 million will be used on a road paving project in Pinal County that will reduce dust pollution on local dirt roads close to the towns and benefit residents exposed to PM emissions. In addition, $2 million will be provided to the Gila County Environmental Health Services to conduct lead-based paint testing and abatement in homes, schools and other public buildings in the towns of Hayden and Winkelman.
ASARCO will spend approximately $1 million to replace an existing diesel switch locomotive operated at the facility with a cleaner diesel-electric switch locomotive. The project will reduce emissions of nitrogen oxides, which are precursors to the formation of PM2.5 and greenhouse gases.
Long-term inhalation exposure to inorganic arsenic is associated with irritation of the skin and can affect the brain and nervous system. Exposure to lead can cause effects on the blood, as well as the nervous, immune, renal and cardiovascular systems. Particulate matter, especially inhalable coarse particles (PM10) and fine particles (PM2.5), can cause coughing or difficulty breathing, decreased lung function, aggravated asthma and even premature death in people with heart or lung disease. SO2 has also been linked to a number of adverse effects on the respiratory system and SO2 is also a precursor to the formation of PM2.5. Fine particles are also the main cause of reduced visibility (haze) in parts of the United States, including national parks and wilderness areas. The PM2.5 and SO2 emission reductions achieved through compliance with this settlement will also serve to reduce visibility impairment owing to emissions from the facility.
Built in 1912 and expanded over the years, the ASARCO Hayden site is a copper ore processing, concentrating and smelter facility located adjacent to Hayden and Winkelman. The ASARCO plant includes a crusher, concentrator, smelter and tailings impoundment areas and produces 300 to 400 million pounds of copper and over half a million tons of sulfuric acid annually. ASARCO is owned by Grupo México, a Mexican consortium that owns Ferromex, the largest railroad in Mexico and operates mines and smelters, including the one in Hayden, that make it the fourth largest copper producer in the world. The Hayden facility is one of three copper smelters in the United States, and the only one owned by ASARCO.
The settlement was lodged with the U.S. District Court of Arizona and is subject to a 30-day public comment period and final court approval. The proposed consent decree can be viewed at: www.justice.gov/enrd/consent-decrees.
More on the settlement: http://www2.epa.gov/enforcement/asarco-llc-settlement
La Detención en Bakersfield Lleva una Sentencia de Prisión de 11 Años por Tráfico de MetanfetaminaRead the Press Release
FRESNO, California – Raúl Canchola Farías, 40, residente de Pacoima, ha sido sentenciado hoy por el Juez Federal Anthony W. Ishii a 11 años y tres meses de prisión por posesión con el intento de distribuir metanfetamina, anunció el Procurador de los Estados Unidos Benjamín B. Wagner.
Según los documentos del tribunal, Farías fue arrestado el 5 de noviembre del 2013, después de que su vehículo fuera detenido por un Oficial de la Patrulla de Carretera en la Autopista 99 en Bakersfield y fueron encontradas más de 21 libras de metanfetamina ocultadas en el vehículo.
Este caso ha sido el resultado de una investigación llevada a cabo por la Agencia Antidrogas de Estados Unidos (Drug Enforcement Administration) o DEA y la Patrulla de Carretera de California. El Procurador Auxiliar de los Estados Unidos Brian K. Delaney procesó el caso.
La Detención En Bakersfield Lleva Una Sentencia De Prisión De 11 Años Por Tráfico De MetanfetaminaRead the Press Release
FRESNO, California – Raúl Canchola Farías, 40, residente de Pacoima, ha sido sentenciado hoy por el Juez del Distrito de Estados Unidos Anthony W. Ishii a 11 años y tres meses de prisión por posesión con el intento de distribuir metanfetamina, anunció el Procurador de los Estados Unidos Benjamín B. Wagner.
Según los documentos del tribunal, Farías fue arrestado el 5 de noviembre del 2013, después de que su coche fuera detenido por un Oficial de la Patrulla de Carretera en la Autopista 99 en Bakersfield y fueron encontradas más de 21 libras de metanfetamina ocultadas en el vehículo.
Este caso ha sido el resultado de una investigación llevada a cabo por la Agencia Antidrogas de Estados Unidos (Drug Enforcement Administration) o DEA y la Patrulla de Carretera de California. El Procurador Auxiliar de los Estados Unidos Brian K. Delaney procesó el caso.
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Justice Department Sues South Dakota State Agency for Discrimination Against Native American Job Applicants at Pine Ridge ReservationRead the Press Release
The Justice Department today filed a lawsuit against the South Dakota Department of Social Services (DSS) alleging that at its Pine Ridge Reservation Office, the state agency repeatedly discriminated against Native American job applicants because of their race, in violation of Title VII of the Civil Rights Act of 1964.
The lawsuit, filed in the U.S. District Court for the District of South Dakota, alleges that in failing to select well-qualified Native American applicants for several positions in DSS’s Pine Ridge Reservation Office, the state agency engaged in a pattern or practice of discrimination and violated Title VII of the Civil Rights Act of 1964, a federal statute that prohibits employment discrimination on the basis of sex, race, color, national origin and religion.
“Federal law provides all Americans with equal opportunity to compete for jobs on a level playing field free from racial discrimination,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “When employers discriminate against qualified job applicants because of what they look like or where they come from, they violate both the values that shape our nation and the laws that govern it.”
According to the complaint, in October 2010, Cedric Goodman, a Native American with supervisory experience as a social worker, as well as several other well-qualified Native Americans, applied for an Employment Specialist position at DSS’s Pine Ridge Office. The complaint alleges that after interviewing Goodman and the other Native American candidates who met the employer’s objective job qualifications, DSS removed the vacancy and hired no one. The next day, however, DSS reopened the position and ultimately selected a white applicant with inferior qualifications and no similar work experience. The complaint alleges that DSS discriminated against Goodman and other similarly-situated Native American applicants based on their race.
In addition, the complaint alleges that denying Goodman’s application was part of a pattern or practice of race discrimination by DSS, where the agency repeatedly removed job postings and used subjective, arbitrary hiring practices to reject qualified Native American applicants for Specialist positions.
Over a two year period beginning in 2010, DSS posted 18 Specialist vacancies for its Pine Ridge Reservation Office. Even though the agency received nearly 40 percent of its applications from Native Americans, DSS hired 11 Whites and only one Native American, while removing six other openings entirely.
The lawsuit seeks declaratory and injunctive relief requiring DSS to implement employment policies, including fair applicant screening and interviewing practices, that prevent racial discrimination in hiring. The United States will also seek to obtain “make whole” relief, including monetary damages, for Goodman and other similarly situated individuals.
"The facts obtained during the investigation by the EEOC are disheartening," said Julianne Bowman, Chicago District Director. "We are pleased that the Department of Justice is filing a lawsuit to resolve the injustices uncovered."
Goodman originally filed a charge of race discrimination with the Equal Employment Opportunity Commission (EEOC). The EEOC’s Minneapolis Area Office, in the Chicago District, investigated the matter and found reasonable cause to believe that DSS discriminated against Goodman and a class of Native American applicants. After unsuccessful conciliation, the EEOC referred the matter to the Justice Department.
The Justice Department’s Civil Rights Division brought this lawsuit as part of a joint effort to enhance collaboration between the Justice Department and the EEOC in the vigorous enforcement of Title VII. Additional information about the division, including a copy of the complaint, can be found online on its website at www.justice.gov/crt.
U.S. v. S.D. DSS Complaint (146.11 KB)
Justice Department Announces Banque Bonhôte & Cie SA Reaches Resolution Under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Banque Bonhôte & Cie SA (Banque Bonhôte) has reached a resolution under the department’s Swiss Bank Program.
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, Banque Bonhôte agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute this bank for tax-related criminal offenses.
Banque Bonhôte is a private bank established in 1815 in the City of Neuchâtel, Switzerland. It is a privately held stock company, and the majority of its share capital is owned by its management board and employees. Until 2002, Banque Bonhôte had a single office in Neuchâtel; since then, it has opened branches in Bienne, Geneva and Berne, Switzerland.
Banque Bonhôte’s cross-border banking business aided and assisted some U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income the clients held in their accounts from the Internal Revenue Service (IRS). Banque Bonhôte knew, or should have known, that it was likely that certain U.S. taxpayers who maintained accounts at Banque Bonhôte were not complying with their U.S. tax reporting obligations.
Banque Bonhôte used a variety of means to assist U.S. clients in concealing the assets and income the clients held in their Bonhôte undeclared accounts, including opening and maintaining numbered accounts, as well as holding bank statements and other mail at Banque Bonhôte’s offices in Switzerland. Banque Bonhôte also opened accounts for U.S. taxpayers who had left UBS or Credit Suisse when these banks were being investigated by the department.
Private bankers, referred to as client relationship managers, served as Banque Bonhôte’s primary contact for accountholders at the bank. Client relationship managers aided or assisted U.S. clients to open and manage accounts that were undeclared and that were established and maintained in a manner designed to conceal the U.S. taxpayers’ ownership or beneficial interest in the accounts. Banque Bonhôte compensated client relationship managers, in part, based on the amount of business they generated for Banque Bonhôte.
Banque Bonhôte referred bank clients to Bonhôte Trust SA, a Swiss fiduciary and trust advisory firm located in Neuchâtel and acquired by Banque Bonhote in 2001. Bonhôte Trust provided assistance in setting up entities such as offshore companies and foundations, including sham entities, for clients including U.S. taxpayers and provided administrative services to those entities.
Through Bonhôte Trust, Banque Bonhôte created offshore foundations, corporations, trusts and similar entities organized in jurisdictions such as the British Virgin Islands and Nevis. In some instances, Banque Bonhôte structured a U.S.-related account that appeared as if it was held by a non-U.S. legal entity, such as an offshore corporation or trust, which aided and abetted the clients’ ability to conceal their undeclared accounts from the IRS. Banque Bonhôte also had accounts opened through external asset managers and maintained in the name of offshore structures, despite knowing that in at least some instances the beneficial owners of such accounts were U.S. persons. Banque Bonhôte knew or should have known that, at least in some instances, external asset managers opened and managed accounts at Banque Bonhôte in the name of a sham offshore structure that in reality held assets owned by a U.S. client.
Approximately 35 percent of Banque Bonhôte’s U.S.-related accounts were held in the name of offshore structures, and Banque Bonhôte accepted the use of IRS or substitute forms that falsely stated under penalties of perjury that sham entities beneficially owned the assets in the undeclared accounts.
Throughout its participation in the Swiss Bank Program, Banque Bonhôte committed to providing full cooperation to the U.S. government. Among other things, Banque Bonhôte described in detail the structure and operation of its U.S. business, including its cross-border business policies. Banque Bonhôte was able to disclose the identities of more than half of the beneficial owners of its U.S.-related accounts to the department and provided narrative summaries of other U.S.-related accounts for use in other ongoing and potential department investigations.
Since Aug. 1, 2008, Banque Bonhôte held and managed 63 U.S.-related accounts, including both declared and undeclared accounts, which had a peak of aggregated assets under management of $88.7 million. Banque Bonhôte will pay a penalty of $624,000.
While U.S. accountholders at Banque Bonhôte who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of this non-prosecution agreement, noncompliant U.S. accountholders at Banque Bonhôte must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division thanked the IRS, and in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance. Ciraolo also thanked Lisa L. Bellamy, who served as counsel on this matter, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer, Senior Litigation Counsel Nanette L. Davis and Attorney Kimberle E. Dodd of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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Former Portland Resident Sentenced to Prison for Tax Fraud SchemeRead the Press Release
A former Portland, Oregon, resident was sentenced to serve 24 months in prison followed by three years of supervised release for his involvement in a fraudulent income tax refund scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Brandon Leath, 36, pleaded guilty on July 23 to one count of conspiracy to file false claims and one count of theft of government funds. U.S. District Judge for the District of Oregon Robert E. Jones also ordered Leath to pay $55,635 in restitution to the Internal Revenue Service (IRS).
According to court documents, Leath conspired with others, including his wife, Shawntina Ware, to file more than 227 false income tax returns fraudulently claiming more than $1 million in refunds. The false information on the tax returns included fictitious W-2 wages and inflated withholding amounts. The co-conspirators often shared the fraudulent refunds with each other by splitting the refund into multiple bank accounts controlled by the co-conspirators or their family and friends.
Three of Leath’s co-conspirators have pleaded guilty to various charges and are scheduled to be sentenced. On June 5, co-conspirator Jasmine Mason pleaded guilty and is scheduled to be sentenced on Nov. 18. Ware pleaded guilty on July 23 and is scheduled to be sentenced on Jan. 6, 2016. Co-Conspirator Tataneisha White pleaded guilty on Oct. 1 and is scheduled to be sentenced on Jan. 7, 2016.
Acting Assistant Attorney General Caroline D. Ciraolo commended special agents of the IRS - Criminal Investigation, who investigated the case, and Trial Attorneys Lori A. Hendrickson and Ryan R. Raybould of the Tax Division, who are prosecuting the case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office of the District of Oregon for their substantial assistance.
Two Former Jailers at the Kentucky River Regional Jail Indicted on Charges Related to the Death of A Pretrial DetaineeRead the Press Release
The Justice Department announced today that a federal grand jury in London, Kentucky, has indicted two former deputy jailers at the Kentucky River Regional Jail on charges related to the July 9, 2013, in-custody death of Larry Trent, a pretrial detainee at the jail. The indictment charges Damon Hickman, 38, and William Howell, 59, with causing Trent’s death, and charges Hickman with attempting to cover up his involvement in the death.
Hickman and Howell are charged with federal civil rights violations for depriving Trent of his civil rights. Count one of the indictment charges Hickman and Howell of failing to provide Trent with necessary medical care after he was injured, thereby acting with deliberate indifference to a substantial risk of harm to Trent, which resulted in Trent’s death. Count two of the indictment also charges both defendants with using excessive force against Trent, resulting in bodily injury to him.
Hickman is additionally charged with one count of obstruction of justice for falsifying an official log by indicating that observations of Trent were being made and that Trent was “10-4,” meaning that he was safe and not in obvious physical distress, when in fact Trent was not “10-4.”
Hickman and Howell face a maximum penalty of life in prison for the death-resulting civil rights offense, and face a maximum penalty of 10 years in prison for assaulting Trent. Hickman faces a maximum penalty of 20 years in prison for falsification of records in a federal investigation.
An indictment is merely an accusation, and the defendants are presumed innocent unless proven guilty.
The case is being investigated by the FBI’s London Resident Agency, with assistance provided by the Kentucky State Police. The case is being prosecuted by Trial Attorney Sanjay Patel of the Civil Rights Division’s Criminal Section and Assistant U.S. Attorney Hydee Hawkins of the Eastern District of Kentucky.
Hickman and Howell Indictment
The Justice Department and U.S. Department of Housing and Urban Development Announce New Juvenile Re-Entry Assistance ProgramRead the Press Release
New Re-Entry Program Aims to Reduce Barriers to Public Housing, Employment and Educational Opportunities
In an effort to reduce barriers for justice-involved youth, the U.S. Department of Justice and the U.S. Department of Housing and Urban Development (HUD) today announced a new Juvenile Re-Entry Assistance Program: a $1.7 million initiative to help Public Housing Authorities (PHAs) and legal assistance organizations address challenges to housing and employment among justice-involved individuals.
Through the Juvenile Re-entry Assistance Program (JRAP), DOJ and HUD are working collaboratively to help individuals that have paid their debt to society rehabilitate and reintegrate back into their communities. This program specifically excludes those who are convicted of making methamphetamine drugs, sex offenses or domestic violence.
"The Department of Justice is committed to giving justice-involved youth the tools they need to become productive members of society," said Attorney General Loretta Lynch. "Providing meaningful support through housing opportunities, prevention programs and other critical services is vital to our ongoing efforts to reduce recidivism, promote public safety and foster positive results in communities across the country."
Additionally, HUD announced updated public housing arrests guidance to PHAs regarding the use of arrests in determining who can live in HUD-assisted properties. The Guidance outlines that arrest records may not be the sole basis for denying admission, terminating assistance or evicting tenants; and reiterates that HUD does not require PHAs and owners to adopt “One Strike” policies and includes best practices and models of success from PHAs across the nation.
HUD Secretary Julián Castro made these announcements today in Chicago as part of the Obama Administration’s criminal justice and reentry incentive.
“Life is about second chances and offering young people an opportunity to turn away from their mistakes and get back on the right path,” said Secretary Castro. “These grants will allow Public Housing Authorities to help these young people to reach their potential and begin to contribute to their own communities.”
Having a juvenile or a criminal record can severely limit a person’s ability to seek higher education, find good employment, or secure affordable housing. Today, there are nearly 55,000 individuals under age 21 in juvenile justice facilities. These consequences create unnecessary barriers to economic opportunity and productivity, and President Obama and members of his Cabinet continue to take impactful steps to ensure those exiting the justice system become productive, law-abiding citizens.
Owner of Maryland Tax Business Admits to Filing False Tax ReturnsRead the Press Release
A Fort Washington, Maryland man pleaded guilty today to aiding in the preparation of false tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Rod J. Rosenstein for the District of Maryland and Special Agent in Charge Thomas Jankowski of the Internal Revenue Service’s (IRS) Criminal Investigation’s Washington, D.C. Field Office.
Vivencio P. Concepcion, 53, pleaded guilty before U.S. District Judge Paul W. Grimm. According to his plea agreement, Concepcion operated Money Concept Services, a tax return preparation business located in Fort Washington, Maryland. From January 2009 to April 2012, Concepcion prepared more than 24 false federal individual tax returns for more than nine taxpayers using inflated charitable contribution amounts; fictitious unreimbursed employee business expenses and fictitious business income and expenses. As a result, the client-taxpayers received either larger refunds than they were entitled to or a decrease in the amount of taxes due.
Concepcion admitted that his conduct resulted in a tax loss of between $211,666 and $400,000. Concepcion has agreed to the entry of an order requiring him to pay $211,666 in restitution.
Concepcion faces a statutory maximum sentence of three years in prison at his sentencing on Jan. 29, 2016 at 9:00 a.m..
Acting Assistant Attorney General Ciraolo and U.S. Attorney Rosenstein commended the IRS-Criminal Investigation and thanked Assistant U.S. Attorney Lindsay Eyler Kaplan and Trial Attorney Christopher P. O’Donnell of the Tax Division, who are prosecuting the case.
Netcracker Technology Corp. and Computer Sciences Corp. Agree to Settle Civil False Claims Act AllegationsRead the Press Release
NetCracker Technology Corp. has agreed to pay $11.4 million and Computer Sciences Corp. (CSC) has agreed to pay $1.35 million to resolve allegations under the False Claims Act that they used individuals without security clearances on a Defense Information Systems Agency (DISA) contract, the Justice Department announced today. NetCracker is a telecom software and services company headquartered in Waltham, Massachusetts, and CSC is an information technology services company with its headquarters in Falls Church, Virginia.
“Protecting the federal procurement process from false claims is central to the mission of the Department of Justice,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to ensure that the government receives what it pays for when federal monies are used to purchase services.”
“Companies that do business with the federal government have a responsibility to fully meet the terms of their contracts,” said U.S. Attorney Channing D. Phillips of the District of Columbia. “In addition to holding these two companies accountable for their contracting obligations, this settlement shows that the U.S. Attorney’s Office will take appropriate measures necessary to ensure the integrity of government communications systems.”
“This NetCracker case is a prime example of how the DISA IG works to detect and prevent fraud schemes within the Agency and recuperate funds for the U.S. government,” said Colonel Bill Eger, Inspector General (IG) of DISA.
NetCracker and CSC implemented software used to help manage the telecommunications network used by the U.S. Department of Defense. The work was done pursuant to a contract with DISA, under which CSC was the prime contractor and NetCracker was a CSC subcontractor. From 2008 through 2013, NetCracker allegedly used employees without security clearances to perform work when it knew the contract required those individuals to have security clearances, resulting in CSC recklessly submitting false claims for payment to DISA.
The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery. The civil lawsuit was filed in the District of Columbia by John Kingsley, a former NetCracker employee. Mr. Kingsley will receive $2,358,750 as his share of the recovery in this case.
This resolution in this matter was the result of a coordinated effort between the U.S. Attorney’s Office of the District of Columbia, the Civil Division’s Commercial Litigation branch and the DISA IG Office.
The lawsuit is captioned United States ex rel. Kingsley v. NetCracker Technology Corp. Civil Action 1:11-cv-00629 (D.D.C.). The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Los Angeles Man Convicted of Sexually Abusing Minors while in RussiaRead the Press Release
A Los Angeles man was found guilty of sexually abusing three minor girls during trips to Russia over a two-year period. Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division made the announcement.
Yusef Yunosovich Abramov, 58, was convicted on Friday night after a four-day jury trial of six felony counts, including engaging in illicit sexual conduct in foreign places and traveling in foreign commerce with the intent to engage in illicit sexual conduct. He is scheduled to be sentenced on Jan. 6, 2016.
According to the evidence introduced at trial, in June 2009, Abramov, a dual Russian and U.S. citizen, flew from Los Angeles to Russia, and shortly after his arrival, he violently raped a 12-year-old girl and threatened to sever her head and play soccer with it if she told anyone about the abuse. The trial evidence showed that, in November 2009, Abramov again traveled to Russia and engaged in further sexual abuse of minor girls while there.
In addition, according to the evidence presented at trial, in March 2010, believing that local schoolgirls had contacted the police, Abramov and two accomplices cornered three minor girls. Abramov threatened all three girls while wielding a knife and each man then raped one of the girls. The evidence showed that, after threatening the girls’ lives, Abramov continued to rape at least two of the girls during his subsequent trips to Russia.
In April 2014, following an investigation by Russian and U.S. authorities, Abramov was arrested in Los Angeles. He has remained in custody since then.
The investigation was conducted by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, in cooperation with The Investigative Committee of the Russian Federation and the Moscow City Police. The case is being prosecuted by Trial Attorneys Maureen C. Cain and Ravi Sinha of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS). The Criminal Division’s Office of International Affairs also provided assistance with this case.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
U.S. Attorney Alicia A.G. Limtiaco Receives Distinguished Alumni Award at UCLARead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), was recognized as the “2015 Alumnus of the Year” by the Asian Pacific Island Law Students Association (APILSA) and the Asian Pacific American Law Journal (APALJ) at the University of California at Los Angeles (UCLA) on April 25, 2015. U.S. Attorney Limtiaco is the first Pacific Islander to receive the award; she is a graduate of the UCLA School of Law Class of 1990.
APILSA was founded over 30 years ago and consistent with its mission and commitment to serve as a valuable resource and support network for law students to succeed academically, socially, politically, and professionally, APILSA has supported and advocated important fundamental causes as evidenced by its years of community service, accomplishments, and meaningful contributions to causes related to diversity, civil rights, human rights and human dignity, cultural preservation and cultural competency, education, health, and international goodwill and understanding.
U.S. Attorney Limtiaco commended the hard working and dedicated APILSA members for their invaluable service, for their vision in advocating and promoting these fundamental causes, and for serving as role models for students and the community.
In her address at the awards banquet, U.S. Attorney Limtiaco stated, “… In law school and like today's APILSA, we – the APILSA generations of the past, through our unified voices, pursued and advocated for the achievement of equality and freedom for human kind, and racial, social and economic justice. We were also able through APILSA's support, to make a difference and contribute to the recruitment and consideration process of Asian and Pacific Islander law school applicants. … We too must remind ourselves that our nation is a nation that promotes diversity, equality and respect for human rights and human dignity. We must continue then to draw strength from our diversity as a nation, as it is our diversity as a people and the strength that we gain from it that contributes to our resiliency as a nation during our most challenging times.”
U.S. Attorney Alicia Limtiaco, James Park, Professor of Law,
UCLA School of Law, Rachel Moran, Dean and Michael J. Connell
Professor of Law, UCLA School of Law
Yisha Fan and Dat Phan, 2014-2015 APILSA Co-Chairs, U.S.
Attorney Alicia Limtiaco, Rachel Moran, Dean and Michael J.
Connell Professor of Law, UCLA School of LawNearly 500 Hospitals Pay United States More Than $250 Million to Resolve False Claims Act Allegations Related to Implantation of Cardiac DevicesRead the Press Release
The Department of Justice has reached 70 settlements involving 457 hospitals in 43 states for more than $250 million related to cardiac devices that were implanted in Medicare patients in violation of Medicare coverage requirements, the Department of Justice announced today.
“While recognizing and respecting physician judgment, the department will hold accountable hospitals and health systems for procedures performed by physicians at their facilities that fail to comply with Medicare billing rules,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We are confident that the settlements announced today will lead to increased compliance and result in significant savings to the Medicare program while protecting patient health.”
An implantable cardioverter defibrillator, or ICD, is an electronic device that is implanted near and connected to the heart. It detects and treats chaotic, extremely fast, life-threatening heart rhythms, called fibrillations, by delivering a shock to the heart, restoring the heart’s normal rhythm. It is similar in function to an external defibrillator (often found in offices and other buildings) except that it is small enough to be implanted in a patient’s chest. Only patients with certain clinical characteristics and risk factors qualify for an ICD covered by Medicare.
Medicare coverage for the device, which costs approximately $25,000, is governed by a National Coverage Determination (NCD). The Centers for Medicare and Medicaid Services implemented the NCD based on clinical trials and the guidance and testimony of cardiologists and other health care providers, professional cardiology societies, cardiac device manufacturers and patient advocates. The NCD provides that ICDs generally should not be implanted in patients who have recently suffered a heart attack or recently had heart bypass surgery or angioplasty. The medical purpose of a waiting period -40 days for a heart attack and 90 days for bypass/angioplasty - is to give the heart an opportunity to improve function on its own to the point that an ICD may not be necessary. The NCD expressly prohibits implantation of ICDs during these waiting periods, with certain exceptions. The Department of Justice alleged that from 2003 to 2010, each of the settling hospitals implanted ICDs during the periods prohibited by the NCD.
“The settlements announced today demonstrate the Department of Justice’s commitment to protect Medicare dollars and federal health benefits,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “Guided by a panel of leading cardiologists and the review of thousands of patients’ charts, the extensive investigation behind the settlements was heavily influenced by evidence-based medicine. In terms of the number of defendants, this is one of the largest whistleblower lawsuits in the United States and represents one of this office’s most significant recoveries to date. Our office will continue to vigilantly protect the Medicare program from potential false billing claims.”
“Working as a team with the Department of Justice to investigate and settle false billing claims of this magnitude has resulted in substantial recoveries to Medicare and the successful enforcement of Medicare’s coverage requirements for these procedures,” said Inspector General Daniel Levinson of the Department of Health and Human Services’ Office of Inspector General (HHS-OIG).
The 70 settlements, representing nearly 500 hospitals, are listed on the attached chart. Most of the settling defendants were named in a qui tam, or whistleblower, lawsuit brought under the False Claims Act, which permits private citizens to bring lawsuits on behalf of the United States and receive a portion of the proceeds of any settlement or judgment awarded against a defendant. The lawsuit was filed in federal district court in the Southern District of Florida by Leatrice Ford Richards, a cardiac nurse, and Thomas Schuhmann, a health care reimbursement consultant. The whistleblowers have received more than $38 million from the settlements. The Department of Justice is continuing to investigate additional hospitals and health systems.
The settlements were the result of a coordinated effort among the U.S. Attorney’s Office of the Southern District of Florida, the Civil Division’s Commercial Litigation Branch and HHS-OIG, Office of Investigations and Office of Counsel to the Inspector General.
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 $26.2 billion through False Claims Act cases, with more than $16.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The claims resolved by these settlements are allegations only and there has been no determination of liability.
Large Scale Miami Drug Supplier Pleads Guilty in Nationwide Prescription Drug Diversion SchemeRead the Press Release
The Department of Justice announced that a South Florida man pleaded guilty in U.S. District Court in Cincinnati, Ohio, in connection with the prosecution of a nationwide prescription drug diversion scheme.
Ricardo Alfredo Jurado, 59, of Miami Beach, pleaded guilty before U.S. District Court Judge Timothy S. Black to one count of conspiracy to commit mail and wire fraud.
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division; U.S. Attorney Carter M. Stewart of the Southern District of Ohio; Special Agent in Charge Antoinette V. Henry of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI), Metro Washington Field Office and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS), Cincinnati Field Office, announced the guilty plea.
“Prescription drug diversion compromises the integrity of America’s drug supply chain,” said Principal Deputy Assistant Attorney General Mizer. “This Miami-based supplier sold tens of millions of dollars of illegally diverted drugs, which ended up on the shelves of pharmacies and in the medicine cabinets of American consumers.”
“The drug diversion activities charged in this case create unacceptable public health risks,” said U.S. Attorney Stewart. “Patients purchased what they believed were FDA-approved prescription drugs that had remained in regulated distribution channels intended to protect against misbranded, adulterated, sub-potent, improperly handled, counterfeit and stolen products. Instead, these customers received drugs of unknown quality and origin.”
Jurado sold illegally diverted prescription drugs to David Miller and his company, Minnesota Independent Cooperative (MIC). On May 6, Miller and MIC, along with Artur Stepanyan and Mihran Stepanyan, were indicted in the Southern District of Ohio and charged with one count of conspiracy to commit mail and wire fraud, ten counts of mail fraud and one count of conspiracy to make false statements and to distribute prescription drugs without a wholesale license. Those charges are still pending. Jurado is the eighth co-conspirator who pleaded guilty for participating in the drug diversion scheme involving Miller and MIC.
Miller and MIC sold the prescription drugs obtained through Jurado – along with multiple other illegal sources – to wholesale and retail customers throughout the United States, including in the Southern District of Ohio. Miller and MIC are alleged to have created fraudulent pedigree documents falsely stating that they had purchased the drugs from B&Y Wholesale, a company in Puerto Rico. These false pedigrees covered up the illegitimate sources of the drugs – various illicit suppliers, including Jurado – and falsely stated that B&Y was an authorized distributor of the prescription drugs.
According to court documents, from July 2007 through April 2014, Jurado facilitated the sale of tens of millions of dollars of illegally diverted prescription drugs to Miller and MIC. Jurado obtained the drugs from other illicit, unlicensed sources in South Florida. To hide Jurado’s involvement in the sale of these drugs, Jurado and Miller used a middleman, Fernando Galan. On Oct. 14, Galan pleaded guilty for his role in the conspiracy. Neither Jurado nor Galan was licensed to engage in the wholesale distribution of prescription drugs.
In connection with the sale of the diverted drugs, Jurado sent bank wiring instructions, frequently through his middleman Galan, directing Miller to send payments for the drugs. During the course of the entire conspiracy, Jurado and his co-conspirators directed payments to more than 25 different bank accounts at banks in Mexico, Nicaragua, Canada, Florida and other locations. During the course of the conspiracy, Miller and MIC wired more than $40 million to the bank accounts specified by Jurado.
This matter is being investigated by FDA-OCI and the USPIS. Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are representing the United States in this case.
Justice Department Settles with Housing Authority of Baltimore City for Failure to Provide Accessible Housing to Persons with DisabilitiesRead the Press Release
The Justice Department announced today that a federal district court has approved a supplemental consent decree between the United States, the Maryland Disability Law Center and the Housing Authority of Baltimore City (HABC). The original consent decree contained remedies for HABC’s failure to provide accessible housing to persons with disabilities. The supplemental consent decree, which was approved today by U.S. District Judge J. Frederick Motz of the District of Maryland, continues and amends certain terms in the original consent order in United States v. HABC, and Bailey v. HABC, entered on Dec. 20, 2004.
“We are pleased with the significant progress made by the Housing Authority of Baltimore City to implement the terms of the original decree,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “We look forward to working with the Housing Authority to create new accessible housing opportunities for persons with disabilities and enhancing their quality of life.”
The original consent decree mandates that HABC create 756 units to comply with federal accessibility standards. As of Aug. 31, 2015, HABC had developed all but 54 of such units. Under the supplemental decree, these remaining units will be completed by Dec. 31, 2016. HABC’s plan requires two and three bedroom single family homes that are fully accessible to families with a household member who has physical disabilities.
The original consent decree also mandates that HABC create 500 units for non-elderly persons with disabilities. As of Aug. 31, 2015, HABC had created 411 such units. Under the supplemental decree, the remaining units will be completed by Dec. 31, 2016. Further, the original consent decree mandates that HABC create 100 new housing opportunities for non-elderly persons with disabilities called “Long Term Affordable” units. HABC has until Dec. 31, 2017, to develop the remaining balance of these units from certain specified developments.
HABC is participating in the Rental Assistance Demonstration Program. Under this program, HABC will be transferring certain public housing properties to private ownership. Under the supplemental decree, the new owners are required to preserve the accessibility of the units and implement the policies and practices that protect the rights of tenants with disabilities.
The Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the division’s Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777.
HABC Supplemental Consent Decree
Former Senate Staffer Sentenced to 38 Months for Defrauding Three WomenRead the Press Release
A former staff member of the U.S. Senate Committee on Commerce, Science and Transportation was sentenced today to 38 months in prison for a wire fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office.
Robert Lee Foster, 65, formerly of Falls Church, Virginia, was also ordered to forfeit $499,622.54 and pay $503,003.37 in restitution as part of his sentence, which was imposed by Senior U.S. District Judge T.S. Ellis III of the Eastern District of Virginia. Foster pleaded guilty on July 31, 2015.
According to admissions made in connection with his guilty plea, between 2008 and May 2015, Foster devised a scheme to fraudulently obtain approximately $500,000 from three women in their 60s and 70s. Foster admitted that, to perpetuate the scheme, he gained the victims’ trust and confidence, after which he made various false statements to the victims to convince them to send him money. Among other things, Foster admitted that he told his victims he needed to borrow money to pay for litigation costs and business expenses that did not exist and for foreign travel that did not occur. Foster also admitted that he promised to repay the victims from large sums of money he claimed he was about to receive, which was another lie.
This case was investigated by the FBI’s Washington Field Office. Trial Attorneys Peter Halpern and Kevin Driscoll of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Jamar Walker and Ryan Faulconer of the Eastern District of Virginia prosecuted the case.
Employer Support of the Guard and Reserve (Esgr) Honors U.S. Attorney Alicia A.G. LimtiacoRead the Press Release
United States Attorney ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands, was presented with the “Above and Beyond” Award on May 23, 2015, by the Employer Support of the Guard and Reserve (ESGR). The awards event was held at the Sheraton Laguna Resort & Spa in Tumon, Guam. U.S. Attorney Limtiaco and the U.S. Attorney’s Office were nominated by an employee of the U.S. Attorney’s Office presently serving in the Guam Air National Guard.
According to the ESGR website, the Above and Beyond Award is presented by ESGR State Committees to recognize employers at the local level who have gone above and beyond the legal requirements of the Uniformed Services Employment and Reemployment Rights Act (USERRA) by providing their Guard and Reserve employees additional, non-mandated benefits such as differential or full pay to offset lost wages, extended health benefits, and other similar benefits. The award is given in limited numbers by state committees to employers who have had at least one of their supervisors/managers recognized with a Patriot Award, and who have signed or agreed to sign a Statement of Support. Statements of Support pledge, among other things, to recognize, honor and enforce USERRA and to encourage opportunities to employ Guardsmen, Reservists, and Veterans.
U.S. Attorney Limtiaco expressed her appreciation to all Veterans and to all service members for their courage and fortitude and their commitment to protecting our freedoms as Americans, and to the ESGR for their continued efforts to raise awareness among employers about the significant role and responsibilities employers have in supporting and protecting the rights of employees in military service.
Student Trainee Clerk Sean Perez, former member of the
U.S. Air Force Reserve, U.S. Attorney Alicia Limtiaco and
AUSA Stephen Leon Guerrero (Major in the Guam Air
National Guard)