District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
EEOC Training Held for the Districts of Guam and the NMIRead the Press Release
U.S. Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands (NMI), announced that the U.S. Attorney’s Office sponsored training by Glory Gervacio Saure, Director of the Honolulu Local Office for the U.S. Equal Employment Opportunity Commission (EEOC). In her capacity as Director, Ms. Gervacio Saure oversees the EEOC’s operations in the State of Hawaii and the U.S. Territories of Guam, American Samoa, Wake Islands and the Commonwealth of the Northern Mariana Islands.
The half-day training was held at the U.S. Attorney’s Office in Guam on September 17, 2015. The training session reviewed Equal Employment Opportunity laws and recent EEOC updates, including new developments involving sex discrimination (i.e., discrimination against pregnant women and LGBT persons) and rules and regulations on the use of arrest and conviction records in the employment process. The training was attended by approximately 30 members from various sectors of the community.
Glory Gervacio Saure during her presentation.Defendant Convicted of Three Counts of Murder in Indian CountryRead the Press Release
Today, a man was convicted of three counts of murder in Indian country after a week-long jury trial, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Mark F. Green of the Eastern District of Oklahoma.
David Brian Magnan, 53, was convicted in the shooting deaths of three victims, James Howard, Karen Wolf and Lucilla McGirt, who were all members of the Seminole Nation. U.S. District Court Judge Ronald A. White of the Eastern District of Oklahoma presided over the trial.
The evidence presented at trial established that the victims were celebrating a birthday on the evening of March 1, 2004, at Howard’s home. In the early morning hours of March 2, 2004, Magnan arrived at the home with two other men. Armed with a pistol, Magnan confronted an individual outside of the house and a fight ensued, after which Magnan shot the individual in the abdomen. Magnan then entered the home where he found the three victims asleep. He first confronted Howard, who he shot multiple times in the chest as he lay in bed. Magnan then moved to a bedroom where he found McGirt and Wolf sleeping. Magnan shot Wolf in the head and shot McGirt in the shoulder and head. McGirt survived that evening and identified Magnan as the shooter, but she ultimately succumbed to her wounds and died two weeks later. Following the shootings, Magnan and the two other men fled the scene and hid the murder weapon, which police subsequently recovered.
This case was investigated by the Oklahoma State Bureau of Investigation, the Seminole County Sheriff’s Office, the Seminole Nation Lighthorse Police and the FBI. The case is being prosecuted by Trial Attorney Mike Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Edward Snow of the Eastern District of Oklahoma. Trial Attorney Richard Friedman of the Criminal Division’s Appellate Section handled an interlocutory appeal.
Asset Forfeiture Training Hosted by the U.S. Attorney’s Office for the Districts of Guam and the NMIRead the Press Release
U.S. Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands, announced that the U.S. Attorney’s Office hosted an Asset Forfeiture training conducted by Scott Gilbert, Assistant U.S. Attorney of the Southern District of Mississippi, and James Curt Bohling, Assistant U.S. Attorney of the Western District of Missouri. The training was held at the U.S. Attorney’s Office in Guam on August 26 and 27, 2015, with a live feed to the Northern Mariana Islands via video teleconference, and was made available to federal and local law enforcement officers and the prosecution team of the U.S. Attorney’s Office. Approximately 75 participants attended the training.
The training topics included Forfeiture 101, Financial Investigation and Tracing of Assets, Anticipating Defenses, Forfeiting Real Property, Adoption and Structuring Orders, Equitable Sharing, Building a Federal Case from a Money Seizure, and Ethics.
From left to right: U.S. Attorney’s Office Staff from Guam and the
Northern Mariana Islands with instructors Scott Gilbert and James
Bohling, and attendees from DEA and ATF.
Agueda Johnston Middle School Invites U.S. Attorney to Youth and Parent SymposiumRead 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 on “Enhancing Community Bonds” at Agueda Johnston Middle School’s Youth and Parent “Change for the Better” Symposium, held on February 28, 2015.
U.S. Attorney Limtiaco introduced the audience to the Department of Justice’s Smart on Crime Initiative, which focuses on crime prevention, strengthening protections for vulnerable populations, and reentry of criminal offenders into the community. The U.S. Attorney spoke with students, parents/guardians, family members, school teachers, and administrators about the importance of building community relationships, as well as the value of collaboration, diversity, and cultural competency, in our efforts to foster greater understanding, appreciation and trust among the various ethnic and multicultural groups on Guam.
U.S. Attorney Limtiaco addressing the audience at Agueda
Johnston Middle School.
Picture of the students and parents attending the Symposium
Group photo of the organizers and presenters at the SymposiumWarner Chilcott Agrees to Plead Guilty to Felony Health Care Fraud Scheme and Pay $125 Million to Resolve Criminal Liability and False Claims Act AllegationsRead the Press Release
Former President and Three District Managers Also Face Criminal Charges
Warner Chilcott U.S. Sales LLC, a subsidiary of pharmaceutical manufacturer Warner Chilcott PLC, has agreed to plead guilty to a felony charge of health care fraud, the Justice Department announced today. The plea agreement is part of a global settlement with the United States in which Warner Chilcott has agreed to pay $125 million to resolve its criminal and civil liability arising from the company’s illegal marketing of the drugs Actonel®, Asacol®, Atelvia®, Doryx®, Enablex®, Estrace® and Loestrin®. Prior to today’s guilty plea by Warner Chilcott, several individuals also pleaded guilty or were charged in connection with the company’s illegal activities.
Warner Chilcott agreed to plead guilty in the District of Massachusetts to criminal charges that the company committed a felony violation by paying kickbacks to physicians throughout the United States to induce them to prescribe its drugs, manipulating prior authorizations to induce insurance companies to pay for prescriptions of Atelvia® that the insurers may not have otherwise paid for and making unsubstantiated marketing claims for the drug Actonel®.
Earlier today, an indictment was unsealed in the District of Massachusetts charging former Warner Chilcott President W. Carl Reichel, 57, of Chester, New Jersey, with one count of conspiring to pay kickbacks to physicians. Reichel was arrested today in Boston and will make an initial appearance at 2:30 p.m. before U.S. District Court Magistrate Judge Jennifer C. Boal.
“The Justice Department is committed to protecting the integrity of physician prescribing decisions and ensuring that financial arrangements in the healthcare marketplace comply with the law,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “The Department will continue to hold companies and responsible individuals accountable when they use improper incentives, like those alleged here, to promote their products.”
“Doctors’ medical judgment should be based on what is best for the patient, and not clouded by expensive meals and other pharmaceutical company kickbacks,” said U.S. Attorney Carmen M. Ortiz for the District of Massachusetts. “Pharmaceutical company executives and employees should not be involved with treatment decisions or submissions to a patient’s insurance company. Today’s enforcement actions demonstrate that the government will seek not only to hold companies accountable, but will identify and charge corporate officials responsible for the fraud.”
In a criminal information filed today in the District of Massachusetts, the government charged that, between 2009 and 2013, Warner Chilcott, through its employees acting at the direction of members of the company’s management team, knowingly and willfully paid remuneration to physicians in order to induce those physicians to prescribe Warner Chilcott drugs. Under the law, it is illegal to offer or pay remuneration to physicians to induce them to refer individuals to pharmacies for the dispensing of drugs for which payments are made in whole or in part under a federal health care program. The information alleges that Warner Chilcott employees, at the direction of company management, provided payments, meals and other remuneration associated with so-called “Medical Education Events,” which included dinners, lunches and receptions. These events, which were often held at expensive restaurants, often contained minimal or no educational component and were instead used to pay prescribing physicians in an attempt to gain a “competitive advantage” over other companies. Warner Chilcott also enlisted high-prescribing physicians as “speakers” for the company. In fact, the “speakers” often did not actually speak about any clinical or scientific topics, and, instead, the payments were primarily intended to induce prescriptions. For instance, Warner Chilcott informed “speakers” who were not prescribing at a high volume that they would not be paid for subsequent events unless their prescribing habits increased.
In addition, the information alleges that from 2011 to 2013, Warner Chilcott employees knowingly and willfully submitted false, inaccurate, or misleading prior authorization requests and other coverage requests to federal health care programs for the osteoporosis medications Atelvia® and Actonel®. The false, inaccurate and misleading information was provided to certain insurance companies in order to overcome formulary restrictions that favored less expensive osteoporosis drugs. For instance, Warner Chilcott was aware that many insurers only paid for Atelvia® if a physician submitted an individualized request explaining why the patient could not be treated with less-expensive medications approved to treat the same conditions. As detailed in the information, Warner Chilcott sales representatives filled out numerous prior authorizations for Atelvia®, using “canned” medical justifications which often were inconsistent with the patients’ medical conditions. In some instances, according to the information, Warner Chilcott sales representatives submitted these prior authorizations directly to insurance companies, holding themselves out to be physicians. In other cases, sales representatives coached physicians and staff about which medical justifications would result in an approved prior authorization, whether or not the justification was true for a particular patient.
Finally, the information alleges that Warner Chilcott employees were instructed by members of the company’s management team to make unsubstantiated superiority claims when marketing the drug Actonel®. The management team instructed the sales representatives to tell physicians that Actonel® was superior to other bisphosphonates due to its supposedly unique “mechanism of action.” According to the information, Warner Chilcott managers also encouraged sales representatives to use props to visually support this false claim, including pouring water and syrup onto two sponges while telling physicians that Actonel, like water, penetrated and exited the bone more quickly than its competitors, represented by the syrup. Warner Chilcott management directed the sales representatives to make the superiority claim even though the claim was not supported by clinical evidence.
Under the terms of the plea agreement, Warner Chilcott will pay a criminal fine of $22.94 million.
Warner Chilcott also entered into a civil settlement agreement under which it agreed to pay $102.06 million to the federal government and the states to resolve claims arising from its conduct, which allegedly caused false claims to be submitted to government health care programs. The civil settlement resolved allegations that Warner Chilcott violated the federal Ant-Kickback Statute by paying illegal remuneration to prescribing physicians in connection with the so-called “Medical Education Events” and speaker programs and caused the submission of false prior authorization requests for Atelvia® and Actonel®. The federal share of the civil settlement is approximately $91.5 million, and the state Medicaid share of the civil settlement is approximately $10.6 million.
Prior to today’s guilty plea by Warner Chilcott and civil settlement, several individuals were either criminally charged or pleaded guilty to various offenses related to the company’s alleged conduct. Two former district managers, Jeffrey Podolsky, 49, of East Meadow, New York, and Timothy Garcia, 35, of Los Gatos, California, previously pleaded guilty to various charges, including conspiracy to commit health care fraud and violations of the Health Insurance Portability and Accountability Act (HIPAA). A third former district manager, Landon Eckles, 30, of Huntersville, North Carolina, was criminally charged earlier this month for alleged HIPAA violations relating to the alleged prior authorization scheme. Last week a Springfield, Massachusetts physician, Rita Luthra, M.D., 64, of Longmeadow, Massachusetts, was charged with, among other things, allegedly accepting free meals and speaker fees from Warner Chilcott in return for prescribing its osteoporosis drugs.
“Placing financial gain above the legitimate needs of patients is deplorable,” said Inspector General Daniel R. Levinson of the U.S. Department of Health and Human Services (HHS). “Paying kickbacks and even providing instructions on how to defraud Medicare are practices that will not be tolerated.”
“Pharmaceutical companies and their employees have a significant responsibility to sell and market drugs in an ethical and legal manner,” said Special Agent in Charge Harold H. Shaw of the FBI’s Boston Field Office. “This settlement and the related indictments reflect the commitment of the FBI and our government partners to aggressively investigate companies and individuals who fail that responsibility and seek to profit from fraudulent activities.”
The civil settlement resolves a lawsuit filed under the whistleblower provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The civil lawsuit was filed in the District of Massachusetts and is captioned United States ex rel. Alexander, et al. v. Warner Chilcott plc, et al., Civil Action No. 11-CA-1121 (D. Mass.). As part of today’s resolution, the whistleblowers will receive approximately $22.9 million from the federal share of the civil recovery.
The criminal case was prosecuted by the U.S. Attorney’s Office of the District of Massachusetts and the Civil Division’s Consumer Protection Branch. The civil settlement was handled by the U.S. Attorney’s Office of the District of Massachusetts and the Civil Division’s Commercial Litigation Branch. Assistance was provided by the FDA’s Office of Chief Counsel, HHS Office of Counsel to the Inspector General, and the National Association of Medicaid Fraud Control Units. This matter was investigated by the FBI, HHS Office of the Inspector General, the Department of Defense’s Defense Criminal Investigative Service, the FDA’s Office of Criminal Investigations, the Department of Veterans Affairs and the Office of Personnel Management’s Office of 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.
Except for the conduct admitted in connection with the criminal plea, the claims resolved by the civil agreement are allegations only, and there has been no determination of civil liability.
Michigan Ferrari Mechanic Sentenced to Prison for Tax FraudRead the Press Release
A Smith’s Creek, Michigan resident, who specialized in repairing classic and rare cars was sentenced today to two years in prison, followed by two years of supervised release, for tax evasion and failure to file income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
On April 29, Terry Myr, 71, was convicted by a jury on one count of attempted tax evasion and four counts of failure to file tax returns. According to the evidence presented at trial and court documents, the Internal Revenue Service (IRS) assessed Myr approximately $195,000 in taxes, interest and penalties for his failure to report all of his income for the tax years 2000 through 2003. In 2009, when his tax liabilities remained unpaid, Myr sold a rare Ferrari engine for $610,000. To prevent the IRS from collecting the taxes he owed, Myr transferred property that he owned to a third party, used nominee companies to conceal his income and assets and otherwise dealt in cash. Myr used some of the Ferrari engine proceeds to purchase more than $360,000 in gold and silver coins. Myr also attempted to evade the payment of his taxes by asking his customers to pay him in cash, money orders, or prepaid debit cards. The evidence also showed that although Myr was required to file individual income tax returns, he had not filed a tax return or paid federal income taxes since 2001. The government estimated that Myr’s actions caused a total tax loss of $738,904.
U.S. District Court Judge Nancy G. Edmunds in the Eastern District of Michigan also ordered Myr to pay his back taxes, penalties and interest.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation who investigated the case, and Trial Attorneys Tiwana Wright and Kenneth C. Vert of the Tax Division, who are prosecuting the case.
Long Island Fisherman Sentenced to Prison Time and Pay More Than $600,000 for Fisheries FraudRead the Press Release
Anthony Joseph, a commercial fisherman from Levittown, New York, was sentenced today in federal court in Central Islip, New York, to seven months in prison for federal violations stemming from his role in systematically underreporting fluke (summer flounder) that was being harvested as part of the federal Research Set-Aside (RSA) Program, the Justice Department’s Environment and Natural Resources Division announced.
Joseph was also sentenced to three years of supervised release following his incarceration and to pay $603,000 in restitution.
Joseph, the former operator of the dragger F/V Stirs One, pleaded guilty on April 11, 2014, to one count of mail fraud, two counts of wire fraud and one count of falsification of federal records for knowingly submitting 158 falsified fishing logs, known as fishing vessel trip reports (FVTRs) and aiding and abetting the submission of 167 falsified dealer reports from June 2009 through December 2011, as part of a scheme to defraud the United States of overharvested and underreported fluke.
Under the National Oceanic and Atmospheric Administration’s (NOAA) regulations, all of the Stirs One’s catch had to be reported to NOAA on FVTRs. During the years 2009, 2010 and 2011, the Stirs One principally targeted fluke. However, under the captaincy and with the knowledge of Joseph, the vessel exceeded its relevant federal and New York State quotas for fluke for at least 158 trips. These illegal overages totaled 302,000 pounds of fluke worth approximately $626,000.
In order to cover up the illegal fluke harvesting, Joseph falsified the FVTRs that he personally mailed to NOAA. He also utilized the exempted fisheries permit quota that was acquired through the federal RSA Program as a mask for his fluke overages. According to court documents, the defendant characterized the RSA Program as “a license to steal” and remarked that during the period of 2009 to 2011, he referred to the Research Set-Aside Program with the nickname, “Research Steal-Aside.”
NOAA regulations also required the first purchasers of seafood, i.e., directly from the fishing vessel, to report their purchases to NOAA on an electronic form known as a dealer report. The dealer reports include information such as date of landing, port of landing, catch vessel, corresponding FVTR numbers, commercial grade, species, price and weight. NOAA utilizes the data in the dealer reports to set quotas and implement other management measures designed to ensure a sustainable fisheries. The dealer reports also serve as a check on the information that is submitted in FVTRs. In other words, in order to effectuate his scheme, Joseph needed to ensure that corresponding false dealer reports were being submitted that contained the same false information as was contained on the falsified FVTRs. A mismatch would have indicated a serious error or fraud, and would have been a red flag for fisheries managers. Accordingly, during June 2009 to December 2011, the defendant schemed with two other fish dealers to submit false dealer reports in furtherance of the fraud. In doing so, the defendant aided and abetted previously convicted Alan Dresner and Jones Inlet Seafood Company in their internet submission of a total of at least 167 false dealer reports from computers in New York to NOAA’s Regional Fisheries Office in Gloucester, Massachusetts.
The case was investigated by agents of NOAA’s National Marine Fisheries Service, with assistance from the New York State Department of Environmental Conservation Police. The case is being prosecuted by Christopher L. Hale of the Justice Department’s Environment and Natural Resources Division’s Environmental Crimes Section.
Justice Department Settles with Colorado Youth Wrestling League to Prevent Disability DiscriminationRead the Press Release
The Justice Department announced today that it reached a settlement with the operators of Pikes Peak Wrestling League, a youth wrestling league that serves approximately 4,000 children across the state of Colorado, under the Americans with Disabilities Act (ADA). The settlement resolves allegations that Pikes Peak Youth Sports Association LLC and Peak Youth Sports Association violated the ADA by failing to modify their policies, practices or procedures to allow a child who has dwarfism to “play down” one age division at the 2014 Colorado State Wrestling Championship so that he could compete with wrestlers closer to his weight and size. The agreement was filed today as a proposed consent decree, which must be approved by the U.S. District Court for the District of Colorado, along with a complaint.
Under the agreement, the wrestling league will adopt and publicize a disability nondiscrimination policy, including procedures for handling requests to modify policies for wrestlers with disabilities. The league will train employees on ADA requirements and invite coaches affiliated with Pikes Peak Wrestling League and USA Wrestling Directors to attend this training, free of charge. In addition, the wrestling league will pay compensatory damages to the child identified in the complaint and report to the department on its compliance with the agreement.
“Participating in athletic competition is a formative experience for children across this country, and children with disabilities are entitled to participate equally in youth sports,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “The ADA celebrated its 25th anniversary this year and private entities that operate youth athletics should be well aware of their obligations under the ADA.”
Title III of the ADA requires public accommodations, including youth sports leagues like Pikes Peak Wrestling League, to reasonably modify their policies, practices or procedures, when such modifications are necessary to afford their goods, services, facilities, privileges, advantages or accommodations to individuals with disabilities and when such modifications would not fundamentally alter the nature of their goods, services, facilities, privileges, advantages or accommodations. For more information about the ADA, call the department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov.
The relevant court documents can be found at the following links: complaint and consent decree.
Justice Department Announces Four Banks Reach Resolutions Under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Luzerner Kantonalbank AG (Luzerner), Habib Bank AG Zurich (HBZ), Banque Heritage S.A. and Hyposwiss Private Bank Genève S.A. (Hyposwiss Geneva) have reached resolutions under the department’s Swiss Bank Program. These banks will collectively pay penalties totaling more than $25 million and continue to cooperate with the department.
“With each agreement executed under the Swiss Bank Program, the department continues to eradicate Swiss bank secrecy and hold accountable those financial institutions that profited from willfully assisting accountholders in the evasion of their U.S. tax obligations,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Working with our partners at the Internal Revenue Service, we are following leads and pursuing criminal and civil investigations focused on targets around the globe.”
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 agreements signed today, each bank 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 these banks for tax-related criminal offenses.
Luzerner was established in 1850 by the Canton of Lucerne, a sovereign political subdivision of the Swiss Confederation. Luzerner was aware that U.S. taxpayers had a legal duty to report to the Internal Revenue Service (IRS) and pay taxes on the basis of all their income, including income earned in accounts that the U.S. taxpayers maintained at Luzerner. Luzerner knew or had reason to know that it was likely some taxpayers who maintained accounts at Luzerner were not complying with their U.S. tax and reporting obligations.
Luzerner offered a variety of traditional Swiss banking services that it knew could assist, and did assist, U.S. taxpayers in concealing their identity from the IRS by minimizing the paper trail associated with their undeclared assets and income. These services included hold mail and numbered accounts. Luzerner also opened and maintained accounts held in the name of non-U.S. corporations, foundations or other entities, while knowing, or having reason to know, that a U.S. taxpayer ultimately held an interest in these non-U.S. entities. In at least six cases, these structured accounts were established in the names of entities set up in Panama, Seychelles and the British Virgin Islands by two Swiss-based advisory companies.
Luzerner maintained 115 U.S.-related accounts for insurance carriers, commonly called insurance-wrapped accounts, as to which Luzerner was aware that the policy holder or premium payer was a U.S. person. These accounts titled in the name of an insurance carrier, but are funded with bankable assets transferred to the account by the beneficial owner of the policy. The insurance carriers, at Luzerner’s request, provided Luzerner with the identities of the beneficial owners of these policies. The assets in the account, while titled in the name of the insurance carrier, were managed by the external asset manager for the beneficial owner through a power of attorney given by the insurance carrier.
Nearly all of these insurance-wrapped accounts were managed by a single external asset manager. In an e-mail sent to the head of the private banking department in December 2007, the head of the external asset manager desk at Luzerner described that external asset manager as “[specializing] in aspects of legal asset protection as well as tax optimization and has approx. CHF 750 million [Swiss francs] in assets under management, in particular in life insurances. Its main clients include wealthy U.S. nationals (doctors, lawyers, etc.).” Luzerner knew or had reason to know that U.S. citizens, residents and others obligated to pay U.S. taxes who contributed the assets to the insurance-wrapped accounts sought to conceal their ownership of those and also to evade their U.S. federal income tax obligations.
Since Aug. 1, 2008, Luzerner held a total of 595 U.S.-related accounts, which amounted to approximately $300 million. Luzerner will pay a penalty of $11.031 million.
HBZ primarily serves South Asian commercial businesses and entrepreneurs, and their families. In 1941, Habib Bank Ltd. (HBL), the predecessor to HBZ, was founded in Bombay (now Mumbai), India. In 1967, the founders of HBL founded HBZ as a stand-alone entity in Switzerland. In 1974, Pakistan nationalized HBL and all of its subsidiaries and overseas branches. Following the nationalization of HBL, the founders of HBZ rebuilt a global banking business independent of HBL. HBZ has branches and subsidiaries in Canada, Hong Kong, the Isle of Man, Kenya, Pakistan, South Africa, Switzerland, the United Arab Emirates and the United Kingdom.
The HBZ Swiss Office has local management, a local banking team and a client base with accounts held in Switzerland that is distinct from, and tracked and managed separately from, the HBZ operations in other jurisdictions. The HBZ Swiss Office assisted or otherwise facilitated U.S. clients in establishing and maintaining undeclared accounts in a manner that the HBZ Swiss Office knew or should have known was designed to conceal the U.S. clients’ ownership or beneficial interest in the accounts.
Employees of Habib American Bank, Inc. (HAB), an unrelated bank with common ownership, introduced or referred U.S. persons to the HBZ Swiss Office. HBZ has identified one account opened at the HBZ Swiss Office for a U.S. person as a result of a referral from HAB. HBZ and HAB are owned through separate legal structures for the benefit of members of the same extended family.
In connection with one relationship, the HBZ Swiss Office assisted with creating four Liechtenstein “Anstalts” or entities with U.S. beneficial owners. A Liechtenstein law firm structured and managed these entities. This Liechtenstein law firm served as the nominee, director and signatory authority of these accounts. The HBZ Swiss Office knew or should have known that these entities were created with an intention of masking U.S. ownership. The HBZ Swiss Office further facilitated the transfer of the funds from these accounts to HBZ Finance Limited, Hong Kong.
In connection with closing U.S.-related accounts, the HBZ Swiss Office permitted certain U.S. clients to transfer funds to accounts held at other HBZ branches and subsidiaries, or to other accounts at the HBZ Swiss Office, either knowing or when it should have known that such transfers were motivated by a desire to avoid U.S. tax or information reporting requirements.
Since Aug. 1, 2008, HBZ had 125 U.S.-related accounts, comprising approximately $118.9 million in assets under management. HBZ will pay a penalty of $9.4 million.
Banque Heritage is a private bank headquartered in Geneva. It was founded in 1986 as an asset management firm and obtained its Swiss banking license in 2003. Banque Heritage has a branch in Zurich, a representative office in Lugano, Switzerland, and a fully licensed banking operation in Uruguay. It also had an investment advisory company in Guernsey, which was closed in 2014.
Banque Heritage offered hold mail and opened accounts in the names of offshore structures. Since Aug. 1, 2008, Banque Heritage had 47 U.S.-related accounts with U.S. beneficial owners that were held by entities created in Panama, the British Virgin Islands, Hong Kong, Belize or other foreign countries.
Banque Heritage established banking relationships with U.S. taxpayers who were transferring funds from other Swiss financial institutions that were closing such accounts. In at least seven such instances, comprising at least $10 million, Banque Heritage knew, or had reason to know, that the accounts were or may have been undeclared. Banque Heritage also:
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Transferred the beneficial ownership of some U.S. taxpayers’ accounts to non-U.S. persons’ accounts at Banque Heritage; and
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Facilitated the transfer, to Banque Heritage’s affiliate in Uruguay, of approximately $700,000 held in at least two U.S.-related accounts being closed at Banque Heritage, when it knew or had reason to know that these accounts were undeclared.
In May 2001, Banque Heritage entered into a Qualified Intermediary (QI) Agreement with the IRS and required all clients to sign a declaration confirming whether the client was a U.S. national or U.S. resident. Banque Heritage also asked U.S. nationals and U.S. residents to provide an IRS Form W-9. Prior to May 2009, Banque Heritage’s position was that it could service a U.S. client without reporting the U.S. taxpayer’s interest in the account to the IRS so long as it either prohibited the accountholder from trading in U.S.-based securities or the account was nominally structured in the name of a non-U.S.-based entity accompanied by an IRS Form W-8BEN or a Bank Non-U.S. Status Declaration. In the latter circumstance, U.S. clients, with the assistance of their advisors, would create an entity, such as a Panama corporation or a British Virgin Islands company, and pay a fee to third parties to act as corporate directors. Those third parties, at the direction of the U.S. client, would then open a bank account at Banque Heritage in the name of the entity or transfer a pre-existing Swiss bank account from another Swiss bank.
In cases involving a non-U.S. entity, Banque Heritage was aware that a U.S. client was the true beneficial owner of the account and would receive from the entity’s directors an IRS Form W-8BEN or equivalent bank document that falsely declared that the beneficial owner was not a U.S. taxpayer. Knowing that it was probable that certain U.S. taxpayers were not complying with their U.S. income tax and reporting obligations, Banque Heritage effectively provided assistance to certain U.S. taxpayers in evading their U.S. tax obligations, and permitted three accounts to trade in U.S. securities without reporting account earnings or transmitting any withholding taxes to the IRS, as required by the QI Agreement.
Since Aug. 1, 2008, Banque Heritage had 131 U.S.-related accounts with an aggregate maximum balance of approximately $198 million. Banque Heritage will pay a penalty of $3.846 million.
Hyposwiss Geneva is a private bank based in Geneva that was founded in 1997 as Marcuard Cook & Cie S.A. Hyposwiss Geneva was acquired by Anglo Irish Bank Corporation Ltd. in 2001 and then by St. Galler Kantonalbank AG, a Category 2 bank in the Swiss Bank Program, in early 2008. St. Galler Kantonalbank AG announced in June 2013 that it was divesting Hyposwiss Geneva and that Mirelis InvesTrust S.A. would become the new shareholders of Hyposwiss Geneva at the beginning of 2014.
Hyposwiss Geneva opened, serviced and profited from accounts for U.S. clients who Hyposwiss Geneva knew or had reason to know were not complying with their U.S. income tax obligations. In addition to offering the traditional Swiss banking services of hold mail and accounts with code names or numbers, Hyposwiss Geneva accepted instructions in connection with at least 22 U.S.-related accounts not to invest in U.S. securities and not to disclose the names of U.S. clients to U.S. tax authorities, including the IRS. Hyposwiss Geneva assisted at least one U.S. taxpayer client in concealing his identity from the IRS by titling securities in the name of the U.S. taxpayer’s Hyposwiss Geneva relationship manager as a nominee of the U.S. taxpayer by depositing the securities in the relationship manager’s personal account with another Swiss bank. Hyposwiss Geneva also processed large cash and gold withdrawals totaling approximately $3.4 million for at least nine U.S. taxpayers at or around the time the clients’ accounts were closed, even though Hyposwiss Geneva knew, or had reason to know, the accounts contained undeclared assets.
Since Aug. 1, 2008, Hyposwiss Geneva opened and maintained at least 21 undeclared accounts in the names of structures that were beneficially owned by U.S. taxpayers, while knowing, or having reason to know, that these structures were used by U.S. clients to help conceal their identities from the IRS. One structured account was a U.S. trust, two were Swiss-based operating companies and 21 U.S.-related accounts were held by a non-U.S. structure, such as an offshore corporation or trust, which aided and abetted the clients’ ability to conceal their undeclared accounts from the IRS. The entities were incorporated as follows: 10 companies in the British Virgin Islands; five companies in Panama; one trust in the Cook Islands; and one each in Liberia, St. Vincent & the Grenadines, the Marshall Islands, and the Cayman Islands.
Since Aug. 1, 2008, Hyposwiss Geneva held a total of 91 U.S.-related accounts with approximately $74.9 million in assets under management. Hyposwiss Geneva will pay a penalty of $1.109 million.
In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at these banks 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 these non-prosecution agreements, noncompliant U.S. accountholders at these banks must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today's settlements and the steady success of DOJ’s Swiss Bank Program continue to alter the thinking of those seeking to hide their money offshore,” said acting Deputy Commissioner International David Horton of the IRS Large Business & International Division (LB&I). “Through these agreements, we are shining a bright light on those who sought to evade paying what they owe. U.S. taxpayers with undeclared accounts need to report their foreign accounts and pay their income taxes”
“The bank agreements announced today continue to change the paradigm of the offshore banking world and the message sent to that community should be clear,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “The days of secretly hiding funds offshore to avoid paying taxes are over. We are proud of our joint efforts and the resulting success of the program to date. Each additional agreement provides us with highly-detailed data on the accounts, schemes and linkages we need to combat international tax evasion.”
Acting Assistant Attorney General Ciraolo thanked the IRS, and in particular, IRS-CI and the IRS LB&I Division for their substantial assistance. Ciraolo also thanked Michael N. Wilcove, Henry C. Darmstadter, John E. Sullivan, Thomas G. Voracek and Kimberle E. Dodd, who served as counsel on these matters, as well as Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer and Senior Litigation Counsel Nanette L. Davis 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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Government Intervenes in Lawsuits Alleging That Skilled Nursing Chain SavaSeniorCare Provided Medically Unnecessary TherapyRead the Press Release
The government has intervened in three False Claims Act lawsuits and filed a consolidated complaint against SavaSeniorCare LLC and related entities (Sava) alleging that Sava knowingly and routinely submitted false claims to Medicare for rehabilitation therapy services that were not medically reasonable and necessary, the Department of Justice announced today. Sava is one of the nation’s largest healthcare providers, operating approximately 200 skilled nursing facilities (SNFs) in 23 states.
“The provision of Medicare benefits must be dictated by patient need, not by Medicare providers’ efforts to maximize profits by pressuring their employees to provide medically unnecessary services,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice will continue to aggressively pursue companies that seek to engage in this kind of fraudulent scheme.”
The government’s complaint alleges that Sava exerted significant pressure on its SNFs to meet unrealistic financial goals that resulted in the provision of medically unreasonable, unnecessary and unskilled services to Medicare patients. Sava allegedly set these aggressive, prospective corporate targets for the highest Medicare reimbursement rates to significantly increase Sava’s revenues without regard for its patients’ actual clinical needs and then pressured its staff to meet those goals. Sava also allegedly delayed discharging patients from its facilities, even though the patients were medically ready to be discharged, in order to increase its Medicare payments.
“Enforcing the False Claims Act and combating healthcare fraud remains a top priority of the U.S. Attorney’s Office,” said U.S. Attorney David Rivera of the Middle District of Tennessee. “When healthcare providers subject patients to unnecessary treatment, we will intervene and hold them accountable.”
The three consolidated lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government for false claims for government funds and to receive a share of any recovery. The False Claims Act also permits the government to intervene in such lawsuits, as it has done in these cases. Under the Act, a defendant that is found liable is subject to damages equal to three times the government’s loss plus applicable penalties.
The government’s intervention in these matters illustrates its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $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. Tips and complaints from all sources about potential fraud, waste, abuse and mismanagement, including the conduct described in the United States’ complaint, can be reported to the Department of Health and Human Services at 800-HHS-TIPS (800-447-8477).
The lawsuits are being handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Middle District of Tennessee. Investigative support is being provided by the U.S. Attorneys’ Offices of the Southern District of Texas and the Western District of Texas; the Offices of Inspector General for the Department of Health and Human Services and the Office of Personnel Management and the National Association of Medicaid Fraud Control Units.
The cases are captioned United States ex rel. Hayward v. SavaSeniorCare, LLC, et al., No. 3:11-0821 (M.D. Tenn.); United States ex rel. Scott v. SavaSeniorCare Administrative Services, LLC, 3:15-0404 (M.D. Tenn.); and United States ex rel. Kukoyi v. Sava Senior Care, L.L.C., et al., No. 3:15-1102 (M.D. Tenn.).
The claims asserted in the government’s complaint against Sava are allegations only and there has been no determination of liability.
Tuna Fleet Companies to Pay over $1 Million in Civil Penalties and Perform Fleet-Wide Compliance Review to Settle U.S. Claims for American Samoa Oil SpillRead the Press Release
Tri-Marine Management Co., Tri-Marine Fishing Management and Cape Mendocino Fishing (Tri-Marine) have agreed to pay $1.05 million in civil penalties and to perform fleet-wide inspections and other corrective measures to resolve claims stemming from an October 2014 oil spill in American Samoa and related violations of spill prevention regulations, the Department of Justice and the Coast Guard announced today.
In its complaint, filed today along with the lodging of a consent decree in the U.S. District Court for the District of Hawaii, the United States alleges that the Tri-Marine companies are liable for the October 2014 oil spill from their 230-foot commercial tuna fishing vessel, the Capt. Vincent Gann, into Pago Pago Harbor in American Samoa and related violations of the Coast Guard’s spill prevention regulations. After the Capt. Vincent Gann returned to Pago Pago Harbor from a two-month fishing voyage, it struck two moored fishing vessels while maneuvering in the harbor on Oct. 16, 2014. The hull of the Capt. Vincent Gann was breached during the crash and at least 35 barrels of marine fuel oil flowed out of the bulbous bow into the water. It is illegal to store fuel in the bulbous bow.
The complaint further alleges the illegal oil storage was done to extend the duration of the fishing voyage and allow storage of a larger catch of fish. The extra fuel oil had been stored in two of the fish holds, but the oil was transferred out of the fish holds to the bulbous bow to make room for storage of tuna in those fish holds.
The complaint also alleges the vessel was equipped with unlawful piping configurations that tied the bilge water system into the fuel system and that the extra fuel originally was loaded into the vessel using an unauthorized method of pumping fuel oil with hoses over the top of the deck into open fish holds.
In addition to payment of the civil penalties, the consent decree requires Tri-Marine to perform inspections and corrective measures across its entire fleet of ten American Samoa-based vessels, including a top-to-bottom review and overhaul of all of the vessels’ oil handling practices, operator certifications, independent audits, increased reporting, and the engagement of a full-time consultant or in-house personnel focused on environmental and maritime compliance.
“This settlement sends a clear message to vessel owners and operators that they cannot put profits ahead of protection of the marine environment or compliance with the law,” said Assistant Attorney General John C. Cruden, for the Justice Department’s Environment and Natural Resources Division. “Tri-Marine will pay a significant penalty and conduct meaningful fleet-wide corrective measures for its release of oil into Pago Pago Harbor, a sensitive and valuable marine environment. We are grateful to our partner at the U.S. Coast Guard for their swift and diligent investigation of these violations.”
“Storage of oil in the bulbous bow has long been prohibited and poses obvious and serious risks to a vessel’s crew and the marine environment,” said Captain Shannon Gilreath, Sector Commander of the Coast Guard’s Sector Honolulu, which covers both American Samoa and Hawaii. “This enforcement action reinforces this point and emphasizes safety and pollution prevention measures within this fleet of vessels.”
Section 311(b) of the Clean Water Act makes it unlawful to discharge oil or hazardous substances into or upon the navigable waters of the United States or adjoining shorelines in quantities that may be harmful to the environment or public health. In addition, the Coast Guard has promulgated spill prevention regulations for vessels and other facilities under Section 311(j) of the Act. The penalty paid for this spill and the related spill prevention violations will be deposited in the federal Oil Spill Liability Trust Fund managed by the National Pollution Fund Center. The Oil Spill Liability Trust Fund is used to pay for federal response activities and to compensate for damages when there is a discharge or substantial threat of discharge of oil or hazardous substances to waters of the United States or adjoining shorelines.
The proposed consent decree, lodged in the District of Hawaii, is subject to a 30-day public comment period and court review and approval. A copy of the consent decree is available on the Department of Justice website at www.justice.gov/enrd/Consent_Decrees.html.
Seller of “Miracle Mineral Solution” Sentenced to Prison for Marketing Toxic Chemical as a Miracle CureRead the Press Release
A Spokane, Washington, man was sentenced last night to more than four years in federal prison for selling industrial bleach as a miracle cure for numerous diseases and illnesses, including cancer, AIDS, malaria, hepatitis, Lyme disease, asthma and the common cold, the Department of Justice announced today.
Louis Daniel Smith, 45, was sentenced by Chief Judge Rosanna Malouf Peterson of the Eastern District of Washington to serve 51 months in prison to be followed by three years of supervised release.
After a seven-day trial in June, a jury convicted Smith of one count of conspiracy to commit multiple crimes, three counts of introducing misbranded drugs into interstate commerce with intent to defraud or mislead and one count of fraudulently smuggling merchandise into the United States. Evidence at trial showed that Smith operated a business called “Project GreenLife” (PGL) from 2007 to 2011. PGL sold a product called “Miracle Mineral Supplement,” or MMS, over the Internet. MMS is a mixture of sodium chlorite and water. Sodium chlorite is an industrial chemical used as a pesticide, for hydraulic fracturing and for wastewater treatment. Sodium chlorite cannot be sold for human consumption, and suppliers of the chemical include a warning sheet stating that it can cause potentially fatal side effects if swallowed.
“Today’s sentence is a just result reflecting the defendant’s role as the leader of a business that sold dangerous chemicals as miracle cures to sick people and their desperate loved ones,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Consumers have the right to expect that the medicines that they purchase are safe and effective.”
The government presented evidence that Smith instructed consumers to combine MMS with citric acid to create chlorine dioxide, add water and drink the resulting mixture. Chlorine dioxide is a potent agent used to bleach textiles, among other industrial applications. Chlorine dioxide is a severe respiratory and eye irritant that can cause nausea, diarrhea and dehydration. Smith provided instructions for use of his product including that nausea, diarrhea and vomiting were all signs that the miracle cure was working. The instructions also stated that despite a risk of possible brain damage, the product might still be appropriate for pregnant women or infants who were seriously ill.
According to the evidence presented at trial, Smith created phony “water purification” and “wastewater treatment” businesses in order to obtain sodium chlorite and ship his MMS without being detected by the Food and Drug Administration (FDA) or U.S. Customs and Border Protection. The government also presented evidence that Smith hid evidence from FDA inspectors and destroyed evidence while law enforcement agents were executing search warrants.
Before trial, three of Smith’s alleged co-conspirators, Chris Olson, Tammy Olson and Karis DeLong, Smith’s wife, pleaded guilty to introducing misbranded drugs into interstate commerce. Chris Olson, along with alleged co-conspirators Matthew Darjanny and Joseph Lachnit, testified at trial that Smith was the leader of PGL.
The case was investigated by agents of the FDA’s Office of Criminal Investigations and the U.S. Postal Inspection Service. The case was prosecuted by Christopher E. Parisi and Timothy T. Finley of the Civil Division’s Consumer Protection Branch in Washington, D.C.
Former Business Manager and Two Contractors Charged with Theft from Labor Union, Unlawful Labor Payments, Fraud and Money LaunderingRead the Press Release
A former business manager of the Local 657 of the Laborers International Union of North America (LIUNA) and two building contractors were charged today with stealing from Local 657 and related offenses.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Director in Charge Paul M. Abbate of the FBI’s Washington Field Office, Special Agent in Charge Steven D. Anderson of the Department of Labor-Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations’ Washington, D.C., Regional Office and District Director Mark Wheeler of the Department of Labor’s Office of Labor Management Standards’ Washington, D.C., District Office made the announcement.
Anthony Wendel Frederick Sr., 49, of Upper Marlboro, Maryland, was charged with one count of theft from a labor organization, one count of receiving unlawful labor payments, wire fraud and one count of money laundering
Gary Amoes Cooper, 56, of Upper Marlboro, and Christopher Andrew Kwegan, 58, of Randallstown, Maryland, each also were charged with one count of theft from a labor organization, one count of payment unlawful labor payments, wire fraud and several counts of money laundering. Cooper and Kwegan own STS General Contracting of Greenbelt, Maryland. All three defendants are in custody and are scheduled to have their initial appearance at 1:45 p.m. EDT today before U.S. Magistrate Judge G. Michael Harvey of the District of Columbia.
LIUNA is a labor organization that represents laborers in the construction industry. LIUNA’s Local 657 represents construction laborers in Washington, D.C., and five adjacent counties. For approximately 10 years, until June 2014, Frederick served as the business manager for Local 657.
The indictment alleges that, from May 2013 to June 2014, Frederick directed more than $1.7 million in Local 657 funds to STS Contracting without the knowledge or authorization of the Local 657 Executive Board or officials in the LIUNA International. Specifically, according to the indictment, in June 2014, a routine audit of the local union by LIUNA revealed that Frederick had paid nearly $1.1 million to STS Contracting for minimal renovations at the Local 657 administrative building. In addition, the indictment alleges that, without authorization, Frederick directed over $580,000 in Local 657 funds to STS Contracting for expediting permits for the construction of a new training center for Local 657, which expediting had previously been handled by another construction firm. According to the indictment, the LIUNA auditor also discovered that Frederick grossly overpaid STS Contracting for expediting various permits, including $20,000 to expedite a $143 excavation permit, and more than $20,000 to renew existing permits, which could have been accomplished online for approximately $250 apiece.
The indictment further alleges that Cooper and Kwegan used the stolen Local 657 funds to make a down payment of $225,000 on a home purchased by Frederick and to pay for the construction of a three-car garage on the property, and directed more than $600,000 to a corporation owned in part by Frederick’s wife. In addition, Cooper and Kwegan allegedly depleted a company bank account, which primarily contained stolen Local 657 funds, by withdrawing more than $500,000 in cash, sending hundreds of thousands of dollars to third parties in Qatar, and using the remainder for personal items, entertainment, shopping trips, hotel stays and overseas travel.
The charges and allegations contained in an indictment are merely accusations. The defendants are presumed innocent until and unless proven guilty.
The case is being investigated by the FBI and the Department of Labor. The case is being prosecuted by Trial Attorney Vincent Falvo of the Criminal Division’s Organized Crime and Gang Section.
Department of Justice and Department of Health and Human Services Announce $1.5 Million in Funding to Increase Support for Male Violence Survivors and Support Safe Streets ExpansionRead the Press Release
The Department of Justice and Department of Health and Human Services (HHS) today announced $1.5 million in new federal grants focused on violence prevention efforts in Baltimore.
Joining Administrator Robert L. Listenbee of the Justice Department’s Office of Juvenile Justice and Delinquency Prevention at a press conference to announce the grants were Deputy Director Kristina Rose of the Justice Department’s Office for Victims of Crime, Regional Director Joanne Grossi of the Department of Health and Human Services, Baltimore Mayor Stephanie Rawlings-Blake and Baltimore Health Commissioner Dr. Leana Wen.
“At the Department of Justice, we firmly believe that a public health approach – one that fights not just the symptoms but the root causes of violence – is the most effective and sustainable way to prevent and reduce crime in our communities,” said Administrator Listenbee. “What is so tremendously gratifying about these efforts is that they are all the direct result of partnerships – between Safe Streets Baltimore, the health department, the schools, the faith community and agencies across the federal government. We are proud to make these investments and honored to be part of this exciting work.”
“Violence devastates individuals and families and can undermine the very fabric of our communities,” said Regional Director Grossi. “The good news is that there is hope – we know what works to prevent violence. The federal government is looking forward to collaborating with NACCHO and the city of Baltimore to prevent the violence and foster a safe and healthy environment for all residents.”
The three grants from the U.S. Department of Justice include:
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$999,564 from the Office for Victims of Crime to more effectively reach male survivors of violence and their families.During the three-year project period, these partners will convene a planning group to develop a culturally-relevant, trauma-informed curriculum for survivors, establish a standardized and multidisciplinary shooting response protocol and implement a plan to increase public awareness of the effects of trauma and victimization.
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$278,000 from the Office of Juvenile Justice and Delinquency Prevention for the National Forum on Youth Violence Prevention to implement strategies and evidence-based programs to reduce youth violence.As a means of addressing school climate issues, the Baltimore City Health Department and the Baltimore Public School System aim to enhance the capacity of schools to successfully implement and sustain the school-wide positive behavioral interventions and support (PBIS) model.
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$70,000 from the Office of Juvenile Justice and Delinquency Prevention to integrate the faith community into activities aimed at the prevention and reduction of youth violence and victimization within and around the Safe Streets Baltimore areas.Specifically, this funding will support a Faith Community Coordinator position to conduct outreach to Baltimore’s diverse faith-based community which serves and surrounds the Safe Streets areas.
Additionally, the Department of Health and Human Services, through the Centers for Disease Control and Prevention, has awarded the National Association of County and City Health Officials (NACCHO) with $175,000 to fund a pilot of Safe Streets in the Sandtown-Winchester neighborhood of Baltimore.
A request for proposals is currently offering community-based organizations in West Baltimore the opportunity to bring the program credited with reducing gun violence to their neighborhoods.
In 2014, Safe Streets workers had 15,000 client interactions and mediated 880 conflicts. More than 80 percent of interactions were deemed to be “likely” or “very likely” to result in gun violence. Three of the four sites have gone over a year without a fatal shooting.
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Arkansas Chiropractor Sentenced for Federal Tax CrimeRead the Press Release
An Arkansas chiropractor was sentenced today to serve 17 months in prison, followed by one year of supervised release announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney Kenneth Elser of the Western District of Arkansas.
“Today’s sentence sends a clear message that the department, working with its law enforcement partners, will aggressively pursue and prosecute those individuals who willfully seek to obstruct the Internal Revenue Service and evade their tax obligations,” said Acting Assistant Attorney General Ciraolo.
According to court documents, Philip Roberts, 60, of Fort Smith, Arkansas, had an outstanding federal income tax liability of more than $2 million for tax years 1991 through 2004. In 2008, Roberts filed a series of false and fraudulent documents with the Internal Revenue Service (IRS) in an effort to obstruct and impede the tax laws, including filing false financial instruments that claimed millions of dollars of transactions with both the Secretary of the Treasury and the IRS Commissioner, and filing forms that falsely reported payments to the IRS.
Roberts pleaded guilty on June 22 to corruptly endeavoring to obstruct and impede the IRS. U.S. District Judge Timothy L. Brooks of the Western District of Arkansas also ordered Roberts to pay a $3,000 fine. This is Roberts’ second conviction for income tax related offenses. In 2000, after a jury trial, Roberts was convicted of two counts of willfully failing to file federal income tax returns and sentenced to serve 16 months in prison.
“An important part of our mission is to protect the integrity of the Federal tax system,” said J. Russell George, Treasury Inspector General for Tax Administration (TIGTA). “TIGTA will vigorously investigate individuals who attempt to corruptly interfere with the administration of the Internal Revenue laws through fraudulent means, and will do everything within its power to ensure that those involved will be prosecuted to the fullest extent of the law.”
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Elser commended the Treasury Inspector General for Tax Administration, who investigated the case, as well as Trial Attorneys Robert A. Kemins and David Zisserson of the Tax Division and Assistant U.S. Attorney Kimberly Davis of the Western District of Arkansas, who prosecuted the case.
Louisiana Man Sentenced for Involvement in Stolen Identity Tax Fraud SchemeRead the Press Release
A resident of Tangipahoa Parish, Louisiana, was sentenced to serve 15 months in prison to be followed by three years of supervised release for his involvement in a stolen identity refund fraud (SIRF) scheme, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana announced today.
Brad Lewis, aka Bird, 33, pleaded guilty on May 26 to one count of a multi-object conspiracy to defraud the United States and to commit mail fraud and theft of public money. U.S. District Judge Jay C. Zainey of the Eastern District of Louisiana imposed today’s sentence and also ordered Lewis to pay $1,136,966.94 in restitution owed to the Internal Revenue Service (IRS).
According to court documents, Lewis and his co-defendants conspired to prepare and file false income tax returns using stolen identities, including the victims’ names and social security numbers, to claim large tax refunds. The refund checks were mailed to addresses in Louisiana, including post office boxes that Lewis opened. Once the checks were received, Lewis and his co-defendants falsely endorsed and deposited the refund checks into bank accounts under their control. The co-conspirators then divided the proceeds of the refund checks amongst themselves.
The indictment also charged Cedrick Mitchell aka Skeet, 40; Corey Lewis, 37; Craig Lewis, 40; Angela Chaney, 43; Thaddeus Richardson, 49; and Martin Jackson Sr., 49, with conspiracy to defraud the United States, conspiracy to commit money laundering, conspiracy to commit mail fraud, conspiracy to commit theft of public money and other charges. On Sept. 15, Cedrick Mitchell was sentenced to 33 months in prison. On Sept. 29, Corey Lewis was sentenced to 75 months in prison. On Oct. 6, Thaddeus Richardson was sentenced to 51 months in prison. On Oct. 13, Angela Chaney was sentenced to 36 months in prison and Craig Lewis was sentenced to three years of probation. On Oct. 20, Martin Jackson Sr. was sentenced to 12 months and one day in prison.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case and Assistant U.S. Attorneys Hayden Brockett and Dall Kammer of the Eastern District of Louisiana and Trial Attorney Lauren M. Castaldi of the Tax Division, who are prosecuting the case.
Georgia Real Estate Investor Admits to Bid Rigging and Mail Fraud Conspiracies at Home Foreclosures AuctionsRead the Press Release
A Georgia real estate investor pleaded guilty today for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia.
Trent Gaines admitted that he and others conspired not to bid against one another at public real estate foreclosure auctions from October 2008 to November 2010 in Fulton County, Georgia, and from September 2006 to February 2011 in DeKalb County, Georgia. Gaines also admitted to conspiring with others to use the mail to carry out a scheme to fraudulently acquire title to selected Fulton and DeKalb properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that should have gone to mortgage holders and others. The selected properties were then awarded to the conspirators who submitted the highest bids in private side auctions open only to Gaines and his co-conspirators.
“Today’s prosecution demonstrates the division’s continuing commitment to vigorously prosecute domestic cartels and fraud, and to obtain justice for victims of antitrust and fraud offenses,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “The guilty plea is the 10th prosecution against defendants for bid rigging at public foreclosure auctions in Georgia.”
According to documents filed with the court, the purpose of the conspiracies was to suppress and restrain competition and divert money to the conspirators that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“This case again illustrates not only the problems regarding bid rigging at real estate auctions in Georgia but also the federal efforts involved in shutting this type of criminal activity down,” said Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Division. “The FBI reminds the public that such activity as seen in this case is a violation of federal law and, as such, the FBI will continue to work with the U.S. Department of Justice’s Antitrust Division in identifying, investigating and presenting for federal prosecution, those involved.”
Including Gaines, 10 cases have been filed as a result of the ongoing investigation being conducted by the Antitrust Division’s Washington Criminal II Section, the FBI’s Atlanta Division and the U.S. Attorney’s Office of the Northern District of Georgia.
Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact the Antitrust Division’s Washington Criminal II Section at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.htm.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force, which was established 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. 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.
The Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants since fiscal year 2009. For more information about the task force, please visit www.StopFraud.gov.
Former Executive Admits Guilt in Conspiracy Affecting Water Treatment ChemicalsRead the Press Release
A former executive of a water treatment chemicals manufacturer has pleaded guilty for his role in a conspiracy to eliminate competition by fixing prices, rigging bids and allocating customers for liquid aluminum sulfate supplied to municipalities and pulp and paper companies in the United States.
Frank A. Reichl, of Flanders, New Jersey, admitted to agreeing not to compete for contracts for liquid aluminum sulfate, a coagulant used by municipalities to treat drinking and waste water, and by pulp and paper companies in their manufacturing processes.
“By agreeing not to disturb each other’s ‘historical’ business, Reichl and his co-conspirators cheated municipalities and paper companies out of competitive prices for their supplies of liquid aluminum sulfate, a key water treatment chemical,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “We continue to work with our partners at the FBI to hold offenders in this industry criminally accountable.”
According to documents filed with the court, from 1997 until July 2010, Reichl and his co-conspirators met to discuss each other’s liquid aluminum sulfate business, submitted intentionally losing bids to favor the intended winner of the business, withdrew inadvertently winning bids and discussed prices to be quoted or bid to customers. Reichl is the first defendant to plead guilty to participating in this decade-and-a-half-long conspiracy.
“Reichl and his co-conspirators colluded to circumvent competitive bidding and independent pricing for liquid aluminum sulfate contracts, and conspired to raise prices by submitting artificially inflated bids to their customers,” said Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division. “They also allocated customers in furtherance of their collusive scheme. By agreeing to violate both the spirit and the letter of the competitive process, Reichl and others defrauded municipalities as well as pulp and paper companies out of millions of dollars.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than the statutory maximum fine.
The investigation into collusion in the liquid aluminum sulfate industry is being conducted by the Antitrust Division’s New York Office and the FBI’s New Jersey Office. Anyone with information regarding price fixing, bid rigging or customer allocation in the liquid aluminum sulfate industry should contact the Antitrust Division’s New York Office at 212-335-8000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.htm.
Department of Justice Releases Report on the Ambush of Police OfficersRead the Press Release
The Department of Justice today announced the release of an Office of Community Oriented Policing Services (COPS Office) report that addresses ambushes and violence against police officers. The report, Ambushes of Police: Environment, Incident Dynamics, and the Aftermath of Surprise Attacks against Law Enforcement, analyzes ambushes of the police and provides new information that can guide police executives, trainers, supervisors, policymakers and researchers in addressing the issue.
“Law enforcement officers regularly put their lives on the line in order to protect our communities and serve our nation,” said Attorney General Lynch. “As part of our work to support these brave men and women, the Department of Justice is committed to extensive efforts aimed at preventing violent action against the police. This report will serve as a critical base of knowledge as we work to defend our law enforcement and ensure our officers’ safety.”
“Every day, law enforcement officers serve this nation with distinction by protecting all of us from harm,” said Director Ronald Davis of the COPS Office. “That protection, however, comes at great risk to the men and women who courageously don the uniform and wear the badge. We know that the murder of a police officer in the line of duty is an assault on the entire community. When that murder is a result of an ambush, it also attacks the very foundation of our democracy. We must act to address this persistent threat. This ambush report is an important first step.”
The report, compiled by CNA, investigates methods for preventing, responding to, and effectively responding to ambushes of police officers. Ambush attacks against law enforcement officers remain a threat to officer safety, with the number of attacks per year holding steady since a decline in the early 1990s and the proportion of fatal attacks on officers attributable to ambushes increasing.
The report examines the environmental factors prevalent in ambush situations, and considers factors that may impact the survivability of an ambush assault. It also examines how police organizations can learn in the wake of these critical incidents and aid in the development and evaluation of policies and training programs aimed at improving outcomes following an ambush assaults against an officer.
The report, Ambushes of Police: Environment, Incident Dynamics, and the Aftermath of Surprise Attacks against Law Enforcement, is available here: https://cops.usdoj.gov/RIC/ric.php?page=detail&id=COPS-P340.
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 126,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about the COPS Office, please visit www.cops.usdoj.gov.
Department of Justice Releases Report on Officer Safety and WellnessRead the Press Release
Report Highlights Four Police Departments with Effective Programs
The Department of Justice today announced the release of a new report that focuses on advancing the health and safety of police officers across the country. The publication, Health, Safety, and Wellness Program Case Studies in Law Enforcement, focuses on the innovative approaches to promoting officer safety and wellness taken by four police agencies. The report was released by the Department of Justice’s Office of Community Oriented Policing Services (COPS Office).
“The health and wellness of law enforcement officers is essential to public safety,” said Attorney General Lynch. “In order to ensure that our communities are kept as secure as possible, we must provide the officers who serve them with the tools they need to protect their health, ensure their well-being, and manage the rigors of their difficult work. The case studies in this report offer an important guide as we seek to support and care for men and women who risk their lives for us every day.”
“The safety and well-being of our police officers are as important to community policing and public safety as are building community trust and confidence,” said Director Ronald Davis of the COPS Office. “We know police work is tough, stressful, and dangerous. Officers are put in dangerous situations every day. We must make police officer wellness and safety a top priority.”
The four case studies presented in the publication offer an opportunity to better understand the significance and value that officer wellness programs present in successfully reducing officer sickness, injuries and deaths associated with poor health or traffic-related accidents. The case studies serve as models for safety, health and wellness programs and each offers practical strategies that have shown positive results. The four law enforcement agencies featured in this publication are the Boca Raton Police Department, the Prince George’s County Police Department, the Fairfax County Police Department and Reno Police Department.
The report is the product of the Attorney General’s Officer Safety and Wellness Group, led by the COPS Office and Bureau of Justice Assistance, in partnership with the Major Cities Chiefs Association. The group is comprised of representatives from police associations and unions, federal government agencies, universities and local law enforcement agencies, with additional subject matter experts and guest presenters with expertise on specific topics.
The publication, Health, Safety, and Wellness Program Case Studies in Law Enforcement, is available here: https://cops.usdoj.gov/RIC/ric.php?page=detail&id=COPS-P332.
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 127,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about the COPS Office, please visit www.cops.usdoj.gov.
Department of Justice Announces New Guidebook on 21st Century PolicingRead the Press Release
Attorney General Lynch to Launch Phase Two of Six-City Community Policing Tour Highlighting Jurisdictions that Effectively Implement Recommendations in the 21st Century Policing Guidebook
The Department of Justice today released a new resource guide called The President’s Task Force on 21st Century Policing Implementation Guidebook, which outlines strategies to help communities, law enforcement and local government implement recommendations in the President's Task Force on 21st Century Policing Report. President Obama announced the new guidebook today at the International Association of Chiefs of Police Convention in Chicago.
As part of the announcement, the Attorney General will launch Phase Two of the Justice Department’s Community Policing Tour. Each stop along the six-city tour will highlight a jurisdiction that is effectively implementing one of the six pillars outlined in the task force guidebook.
“The Department of Justice is dedicated to building trust between law enforcement officers and the communities they serve; enlisting the public’s assistance in reducing crime; and creating the stronger and safer communities that all Americans deserve,” said Attorney General Loretta E. Lynch. “This implementation guide offers a crucial blueprint for elected officials, law enforcement officers, and community leaders alike as they work to put important policies and reforms into practice across the country.”
“The President’s Task Force on 21st Century Policing Implementation Guide highlights specific actions for local elected and appointed government officials, law enforcement agencies, communities and other stakeholders to support a comprehensive approach to reduce crime and build trust and legitimacy,” said Director Ronald Davis of the Office Community Oriented Policing Services (COPS Office). “Success will require collaboration and partnerships among these groups.”
Guidebook Summary on 21st Century Policing: Five Ways Stakeholder Groups Can Implement the Task Force’s Recommendations
Communities
1. Engage with local law enforcement; participate in meetings, surveys, and other activities.
2. Participate in problem-solving efforts to reduce crime and improve quality of life.
3. Work with local law enforcement to ensure crime-reducing resources and tactics are being deployed that mitigate unintended consequences.
4. Call on state legislators to ensure that the legal framework does not impede accountability for law enforcement.
5. Review school policies and practices, and advocate for early intervention strategies that minimize involvement of youth in the criminal justice system.
Law enforcement
1. Review and update policies, training, and data collection on use of force, and engage community members and police labor unions in the process.
2. Increase transparency of data, policies, and procedures.
3. Call on the POST Commission to implement all levels of training.
4. Examine hiring practices and ways to involve the community in recruiting.
5. Ensure officers have access to the tools they need to keep them safe
Local government
1. Create listening opportunities with the community.
2. Allocate government resources to implementation.
3. Conduct community surveys on attitudes toward policing, and publish the results.
4. Define the terms of civilian oversight to meet the community’s needs.
5. Recognize and address holistically the root causes of crime.
The President’s Task Force on 21st Century Policing was charged by President Barack Obama with identifying best practices and offering recommendations on how policing practices can promote effective crime reduction while building public trust. The task force submitted its final report to the President in May 2015. In July 2015, the White House and the COPS Office convened a forum of elected officials, police executives and community members to jointly discuss the task force recommendations and share strategies for implementation.
The implementation guide is a companion to the task force report and is informed by strategies shared at the July convening and feedback from the field. It provides guidance on implementing the task force’s 59 recommendations and 92 action items and serves as a resource for law enforcement, local government, community members and other stakeholders interested in concrete examples of how to turn the task force recommendations into action.
The President’s Task Force on 21st Century Policing Implementation Guidebook is available here: https://cops.usdoj.gov/RIC/ric.php?page=detail&id=COPS-P341. Further information about the President’s Task Force on 21st Century Policing is available here: https://www.cops.usdoj.gov/default.asp?Item=2761.
The COPS Office is a federal agency responsible for advancing community policing nationwide. Since 1995, the COPS Office has invested more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 127,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about the COPS Office, please visit www.cops.usdoj.gov.
APL Ltd. to Pay $9.8 Million to Resolve Alleged False Claims Under the Department of Defense Shipping ContractRead the Press Release
APL Limited has agreed to pay the government $9.8 million to resolve allegations that it violated the False Claims Act in connection with a contract to provide GPS tracking of shipping containers in Afghanistan, the Justice Department announced today. APL, an ocean carrier based in Scottsdale, Arizona, is a wholly-owned American subsidiary of Singapore-based Neptune Orient Lines Limited.
The Department of Defense contract required APL to affix a satellite tracking device to each shipping container transported from Karachi, Pakistan to U.S. military bases in Afghanistan when the Department of Defense (DOD) requested the tracking services. The United States alleges that APL billed the DOD for tracking services despite knowing that the tracking devices completely or partially failed to transmit data, or were not affixed to shipping containers. The government also claims that APL attached a single satellite tracking device to two shipping containers despite being required to affix one device to every container.
“Today’s settlement demonstrates our commitment to ensure that contractors doing business with the military perform their contracts honestly,” said Principal Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to ensure that there are appropriate consequences for those who knowingly fail to live up to their bargain and misuse taxpayer funds.”
“The U.S. Attorney’s Office will continue to work with our partners to protect the public fisc from government contractors who fail to deliver what they promise,” said Acting U.S. Attorney Brian J. Stretch of the Northern District of California.
“Thanks to the collaborative efforts of many U.S. law enforcement professionals, APL is today being held accountable for their actions,” said Director Frank Robey of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. “I applaud all those responsible for their continued pursuit of those who attempt to take advantage of the U.S. military through false claims for services that were not provided.”
The settlement with APL was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch; the U.S. Attorney’s Office of the Northern District of California, Affirmative Civil Enforcement Unit; DOD’s Defense Criminal Investigative Service; the Army’s Criminal Investigation Command and DOD’s Defense Contract Audit Agency.
The claims resolved by today’s civil settlement are allegations only; there has been no determination of liability.
San Juan Puerto Rico Agrees to Make Investments in Clean WaterRead the Press Release
Under a settlement with the Department of Justice and the Environmental Protection Agency (EPA), the Municipality of San Juan has agreed to make substantial upgrades to its storm sewer systems. The upgrades and related cleaning activities are aimed at eliminating or minimizing daily discharges of large volumes of raw sewage and will minimize discharges of other pollutants into nearby water bodies, including the San Juan Bay Estuary and the Martin Peña Canal. The estimated cost of the upgrades and actions over the life of the agreement is $180 million.
“The residents of San Juan deserve a better storm sewer system, one that does not expose them to the serious health risks posed by untreated sewage,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “The requirements of this settlement are good for the environment and necessary for the long-term health and safety of local waterways and communities.”
“Billions of gallons of raw sewage are released every year, threatening public health and the environment in San Juan,” said Regional Administrator Judith A. Enck for EPA. “This legally binding agreement will ensure that this sad legacy of sewage pollution is finally addressed.”
Storm water runoff in urban areas is collected through separate storm sewer systems and is discharged into local waterways. When rain falls on roofs, streets and parking lots, the water cannot soak into the ground and carries trash, bacteria, heavy metals and other pollutants into streams, often damaging health. In addition, property and infrastructure can be damaged by storm water runoff due to erosion. The primary method to control these storm water discharges is through the use of effective practices to protect water quality under a storm water permit issued under the Clean Water Act. Storm water permits do not authorize the discharge of raw sewage, which has been occurring in San Juan for years.
In addition to documenting daily discharges of untreated sewage, EPA documented that the Municipality of San Juan failed to implement its own storm water management plan, including failing to establish storm sewer maps to facilitate the detection of illegal discharges and failing to implement a program to detect illegal discharges and failure to provide routine cleaning and maintenance to its system. Between 2008 and 2013, EPA documented that pollutants, including millions of gallons of untreated sewage, were being discharged every day from the Municipality of San Juan’s system. In addition to collecting rain from streets, EPA determined that San Juan’s storm sewer system has been collecting sewage from homes through pipes that have been improperly connected to the storm sewers. EPA also determined that infiltration from cracked sanitary systems and direct connections of sanitary sewers to storm sewers have resulted in additional contributions of untreated sewage to the storm sewer systems.
The waters receiving the untreated sewage include those that are classified for activities where the human body may come into direct and indirect contact with the water, such as fishing, boating, swimming, wading and/or other recreational and commercial activities. Untreated sewage can carry bacteria, viruses and other harmful pollutants that can cause a number of illnesses. Direct and indirect human exposure to or contact with untreated sewage and contaminated waters discharged on a daily basis presents an imminent and substantial endangerment to human health and welfare.
Under this legal agreement, the Municipality of San Juan will come into compliance with their storm water permit, develop and implement a storm water management program to prevent pollutants from entering and being discharged from their storm sewer systems and to develop and implement a plan to identify and address issues within their systems, including eliminating illegal discharges. Illicit connections and discharges in some areas of San Juan must be eliminated within 10 years and in other areas within 14 years. Within eight years, the Municipality of San Juan must also submit a schedule for the completion of an investigation of and a design plan for eliminating all illegal connections and discharges to its municipal separate storm sewer systems in the remainder of the city of San Juan and San Juan must also implement the plan and complete construction within an EPA-approved schedule.
Additional requirements under the agreement include:
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Capital improvements: The Municipality of San Juan must install, inspect, maintain and replace warning signs at sewer outfalls, submit a vacuum truck sludge disposal plan and submit standard operating procedures for pump stations. The municipality must also submit a plan to address and abate backflow from the receiving waters into the storm sewer system east of the Stop 18 Pump Station.
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Asset management program: The Municipality of San Juan will develop an asset management program, including protocols and operating procedures for inspection, cleaning and repair of sewer infrastructure; consistently clean the sewer system; and submit a routine cleaning schedule and checklist to the EPA for review.
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Spill prevention control and countermeasures: San Juan will develop and implement a spill prevention control and countermeasures plan, as well as a spill control plan.
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Water quality monitoring and outfall inventory program: The municipality will sample and monitor water quality, maintain an electronic record of information on system outfalls and complete an inventory of all of its outfalls in the city of San Juan within three years.
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Warning Signs: The Municipality of San Juan will inform the public through warning signs posted at discharge points and through a public education program on the dangers of being exposed to these discharges.
- Urgent Action Registry: The Municipality of San Juan will maintain an Urgent Action Registry that will track all complaints by government agencies and individuals of illegal discharges into San Juan's storm sewer systems. San Juan will address these complaints within one to three years from the date a complaint is made. This is an innovative tool to address the multiple traditionally unaddressed complaints to bring relief to affected residents.
The Municipality of San Juan will consider green infrastructure projects to comply with obligations under the agreement. Green infrastructure is an environmentally friendly technique to manage storm water that uses vegetation, soils, and natural processes to manage water and create healthier, more resilient urban environments.
Discharges of untreated sewage from San Juan’s storm sewers disproportionately affect disadvantaged communities in the municipality, leading to the prevalence of gastrointestinal symptoms in areas such as the neighborhoods adjacent to the Martín Peña Canal. By requiring the municipality to prevent exposure to untreated sewage, EPA is advancing environmental justice in the community through the fair treatment and meaningful involvement of all people, regardless of race or income, in the environmental decision-making process.
The settlement was lodged today in the U.S. District Court of Puerto Rico, and is subject to a 30-day public comment period and approval by the federal court. The settlement will be available for viewing at www.justice.gov/enrd/Consent_Decrees.html
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Owner of Two New York Medical Clinics Pleads Guilty to Role in $55 Million Health Care Fraud SchemeRead the Press Release
Defendant Laundered Millions through Sham Vendors, Generating Cash to Pay Illegal Kickbacks
The owner of two medical clinics in Brooklyn, New York, pleaded guilty today to her role in a $55 million health care fraud and money laundering conspiracy.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Robert L. Capers of the Eastern District of New York, Special Agent in Charge Scott Lampert of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG’s) Office of Investigations, Special Agent in Charge Shantelle P. Kitchen of Internal Revenue Service-Criminal Investigation (IRS-CI) New York and Inspector General Dennis Rosen of New York State Medicaid made the announcement.
Valentina Kovalienko, 46, pleaded guilty before U.S. District Judge Roslynn R. Mauskopf of the Eastern District of New York to conspiracy to commit health care fraud and conspiracy to commit money laundering. Her sentencing date has not yet been scheduled. Pursuant to her plea agreement, Kovalienko agreed to forfeit $29,336,497.27, which amount she admitted is traceable to her criminal conduct.
According to admissions made in connection with her plea, from approximately February 2008 to February 2011, Kovalienko and others executed a scheme in which patients were paid cash kickbacks to subject themselves to medically unnecessary physical and occupational therapy, diagnostic tests and office visits that were not performed by licensed professionals, and for which the clinics billed Medicare and Medicaid. Kovalienko also admitted that, to support the fraudulent claims, she paid occupational and physical therapists to falsify patient charts and billing records.
In connection with her guilty plea, Kovalienko admitted that she diverted funds deposited into the clinics’ bank accounts by Medicare and Medicaid to herself and her co-conspirators and to the patients to whom kickbacks were paid. Kovalienko admitted that she did so by writing checks from the clinics’ bank accounts to an elaborate network of sham third-party vendors, purportedly in the business of providing “consulting,” “advertising” and “computer support” services, which checks she and her co-conpsirators cashed for their own benefit and to perpetuate the scheme by paying kickbacks to patients.
To date, at least 10 other individuals have pleaded guilty to participating in the scheme, including the former medical directors of both clinics, three former occupational therapists, a former physical therapist, three ambulette drivers, the owner of several of the sham vendors used to launder the money and a former patient who received illegal kickbacks.
In July and August 2014, three additional clinic managers and one ambulette driver were also charged with crimes arising from the scheme. A trial date has not yet been set.
The case was investigated by HHS-OIG, IRS-CI and the New York State Office of the Medicaid Inspector General, and was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of New York. The case is being prosecuted by Trial Attorneys Bryan D. Fields, A. Brendan Stewart and F. Turner Buford of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,300 defendants who have collectively billed the Medicare program for more than $7 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Department of Justice and Federal Trade Commission Support Reform of Virginia Laws that Curb Competition, Limit Consumer Choice, and Stifle Innovation for Health Care ServicesRead the Press Release
Agencies Submit Joint Statement Regarding Virginia Certificate-of-Need Laws for Health Care Facilities
The Department of Justice’s Antitrust Division and the Federal Trade Commission have recommended that Virginia reform its laws regulating the building of hospitals and the process of health care services.
In response to a request by Kathy Byron, a Virginia state delegate, the joint statement submitted to the Virginia Certificate of Public Need Work (COPN) Group suggests the state consider whether its COPN program best serves the needs of its citizens.
“The evidence suggests that certificate-of-need laws have not served consumers well,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “They raise the cost of investment in new health care services and can shield incumbents from competition that would benefit consumers and lower costs. By reexamining the certificate-of-need process state policymakers have an opportunity to invigorate competition in this important sector, to the benefit of patients, employers and other health care consumers.”
Although Certificate-of-Need (CON) laws vary considerably by state, these laws, including Virginia’s COPN laws, typically require certain healthcare providers to obtain state approval before expanding, establishing new facilities or services or making certain large capital expenditures.
According to the joint statement, the Department of Justice and FTC historically have urged states to consider repeal or reform of their CON laws because they can prevent the efficient functioning of health care markets that may harm consumers. CON laws have created barriers to expansion, limited consumer choice and stifled innovation.
Incumbent providers may use CON laws when seeking to stop or delay entry by new competitors. CON laws can also deny consumers the benefit of an effective remedy for antitrust violations and can facilitate anticompetitive agreements.
Barton Solvents Enters into Settlement to Ensure Safe Processes at Six Chemical Blending and Distribution Plants in Iowa, Kansas and WisconsinRead the Press Release
The Department of Justice and the Environmental Protection Agency (EPA) today announced a proposed settlement with Barton Solvents Inc. that resolves multiple environmental violations at five of the company’s chemical blending and distribution facilities in Iowa, Kansas and Wisconsin.
The proposed settlement, in the form of a consent decree lodged today in U.S. District Court in Des Moines, Iowa, requires Barton to pay a civil penalty of $1.1 million and undertake measures to ensure that it’s blending and packaging processes adhere to safety and environmental requirements.
In 2007, violations of the Clean Air Act General Duty Clause resulted in explosions and major fires at two Barton facilities. These explosions and fires led to damage of the facilities, nearby businesses and the evacuation of the facilities and the surrounding communities. EPA inspections at these and other Barton facilities, along with information collected by EPA, found widespread violations of federal and state Resource Conservation and Recovery Act (RCRA) hazardous waste storage requirements and the Clean Water Act (CWA) Spill Prevention, Control and Countermeasure (SPCC) requirements. These types of violations not only put facilities at risk, but the surrounding communities as well.
“This settlement requires Barton to take immediate measures to minimize the potential for dangerous environmental releases and provide maximum safety for workers and the communities where its facilities reside.” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division. “Barton must also take action in its handling of hazardous waste so that it can achieve full compliance with all state and federal environmental requirements under the RCRA.”
“When companies handling dangerous chemicals fail to comply with environmental laws, catastrophic events can happen,” said Region 7 Acting Regional Administrator Mark J. Hague for EPA. “Under this settlement, Barton will take steps to ensure safe chemical handling at all its facilities by complying with environmental laws that create safer facilities and communities.”
Under the settlement, Barton will also hire independent auditors to perform comprehensive environmental compliance audits and correct any additional violations uncovered at all of its facilities, including a facility in West Bend, Wisconsin.
The proposed consent decree is subject to a 30-day public comment period and approval by the federal court before it becomes final.
For a copy of the consent decree, visit www.justice.gov/enrd/consent-decrees.
Louisiana Man Sentenced for Involvement in Stolen Identity Tax Refund Fraud SchemeRead the Press Release
A resident of Tangipahoa Parish, Louisiana, was sentenced to serve 12 months and one day in prison to be followed by three years of supervised release for his involvement in a stolen identity refund fraud (SIRF) scheme, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana announced today.
Martin Jackson Sr., 49, pleaded guilty on July 7 to one count of a multi-object conspiracy to defraud the United States and to commit mail fraud and theft of public money. U.S. District Judge Jay C. Zainey of the Eastern District of Louisiana, who imposed today’s sentence, will determine restitution owed to the Internal Revenue Service (IRS) at a later date.
According to court documents, Jackson, who owned two automotive businesses, and his co-defendants conspired to prepare and file false income tax returns using stolen identities, including the victims’ names and social security numbers, to claim large tax refunds. The refund checks were mailed to addresses in Louisiana, including post office boxes that were opened by the co-conspirators. Once the checks were received, Jackson and his co-defendants falsely endorsed and deposited the refund checks into bank accounts under their control. The co-conspirators then divided the proceeds of the refund checks amongst themselves.
The indictment also charged Cedrick Mitchell, 40; Corey Lewis, 37; Craig Lewis, 40; Angela Chaney, 43; Thaddeus Richardson, 49; and others with conspiracy to defraud the United States, conspiracy to commit money laundering, conspiracy to commit mail fraud, conspiracy to commit theft of public money and other charges. On Sept. 15, Cedrick Mitchell was sentenced to serve 33 months in prison. On Sept. 29, Corey Lewis was sentenced to serve 75 months in prison. On Oct. 6, Thaddeus Richardson was sentenced to serve 51 months in prison. On Oct. 13, Angela Chaney was sentenced to serve 36 months in prison and Craig Lewis was sentenced to serve three years of probation. All of the remaining defendants in this case have pleaded guilty to various charges and are awaiting sentencing.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, and Assistant U.S. Attorneys Hayden Brockett and Dall Kammer of the Eastern District of Louisiana and Trial Attorney Lauren M. Castaldi of the Tax Division, who are prosecuting the case.
Justice Department Announces Piguet Galland & Cie SA Reaches Resolution under Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Piguet Galland & Cie SA (Piguet Galland) has reached a resolution under the department’s Swiss Bank Program. Piguet Galland will pay a penalty of more than $15 million and continue to cooperate with the department.
“With each agreement signed under the Swiss Bank Program, we gain a deeper understanding of the historical patterns and practices of entities and individuals around the world facilitating U.S. tax evasion,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “We are analyzing the information received, pursuing investigations, and remain committed to holding those involved accountable through both civil and criminal enforcement efforts.”
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, Piguet Galland 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.
Piguet Galland evolved through the combination of three small, traditional Swiss private banks focused on wealth management. In November 2003, Banque Franck SA acquired the client relationships of Banque Galland & Cie SA to become Franck Galland & Cie SA. Until 2011, Piguet & Cie (Banque Piguet) was a separate entity, majority-owned by Banque Cantonale Vaudoise (BCV). Between February and April 2011, BCV acquired Franck Galland from its owner, a U.S. financial group (the U.S. financial group), and then merged it with Banque Piguet (the 2011 Acquisition) to form the current entity, Piguet Galland. BCV owns Piguet Galland.
Piguet Galland and its predecessor banks opened, serviced and profited from accounts for U.S. taxpayers with the knowledge that some of these accountholders likely were not complying with their U.S. income tax and reporting obligations. Piguet Galland and its predecessor banks offered a variety of traditional Swiss banking services that they knew or should have known would assist U.S. taxpayers in concealing assets and income from the Internal Revenue Service (IRS), including hold mail and code name or numbered account services.
One particular relationship manager (RM-1) was responsible for managing many of the U.S.-related accounts at Banque Franck and later Franck Galland. RM-1 was a member of senior management at both of those banks. Before Aug. 1, 2008, RM-1 opened several entity and trust accounts for U.S. persons, which remained open past Aug. 1, 2008. RM-1 was a relationship manager for at least 65 U.S.-related accounts at Piguet Galland after Aug. 1, 2008.
RM-1 traveled regularly to the United States, mostly to attend meetings with both existing and potential U.S. clients. Among other places, RM-1 traveled to Arizona, California, New Hampshire, New York and Wisconsin to meet both existing and potential clients. This travel sometimes occurred at the request of the U.S. financial group that owned Franck Galland and often was in connection with trips to visit the U.S. financial group’s management. RM-1 met with U.S. clients at hotels, clients’ clubs and other public places in the United States. Management at Franck Galland, including its former chief executive officer, was aware of RM-1’s travel to the United States. In fact, at least one member of Franck Galland’s Executive Committee knew that RM-1 was a U.S. person at the time he started employment.
Franck Galland permitted two other former relationship managers to travel to the United States to meet with U.S. taxpayer-clients. On one occasion, one of these relationship managers provided $5,000 in cash from an undeclared account held by a U.S. taxpayer-client directly to that client in the United States.
Franck Galland had a sister entity that was also owned by the U.S. financial group. This sister entity was a now-dissolved Cayman Island entity (the Cayman Entity). The Cayman Entity was acquired by Piguet Galland as part of the 2011 Acquisition. The Cayman Entity was ultimately liquidated in 2013, effective in 2014. Prior to the 2011 Acquisition, the Cayman Entity:
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Assisted in the opening of undeclared U.S.-related accounts at Franck Galland, sometimes through entities the Cayman Entity helped to create;
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Helped manage structures holding undeclared U.S.-related accounts at Franck Galland;
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Suggested facilitating meetings in the United States between RM-1 and undeclared U.S. taxpayer-clients with Cayman Entity accounts at Franck Galland;
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Facilitated cash withdrawals and transfers out of undeclared U.S.-related accounts at Franck Galland; and
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Served as trustee for two trusts that held U.S.-related accounts from 1995 to June 2011.
The Cayman Entity also held a subsidiary, the only purpose of which was to hold a condominium in George Town, Cayman Islands. While the condominium was principally for use by the U.S. financial group and its management, it was also used by executives of Franck Galland and at least three of its U.S. taxpayer-clients. The condominium was sold prior to the 2011 Acquisition.
Banque Piguet, another predecessor to Piguet Galland, allowed some of its relationship managers to communicate with its clients, including U.S. taxpayers, through private email accounts and the email domain “4uonly.ch,” without disclosure of the communication’s origin.
Franck Galland and Banque Piguet opened and maintained undeclared accounts beneficially owned by U.S. taxpayers and held in the name of structures, some of which had cash or credit cards linked to them, while knowing, or having reason to know, that some of these structures were used by U.S. taxpayer-clients to help conceal their identities from the IRS. Franck Galland and Banque Piguet also:
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Accepted instructions in connection with U.S.-related accounts not to invest in U.S. securities and not to disclose the names of U.S. taxpayer-clients to U.S. tax authorities, including the IRS;
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Opened and maintained accounts for U.S. taxpayer-clients transferring from other Swiss financial institutions that were closing such accounts, while both Franck Galland and Banque Piguet knew, or had reason to know, that a portion of the accounts at the other institutions were or likely were undeclared; and
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Maintained undeclared accounts for U.S. taxpayer-clients who renounced their beneficial ownership of such accounts, or who transferred account funds to non- U.S.- related accounts, while continuing to exercise control or retain entitlement to the funds.
Throughout its participation in the Swiss Bank Program, Piguet Galland committed to providing full cooperation to the U.S. government. Among other things, Piguet Galland provided a list of the names and functions of individuals who structured, operated or supervised the cross-border business at Franck Galland, Banque Piguet and Piguet Galland.
Since Aug. 1, 2008, Piguet Galland and its predecessor banks held 337 U.S.-related accounts, with aggregate assets under management of $441 million. Piguet Galland will pay a penalty of $15.365 million.
While U.S. accountholders at Piguet Galland 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 Piguet Galland must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
“Today’s resolution with Piguet Galland & Cie SA reflects the continuing success of DOJ’s Swiss Bank Program,” said Acting Deputy Commissioner International David Horton of the IRS Large Business & International Division (LB&I). “Through these agreements, we are getting hidden account data and information on those who have aided this tax evasion. U.S. taxpayers with undeclared accounts need to come forward, report their foreign accounts and pay their income taxes.”
“The veil of secrecy has been lifted from what was once a common place for criminals to hide their money offshore,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “By requiring banks to follow the laws already in place and not turn a blind eye to criminal activity, the success of the Swiss Bank Program echoes around the world. The American public expects and deserves the enforcement of the U.S. tax laws to ensure the integrity and fairness of our nation’s tax system.”
Acting Assistant Attorney General Ciraolo thanked the IRS, and in particular, IRS-CI and IRS LB&I for their substantial assistance. Ciraolo also thanked W. Damon Dennis, 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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Georgia Resident Sentenced to Prison in Connection with Fraudulent Lottery Scheme Based in JamaicaRead the Press Release
A Douglasville, Georgia, man was sentenced after pleading guilty to his role in a Jamaican-based fraudulent lottery scheme that targeted victims in the United States, the Department of Justice announced today. This prosecution is part of the Department of Justice’s effort, working with federal, state and local law enforcement, to combat lottery fraud schemes from Jamaica preying on American citizens. According to the U.S. Postal Inspection Service (USPIS), Americans have lost tens of millions of dollars to fraudulent foreign lotteries.
Dominic Hugh Smith, 27, was sentenced by U.S. District Court Judge Robert J. Conrad Jr. of the Western District of North Carolina to serve 27 months in prison and one year of supervised release. Smith was also ordered to pay $724,408.79 in restitution. In June 2014, Smith pleaded guilty to one count of conspiracy to commit wire fraud in connection with the conduct of telemarketing. Prior to pleading guilty, Smith had been employed both as a Transportation Security Administration agent and an Atlanta Police Department police officer.
“International lottery fraud aimed at stealing from elderly victims cannot, and will not, be tolerated by the Department of Justice,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will seek to hold accountable those who participate in illegal lottery schemes, including those in the United States who facilitate schemes directed from abroad as well as those who operate from foreign countries.”
“As these types of financial scams continue to grow in scope and sophistication, we will utilize all resources to prosecute and deter such criminal activity,” said U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina. “Now more than ever, the public needs to be mindful of these schemes to avoid falling prey to them. Greedy criminals looking to line their pockets with money stolen from our nation’s seniors will ultimately face American justice.”
As part of his guilty plea, Smith acknowledged that had the case gone to trial, the government would have proved beyond a reasonable doubt that from December 2010 through at least April 2012, he was a member of a conspiracy in which elderly victims were informed by telephone that they had won a large amount of money and prizes in a lottery and were induced to pay bogus fees in advance of receiving their purported lottery winnings. Victims sent hundreds of thousands of dollars to Smith in the United States. Smith acknowledged that the government would have proved that he knew there was no lottery, and that he, along with his coconspirators, kept the victims’ money for their own benefit.
Principal Deputy Assistant Attorney General Mizer and U.S. Attorney Rose commended the investigative efforts of the USPIS and the Internal Revenue Service. The sentencing was handled by Trial Attorney Stephen T. Descano of the Civil Division’s Consumer Protection Branch.
Federal Government Contractor Pleads Guilty to Accepting Kickbacks and Tax EvasionRead the Press Release
An Enterprise, Alabama, resident pleaded guilty today in U.S. District Court for the Southern District of Florida to accepting unlawful kickbacks and tax evasion, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to court documents and statements made in open court, Victor Villalobos, 47, worked for a federal prime contractor at Fort Rucker in Alabama. In 2009, Villalobos approached a subcontractor for this company and solicited illegal kickbacks on the federal subcontracts the subcontractor held in connection with the federal prime contractor. Villalobos agreed that in exchange for kickback payments he would refrain from conduct that would unfavorably affect the subcontractor’s business relationship with the federal prime contractor and help ensure that the subcontractor obtained additional business.
As part of his plea, Villalobos admitted that from June 2009 to December 2014, he received approximately 57 separate wire transfers totaling more than $1.9 million in kickback payments from various foreign and domestic bank accounts controlled by the subcontractor. At two separate meetings in 2015, Villalobos met with the subcontractor and accepted an envelope containing $5,000 in cash and a bag containing $55,000 in cash as kickback payments. Between June 2009 and February 2015, Villalobos attempted to conceal his receipt of the kickbacks by incorporating nominee entities and opening nominee bank accounts. Villalobos also admitted that he attempted to evade income taxes on the kickback payments by causing false federal income tax returns to be filed.
Villalobos faces a statutory maximum sentence of 10 years in prison for accepting the kickbacks and a statutory maximum sentence of five years in prison for tax evasion. He could also be fined up to $500,000 or twice the gain from his crimes.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, the U.S. Air Force’s Office of Special Investigations and the Department of Defense’s Office of the Inspector General, who investigated this case, and Trial Attorneys Charles M. Edgar Jr. and Jason H. Poole of the Tax Division, who are prosecuting this case. Ciraolo also thanked the U.S. Attorney’s Office of the Southern District of Florida for their substantial assistance.
Women’s Equality Day CelebratedRead 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 Women’s Equality Day 2015 event coordinated by the U.S. Citizenship and Immigration Services, Guam Field Office and held on August 26, 2015, at the Guam Field Office in Tiyan. The theme of the event was “95th Anniversary of Women Winning the Vote,” which acknowledged and celebrated the 1920 passage of the 19th Amendment of the Constitution, granting women the right to vote, as well as women’s continuing efforts toward full equality.
In his proclamation for Women’s Equality Day, President Barack Obama stated, “Women’s equality is a core civil and human rights principle in the United States and around the world. Across America, women are contributing to our economy and our Nation in innovative and exciting ways. From businesses to battlefields, women are vital to the prosperity and security of our country. As we celebrate the last 95 years of progress in advancing women’s rights, let us rededicate ourselves to the idea that our Nation is not yet complete: there is still work to do to secure the blessings of our country for every American daughter.”
U.S. Attorney Limtiaco shared information on the Pacific Regional Response to Combat Human Trafficking Initiative (the “Initiative”), which is a collaborative effort among the U.S. Attorney’s Office for the Districts of Guam and the NMI; the U.S. Department of State Office’s Office to Monitor and Combat Trafficking in Persons; the U.S. Department of the Interior, Office of Insular Affairs; the U.S. Department of Labor; the Guam Human Trafficking Task Force; the NMI Human Trafficking Intervention Coalition; and other community partners. U.S. Attorney Limtiaco also discussed the intersection and relationship between human trafficking, sexual assault, child abuse and domestic and family violence, and prevention and enforcement efforts in the Pacific region.
The Initiative employs a multi-disciplinary model, including participation, coordination, and collaboration among law enforcement, prosecution, victim service providers, social services, medical, mental and public health professionals, faith based organizations, educational institutions, Consulates, and other community stakeholders. The Initiative calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, community outreach/public awareness and prevention programs, and the creation of human trafficking task forces and coalitions in the Pacific region island communities. The Initiatives also provides fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics to government and community partners in our Pacific region island communities, which is critical to effective prevention and enforcement efforts in the region.
U.S. Attorney Alicia Limtiaco addressing the attendees at the
Women’s Equality Day Event
Field Office Director Stephen P. Green presenting a certification
of appreciation to U.S. Attorney Alicia Limtiaco.
Two Psychologists Charged in $25.2 Million Fraud Scheme Involving Psychological Testing in Gulf Coast StatesRead the Press Release
Two clinical psychologists were charged today with participating in a $25 million Medicare fraud scheme involving psychological testing in nursing homes in Gulf Coast states.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Michael J. Anderson of the FBI’s New Orleans Field Office and Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Regional Office made the announcement.
Beverly Stubblefield, Ph.D., 62, of Slidell, Louisiana, and John Teal, Ph.D., 46, of Jackson, Mississippi, were charged by a superseding indictment with conspiracy to commit health care fraud and conspiracy to make false statements related to health care matters. Two other defendants, Rodney Hesson, Psy.D., 46, and Gertrude Parker, 62, both of Slidell, were charged in the initial indictment returned in June 2015 in connection with a large-scale Medicare Fraud takedown, and were also charged in today’s superseding indictment.
According to the superseding indictment, Hesson and Parker owned and controlled Nursing Home Psychological Service (NHPS) and Psychological Care Services (PCS), each of which operated in Louisiana, Mississippi, Florida and Alabama. The superseding indictment alleges that NHPS and PCS contracted with nursing homes in these states to allow NHPS and PCS clinical psychologists, including Stubblefield, Teal and Hesson, to administer to nursing home residents psychological tests and related services that were not necessary and, in some instances, never provided.
According to the superseding indictment, between 2009 and 2015, NHPS and PCS submitted more than $25.2 million in claims to Medicare. Medicare paid approximately $17 million on those claims.
The charges and allegations contained in an indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Louisiana. The case is being prosecuted by Trial Attorneys William Kanellis and Antonio Pozos of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Patrice Harris Sullivan of the Eastern District of Louisiana.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Retired Air Force Master Sergeant Pleads Guilty to Disclosing Confidential Bid Information for Government Contracts and Tax FraudRead the Press Release
A retired U.S. Air Force Master Sergeant pleaded guilty today in U.S. District Court for the Southern District of Florida to unlawfully disclosing confidential procurement information and filing a false tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Trevor Smith retired from the U.S. Air Force in December 2012, according to court documents and statements made in open court. From February 2009 through February 2010, Smith was deployed to Afghanistan, where he served as Supply Non-Commissioned Officer-In-Charge for the Operation Enduring Freedom/Combined Security Transition Command-Afghanistan NATO Training Mission. In that capacity, Smith met a Fort Lauderdale, Florida-based government contractor and agreed to disclose confidential bid information on government contracts to the contractor in exchange for bribe payments. Smith and the contractor agreed that Smith would receive two percent of all revenues on contracts that the contractor received as a result of Smith’s assistance.
In January 2010, the contractor wired $42,853.29 to Smith. The two agreed to wait until Smith returned to the United States for more payments. After returning to the United States, Smith set up a shell corporation called T Star Air Inc. to receive 23 additional payments totaling $220,600. Smith also created and submitted phony invoices to conceal the scheme. For tax years 2010 through 2012, Smith filed corporate tax returns for T Star Air that falsely claimed inflated expenses and deductions.
At his Jan. 5, 2016 sentencing, Smith faces a statutory maximum penalty of five years in prison for disclosing confidential procurement information and three years in prison for filing a false tax return. He could also be fined up to $500,000 or twice the gain from his crimes.
Acting Assistant Attorney General Ciraolo commended special agents of Internal Revenue Service-Criminal Investigation, the U.S. Air Force’s Office of Special Investigations and the U.S. Department of Defense’s Office of the Inspector General, who investigated this case and Trial Attorneys Charles M. Edgar Jr. and Jason H. Poole of the Tax Division, who are prosecuting this case. Acting Assistant Attorney General Ciraolo also thanked the U.S. Attorney’s Office of the Southern District of Florida for their substantial assistance.
OCDETF Training for Law Enforcement Sponsored by the U.S. Attorney’s OfficeRead the Press Release
U.S. Attorney Alicia A.G. Limtiaco, Districts of Guam and the Northern Mariana Islands (NMI), announced that the Regional Organized Crime Drug Enforcement Task Force (OCDETF) coordinators from the Pacific Region made their annual visit to Guam and the NMI and provided OCDETF training to law enforcement partners. The training was conducted by Thomas Colthurst, OCDETF Regional Director, Steve Jensen, OCDETF Regional Coordinator from the Internal Revenue Service-Criminal Investigation (IRS-CI), and Deborah Wee, OCDETF Regional Coordinator from the Federal Bureau of Investigation (FBI). The training was held at the U.S. Attorney’s Office in Guam on March 11, 2015, from 2:00 p.m. to 5:00 p.m. and was attended by approximately 30 local and federal law enforcement officers.
The training topics included Money Laundering and Financial Analysis, OCDETF Airport Security Initiative, and Searches and Seizure.
The OCDETF Program was established in 1982 to mount a comprehensive attack against organized drug traffickers. Today, the OCDETF Program is the centerpiece of the United States Attorney General's drug strategy to reduce the availability of drugs by disrupting and dismantling major drug trafficking organizations and money laundering organizations and related criminal enterprises.
OCDETF investigations involve a focused multi-agency, multi-jurisdictional task force that investigates and prosecutes the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.
An OCDETF investigation involves federal agents and local law enforcement officers of the Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), the Drug Enforcement Administration (DEA), the FBI, the IRS-CI, the U.S. Coast Guard Criminal Investigative Service (CGIS), the U.S. Department of Homeland Security Investigations (HSI), the U.S. National Oceanic Atmosphere Administration (NOAA), the U.S. Marshal’s Service, the U.S. Postal Inspection Service (USPIS), the Guam Police Department (GPD) and Guam Customs and Quarantine Agency (GCQA), and other law enforcement partners.
Lumber Liquidators Inc. Pleads Guilty to Environmental Crimes and Agrees to Pay More Than $13 Million in Fines, Forfeiture and Community Service PaymentsRead the Press Release
Virginia-based hardwood flooring retailer Lumber Liquidators Inc. pleaded guilty today in federal court in Norfolk, Virginia, to environmental crimes related to its illegal importation of hardwood flooring, much of which was manufactured in China from timber that had been illegally logged in far eastern Russia, in the habitat of the last remaining Siberian tigers and Amur leopards in the world, announced the Department of Justice.
Lumber Liquidators was charged earlier this month in the Eastern District of Virginia with one felony count of importing goods through false statements and four misdemeanor violations of the Lacey Act, which makes it a crime to import timber that was taken in violation of the laws of a foreign country and to transport falsely-labeled timber across international borders into the United States. The charges describe Lumber Liquidators’ use of timber that was illegally logged in Far East Russia, as well as false statements on Lacey Act declarations which obfuscated the true species and source of the timber. This is the first felony conviction related to the import or use of illegal timber and the largest criminal fine ever under the Lacey Act.
“Lumber Liquidators’ race to profit resulted in the plundering of forests and wildlife habitat that, if continued, could spell the end of the Siberian tiger,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “Lumber Liquidators knew it had a duty to follow the law, and instead it flouted the letter and spirit of the Lacey Act, ignoring its own red flags that its products likely came from illegally harvested timber, all at the expense of law abiding competitors. Under this plea agreement, Lumber Liquidators will pay a multi-million dollar penalty, forfeit millions in assets, and must adhere to a rigorous compliance program. We hope this sends a strong message that we will not tolerate such abuses of U.S. laws that protect and preserve the world’s endangered plant and animal species.”
“This prosecution has been the result of hard work of federal agents and prosecutors who have been dedicated to protecting our natural habitats in the United States and around the world,” said U.S. Attorney Dana Boente of the Eastern District of Virginia.
“Companies knowingly accepting illegally sourced materials need to recognize there are far-reaching consequences to their actions,” said Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) Washington, D.C. “In this case, in addition to violating U.S. customs law, Lumber Liquidators contributed to the potential eradication of an endangered species simply to increase profit margins.”
“This multi-agency investigation highlights the importance the U.S. Government places on protecting tree species around the world from unlawful import, export and trade, and the effectiveness of the Lacey Act in implementing those protections,” said Deputy Assistant Director Ed Grace of the U.S. Fish and Wildlife Service’s (USFWS) Office of Law Enforcement. “Thanks to this intergovernmental team, the habitat of the last remaining Siberian tigers and Amur leopards will no longer be threatened by the activities of this company. This case and today’s plea deal demonstrate that those engaged in the commercialization of illegal timber imported into the United States will be caught and held accountable.”
According to a joint statement of facts filed with the court, from 2010 to 2013, Lumber Liquidators repeatedly failed to follow its own internal procedures and failed to take action on self-identified “red flags.” Those red flags included imports from high risk countries, imports of high risk species, imports from suppliers who were unable to provide documentation of legal harvest and imports from suppliers who provided false information about their products. Despite internal warnings of risk and non-compliance, very little changed at Lumber Liquidators.
For example, Lumber Liquidators employees were aware that timber from the Russian Far East was considered, within the flooring industry and within Lumber Liquidators, to carry a high risk of being illegally sourced due to corruption and illegal harvesting in that remote region. Despite the risk of illegality, Lumber Liquidators increased its purchases from Chinese manufacturers using timber sourced in the Russian Far East. In 2013, the defendant imported Russian timber logged under a concession permit that had been utilized so many times that the defendants’ imports alone exceeded the legal harvest allowance of Mongolian oak, Quercus mongolica, by more than 800 percent. The investigation revealed a prevalent practice in timber smuggling enterprises, where a company uses a seemingly legitimate government permit to log trees. Corruption and criminal activity along the supply chain results in the same permit being used multiple times and in areas outside of the designated logging area, sometimes vastly exceeding its legal limits.
On other occasions, Lumber Liquidators falsely reported the species or harvest country of timber when it was imported into the United States. In 2013, Lumber Liquidators imported Mongolian oak from Far East Russia which it declared to be Welsh oak and imported merpauh from Myanmar which it declared to be mahogany from Indonesia.
The illegal cutting of Mongolian oak in far eastern Russia is of particular concern because those forests are home to the last 450 wild Siberian tigers, Panthera tigris altaica. Illegal logging is considered the primary risk to the tigers’ survival, because they are dependent on intact forests for hunting and because Mongolian oak acorns are a chief food source for the tigers’ prey species. Mongolian oak forests are also home to the highly endangered Amur leopard Panthera pardus orientalis, of which fewer than 50 remain in the wild. In June 2014, in response to illegal logging and the decline in tiger populations, Mongolian oak was added to the Convention on the International Trade in Endangered Species (CITES) Appendix III.
Under the plea agreement, Lumber Liquidators will pay $13.15 million, including $7.8 million in criminal fines, $969,175 in criminal forfeiture and more than $1.23 million in community service payments. Lumber Liquidators has also agreed to a five year term of organizational probation and mandatory implementation of a government-approved environmental compliance plan and independent audits. In addition, the company will pay more than $3.15 million in cash through a related civil forfeiture. The more than $13.15 million dollar penalty is the largest financial penalty for timber trafficking under the Lacey Act and one of the largest Lacey Act penalties ever. The company is scheduled to be sentenced on Feb. 1, 2016.
The $1,230,825 in community service payments is being provided to two Congressionally-chartered recipients, the National Fish and Wildlife Foundation (NWFW) and the USFWS Rhinoceros and Tiger Conservation Fund. One project that will be funded is the development of a wood identification device that if successful, could fill a critical gap in enforcement when it comes to identifying the species of timber at a border or in an enforcement scenario. The device would be able to identify timber species that are listed on the CITES Appendices, including the species that were at issue in this case. If U.S. border officials would have had access to such a device in 2011, then perhaps Lumber Liquidators could have been flagged for violation years ago, thus averting the flow of money back to China and Far East Russia in support of illegal logging. Other projects would involve protecting, researching and preserving the Siberian tiger, Amur leopard and their habitat.
The case was jointly investigated by agents of the USFWS and HSI as part of Operation Oakenshield. The case is being prosecuted by Patrick M. Duggan and Christopher L. Hale of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division, and Stephen Haynie and Kevin P. Hudson of the U.S. Attorney’s Office in Norfolk.
Justice Department Settles Immigration-Related Discrimination Claim Against Miami-Dade County Public SchoolsRead the Press Release
The Justice Department announced today that it reached a settlement with Miami Dade County Public Schools (MDCPS) resolving claims that MDCPS discriminated against employees because of their citizenship status in violation of the Immigration and Nationality Act (INA).
The department’s investigation, conducted by the Civil Rights Division’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), found that MDCPS required non-U.S. citizens, but not similarly-situated U.S. citizens, to present specific documents to prove their employment eligibility. The INA’s anti-discrimination provision prohibits employers from making specific documentary demands based on citizenship or national origin when verifying an employee’s authorization to work.
“Employers must ensure that their human resources staff understand proper hiring practices,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “Promoting compliance is especially important to ensure that workers are not excluded due to discriminatory treatment.”
Under the settlement agreement, MDCPS will pay a $90,000 civil penalty to the United States and will establish a $125,000 back pay fund to compensate individuals who lost wages because of the MDCPS’ practices. Among other things, the settlement also requires MDCPS to undergo compliance monitoring for three years, permit OSC to train MDCPS students on worker rights, and train its human resources employees on the anti-discrimination provision of the INA.
OSC is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation. Trial Attorney Liza Zamd of the Civil Rights Division handled this matter.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they were subjected to different documentary requirements based on their citizenship, immigration status or national origin; or discrimination based on their citizenship, immigration status or national origin in hiring, firing, or recruitment or referral for a fee should contact OSC’s worker hotline for assistance.
Miami-Dade County Public Schools Settlement Agreement
Justice Department Seeks to Shut Down Southeast Florida Tax Return Preparers and Owners of “Tax Mon$Ter” and “Tax Pros” Tax Preparation BusinessesRead the Press Release
Businesses Allegedly Prepare Fraudulent Tax Returns While Charging Customers Undisclosed, Unconscionable Fees
The United States filed a civil injunction suit seeking to bar Christopher Lawrence and Kenneth Aikens from owning, operating or franchising a tax return preparation business and from preparing tax returns for others, the Justice Department announced today.
The complaint also asks the court to order Lawrence and Aikens to disgorge the fees that they obtained through the alleged fraudulent tax return preparation. According to the complaint, Lawrence owns and operates Tax Mon$ter and Aikens owns and operates Tax Pros, each of which is a tax return preparation business with locations in Southeast Florida. Lawrence was previously a franchisee of LBS Tax Services, the complaint alleges. This lawsuit is one of nine filed against LBS Tax Services-related individuals, including Walner Gachette, Douglas Mesadieu, Jean Demesmin, Kerny Pierre-Louis, Demetrius Scott, Jason Stinson, Wilfrid Antoine, Tonya Chambers, Jehoakim Victor, Lauri Rodriguez and Milot Odne.
According to the complaint, Lawrence and Aikens target primarily low-income customers with deceptive and misleading advertisements, prepare and file fraudulent tax returns to fraudulently increase their customers’ refunds and profit through unconscionable, exorbitant and often undisclosed fees—all at the expense of their customers and the U.S. Treasury.
According to the complaint, Lawrence’s and Aikens’ tax return preparation businesses expressly promote and encourage the preparation of false and fraudulent federal tax returns in order to maximize corporate and individual profits. The complaint alleges that Lawrence’s and Aikens’ stores engage in fraudulent activity, including:
• Falsely claiming the Earned Income Tax Credit
• Claiming improper filing status (i.e. head of household for married individuals)
• Fabricating businesses and related business income and expenses
• Fabricating Schedule A deductions, particularly for unreimbursed employee business expenses
• Charging deceptive and unconscionable fees
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
El Departamento de Justicia Resuelve Reclamación de Discriminación Relacionada a la Inmigración Contra las Escuelas Públicas del Condado de Miami-DadeRead the Press Release
WASHINGTON – El Departamento de Justicia anunció hoy que llegó a un acuerdo con las Escuelas Públicas del Condado de Miami-Dade (MDCPS por sus siglas en inglés) resolviendo unas reclamaciones que MDCPS discriminó a sus empleados debido a su ciudadanía en violación de la Ley de Inmigración y Nacionalidad (INA por sus siglas en inglés).
La investigación del departamento, realizada por la Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a Inmigración (OSC por sus siglas en inglés) de la División de Derechos Civiles, encontró que MDCPS obligó a inmigrantes, pero no a ciudadanos estadounidenses similarmente situados, a presentar documentos específicos para comprobar su elegibilidad para trabajar. La disposición antidiscriminatoria de la INA prohíbe a los empleadores hacer exigencias documentales específicas basadas en la ciudadanía u origen nacional cuando verifican la autorización de trabajar de un empleado.
“Los empleadores tienen que asegurarse de que su personal de recursos humanos entienda las prácticas propias de contratación,” dijo Vanita Gupta, la Subprocuradora Prinicpal General y Directora de la División de Derechos Civiles del Departamento de Justicia. “Promoviendo el cumplimiento con la ley es importante para asegurar que los trabajadores no sean excluidos debido a tratamiento discriminatorio.”
Bajo el acuerdo, MDCPS pagará una penalidad civil de $90,000 a los Estados Unidos y establecerá un fondo de $125,000 para indemnizar a los individuos quienes perdieron sueldos debido a las prácticas de la compañía. Entre otras cosas, el acuerdo también requiere que la compañía realice monitoreo de cumplimiento por tres años, permita a OSC a entrenar a los estudiantes de MDCPS sobre los derechos del trabajador, y entrene sus empleados de recursos humanos sobre la provicíon antidiscriminatoria de la INA.
OSC es responsable de hacer cumplir la disposición antidiscriminatoria de la INA. Entre otras cosas, la ley prohíbe la discriminación por causa de ciudadanía y origen nacional en la contratación, despido o reclutamiento o referencia por honorario; prácticas documentales injustas, represalias; e intimidación. La Abogada Litigante Liza Zamd de la División de Derechos Civiles trató este asunto.
Para más información sobre las protecciones contra la discriminación en el empleo bajo las leyes de inmigración, llame a la línea directa para trabajadores al 1-800-255-7688 (1-800-237-2515, TTY para las personas con deficiencias auditivas); llame a la línea directa para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para las personas con deficiencias auditivas); inscríbase a un webinario gratis al www.justice.gov/crt/about/osc/webinars.php, correo electrónico [email protected]; o visite la página web de OSC en www.justice.gov/crt/about/osc.
Los solicitantes o empleados quienes creen que fueron sujetos a diferentes requisitos documentales basados en su ciudadanía, estado migratorio u origen nacional; o discriminación basada en su ciudadanía, estado migratorio u origen nacional en su contratación, despido o reclutamiento o referencia por honorario deben de contactar a la línea directa de OSC para trabajadores para asistencia.
Alabama Man Sentenced for Stolen Identity Refund FraudRead the Press Release
A Montgomery County, Alabama, resident was sentenced to prison today for his involvement in a stolen identity tax refund fraud (SIRF) scheme, Acting Assistant Attorney Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama announced today.
Jerome Marcel Newton was sentenced to serve 48 months in prison to be followed by three years of supervised release and was ordered to pay $147,102 in restitution to the Internal Revenue Service (IRS).
Newton previously pleaded guilty to one count of mail fraud and one count of aggravated identity theft. According to the superseding indictment and the plea agreement, Newton obtained the personal identifying information of others in various ways, including by using other individuals to collect identities or recruit people to provide their identities. Although Newton resided in Alabama, a number of the identities belonged to people living in Pittsburgh. Newton also obtained the identity information of prison inmates. Newton used the identities he obtained to file fraudulent tax returns, directing the refunds claimed on those returns into bank accounts or onto prepaid debit cards. Some of the prepaid debit cards were then mailed to addresses within the Middle District of Alabama.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck Jr. commended special agents of the IRS-Criminal Investigation and officers of the Sheriff’s Office for Douglas County, Georgia, who investigated the case, as well as Trial Attorneys Jason H. Poole and Michael C. Boteler of the Tax Division and Assistant U.S. Attorney Jonathan S. Ross of the Middle District of Alabama, who are prosecuting the case.
Additional information about the Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax.
Attorney General Loretta E. Lynch Hosts the 63rd Annual Attorney General Awards Honoring Department Employees and Others for Their ServiceRead the Press Release
Attorney General Loretta E. Lynch recognized 279 department employees for their distinguished public service today at the 63nd Annual Attorney General’s Awards Ceremony. Thirty-three other individuals outside of the department were also honored for their work. This annual ceremony recognizes individuals for their outstanding service and dedication to carrying out the missions of the Department of Justice. The department will also present one posthumous award in honor of Deputy U.S. Marshal Josie Wells for his exceptional heroism in the line of duty.
“The individuals being honored today stand out within a department that holds all of its employees and partners to an extremely high standard of excellence,” said Attorney General Lynch. “They have put in long hours, made immense sacrifices and, in some cases, placed themselves in harm’s way. They have taken on issues that once seemed intractable, and made progress on problems that once seemed impossible. And their outstanding work is an inspiration to public servants everywhere.”
The Attorney General’s Award for Exceptional Service is the department’s highest award for employee performance and this year’s award was presented to the team responsible for the thorough investigation of the Ferguson, Missouri, Police Department.
On Aug. 9, 2014, Ferguson Police Department Officer Darren Wilson shot and killed 18-year-old Michael Brown. The shooting immediately drew worldwide scrutiny, spawned weeks of unrest that resulted in the declaration of a state of emergency in Ferguson and the mobilization of the National Guard, which threatened to devolve into large-scale civil unrest. Simultaneously, the case and aftermath spawned a national debate on the nature of the roles of race and class in policing. Immediately following the shooting, the department’s Civil Rights Division began criminal and civil investigations to uncover and analyze the facts surrounding the shooting and the broader practices of the Ferguson Police Department. These reports were widely read, were published in the most prominent news sources around the world and were received as credible by community members and law enforcement alike. The work of the recipients not only calmed the community, it set the framework for a groundbreaking project to improve police practices and police and community relations, while also reinforcing the credibility of the department by enforcing the civil rights of all Americans.
The recipients of the Attorney General’s Award for Exceptional Service include, from the Office of the Attorney General, Counselor Benjamin C. Mizer, who is now the Principal Deputy Assistant Attorney General of the department’s Civil Division; from the Office of the Associate Attorney General, Principal Deputy Assistant Attorney General Molly J. Moran; from the Civil Rights Division, Deputy Assistant Attorney General Mark J. Kappelhoff, Office of the Assistant Attorney General Senior Counsel Chiraag Bains, Deputy Assistant Attorney General Robert J. Moossy, Criminal Section Acting Chief Paige Fitzgerald, Criminal Section Deputy Chief Kristy L. Parker, Criminal Section Trial Attorney Fara T. Gold, Special Litigation Section Deputy Chief Christy E. Lopez, Special Litigation Section Trial Attorneys Charles W. Hart Jr. and Jude J. Volek and Special Litigation Section Equal Opportunity Specialist Earl H. Saunders; from the U.S. Attorney’s Office of the Eastern District of Missouri, Assistant U.S. Attorney Cristian M. Stevens; from the FBI’s St. Louis Field Office, Special Agents Carolyn A. Cerone and Cynthia Dockery; and from the Office of Public Affairs, Public Affairs Specialist Dena W. Iverson.
The Attorney General’s Award for Exceptional Heroism is given to recognize an extraordinary act of courage and voluntary risk of life during the performance of official duties.
The recipients of the Attorney General’s Award for Exceptional Heroism are, from the U.S. Marshals Service-Southern District of Mississippi, Deputy U.S. Marshal (DUSM) Josie Wells, and from the Drug Enforcement Administration’s Washington, D.C., Field Division, Special Agent (SA) Mark T. Simala.
On March 10, 2015, the U.S. Marshals Service (USMS)-Middle District of Louisiana was involved in a significant incident in Baton Rouge, Louisiana, while attempting to arrest fugitive Jamie Croom during Operation Violence Reduction. Croom was wanted on two counts of first degree murder and violation of his federal supervised release. USMS personnel and Task Force Officers (TFO) responded to the Elm Grove Gardens Hotel in Baton Rouge in an attempt to arrest Croom. Dressed in tactical attire with clearly marked law enforcement insignias, the entry team knocked and announced their presence when opening the door. Law enforcement personnel proceeded into the room, at which time DUSM Wells was struck by gun fire initiated by Croom, who was hiding behind the hotel room door. Law enforcement personnel immediately returned fire at the threat, striking Croom and subsequently restraining him. Task force personnel immediately extracted DUSM Wells from the room to the parking lot and attempted to render first aid. DUSM Wells was placed in a TFO’s vehicle and transported to Lane Regional Medical Center in Zachary, Louisiana, where he was pronounced dead upon arrival.
On Nov. 19, 2014, SA Simala came to the aid of John Robert Phillips after he was involved in a horrific vehicle accident. With complete disregard for his own personal safety, SA Simala was able to rescue an unconscious Phillips from his burning vehicle shortly before it became engulfed by flames. Had SA Simala not acted, Phillips undoubtedly would have perished inside his burning vehicle. During the incident, SA Simala suffered burns to his outer clothing, smoke inhalation and had several small and treatable glass cuts to his right hand. Meanwhile, Phillips is said to be doing well and recovering from a shattered pelvis and two broken legs.
The Edward H. Levi Award for Outstanding Professionalism and Exemplary Integrity is presented to pay tribute to the memory and achievements of former Attorney General Edward H. Levi, whose career as an attorney, law professor, dean and public servant exemplified these qualities in the best traditions of the department. This year’s award is presented to Charles E. Samuels Jr., Director of the Federal Bureau of Prisons.
Samuels is honored for his distinguished public service career. He began his career as a correctional officer and moved through the ranks before becoming the eighth director of the Federal Bureau of Prisons on Dec. 21, 2011. During his tenure as director, Samuels has significantly enhanced the operations of the largest agency in the department, thereby increasing public safety and reducing crime. He has refreshed the country’s largest corrections system, bringing a renewed emphasis to the department and administration priorities, such as the Smart on Crime Initiative, prisoner reentry, Children of Incarcerated Parents, evidence based approaches to programs, solid labor-management relations, transparency and ensuring the most efficient use of taxpayer dollars. Samuels has made great strides in aligning the work of the department with the Bureau of Prisons’ crime prevention mission through a variety of significant initiatives centered around enhancing safety of staff and inmates; increasing security and order inside federal prisons; increasing and improving inmate program offerings; realigning resources to increase efficiencies; increasing transparency with the public and stakeholders; enhancing labor-management relations; enhancing programs to strengthen bonds between incarcerated parents and their children; and expanding the use of sentence reduction mechanisms. Through continual direct communications with thousands of employees around the country, using web-based messages, videos and live teleconferences, he rallies staff around his message of making a positive difference in the lives of others.
The Mary C. Lawton Lifetime Service Award recognizes employees who have served at least 20 years in the department and have demonstrated high standards of excellence and dedication throughout their careers. This award is presented only in exceptional circumstances to those individuals of special merit and is not awarded to express general appreciation for tenure alone. This year’s Mary C. Lawton Lifetime Service Award is presented to Joyce R. Branda, the Deputy Assistant Attorney General of the Civil Division’s Commercial Litigation Branch.
During her distinguished 30-year career in the Civil Division, Branda has consistently made significant contributions to the department’s mission and its people, which led to her being selected in 2012 as Deputy Assistant Attorney General, the highest ranking career manager in the Civil Division. Her exemplary management in that role has been reflected by her selection in September 2014 to serve as the Acting Assistant Attorney General of the Civil Division. Branda has demonstrated the highest standards of excellence and commitment throughout her career.
The William French Smith Award for Outstanding Contributions to Cooperative Law Enforcement is an honorary award granted to recognize state and local law enforcement officials who have made significant contributions to cooperative law enforcement endeavors.
This year’s award is presented to Brian Bailey, Danny Doyle and Joshua Mauney, Task Force Officers of the U.S. Marshals Service-Southeast Regional Fugitive Task Force Investigative Operations Division.
This team assisted in an investigation that led to the successful arrest of Billy Lee Owens, a fugitive wanted on 22 outstanding warrants from five separate agencies. As evidenced by his criminal history and previous arrests, Owens was an infamous thief with a complete lack of regard for public safety in his attempts to evade capture. During the 48 hours prior to his capture, Owens led law enforcement officers on two vehicle pursuits, striking a dismounted task force officer with a stolen vehicle during one pursuit. On June 18, 2014, the recipients captured and arrested Owens.
The Attorney General’s Award for Meritorious Public Service is the top public service award granted by the department, and is designed to recognize the most significant contributions of citizens and organizations that have assisted the department in the accomplishment of its mission and objectives. One Meritorious Public Service award is presented this year to Michael Lieberman, Washington Counsel and Director at the Anti-Defamation League Civil Rights Policy Planning Center.
Lieberman is recognized for his significant contributions to the enactment and implementation of the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. Prior to its enactment in 2009, Lieberman was a major contributor to the act’s development, both as policy counsel for the Anti-Defamation League and as the organizer and leader of the Hate Crimes Coalition, a working group of diverse non-governmental organizations (NGOs) representing communities across the nation. Through his leadership in the coalition, Lieberman worked collegially and constructively with the department and Congress to secure passage of an effective and potent hate crimes statute. Since its enactment in 2009, Lieberman has been an active and helpful community partner in the department’s implementation and enforcement of the act. He has worked with community groups and law enforcement across the nation to ensure that hate crimes are reported to law enforcement by working to build trust between community groups and local law enforcement through outreach and training events; expanding the Uniform Crime Report to collect hate crimes data on more religions; developing a law enforcement guide for identifying and reporting cases of hate crimes based on gender identity; providing active NGO participation in NGO/law enforcement joint hate crimes trainings across the nation; and filing amicus briefs in federal and state hate crimes cases on appeal that support the department’s legal positions on the act. Through these efforts and more, Lieberman has made significant contributions that assist the department in the accomplishment of its mission and objectives.
The Attorney General’s Award for Distinguished Service is the Justice Department’s second-highest award for employee performance. The recipients of this award exemplify the highest commitment to the department’s mission. Twelve Distinguished Service Awards are presented this year to individuals or teams of people.
The first Distinguished Service Award is presented to members of the team responsible for successfully litigating to enjoin anti-steering rules maintained by credit card companies. This team is honored for its outstanding achievements in prevailing in one of the most significant and challenging cases the department’s Antitrust Division has litigated in decades. The Antitrust Division filed a complaint in the U.S. District Court for the Eastern District of New York in October 2010 to enjoin anti-steering rules maintained by American Express, MasterCard and Visa that prevented merchants from encouraging consumers to use lower-cost forms of payment. Because merchants had no ability under the defendants’ rules to reward lower-cost credit card networks with increased transaction volume, the $50 billion in swipe fees that credit card networks collect from merchants each year were insulated from the forces of competition. The recipients negotiated successful settlements with Visa and MasterCard but continued to litigate against American Express until the case proceeded to a seven-week trial before Senior U.S. District Judge Nicholas G. Garaufis of the Eastern District of New York in the summer of 2014. In February 2015, Judge Garaufis found, after a full rule-of-reason analysis, that American Express violated Section 1 of the Sherman Act. The team persuaded Judge Garaufis of American Express’s liability in spite of complex two-sided platform issues associated with the payments industry, American Express’s relatively low market share, and a determined defense by a well-financed defendant represented by lawyers from some of the country’s most prestigious litigation firms. Judge Garaufis complimented the parties for conducting the best trial he had ever presided. In addition to the significant benefits that the team’s success will bring to American consumers, it will also pay dividends for the division for many years as potential future defendants evaluate their risks of litigating against the Antitrust Division.
Award recipients include, from the Antitrust Division, Litigation III Section Chief David Kully, Litigation III Section Assistant Chief Ethan Glass, Litigation III Section Trial Attorneys Craig Conrath, Andrew Ewalt, Mark Hamer, Gregg Malawer, Bennett Matelson, John Read, Lisa Scanlon, Joseph Vardner and Rachel Zwolinski, Networks and Technology Section Trial Attorney Ihan Kim, Competition Policy Section Economists Jeffrey Lien and Diane Owen and Economic Litigation Section Economist Deborah Minehart.
The second team to receive the Distinguished Service Award receives the award for its extraordinary work and exceptional service in the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) investigation and litigation against Standard & Poor’s Ratings Services (S&P) for its issuance of fraudulently inflated ratings of Residential Mortgage Backed Securities (RMBS) and Collateralized Debt Obligations (CDOs) in the run-up to the 2007 through 2008 financial crisis. The investigation and litigation, coordinated with related civil actions by 19 states and the District of Columbia, led to a record $1.375 billion settlement, half of which ($687.5 million) constitutes a penalty to be paid to the federal government, and is the largest penalty of its type ever paid by a credit rating agency. As part of the settlement, S&P admitted it ignored senior analysts within the company who complained it had given top ratings to financial products that were failing to perform as expected and it had declined to downgrade underperforming assets because it was worried that doing so would hurt the company’s business. While this strategy helped S&P avoid disappointing its clients, it did major harm to investors, including federally insured financial institutions that suffered losses exceeding $20 billion and to the larger economy, contributing to the worst financial crisis since the Great Depression. The litigation and its resolution provided further proof that the department will vigorously pursue investigations and litigation, no matter how challenging, to address misconduct that contributed to the financial crisis.
Award recipients include, from the U.S. Attorney’s Office of the Central District of California, Assistant U. S. Attorneys George S. Cardona and Anoiel Khorshid; from the Office of the Associate Attorney General, former Deputy Associate Attorney General Geoffrey T. Graber; from the Civil Division’s Consumer Protection Branch, Trial Attorneys James T. Nelson and Sondra L. Mills, Director Michael S. Blume and Investigator Michael A. Nash; from the Civil Division’s Federal Programs Branch, Assistant Director Arthur R. Goldberg and Trial Attorneys Bradley Cohen and Jennie L. Kneedler; and from the Criminal Division’s Office of International Affairs, Trial Attorney Thomas D. Zimpleman.
The third Distinguished Service Award is presented to the team responsible for their outstanding work organizing and leading a complicated and groundbreaking takedown operation that combined civil and criminal authorities to dismantle the notorious Gameover Zeus botnet and related to Cryptolocker, as well as the prosecution of Evgeniy Bogachev, a Russian national regarded as one of the most prolific cyber criminals in the world. The operation, which involved coordination among more than 10 countries and dozens of private sector partners, wrested control of a global botnet that had stolen approximately $100 million from U.S. and European businesses and consumers and dismantled the computer infrastructure of a “ransomware” scheme that netted millions from victims by locking them out of their files until they paid a ransom to the criminals. In connection with the takedown, a federal grand jury in Pittsburgh unsealed a 14-count indictment against Bogachev, charging him with conspiracy, computer hacking, wire fraud, bank fraud and money laundering in connection with his alleged role as an administrator of the Gameover Zeus botnet. Bogachev was also charged by criminal complaint in Omaha, Nebraska, with conspiracy to commit bank fraud related to his alleged involvement in the operation of a prior version of Gameover Zeus. Although Bogachev remains a fugitive, he is on the FBI’s Cyber Most Wanted List and in March 2015, the FBI announced a $3 million reward for information leading to his arrest.
Award recipients include, from the National Security Division, Deputy Assistant Attorney General Luke Dembosky; from the National Security Division, Counterintelligence and Export Control Section Trial Attorney David Aaron; Computer Crime and Intellectual Property Section Trial Attorneys Ethan Arenson and William A. Hall Jr.; from the Criminal Division’s Office of International Affairs, Principal Deputy Director Mary D. Rodriguez and Associate Director (Europe and Central Asia) Jason E. Carter; from the U.S. Attorney’s Office of the Western District of Pennsylvania, Assistant U.S. Attorneys Michael A. Comber and Shardul S. Desai; from the FBI’s Anchorage, Alaska, Field Office, Special Agent Elliott R. Peterson; from the FBI’s Omaha, Nebraska, Field Office Special Agents James K. Craig and Sara K. Stanley; and from the FBI’s Pittsburgh Field Office, Special Agent Steven J. Lampo.
The fourth team to be awarded the Distinguished Service Award is presented this award for its outstanding work on the successful long-term investigation and prosecution of the Aryan Brotherhood of Texas (ABT). The ABT was a powerful, race-based Texas state-wide organization operating inside and outside state and federal prisons throughout Texas and the United States. ABT protected its criminal money-making enterprises, including narcotics trafficking, identity theft, counterfeiting and check fraud, through assault, murder and other acts of violence while enforcing violent internal discipline. In an investigation spanning six years and 17 separate indictments in five different federal districts, the recipients targeted the leadership and the most violent members and associates of the ABT. Their work culminated in the indictment and conviction of 73 ABT members and associates on charges ranging from racketeering conspiracy, murder in aid of racketeering, narcotics trafficking, assault in aid of racketeering, firearms offenses and obstruction of justice. This investigation and prosecution was exceedingly successful and the resulting convictions of every high ranking member of the ABT have effectively dismantled this violent criminal network. The collaborative work of the recipients in this long-term case is truly exceptional and worthy of this distinguished honor.
Award recipients include, from the Criminal Division’s Organized Crime and Gang Section, Trial Attorney David N. Karpel; from the Bureau of Alcohol, Tobacco, Firearms and Explosives’ Houston Field Division, Senior Special Agent Richard J. Boehning, Special Agent Allen D. Darilek and Intelligence Research Specialist Donna S. Gray; from the U.S. Attorney’s Office of the Southern District of Texas, Assistant U.S. Attorney Timothy S. Braley; from the FBI’s Boston Field Office, Supervisory Special Agent William Scott O’Donnell; from the FBI’s Houston Field Office, Special Agent Keith W. Koncir; from the U.S. Marshals Service-Southern District of Texas, Deputy U.S. Marshal Justin J. Perusich; from the U.S. Department of Homeland Security-U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Special Agents Steven D. Cavitt and Steven N. VanGeem and Task Force Officer Steven J. Lair; from the Texas Department of Criminal Justice’s Office of the Inspector General, Criminal Investigator Joshua D. Lyons; from the Texas Department of Public Safety’s Criminal Investigations Division-Major Gang Unit, Special Agent Devin R. Gonzales; from the Montgomery County, Texas, Sherriff’s Office, Detective David J. Wells; and from the Texas Rangers Company “A”, Texas Ranger Brandon Bess.
The fifth Distinguished Service Award is awarded to the Blackwater team for its historic achievement in bringing to justice four Blackwater contractors assigned to a security team in Baghdad, who, without justification, fired a sniper rifle, machine guns and rocket-propelled grenades at innocent, unarmed Iraqi civilians at Nisur Square, killing 14 and injuring at least 18 others on Sept. 16, 2007. The Nisur Square shooting was a watershed event for our nation’s involvement in Iraq and it presented a test as to whether the U.S. Criminal Justice System was capable of holding these American contractors accountable for their criminal acts overseas against foreign nationals. It took seven long years to obtain the guilty verdicts in the case, during which time the team overcame complex legal challenges, which included a dismissal of the entire case by the district court and a successful appeal, daunting problems of proof arising from a factual scenario that the defendants characterized as a “battlefield,” and the enormous logistical and victim-witness challenges of bringing more than 40 Iraqi witnesses to the United States to testify at a time when Iraq was undergoing a particularly intense period of turmoil. The team’s ability to overcome each of these monumental challenges is a testament to their tremendous skill and unwavering dedication. Ultimately, the jury’s guilty verdicts on virtually every charge represent a reaffirmation of the power of the rule of law.
Award recipients include, from the U.S. Attorney’s Office of the District of Columbia, Assistant U.S. Attorneys Jay I. Bratt, John Crabb Jr., Kenneth C. Kohl, Gregg A. Maisel, Jonathan M. Malis, T. Patrick Martin and David Mudd, and Victim Witness Program Specialist Yvonne Bryant; from the U.S. Attorney’s Office of the Western District of Virginia, Assistant U.S. Attorney Christopher R. Kavanaugh; from the Criminal Division’s Appellate Section, Attorney Demetra Lambros; from the FBI’s Houston Field Office, Supervisory Special Agent Brian M. Rasmussen; from the FBI’s Washington, D.C., Field Office, Special Agents Marc Daniel Hess, Jeremy David Moore, Thomas F. O’Connor and Katrice Stubbs; and from the National Security Division’s Counterterrorism Section, Deputy Chief Anthony Asuncion.
The sixth Distinguished Service Award is awarded to the multi-agency team responsible for their exemplary performance in the shutdown of the Silk Road website and the subsequent sale of bitcoins. The multi-agency effort to dismantle the Silk Road website was a landmark event in the department’s fight against cybercrime. These efforts brought the owner and operator to justice through a cutting-edge criminal investigation and subsequent trial and pioneered the first-ever government-sponsored sale of bitcoins. Silk Road was a sprawling, black market bazaar which operated on the “dark web” and required all transactions to be paid for in bitcoins, enabling its users to anonymously buy and sell illicit goods and services, including drugs, counterfeit IDs, computer hacking tools, pornography and weapons. The team, which was nominated by the U.S. Attorney’s Office of the Southern District of New York and the U.S. Marshals Service, led this extraordinary and groundbreaking effort by successfully navigating uncharted government territory and dismantling a notorious criminal enterprise of unprecedented scope and sophistication. The case not only serves as a model for others to follow in conducting complex cybercrime investigations, prosecutions and asset dispositions in the future, but it also demonstrates that law enforcement is capable of rising to the challenge in the growing shift of criminal activity on the Internet.
Award recipients include, from the U.S. Attorney’s Office of the Southern District of New York, Assistant U.S. Attorneys Timothy Howard and Serrin Turner; from the FBI’s New York Field Office, Special Agent Vincent D. D’Agostino and Computer Scientist Thomas Kiernan; from the U.S. Marshals Service-Southern District of New York, Acting U.S. Marshal Eric B. Timberman; from the U.S. Marshals Service’s Office of General Counsel, Associate General Counsel Clifford R.R. Krieger; from the U.S. Marshals Service’s Asset Forfeiture Division, Assistant Program Manager Kyle T. Bateman; from the Criminal Division’s Asset Forfeiture and Money Laundering Section, Assistant Deputy Chief for Policy John W. Vardaman III and Attorney-Advisor Joseph F. Mignano; from the FBI’s Criminal Investigative Division, Intelligence Analyst Catherine Diane Pelker; from the U.S. Attorney’s Office of the Southern District of New York, Assistant U.S. Attorneys Sharon Cohen Levin and Christine I. Magdo; from the U.S. Department of Homeland Security-U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Special Agent Jared Der-Yeghiayan; and from the U.S. Department of the Treasury, Internal Revenue Service-Criminal Investigation Special Agent Gary L. Alford.
The seventh Distinguished Service Award is awarded to the state of Maryland’s Prison Corruption Task Force. In 2011, the state of Maryland established a Prison Corruption Task Force for state, local and federal officials to share intelligence about high levels of gang activity in state correctional facilities. Based on leads developed by the task force, federal agents and prosecutors used sophisticated investigative techniques to expose a widespread racketeering conspiracy in which leaders of Maryland’s most prominent criminal gang corrupted correctional officers and exerted influence while incarcerated in the Baltimore City Detention Center. The correctional officers smuggled contraband, drugs and cell phones into the facility and engaged in sexual relationships with gang members. Gang leaders generated large profits by selling drugs and extorting payments from non-gang-affiliated inmates. Using cell phones and electronic payment systems, gang leaders arranged to bribe correctional officers, purchase and sell drugs and transmit money outside the jail. As a result of evidence gathered through multiple wiretaps, surveillance and cooperating witnesses, the team successfully prosecuted 40 defendants, including 24 correctional officers. The team also worked closely with state correctional officials and other agencies to identify systemic weaknesses and develop effective reforms. The shocking facts detailed in the charging documents prompted the state legislature to step in with enhanced oversight. As a result of the case, correctional and law enforcement agencies developed new intelligence about prison corruption and a strategy about how to conduct criminal investigations behind bars.
Award recipients include, from the U.S. Attorney’s Office of the District of Maryland, Assistant U.S. Attorneys Ayn B. Ducao and Robert R. Harding and Legal Assistant Joanna B. Huber; from the FBI’s Counterintelligence Division, John C. Hawkins; and from the FBI’s Baltimore Field Office, Supervisory Special Agent Wendy L. Hassett, Special Agents Karen Robertson Franks, Erika Jensen, Jeffrey P. Kramer, David D. Lee and Sarah Lewis, Intelligence Analyst Jody E. Zaruba and Task Force Officers Michael R. Corcoran, Michael J. Baier and Lynn G. Grant.
The eighth Distinguished Service Award is awarded to Melinda B. Morgan, Director of the Finance Staff in the Justice Management Division (JMD).
Morgan is a department and federal government leader in financial management, as evidenced by the success she has achieved in saving taxpayer money, implementing complex financial systems and managing a large workforce during times of financial stress. She makes certain all of the department’s 40 components have the strongest financial management portfolio by ensuring that policies and priorities are not only communicated but implemented according to guidelines. Since 2004, Morgan has been instrumental in safeguarding the department’s clean audit opinions, including the last four years, with no significant deficiencies identified by the auditors at the consolidated level. This is known in financial circles as a “clean-clean” audit opinion and it is a mark of outstanding financial management achievement on behalf of the taxpayers. The department has maintained a clean audit opinion while major department organizations have transitioned to a new financial system that, to date, has reduced eight legacy systems to three. Measured by either the millions of dollars she has achieved in savings or by the improvements she has made in the department’s financial operations and support for our national security and law enforcement programs, Morgan stands out as one of the department’s key executives responsible for improved financial management in government.
The ninth Distinguished Service Award is presented to the team responsible for their outstanding work in the groundbreaking national security cyber case, United States v. Wang Dong, which involved charges against five members of the Chinese military for computer hacking, economic espionage and other offenses directed at six American victims in the U.S. nuclear power, metals and solar products industries. The investigation was extremely complex and involved extensive and close coordination over several years. Throughout the investigation, the team worked collaboratively and thought creatively, exploring all available options to marshal the proof available from different sources sufficient to prove beyond a reasonable doubt who was responsible for the charged crimes. It is notable among other cyber investigations for the volume and complexity of technical information, stored in different systems, that the team developed new ways to analyze. The recipients’ exemplary efforts were a critical step forward in addressing the national security cyber threat. This award included recipients from the National Security Division, Criminal Division, U.S. Attorney's Office for the Southern District of New York, U.S. Attorney’s Office for the Western District of Pennsylvania, U.S. Attorney’s Office for the Eastern District of Wisconsin, and the FBI.
The 10th Distinguished Service Award is awarded to the team responsible for its extraordinary work in United States v. Citigroup, which resulted in a landmark settlement of civil fraud claims with one of the architects of the nation’s financial crises, Citigroup Inc. Totaling $7 billion, the settlement included payment of a record $4 billion penalty under FIRREA, Citigroup’s agreement to provide $2.5 billion in consumer relief and Citigroup’s acknowledgment that it made misrepresentations to investors in residential mortgage-backed securities (RMBS). The recipients conducted a sweeping, two-year investigation of Citigroup’s RMBS securitization practices, issuing nearly 50 subpoenas, reviewing over 25 million documents and taking testimony from over 30 witnesses.
Award recipients include, from the U.S. Attorney’s Office of the District of Colorado, Assistant U.S. Attorneys Lila M. Bateman, J. Chris Larson and Kevin T. Traskos and Financial Analyst Laura K. Keane; from the U.S. Attorney’s Office of the Eastern District of New York, Assistant U.S. Attorneys Richard K. Hayes, Charles S. Kleinberg, Edward K. Newman and John Vagelatos; and from the Office of the Associate Attorney General, Deputy Assistant Attorney General Joshua I. Wilkenfeld.
The 11th Distinguished Service Award is awarded to the team for its work in the historic $16.65 billion settlement with Bank of America for fraud in the origination and securitization of residential mortgages. In his January 2012 State of the Union address, President Obama called upon the Attorney General to create a priority taskforce aimed at bringing financial accountability to banking institutions for their role in the residential mortgage crisis and resulting economic downturn. Delivering on that promise, the recipients assembled and led teams to investigate the entire platform of RMBS offered for sale in 2006 through 2008 by Merrill Lynch, Bank of America and Countrywide. This team pursued extensive and detailed fact investigations, developed and adapted innovative legal theories under FIRREA and prepared comprehensive civil complaints seeking billions of dollars in penalties. In addition to resolving RMBS-related claims, the settlement also resolved claims by the U.S. Attorney’s Offices of the Eastern District of New York and the Southern District of New York related to faulty loan origination practices by Bank of America and Countrywide that resulted in misrepresentations about the quality of those loans to Fannie Mae, Freddie Mac and the Federal Housing Administration. The exhaustive efforts and perseverance of these teams advanced the core mission of the department by holding Bank of America accountable for its fraudulent conduct that contributed to the financial crisis, as well as providing substantial compensation for entities supported by American taxpayers and critical assistance to homeowners and neighborhoods impacted by the mortgage meltdown.
Award recipients include, from the U.S. Attorney’s Office of the Eastern District of New York, Assistant U.S. Attorney Kenneth M. Abell and Affirmative Civil Enforcement Auditor Emily J. Rosenthal; from the U.S. Attorney’s Office of the Southern District of New York, Assistant U.S. Attorneys Pierre G. Armand and Jaimie Nawaday; from the U.S. Attorney’s Office of the District of New Jersey, Assistant U.S. Attorneys David W. Feder and Leticia B. Vandehaar and Auditor Barbara Radey; from the U.S. Attorney’s Office of the Central District of California, Assistant U.S. Attorneys Evan J. Davis, Leon W. Weidman and Brent A. Whittlesey; from the U.S. Attorney’s Office of the Western District of North Carolina, Assistant U.S. Attorneys Mark T. Odulio and Daniel S. Ryan; and from the Civil Division, Director of E-Discovery, FOIA and Records Allison C. Stanton.
The 12th Distinguished Service Award is awarded to the team responsible for the review of the U.S. government’s handling and sharing of information prior to the Boston Marathon bombings, identified areas where broader information sharing between agencies may have been required, or where broader information sharing in the future should be considered. The report made two recommendations: that the FBI and U.S. Department of Homeland Security (DHS) clarify Joint Terrorism Task Force alert procedures and that the FBI consider establishing a procedure for sharing threat information with state and local partners more proactively and uniformly. The FBI and DHS concurred with the recommendations and took immediate actions to implement them.
Award recipients include, from the department’s Office of the Inspector General, Investigative Counsels Jonathan A. Marks, Julie McConnell and Ann Marie Terzaken, Program Analyst Katherine Hazemey and Oversight and Review Division Paralegal Specialist Valencia E. Philyaw; from the DHS Office of Inspector General, Program Analyst Lindsay K. Clarke, Intelligence Officer Anthony D. Crawford, Lead Inspector Elizabeth A. Kingma, Inspector Megan T. Pardee and Analyst Brendan S. Bacon; from the Intelligence Community’s Office of Inspector General, Senior Auditor Catherine A. Cruz, Inspector William F. Rucker and Deputy Assistant Inspector General for Inspections William F. O’Neill; and from the Central Intelligence Agency’s Office of Inspector General, Audit Project Manager Mark A. Krulikowski, Auditors Matthew D. Seaman and Eric T. Tarnovsky and Attorney Renee Rocque Lee.
The Attorney General’s Award for Exceptional Service in Indian Country recognizes extraordinary efforts by department employees who demonstrate the department’s commitment to fighting crime in Indian Country. This year’s award is presented to, from the U.S. Attorney’s Office of the Eastern District of New York, Assistant U.S. Attorneys Tanisha R. Payne, Steven L. Tiscione and Amir H. Toossi and Paralegal Specialist Huda Abouchaer; and, from the DEA’s New York Division, Special Agent Francis G. O’Regan. This team is recognized for its outstanding achievements in connection with the seven-year investigation of drug trafficking through the Akwesasne Native American Reservation on the U.S. and Canada border. The investigation resulted in the arrest, prosecution and conviction of more than 100 members and associates of a massive international criminal syndicate responsible for smuggling more than 100,000 kilograms of marijuana, tens of thousands of ecstasy pills and hundreds of kilograms of cocaine through Native American reservations straddling the border between the United States and Canada. The investigation resulted in the complete dismantlement of the three largest smuggling networks on the Akwesasne, a designated high-intensity drug-trafficking area (HIDTA), with the leaders of all three organizations pleading guilty to continuing criminal enterprise charges and the conviction of Canadian drug kingpin Jimmy Cournoyer, leader of a Montreal-based criminal enterprise that worked directly with the Rizzuto Crime Family of the Montreal Mafia, the Hells Angels, the Bonanno Crime Family of La Cosa Nostra and the Sinaloa Cartel in Mexico. These prosecutions stemmed the flow of a massive drug pipeline into the U.S. and drew national attention to the tremendous security risk posed by international drug cartels utilizing sovereign tribal lands to smuggle drugs and weapons across our northern border.
The Attorney General’s Award for Excellence in Law Enforcement recognizes outstanding professional achievements by law enforcement officers of the Department of Justice. This year’s award is presented to the U.S. Marshals Service (USMS) Special Operations Group (SOG) played an essential role in the apprehension of Eric Frein, a fugitive wanted for the Sept. 12, 2014, ambush of the Pennsylvania State Police that killed Corporal Byron Dickson and critically wounded Trooper Alex Douglass. In support of the Pennsylvania State Police and with the assistance of hundreds of law enforcement officers, the SOG team apprehended Frein on Oct. 30, 2014, after an almost seven-week manhunt, the longest in Pennsylvania state history. The pursuit of Frein, a self-reported sniper with a myriad of outdoor survival and military tactical skills, required SOG deputies to deploy the full range of their tactical capabilities in rural operations and put themselves in the way of serious harm. SOG collaborated with other USMS units in its investigation, including the Investigative Operations Division, the Office of Strategic Technology and the Office of Emergency Management. Because of the perseverance, dedication, cooperation and bravery of the recipients during the long and difficult search, the SOG team was able to apprehend a dangerously armed suspect without incident.
Award recipients include, from the U.S. Marshals Service, Middle District of Pennsylvania Assistant Chief Deputy U.S. Marshal James A. Nelson, Northern District of Georgia Criminal Investigator Travis D. Burdette, Tactical Operation Division Supervisory Criminal Investigators Scott C. Kimball and Scott M. Malkowski, Central District of California Criminal Investigator Markus R. Dale, District of Arizona Criminal Investigator Justin M. Davis, District of Columbia Criminal Investigator Scott R. Dmytryshyn, District of Minnesota Criminal Investigator Nathan T. Matthews, Eastern District of Kentucky Criminal Investigator Zachary P. Thompson, Western District of Kentucky Criminal Investigator John S. Schaaf, Eastern District of Michigan Criminal Investigator Joseph E. Godlewski, Middle District of Florida Criminal Investigator Mark J. Graham and Eastern District of Washington Criminal Investigator Julio A. Hernandez.
The Attorney General’s Award for Excellence in Management recognizes outstanding administrative or managerial achievements which have significantly improved operations or productivity, or reduced costs. This year’s award is presented to the Office of Justice Programs’ (OJP) Program Management Office. Award recipients include, from OJP’s Bureau of Justice Assistance, Associate Deputy Director Ruby F. Qazilbash, Senior Policy Advisor Thomas B. Talbot IV and Special Assistant Thurston L. Bryant; and from the OJP Office of General Counsel, Assistant General Counsels Peter M. Brien and Emily M. Gallas and Deputy General Counsel Charles T. Moses III.
The Office of Justice Programs Program Management Office’s assiduous and collaborative work has laid the foundation to promote sexual safety in confinement facilities across the country. This work most certainly represents a special service in the public interest which is over and above normal requirements, and of an outstanding and distinctive character in terms of improved operations, public understanding of the department’s mission, and accomplishments of one of the major goals of the department. At the end of the day, if it were not for the work of the Prison Rape Elimination Act Management Office during this time period, the department and the nation would be years away from improved conditions of confinement. This team thoughtfully developed a plan and implemented it, and now the office operates seamlessly as if it has been in operating for years. Taking a concept from “zero to one” is an extraordinary feat, especially in such a complicated area.
The Attorney General’s Award for Excellence in Information Technology recognizes outstanding achievements in applying information technology to improve operations and productivity, reduce or avoid costs, and solve problems. This year’s award is presented to the team responsible for implementing the department’s Unified Financial Management System.
Award recipients include, from JMD Finance Staff’s Unified Financial System Group, Deputy Director Christopher C. Alvarez, Assistant Director Mark C. Miller, Deputy Assistant Director Matthew J. Roper, Deputy Assistant Director for Production Jeffrey D. Pullen, Deputy Assistant Director for Migration and Integration Ping Oberst, Deputy Assistant Director for Infrastructure Marc Berlove, Testing Manager Tim D. Taylor, and Implementation Managers Jocelyn M. Harris and Arlene B. Helm; from JMD Finance Staff, Quality Control and Compliance Deputy Assistant Director Vu C. Truong; from JMD Service Delivery Staff, Unix Team Lead Jerome K. Milligan; and from the FBI’s Finance Division, Unit Chief Robert J. White Jr. and Management and Program Analyst Lowell Alden Williams.
The Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security recognizes outstanding achievements and contributions in protecting U.S. national security. Two Awards for Excellence in Furthering the Interests of U.S. National Security are presented this year.
The first Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security is presented to the team who investigated and prosecuted two individuals and one company for economic espionage and theft of trade secrets for stealing valuable and sensitive U.S. trade secrets for the benefit of the People’s Republic of China (PRC). This marked the first-ever jury trial conviction under the Economic Espionage Act of 1996. The investigation uncovered a 20-year plan hatched by high-level PRC government officials to obtain E.l. du Pont de Nemours and Company (DuPont) trade secrets for the production of titanium dioxide (Ti02) and exploit its value through PRC state-owned enterprises. Ti02 is a commercially valuable white pigment that is used in a multitude of products including paint, plastic and food items. DuPont’s unique process for creating Ti02 also creates a rare intermediary compound that has military and aerospace uses, such as coatings for ballistic missiles. Transfer of these trade secrets to the PRC would have had an extremely negative impact on the United States’ $13 billion per year Ti02 industry. The defendants had obtained the trade secrets and were in the process of providing them to state-owned entities of the PRC when law enforcement intervened. After hard-fought litigation and a seven-week trial, the jury returned guilty verdicts on all counts.
Award recipients include, from the U.S. Attorney’s Office of the Northern District of California, Assistant U.S. Attorneys Peter B. Axelrod, John H. Hemann and Candace Kelly and Visual Information Specialist Sutton A. Peirce; from the National Security Division’s Counterintelligence and Export Control Section, Supervisory Trial Attorney Richard S. Scott; from the FBI’s San Francisco Field Office, Supervisory Special Agent Kevin J. Phelan, Special Agents Bianca N. Betz, Cynthia Ho, Cecily Laine Rometo and Christopher J. White and Intelligence Analyst Nathan D. Francis; from the FBI’s Criminal Investigative Division, Supervisory Special Agent Katherine E. Pattillo; and from the U.S. Treasury’s Internal Revenue Service-Criminal Investigation, Special Agent Justin E. Fletcher.
The second Attorney General’s Award for Excellence in Furthering the Interests of U.S. National Security is presented to the team responsible for the successful prosecution of United States v. Mohamed Osman Mohamud. The team’s exceptional diligence and expert handling of difficult litigation challenges led to a conviction and 30-year sentence for attempted use of a weapon of mass destruction. The defendant in this case sought to detonate a truck bomb at a public Christmas celebration in Portland, Oregon, in the hopes of murdering thousands of people. The case posed numerous unique challenges in handling classified and sensitive information and countering a defense claim of entrapment. The guilty verdict obtained in this case brought justice to a dangerous extremist and affirmed the department’s use of investigative sting techniques to detect and neutralize homegrown terrorists.
Award recipients include, from the U.S. Attorney’s Office of the District of Oregon, Assistant U.S. Attorneys Pamela R. Holsinger, Ethan D. Knight and Jeffrey S. Sweet, Supervisory Litigative Support Specialist Susan E. Cooke, Litigation Support Specialist Rena R. Rallis and Paralegal Specialist Lori A. McBryde; from the National Security Division’s Counterterrorism Section, Supervisory Trial Attorney Alexis L. Collins, Trial Attorney Jolie F. Zimmerman, and Legal Administrative Specialist Pamela J. Hall; from the National Security Division’s Office of Intelligence, Supervisory Attorney-Advisor Paul E. Ridge and Attorney-Advisor Bryan Chehock; from the National Security Division’s Office of Law and Policy, Attorney-Advisor Joseph F. Palmer; from the FBI’s Counterterrorism Division, Supervisory Special Agent Jared J. Garth; from the FBI’s Criminal Investigative Division, Supervisory Special Agent Ryan Dwyer; from the FBI’s San Francisco Field Office, Supervisory Special Agent Elvis M. Chan; from the FBI’s Washington, D.C., Field Office, Special Agent Miltiadis Trousas; and from the FBI’s Baltimore Field Office, Special Agent Thomas M. Ford Jr.
The Attorney General’s Award for Equal Employment Opportunity is the department’s highest award for performance in support of the Equal Employment Opportunity program. One Equal Employment Opportunity Award is presented this year for outstanding leadership and performance in equal employment opportunity and diversity in the department’s Environment and Natural Resources Division (ENRD). Jeffrey Sands, Senior Attorney in ENRD, is presented this award for his leadership and tireless work to achieve equal employment opportunities for minority attorneys and law students in the ENRD’s workforce. In addition to performing his regularly assigned duties as a senior attorney, he has devoted countless hours and energy to promote equal employment opportunities through his work on the Environmental Enforcement Section (EES) Hiring Committee for Lateral Attorneys, the EES Legal Intern Hiring Committee, the ENRD Diversity and Career Development Committee and through the individual counseling he has provided to minority attorneys and law students who have been referred to him and whom he has met during outreach activities. Sands has done a great deal to advance equal employment opportunity for minority attorneys and law students, and his work in this area has been a great benefit to both the department and ENRD.
The Attorney General’s Award for Excellence in Legal Support recognizes outstanding achievements in the field of legal support to attorneys by paralegal specialists and other legal assistants.
In the Paralegal Category, this year’s Award for Excellence in Legal Support is presented to Milton E. Ramos, Paralegal Specialist in the FBI’s San Juan Division. Ramos’ initiative was evident when he reviewed the San Juan Division’s Legal Unit administrative tort claim procedures in order to assess its strengths and weaknesses. His experience allowed him to develop a more concise and effective process in order to obtain quicker reimbursements of government vehicle accident claims in which the FBI was not at fault. Ramos developed and implemented this process in concurrence with the San Juan Third Party Draft. As a result of this new process, he saved the FBI thousands of dollars. Additionally, Ramos utilized his professional experience and knowledge to organize and implement new procedures designed to fully comply with the annual requirements of the Ethics Program for the San Juan Division. The Office of Integrity and Compliance reviewed the new procedures and the inspectors highly praised Ramos’ dedication and effective work. They further indicated they would recommend some of Ramos’ innovative procedures as a best practice for other FBI offices. Another significant example of Ramos’ outstanding performance was his assistance to the Civil Division Torts Branch litigation team assigned to the litigation of Ortiz Lebron v. United States. Throughout the four year litigation process, Ramos’ expertise and support were crucial. His ability to coordinate informal interviews of FBI witnesses and their preparation for depositions and trial testimonies saved the litigation team time and effort. He actively assisted the litigation team with the review and signing of deposition transcripts of FBI witnesses, including Spanish-speaking Task Force Officers. Ramos saved the FBI time and money through his work and attention to detail.
In the Legal Support Category, this year’s Award for Excellence in Legal Support is presented to Beryl A. Robbins, Senior Legal Assistant Coordinator in the U.S. Attorney’s Office of the Eastern District of Michigan. Robbins, a 30-year veteran of the Eastern District of Michigan, is presented this award for volunteering to undertake the position of Senior Legal Assistant Coordinator. She was selected for this role because of her expertise in the area and extraordinary professionalism and dedication. Robbins is now responsible for creating, updating and maintaining all forms used by the office in criminal case filings and training all legal assistants about proper case filing practices. She is also the office liaison to the Clerk of the District Court. As a result of her work, the U.S. Attorney’s Office has seen a vast improvement in the quality and uniformity of its court filings, which has resulted in an almost negligible rate of errors and an equally impressive improvement in its working relationship with the courts.
The Attorney General’s Award for Excellence in Administrative Support recognizes outstanding performance in administrative or managerial support by an administrative employee or secretary.
In the Administrative Category, this year’s Award for Excellence in Administrative Support is presented to Michelle T. Stallings, Office Manager in the Criminal Division’s Office of the Assistant Attorney General. Stallings is presented this award for her sustained outstanding performance in the field of administrative support, and for her extraordinary achievements in revamping the Criminal Division Office of the Assistant Attorney General’s support structure. She has restructured the front office’s secretarial and paralegal support system, making major changes in a short amount of time. Additionally, she recruited top talent to the front office; designed and implemented new training programs and materials; and raised the standards of professionalism by encouraging each assistant to improve his or her skills and aim for top-notch work product, as well as provide good customer service. On her own initiative, Stallings reviewed existing policies and revised them as appropriate to improve and streamline operations. She performed analytical studies to measure the effectiveness and productivity of office workflow and she improved the flow of correspondence and memoranda through the use of internal databases and tracking systems. Stallings essentially transformed the operations of the front office, and raised the bar for quality and timeliness of work, professionalism and operating efficiency. Her work in the front office now serves as a model for standards to follow in the different sections within the Criminal Division.
In the Secretarial Category, this year’s Award for Excellence in Administrative Support is presented to Patricia M. Jones, Special Assistant to the Executive Officer in the National Security Division. Jones is presented this award for her dedication to the mission of the division’s Executive Office through her hard work and positive approach to all of her assigned tasks. She has provided exceptional service for the Executive Office, the Office of the Assistant Attorney General and other sections of the division. Her extraordinary customer service has proven to be invaluable when providing the complete range of administrative and logistical support services. Her integrity, initiative, diligence, knowledge and professionalism play a critical role to ensure success in supporting the national security mission.
The Claudia J. Flynn Award for Professional Responsibility recognizes a department attorney who has made significant contributions in the area of professional responsibility by successfully handling a sensitive and challenging professional responsibility issue in an exemplary fashion and/or leading efforts to ensure that department attorneys carry out their duties in accordance with the rules of professional conduct. This year’s award is presented to G. Bradley Weinsheimer, Deputy Counsel on Professional Responsibility in the Office of Professional Responsibility (OPR). Weinsheimer is presented this award for his tireless and dedicated efforts to ensure that the department’s attorneys and agents maintain and are held accountable to the highest standards of professional responsibility. As Deputy Counsel of OPR, Weinsheimer, through skillful and creative management, has enabled OPR to reduce its backlogged investigations and inquiries while producing thorough, well-reasoned reports of its investigations. He also ensured that the results of OPR’s inquiries and investigations were fully understood by the subjects of the investigations and the department’s components. With improved intake, assignment and management policies in OPR, inquiries and investigations do not remain pending as long as in the past and subjects receive more immediate and critical feedback assessing their professional responsibilities. Under Weinsheimer’s leadership, the department’s attorneys are better able to carry out their duties in accordance with the rules of professional conduct.
The Attorney General’s Award for Outstanding Service in Freedom of Information Act Administration recognizes exceptional dedication and effort to the implementation of the Freedom of Information Act (FOIA). President Obama’s Open Government Directive and the Attorney General’s FOIA Guidelines prioritize the need for the government to incorporate information technology into FOIA processing when responding to requests for information. This year’s award is presented to Carmen L. Mallon, Chief of Staff in the Office of Information Policy (OIP). Mallon is presented this award for her exemplary and sustained role as a dedicated, highly-talented manager of a multi-faceted office with government-wide responsibilities. As OIP’s Chief of Staff, she provides strategic direction, guidance and support to three distinct teams of professionals charged with carrying out the statutory responsibilities of encouraging and overseeing compliance with FOIA. The department’s senior leadership offices also confidently rely upon Mallon to personally provide advice and assistance on record-disclosure issues. In carrying out these many responsibilities, Mallon has proven herself to be a truly outstanding federal manager, with unmatched dedication to her duties, excellent problem-solving skills, exceptional ability and outstanding subject-matter expertise. She is an industrious and skilled leader, whose talents and attributes are a continuous credit to both OIP and the department.
The Attorney General’s Award for Fraud Prevention recognizes exceptional dedication and effort to prevent, investigate and prosecute fraud, white-collar crimes and official corruption. This team is presented this award for its work in the four-year investigation, Operation Sledgehammer (OS). Over the course of the four-year investigation, OS charged more than 100 perpetrators at the state and federal levels; influenced positive reformations to Florida’s personal injury protection (PIP) laws; and developed investigative best practices that have been shared nationwide with other law enforcement officers and private liaison partners. As a result of the investigation, OS dismantled 21 fraudulent treatment clinics operating in South Florida. The case also charged 105 perpetrators operating at all levels of the fraud scheme, to include staged accident participants, patient recruiters, money launderers, licensed medical staff, true owners and doctors. Seven of the most egregious chiropractors operating in Florida were charged federally, resulting in convictions and prison sentences for six of them; the seventh is an active fugitive. Three doctors and a patient recruiter proceeded with a federal jury trial in March and April 2014, and were found guilty of 104 of the 105 charged counts. The total federal prison time for those charged in the case exceeded 2,000 months and more than $92 million in restitution has been awarded to the victims. The investigation and prosecution of OS eliminated the fraud that was being perpetrated by direct targets of the investigation; however, the greater accomplishments of the case were its broad-based deterrent effect on others in South Florida and the influence it had on state legislation. One of the 49 victim insurance companies identified in the case reported a 61 percent decrease in PIP billings in Palm Beach County, Florida, between 2010 and 2014, representing a savings of over $21 million. Throughout the case, members of the investigative team provided input through the National Insurance Crime Bureau to assist with legislative changes based on the scheme characteristics uncovered during the investigation. Effective Jan. 1, 2013, the Florida legislature reformed PIP laws, making it more difficult for perpetrators to commit staged accident fraud.
Award recipients include, from the FBI’s Miami Field Office, Special Agents Shaun P. O’Neill, Craig B. Stallings, Roger M. Stevens, William Stewart and Frances Szczepanski and Administrative Specialist Luz Delgado; from the FBI’s Tampa, Florida, Division, Special Agent Jorge A. Rivera; from the U.S. Attorney’s Office of the Southern District of Florida, Assistant U.S. Attorneys A. Marie Villafaña and Evelio J. Yera; from the Department of the Treasury’s Internal Revenue Service, Special Agent Pamela Martin; and from the National Insurance Crime Bureau, Supervisory Special Agent Fred Burkhardt and Special Agent Teresa Grimaldi.
The Attorney General’s Award for Outstanding Contributions to Community Partnerships for Public Safety recognizes outstanding achievement in the development and support of community partnerships designed to address public safety within a community. The award recognizes the significant contributions of citizens and organizations that have assisted the department in the accomplishment of these programs. This year’s Outstanding Contribution to Community Partnerships for Public Safety Award is presented to the team responsible for implementing the Collaborative Reform Initiative for Technical Assistance (CRI-TA) through the Office of Community Oriented Policing Services (COPS Office).
In August 2014, President Barack Obama and Attorney General Eric Holder directed the COPS Office CRI-TA team to assess and provide technical assistance in the communities surrounding Ferguson after the tragedy. With the theme “public safety is not just the absence of crime but the presence of justice,” the COPS Office has become a strong voice for collaborative reform and critical response for law enforcement agencies nationwide and the source for innovation in procedural justice for disenfranchised communities. Moreover, the COPS Office has reframed the conversation around social justice and community engagement with law enforcement. With the implementation of the CRI-TA in Las Vegas; Spokane, Washington; Philadelphia; St. Louis County, Missouri; Baltimore; and Fayetteville, North Carolina, law enforcement has a new tool to address its systemic challenges related to community trust. The outcome of the CRI-TA assessment process is a road map for reform in a report tied to technical assistance goals. As the training provider for the 60 agencies in St. Louis County, the St. Louis County Police Department is undergoing the collaborative reform process and the lessons learned will be incorporated into their police academy and transform policing for these communities experiencing such tension and mistrust of law enforcement practices. The COPS Office intends to use this process to facilitate significant law enforcement reform efforts in communities across the nation.
Award recipients include, from the COPS Office, Senior Advisor to the Director Katherine A. McQuay; Deputy Director of the Community Policing Advancement Directorate Robert E. Chapman; from the Research and Development Division, Assistant Director Matthew C. Scheider and Social Science Analyst Jessica A. Mansourian; from the Grant Operations Directorate, Deputy Director for Grant Operations Sandra R. Webb; and from the Partnerships and Technical Assistance Division, Supervisory Policy Analyst Helene Brody Bushwick, Senior Program Specialist Tawana V. Elliott, Policy Analyst Melissa E. Bradley and Collaborative Reform Specialist Billie Yrlas Coleman.
The Cubby Dorsey Award for Outstanding Contributions by a Wage Grade System Employee recognizes extraordinary performance and contributions by wage grade system employees, including laborers, mechanics and skilled craft workers. This year’s award is presented to Philip Stoick, Automotive Mechanic in the FBI’s Minneapolis Division. Stoick, in addition to his regular duties, has designed and built custom trunk vaults for sport utility vehicles (SUVs) within the FBI’s Minneapolis Division. Previously used custom trunk vaults were purchased at a cost of between $1,600 and $2,000 to the FBI. Conversely, the trunk vaults built by Stoick are completed with a cost of under $500 to the FBI. Due to the high cost of commercial trunk vaults, not all SUV vehicles had one installed. However, with the lower cost, now all FBI Minneapolis Division SUV vehicles are being outfitted with a custom vault that allows for the safe transportation of weapons while providing special agents with more storage space for investigative gear.
The Attorney General’s Award for Outstanding Contributions by a New Employee recognizes exceptional performance and notable accomplishments towards the department’s mission by an employee with less than five years of federal career service. This year’s award is presented to Nan Roberts Eitel, Associate General Counsel for Chapter 11 Practice in the Executive Office for U.S. Trustees’ Office of the General Counsel. Eitel is presented this award for her exceptional service in modernizing the U.S. Trustee Program’s (USTP) review of the compensation and expenses sought by attorneys in large Chapter 11 bankruptcy cases. In the time she has been with the program, Eitel has undertaken extensive study of professional compensation schemes both in and out of bankruptcy, engaged in extensive stakeholder review, drafted an innovative and workable set of industry guidelines and worked tirelessly to ensure their successful implementation. Her efforts have resulted in an approach to professional compensation that is grounded in modern bankruptcy practice, and that supports the USTP mission by enhancing public confidence in the integrity of the bankruptcy compensation process.
The John Marshall Awards are the department’s highest awards offered to attorneys for contributions and excellence in specialized areas of legal performance. Eleven awards in nine categories are presented this year.
The first John Marshall Award for Trial of Litigation is presented to Assistant U.S. Attorneys from the Southern District of New York Justin Anderson, Douglas B. Bloom and Perry A. Carbone. This team is responsible for the successful prosecution of a group of New York state politicians for bribery and corruption, ranging from the highest ranks of state government, to the governing body of America’s largest city, to the highest officials of a local municipality. The team conducted a complex undercover operation that exposed the broad extent and brazen nature of corruption in New York state politics and led to the arrest and conviction of five political figures with one more awaiting trial. Three of those defendants, the former majority leader and president pro tempore of the New York State senate and acting lieutenant governor of New York, a New York City councilman and a leader of a New York City Republican party, heavily contested the charges and were convicted after hard-fought trials. The team’s work helped catalyze ongoing efforts at reform of New York state and local government.
The second John Marshall Award for Trial of Litigation is presented to the team responsible for convicting serial killer and sexual predator Jorge Avila Torrez. As a result of the tireless efforts of investigators and prosecutors over the course of several years, Torrez was held accountable by a federal jury in April 2014 for the premeditated murders of three innocent victims and the abduction and sexually motivated assault of three survivors. Prosecutors charged Torrez with the capital murder of Amanda Jean Snell, a promising young petty officer in the U.S. Navy, who was found dead in her barracks near the Pentagon in July 2009. Although Snell’s death was not ruled a homicide by the medical examiner, a later re-examination of the evidence, including DNA analysis, proved that she was the victim of a sexually motivated assault and murder. The prosecution team proved that Torrez was also responsible for attacks on three young women in Arlington, Virginia, and the brutal murder of two young girls in Zion, Illinois, despite the fact that an innocent man stood accused of the Illinois killings for approximately five years. Following a lengthy trial involving the presentation of more than 60 witnesses and hundreds of exhibits, the defendant was found guilty of first-degree murder and sentenced to death.
Award recipients include, from the U.S. Attorney’s Office of the Eastern District of Virginia, Assistant U.S. Attorneys Jonathan L. Fahey and Michael E. Rich, Special Assistant U.S. Attorney Robert J. Heberle and Senior Litigation Counsel James L. Trump.
The John Marshall Award for Participation in Litigation is presented for this team’s outstanding work in negotiating the federal government’s first settlement involving student loans under the Servicemembers Civil Relief Act (SCRA). The lawsuit alleges that Sallie Mae Inc. (now known as Navient Solutions Inc.), SLM DE Corporation (now known as Navient DE Corporation) and Sallie Mae Bank (collectively Sallie Mae) failed to provide members of the military the 6 percent interest rate cap to which they were entitled in violation of the SCRA. The department’s settlement was the result of a joint effort with the U.S. Department of Education (ED), the Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau’s Office of Servicemember Affairs. It requires Sallie Mae to pay $60 million in compensation to over 60,000 service members and to streamline the process by which service members may obtain interest rate reductions in the future. Attorney General Holder announced this landmark settlement along with ED Secretary Arne Duncan, who announced ED’s plans to adopt new industry-wide streamlined procedures that will minimize administrative burdens on service members and allow more of them to obtain the SCRA benefits to which they are entitled.
Award recipients include, from the Civil Rights Division’s Housing and Civil Enforcement Section, Chief Steven H. Rosenbaum and Trial Attorneys Tanya I. Kirwan and Elizabeth A. Singer.
The first John Marshall Award for Support of Litigation is presented to this team for their exceptional performance in three trials under the Racketeer Influenced and Corrupt Organizations (RICO) Act against members of La ONU, one of the largest and most violent drug trafficking organizations in Puerto Rico. The three trials focused on the drug trafficking activities and the numerous murders committed by the organization. La ONU’s quest to maintain and increase their power of the drug trade led them to commit some of the most brazen murders seen in Puerto Rico, which cost the lives of ordinary law-abiding citizens. Among the murders that the recipients proved during the trials was the downing of a police helicopter by a member of La ONU, who shot at the helicopter during flight with an AK-47 rifle, killing the co-pilot. The recipients also proved the murder of a police woman and a librarian who were driving to work when they were caught in the crossfire and killed during a shootout between members of La ONU and their main rival. In total, the team convicted seven defendants who were all sentenced to life in prison. The defendants who were convicted included La ONU’s leader and main enforcers. As a result of the convictions obtained in the three trials, La ONU was significantly weakened. Moreover, the conviction of the defendants involved in these murders brought peace to the citizens of Puerto Rico, as they would no longer be threatened by members of an organization whose brazenness put at risk the lives of law-abiding citizens.
Award recipients include, from the U.S. Attorney’s Office of the District of Puerto Rico, Assistant U.S. Attorneys Victor O. Acevedo-Hernandez and Jenifer Y. Hernandez-Vega.
The second John Marshall Award for Support of Litigation is presented to Richard Farber, Senior Appellate Counsel in the Tax Division’s Appellate Section. Farber is presented this award for his exceptional record of accomplishments in support of litigation of the most important tax cases that are presented to the federal courts of appeals. He has long been regarded as an appellate advocate of the highest caliber and for that reason he has, for many years, been asked to supervise the government’s appellate litigation in the most important and complex tax cases. Over the past two years alone, his astute supervision of the government’s litigating strategy has saved more than $1 billion in revenue. Moreover, Farber has made major contributions to the Tax Division’s mission of protecting the public fisc.
The first John Marshall Award for Handling of Appeals is presented to Vijay Shanker, Deputy Chief in the Criminal Division’s Appellate Section. Shanker is presented this award for his superlative skill in appellate advocacy. Never flummoxed by a short deadline or a long dormant statute suddenly restored to life, he excels at solving puzzles and translating the solution into persuasive but crisp prose. Shanker routinely handles complex cases requiring meticulous analysis, thorough research and an orderly, scholarly and clear presentation. At oral argument, he knows that fist-pounding and hyperbole destroy credibility and that when representing the United States, earning the court’s trust and respect is critical. The soft-spoken Shanker earns that trust by anticipating the toughest questions and focusing on the key points needed to win. With superlative skill and integrity, he has secured dozens of appellate victories for the government, defending the convictions of violent carjackers and robbers, fraudsters and corrupt public officials, drug dealers, narcoterrorists and criminals who exploit children. He has also obtained several ground-breaking decisions on issues that lay at the intersection of forfeiture law, international relations and terrorism. Additionally, Shanker finds time to provide legal advice to department’s leadership and prosecutors on a variety of issues.
The second John Marshall Award for Handling of Appeals is presented to the Bay Mills Indian Community team for its outstanding win in a case by the state of Michigan that presented a direct, frontal-assault on the concept of tribal sovereign immunity from suit in the absence of Congressional authorization. Against a backdrop of bad facts in which to litigate this issue (apparently unlawful gaming by the tribe), the team presented cogent arguments as to why Congress had not authorized the kind of suit the state had brought and presented other clear avenues by which the state could obtain review of the legality of the tribe’s actions without necessitating a complete revision of tribal sovereign immunity concepts. Favorable decisions in the U.S. Supreme Court for Indian tribes have been quite scarce over the last decades. This decision was a shining star, achieved because of the team’s stellar work.
Award recipients include, from the Environment and Natural Resources Division, the Office of the Assistant Attorney General-Senior Counsel for Indian Affairs Gina L. Allery, Indian Resources Section Deputy Chief John H. Turner Jr., and Appellate Section Assistant Chief William B. Lazarus and Attorney Mary Gabrielle Sprague; from the Office of the Solicitor General, Deputy Solicitor General Edwin S. Kneedler and Assistant to the Solicitor General Ann E. O’Connell.
The first John Marshall Award for Providing Legal Advice is presented to the team responsible for guiding the department to its new position regarding Title VII and gender identity. In December 2014, Attorney General Holder announced that it is now the view of the department that Title VII’s prohibition on sex discrimination reaches discrimination due to gender identity, gender transition and transgender status. This announcement was the culmination of many years of not only legal analysis and internal discussion, but also outreach to stakeholders within the government and beyond. Transgender individuals are among the most marginalized in our society, and thus they are sorely in need of the protections of federal antidiscrimination law. Consequently, the significance of the department’s change in position cannot be overstated.
Award recipients include, from the Civil Rights Division, Deputy Assistant Attorney General Gregory B. Friel and former Deputy Assistant Attorney General Pamela S. Karlan, and from the division’s Appellate Section, Chief Diana K. Flynn, Deputy Chief Sharon M. McGowan, Special Litigation Counsel Tovah R. Calderon and Trial Attorney Holly Thomas.
The second John Marshall Award for Providing Legal Advice is presented to the Justice Management Division’s (JMD) Office of General Counsel (OGC) for providing exceptional, soundly reasoned and well researched legal advice to JMD staff and senior departmental and component leadership across the department. Much of OGC’s work is often behind-the-scenes, providing crucial support and confidence to leadership and components in the performance of their missions. OGC’s contributions to the department’s nuts-and-bolts management issues, addressing all aspects of matters covering appropriations, personnel and appointments of officers, procurement, grant management, security, property management and department-wide directives are essential to the continued sound functioning of the department and effectuation of important policies and initiatives. Additionally, through its effective coalitions with other federal agencies and interagency legal working groups, OGC is recognized and called upon by other agency general counsels and interagency legal working groups to provide invaluable assistance.
Award recipients include, from JMD’s OGC, General Counsel Arthur E. Gary, Deputy General Counsel Barbara A. Bush, Assistant General Counsels John R. Caterini, Kristen Bucher Hahn, Barry C. Hansen, Pamela J. Jadwin, Morton J. Posner, Evelyn S. Tang and John E. Thompson and Staff Assistant Michelle M. Allen.
This year’s John Marshall Award for Alternative Dispute Resolution is presented to Daniel Tenny, Trial Attorney in the Civil Division’s Appellate Section. Tenny is presented this award for achieving a groundbreaking settlement of much publicized litigation that was closely followed by veterans groups and members of Congress. In Valentini v. McDonald, homeless veterans claimed, and the district court found, that the U.S. Department of Veterans Affairs (VA) was improperly allowing land at its West Los Angeles Campus to be used for commercial purposes. Tenny’s intensive efforts over more than a year were central to the settlement, in which Tenny worked directly with the VA Secretary and disentangled the legal issues posed by the litigation from the substantive and policy issues on which the parties agreed. The settlement has been lauded by commentators who had previously been critical of VA’s operations in West Los Angeles as a new beginning and an opportunity to achieve significant policy objectives that would have been impossible if the parties had continued in an adversarial fashion. The parties have already begun working together on new homelessness plans and on a process for making better use of the West Los Angeles campus, outside the context of any adversarial litigation. Tenny achieved far more than could have been accomplished by success in the litigation and his work exemplifies the means by which the adversarial process can be transformed into a constructive endeavor.
This year’s John Marshall Award for Interagency Cooperation is presented to Dustin F. Minor, Hazardous Waste Branch Chief in the Office of Regional Counsel – Region 9 of the Environmental Protection Agency (EPA). Minor has demonstrated extraordinary cooperation with ENRD’s Environmental Enforcement and Environmental Defense Sections in connection with its joint efforts to pursue parties responsible for the contamination of over 500 abandoned uranium mines on Navajo Nation lands. These abandoned mines have contaminated land near Navajo homes, roads, grazing lands and cultural areas, resulting in one of the most severe environmental justice problems in Indian Country. Minor played an important role supporting the Environmental Defense Section in its ground-breaking work to craft a settlement with the Navajo Nation that will lead to the important response measures to address the uranium contamination resulting from mining on Navajo lands. He has also played an essential role in the work of a combined EPA/department team to litigate against responsible private parties and to foster outreach to the Navajo Nation. Minor played an equally central role helping litigate and settle consolidated Comprehensive Environmental Response, Compensation, and Liability Act actions in connection with a 160-acre contaminated Superfund site in Rialto, California, litigation that was unusually challenging due to its extensive discovery and contentious disputes over its 10-year history. Ultimately, five separate consent decrees were entered, which together will result in the cleanup of the entire site at a cost of approximately $100 million. Minor played an important role in finding creative solutions that enabled both EPA and the U.S. Department of Defense to settle on terms that were appropriate to each agency.
South Florida Woman Pleads Guilty to Filing False Tax ReturnsRead the Press Release
A resident of Islamorada, Florida, pleaded guilty today in the U.S. District Court for the Eastern District of Michigan to one count of filing a false tax return, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced today.
Justina Black, 53, previously resided in Washington, Michigan. Black is also known by the names Justina Kopek, Guistina Kopek and Justina Fazzolari.
According to court documents, Black operated a company called Justina Inc., which was in the business of buying and selling gold through “gold parties.” At these parties, individuals sold gold to representatives of Justina Inc., which then sold the gold to another company. Black caused corporate tax returns to be filed for Justina Inc. that did not report the full amount of gross receipts that the company received for the tax years 2009 and 2010. On the 2008 through 2010 corporate tax returns for Justina Inc., Black also falsely claimed deductions relating to a property in Florida that was not an asset of the company.
U.S. District Judge George C. Steeh set sentencing on March 31, 2016. Black faces a statutory maximum sentence of three years in prison. Under the terms of her plea agreement, Black is required to pay restitution to the Internal Revenue Service (IRS).
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Melissa S. Siskind and Jeffrey A. McLellan of the Tax Division, who are prosecuting the case.
Justice Department Settles Claim Against Nevada Taxicab Companies for Discrimination Against ImmigrantsRead the Press Release
The Justice Department announced today that it reached an agreement with Nevada Yellow Cab Corporation, Nevada Checker Cab Corporation, and Nevada Star Cab Corporation – three Las Vegas, Nevada, taxicab companies that collectively operate under the umbrella company “Yellow Checker Star Transportation Company” (YCS). The agreement resolves claims that YCS discriminated against work-authorized immigrants because of their citizenship status.
The Justice Department’s investigation found that YCS violated the Immigration and Nationality Act’s (INA) anti-discrimination provision by requiring non-U.S. citizens, but not similarly-situated U.S. citizens, to present additional and unnecessary documentation to prove their employment eligibility. The INA’s anti-discrimination provision prohibits employers from placing additional burdens on work-authorized employees during the hiring and employment eligibility verification process because of their citizenship status or national origin.
Under the terms of the settlement agreement, YCS will pay $445,000 in civil penalties to the United States, place print advertisements in a monthly trade publication for a period of six non-consecutive months advising employees of the anti-discrimination provision of the INA, undergo monitoring for three years, and train its employees on the INA’s anti-discrimination provision.
“Employers are not permitted to impede the employment opportunities of work-authorized immigrants by imposing additional and unnecessary documentary requirements upon them,” said Principal Deputy Assistant Attorney General Vanita Gupta, head of the Civil Rights Division. “The Civil Rights Division commends Yellow Checker Star Transportation Company for working with the division to educate members of the Las Vegas community about their rights under the anti-discrimination provision of the Immigration and Nationality Act.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), which is handling this investigation, is responsible for enforcing the anti-discrimination provision of the INA. The provision protects work-authorized individuals from employment discrimination on the basis of citizenship status or national origin, including discrimination in hiring, firing and the employment eligibility verification process. Trial Attorneys Linda White Andrews, Pablo A. Godoy and Kayla Gassmann of the Civil Rights Division handled this matter.
For more information about protections against employment discrimination under federal immigration law, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TDD for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TDD for hearing impaired); e-mail [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they were subjected to: different documentary requirements based on their citizenship status, immigration status, or national origin; or discrimination based on their citizenship status, immigration status or national origin in hiring, firing, or recruitment or referral for a fee, should contact OSC’s worker hotline for assistance.
El Departamento de Justicia Resuelve Denuncia Contra Empresas de Taxi en Nevada por Discriminación a InmigrantesRead the Press Release
WASHINGTON, D.C. – El Departamento de Justicia anunció hoy que ha llegado a un acuerdo con Nevada Yellow Cab Corporation, Nevada Checker Cab Corporation, y Nevada Star Cab Corporation – tres empresas de taxi que operan colectivamente bajo la empresa “Yellow Checker Star Transportation Company” (YCS). El acuerdo resuelve acusaciones de que YCS discriminό a inmigrantes con permiso de trabajar por su ciudadanía.
La investigación del Departamento de Justicia encontró que YCS violό la disposición antidiscriminatoria de la Ley de Inmigración y Nacionalidad (INA, por sus siglas en inglés) cuando les exigiό a inmigrantes, pero no a ciudadanos estadounidenses similarmente situados, a presentar documentos adicionales e innecesarios para comprobar su elegibilidad para trabajar. La disposición antidiscriminatoria de la INA prohíbe que los empleadores impongan cargos adicionales a empleados autorizados a trabajar durante el proceso de contratación y verificación de la autorización de trabajo basado en ciudadanía u origen nacional.
Según el acuerdo, YCS pagará una multa civil de $445,000 a los Estados Unidos, colocará anuncios en una publicación comercial mensual por un período de seis meses no consecutivos asesorando a los empleados de la disposición antidiscriminatoria de la INA, será sujeto al monitoreo por tres años y capacitará a sus empleados acerca de la disposición antidiscriminatoria de la INA.
“Empleadores no pueden impedir las oportunidades de empleo de inmigrantes autorizados a trabajar con requisitos adicionales e innecesarios,” declaró la Principal Subprocuradora General Interina, Vanita Gupta, de la División de Derechos Civiles. “La División de Derechos Civiles elogia a Yellow Checker Star Transportation Company por cooperar con la división en educar a los miembros de la comunidad de Las Vegas sobre sus derechos bajo la disposición antidiscriminatoria de la Ley de Inmigración y Nacionalidad.”
La Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a Inmigración (OSC, por sus siglas en inglés), quien está a cargo de esta investigación, es responsable por hacer cumplir con la disposición antidiscriminatoria de la INA. La disposición antidiscriminatoria protege a individuos quienes son autorizados a trabajar contra la discriminación basado en la ciudadanía u origen nacional, incluyendo discriminación en la contratación, el despido, y en el proceso de verificación de elegibilidad de empleo. Los Abogados Litigantes, Linda White Andrews, Pablo A. Godoy, and Kayla Gassmann de la División de Derechos Civiles manejaron este asunto.
Para más información sobre las protecciones contra la discriminación en el empleo bajo las leyes migratorias, llame a la línea directa de la OSC para trabajadores al 1-800-255-7688 (1‑800-237-2515, TTY para las personas con discapacidades auditivas); llame a la línea directa de la OSC para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para las personas con discapacidades auditivas); mande un correo electrónico a [email protected] o visite la página web de la OSC en www.justice.gov/crt/about/osc.
Los solicitantes o empleados que creen que fueron sometidos a requerimientos discriminatorios (durante la verificación de elegibilidad de empleo) por motivo de su ciudadanía, estatus migratorio u origen nacional; o en discriminación basada en estatus de ciudadanía, estatus migratorio o en origen nacional en la contratación, el despido o el reclutamiento o referencia por comisión deberán llamar a la línea directa para trabajadores mencionada arriba y serán atendidos.
Millennium Health Agrees to Pay $256 Million to Resolve Allegations of Unnecessary Drug and Genetic Testing and Illegal Remuneration to PhysiciansRead the Press Release
Millennium Health, formerly Millennium Laboratories, has agreed to pay $256 million to resolve alleged violations of the False Claims Act for billing Medicare, Medicaid and other federal health care programs for medically unnecessary urine drug and genetic testing and for providing free items to physicians who agreed to refer expensive laboratory testing business to Millennium, the Justice Department announced today. Millennium, headquartered in San Diego, is one of the largest urine drug testing laboratories in the United States and conducts business nationwide.
“The Department of Justice is committed to ensuring that laboratory tests, including drug and genetic tests, are ordered based on each patient’s medical needs and not just to increase physician and laboratory profits,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will not tolerate practices such as the ordering of excessive, non-patient specific tests and the provision of inducements to physicians that lead to unnecessary costs being imposed upon our nation’s health care programs.”
As part of today’s announced settlements, Millennium has agreed to pay $227 million to resolve False Claims Act allegations, detailed in a complaint filed by the United States, that Millennium systematically billed federal health care programs for excessive and unnecessary urine drug testing from Jan. 1, 2008, through May 20, 2015. The United States alleged that Millennium caused physicians to order excessive numbers of urine drug tests, in part through the promotion of “custom profiles,” which, instead of being tailored to individual patients, were in effect standing orders that caused physicians to order large number of tests without an individualized assessment of each patient’s needs. This practice violated federal healthcare program rules limiting payment to services that are reasonable and medically necessary for the treatment and diagnosis of an individual patient’s illness or injury. The United States also alleged that Millennium’s provision of free point of care urine drug test cups to physicians—expressly conditioned on the physicians’ agreement to return the urine specimens to Millennium for hundreds of dollars’ worth of additional testing—violated the Stark Law and the Anti-Kickback Statute. The Stark Law and the Anti-Kickback Statute generally prohibit laboratories from giving physicians anything of value in exchange for referrals of tests.
Millennium has also agreed to pay $10 million to resolve False Claims Act allegations that it submitted false claims to federal health care programs from Jan. 1, 2012, through May 20, 2015, for genetic testing that was performed routinely and without an individualized assessment of need.
“Millennium allegedly promoted indiscriminate and unnecessary testing that increased medical costs without serving patients’ real medical needs,” said U.S. Attorney Carmen M. Ortiz of the District of Massachusetts. “A laboratory that promotes and knowingly conducts medically unnecessary drug testing operates unlawfully and squanders our precious federal health care resources.”
In connection with the False Claims Act settlements, Millennium has also entered into a corporate integrity agreement (CIA) with the Department of Health and Human Services-Office of Inspector General (HHS-OIG). In addition, Millennium will pay $19.2 million to the Centers for Medicare and Medicaid Services (CMS) to resolve certain administrative actions related to Millennium’s urine drug test billing practices.
“This company has taken the first step toward demonstrating a commitment to compliance by agreeing to make significant changes to its board of directors,” said Inspector General Daniel R. Levinson of HHS-OIG. “Most of the board will be comprised of new independent members. Under the five-year CIA, OIG will monitor the company’s compliance efforts under this new leadership.”
“CMS is committed to exercising quick and effective oversight to protect Medicare beneficiaries and the Medicare Trust Fund,” said Acting Administrator Andy Slavitt for CMS. “The resolution of this case is the result of the important partnership between CMS and the Department of Justice.”
The False Claims Act allegations resolved were originally brought in lawsuits filed by whistleblowers under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. Under the act, the United States can elect to intervene in an action filed by a whistleblower, as it did, in part, with respect to several of the qui tam actions regarding urine drug testing allegations. The whistleblowers will receive $30.35 million from the False Claims Act recovery for the urine drug testing claims and $1.48 million from the False Claims Act recovery for the genetic testing claims.
The government’s pursuit of the claims resolved by the settlements 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 $25.3 billion through False Claims Act cases, with more than $16.2 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation was conducted by the Civil Division’s Commercial Litigation branch, the U.S. Attorney’s Office of the District of Massachusetts, HHS-OIG and HHS’ Office of the General Counsel, CMS, the Office of Personnel and Management Office of Inspector General, the U.S. Postal Service Office of Inspector General, the Department of Veterans Affairs and the FBI.
The cases that will be dismissed as part of the settlements are captioned United States ex rel. McGuire v. Millennium Laboratories, Inc., No. 12-cv-10132 (D. Mass.), United States ex rel. Uehling v. Millennium Laboratories, Inc. et al., No. 12-cv-10631 (D. Mass.), United States ex rel. Omni Healthcare Inc. v. Millennium Laboratories, Inc., No. 13-cv-10825 (D. Mass.), United States, et al., ex rel. Estate of Robert Cunningham v. Millennium Laboratories of California, Inc., No. 09-cv-12209 (D. Mass.); United States, et al., ex rel. Wendy Johnson v. Millennium Laboratories, Inc., No. 12-cv-12387 (D. Mass.), United States ex rel. Allstate Insurance Co. and Lawrence K. Spitz, M.D. v. Millennium Laboratories, Inc., No. 14-cv-14276 (D. Mass.), United States ex rel. Amadeo Pesce, Ph.D. v. Millennium Health, No. 15-cv-10821 (D. Mass.), and United States ex rel. Omni Healthcare Inc. v. Millennium Laboratories, Inc., No. 14-cv-13052 (D. Mass.).
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Former DEA Agent Sentenced for Extortion, Money Laundering and Obstruction Related to Silk Road InvestigationRead the Press Release
A former Drug Enforcement Administration (DEA) agent was sentenced today to 78 months in prison for extortion, money laundering and obstruction of justice, which crimes he committed while working as an undercover agent investigating Silk Road, an online marketplace used to facilitate the sale and purchase of illegal drugs and other contraband.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Brian Stretch of the Northern District of California, Chief Richard Weber of the IRS-Criminal Investigation (IRS-CI), Special Agent in Charge David J. Johnson of FBI’s San Francisco Division, Special Agent in Charge Michael P. Tompkins of the Department of Justice Office of the Inspector General’s Washington, D.C., Field Office and Special Agent in Charge James E. Ward of the Department of Homeland Security Office of the Inspector General’s Atlanta Field Office made the announcement.
Carl M. Force, 46, of Baltimore, pleaded guilty on July 1, 2015, before U.S. District Court Judge Richard Seeborg of the Northern District of California. In addition to imposing the prison term, the court ordered Force to pay $340,000 in restitution and serve three years of supervised release following his sentence.
Force was a special agent with the DEA for 15 years. From 2012 through 2013, he was assigned to the Baltimore Silk Road Task Force, a multi-agency group investigating illegal activity on the Silk Road. Force served as an undercover agent and was tasked with, among other things, establishing communications with a target of the investigation, Ross Ulbricht, aka “Dread Pirate Roberts.”
In connection with his guilty plea, Force admitted that, while working in an undercover capacity using his DEA-sanctioned persona, “Nob,” in the summer of 2013, Force offered to sell Ulbricht fake drivers’ licenses and “inside” law enforcement information about the Silk Road investigation. Force admitted that he attempted to conceal his communications with Ulbricht about the payments by directing Ulbricht to use encrypted messaging. Force admitted that he understood the payments from Ulbricht, which were made in bitcoin, were government property, as they constituted evidence of a crime, and that he falsified official reports and stole the funds, which he deposited into his own personal account. Force admitted that, as Nob, he received bitcoin payments from Ulbricht worth more than approximately $100,000.
In addition, Force admitted that he devised and participated in a scheme to fraudulently obtain additional funds from Ulbricht through another online persona, “French Maid,” of which his task force colleagues were not aware. Force admitted that, as French Maid, he solicited and received bitcoin payments from Ulbricht worth approximately $100,000 in exchange for information concerning the government’s investigation into the Silk Road.
Force also admitted that he obstructed justice both by soliciting and accepting bitcoin from Ulbricht and by lying to federal prosecutors and agents who were investigating potential misconduct by Force and others.
In connection with his guilty plea, Force also admitted that, although he did not receive permission from the DEA to do so, he served as the chief compliance officer for CoinMKT, a digital currency exchange company. In this role, in February 2014, Force was alerted by CoinMKT to what the company initially believed to be suspicious activity in a particular account. Force admitted that, thereafter, in his capacity as a DEA agent, but without authority or a legal basis to do so, he directed CoinMKT to freeze $337,000 in cash and digital currency from the account. Force further admitted that he subsequently transferred approximately $300,000 of the digital currency into a personal account that he controlled.
The case is being investigated by the FBI’s San Francisco Division, the IRS-CI’s San Francisco Division, the Department of Justice Office of the Inspector General and the Department of Homeland Security Office of the Inspector General in Washington, D.C. The case is being prosecuted by Assistant U.S. Attorneys Kathryn Haun and William Frentzen of the Northern District of California and Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section. Assistant U.S. Attorney Arvon Perteet of the Northern District of California handled the asset forfeiture aspects of the case.
Former Civilian Department of Defense Employee Sentenced for Engaging in Illicit Sexual Conduct with a Minor in HondurasRead the Press Release
A former civilian employee of the Department of Defense was sentenced to 84 months in prison for engaging in illicit sexual conduct with a minor in a foreign place.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas made the announcement.
William Curry McGrath, 55, of San Antonio, pleaded guilty on April 28, 2015, and has been in custody since his arrest in October 2014. In addition to imposing the prison term, U.S. District Judge Lee H. Rosenthal of the Southern District of Texas ordered McGrath to register as a sex offender and to serve five years of supervised release following his prison term.
From December 2012 to March 2014, McGrath was the director of the Network Enterprise Center at the Soto Cano Air Base in Comayagua, Honduras. In connection with his guilty plea, McGrath admitted that, while stationed in Honduras, he began a sexual relationship with a 13-year-old girl. He further admitted that he gave the girl money, gifts and other items of value in exchange for sexual acts.
The investigation was conducted by the FBI’s Houston Division. The case is being prosecuted by Trial Attorney Amy E. Larson of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Sherri Zack of the Southern District of Texas.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.justice.gov/psc.
Director Shawn Bray Retires from Public Service at 2015 Partner Recognition CeremonyRead the Press Release
On October 14, 2015 INTERPOL Washington hosted its third Partner Recognition Ceremony. The ceremony honored Director Shawn Bray, as he prepares for retirement from public service at the end of this month, and the successful partnerships that have made his time as director a success. Representatives from the Department of Homeland Security (DHS) and the Department of Justice (DOJ), INTERPOL Washington’s parent agencies, as well as partners from other federal agencies, embassy liaisons, nonprofit organizations, and the private sector were all in attendance to show their support for INTERPOL Washington and Director Bray.
Jolene Lauria, Deputy Assistant Attorney General and Controller for the Department of Justice spoke about her relationship with the USNCB and Director Bray. She praised the director’s ability to create lasting friendships while still relentlessly accomplishing the agency’s goals.
Lev Kubiak, Assistant Director of Immigration and Customs Enforcement (ICE) also addressed the audience, touching on the close and productive relationship between ICE and the USNCB. He also described fondly the Director’s time at ICE before coming to INTERPOL Washington and the various successes that he had during his long career there.
A surprise video from the INTERPOL General Secretariat (IPSG) was also shown – allowing INTERPOL Secretary General Jürgen Stock to express his gratitude to Director Bray for his years of service and leadership in the international community. His kind message was a reminder of the many strong and effective working relationships that Director Bray has fostered.
Deputy Director Geoffrey Shank was the Master of Ceremonies for the event. Dep. Dir. Shank took the time to highlight how much Director Bray and, by extension, the entire USNCB benefited from the quiet and steadfast support of the Director’s wonderful wife. He also expressed gratitude for the role that Director Bray has played in his professional development, serving as both an example and as a mentor.
A series of unplanned remarks were also made by members of the audience who came to celebrate the agency and to wish the Director well as he closes this chapter of his life. It was during these remarks that the diversity and range of INTERPOL Washington’s partners was truly demonstrated. Law enforcement representatives from an incredible range of U.S. agencies spoke as well as representatives from partner law enforcement agencies from absolutely every corner of the globe.
It was a fitting memorandum to a career that was characterized by lasting friendships being formed through professional excellence.
Deputy Attorney General Sally Quillian Yates Written Testimony Before the Senate Judiciary Committee on the Sentencing Reform and Corrections Act of 2015Read the Press Release
Written Testimony Submitted for the Record
Mr. Chairman, Senator Leahy, distinguished Members of the Committee – thank you for holding this hearing on Federal sentencing and corrections policy and for allowing the Administration to share our views on this very important topic. It is an honor to be here to discuss an issue that is important to our country, our system of justice, and about which I personally feel very strongly.
I joined the Department of Justice in 1989 as a line AUSA in the U.S. Attorney’s office in Atlanta, and it has been my privilege to represent the people of the United States for over 27 years now. My perspective on sentencing policy is informed by my years of experience as an AUSA in the trenches, as a U.S. Attorney responsible for a district of over 6 million people, and now as the Deputy Attorney General.
As a career prosecutor, I have devoted my professional life to enforcing the law and keeping our communities safe. The fundamental responsibility of all prosecutors is not simply to win convictions or send people to prison. Our responsibility is to seek justice. And I believe that justice now requires that we recalibrate our approach to our sentencing laws.
For three decades, well-intentioned prosecutors have used the tools Congress gave them, including stiff mandatory minimum sentences, to prosecute drug cases. While the stated congressional purpose of those laws was to focus on the newly emerging South American drug cartels and the leaders of drug organizations who were responsible for large quantities of drugs, as we look back, it has become clear that these harsh sentencing laws cast too broad a net. This has come with real costs, both in dollars and cents but even more importantly, in the impact on our communities and the public’s confidence in our criminal justice system.
An unprecedented bi-partisan coalition has come together to arrive at a sentencing proposal that adjusts our laws so that the Department of Justice has the tools it needs to protect society from the most serious criminals, while ensuring that our criminal justice system operates in a manner that is fair, effective, and worthy of the public’s trust. This bi-partisan bill recalibrates some of our sentencing laws, invigorates recidivism-reduction programs and provides added protections to juveniles, all designed to make our communities safer and our system more just. The Department of Justice believes that reform is not only appropriate but necessary, and applauds the broad and impressive bipartisan efforts that went into this bill.
There are many facets to the debate surrounding sentencing reform. I know that for many of you, and for many Americans, one of the most important questions is whether we can reform sentencing policy without endangering the safety of our communities. As the official responsible for day-to-day operations of the Department of Justice, keeping America safe is my solemn responsibility. And I believe that sentencing reform will enhance our ability to keep the American people safe.
To understand why, it is helpful to step back and understand the costs of the current system – the fiscal costs and the human costs.
We have seen an explosion in the Federal prison population since the 1980’s. While the country’s population has only grown by about a third, our Federal prison population has grown by almost 800 percent, due in large part to the influx of drug defendants. Today, nearly half of all Federal inmates are in Federal prison for drug-related offenses. Under the current sentencing regime, our mandatory minimum laws do not calibrate a defendant’s sentence to match the threat that he or she poses to our safety. At its core, one of the basic problems with our mandatory minimum system is that it’s based almost exclusively on one factor – drug quantity. And so, we have a hard time distinguishing the cartel leader who needs to be in prison for a long time from the low level distributor who doesn’t. As a result, we have some defendants serving far more time in prison than necessary to punish and deter. This comes with great costs – costs to operate our prisons system, costs to our families and communities, and costs to the public’s confidence in the fairness of their system of justice.
From a dollar and cents standpoint, the Department’s prison and detention costs have increased by almost three billion dollars in the past decade and now account for roughly one third of the Department’s budget. Our mandatory minimum drug laws sweep broadly, and result in many prisoners serving long sentences. Every dollar that we spend imprisoning a non-violent drug offender for longer than necessary is a dollar that could be spent investigating emerging threats, from hackers to home-grown terrorists or to support State and local law enforcement, victims of crime, and crucial programs for prevention, intervention, and reentry.
This is not to say that every sentence is longer than necessary, nor that every sentence should be lowered. But we need an approach that is more carefully tailored, so we that we can focus our resources where they are needed most. Sentencing reform is critical to ensuring the Department and our State and local law enforcement partners have both strong laws and sufficient resources to combat drug and violent crime. Reform will enhance public safety. The reforms being considered in this bill do not reduce statutory maximums, and drug offenders will still receive significant sentences. Moreover, kingpins, drug organization leaders, violent criminals, as well as those who possess a firearm or dangerous weapon, will still receive enhanced penalties. But sentencing reform should permit a certain type of defendant – a low- level, non-violent drug defendant – to demonstrate to the sentencing judge that he or she should not be subject to the most onerous sentences. These modest revisions will help ensure that, in those cases, the punishment more closely matches the crime. In the long run, this should result in a lower Federal prison population, which will allow the Department to reallocate funds to other pressing needs.
But in addition to the fiscal costs, there are human costs to our current system as well.
We all know the toll that illegal drugs have taken on our society. The Justice Department aggressively pursues high-level drug traffickers because we know how these substances harm those with substance use disorders. We recognize the many lives ruined by the drug trade – from rural villages in Colombia and Mexico to the streets of Oakland and Newark.
But the harms of drug addiction are not necessarily solved by locking up, for as long as possible, everyone who touches the drugs. Take for example the case of one defendant whose record I recently reviewed. This particular defendant, who only had a 6th grade education, was a veteran of the Army, who was honorably discharged. He was convicted of selling crack on the street, in a case that may not even be a Federal case today. Although this defendant didn’t possess a gun or have any history of violence, he was sentenced to mandatory life in prison because he had two prior State convictions for selling cocaine, one of which involved just one ounce of cocaine. Life in prison is simply too high a price to pay for these three small-time drug sales.
Importantly, the costs aren’t just born by defendants. Too many children, over 2.7 million in the United States, have a parent behind bars. Approximately one in nine African- American children has a mother or father in prison. This cuts deeply into our society, and we must not pass this legacy to the next generation.
Similarly, when we impose longer-than-necessary prison sentences under the guise of public safety, we undermine the public’s confidence in the fairness of the criminal justice system. It’s not enough to have a system of justice that holds wrongdoers accountable. The system must also mete out punishment in a manner that is fair, reasonable, and tailored to the facts and circumstances of the crime. If it does not, then we risk losing the community’s faith in the institutions we represent. In the long run, that loss of faith could prove more costly to our nation’s future than any dollars and cents spent on the criminal justice system.
In looking for solutions, I am encouraged by the great innovations occurring at the State level. As Deputy Attorney General, I have had the opportunity to learn more about a wide variety of exciting programs, from drug courts to recidivism reduction programs. These efforts have been part of a broader shift away from thinking of incarceration as the only answer to crime. Across the country, States as varied as Texas, Ohio, North Carolina, and my home State of Georgia, have confronted exploding prison costs by enacting bold criminal justice reforms. Most importantly, these reforms have demonstrated that sentencing reform is compatible with lower crime rates. I am encouraged to see that ideas that have worked well on the State level – including expanded reentry programming to reduce prison sentences – have been included in the proposed legislation.
And these new, more focused approaches to combating crime will enhance, not undercut, our ability to enforce the law and protect the public. For example, one of the most common concerns raised is that long sentences for low-level drug defendants is the only way to secure their cooperation against the worst criminals. Not only is this inconsistent with my personal experience as a prosecutor, it is inconsistent with the data that we have gathered since the Justice Department readjusted its drug charging policy two years ago. As you most likely know, as part of the Smart on Crime Initiative, the Department directed Federal prosecutors not to charge certain drug offenses triggering mandatory minimum sentences in cases involving lower-level, non-violent drug offenders. Since that time, the Department’s charging of mandatory minimum drug offenses have decreased by approximately twenty percent. Although some feared that defendants would stop pleading guilty and stop cooperating, our experience has shown otherwise. In fact, defendants are pleading guilty at the same rates as they were before we instituted Smart on Crime. Similarly, the rates of cooperation have remained the same or even ticked up slightly.
But to make lasting changes, it is Congress that must establish a new sense of proportionality to our sentencing laws. As a society, we must balance our need for deterrence and our desire for retribution with our decency, our humanity, and our sense of fairness. We need an approach that is more carefully tailored, so that we can better distinguish between those who pose a more serious threat to our society and those who do not.
Back when I was a line prosecutor, I faced questions of balance and proportionality on a daily basis. In every case I prosecuted, there was a time when the AUSA was called upon to make a recommendation to the judge about the sentence to be imposed. Congress has laid out the factors a court is to consider in fashioning the appropriate sentence at Section 3553(a) of Title 18 in the United States Code. These considerations, known as the 3553(a) factors, loom large at every sentencing hearing. They require reflection on the nature and circumstances of the offense, the history and characteristics of the defendant, the need for specific and general deterrence, and a range of other issues.
But it is the opening sentence of Section 3553(a) that establishes the overarching principle: that the court shall impose a sentence “sufficient, but not greater than necessary,” to comply with the stated purposes of sentencing. Sufficient, but not greater than necessary. That phrase should guide us as we consider modification to America’s sentencing laws. We must punish, but no more so than is necessary to achieve our goals. Anything beyond that is a disservice to the principles of justice and to our system of laws. There is a balance we must strike, and I believe the proposed Sentencing Reform and Corrections Act is a good step to striking that balance. The country that we love and that we have a duty to defend deserves nothing less.
Thank you again for inviting me to speak here today. With that, I am happy to take your questions.
United States Settles False Claims Act Action against Estate and Trusts of Layton P. Stuart for $4 MillionRead the Press Release
The United States resolved for $4 million a False Claims Act action against the estate and trusts of the late Layton P. Stuart, former owner and president of One Financial Corporation, and its subsidiary, One Bank & Trust N.A., both based in Little Rock, Arkansas. One Bank, another victim of Stuart’s frauds that is now under new management, will receive an additional $6.9 million.
The United States’ complaint, filed earlier this year, alleged that Stuart and One Financial violated the False Claims Act by making false statements about the financial condition of One Financial and One Bank to induce the Department of the Treasury to invest Troubled Asset Relief Program (TARP) funds in One Financial.
“Today’s settlement is an important milestone in the recovery of TARP funds that were obtained under false pretenses and used for improper purposes,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “We will continue to be vigilant in assuring the proper use of taxpayer funds.”
Congress created TARP in response to the financial crisis of 2008 to restore liquidity and stability to the financial systems of the United States. Under the Capital Purchase Program component of TARP, the Treasury invested capital in financial institutions in exchange for preferred stock or debt securities and other consideration.
In the lawsuit, the United States alleged that in 2009, Stuart, on behalf of One Financial, applied for a TARP investment. According to the United States, Stuart knowingly made false statements about the financial condition of One Financial and One Bank and about the intended use of the TARP funds. In particular, Stuart allegedly concealed serial frauds that he and other One Financial directors and One Bank executives had been committing, and intended to continue committing, on One Bank. The schemes involved Stuart’s diversion of One Bank funds for personal use, including Stuart’s purchase of luxury vehicles for his wife and children. Within two weeks of receiving the TARP funds, Stuart allegedly diverted $2.185 million into his personal accounts. Stuart was terminated from One Bank in September 2012.
“TARP’s Capital Purchase Program was designed to provide emergency assistance to banks and other financial institutions to facilitate lending to the American public, not for personal use of the bank holding company’s CEO,” said Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP). “This settles the government’s claim that as CEO of One Financial Corporation, Layton Stuart applied for TARP using false records or statements causing Treasury to provide TARP funds intended for the benefit of the bank, and then immediately diverted millions for his own personal use. This is an important False Claims Act case to bring and recover TARP funds on behalf of taxpayers. SIGTARP will aggressively root out and investigate all fraud related to TARP.”
Stuart’s frauds were discovered through a federal investigation launched in 2013. The assets of Stuart’s estate and the trusts he had created were subject to a civil forfeiture action in the Eastern District of Arkansas. The civil forfeiture action was settled and dismissed contemporaneously with the False Claims Act settlement with the Stuart estate and trusts. Under these settlements, in addition to the $4 million recovered by the United States, $6.9 million will be received by One Bank and $4 million will be returned to the Stuart trusts.
“This resolution is a just and appropriate result,” said U.S. Attorney Christopher R. Thyer of the Eastern District of Arkansas. “It is due in large part to the parties working toward an end to the forfeiture proceeding that would help the bank and the taxpayers of the United States who loaned money to the bank in 2009. I am hopeful that our community will benefit immensely from this result.”
The government’s False Claims Act lawsuit remains pending against One Financial. Separate criminal actions against several former One Financial and former One Bank executives also remain pending in the Eastern District of Arkansas.
The investigation was conducted by the Internal Revenue Service-Criminal Investigation Division, the Office of SIGTARP, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Eastern District of Arkansas.
The case is captioned United States v. Estate of Layton P. Stuart, et al., No. 1:15-cv-01044-RDM (D.D.C.). The claims asserted by the government are allegations only and there has been no determination of liability.
United States Resolves $237 Million False Claims Act Judgment against South Carolina Hospital that Made Illegal Payments to Referring PhysiciansRead the Press Release
The Department of Justice announced today that it has resolved a $237 million judgment against Tuomey Healthcare System for illegally billing the Medicare program for services referred by physicians with whom the hospital had improper financial relationships. Under the terms of the settlement agreement, the United States will receive $72.4 million and Tuomey, based in Sumter, South Carolina, will be sold to Palmetto Health, a multi-hospital healthcare system based in Columbia, South Carolina.
“Secret sweetheart deals between hospitals and physicians, like the ones in this case, undermine patient confidence and drive up healthcare costs for everybody, including the Medicare program and its beneficiaries,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “This case demonstrates the United States’ commitment to ensuring that doctors who refer Medicare beneficiaries to hospitals for procedures, tests and other health services do so only because they believe the service is in the patient’s best interest, and not because the physician stands to gain financially from the referral. The Department of Justice is determined to prevent the kind of abuses uncovered in this case, and we are willing to take such cases to trial to protect the integrity of the Medicare program.”
The judgment against Tuomey related to violations of the Stark Law, a statute that prohibits hospitals from billing Medicare for certain services (including inpatient and outpatient hospital care) that have been referred by physicians with whom the hospital has an improper financial relationship. The Stark Law includes exceptions for many common hospital-physician arrangements, but generally requires that any payments that a hospital makes to a referring physician be at fair market value for the physician’s actual services, and not take into account the volume or value of the physician’s referrals to the hospital.
The government argued in this case that Tuomey, fearing that it could lose lucrative outpatient procedure referrals to a new freestanding surgery center, entered into contracts with 19 specialist physicians that required the physicians to refer their outpatient procedures to Tuomey and, in exchange, paid them compensation that far exceeded fair market value and included part of the money Tuomey received from Medicare for the referred procedures. The government argued that Tuomey ignored and suppressed warnings from one of its attorneys that the physician contracts were “risky” and raised “red flags.”
On May 8, 2013, after a month-long trial, a South Carolina jury determined that the contracts violated the Stark Law. The jury also concluded that Tuomey had filed more than 21,000 false claims with Medicare. On Oct. 2, 2013, the trial court entered a judgment under the False Claims Act in favor of the United States for more than $237 million. The United States Court of Appeals for the Fourth Circuit affirmed the judgment on July 2, 2015.
“This case reinforces the need for hospitals to abide by the requirements of the Stark Law,” said U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina.
The case arose from a lawsuit filed on Oct. 4, 2005, by Dr. Michael K. Drakeford, an orthopedic surgeon who was offered, but refused to sign, one of the illegal contracts. The lawsuit was filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The act allows the government to intervene and take over the action, as it did in this case. Dr. Drakeford will receive approximately $18.1 million under the settlement.
“The type of abusive compensation arrangements at issue in this case is precisely what the physician self-referral law was designed to prevent,” said Inspector General Dan Levinson of of the Department of Health and Human Services-Office of the Inspector General (HHS-OIG). “Patients need and deserve to know that the hospital services they receive are the product of sound medical judgment, rather than motivated by the physician’s financial interests. The extensive litigation and settlement in this case should send a signal to the hospital industry that these tainted financial relationships simply will not be tolerated.”
As part of the settlement announced today, Tuomey will be required to retain an independent review organization to monitor any arrangements it makes with physicians or other sources of referrals for the duration of the five-year Corporate Integrity Agreement.
This case 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 $25.3 billion through False Claims Act cases, with more than $16.1 billion of that amount recovered in cases involving fraud against federal health care programs. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement, including the conduct described in the opinions of the trial and appellate courts in this case, can be reported to the Department of Health and Human Services, at 800-HHS-TIPS (800-447-8477).
The judgment and resolution of the case were the result of a coordinated effort by the Civil Division’s Commercial Litigation branch, the U.S. Attorney’s Office of the Eastern District of North Carolina and HHS-OIG.
The case is captioned United States ex rel. Drakeford v. Tuomey Healthcare System, Inc., Case No. 3:05-cv-02858 (MBS) (D.S.C.).