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• Three Swiss Banks Reach Resolutions under Justice Department's Swiss Bank Program

  2015-07-30 · District not recorded

  Read the Press Release

  Banks Will Collectively Pay Penalties of More than $8.4 Million and Continue to Cooperate with Department

  The Department of Justice announced today that PKB Privatbank AG, Falcon Private Bank AG and Credito Privato Commerciale in liquidazione SA (CPC) have reached resolutions under the department’s Swiss Bank Program.

  “Swiss banks continue to lift the veil of secrecy that for decades has assisted U.S. individuals in willfully evading their U.S. tax obligations, often through the use of sham structures and trusts established in foreign jurisdictions,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division.  “The department’s prosecutors and the IRS are actively following these leads to countries across 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:

  • Make a complete disclosure of their cross-border activities;

  • Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;

  • Cooperate in treaty requests for account information;

  • Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;

  • Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and

  • 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.

  PKB Privatbank AG was founded in 1958 and has its head office in Lugano, Switzerland.  It also maintained offices in Bellinzona, Zurich, Geneva and Lausanne, Switzerland.  PKB was aware that some U.S. taxpayers who had opened and maintained accounts at PKB were not complying with their U.S. income tax and reporting obligations.  PKB offered a variety of traditional Swiss banking services that it knew would, and in certain instances did, assist U.S. clients in concealing assets and income from the Internal Revenue Service (IRS).  These services included code name or numbered accounts and hold mail services, pursuant to which PKB would hold all mail correspondence for a particular client.  These services allowed U.S. clients to conceal their identities and minimize the paper trail associated with the undeclared assets and income they held at PKB in Switzerland.

  PKB also employed a variety of other means or conduct that it knew or should have known would assist U.S. taxpayers in concealing their PKB accounts, including:

  • referring U.S. taxpayers to an outside service provider to establish an offshore structure for purposes of holding an undeclared account at PKB;

  • assisting U.S. taxpayers in transferring assets from accounts being closed at PKB to other PKB accounts held by a non-U.S. relative or other non-U.S. parties;

  • assisting U.S. beneficial owners in transferring assets from accounts being closed at PKB to accounts at other banks in Switzerland;

  • opening accounts for U.S. taxpayers who had left other banks being investigated by the department, including UBS; and

  • providing credit cards or debit cards linked to undeclared accounts held in the name of an offshore trust, foundation or company that was beneficially owned by one or more U.S. taxpayers.

  In certain cases, U.S. clients of PKB, with the assistance of their advisors, would create an entity, such as a Liechtenstein foundation, a Panamanian corporation or a British Virgin Islands corporation, 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 PKB in the name of the entity or transfer assets from an account at another Swiss or other foreign bank.  In such cases involving a non-U.S. entity, PKB was aware that a U.S. client was the true beneficial owner of the account.  Despite this, PKB would obtain from the entity’s directors an IRS Form W-8BEN or equivalent bank document that falsely declared that the beneficial owner of the PKB account was not a U.S. taxpayer.  In some cases, the U.S. client or a related party also held a power of attorney or other signature authority with respect to the PKB account, thereby permitting the U.S. client to act directly with respect to the account and assets held therein, notwithstanding the corporate form of the accountholder.  Ultimately, the use of such offshore structures by U.S. taxpayer clients provided an additional layer of confidentiality and further assisted them in concealing their beneficial ownership of their PKB accounts and evading their U.S. tax and information reporting obligations.

  Since Aug. 1, 2008, PKB had 244 U.S.-related accounts, both declared and undeclared, with an aggregate maximum balance of approximately $328.8 million.  PKB will pay a penalty of $6.328 million.

  Falcon Private Bank AG was founded in 1965 by American International Group Inc. (AIG), and is headquartered in Zurich.  Falcon has branches in Geneva, Hong Kong and Singapore, and representative offices in Abu Dhabi, Dubai and London.  Since April 2009, Falcon has been owned by aabar Investments.  The majority shareholder of aabar is the International Petroleum Investment Company, a sovereign wealth fund owned by the government of Abu Dhabi.

  Through its managers, employees and others, Falcon knew that some U.S. taxpayers who had opened and maintained accounts at Falcon were not complying with their U.S. income tax and reporting obligations.  Falcon offered a variety of standard Swiss banking services, including hold mail and code name or numbered account services, which it knew could assist, and did assist, its U.S. clients in the concealment of assets and income from the IRS.

  The majority of Falcon’s U.S.-related accounts held since Aug. 1, 2008, were held in the names of entities or structures.  Those accounts were almost entirely held by non-U.S. structures, such as offshore corporations or trusts.  Typically, the beneficial owners of these structures created a legal entity, such as a Panamanian corporation, and paid third parties to act as the corporate “directors.”  Those third parties would then open a bank account at Falcon in the name of the entity, allowing clients the ability to conceal their undeclared accounts from the IRS.

  Falcon also:

  • accepted instructions in connection with one U.S.-related account 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;

  • issued checks, including series of checks, in amounts of less than $10,000, in seven cases, that were drawn on accounts of U.S. taxpayers or structures even though Falcon knew or had reason to know that the withdrawals were made to avoid triggering scrutiny; and

  • provided cash (310,000 Swiss francs and $250,000) at account closure in July 2011 to a U.S. citizen with signatory authority over an account held in the name of a British Virgin Island nominee company. 

  Falcon maintained accounts for four British Virgin Islands nominee companies and two Panamanian nominee companies when Falcon knew or should have known that the Forms W-8BEN and Forms A associated with those accounts were contradictory, that the beneficial owners were U.S. citizens or residents, and that the structures were used by the U.S. taxpayer-clients to help conceal their identities from the IRS.

  Since Aug. 1, 2008, Falcon also maintained three insurance segregated accounts for which it was aware that the policy holder or premium payer was a U.S. person.  By placing and maintaining their assets in accounts held in the names of insurance companies and not the actual beneficial owner of the funds (a procedure known colloquially as an “insurance wrapper”), Falcon was aware that by operation of Swiss bank secrecy laws, the U.S. client’s ownership would not be disclosed to U.S. authorities, including the IRS.

  Since Aug. 1, 2008, Falcon maintained a total of 84 U.S.-related accounts with an aggregate value of approximately $134 million.  Falcon will pay a penalty of $1.806 million.

  CPC is located in Lugano.  It was established in 1973 as a trust company and received its Swiss banking license in 2004.  On June 8, 2012, CPC’s Italian parent decided to exit the banking industry in Switzerland for reasons unrelated to U.S. tax issues and entered CPC into voluntary liquidation.  Ernst & Young AG, Zurich (Ernst & Young) was appointed as liquidator.  As of that date, with the assistance of three administrative personnel, Ernst & Young has engaged solely in carrying out the liquidation of CPC, including closing client accounts and disposing of assets pursuant to client instructions.

  CPC offered a variety of traditional Swiss banking services, including numbered accounts and hold mail service.  CPC also employed other means to assist U.S. taxpayers in concealing their undeclared accounts, including:

  • opening an account for a U.S. taxpayer who had left UBS, which was being investigated by the department;

  • opening an account for two U.S. taxpayers who had left a bank in Luxembourg because, according to their later voluntary disclosures, their external asset manager was concerned about bank secrecy in Luxembourg and indicated it would be safer to maintain an undeclared account in Switzerland; and

  • providing a cash card linked to an undeclared account.

  After March 13, 2012, and considering the implementation of the U.S. Foreign Account Tax Compliance Act (FATCA), CPC decided to discontinue all of its relationships with its U.S. customers and closed its last U.S.-related account in April 2013.

  In the period between Aug. 1, 2008, and CPC’s liquidation, CPC had 16 U.S.-related accounts with an aggregate maximum balance of approximately $71 million.  CPC will pay a penalty of $348,900.

  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 agreement underscores the partnerships forged in this new era of international collaboration and further demonstrates IRS-CI’s commitment to pursuing offshore tax compliance,” said Chief Richard Weber of IRS-Criminal Investigation (IRS-CI).  “In today’s world, criminals can no longer hide assets behind a foreign border and assume that they will not be caught.  You can be certain that IRS-CI will use the information we are gathering through these partnerships to vigorously pursue tax cheats around the world, no matter how remote the location.” 

  Acting Assistant Attorney General Ciraolo thanked the IRS, and in particular, IRS-CI and the IRS Large Business and International Division for their substantial assistance.  Ciraolo also thanked Mark W. Kotila, Carl D. Wasserman and John E. Sullivan, 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.

  View the Original Release on justice.gov

• Thirteen U.S. Soldiers Sentenced for Roles in Fraudulent Military Recruiting Bonus Scheme

  2015-07-30 · District not recorded

  Read the Press Release

  Thirteen members of the Texas Guard have received their sentences for their roles in wide-ranging bribery and fraud schemes that caused more than $170,000 in losses to the United States.  Seven of those members were sentenced this past week in Houston.   

  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.   

  • Jammie Martin, 38, of Katy, Texas, and Michelle Davis, 34, of Houston, were convicted in February of this year after a five-day trial of conspiracy, bribery, wire fraud and aggravated identity theft.  Martin was sentenced to serve 102 months in prison and Davis was sentenced to serve 57 months in prison.   

  • Vanessa Phillips, 37, of Houston, pleaded guilty to one count of conspiracy and one count of bribery and was sentenced to three years probation. 

  • Zaunmine “Orlando” Duncan, 39, of Douglasville, Georgia, pleaded guilty to one count of conspiracy, one count of bribery and one count of aggravated identity theft.  He was sentenced to serve 70 months in prison. 

  • Annika Chambers, 29, of Houston, and Lashae Hawkins, 29, of San Antonio, pleaded guilty to one count of conspiracy and one count of bribery.  Chambers was sentenced to serve six months in prison.  Hawkins received one year and one day in prison. 

  • Christopher Renfro, 27, of Houston, pleaded guilty to one count of conspiracy, one count of bribery, one count of aggravated identity theft and two counts of wire fraud.  He was sentenced to serve 36 months in prison. 

  In June, six other members of the Texas Guard were sentenced for their roles in the scheme.   

  • Michael Rambaran, 52, of Pearland, Texas, pleaded guilty to one count of conspiracy, one count of bribery and one count of aggravated identity theft.  He was sentenced to serve 60 months in prison.   

  • Edia Antoine, 29, and Ernest A. Millien III, 51, both of Houston, and Melanie Moraida, 35, of Pearland, pleaded guilty to one count of conspiracy and one count of bribery.  Each received 12 months and one day in prison.   

  Elisha Ceja, 28, of Barboursville, West Virginia, and Kimberly Hartgraves, 30, of League City, Texas, pleaded guilty to one count of conspiracy and one count of bribery.  Ceja was sentenced to serve nine months in prison and Hartgraves received probation.

  U.S. District Judge Lee H. Rosenthal in the Southern District of Texas imposed the prison terms and also ordered all 13 defendants to pay restitution.  One remaining defendant, Danielle Applin 29, of Harker Heights, Texas, who previously pleaded guilty to one count of conspiracy and one count of bribery, is scheduled to be sentenced on Sept. 2, 2015, in Houston. 

  In approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. to administer the Guard Recruiting Assistance Program (G-RAP).  Through this program, a participating soldier, known as a recruiting assistant, could receive bonus payments for referring another individual to join the National Guard.  Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account.  To participate in the program, recruiting assistants were required to create online accounts.

  According to the evidence presented at trial and in connection with various guilty pleas, Phillips and Davis, both of whom participated in the G-RAP as recruiting assistants, conspired with Martin, a recruiter, to defraud the program by falsely claiming that they were responsible for referring potential soldiers to join the National Guard.  The trial evidence showed that Martin used his position to obtain the names and Social Security numbers of potential soldiers which he provided to recruiting assistants so that they could use the information to obtain fraudulent recruiting referral bonuses.  The evidence at trial showed that, in exchange for the information, Martin, who organized and led the scheme, personally received approximately $15,000 in payments from the recruiting assistants.  This scheme resulted in more than $30,000 in losses to the National Guard Bureau.

  In a separate scheme that resulted in an additional $70,000 in losses, recruiting assistants Antoine, Millien, Moraida and Renfro admitted to paying Rambaran, a recruiter who organized and led the scheme, for the personal information of potential soldiers.  They then used that information to obtain fraudulent bonuses by falsely claiming they referred those individuals to join the National Guard.  Rambaran admitted that, in exchange for the recruit information, he personally received a total of approximately $29,000 in payments from the recruiting assistants. 

  In connection with his guilty plea in a scheme he organized and led, Duncan, a recruiter, admitted he personally received approximately $24,000 in payments from recruiting assistants in exchange for personal information of potential soldiers.  Those recruiting assistants – Ceja, Chambers, Hartgraves and Hawkins – admitted to paying Duncan for the information and using it to obtain fraudulent bonuses by falsely claiming they referred those individuals to join the National Guard.  This scheme resulted in another $70,000 in losses to the National Guard Bureau.

  The cases were investigated by the San Antonio Fraud Resident Agency of Army Criminal Investigation Command’s Major Procurement Fraud Unit.  These cases are being prosecuted by Trial Attorneys Sean F. Mulryne, Heidi Boutros Gesch and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas. 

  View the Original Release on justice.gov

• Medical Device Manufacturer NuVasive Inc. to Pay $13.5 Million to Settle False Claims Act Allegations

  2015-07-30 · District not recorded

  Read the Press Release

  California-based medical device manufacturer NuVasive Inc. has agreed to pay the United States $13.5 million to resolve allegations that the company caused health care providers to submit false claims to Medicare and other federal health care programs for spine surgeries by marketing the company’s CoRoent System for surgical uses that were not approved by the U.S. Food and Drug Administration (FDA), the Justice Department announced today.  The settlement further resolves allegations that NuVasive caused false claims by paying kickbacks to induce physicians to use the company’s CoRoent System.    

  “The Justice Department is committed to holding medical device manufacturers accountable, which includes requiring that they follow all laws designed to ensure that medical devices are safe and effective,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “It is also imperative that manufacturers not improperly influence the selection of medical devices in order to ensure that these decisions are based on the needs and interests of patients, not on a physician’s own financial interests.”   

  The United States alleged that between 2008 and 2013, NuVasive promoted the use of the CoRoent System for surgical uses that were not approved or cleared by the FDA, including for use in treating two complex spine deformities, severe scoliosis and severe spondylolisthesis.  As a result of this conduct, the United States alleged that NuVasive caused physicians and hospitals to submit false claims to federal health care programs for certain spine surgeries that were not eligible for reimbursement.       

  The settlement agreement also resolves allegations that NuVasive knowingly offered and paid illegal remuneration to certain physicians to induce them to use the CoRoent System in spine fusion surgeries, in violation of the federal Anti-Kickback Statute.  The illegal remuneration consisted of promotional speaker fees, honoraria and expenses relating to physicians’ attendance at events sponsored by a group known as the Society of Lateral Access Surgery (SOLAS).  SOLAS was allegedly created, funded and operated solely by NuVasive, despite its outward appearance of independence.       

  “Health care providers need to be free to make medical decisions without improper influence by material or incentives from manufacturers,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland.  “A medical device manufacturer violates the law if it knowingly causes physicians to use its products for purposes that are not medically reasonable and necessary and to bill federal health insurance programs.”

  “Defrauding Medicare and Medicaid by paying kickbacks to physicians and promoting uses not covered by Federal health care programs will not be tolerated,” said Special Agent in Charge Nick DiGiulio of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG).  “Settlements such as the one entered into today by NuVasive send a message to the medical device industry that such practices will be closely monitored.”

  The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act by Kevin Ryan, a former NuVasive sales representative.  The act permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.  As part of today’s resolution, Mr. Ryan will receive approximately $2.2 million.

  This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $24.8 billion through False Claims Act cases, with more than $15.9 billion of that amount recovered in cases involving fraud against federal health care programs.

  The settlement with NuVasive was the result of a coordinated effort among the U.S. Attorney’s Office of the District of Maryland, the Civil Division’s Commercial Litigation Branch and the National Association of Medicaid Fraud Control Units.  This matter was investigated by HHS-OIG, the Department of Defense’s Office of the Inspector General and the Office of Personnel Management’s Office of Inspector General, with assistance from the FDA’s Office of Chief Counsel and Office of Criminal Investigations. 

  The federal share of the civil settlement is $12,583,413.84, and the state Medicaid share of the civil settlement is $916,586.16.  The claims resolved by this settlement are allegations only, and there has been no determination of liability. 

  The lawsuit is captioned United States ex rel. Kevin Ryan v. NuVasive, Inc. (D. Md.).   

  View the Original Release on justice.gov

• United States Seeks Criminal Penalties for Man Selling Dietary Supplements Online in Violation of Court Orders

  2015-07-29 · District not recorded

  Read the Press Release

  The Department of Justice announced today that it is pursuing criminal contempt sanctions against a Livingston, Montana, man for selling dietary supplements and drugs in violation of two court orders.

  Toby McAdam, 57, is alleged to have violated a 2010 court order and an order of civil contempt issued in 2013, both of which prohibit him from selling dietary supplements and drugs.  The government alleges that McAdam has continued to sell both supplements and drugs, and failed to close down his business and online sites.

  According to documents filed today, McAdam violated the order of civil contempt by failing to shutter Internet businesses on Amazon.com, websites and a promotional Facebook page McAdam uses to promote his products.

  “Court orders must be taken seriously,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “The Civil Division’s Consumer Protection Branch will aggressively pursue those who violate court orders imposed to protect public health and prevent false product claims.”

  The criminal contempt action arises out of a prior civil action the department filed in 2010 against McAdam, who was the owner and operator of Risingsun Health, based in Livingston.  According to court documents, McAdam sold misbranded and adulterated dietary supplements and drugs that made unsupported claims to cure cancer, ADD/ADHD, epilepsy and intestinal parasites, among other things.  McAdam agreed to close his business until the U.S. Food and Drug Administration (FDA) authorized him to return to business.  No such authorization was given and McAdam was later held in civil contempt for violation of the consent decree.  The Ninth Circuit Court of Appeals later upheld the order of civil contempt against McAdam.

  Principal Deputy Assistant Attorney General Mizer commended the investigative efforts of the U.S. Postal Inspection Service and the FDA’s Seattle District Office.  This matter is filed in the District of Montana and is being handled by Trial Attorney David Sullivan of the Consumer Protection Branch.

  View the Original Release on justice.gov

• New York Man Arrested and Charged with Attempting to Provide Support to ISIL

  2015-07-29 · District not recorded

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  Arafat M. Nagi, 42, of Lackawanna, New York, was arrested and charged by criminal complaint with attempting to provide material support and resources, namely personnel, to a foreign terrorist organization, the Islamic State of Iraq and the Levant (ISIL).  The charge carries a maximum penalty of 15 years in prison and a $250,000 fine.

  Assistant Attorney General for National Security John P. Carlin, U.S. Attorney William J. Hochul Jr. of the Western District of New York and Special Agent in Charge Brian P. Boetig of the FBI’s Buffalo, New York, Division made the announcement today.

  “Our continuing fight against international terrorism today returns to Western New York,” said U.S. Attorney Hochul.  “As alleged, Arafat Nagi pledged allegiance to the Islamic State and the leader of this terrorist organization.  After buying military combat gear, he traveled twice to Turkey in an effort to help the group.  Thanks to the combined efforts of law enforcement and community members, this defendant is no longer capable of achieving his goal of joining the most despicable group of our time.”

  “The FBI has a responsibility to ensure that our law enforcement and intelligence agencies are positioned to identify existing or emerging threats,” said Special Agent in Charge Boetig.  “Joint Terrorism Task Forces (JTTFs) serve as the national platforms for deterring, detecting and disrupting terrorist machinations.  The JTTF in Buffalo relies on community engagement to gain perspectives on radicalization and to deter recruitment and the spread of radicalization messages.  We continue to call upon people to contact law enforcement if they know of someone who has been influenced by ISIL rhetoric on social media – powerful propaganda that calls for followers to commit quick and unpredictable violent acts.”

  According to the complaint, on Aug. 28, 2014, a Lackawanna community member advised the FBI that Nagi talks about violent jihad to various people in the community and it is common for Nagi to get into verbal arguments regarding his jihadi beliefs.

  Further investigation determined that Nagi pledged allegiance to ISIL and the leader of the terrorist group, Abu Bakr al Bagdadi.  The defendant traveled to Turkey on two occasions, in October 2012 and July 2014, with the intention to meet with members of the group.  Evidence revealed that prior to these trips, the defendant purchased large number of military combat items, including a tactical vest, army combat shirt, body armor, a Shahada Flag, combat boots, a backpack, burn kit, hunting knife, machete and night vision goggles.

  During follow up interviews in December 2014 and March 2015, the community member who alerted the FBI regarding Nagi’s actions stated that the defendant still possessed radical political and religious views.  According to the individual, Nagi was angry about the killing of rebels in Yemen, which he blamed on the United States; pledged an oath to ISIL leaders; expressed agreement with ISIL tactics, including the killing of innocent men, women and children; and planned to travel to Yemen and Turkey again soon.  

  Nagi will make his initial appearance this morning at 11:00 a.m. before U.S. Magistrate Judge Hugh B. Scott in the Western District of New York.

  The complaint is the culmination of an investigation by the FBI’s Buffalo JTTF, which includes the Amherst, New York, Police Department; the Buffalo Police Department; the U.S. Department of State; the Federal Protective Service; Immigration and Customs Enforcement’s Homeland Security Investigations; the Internal Revenue Service; the New York State Police; the Niagara County, New York, Sheriff’s Office; the Niagara Falls, New York, Police Department; the Customs and Border Protection’s U.S. Border Patrol; and the U.S. Customs and Border Protection/Air and Marine Branch.  Additional assistance was provided by the New York State Attorney General’s Office.

  The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

  View the Original Release on justice.gov

• Congressman Chaka Fattah and Associates Charged with Participating in Racketeering Conspiracy

  2015-07-29 · District not recorded

  Read the Press Release

  A member of Congress and four of his associates were indicted today for their roles in a racketeering conspiracy involving several schemes that were intended to further the political and financial interests of the defendants and others by, among other tactics, misappropriating hundreds of thousands of dollars of federal, charitable and campaign funds.   

  Congressman Chaka Fattah Sr., 58, of Philadelphia; lobbyist Herbert Vederman, 69, of Palm Beach, Florida; Fattah’s Congressional District Director Bonnie Bowser, 59, of Philadelphia; and Robert Brand, 69, of Philadelphia; and Karen Nicholas, 57, of Williamstown, New Jersey, were charged today in a 29-count indictment with participating in a racketeering conspiracy and other crimes, including bribery; conspiracy to commit mail, wire and honest services fraud; and multiple counts of mail fraud, falsification of records, bank fraud, making false statements to a financial institution and money laundering.

  Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania, Special Agent in Charge Edward J. Hanko of the FBI’s Philadelphia Division and Special Agent in Charge Akeia Conner of the Internal Revenue Service-Criminal Investigation (IRS-CI) Philadelphia Field Office made the announcement.

  “As charged in the indictment, Congressman Fattah and his associates embarked on a wide-ranging conspiracy involving bribery, concealment of unlawful campaign contributions and theft of charitable and federal funds to advance their own personal interests,” said Assistant Attorney General Caldwell.  “When elected officials betray the trust and confidence placed in them by the public, the department will do everything we can to ensure that they are held accountable.  Public corruption takes a particularly heavy toll on our democracy because it undermines people’s basic belief that our elected leaders are committed to serving the public interest, not to lining their own pockets.”

  “The public expects their elected officials to act with honesty and integrity,” said U.S. Attorney Memeger.  “By misusing campaign funds, misappropriating government funds, accepting bribes, and committing bank fraud, as alleged in the Indictment, Congressman Fattah and his co-conspirators have betrayed the public trust and undermined faith in government.”

  “These crimes and the subsequent elaborate cover-up constitute an egregious breach of public trust,” said Special Agent in Charge Hanko.  “It is the duty of the FBI, IRS and Department of Justice to investigate and prosecute those who violate this trust and put personal gain above public service.”

  “Public corruption by our elected officials and their associates undermines the American public’s confidence in our government,” said Special Agent in Charge Conner.  “When our elected officials and their associates violate the law and create sophisticated financial schemes to enrich themselves, the Internal Revenue Service-Criminal Investigation, will work diligently with our fellow law enforcement partners to restore the public’s trust.”

  Specifically, the indictment alleges that, in connection with his failed 2007 campaign to serve as mayor of Philadelphia, Fattah and certain associates borrowed $1 million from a wealthy supporter and disguised the funds as a loan to a consulting company.  After he lost the election, Fattah allegedly returned $400,000 to the donor that the campaign had not used, and arranged for Educational Advancement Alliance (EAA), a non-profit entity that he founded and controlled, to repay the remaining $600,000 using charitable and federal grant funds that passed through two other companies, including one run by Brand.  To conceal the contribution and repayment scheme, the defendants and others allegedly created sham contracts and made false entries in accounting records, tax returns and campaign finance disclosure statements. 

  In addition, the indictment alleges that after his defeat in the mayoral election, Fattah sought to extinguish approximately $130,000 in campaign debt owed to a political consultant by agreeing to arrange for the award of federal grant funds to the consultant.  According to the allegations in the indictment, Fattah directed the consultant to apply for a $15 million grant, which he did not ultimately receive, on behalf of a then non-existent non-profit entity.  In exchange for Fattah’s efforts to arrange the award of the funds to the non-profit, the consultant allegedly agreed to forgive the debt owed by the campaign.

  The indictment further alleges that Fattah misappropriated funds from his mayoral and congressional campaigns to repay his son’s student loan debt.  To execute the scheme, Fattah and Bowser allegedly arranged for his campaigns to make payments to a political consulting company, which the company then used to lessen Fattah’s son’s student loan debt.  According to the allegations in the indictment, between 2007 and 2011, the consultant made 34 successful loan payments on behalf of Fattah’s son, totaling approximately $23,000. 

  In another alleged scheme, beginning in 2008, Fattah communicated with individuals in the legislative and executive branches in an effort to secure for Vederman an ambassadorship or an appointment to the U.S. Trade Commission.  In exchange, Vederman provided money and other items of value to Fattah.  As part of this scheme, the indictment alleges that the defendants sought to conceal an $18,000 bribe payment from Vederman to Fattah by disguising it as a payment for a car sale that never actually took place.

  Finally, the indictment alleges that Nicholas obtained $50,000 in federal grant funds that she claimed would be used by EAA to support a conference on higher education.  The conference never took place.  Instead, Nicholas used the grant funds to pay $20,000 to a political consultant and $10,000 to her attorney, and wrote several checks to herself from EAA's operating account.

  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 IRS-CI.  Assistance was also provided by the Department of Justice’s Office of the Inspector General, the NASA Office of Inspector General and the Department of Commerce’s Office of Inspector General.  The case is being prosecuted by Trial Attorneys Eric L. Gibson, T. Patrick Martin and Jonathan Kravis of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Paul L. Gray of the Eastern District of Pennsylvania.  Trial Attorney Bob Dalton of the Criminal Division’s Organized Crime and Gang Section also provided assistance in this case. 

  Fattah et al. Indictment.pdf (5.96 MB)

  View the Original Release on justice.gov

• Alaskan Physician Convicted of Distributing and Receiving Child Pornography

  2015-07-29 · District not recorded

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  A federal jury convicted an Alaskan physician of distributing and receiving child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Karen. L. Loeffler of the District of Alaska.

  Greg Alan Salard, 54, of Wrangell, Alaska, was found guilty after a six-day trial before U.S. District Judge Timothy Burgess of the District of Alaska.  Sentencing has been scheduled for Oct. 9, 2015, in Juneau, Alaska.

  According to evidence presented at trial, in June 2014, during an FBI investigation concerning the trading of child pornography using peer-to-peer (P2P) software, investigators discovered that an Internet Protocol (IP) address linked to Salard was used to share files of known child pornography and that one of those files contained a video of child pornography.  The evidence also showed that a laptop computer subsequently seized from Salard’s home contained the same P2P software used to share the video.

  Testimony regarding a forensic examination of the laptop demonstrated that the computer contained a child pornography video as well as evidence of hundreds of other files with names indicative of child pornography; the jury reviewed the contents of 11 of those files.  The testimony also showed that multiple searches had been run on the laptop for a term associated with child pornography, and that videos of child pornography had been viewed on the computer.  Finally, the evidence introduced at trial revealed that a program designed to erase or “wipe” computer files had been used multiple times, including on the morning the search warrant was executed.

  This case was investigated by the FBI, with assistance from the U.S. Forest Service, Petersburg, Alaska Police Department, Wrangell, Alaska Police Department and Juneau, Alaska, Police Department.  The case is being prosecuted by Trial Attorney Leslie Williams Fisher of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Kyle Reardon of the District of Alaska.

  This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorney’s Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

  View the Original Release on justice.gov

• Member of Lucchese Organized Crime Family Sentenced to 360 Months in Prison for Racketeering and Other Crimes

  2015-07-28 · District not recorded

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  A member of the Lucchese organized crime family of La Cosa Nostra (LCN) was sentenced today to serve 360 months in prison for participating in a racketeering conspiracy and related offenses.  Three other members of the conspiracy are scheduled to be sentenced later this week.

  Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Paul J. Fishman of the District New Jersey made the announcement. 

  “Nicodemo Scarfo and his associates tried to take La Cosa Nostra corporate, using traditional, strong-arm mob tactics to take over a publicly traded company and loot it like a personal piggy bank,” said Assistant Attorney General Caldwell.  “The Justice Department will fight organized crime wherever it may surface – from back alleys to public board rooms – to ensure that crime does not pay.”

  “Scarfo and his crew gave new meaning to the term ‘corporate takeover,’ pushing out the legitimate leadership of a publicly traded company and then looting it,” said U.S. Attorney Fishman.  “They used false SEC filings, phony consulting agreements and more traditional mob methods to steal $12 million from the company’s shareholders.  That’s a risk that investors should never have to take.”

  Nicodemo S. Scarfo, 50, of Galloway, New Jersey; Salvatore Pelullo, 48, of Philadelphia, an associate of the Philadelphia and Lucchese LCN families; William Maxwell, 56, of Houston, a Texas attorney; and John Maxwell, 63, of Dallas, were convicted in July 2014, after a six-month trial, of racketeering conspiracy and related offenses, including securities fraud, wire fraud, mail fraud, bank fraud, extortion, money laundering and obstruction of justice. 

  In addition to sentencing Scarfo to prison, U.S. District Judge Robert B. Kugler ordered Scarfo to forfeit his interest in certain properties and to pay restitution in the amount of approximately $14 million.  Pelullo, William Maxwell and John Maxwell are scheduled to be sentenced later this week. 

  According to evidence presented at trial, since 1989, Scarfo has been a member of the Lucchese family.  As a member, he was required to earn money and participate in the affairs of the Lucchese family.

  The trial evidence showed that, in April 2007, Scarfo, Pelullo and others conspired to take control of FirstPlus Financial Group Inc. (FPFG), a publicly-held company in Texas, by using threats of economic harm to intimidate and remove FPFG’s management and board of directors, and to replace them with persons beholden to Scarfo and Pelullo, including William Maxwell and his brother, John Maxwell.  The evidence introduced at trial further demonstrated that, once the takeover had occurred, FPFG’s new board of directors named William Maxwell as “special counsel” to FPFG and John Maxwell as the company’s CEO, positions that they used to funnel approximately $12 million to themselves, Scarfo and Pelullo through fraudulent legal services and consulting agreements.  According to evidence presented at trial, Scarfo and Pelullo used their illicit gains to fund extravagant purchases, including an $850,000 yacht, a luxury home, a Bentley automobile and thousands of dollars in jewelry. 

  The indictment also named as co-conspirators Nicodemo D. Scarfo, or Scarfo Sr., the imprisoned former boss of the Philadelphia LCN family, and Vittorio Amuso, the imprisoned boss of the Lucchese LCN family.  Five other defendants – Cory Leshner, Howard Drossner, John Parisi, Todd Stark and Scarfo’s wife, Lisa Murray-Scarfo – previously pleaded guilty to various charges related to their roles in the conspiracy. 

  The case was investigated by the FBI’s Newark, New Jersey, Division, with assistance from the U.S. Department of Labor-Office of Inspector General’s Office of Labor Racketeering and Fraud Investigations New York Region, the FBI’s Philadelphia Division and the Bureau of Alcohol, Tobacco, Firearms and Explosives.  The case is being prosecuted by Trial Attorney Adam L. Small of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Steven D’Aguanno and Howard Wiener of the District of New Jersey.

  View the Original Release on justice.gov

• Justice Department Announces Departure of Criminal Division Leader Marshall L. Miller

  2015-07-28 · District not recorded

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  After more than 13 years of service as a federal prosecutor, including 16 months as Principal Deputy Assistant Attorney General and Chief of Staff of the Criminal Division, Marshall L. Miller will leave the Justice Department.  His last day will be Friday, July 31, 2015.  David Bitkower has been selected to assume the position following Miller’s departure.

  “Marshall Miller is an outstanding attorney, a remarkable public servant, and an unwavering advocate for the principles of justice,” said Attorney General Loretta E. Lynch.  “Throughout his career in law enforcement – from the Eastern District of New York to Washington, D.C. – he has taken on some of America's most pressing challenges.  He has strengthened our country and empowered our communities.  And he has demonstrated his commitment to fair application of the law.  I commend him for his extraordinary service to the Department of Justice and to the American people, and I look forward to all that he will continue to achieve in the days and years ahead.”

  “Throughout his career as a prosecutor, Marshall has inspired his colleagues with his unfailing commitment to the pursuit of justice,” said Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.  “He has been a real force in the Criminal Division, and has had a strong voice in all the key decisions we have made during my tenure.  While Marshall’s departure is a great loss to the department, I am grateful to have someone with David’s experience, intellect and dedication to help guide me in leading the Criminal Division.”

  Miller was appointed to his current position on April 17, 2014, from the U.S. Attorney’s Office of the Eastern District of New York, which Miller joined in 1999 as an Assistant U.S. Attorney.  While in the U.S. Attorney’s Office, Miller served as Chief and Deputy Chief of the Criminal Division, Chief and Deputy Chief of the Violent Crimes and Terrorism Section and Deputy Chief of the General Crimes Section.  He conducted and supervised numerous significant and complex investigations and prosecutions, including cases involving terrorism, organized crime, violent crime, political corruption and financial fraud.

  For his work, Miller received a number of the department’s highest awards, including the Attorney General’s Award for Excellence in Furthering the Interests of National Security and the Director’s Award for Superior Performance.  He also received the Henry L. Stimson Medal from the New York City Bar Association, the National Intelligence Merit Award from the Director of National Intelligence and a Federal Prosecutor of the Year Award from the Federal Law Enforcement Foundation.  In 2009, Miller was recognized for the most outstanding performance by an Assistant U.S. Attorney by the National Association of Former U.S. Attorneys.

  Miller has also significantly engaged in the teaching of law.  He has served as a professor at New York University (NYU) School of Law, where he founded the NYU Federal Prosecution Clinic at the Eastern District of New York.  He also served as an adjunct professor at Fordham University School of Law.  

  Before joining the department, Miller clerked for U.S. District Judge Allyne R. Ross of the Eastern District of New York.  He earned both his undergraduate and law degrees from Yale University. 

  Since April 2013, David Bitkower has served as a Deputy Assistant Attorney General of the Criminal Division, overseeing the Computer Crime and Intellectual Property Section, the Human Rights and Special Prosecutions Section and the Organized Crime and Gang Section.  He has represented the Department of Justice at Congressional hearings and in international fora, including the United Nations Committee against Torture in Geneva.   

  Prior to joining the Criminal Division, Bitkower was an Assistant U.S. Attorney in the Eastern District of New York.  He served most recently as the first Chief of the National Security and Cybercrime Section, and previously served as Chief and Deputy Chief of the Violent Crimes and Terrorism Section.  From 2008 to 2009, Bitkower also served on detail to the Justice Department’s Counterterrorism Section of the National Security Division and to the President’s Guantanamo Bay Review Task Force. 

  Bitkower has received several notable awards, including the Attorney General’s Award for Exceptional Service.  Before joining the Department of Justice, Bitkower was a law clerk for U.S. Circuit Judge Pierre N. Leval of the Second Circuit Court of Appeals and for U.S. District Judge Leonard B. Sand of the Southern District of New York.  He is a graduate of Yale University and Harvard Law School, where he served as an editor of the Harvard Law Review.

  View the Original Release on justice.gov

• Georgia Man Sentenced to 15 Years in Prison for Attempting to Provide Material Support to ISIL

  2015-07-28 · District not recorded

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  Leon Nathan Davis, 37, of Augusta, Georgia, was sentenced today to 15 years in federal prison by U.S. District Judge J. Randal Hall of the Southern District of Georgia for attempting to provide material support to a designated foreign terrorist organization, namely, the Islamic State of Iraq and the Levant (ISIL).  Davis pleaded guilty to an information charging him with attempting to provide material support to ISIL on May 27, 2015.  His prison term will be followed by a lifetime of supervised release.

  Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Edward J. Tarver of the Southern District of Georgia and Special Agent in Charge J. Britt Johnson of the FBI’s Atlanta Field Office made the announcement.

  “It is the obligation of all nations to serve as responsible global citizens and stem the flow of their residents from traveling abroad as foreign terrorist fighters engaged in the violence and oppression that ISIL is inflicting everywhere it operates,” said Assistant Attorney General Carlin.  “One of the National Security Division’s top priorities remains stemming the flow of foreign fighters and bringing to justice those who seek to provide material support to foreign designated terrorist organizations.”

  “This defendant planned for over a year to join, assist and fight alongside an enemy of the United States,” said U.S. Attorney Tarver.  “His actions were criminal and he now faces a lengthy federal prison sentence.  I commend the hard work of the federal and local agents who work to keep our nation safe from terrorist organizations such as ISIL.” 

  “The details and federal charges in this case provide a clear illustration of the problems that we face as a nation when our own citizens become radicalized in support of a foreign terrorist organization such as ISIL,” said Special Agent in Charge Johnson.  “Today’s sentencing of Mr. Davis in federal court, however, clearly illustrates the consequences.  The FBI will continue to partner with its various local, state and other federal law enforcement and intelligence agencies as we remain vigilant in identifying, investigating and presenting for prosecution those individuals who would pose a threat to our national security in this manner.”

  Evidence produced at the guilty plea and sentencing hearings revealed that for more than a year, an FBI-led team investigated Davis’ attempts to join an overseas designated foreign terrorist organization.  Davis was arrested at the Atlanta Hartfield-Jackson Airport in October 2014 on a parole violation, after he had purchased a ticket to fly to Turkey and then traveled from Augusta to the Atlanta airport.  Davis has been in custody since his arrest.

  Assistant Attorney General Carlin and U.S. Attorney Tarver commended the FBI-led Joint Terrorism Task Force, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Georgia Board of Pardons and Paroles for their work on this case.  Carlin and Tarver also expressed gratitude to the U.S. Customs and Border Protection Service and the Atlanta Police Department for their contributions to the investigation.

  The case was prosecuted by Assistant U.S. Attorneys Charlie Bourne and Nancy Greenwood of the Southern District of Georgia and Trial Attorney Clement McGovern of the Justice Department’s National Security Division.  

  View the Original Release on justice.gov

• Florida Resident Charged with Attempting to Use Weapon of Mass Destruction

  2015-07-28 · District not recorded

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  Defendant, Allegedly Inspired by ISIL, Attempted to Obtain Weapons and Explosives to Conduct Attacks

  Harlem Suarez, also known as Almlak Benitez, 23, of Key West, Florida, was charged by a criminal complaint with attempting to use a weapon of mass destruction against a person or property within the United States.

  Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.

  “According to the complaint, Harlem Suarez, a self-professed ISIL adherent, knowingly attempted to use a weapon of mass destruction - a backpack bomb - in the United States,” said Assistant Attorney General Carlin.  “Stopping attacks on our homeland by those inspired or directed by designated foreign terrorist organizations is the highest priority of the National Security Division.”

  “The top priority of the Department of Justice is to protect the security of the American people,” said U.S. Attorney Ferrer.  “The U.S. Attorney’s Office, in collaboration with the FBI, works tirelessly to advance this mission by continuing to thwart home-grown acts of terrorism.”

  “There is no room for failure when it comes to investigating the potential use of a weapon of mass destruction,” said Special Agent in Charge Piro.  “The FBI and our local, state and federal partners work around the clock to prevent such catastrophic weapons from being used against our citizens.  Even so, we ask the public to be vigilant and report suspicious activity to law enforcement.”

  According to the complaint, in April 2015, Suarez came to the attention of the FBI due to Facebook posts that contained extremist rhetoric and promoted the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.

  The complaint further alleges that Suarez told the confidential source that he wanted to make a “timer bomb.”  Suarez purchased components for this device, which was to contain galvanized nails, be concealed in a backpack and be remotely detonated by a cellphone.  Suarez intended to bury the device at a public beach in Key West and then detonate it.

  On July 27, 2015, Suarez took possession of an inert device and was arrested.

  Assistant Attorney General Carlin and U.S. Attorney Ferrer commended the investigative efforts of the FBI,  members of the South Florida Joint Terrorism Task Force, the Bureau of Alcohol, Tobacco, Firearms, and Explosives , U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI), the Key West Police Department, the Monroe County Sheriff’s Office and the Palm Beach County Sheriff’s Office.  This case is being prosecuted by Assistant U.S. Attorneys Marc S. Anton and Karen E. Gilbert and Trial Attorneys Clement McGovern and Michael Dittoe of the Justice Department’s Counterterrorism Section.

  A complaint is only an accusation and a defendant is presumed innocent unless and until proven guilty. 

  View the Original Release on justice.gov

• Florida Man Charged with Bribing Officials at Georgia Military Base

  2015-07-28 · District not recorded

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  A former agent for a large national trucking company was indicted for paying bribes to officials at the Marine Corps Logistics Base (MCLB) in Albany, Georgia, in order to obtain lucrative freight hauling business from the base.  Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia made the announcement.

  Ivan Dwight Brannan, 60, of Jupiter, Florida, is charged by indictment with one count of conspiracy to bribe a public official and three counts of bribery of a public official. 

  From 1999 to 2013, Brannan worked as a broker for a national trucking company that delivers both commercial and military freight.  According to the indictment, he was paid a commission for each delivery that he arranged.

  According to the allegations in the indictment, from 2006 to 2012, Brannan provided cash and other items of value to Mitchell Potts, a former Traffic Office Supervisor for the Defense Logistics Agency (DLA) at MCLB-Albany, for the purpose of ensuring that Brannan’s trucking company client was awarded business at MCLB-Albany.  The indictment also alleges that Brannan directed truck driver David Nelson to provide cash to both Potts and Jeffrey Philpot, another official in the DLA Traffic Office at MCLB-Albany, to ensure that the trucking company continued to receive MCLB-Albany’s business.  According to the indictment, over the course of the conspiracy Nelson paid at least $120,000 in bribes to Potts and Philpot at Brannan’s behest.   

  In October 2014, Philpot, Nelson and Potts each pleaded guilty to one count of bribery of a public official.  They are scheduled to be sentenced on Sept. 29, 2015. 

  The charges and allegations in an indictment are merely accusations.  A defendant is presumed innocent unless and until proven guilty. 

  The case is being investigated by the U.S. Army Criminal Investigation Command, the Naval Criminal Investigative Service and the Defense Criminal Investigative Service.  The case is being prosecuted by Trial Attorney John Keller of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia. 

  View the Original Release on justice.gov

• Former Security Company Operator Sentenced to Prison for Employment Tax Fraud

  2015-07-27 · District not recorded

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  A former Washington, D.C., businessman was sentenced today to serve three and one-half years in prison for employment tax fraud, announced Acting Deputy Assistant Attorney General Larry J. Wszalek of the Justice Department’s Tax Division. 

  Jeffrey Norman Jackson, who currently resides in Maryland, previously pleaded guilty to failing to file federal employment tax returns and failing to pay over approximately $600,000 in employment taxes.  In addition to 42 months in prison, Jackson was sentenced to three years of supervised released, ordered to perform 360 hours of community service and ordered to pay $595,687.39 in restitution to the Internal Revenue Service (IRS).

  “Business owners have a responsibility to their employees and the IRS to honestly collect, account for and pay over employment taxes to the IRS,” said Acting Deputy Assistant Attorney General Wszalek.  “As evidenced by today’s sentencing, employers like Jeffrey Jackson, who willfully evade their employment tax obligations, will be prosecuted to the fullest extent and face lengthy terms of imprisonment and substantial financial penalties.”

  According to court documents, Jackson operated Innovative Security Services LLC (Innovative) in the District of Columbia.  From 2006 through 2010, Jackson controlled the company’s finances and was responsible for filing the Employer’s Quarterly Federal Tax Returns (IRS Forms 941).  He was also responsible for paying over to the IRS the federal income, social security and Medicare taxes, known as Federal Insurance Contributions Act (FICA) taxes, that were withheld from the wages of Innovative’s employees.

  Instead of paying the taxes that were due and owing to the IRS over the four-year period, Jackson diverted money from the company for his personal use.  He used company funds to pay rent and buy furniture for his personal residence, spent more than $21,000 at the men’s clothing store Everett Hall and made other personal expenditures at Nordstrom and Tiffany & Co.  Jackson also paid more than $10,000 for his gym membership and personal training sessions and paid $10,000 to his childcare provider. 

  Jackson has a previous federal conviction related to the theft of employment taxes.  In 2006, he pleaded guilty to bankruptcy fraud after he stole $373,429.57 from a bank account that was set up to pay the payroll taxes for Jackson’s former company, Unlimited Security Inc., while that company was proceeding through Chapter 11 bankruptcy.  In that case, Jackson used the stolen funds to support a boxing promotion business that he controlled and to pay professional boxers. 

  Acting Deputy Assistant Attorney General Wszalek commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorney Melissa S. Siskind of the Tax Division, who prosecuted the case.  He also thanked the U.S. Attorney’s Office of the District of Columbia for their substantial assistance.

  View the Original Release on justice.gov

• Detroit-Area Home Health Care Agency Owners Convicted in $33 Million Medicare Fraud Scheme

  2015-07-27 · District not recorded

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  Two home health care agency owners were convicted today of various offenses based on their roles in a $33 million Medicare fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

  Zafar Mehmood, 49, of Ypsilanti, Michigan, was convicted of conspiracy to commit health care fraud, four counts of health care fraud, one count of conspiracy to pay and receive health care kickbacks, one count of conspiracy to commit money laundering and two counts of money laundering.  Mehmood also was convicted of two counts of obstruction of justice related to his theft of evidence from an HHS-OIG facility.  Badar Ahmadani, 48, also of Ypsilanti, was convicted of one count of conspiracy to commit health care fraud and one count of conspiracy to pay and receive health care kickbacks. 

  According to evidence presented at trial, from 2006 through 2011, Mehmood and Ahmadani participated in a scheme in which they obtained patients by paying cash kickbacks to recruiters, who in turn paid cash to patients to induce them to sign up for home health care with Mehmood’s companies: Access Care Home Care Inc., Patient Care Home Care Inc., Hands On Healing Home Care Inc. and All State Home Care Inc.  The evidence also showed that the defendants paid kickbacks to physicians to refer patients to the defendants’ companies for unnecessary home health care services.

  The evidence introduced at trial further established that the defendants and their co-conspirators falsified records to make it appear as if the patients qualified for and received the services for which Medicare was billed over $33 million during the course of the conspiracy.  The evidence also showed that Mehmood used a co-conspirator to launder the proceeds of the fraud through shell companies under his control.          

  Trial evidence also demonstrated that, while visiting an HHS-OIG facility during pretrial release, Mehmood stole documents and materials that law enforcement authorities seized during the execution of search warrants at his companies.  Law enforcement subsequently recovered the missing documents and materials during the execution of a search of Mehmood’s jail cell.

  The investigation was conducted by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, a joint effort of the U.S. Attorney’s Office of the Eastern District of Michigan and the Criminal Division’s Fraud Section.  This case was prosecuted by Trial Attorneys Niall M. O’Donnell and A. Brendan Stewart, and Senior Trial Attorney Nathan Dimock, Assistant Chief Jennifer L. Saulino, Assistant Chief Catherine K. Dick and Deputy Chief Gejaa T. Gobena 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 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 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.

  View the Original Release on justice.gov

• Owner of Detroit Home Health Care Companies Sentenced to 80 Months in Prison for Role in $12.6 Million Fraud Scheme

  2015-07-24 · District not recorded

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  A Michigan resident was sentenced to 80 months in prison late yesterday for his leading role in a $12.6 million Medicare fraud and tax fraud scheme.  Eleven other individuals have been convicted in this case.

  Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Chicago Regional Office and Special Agent in Charge Jarod Koopman of the Internal Revenue Service-Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.

  Mohammed Sadiq, 67, of Oakland County, Michigan, pleaded guilty on March 13, 2015, to one count of health care fraud and one count of filing a false tax return.  In addition to imposing the prison term, U.S. District Judge Denise Page Hood of the Eastern District of Michigan ordered Sadiq to pay $14.1 million in restitution and entered a forfeiture judgment for the same amount, which represents the proceeds traceable to his criminal conduct.

  Sadiq owned and directed operations at two home health care companies in Detroit.  In connection with his guilty plea, Sadiq admitted that, working with co-conspirators, he billed Medicare for home health services that were not provided.  Sadiq also admitted to paying kickbacks to patient recruiters in order to obtain the information of Medicare beneficiaries, which he then used to bill Medicare for services that were not medically necessary or were not provided at all.  Sadiq further admitted that he created fake patient files to fool a Medicare auditor by making it appear as if home health services were provided and medically necessary.  Medicare paid $12.6 million for these services.

  In connection with his guilty plea, Sadiq also admitted that he received proceeds of the fraud through bank accounts that he controlled, that he withdrew substantial sums for his personal use and that he failed to report these amounts on his individual federal income tax return in 2008.  In total, Sadiq admitted that he owes approximately $1.5 million in taxes, interest and penalties for tax years 2008 through 2010.

  This case was investigated by the FBI, HHS-OIG and IRS-CI, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Michigan.  The case is being prosecuted by Trial Attorneys William Kanellis, Christopher Cestaro, Brooke Harper and Elizabeth Young of the Criminal Division’s Fraud Section, as well as Assistant U.S. Attorney Patrick Hurford of the Eastern District of Michigan.

  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,300 defendants who have collectively billed the Medicare program for more than $7 billion.  In addition, HHS’ Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

  View the Original Release on justice.gov

• On the 25th Anniversary of the ADA, the Justice Department Signs Agreement to Bring the Promise of the ADA to Lumpkin County, Georgia

  2015-07-23 · District not recorded

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  The Department of Justice announced an agreement today under its Project Civic Access (PCA) initiative with Lumpkin County, Georgia, to address accessibility issues in the county’s services, programs, activities and facilities under Title II of the Americans with Disabilities Act (ADA). The department’s celebration of the 25th anniversary of the ADA – ADA 25: Advancing Equal Access – culminates today in a convening of ADA pioneers, advocates, persons with disabilities and dignitaries to commemorate the enactment of this historic civil rights law.

  PCA was initiated to ensure that persons with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society.  As part of the PCA initiative, Justice Department investigators, attorneys and architects survey state and local government facilities, services and programs in communities across the country to identify the modifications needed for compliance with ADA requirements.

  Today’s agreement will allow people with disabilities to participate in and benefit from the services provided in Lumpkin County’s facilities including the Justice Center, Mental Health Center, Law Enforcement Center, Senior Center, Community Pavilion, the Health Department, the Administration Building, the Animal Shelter and library.  Lumpkin County will renovate and remediate everything from entrances, service areas, counters, restrooms and parking so that people with disabilities can get into county buildings and use the services and programs offered by the county in each of its buildings. 

  “The Americans with Disabilities Act was signed into law on July 26th 1990,” said head of the Civil Rights Division, Principal Deputy Assistant Attorney General Vanita Gupta.  “Today, as we gather to remember, honor, and celebrate the ADA’s 25th Anniversary, it is fitting that we sign this agreement.  It reminds us that when it comes to the civil rights of persons with disabilities, the work never stops.  I congratulate Lumpkin County, who has worked cooperatively with the department to come to this agreement and has demonstrated its commitment to serve its citizens with disabilities.”

  In addition, Lumpkin County will take several important steps to improve access for individuals with disabilities, including:

  • Ensuring that all of its webpages comply with the Web Content Accessibility Guidelines version 2.0;

  • Officially recognizing Georgia telephone relay service as a key means of communicating with individuals who are deaf, are hard-of-hearing or have speech impairments and training staff in using the relay service for telephone communications;

  • Surveying other facilities and programs and making modifications under the supervision of an Independent Licensed Architect to achieve full compliance with ADA requirements;

  • Ensuring that buildings and outdoor facilities that will be built or altered by or on behalf of the county comply with the ADA’s architectural requirements; and

  • Providing information for interested persons with disabilities concerning the existence and location of the county’s accessible services, activities and programs.

  For more information about the ADA, today’s agreement or the PCA, individuals may access the ADA Web page at http://www.ada.gov/civicac.htm or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).

  View the Original Release on justice.gov

• Miami-Area Pharmacy Owner Pleads Guilty to Role in $1.8 Million Medicare Fraud Scheme

  2015-07-23 · District not recorded

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  A Miami-area pharmacy owner pleaded guilty today for his role in the submission of more than $1.8 million in fraudulent claims to Medicare.

  Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

  Evelio Fernandez Penaranda, 47, of Miami, Florida, pleaded guilty before U.S. Magistrate Judge Chris M. McAliley of the Southern District of Florida to one count of health care fraud.  Sentencing has been scheduled for Oct. 8, 2015.

  Penaranda owned Naranja Pharmacy Inc.  In connection with his guilty plea, Penaranda admitted that, between May 2013 and March 2014, Naranja Pharmacy submitted fraudulent claims to Medicare for prescription drugs that were not prescribed by physicians, not medically necessary and not provided to Medicare beneficiaries.  According to admissions made in connection with Penaranda’s guilty plea, Naranja Pharmacy submitted these false claims by obtaining and using the unique identifying information of Medicare beneficiaries and doctors without their consent.

  Penaranda admitted that he controlled Naranja Pharmacy’s bank accounts, and that he transferred the payments received from Medicare to himself and his accomplices.  According to admissions made in connection with Penaranda’s plea, during the course of the scheme, Naranja Pharmacy submitted to Medicare over $1.8 million in false claims for prescription drugs, and Medicare paid 100 percent of the claims.

  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 Southern District of Florida.  The case is being prosecuted by Trial Attorney Nicholas E. Surmacz 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 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 Team, go to: www.stopmedicarefraud.gov.

  Fernandez Penaranda Plea Agreement

  View the Original Release on justice.gov

• Massachusetts Man Charged in Connection with Plot to Engage in Terrorism Plot

  2015-07-23 · District not recorded

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  An Adams, Massachusetts, man has been charged in an indictment in connection with a plot to engage in terrorism on behalf of ISIL.  The announcement was made by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Special Agent in Charge Vincent Lisi of the FBI’s Boston Division.

  Alexander Ciccolo, aka Ali Al Amriki, 23, was charged by a grand jury in U.S. District Court in Springfield, Massachusetts, with one count of being a convicted felon in possession of firearms and one count of assault with a deadly weapon and causing bodily injury to a person assisting an officer of the United States in the performance of official duties.  The latter charge stems from Ciccolo’s alleged attack of a nurse during a jail intake process after his arrest.

  According to evidence presented at a previous detention hearing, on July 4, 2015, Ciccolo took delivery of four firearms which he had ordered from a person who was cooperating with members of the Western Massachusetts Joint Terrorism Task Force, and who had been communicating with Ciccolo about Ciccolo’s plans to engage in a terrorist act.  Ciccolo was arrested immediately after taking delivery of the firearms, which included a Colt AR-15 .223 caliber rifle, a SigArms Model SG550-1 556 rifle, a Glock 17-9 mm pistol and a Glock 20-10 mm pistol.  Ciccolo had previously been convicted of a crime punishable by more than a year in jail and therefore was prohibited from possessing firearms.

  The government alleged that Ciccolo is a supporter of the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization.  Ciccolo had spoken with a cooperating witness in recorded conversations about his plans to commit acts of terrorism inspired by ISIL, including setting off improvised explosive devices, such as pressure cookers filled with black powder, nails, ball bearings and glass, in places where large numbers of people congregate, such as college cafeterias.  Prior to his arrest, agents had observed Ciccolo purchase a pressure cooker similar to that used in the Boston Marathon bombings.

  During a search of Ciccolo’s apartment after he was arrested, agents found several partially constructed “Molotov cocktails.”  These incendiary devices contained what appeared to be shredded Styrofoam soaking in motor oil.  Ciccolo had previously stated that this mixture would cause the fire from the exploded devices to stick to people’s skin and make it harder to put the fire out.

  Shortly after his arrest, while he was being processed at the Franklin County Correctional Center, Ciccolo stabbed a nurse with a pen, leaving a bloody gash on the top of the nurse’s head.

  Based on these alleged facts and evidence presented at Ciccolo’s detention hearing on July 14, 2015, Magistrate Judge Katherine A. Robertson of the District of Massachusetts ordered that Ciccolo be detained until trial.

  The charge of being a felon in possession of firearms provides a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000.  The charge of assault with a dangerous weapon causing bodily injury provides a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000.  Actual sentences for federal crimes are typically less than the maximum penalties.  Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

  This investigation is being conducted by the Western Massachusetts Joint Terrorism Task Force.  The case is being prosecuted by Assistant U.S. Attorneys Kevin O’Regan and Deepika Shukla of the District of Massachusetts and the National Security Division’s Counterterrorism Section.

  The details contained in the indictment are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

  Ciccolo Indictment

  View the Original Release on justice.gov

• Justice Department Announces Swiss Bank Program Resolutions with Two More Banks

  2015-07-23 · District not recorded

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  The Department of Justice announced today that SB Saanen Bank AG and Privatbank Bellerive AG have reached resolutions under the department’s Swiss Bank Program.

  The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States.  Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts.  Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

  Under the program, banks are required to:

  • Make a complete disclosure of their cross-border activities;

  • Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;

  • Cooperate in treaty requests for account information;

  • Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;

  • Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and

  • 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.

  SB Saanen Bank AG is headquartered in Saanen, Switzerland.  It was founded in 1874 and has branches in the neighboring villages of Gstaad, Gsteig and Lauenen, as well as a retail office in Schönried. 

  Prior to Aug. 1, 2008, and thereafter, SB Saanen accepted accounts from U.S. taxpayers, some of whom had undeclared accounts and wished to take advantage of Swiss bank secrecy laws.  SB Saanen offered a variety of traditional Swiss banking services which could and did assist U.S. clients in concealing assets and income from the Internal Revenue Service (IRS), including numbered or pseudonym accounts and holding mail at the bank.  These services helped U.S. clients to eliminate the presence of documents in the United States that associated the U.S. taxpayer’s name with the undeclared assets and income they held at SB Saanen in Switzerland.  In some instances, SB Saanen permitted accounts to be closed with large cash withdrawals, precious metals or transfers of funds to accounts held by non-U.S. persons.  SB Saanen had reason to believe that such an accountholder was taking that action to avoid detection by U.S. tax authorities. 

  In December 2008, SB Saanen’s board of directors decided that it should continue to manage U.S. clients and open new accounts for U.S. clients on the condition that they had a “link to our region or one of our relationship managers.”  As a result, SB Saanen opened accounts for some U.S. taxpayers who transferred accounts from other Swiss institutions that were closing such accounts.  SB Saanen knew, or had reason to know, that two of those accounts were undeclared.  SB Saanen continued to service U.S. taxpayers even though it had reason to believe that some of them were evading U.S. taxes. 

  An SB Saanen procedural manual, dated November 2009 and related to the directive, warned its employees to minimize U.S-related contacts with undeclared U.S. clients.  The manual required relationship managers to obtain an IRS Form W-9 for new U.S. clients and stated, with respect to existing U.S. clients, that “clients who do not want disclosure to the IRS (American tax authority) may not be contacted at all in the U.S.A. and/or other countries!  Contact is only permissible within [Switzerland].” 

  In 2009, SB Saanen implemented a policy with respect to foreign travel by its relationship managers.  Pursuant to that policy, travel was permitted to the United States to meet with U.S. clients so long as it was approved in advance by SB Saanen’s chief executive officer and subject to restrictions.  For example, under the policy, SB Saanen declared that “No files may be taken abroad,” relationship managers must “complete a training course,” relationship managers “may not actively acquire” new customers, there was to be “no signing of business documents” or “accepting of orders” or providing “investment advice,” and bank employees were prohibited from “handing over cash, securities, or objects.”  In 2010 and 2011, SB Saanen’s then-head of private banking, who is no longer employed by the bank, traveled to the United States to entertain U.S. clients at the U.S. Open tennis championship in Flushing Meadows, New York. 

  Since Aug. 1, 2008, SB Saanen maintained three U.S.-related accounts for individual U.S. taxpayers who opened the account in the name of a non-U.S. entity, such as offshore corporations or trusts.  Those three accounts comprised an aggregate value of approximately $5 million.  SB Saanen was not involved in creating these entities, but it was aware that some U.S. clients created and used such non-U.S. entities to hold Swiss bank accounts to avoid their disclosure to, or otherwise be concealed from, U.S. tax authorities. 

  The undeclared U.S.-related accounts maintained at SB Saanen include one instance in 2011 where SB Saanen assisted a U.S. taxpayer-client in the transfer of securities from his undeclared account to that of a Jersey company with a non-U.S. person as its beneficial owner.  SB Saanen allowed the transfer of funds even though the Jersey corporation had not completed all required bank documents.  In January and March 2012, the U.S. accountholder closed his account and transferred an additional $4.3 million to an account at SB Saanen held in the name of his wife, who was not a U.S. citizen. 

  Since Aug. 1, 2008, SB Saanen maintained 110 U.S.-related accounts with a maximum aggregate value of approximately $62 million.  SB Saanen will pay a penalty of $1.365 million.

  Privatbank Bellerive AG was founded in 1988, and its sole office is in Zurich.  Bellerive was aware that U.S. taxpayers had a legal duty to report to the IRS and pay taxes on all of their income, including income earned in accounts that these U.S. taxpayers maintained at the bank.  Bellerive knew that it was likely that some of its U.S. customers who maintained accounts at the bank were not complying with their tax and reporting obligations under U.S. law.  In two instances, U.S. accountholders, with the assistance of their external asset managers, created Panamanian corporations and paid a fee to third parties to act as directors.  The companies’ directors were two trust companies based in Panama.  Those third parties, at the direction of the U.S. accountholder, opened a bank account at Bellerive in the name of the entity.  Bellerive made no effort to determine whether such an entity was valid for U.S. tax purposes.  In those circumstances involving a non-U.S. entity, Bellerive was aware that a U.S. person was the true beneficial owner of the account.

  Prior to Nov. 1, 2000, Bellerive required individuals subject to federal income tax under the U.S. Internal Revenue Code and who were beneficial owners of accounts to sign a “Form 1,” titled “W-9 Custodian Waiver.”  The “Form 1” contained two statements from which the beneficial owner could choose one option.  The first of the two options stated: “I would like to avoid disclosure of my identity to the U.S. tax authorities under the new tax regulations.  To this end, I declare that I expressly agree that my account shall be frozen for all new investments in U.S. securities as from November 1, 2000.”  Bellerive knew or had reason to know that the four U.S. accountholders who signed this option were engaged in tax evasion.

  An internal Bellerive memorandum dated Sept. 16, 2008, from the then-head of Legal Compliance and Risk, stated that “all Swiss banks have set up the following rules for dealing with U.S. clients:

  • Absolutely no contact as long as the client is on U.S. territory, even if the contact has been initiated by the client, including phone calls, e-mails, etc.;

  • The client may only take up contact with the bank, if he is not in the United States;

  • Assets may only be managed via a discretionary mandate, or not at all (cash on current account); and

  • No mail correspondence allowed, hold mail agreements however are permitted.”

  Bellerive had hold-mail agreements with its 20 U.S.-related accountholders both before and after the date of the memorandum.

  Since Aug. 1, 2008, Bellerive maintained 20 U.S.-related accounts, comprising a total of $68.9 million in assets under management.  Bellerive will pay a penalty of $57,000.

  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.

  Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division thanked the IRS, and in particular, IRS-Criminal Investigation and the IRS Large Business and International Division for their substantial assistance.  Ciraolo also thanked Thomas J. Sawyer and Michael N. Wilcove, who served as counsel on these matters, as well as 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.

  View the Original Release on justice.gov

• Hong Kong Entertainment (Overseas) Investments, Ltd, D/B/A Tinian Dynasty Hotel & Casino Enters into Agreement with the United States to Resolve Bank Secrecy Act Liability

  2015-07-23 · USAO - Guam & Northern Mariana Islands

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              ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that the Office of the United States Attorney for the Northern Mariana Islands (Office) and Defendant, HONG KONG ENTERTAINMENT (OVERSEAS) INVESTMENTS, LTD. dba TINIAN DYNASTY HOTEL & CASINO (“TDHC”), entered into a Non Prosecution Agreement (Agreement) which requires TDHC to forfeit $3,036,969.12 — the largest forfeiture ever collected by the United States in the Commonwealth of the Northern Mariana Islands.  The Agreement also obligates TDHC to fully cooperate with the United States in ongoing criminal investigations and to comply with federal reporting and other regulatory requirements.  The United States — in its sole discretion — can rescind the Agreement and initiate criminal proceedings should the Government determine that TDHC has failed to comply with any provision of the Agreement.

              The Agreement further requires TDHC to implement new policies and procedures to ensure stringent compliance with federal law.  This will assist the IRS and the Gaming Commission on better identifying all taxable revenue.

              The United States will closely monitor TDHC to ensure compliance with their reporting requirements under federal law as well as under the terms of the Agreement.  “Casino reporting requirements under the Bank Secrecy Act are an important means of preventing abuse of our financial system by those seeking to conceal ill-gotten gains or evade their tax obligations,” said Teri L. Alexander, Special Agent in Charge of IRS Criminal Investigation in Seattle, Washington.  “The requirement of this agreement that the Tinian Dynasty Casino fully cooperate with IRS CI is an important step in ensuring that those who may be trying to evade reporting requirements are detected.”

              Federal law known as the Bank Secrecy Act (BSA) requires that financial institutions and certain businesses, including casinos with annual gaming revenue in excess of $1 million, be vigilant in detecting and reporting activity that may indicate that money laundering, or other financial crimes, are being committed, and that the casino implement and maintain an effective anti-money laundering program.  The BSA requires casinos to file a “Currency Transaction Report for Casinos” (CTR-C) for transactions that involve more than $10,000 in cash.  Cash includes the coins and currency of the United States and foreign countries. The law requires that casinos and businesses report transactions when customers use cash in a single transaction or a related transaction occurring within a 24-hour period.

              On November 20, 2014, a federal grand jury returned a Second Superseding Indictment that charged TDHC with one count of conspiracy to fail to file CTRs in violation of 18 U.S.C. § 371 and 31 U.S.C. §§ 5313(a), 5322(b) and 5324(a)(1) and (d)(2); 155 counts of failure to file CTRs in violation of  31 U.S.C. §§ 5313(a) and 5322(b); one count of failure to file a SAR in violation of 31 U.S.C. §§ 5313(a), and 5322(b); and one count of failure to maintain an effective anti-money laundering program in violation of 31 U.S.C. §§ 5318(h) and 5322(b).

              According to filings with the court, TDHC did not fully identify and disclose all individuals whose gambling activities should have legally triggered a BSA report.  From October 1, 2009 through April 25, 2013, TDHC failed to document over $138 million in reportable cash transactions.  It is estimated that TDHC failed to report 3,640 separate cash transactions during this same time period.

                Documents filed with the court show that during May 2012 and September 2012, TDHC VIP Services Manager George Que spoke to an undercover IRS agent and assured him that he could gamble at TDHC with large amounts of currency, and that no paperwork would be filed by the casino to report their transactions to the United States.  Moreover, between February 28, 2013 and March 4, 2013, two undercover IRS agents posed as casino players at the TDHC and conducted currency transactions totaling more than $450,000.  The undercover agents made repeated requests to TDHC employees Tim Blyth and Que to not file a CTR on their activity.  A CTR was prepared but ultimately never filed with the government.

            U.S. Attorney Alicia A.G. Limtiaco stated, “Under the BSA and its implementing regulations, financial institutions that fail to adequately know its customers and screen their transactions for suspicious activities can be exploited by criminals.  Financial institutions that do not comply with the BSA also gain an unfair competitive advantage within the industry.  The IRS CI, the U.S. Attorney’s Office, and the Department of Justice will continue to partner together to ensure casinos, financial institutions, and businesses comply with the requirements of the BSA and other regulations.  This case was investigated by and we acknowledge and commend the hard work and diligent investigative efforts of the IRS CI.”

              The case was handled and prosecuted by Assistant United States Attorneys Marivic P. David, Russell H. Lorfing, and Ross K. Naughton.

  View the Original Release on justice.gov

• Four Pennsylvania Family Members and Businessmen Sentenced for Tax Fraud

  2015-07-23 · District not recorded

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  Four Lancaster County, Pennsylvania, family members and businessmen were sentenced in U.S. District Court for the Eastern District of Pennsylvania in Allentown, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.

  In October 2010, following a three-week jury trial, Chester A. Bitterman Jr. and his sons, Craig L. Bitterman, C. Grant Bitterman and Curtis L. Bitterman, were convicted of conspiracy to defraud the United States.  Craig Bitterman was additionally convicted of obstruction of justice.  Prior to sentencing, the defendants paid $437,000 in restitution to the Internal Revenue Service (IRS).

  At sentencing hearings held on July 15, 17 and 22, U.S. District Court Judge James Knoll Gardner imposed the following sentences and stated that the offense was serious and the conspiracy was a long-term, complex and concerted effort by a family to avoid taxation:

  • Chester A. Bitterman Jr., 81, was sentenced to serve three years’ probation to include six months of home confinement, due in part to his age and ailing spouse confined to hospice care, and was ordered to pay a $5,000 fine;

  • Craig L. Bitterman, 55, was sentenced to serve three years in prison and three years of supervised release with 1,000 hours of community service at a rate of at least 30 hours of service per week, and was ordered to pay a $10,000 fine;

  • C. Grant Bitterman, 53, was sentenced to serve 21 months in prison and three years of supervised release with 1,000 hours of community service at a rate of at least 30 hours of service per week, and was ordered to pay a $7,500 fine; and

  • Curtis L. Bitterman, 61, was sentenced to serve 21 months in prison and three years of supervised release with 1,000 hours of community service at a rate of at least 30 hours of service per week, and was ordered to pay a $7,500 fine.

  According to the evidence at trial, from 1996 to 2005, the Bittermans owned and operated the Bitterman Scale Company, which now operates as Bitterman Scales LLC.  To conceal their income and assets from the IRS, the Bittermans used aliases, offshore bank accounts and a complex series of sham paper transactions to disguise the income.  The defendants transferred their personal and business assets to sham trusts purchased from the Commonwealth Trust Company, a tax protester organization that marketed trust products to clients for the purpose of avoiding federal income tax payment.  The trusts were used to make it appear as though the defendants had little or no assets or income.  In reality, the defendants retained complete access and control over their funds.  In January 2008, the principal owners of the Commonwealth Trust Company were convicted at trial in the Eastern District of Pennsylvania of tax crimes for causing losses of over $17 million and were sentenced to prison.

  The defendants paid themselves in cash and arranged bogus payments between the numerous trusts that they had created.  These bogus payments were purported to be leases, management fees and fiduciary fees.  The defendants submitted trust tax returns for their business and took fraudulent deductions for these payments to create the appearance of minimal or no taxable business income.  After the IRS levied the business bank account and receivables, the defendants instructed their customers to pay another trust to thwart IRS collection efforts.  The defendants also placed bogus liens and mortgages on their assets to make it appear to the IRS that the defendants had no assets that could be levied or seized as part of the tax collection process.  Some of the defendants used aliases and bank accounts in the names of trusts to make school tuition payments for their children appear as if they were scholarships from third parties.  In addition, to further conceal their assets from the IRS, at least one defendant used offshore bank accounts in the British Virgin Islands and three of the defendants arranged for sham transfers of real estate to their children.

  During the investigation, after Craig Bitterman was served with federal grand jury subpoenas requiring the production of trust records, he failed to produce the records to the grand jury and instead shipped those trust records to Texas and New Mexico in an attempt to conceal them.

  Acting Assistant Attorney General Ciraolo and U.S. Attorney Memeger commended special agents of IRS–Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Vineet Gauri of the Eastern District of Pennsylvania and Trial Attorney Michael C. Vasiliadis of the Tax Division, who prosecuted the case.

  View the Original Release on justice.gov

• Louisiana Woman Indicted for Child Sex Trafficking

  2015-07-22 · District not recorded

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  An indictment was unsealed today charging a Louisiana woman with offenses related to her sex trafficking of a minor, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney J. Walter Green of the Middle District of Louisiana and Special Agent in Charge Michael J. Anderson of the FBI New Orleans Division.

  Kellie M. Dominique, 36, of Baton Rouge, Louisiana, was indicted today for sex trafficking of a minor, attempted sex trafficking of a minor, obstruction of justice and four counts of use of an interstate facility in aid of racketeering.

  According to the indictment, Dominique allegedly promoted a prostitution business out of her home and other venues in Baton Rouge, Louisiana.  The indictment alleges that a minor worked as a prostitute for Dominique, and that, to promote Dominique’s prostitution business, the minor and others allegedly used the website “backpage.com” to post classified advertisements for commercial sex acts.

  The charges and allegations in an indictment are merely accusations.  A defendant is presumed innocent until and unless proven guilty.

  This case is being investigated by the FBI New Orleans Division, Louisiana Attorney General’s Office, Louisiana State Police and East Baton Rouge Parish Sheriff’s Office, with assistance from the Baton Rouge Police Department’s Narcotics Division, the U.S. Marshals Service Fugitive Task Force and other law enforcement agencies.  The case is being prosecuted by Trial Attorney Reginald E. Jones of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Jamie A. Flowers Jr. of the Middle District of Louisiana.

  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 the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

  Dominique Indictment

  View the Original Release on justice.gov

• Leader of Coupon Counterfeiting Ring on Silk Road Websites Pleads Guilty

  2015-07-22 · District not recorded

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  A leader of a coupon counterfeiting ring pleaded guilty today to participating in a conspiracy to sell counterfeit coupons using the “Silk Road” online marketplace, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana.

  Beau Wattigney, 30, New Orleans, pleaded guilty before U.S. District Judge Ivan L.R. Lemelle of the Eastern District of Louisiana to conspiracy to commit wire fraud and conspiracy to commit trademark counterfeiting.  Sentencing has been scheduled for Oct. 28, 2015.

  In connection with his plea, Wattigney admitted that, between May 2012 and November 2014, he used the online monikers “PurpleLotus” and “GoldenLotus” to sell counterfeit coupons for various goods and services on Silk Road 1.0, which was a hidden website through which users around the world bought and sold illegal drugs, goods and services.  Wattigney further admitted that he engaged in the same conduct on Silk Road 2.0, a successor to Silk Road 1.0, using the monikers “PurpleLotus” and “CouponKing.”

  The coupons allowed purchasers to obtain significant discounts on a variety of goods and services offered by the victim companies, including Hopster, Veri-fi, SmartSource, RedPlum and Visa.  For example, Wattigney sold a counterfeit coupon that allowed users to purchase $50.00 Visa Gift Cards for $0.01 each.

  Wattigney admitted that he created and manufactured the fraudulent coupons with the assistance of several co-conspirators, and that they designed the coupons to look like original print-at-home manufacturers’ coupons by using the companies’ trademarks.  He also admitted that the scheme affected more than 50 U.S.-based businesses, and caused or attempted to cause more than one million dollars in intended losses. 

  The investigation is being conducted by the FBI Philadelphia Division, with assistance from the FBI New Orleans Field Office.  The case is being prosecuted by Senior Counsel Marie-Flore Johnson, Gavin Corn and Robert Wallace of the Criminal Division’s Computer Crime and Intellectual Property Section, and Assistant U.S. Attorney Jordan Ginsberg of the Eastern District of Louisiana.

  View the Original Release on justice.gov

• Justice Department Settles Disability Discrimination Lawsuit Against University of Michigan

  2015-07-22 · District not recorded

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  The Justice Department, along with the U.S. Attorney’s Office of the Eastern District of Michigan, announced today that it has reached an agreement with the University of Michigan under the Americans with Disabilities Act (ADA).  The agreement, filed as a consent decree along with a complaint in the U.S. District Court for the Eastern District of Michigan, resolves allegations that the university violated the ADA by failing to accommodate a maintenance employee with degenerative back disease.  Specifically, the Justice Department alleged that the university failed to offer the employee, and another employee with a disability, reassignment to available vacant positions for which they were qualified; rather, the employees were required to compete for available positions along with all other applicants.  The complaint also alleges that the university engaged in a pattern or practice of disability discrimination by applying a policy that denies reassignment as a reasonable accommodation in violation of the ADA. 

  Title I of the ADA prohibits employers from discriminating against individuals on the basis of disability in various aspects of employment.  These prohibitions include failing to provide reasonable accommodations, including reassignment, where such an accommodation does not pose an undue hardship.

  “It is contrary to the letter and the spirit of the ADA to require disabled employees who need a reassignment as a reasonable accommodation to compete for that assignment,” said head of the Civil Rights Division, Principal Deputy Assistant Attorney General Vanita Gupta.  “As we celebrate the 25th anniversary of the ADA, we recognize its critical impact in the American workplace breaking down barriers for individuals with disabilities.  We commend the university for working cooperatively with the department to promptly resolve this matter and affect necessary changes.”

  The consent decree, which must be approved by the court, requires the university to pay the employees a total of approximately $215,000 for monetary and compensatory damages, revise the university’s policies on reassignments and transfers, provide training to university staff on Title I of the ADA and file periodic reports with the department.

  Those interested in finding out more about the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.

  View the Original Release on justice.gov

• Attorney General Lynch Statement Following the Federal Grand Jury Indictment Against Dylann Storm Roof

  2015-07-22 · District not recorded

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  Attorney General Lynch released the following statement after the federal grand jury released its indictment against Dylann Storm Roof:

  “Good afternoon and thank you for coming.

  “I am joined here today by Vanita Gupta, the head of the department’s Civil Rights Division and Mark Giuliano, Deputy Director of the FBI.

  “We are here today to announce that a federal grand jury in South Carolina has returned a 33-count indictment against Dylann Storm Roof, charging him with federal hate crimes and firearms charges for killing and attempting to kill African-American parishioners at Emanuel African Methodist Episcopal Church in Charleston, South Carolina, because of their race and in order to interfere with their exercise of their religion.

  “As set forth in the indictment, several months prior to the tragic events of June 17, Roof conceived of his goal of increasing racial tensions throughout the nation and seeking retribution for perceived wrongs he believed African Americans had committed against white people.

  “To carry out these twin goals of fanning racial flames and exacting revenge, Roof further decided to seek out and murder African Americans because of their race.   An essential element of his plan, however, was to find his victims inside of a church, specifically an African-American church, to ensure the greatest notoriety and attention to his actions.

  “As alleged, Roof set forth the evening of June 17, 2015 to carry out this plan and drove to the Emanuel African Methodist Episcopal Church in Charleston, South Carolina, known as “Mother Emanuel.”  Mother Emanuel was his destination specifically because it was a historically African-American church of significance to the people of Charleston, of South Carolina and the nation.

  “On that summer evening, Dylann Roof found his targets, African Americans engaged in worship.  Met with welcome by the ministers of the church and its parishioners, he joined them in their bible study group.  The parishioners had bibles.  Dylann Roof had his 45 caliber glock pistol and eight magazines loaded with hollow point bullets.  And as set forth in the indictment, while the parishioners of Mother Emanuel were engaged in religious worship and bible study, Dylann Roof drew his pistol and opened fire on them, ultimately killing nine church members. 

  “As you know, the state of South Carolina is also prosecuting Roof for the murders, attempted murders and firearms offenses he is alleged to have committed.  We commend the state authorities for their tremendous work and quick response.  It is important to note, however, that South Carolina does not have a hate crimes statute and as a result, the state charges do not reflect the alleged hate crime offenses presented in the federal indictment returned today.    

  “The federal indictment returned today charges Roof with nine murders and three attempted murders under the Matthew Shepard and James Byrd Hate Crimes Prevention Act.  This federal hate crimes law prohibits using a dangerous weapon to cause bodily injury, or attempting to do so, on the basis of race or color.  The Shepard Byrd Act was enacted specifically to vindicate the unique harms caused by racially motivated violence.

  “Roof is also charged with nine murders and three attempted murders under a second federal hate crimes statute that prohibits the use or threat of force to obstruct any person’s free exercise of their religious beliefs.

  “Finally, Roof has been charged with multiple counts of using a firearm in the commission of these racially motivated murders and attempted murders.

  “For these crimes, Roof faces penalties of up to life imprisonment or the death penalty.  No decision has been made on whether to seek the death penalty in this case.  The department will follow our usual rigorous protocol to thoroughly consider all factual and legal issues relevant to that decision, which will necessarily involve counsel for the defendant Roof.  In addition, consultation with the victims’ families is an important part of this decision making process and no decision will be made before conferring with them.

  “The family members of those killed at Emanuel AME and the survivors were informed of these federal charges earlier today.

  “I also note that this indictment contains allegations and is not evidence of the defendant’s guilt.

  “This federal grand jury indictment follows an announcement I made on June 18, 2015, that the Department of Justice was conducting a hate crime investigation into the shooting incident at Emanuel AME.  Immediately following the shooting, experienced prosecutors from the U.S. Attorney’s Office in South Carolina and the Civil Rights Division began working closely with the FBI, ATF and state and local law enforcement officials including the South Carolina Law Enforcement Division – or SLED – Charleston Police and the Solicitor’s Office for the Ninth Circuit of South Carolina, in thoroughly investigating these crimes.  I would like to the many state and federal law enforcement officials for their dedication and hard work to ensure that this investigation was conducted thoroughly and expeditiously.  I would also like to thank South Carolina U.S. Attorney Bill Nettles for his and his office’s tremendous efforts on this case, as well as the dedicated attorneys from the Civil Rights Division.

  “In particular, I would like to thank Charleston Solicitor Scarlett Wilson for being such a cooperative and effective partner in this matter.  We have a strong working relationship with Solicitor Wilson and her office and we look forward to our continued collaboration as these parallel state and federal prosecutions work their way through their respective court systems.”

  "Questions?”

  View the Original Release on justice.gov

• After Nearly 20 Years, International Fugitive in Multi-Million Dollar Fraud Scheme Apprehended in Greece and Extradited to United States to Serve Prison Sentence

  2015-07-22 · District not recorded

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  WASHINGTON – A former New York businessman, who disappeared the same day a federal jury sitting in the U.S. District Court in Newark, New Jersey, began deliberating in his tax evasion and fraud trial, was caught while in Greece more than 18 years after his conviction, and appeared in federal court in the District of New Jersey on Friday, July 17, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

  Gideon Misulovin, 58, whose last known address was in New York City, was extradited from Greece to the United States to serve his 10-year prison sentence.  He has been incarcerated in the United States since his return on July 16.         

  On March 7, 1996, a jury convicted Misulovin of conspiracy to impede and impair the Internal Revenue Service (IRS) in the ascertainment and collection of more than $6.5 million in federal motor fuel excise taxes, wire fraud and money laundering stemming from a scheme to conceal the unpaid diesel fuel excise taxes from state and federal tax authorities.

  During trial, Misulovin was free on $500,000 bail and attended each day of the trial.  He failed to appear in court March 4, 1996, for the parties’ closing arguments.  U.S. Senior District Judge Dickinson R. Debevoise of the District of New Jersey in Newark issued a warrant for his arrest.  On June 25, 1997, Judge Debevoise sentenced Misulovin in absentia to serve 10 years in prison and a three-year term of supervised release, and to pay a $150,000 fine.  The court also ordered Misulovin to pay restitution in the amount of $200,000 to the United States and $100,000 to the state of New Jersey.

  The evidence at trial established that from 1988 through Jan. 31, 1993, Misulovin and his co-conspirators sold untaxed diesel fuel in a series of paper transactions using wholesale companies.  Some of the companies were shams and called “burn” or “butterfly” companies.  As part of the scheme, the sham company would assume the federal and state tax liability and then vanish, allowing the conspirators to keep the excise taxes they collected from truck stops and service stations.

  The case, part of a then-nationwide motor fuel excise tax enforcement effort, was investigated jointly by the Motor Fuel Task Force and the U.S. Attorney’s Office of the District of New Jersey.  In an effort to infiltrate the bootleg gasoline industry, task force agents set up an undercover business called RLJ Management that competed directly with the defendants’ operation.

  At the conclusion of the undercover operation, in November 1992, federal agents seized Misulovin’s assets, including approximately $70,000 in cash from his residence and $277,000 from his business bank account.

  Misulovin’s co-defendant and co-conspirator, Arnold Zeidenfeld, of Brooklyn, New York, pleaded guilty prior to trial and testified for the government.  Gurmit Singh and Manbir Singh, of Matawan, New Jersey, who operated truck stops in southern New Jersey, also pleaded guilty for their roles in the scheme.

  In August 2014, based on an Interpol Red Notice, Misulovin was detained in a Greek airport using an alias and traveling with an Israeli passport.  He was subsequently arrested pursuant to a U.S. request for a provisional arrest, and after contested extradition proceedings, was found extraditable in 2015.

  The task force included attorneys from the Tax Division and agents from the IRS Criminal Investigation and Examination Divisions, the FBI, the U.S. Department of Transportation and the New Jersey State Department of Taxation and Finance.  Seth D. Uram, formerly a Trial Attorney in the Tax Division and now an Assistant U.S. Attorney in Portland, Oregon, and Trial Attorney Charles A. O’Reilly of the Tax Division prosecuted the case.

  Acting Assistant Attorney General Ciraolo thanked the Department of Justice’s Office of International Affairs, the FBI’s New Jersey Field Office and the Greek Ministry of Justice for their assistance in apprehending and extraditing Misulovin.  Ciraolo also thanked the U.S. Attorney’s Office of the District of New Jersey for their substantial assistance. 

  View the Original Release on justice.gov

• USNCB Supports Security at World Police and Fire Games

  2015-07-21 · District not recorded

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  A Prince George's County Police Department competitor participates in the Pistol Action Combat event at the 2015 World Police and Fire Games. Image courtesy of WPFG.

  Once every two years, the World Police and Fire Games (WPFG) bring together the world’s toughest law enforcement, customs and corrections officers, and firefighters as they compete head-to-head in more than 60 extreme sporting events like Archery, Canine Search, and Toughest Competitor Alive. This year’s Games were held June 26-July 5 in Fairfax County, VA and welcomed more than 9,500 competitors from 70 different countries, 5,100 volunteers, and tens of thousands of spectators. Events such as the Games, with crowds this large and diverse, call for law enforcement and public safety support with international reach. Interpol Washington offered the WPFG Operations Center and the Fairfax County Police Department complementary tools and services to ensure everyone stayed safe while enjoying the event. For the first time Interpol Washington’s 24/7/365 Interpol Operations and Command Center (IOCC) helped field potential threats and was available around the clock to query subjects at this year’s Games. The IOCC helped to ensure a timely and coordinated law enforcement response was ready in the event of a major threat with an international nexus. The 2017 Games will be held in Montréal, Canada.

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

  View the Original Release on justice.gov

• Three Family Members Indicted for Participating in Multi-Million Dollar Scheme to Defraud Commercial Lenders and the U.S. Export-Import Bank

  2015-07-21 · District not recorded

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  Three family members were indicted for their alleged participation in a scheme to defraud Miami-area lenders and the Export-Import Bank of the United States (Ex-Im Bank), announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.

  Guillermo M. Sanchez, 60, Isabel C. Sanchez, 36, and Gustavo Giral 38, all of Cutler Bay, Florida, are charged in the indictment with conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering and money laundering.

  According to allegations in the indictment, from 2007 through 2012, the defendants utilized companies they controlled to create fictitious invoices for sales of merchandise that never occurred.  In a process called “factoring,” the defendants sold the accounts receivables to two Miami-area lenders for approximately 90 percent of the value of the merchandise listed on the alleged fake invoices.  The lenders were not aware that the invoices were fake, and expected to recover the full amount owed from the purported purchasers.  To perpetuate the fraud, the defendants allegedly transferred the proceeds through numerous bank accounts under their control and, in a Ponzi-style scheme, used a portion of the funds to pay off other factored invoices.

  After the Miami lenders refused to extend further credit, the defendants and their co-conspirators allegedly created false invoices and shipping documents to obtain a loan guaranteed by the Ex-Im Bank.  Rather than acquiring, selling and shipping American-manufactured goods as required for Ex-Im Bank-guaranteed loans, the defendants allegedly used the loan proceeds to extend the fraudulent scheme by paying off other lenders, and split the remaining funds among themselves and other co-conspirators.  Ultimately, the defendants defaulted on both the factoring loans and the Ex-Im Bank loan.

  Co-conspirators Fredy Moreno-Beltran, Ricardo Beato and Jorge Amad were separately charged, and each have pleaded guilty to participating in the scheme.  According to his plea agreement, Moreno-Beltran owned Clientric, a purported purchaser of goods from companies controlled by the defendants.  According to their plea agreements, Beato and Amad owned Approach Technologies International, a company that the defendants falsely claimed had sold nearly $2 million of American-manufactured telephone call center software to Clientric in order to obtain an Ex-Im Bank-guaranteed loan.  In connection with their guilty pleas, Beato, Amad and Moreno admitted that the invoices provided to Ex-Im Bank were false.

  The alleged scheme caused approximately $8 million in losses to the private lenders and nearly $2 million in losses to the United States. 

  The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

  The case is being investigated by the Ex-Im Bank Office of Inspector General, with assistance provided by the FBI and U.S. Immigration and Customs Enforcement Homeland Security Investigations.  The case is being prosecuted by Senior Litigation Counsel Patrick Donley and Trial Attorney William Bowne of the Criminal Division’s Fraud Section.

  Sanchez et al Indictment

  View the Original Release on justice.gov

• Justice Department Will Not Challenge AT&T's Acquisition of DirecTV

  2015-07-21 · District not recorded

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  The Department of Justice’s Antitrust Division announced today that it will close its investigation into AT&T’s proposed $48 billion acquisition of DirecTV.

  This announcement follows a statement by FCC Chairman Tom Wheeler that a final order approving the transaction has been circulated to the Commission.

  “After an extensive investigation, we concluded that the combination of AT&T’s land-based internet and video business with DirecTV’s satellite-based video business does not pose a significant risk to competition,” said Assistant Attorney General Bill Baer of the Antitrust Division.  “Our investigation benefitted from the Division’s close and constructive working relationship with the FCC.  The commitments that the proposed FCC order includes, if adopted, will provide significant benefits to millions of subscribers.”

  View the Original Release on justice.gov

• After Nearly 20 Years, International Fugitive in Multi-Million Dollar Fraud Scheme Apprehended in Greece and Extradited to United States to Serve Prison Sentence

  2015-07-21 · District not recorded

  Read the Press Release

  A former New York businessman, who disappeared the same day a federal jury sitting in the U.S. District Court in Newark, New Jersey, began deliberating in his tax evasion and fraud trial, was caught while in Greece more than 18 years after his conviction, and appeared in federal court in the District of New Jersey on Friday, July 17, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. 

  Gideon Misulovin, 58, whose last known address was in New York City, was extradited from Greece to the United States to serve his 10-year prison sentence.  He has been incarcerated in the United States since his return on July 16.           

  On March 7, 1996, a jury convicted Misulovin of conspiracy to impede and impair the Internal Revenue Service (IRS) in the ascertainment and collection of more than $6.5 million in federal motor fuel excise taxes, wire fraud and money laundering stemming from a scheme to conceal the unpaid diesel fuel excise taxes from state and federal tax authorities.

  During trial, Misulovin was free on $500,000 bail and attended each day of the trial.  He failed to appear in court March 4, 1996, for the parties’ closing arguments.  U.S. Senior District Judge Dickinson R. Debevoise of the District of New Jersey in Newark issued a warrant for his arrest.  On June 25, 1997, Judge Debevoise sentenced Misulovin in absentia to serve 10 years in prison and a three-year term of supervised release, and to pay a $150,000 fine.  The court also ordered Misulovin to pay restitution in the amount of $200,000 to the United States and $100,000 to the state of New Jersey.

  The evidence at trial established that from 1988 through Jan. 31, 1993, Misulovin and his co-conspirators sold untaxed diesel fuel in a series of paper transactions using wholesale companies.  Some of the companies were shams and called “burn” or “butterfly” companies.  As part of the scheme, the sham company would assume the federal and state tax liability and then vanish, allowing the conspirators to keep the excise taxes they collected from truck stops and service stations.

  The case, part of a then-nationwide motor fuel excise tax enforcement effort, was investigated jointly by the Motor Fuel Task Force and the U.S. Attorney’s Office of the District of New Jersey.  In an effort to infiltrate the bootleg gasoline industry, task force agents set up an undercover business called RLJ Management that competed directly with the defendants’ operation.

  At the conclusion of the undercover operation, in November 1992, federal agents seized Misulovin’s assets, including approximately $70,000 in cash from his residence and $277,000 from his business bank account. 

  Misulovin’s co-defendant and co-conspirator, Arnold Zeidenfeld, of Brooklyn, New York, pleaded guilty prior to trial and testified for the government.  Gurmit Singh and Manbir Singh, of Matawan, New Jersey, who operated truck stops in southern New Jersey, also pleaded guilty for their roles in the scheme.

  In August 2014, based on an Interpol Red Notice, Misulovin was detained in a Greek airport using an alias and traveling with an Israeli passport.  He was subsequently arrested pursuant to a U.S. request for a provisional arrest, and after contested extradition proceedings, was found extraditable in 2015.  

  The task force included attorneys from the Tax Division and agents from the IRS Criminal Investigation and Examination Divisions, the FBI, the U.S. Department of Transportation and the New Jersey State Department of Taxation and Finance.  Seth D. Uram, formerly a Trial Attorney in the Tax Division and now an Assistant U.S. Attorney in Portland, Oregon, and Trial Attorney Charles A. O’Reilly of the Tax Division prosecuted the case.

  Acting Assistant Attorney General Ciraolo thanked the Department of Justice’s Office of International Affairs, the FBI’s New Jersey Field Office and the Greek Ministry of Justice for their assistance in apprehending and extraditing Misulovin.  Ciraolo also thanked the U.S. Attorney’s Office of the District of New Jersey for their substantial assistance. 

  View the Original Release on justice.gov

• Readout of the Attorney General’s Meeting with President Muhammadu Buhari of Nigeria

  2015-07-20 · District not recorded

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  Attorney General Loretta E. Lynch met with President Muhammadu Buhari of Nigeria today at the Blair House in Washington, D.C.  Both leaders discussed opportunities for U.S. Department of Justice officials to increase collaborative efforts with their Nigerian counterparts to dismantle and defeat Boko Haram, ISIL and other terrorist organizations active in the region.  The Attorney General underscored the importance of combatting transnational crime and corruption through the Kleptocracy Initiative.  These anti-corruption efforts not only assist the Nigerian people in their efforts to recover assets stolen from victims but they are also helpful tools to protect the U.S. financial system from being utilized by criminals.  

  View the Original Release on justice.gov

• Justice Department Reaches Settlements with Multiple Health Care Providers to Stop Discrimination Against Persons with Disabilities Under the Barrier Free Health Care Initiative

  2015-07-20 · District not recorded

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  The Justice Department announced today that, as part of its Barrier Free Health Care Initiative, it has reached three additional settlements with health care providers to ensure that they are complying with the Americans with Disabilities Act (ADA).  The announcement comes as the department marks the 25th anniversary of the ADA.  The Department of Justice, including the nation’s U.S. Attorneys and the Civil Rights Division, are proud to play a critical role in enforcing the ADA, working towards a future in which all the doors are open to equality of opportunity, full participation, independent living, integration and economic self-sufficiency for persons with disabilities.

  The new settlement agreements—entered into by the U.S. Attorney’s Office for the Eastern District of Virginia and the U.S. Attorney’s Office for the Eastern District of Michigan—address the requirements of the ADA for health care providers, such as hospitals, medical clinics, nursing homes, mental health facilities and doctor’s offices, to, among other things, provide effective communication to people who are deaf or have hearing disabilities in the provision of medical services.  In addition, the U.S. Attorney’s Office for the Southern District of New York recently filed a lawsuit against, Emmanuel Asare, M.D. and Springfield Medical Aesthetic PC d/b/a Advanced Cosmetic Surgery of New York for failures to provide medical treatment for an individual with HIV. 

  “Eliminating disability-based discrimination in health care is a priority for the department under the Americans with Disabilities Act,” said head of the Civil Rights Division, Principal Deputy Assistant Attorney General Vanita Gupta.  “Twenty five years after the passage of the ADA, we fully expect that all health care providers will provide equal access to people with disabilities.”

  In the Fairfax Nursing Center (FNC) settlement, entered into by the U.S. Attorney for the Eastern District of Virginia on July 6, 2015, the U.S. Attorney’s Office for the Eastern District of Virginia entered into a settlement agreement with the Fairfax Nursing Center requiring it to: 

  • adopt policies and procedures that ensure that individuals who are deaf or hard of hearing—patients and companions—receive auxiliary aids and services that insure effective communication;

  • train its staff on the ADA’s effective communication requirements;

  • pay $80,000 to the complainants and $5,000 to the United States in a civil penalty; and

  • establish a fund of $12,500 to sponsor training on the ADA’s requirements for others in the Virginia nursing facility industry. 

  The investigation began with a complaint alleging that FNC violated the ADA by failing to provide appropriate auxiliary aids and services, including sign language interpreter services, to two individuals who are deaf (two family members of a patient) during critical interactions relating to the patient’s medical care. 

  In two matters involving individual medical practices in the Eastern District of Michigan, the U.S. Attorney’s Office entered into settlement agreements with the office of Dr. Srinivas Mukkamala and the office of Dr. Arshad Pervez, to ensure that they provide sign language interpreters and other appropriate auxiliary aids and services for patients and companions who are deaf or hard of hearing. 

  The Department of Justice’s Barrier-Free Health Care Initiative is a partnership of the nation’s U.S. Attorneys and the Civil Rights Division.  The initiative, launched on the 22nd anniversary of the ADA in July 2012, includes the participation of more than 45 U.S. Attorney’s Offices.  Today’s Barrier-Free Health Care Initiative settlements may be found at www.ada.gov/settlemt.htm.  For more information on the Barrier Free Health Care Initiative visit www.ada.gov/usao-agreements.htm. 

  The department has a number of publications available to assist entities to comply with the ADA, including a Business Brief on Communicating with People Who Are Deaf or Hard of Hearing in Hospital Settings, www.ada.gov/hospcombr.htm and publications specific to health care providers, HIV discrimination and effective communication with people with hearing and vision disabilities, as well as publications about tax credits available for providing access.  For more information on the ADA and to access these publications, visit www.ada.gov and www.ada.gov/aids.  Those interested in finding out more about these settlements or the obligations of public accommodations under the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov.  ADA complaints may be filed by email to [email protected].

  View the Original Release on justice.gov

• Justice Department Reaches Agreements with Three Counties Across the Country to Increase Accessibility

  2015-07-20 · District not recorded

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  As part of the Justice Department’s year-long celebration marking the 25th anniversary of the American with Disabilities Act (ADA)—ADA 25: Advancing Equal Access—the department announced today the signing of three agreements with counties to improve access to all aspects of civic life for persons with disabilities.  The agreements, reached with the Champaign County, Illinois; Merced County, California; and Yakima County, Washington, are all part of Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the ADA.  

  The PCA initiative ensures that people with disabilities have an equal opportunity to participate in civic life, a fundamental part of American society.  As part of the PCA initiative, Justice Department staff survey state and local government facilities, services and programs in communities across the country to identify what is needed to comply with the ADA.  The agreements address the steps a community must take to improve access.  With the signing of these three agreements, the department has entered into nine PCA agreements this year alone, and more than 217 agreements since the initiative began.

  Under the agreements announced today, the counties will remove barriers to accessibility in buildings, such as government office buildings providing services to its citizens, courthouses, police or sheriff offices, jails, libraries, recreation centers, community centers, polling places, parks and fairgrounds.  The agreements also require the counties to:

  • make physical modifications to facilities so that parking, routes into the buildings, entrances, public telephones, restrooms, service counters and drinking fountains are accessible to people with disabilities, as well as make sure that assembly areas have the required wheelchair and companion seating;
  • post, publish and distribute a notice to inform members of the public of the provisions of Title II and their applicability to the municipalities’ programs, services and activities;
  • train staff in using their state relay service for telephone communications;
  • develop a method for providing emergency management policies and procedures for persons with disabilities, including preparation, notification, response and clean-up;
  • develop a method for providing information for interested persons with disabilities concerning the existence and location of the municipalities’ accessible services, activities and programs;
  • establish, implement and post online a policy that their web pages be accessible, create a process for implementation and ensure that all new and modified web pages are accessible; and
  • implement a plan for the accessibility of sidewalks and curb cuts within their borders.

  “The story of civil rights for persons with disabilities is the story of having to fight paternalistic laws and ill-advised social mores,” said head of the Civil Rights Division, Principal Deputy Assistant Attorney General Vanita Gupta.  “Individuals with disabilities faced the indignities of not being able to enter public buildings or have equal access to the services, programs and activities offered by their local governments; they were barred from attending schools and getting jobs.  Until, that is, the passage of the Americans with Disabilities Act.  As we celebrate the 25th anniversary of this major civil rights law, the department renews its commitment to work with state and local governments to ensure that their citizens with disabilities attain equal access to all of their programs, activities and services.”

  For more information about the ADA, today’s agreement and the PCA initiative, individuals may access the ADA web page at http://www.ada.gov/civicac.htm or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).

  View the Original Release on justice.gov

• Justice Department Asks Federal Court to Shut Down Fraudulent New York Tax Return Business

  2015-07-20 · District not recorded

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  The United States filed a complaint seeking to permanently bar a former Staten Island, New York, man and the tax preparation business he operates from preparing federal tax returns for others, the Justice Department announced today.

  The civil complaint against Ranti Azeez-Taiwo and his business, Lot Associates Inc., was filed in the U.S. District Court for the Eastern District of New York.  The complaint alleges that Azeez-Taiwo prepares federal income tax returns for customers that understate their correct tax liabilities.  The government’s suit alleges that the understatements are the result of fabricated or inflated itemized deductions, particularly charitable deductions and unreimbursed employee business expense deductions, which are claimed on Schedule A, and sole-proprietorship business expenses, which are claimed on Schedule C.  According to the complaint, an undercover Internal Revenue Service (IRS) agent provided Azeez-Taiwo with information that should have resulted in a tax return showing more than $500 in tax due to be paid, but Azeez-Taiwo instead prepared a return claiming a refund of more than $500.

  The suit contends that in January 2013, a grand jury indicted Azeez-Taiwo on 30 counts of willfully aiding and assisting in the preparation of false federal income tax returns for tax years 2006 through 2010.  The complaint further alleges that Azeez-Taiwo was ultimately convicted on multiple counts and on March 6, 2014, was sentenced to serve 18 months in prison.  This civil suit seeks to bar Azeez-Taiwo from ever preparing federal tax returns for others again.

  The IRS estimates that Azeez-Taiwo has prepared more than 7,000 tax returns since 2006, the complaint alleges.  The complaint further contends that the IRS has audited or examined over 250 returns prepared by Azeez-Taiwo and the total tax deficiency for those returns alone exceeds $773,000.  According to the complaint, Azeez-Taiwo’s conduct could have caused more than $773,000 in harm to the U.S. Treasury.

  Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2015.  The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters.  Information about these cases is available on the Justice Department’s website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page.  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

  View the Original Release on justice.gov

• Housing Authority of Los Angeles County and the Cities of Lancaster, California, and Palmdale, California, Agree to Settle Fair Housing Claims in the Antelope Valley for $2 Million

  2015-07-20 · District not recorded

  Read the Press Release

  Agreement Resolves Allegations that Defendants Discriminated Against Section 8 Voucher Holders on the Basis of Race

  The Justice Department today announced a settlement with the Housing Authority of Los Angeles County (HACoLA), and the cities of Lancaster, California, and Palmdale, California, to resolve allegations that these parties targeted African Americans with discriminatory enforcement of the Section 8 housing choice voucher program.  The parties have agreed to enter into a court-enforceable agreement that will provide broad relief meant to ensure unbiased enforcement of the voucher program so that African-American voucher holders in the Antelope Valley are not targeted because of their race.

  HACoLA, a public housing agency that administers the Section 8 voucher program in Los Angeles County, has agreed to pay $1,975,000 in monetary damages on behalf of itself and the cities, and a $25,000 civil penalty to the United States.  When combined with the department’s previously announced settlement with the Los Angeles County Sheriff’s Department (LASD) for related conduct, this means that a total of $2,675,000 is available to compensate individuals who have been harmed by the discriminatory enforcement of the voucher program.  In addition, many voucher holders who were discriminated against will be eligible to have voucher terminations removed from their public housing record, and a few of those who were improperly terminated will be reinstated to the voucher program.

  “Housing choice vouchers, also known as Section 8 vouchers, are meant to help families find homes in neighborhoods that provide greater opportunities for them and their children,” said head of the Civil Rights Division, Principal Deputy Assistant Attorney General Vanita Gupta.  “Such families should be welcomed in every community, including those in the Antelope Valley.  No family living in Los Angeles County should fear having housing authority or law enforcement personnel show up at their homes simply because they are African American and use vouchers to pay their rent.”

  “Local government officials worked with the Los Angeles County Housing Authority and the Sheriff’s Department to subject African-American families to discriminatory enforcement actions in an effort to discourage them from using Housing Choice vouchers to live in Lancaster and Palmdale,” said U.S. Attorney Eileen M. Decker of the Central District of California.  “This type of discrimination is fundamentally wrong and is inconsistent with American values of freedom and equality.  This settlement, together with an earlier settlement with the Sheriff’s department, will ensure it does not recur, and will also provide more than $2.6 million to compensate those harmed.”

  The Justice Department’s complaint, filed today in the U.S. District Court of the Central District of California, alleges that between the years 2004 and 2011, in direct response to racially-based public opposition to the growing presence of African-American voucher holders living in Lancaster and Palmdale, the cities initiated and teamed with HACoLA and LASD in a targeted campaign of discriminatory enforcement against African-American voucher holders in order to discourage and exclude them and other African Americans from living in the cities.  City officials contracted with HACoLA for additional investigative services and devoted substantial financial resources to voucher program enforcement efforts, directed and encouraged LASD deputies to become involved in HACoLA’s enforcement efforts, fueled public opposition to the voucher program by making disparaging statements about voucher program participants and discouraged landlords from renting to voucher holders.  There was no legitimate law enforcement or programmatic justification for these types of extraordinary enforcement efforts. 

  HACoLA and LASD used their resources to effectuate the cities’ mutual discriminatory goals and to carry out their own discriminatory motives by disproportionately subjecting African-American voucher holders in the cities to more intrusive and intimidating compliance checks and referring those households for termination from the voucher program at greater rates than white voucher holders living in the cities, or any voucher holders living elsewhere in the county of Los Angeles.

  Pursuant to the agreement announced today, HACoLA will undertake reforms to its voucher program enforcement protocol, and will cease, for at least six years, the use of unannounced field compliance checks.  HACoLA also will not share personal information about voucher holders with any third party, including LASD or the cities.   

  Lancaster and Palmdale have agreed to enforce their ordinances and process complaints in a way that treats voucher holders and their landlords no differently from other renters and landlords.  Each city will develop procedures for handling discrimination complaints, and have agreed not to seek identifying information regarding voucher holders.  Each city will implement a fair and affordable marketing plan to make clear that the cities are open to all regardless of race, and each will designate a person or entity to oversee compliance and receive complaints of alleged discrimination, among other things.  Employees of both cities and HACoLA are required to participate in fair-housing training to prevent discriminatory conduct in the future. 

  The department estimates that hundreds of African-American voucher holders were subjected to the defendants’ discriminatory conduct, including many of the approximately 200 who were interviewed in the course of the department’s investigation.  The agreement announced today outlines a process for compensating victims.  This process may take a year or longer.  African-American voucher holders who believe they may have been discriminated against by HACoLA, LASD and/or the cities during a compliance check in the Antelope Valley between 2004 and 2011 should contact the Justice Department at 1-800-896-7743, option 98 or e-mail the department at [email protected].  

  The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status.  More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt.  Persons who believe that they have experienced unlawful housing discrimination elsewhere can contact the Justice Department at 1-800-896-7743, or e-mail [email protected] or contact the Department of Housing and Urban Development at 1-800-669-9777.

  HACoLA Settlement Agreement

  HACoLA Complaint

  View the Original Release on justice.gov

• Facilitator and Fundraiser for Islamic Movement of Uzbekistan Extradited to United States to Face Terrorism Charges

  2015-07-20 · District not recorded

  Read the Press Release

  Irfan Demirtas, aka Nasrullah, 56, a duel Dutch-Turkish national, made his first appearance today in the U.S. District Court of the District of Columbia on a federal indictment charging him with terrorism offenses arising from his support of the Islamic Movement of Uzbekistan (IMU), a designated foreign terrorist organization. 

  The indictment was announced by Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington, D.C., Field Office.

  “According to the allegations in the indictment, Demirtas provided material support to the Islamic Movement of Uzbekistan, a designated foreign terrorist organization, through his fundraising and recruiting activities,” said Assistant Attorney General Carlin.  “Counterterrorism is the National Security Division’s highest priority and we will continue to pursue justice against those who provide material support to designated foreign terrorist organizations.”

  “Today Irfan Demirtas was brought into an American courtroom to face charges that he raised money and recruited fighters for a foreign terrorist organization battling the Afghan government and its allies, including U.S. troops,” said Acting U.S. Attorney Cohen.  “His extradition to the United States is an important step forward in holding him accountable for his alleged role in fomenting terror across Europe and the Middle East.  Demirtas is one of four defendants currently pending trial on international terrorism charges in separate cases in the federal court here in our nation’s capital.  These cases highlight our resolve to find and bring to justice those who support terror around the world.”

  “Demirtas was arrested and extradited to face justice in the U.S. because of his role as the European-based fundraiser and recruiter for a designated terrorist organization that directly worked against U.S. forces and our allies,” said Assistant Director in Charge McCabe.  “On a daily basis, the FBI is faced with investigating complex cases that involve terrorist threats.  Through international partnerships, the FBI will continue to pursue those who provide support to terrorist groups who threaten the security of our nation’s equities around the globe.”

  On Dec. 8, 2011, Demirtas was charged in a sealed four-count indictment for conduct occurring from at least January 2006 through May 2008.  Specifically, he was charged with providing material support to terrorists, which carries a maximum penalty of 15 years in prison; providing material support and resources to a designated foreign terrorist organization, which carries a maximum penalty of 15 years in prison; receiving military-type training from a foreign terrorist organization, which carries a 10-year prison sentence; and using or carrying a firearm during and in relation to a crime of violence, which carries up to a mandatory 30-year prison sentence.

  During the charged conduct, the IMU was a militant Islamic group acting as an armed insurgency against the legitimate government of Afghanistan and its allies, including the armed forces of the United States.  The IMU was designated by the U.S. Department of State as a Foreign Terrorist Organization on Sept. 25, 2001.  During the conduct charged in the indictment, Demirtas was a resident of the Netherlands.  He was appointed by the IMU as its European-based fundraiser.  He was responsible for raising funds and recruiting fighters for the IMU.  His activities allegedly took place in Pakistan, Afghanistan, Turkey, Jordan, the Netherlands, France and elsewhere outside the United States.

  In January 2015, Demirtas was arrested in Germany based on a red notice that had been issued on these charges.  He was detained and then extradited to the United States on July 17, 2015.  The indictment was unsealed today.

  An indictment is merely a formal allegation that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty. 

  The case is being investigated by the FBI’s Washington Field Office and is being prosecuted by the U.S. Attorney’s Office of the District of Columbia and the National Security Division’s Counterterrorism Section.

  Demirtas Indictment

  View the Original Release on justice.gov

• Assistant Attorney General John C. Cruden Appoints Andrea L. Berlowe to be Counselor for State and Local Matters

  2015-07-20 · District not recorded

  Read the Press Release

  Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division (ENRD) announced the creation of a new position designed to facilitate work with State and local government attorneys.

  Andrea L. Berlowe – Counselor to the Assistant Attorney General for State and Local Matters

  The newly created role of Counselor for State and Local Matters is designed to facilitate the joint efforts by the division and its environmental partners in state and local governments.  In this important position, Berlowe will work with the National Association of Attorneys General, the Environmental Council of the States (ECOS) and individual attorneys in state and local governments who work on environment and natural resource matters. She also will advise and assist ENRD’s leadership in litigation, legislation and policy matters affecting state and local governments.

  “The majority of environmental litigation takes place at the state and local level and, therefore, cooperative federalism is a top priority for ENRD,” said Assistant Attorney General Cruden.  “Andrea’s breadth of experience in the division will make her an effective liaison between the division and our enforcement partners in state and local governments and build on our prior efforts to foster these critical relationships.”

  One important function of the counselor will be to increase collaboration with our state and local partners to achieve shared environmental enforcement goals.  Such collaboration may range from developing and implementing joint training to serving as a resource for state and local counterparts on issues of shared concern.  The counselor also will advise and assist the division regarding litigation, legislation and policy matters affecting state and local governments.

  “I would like to thank Assistant Attorney General John C. Cruden for his insight with the creation of the position of Counselor on State and Local Matters,” said NAAG President Marty Jackley of South Dakota.  “Allocating resources to work directly with state and local governments is invaluable and we look forward to fostering this partnership while addressing the environment and natural resource issues that affect every citizen throughout the country.”

  “We commend Assistant Attorney General Cruden for his attention to improving the state-federal legal relationship,” said ECOS President Robert J. Martineau Jr., Commissioner of the Tennessee Department of Environment and Conservation.  Martineau, an attorney with past service in the federal government, has made improving coordination between states and the federal government on legal matters a priority while at the helm of the national organization of state environmental agency heads.  “We look forward to making this renewed function at the U.S. Department of Justice Environment and Natural Resources Division productive and positive.”

  Berlowe joined ENRD through the Attorney General’s Honors Program in 1993, serving first as a Trial Attorney, then Senior Attorney, in the Division’s Natural Resources Section.  Since 2001, she has served as Senior Counsel in the Law and Policy Section (LPS) where she handled a wide variety of policy, litigation and legislative matters involving public lands and natural resources, oceans issues, professional responsibility, and international environmental law.  During her ENRD tenure, Berlowe has litigated a broad array of cases in federal district courts and courts of appeal and worked closely with the division’s leadership office on policy matters.  She has received multiple awards from ENRD and client agencies for her work.  In 2013, Berlowe was detailed as special counsel to the newly established Gulf Coast Ecosystem Restoration Council, a new federal entity created by Congress and comprised of six federal agencies and the five Gulf Coast states, which is tasked with developing and funding comprehensive ecological and economic recovery of the Gulf Coast region following the Deepwater Horizon disaster.  She earned a J.D., cum laude, and a Masters in Environmental Law and Policy, summa cum laude, from Vermont Law School and holds a B.S. in Zoology from the University of Vermont.

  View the Original Release on justice.gov

• Three Tennessee Men Plead Guilty to Killing During Home-Invasion Robbery

  2015-07-17 · District not recorded

  Read the Press Release

  Three Clarksville, Tennessee, men pleaded guilty to using a firearm to kill during a home-invasion robbery.  Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David Rivera of the Middle District of Tennessee made the announcement.

  Cornell Oliver, 23, and Blake Wright, 25, pleaded guilty today before Chief U.S. District Judge Kevin H. Sharp to use of a firearm in a crime of violence resulting in death.  Jerry Dinkins, 26, pleaded guilty on June 26, 2015, to the same offense.  Wright and Oliver will be sentenced on Nov. 10, 2015, and Dinkins will be sentenced on Oct. 23, 2015.

  According to the plea agreements, on Oct. 27, 2010, Oliver, Dinkins and Wright participated in a home-invasion robbery at a crack house in Clarksville, and that the defendants targeted the house and the victim Raymond Caston, aka Black, because he was known to cook and sell substantial amounts of crack cocaine at the house and to have large amounts of cash. 

  The plea agreements provide that, when the defendants arrived at the house, one of the defendants kicked open the door.  At the time, at least eight people were inside the house.  The defendants then entered and demanded money and drugs from Caston.  One of the defendants proceeded to hit Caston with a gun.  After Caston indicated that he did not have money or drugs, the defendants forced Caston outside.  People inside the house then heard multiple gunshots, but did not see which of the defendants actually fired shots.  The defendants then fled, and Caston, who had been shot three times, was pronounced dead at the scene. 

  DNA and other physical and forensic evidence collected at the scene and eyewitness accounts also connected the defendants to the murder.

  The case was investigated by Clarksville Police Department and the Drug Enforcement Administration.  The case is being prosecuted by Trial Attorney Laura Gwinn of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Lynne T. Ingram of the Middle District of Tennessee.

  Dinkins Plea Agreement

  Oliver Plea Agreement

  Wright Plea Agreement

  View the Original Release on justice.gov

• Louis Berger International Resolves Foreign Bribery Charges

  2015-07-17 · District not recorded

  Read the Press Release

  Two Former Company Executives Plead Guilty to Participating In Bribery Scheme

  Louis Berger International Inc. (LBI), a New Jersey-based construction management company admitted to violations of the Foreign Corrupt Practices Act (FCPA) and agreed to pay a $17.1 million criminal penalty to resolve charges that it bribed foreign officials in India, Indonesia, Vietnam and Kuwait to secure government construction management contracts.  Two of the company’s former executives also pleaded guilty to conspiracy and FCPA charges in connection with the scheme.   

  Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Richard M. Frankel of the FBI’s Newark Division made the announcement.

  LBI entered into a deferred prosecution agreement (DPA) today and admitted its criminal conduct, including its conspiracy to violate the anti-bribery provisions of the FCPA.  Pursuant to the DPA, LBI has agreed to pay a $17.1 million criminal penalty, to implement rigorous internal controls, to continue to cooperate fully with the department and to retain a compliance monitor for at least three years.

  Richard Hirsch, 61, of Makaati, Philippines, and James McClung, 59, of Dubai, United Arab Emirates, each pleaded guilty to one count of conspiracy to violate the FCPA and one substantive count of violating the FCPA.  Hirsch previously served as the Senior Vice President responsible for the company’s operations in Indonesia, Thailand, the Philippines and Vietnam.  McClung previously served as the Senior Vice President responsible for the company’s operations in India and, subsequent to Hirsch, in Vietnam.  The sentencing hearings for Hirsch and McClung are scheduled for Nov. 5, 2015.

  According to admissions in the DPA and statements in the charging documents, from 1998 through 2010, the company and its employees, including Hirsch and McClung, orchestrated $3.9 million in bribe payments to foreign officials in various countries in order to secure government contracts.  To conceal the payments, the co-conspirators made payments under the guise of “commitment fees,” “counterpart per diems,” and other payments to third-party vendors.  In reality, the payments were intended to fund bribes to foreign officials who had awarded contracts to LBI or who supervised LBI’s work on contracts. 

  Among other factors, in entering into a DPA in this case, the government considered: (1) LBI’s self-reporting of the misconduct; (2) the company’s cooperation, including voluntarily making both U.S. and foreign employees available for interviews, and collecting, analyzing and organizing evidence and information for federal investigators; (3) the company’s extensive remediation, including terminating the officers and employees responsible for the corrupt payments; and (4) the company’s demonstrated commitment to improving its compliance program and internal controls. 

  This case was investigated by the FBI’s Newark Division.  This is being prosecuted by Trial Attorney John W. Borchert of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Thomas J. Eicher and Scott B. McBride of the District of New Jersey.  The Criminal Division’s Office of International Affairs also provided assistance.    

  Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa. 

  Louis Berger International Complaint

  Louis Berger International Continuance & DPA

  View the Original Release on justice.gov

• Justice Department Reaches Settlement in Civil Rights Lawsuit Against Maricopa County, Arizona, and Maricopa County Sheriff

  2015-07-17 · District not recorded

  Read the Press Release

  The Department of Justice’s Civil Rights Division announced today that it has reached a partial settlement in its civil rights lawsuit against Maricopa County, Arizona, and Maricopa County Sheriff Joseph M. Arpaio.  The settlement resolves the United States’ claims that the Maricopa County Sheriff’s Office (MCSO) conducted unlawful detentions of Hispanics during worksite raids of local businesses in violation of the Fourth and 14th Amendments, and retaliated against critics of Sheriff Arpaio and MCSO in violation of the First Amendment.  The parties have filed a joint motion requesting that the federal district court in Arizona approve and agree to enforce the settlement agreement.  The parties also reached a separate settlement resolving the United States’ claim that MCSO failed to provide adequate language access for limited English-proficient Hispanics in MCSO jails in violation of Title VI of the Civil Rights Act of 1964.   

  “The resolution of these claims, with the important safeguards against future constitutional violations included in these agreements, is in the best interests of the people of Maricopa County,” said Deputy Assistant Attorney General Mark Kappelhoff of the Justice Department’s Civil Rights Division.  “The Maricopa County Sheriff’s Office changed many of their practices after the commencement of our litigation, and these agreements ensure that progress continues and the Constitutional rights of the people of Maricopa County will be protected for the long term.”

  Under the agreements, MCSO will comply with the following measures, ensuring that its activities comport with federal law and the Constitution:

  • Before MCSO may conduct any worksite raids, it must first establish a set of written policies and protocols and submit them to the Civil Rights Division for review, to ensure that the worksite raids comply with all applicable laws and constitutional protections.  If MCSO conducts a worksite raid, the Civil Rights Division may request any information and documents to determine whether the operation was conducted consistently with federal law and the Constitution. 

  • MCSO will prohibit retaliation against individuals engaging in First Amendment protected activity, such as public criticism of Sheriff Arpaio or the MCSO.  

  • MCSO must ensure that limited English-proficient (LEP) Hispanic inmates in MCSO jails have adequate language access and are protected from unlawful, national origin-based discrimination.  These measures include:

    • Improving MCSO’s policies and practices for identifying LEP inmates;

    • Ensuring that LEP inmates have adequate access to language assistance services, such as bilingual staff, telephonic interpretation services and Spanish-language translations of important written policies and postings in the jails; and

    • Requiring that all vital announcements in MCSO facilities be made in both English and Spanish; and

  Requiring MCSO to take reasonable steps to ensure that medical staff are informed if an inmate needing medical attention is LEP and requires language assistance.

  As part of today’s agreements, if the Civil Rights Division determines that MCSO is not in substantial compliance with any provision of the agreements, it will attempt to first resolve the issue with MCSO; if the Civil Rights Division is unable to cooperatively resolve the compliance issues, however, it may bring appropriate enforcement actions before the federal district court in Arizona.

  Today’s agreements resolve the majority of the claims involved in the division’s lawsuit, filed in May 2013, against Sheriff Arpaio and Maricopa County.  That lawsuit alleged four patterns or practices of unconstitutional conduct: (1) discriminatory policing against Hispanic persons in MCSO’s saturation patrols, general traffic enforcement and worksite operations targeting Hispanic immigrants, (2) detentions in violation of the Fourth Amendment during MCSO’s worksite raids targeting Hispanic immigrants, (3) failures in the provision of language access to Hispanic LEP jail inmates and (4) retaliatory police action against critics of Sheriff Arpaio and MCSO.  Last month, the federal district court of Arizona granted the United States’ motion for partial summary judgment on its discriminatory policing claim, finding that the United States was entitled to judgment on its claims that MCSO had engaged in discrimination against Hispanics in its enforcement of traffic laws.  A remedy on that issue is still to be determined by the court.  The parties are in ongoing discussions to resolve the remaining claims in the division’s lawsuit.

  The agreements, as well as a description of the division’s previous investigation of and litigation against the Maricopa County Sheriff Arpaio and Maricopa County, will be available at: http://www.justice.gov/crt/about/spl/.

  Maricopa Settlement Agreement and Attachment A.pdf (1.03 MB)

  Maricopa Proposed Order.pdf (23.54 KB)

  Maricopa Joint Motion to Approve.pdf (37.86 KB)

  View the Original Release on justice.gov

• Two New York Salesmen Sentenced to Prison in Business Opportunity Fraud Scheme

  2015-07-16 · District not recorded

  Read the Press Release

  Scheme Defrauded More than 330 Victims Across the Country

  A federal judge in the Eastern District of New York sentenced two sales representatives to prison today for their roles in a vending machine business opportunity fraud scheme, the Department of Justice announced today. 

  Howard S. Strauss, 66, of Jericho, New York, was sentenced to serve 28 months in prison by U.S. District Court Judge Joan M. Azrack, who also ordered him to pay $2,291,844 in restitution to 230 victims.  Mark Benowitz, 68, of Midlothian, Virginia, was sentenced to serve 24 months in prison and ordered to pay $997,210 in restitution to 103 victims.

  Both Strauss and Benowitz pleaded guilty last year to fraud charges in connection with Multivend LLC, doing business as Vendstar, a company based in Deer Park, New York, that sold vending machine business opportunities to consumers throughout the United States until 2010.  Strauss and Benowitz were Vendstar sales representatives who misrepresented the business opportunity’s likely profits, the amount of money that Vendstar’s prior customers were earning, how quickly customers were likely to recover their investment, the quality of locations that were available for the vending machines, and the level of location assistance that customers would receive from locating companies recommended by Vendstar.  Both Strauss and Benowitz also falsely told potential customers that they operated profitable candy vending machine routes themselves.

  “These defendants promised the American dream, but knew that what they in fact were offering was a worthless business opportunity,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “The Department of Justice will continue to prosecute those who seek to scam out of everyday Americans the hard-earned money in their retirement accounts and life savings.”

  Twenty-two individuals have been charged with fraud in connection with Vendstar, including Vendstar managers and sales representatives, and the operators of locating companies recommended by Vendstar.  Three of those defendants have now been sentenced; 13 defendants are awaiting sentencing; and six defendants are scheduled to stand trial in September.

  Principal Deputy Assistant Attorney General Mizer commended the U.S. Postal Inspection Service for its thorough investigation.  The case is being prosecuted by Trial Attorneys Patrick Jasperse and Alan Phelps of the Civil Division’s Consumer Protection Branch.

  View the Original Release on justice.gov

• Three Alleged Indiana Gang Members Charged with Murder in Aid of Racketeering

  2015-07-16 · District not recorded

  Read the Press Release

  In two separate cases, two members of the Two Six nation and one member of the Latin Kings were indicted for murder in aid of racketeering and other offenses, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney David A. Capp of the Northern District of Indiana. 

  “Prosecutions, like the one announced here, demonstrate the effectiveness of the task force approach to fighting gang violence,” said Assistant Attorney General Caldwell.  “Along with our partners, the Criminal Division will aggressively work to release the grip that gangs hold on many neighborhoods across this country.”

  “If you are a member of a violent street gang and you committed a murder or other violent act last week or last decade, we are coming at you,” said U.S. Attorney Capp.  He also reiterated his office’s continuing commitment to removing all members of these violent street gangs from the streets on northwest Indiana.

  Marcus Lovell Jenkins, 26, of East Chicago, Indiana, and Charles Garcia-Berrios, 22, of Hammond, Indiana, were charged by superseding indictment with murder in aid of racketeering and use of a firearm in connection with a crime of violence for their alleged roles in the killing of Kemond Coleman.  Jenkins also is charged with possession of a firearm by a prohibited person.

  According to the allegations in the indictment, Jenkins and Garcia-Berrios are members of the Two Six Nation street gang.  The indictment alleges that, on July 26, 2014, Jenkins and Garcia-Berrios shot and killed Coleman for the purpose of maintaining and enhancing their positions within the gang.  Garcia-Berrios and Two Six member Julio Ivan Cartagena previously were charged with the attempted murders of two individuals in this case.  All three defendants are in federal custody.

  In a separate case, Anton James, 19, of Hammond, was charged by indictment with murder in aid of racketeering and murder resulting from the use of a firearm during a crime of violence for his alleged role in the murder of Martin Hurtado Sr.  According to the allegations in the indictment, James is a member of the Latin Kings street gang.  The indictment alleges that, on Oct. 28, 2014, James shot and killed Hurtado Sr. believing that he was Martin Hurtado Jr., whom James believed was a rival gang member.  James made his initial appearance in federal court this afternoon before Magistrate Judge Andrew Rodovich of the Northern District of Indiana.

  An charges and allegations in the indictments are merely allegations.  The defendants are presumed innocent until and unless proven guilty. 

  These cases are the result of the investigative efforts of the FBI, the ATF, the East Chicago Police Department, the Hammond Police Department, the Lake County, Indiana, Sheriff’s Department and Lake County High Intensity Drug Trafficking Area officers and agents.  The Lake County Prosecutor’s Office also has provided assistance.  The Jenkins case is being prosecuted by Trial Attorney Andrew Creighton of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney David Nozick of the Northern District of Indiana.  The James case is being prosecuted by Assistant U.S. Attorney Nozick.

  Jenkins Superseding Indictment

  James Indictment

  View the Original Release on justice.gov

• Ohio Man Indicted for Providing Support to ISIL and Other Federal Offenses

  2015-07-16 · District not recorded

  Read the Press Release

  A 28-count indictment was filed charging a Sheffield Lake, Ohio, man with providing material support to Islamic State of Iraq and the Levant (ISIL), as well as firearms and narcotics violations.

  Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Steven D. Dettelbach of the Northern District of Ohio and Special Agent in Charge Stephen D. Anthony of the FBI’s Cleveland Division made the announcement.

  Amir Said Rahman Al-Ghazi aka Robert C. McCollum, 38, was arrested last month after he attempted to buy an AK-47 from an undercover agent.

  Al-Ghazi, who changed his name from Robert McCollum earlier this year, is alleged to have pledged his support to ISIL and Abu Bakr Al-Baghdadi via social media in 2014.  From July 2014 to June 2015, Al-Ghazi made multiple statements trying to persuade others to join ISIL.  He also expressed his own desire to perpetrate an attack on the United States and had attempted to purchase an AK-47 assault rifle.  Al-Ghazi has communicated with individuals he believed to be members of ISIL in the Middle East and took steps to create propaganda videos for ISIL, according to court documents.

  Count one of the indictment charges Al-Ghazi with attempting to provide material support to ISIL.  Counts two and three charge Al-Ghazi with being a felon in possession of a firearm.  Counts four through 28 pertain to his sale of marijuana from February 2014 through last month.

  If convicted, the defendant’s sentence will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.

  An indictment is only a charge and is not evidence of guilt.  A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

  This case was investigated by the FBI’s JTTF.  This case is being prosecuted by Assistant U.S. Attorneys Matthew W. Shepherd and Christos N. Georgalis, and the National Security Division’s Counterterrorism Section.

  Al-Ghazi Indictment

  View the Original Release on justice.gov

• New Hampshire Man Charged with Computer Hacking and Cyberstalking in “Sextortion” Scheme Targeting Minors

  2015-07-16 · District not recorded

  Read the Press Release

  A New Hampshire man was charged with remotely hacking into the social media, email and online shopping accounts of almost a dozen minor females and threatening that he would delete, deface, and make purchases from the accounts unless the victims sent him sexually explicit photographs of themselves.

  Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Donald Feith of the District of New Hampshire and Special Agent in Charge Lisa A. Quinn of the U.S. Secret Service’s Boston Field Office made the announcement. 

  “Predators troll the Internet in search of vulnerable children to extort for their own sexual gratification,” said Assistant Attorney General Caldwell.  “The Criminal Division and our law enforcement partners are committed to protecting our youth from sextortion and to finding and prosecuting wrongdoers lurking in the shadows of the Internet.”

  “Individuals who would take advantage of today’s modern technologies to entice and then threaten minors deserve special investigative and prosecutorial attention,” said Acting U.S. Attorney Feith.  “We will continue to work with law enforcement, technology specialists and education professionals to teach minors about the dangers of placing personal information in social media and the need to report threats of this nature so that we may bring these predators to justice.”

  “Child sexual exploitation is an alarming problem in our society,” said Special Agent in Charge Quinn.  “The Secret Service is committed to work closely with our law enforcement partners to identify and prosecute these predators.”

  Ryan J. Vallee, 21, of Franklin, New Hampshire, was charged by indictment with 10 counts of making interstate threats, two counts of computer hacking to steal information, seven counts of computer hacking to extort and seven counts of aggravated identity theft.  Vallee is scheduled to make his initial appearance today at 4:30 p.m. EDT in the District of New Hampshire.

  According to the indictment, from 2012 through November 2013, Vallee, using various aliases that included “Seth Williams” and “James McRow,” engaged in a computer hacking and “sextortion” campaign designed to coerce numerous minor females to provide him with sexually explicit photographs of themselves.  He allegedly hacked into and took control of the girls’ online accounts – including their e-mail, Facebook and Instagram accounts – and threatened to delete the accounts, and defaced the contents of some of the accounts.  Vallee also allegedly hacked into the girls’ Amazon.com accounts and, using their stored payment card information and shipping addresses, ordered items of a sexual nature and had them shipped to the girls’ homes.  Vallee also allegedly obtained sexually explicit photographs of the girls and their friends and distributed them to others.

  The indictment alleges that, in conjunction with his harassment campaign, Vallee sent communications to his victims, usually using a text message spoofing or anonymizing service, threatening to continue his attacks unless the victims provided sexually explicit photographs of themselves.  The indictment alleges that, when victims refused to comply with Vallee’s demands and begged him to leave them alone, Vallee responded with threats to inflict additional harm.

  The charges and allegations contained in an indictment are merely accusations.  A defendant is presumed innocent until and unless proven guilty.

  The case is being investigated by the U.S. Secret Service, with substantial assistance from the Belmont, New Hampshire, Police Department.  The case is being prosecuted by Senior Trial Attorney Mona Sedky and Trial Attorney Sumon Dantiki of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.

  Vallee Indictment

  View the Original Release on justice.gov

• Justice Department Announces Three Banks Reach Resolutions under Swiss Bank Program

  2015-07-16 · District not recorded

  Read the Press Release

  Three Banks Collectively Will Pay Penalties of More than $3.1 Million and Continue to Cooperate with Department

  The Department of Justice announced today that Mercantil Bank (Schweiz) AG, Banque Cantonale Neuchâteloise and Nidwaldner Kantonalbank have reached resolutions under the department’s Swiss Bank Program.

  The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States.  Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts.  Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

  Under the program, banks are required to:

  • Make a complete disclosure of their cross-border activities;

  • Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;

  • Cooperate in treaty requests for account information;

  • Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;

  • Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and

  • 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.

  Mercantil Bank (Schweiz) AG is based in Zurich and initiated operations in 1988.  Its main focus is private banking, which offers wealth management services to individuals and private investment companies.  Mercantil opened, serviced and profited from accounts for U.S. clients and knew or should have known that many of its U.S. clients were likely not complying with their tax obligations.  Its cross-border banking business aided and assisted U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts.  Until 2010, Mercantil maintained a U.S. toll-free telephone number to service its customers. 

  Mercantil used a variety of means that could and did assist U.S. clients in concealing their accounts, including hold mail and code name or numbered account services, thereby ensuring that documents reflecting the existence of the accounts could remain outside the United States, beyond the reach of U.S. tax authorities and protected by Swiss banking secrecy laws.  Mercantil also assisted clients in opening and maintaining accounts in the names of sham entities.  For example, Mercantil provided accounts for what were referred to as “Personal Investment Companies” through its private banking unit.  Where there was no active, ongoing business, it was Mercantil’s practice to ignore the form of the structures and to treat the beneficial owners of the entity as the accountholders in substance.  Mercantil provided services to the accounts knowing that they could be used for evasion or avoidance of tax obligations.  On one occasion in March 2008, Mercantil opened an account for a bank executive with U.S. citizenship in the name of a Panamanian holding company.  In that instance, Mercantil accepted and included in account records forms provided by the director of the Panamanian company that falsely represented the ownership of the account for U.S. federal income tax purposes.

  Since Aug. 1, 2008, Mercantil held a total of 116 U.S.-related accounts with a maximum aggregate value totaling over $59.8 million.  Mercantil will pay a penalty of $1.172 million.

  Banque Cantonale Neuchâteloise (BCN) was formed in 1883 and is headquartered in the city of Neuchâtel, Switzerland.  BCN opened, serviced and profited from accounts for U.S clients with the knowledge that many likely were not complying with their U.S. tax obligations.  BCN knew or had reasons to know that it was likely that certain U.S. taxpayers were maintaining undeclared accounts at BCN in order to evade their U.S. tax obligations in violation of U.S. law.

  BCN provided traditional Swiss banking services that it knew could assist, and that did in fact assist, certain U.S. taxpayers to evade their U.S. tax obligations and otherwise hide accounts held at BCN from the Internal Revenue Service (IRS).  For example, after it became public that the department was investigating the conduct of UBS, and later other Swiss banks, BCN allowed several U.S. persons to open accounts at BCN and transfer funds into those BCN accounts from the banks under investigation.

  BCN provided numbered accounts and agreed to hold bank statements and other mail relating to accounts at BCN, rather than send them to U.S. taxpayers located in the United States, thereby ensuring that documents reflecting the existence of the accounts remained outside the United States and beyond the reach of U.S. tax authorities.  In some instances, BCN permitted accounts to be held by Swiss or, in one case, foreign non-operating entities that were ultimately beneficially owned by U.S. persons.  By permitting U.S. accountholders to hold their accounts in the name of non-operating entities, BCN thus enabled U.S. accountholders to conceal their identity from the U.S. government.  Until 2014, BCN permitted its U.S. accountholders to withdraw funds in cash both by withdrawing sums below $10,000 and, in some cases, withdrawing larger sums of cash when closing their accounts.

  As part of its participation in the Swiss Bank Program, BCN has provided certain account information related to U.S. taxpayers which may assist the government in making requests under the 1996 Convention between the United States of America and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income for, among other things, the identities of U.S. accountholders.

  Since Aug. 1, 2008, BCN had 190 U.S. clients with a total of 595 U.S.-related accounts.  The maximum dollar value, in the aggregate, of all accounts associated with U.S. taxpayers at BCN was approximately $67.5 million.  BCN will pay a penalty of $1.123 million.

  Nidwaldner Kantonalbank (NKB), established in 1879, is a public and registered cantonal bank in Switzerland owned by the canton of Nidwalden, Switzerland.  Despite understanding that U.S. taxpayers had a legal duty to report to the IRS and to pay taxes on income earned in accounts maintained in Switzerland, NKB opened and maintained undeclared accounts for U.S. taxpayers.  NKB chose to continue to service U.S. clients without disclosing their identity to the IRS and without regard for the impact of U.S. criminal law on that decision. 

  NKB offered a variety of traditional Swiss banking services that it knew could assist, and that did assist, U.S. clients in the concealment of assets and income from the IRS.  These services included hold mail and numbered accounts.  NKB also allowed U.S. nationals with Swiss relatives to open accounts, even in circumstances where NKB was or should have been aware that the accounts were not declared in the United States.

  In several instances, requirements of an agreement NKB had with the IRS, in particular with respect to requiring IRS Forms W-9 from U.S. clients, were either not followed or were waived by NKB.  For example, in one case, NKB knowingly waived the W-9 requirement for an account from a bank under investigation by the department.  This allowed the accountholders, both U.S. citizens and residents, to hold U.S. securities in the account without disclosure of the account to the IRS.  NKB’s failure to comply with its reporting and withholding obligations allowed these and other U.S. accountholders to conceal their accounts from U.S. authorities.

  One external asset manager had a relationship with an NKB banker and brought five accounts to NKB, including some from Credit Suisse.  One of these accounts held U.S. securities through a life insurance policy (an “insurance wrapper”) for the benefit of a U.S. person, allowing the account to hold U.S. securities without disclosure to U.S. authorities.  NKB accepted another account from UBS that was owned by an individual who was a foreign national and U.S. resident.  At the time it approved the account, NKB was aware that the client left UBS because he was concerned about the U.S. government’s activities in investigating U.S. persons with accounts at that bank. 

  During the Applicable Period, NKB held a total of 95 U.S.-related accounts with a peak value of assets under management of approximately $30.5 million.  NKB will pay a penalty of $856,000.

  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.

  Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division thanked the IRS, and in particular, IRS-Criminal Investigation and the IRS Large Business and International Division for their substantial assistance.  Ciraolo also thanked Dara B. Oliphant, Gregory S. Seador, Sean P. Beaty and Kathleen E. Lyon, 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.

  View the Original Release on justice.gov

• Former Washington, D.C., Tax Return Preparers Sentenced to Prison for Conspiracy

  2015-07-16 · District not recorded

  Read the Press Release

  A former Washington, D.C., public school teacher and tax return preparer and her son, a current Washington, D.C., public school teacher and former tax return preparer, were sentenced to prison today in the U.S. District Court for the District of Columbia, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. 

  Sherri Davis, 42, and her son, Andre Davis, 24, both of Washington, D.C., were convicted by a federal jury on Jan. 29 of one count of conspiracy to defraud the United States.  Sherri Davis was also convicted of 25 counts of aiding and assisting in the preparation and filing of false federal individual income tax returns and three counts of filing her own false tax returns.  Andre Davis was also convicted of one count of aiding and assisting in the preparation and filing of a false tax return.

  U.S. District Court Judge Thomas Hogan of the District of Columbia sentenced Sherri Davis to serve 48 months in prison to be followed by three years of supervised release, and ordered her to pay $642,103 in restitution to the Internal Revenue Service (IRS) and a $2,900 special assessment.  Judge Hogan sentenced Andre Davis to serve six months of home detention and 100 hours of community service as part of five years of supervised release, and ordered him to pay $37,537 in restitution to the IRS and a $200 special assessment.

  “Identifying and prosecuting fraudulent return preparers are among the Tax Division’s highest priorities,” said Acting Assistant Attorney General Ciraolo.  “Today’s sentences demonstrate that those who willfully assist U.S. taxpayers in filing false returns and in doing so, stealing from the U.S. Treasury, will pay a heavy price for their criminal conduct.”

  According to the evidence presented at trial, from 2003 through 2012, Sherri Davis was the owner and operator of 2FT Fast Facts Tax Service, a tax return preparation business located in Washington, D.C.  In 2012, Sherri Davis changed the business name to Davis Financial Services and Andre Davis was designated as the owner and operator of that business.

  At trial, the evidence established that Sherri and Andre Davis prepared and filed false tax returns for clients that included various false and fraudulent deductions, expenses and credits intended to reduce the amount of taxes owed and obtain refunds for their clients that were larger than the clients were entitled to receive.  In some instances, Sherri and Andre Davis, and others working for them, included false and fraudulent Schedules C that reported false business losses and Schedules A that reported fraudulent itemized deductions.  On some of the returns, Sherri and Andre Davis completely fabricated the Schedule C businesses.  On other returns, the Schedule A included false or grossly inflated gifts to charity, job expenses and other miscellaneous expenses.

  The evidence at trial further established that for calendar years 2007 through 2009, Sherri Davis filed her own false income tax returns on which she failed to report more than $300,000 in tax preparation fees that she received from her business.

  “IRS-Criminal Investigation is focused on cases where greedy individuals, who for their own personal benefit, participate in identity theft schemes to accumulate ill-gotten wealth at a cost to the taxpayer,” said Special Agent in Charge Thomas Jankowski of the IRS-Criminal Investigation (CI), Washington, D.C., Field Office.  “In cooperation with the Department of Justice, IRS-CI is committed to holding thieves, such as Sherri and Andre Davis, accountable for their misdeeds.”

  Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation and the Washington, D.C., Office of Tax and Revenue-Criminal Investigation Division, who investigated the case, and Trial Attorneys Jessica Moran, Tiwana Fleming and Mark McDonald of the Tax Division, who prosecuted the case.  Ciraolo also thanked the U.S. Attorney’s Office of the District of Columbia for their substantial assistance.

  View the Original Release on justice.gov

• California Payment Processing Company Owner Pleads Guilty to Fraud

  2015-07-16 · District not recorded

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  The owner and operator of a payment processing company that was involved in the unauthorized withdrawal of millions of dollars from consumers’ bank accounts pleaded guilty to fraud, the Justice Department announced today.

  Neil Godfrey, 76, of Santa Ana, California, pleaded guilty to a one-count information charging him with wire fraud in the Eastern District of Pennsylvania.  The information described how, working as a payment processor, Godfrey knowingly enabled fraudulent merchants to withdraw money from consumers’ bank accounts without the consumers’ knowledge or consent. 

  In pleading guilty, Godfrey admitted that he used a Santa Ana processing company named Check Site Inc. to assist at least two fraudulent merchants.  The merchants operated websites that purportedly offered payday loans.  The websites were simply a ruse to harvest consumers’ bank account information.  Instead of providing consumers with payday loans, the merchants operating the websites used the information provided by the consumers in loan applications to withdraw money from the consumers’ bank accounts.  Using Check Site, Godfrey knowingly processed the merchants’ fraudulent withdrawals and provided the merchants access to the banking system.

  “Payment processors commit a federal offense when they knowingly facilitate consumer fraud,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “The Justice Department will not sit idly by while companies and individuals take money from victims’ accounts without their consent.  As this case demonstrates, the Department of Justice will continue to prosecute those involved in perpetrating or knowingly assisting fraud schemes.”

  In pleading guilty, Godfrey admitted to using payment devices called remotely created checks (RCCs) to facilitate fraud schemes.  Once the fraudulent merchants had obtained consumer names and bank account information, the merchants created RCCs, which Check Site submitted through the banking system to the consumers’ banks.  Unlike an ordinary check, an RCC is generally honored without the signature of the account holder.  When the RCCs were processed, Check Site kept a fee and transferred the remainder of the withdrawals to the merchants.

  The information to which Godfrey pleaded guilty charged that he was an expert in finding banks that were willing to facilitate these transactions and ignore the red flags raised by these transactions.  Such banks included one located in Irvine, California, and one located in Philadelphia.  The information also alleged that Godfrey helped the fraudulent merchants stay off the radar of other banks and regulators so that the fraud could continue.  For example, Godfrey advised merchants how to change the names of their companies and set up the facade of a legitimate company to defeat banks’ attempts at due diligence.

  In an email message quoted in the information, Godfrey advised a fraudulent merchant that “the lesson we have learned is that we must trick the [bank] folk.  It means you need to set up some type of website front.  What we need to do is set up a legitimate website selling anything you can think of – that is what you get approved on.  It is irrelevant if anything is ever sold there – just so it exists. . . .  In the mean time we set up false credit card approval etcetera.  It is this we use to run the transactions.  Yes, there will be a lot of returns, but what we do is send through transactions over the next few weeks that don’t have high returns.  They stop looking and then we can run the regular stuff. . . .  [A]fter several months we junk that company and go to another company.”

  Principal Deputy Assistant Attorney General Mizer thanked the Federal Trade Commission for providing Attorney Michelle Chua to serve as a Special Assistant U.S. Attorney on the case, and commended the FBI for its thorough investigation.  The case is being prosecuted by Assistant U.S. Attorney Patrick J. Murray of the Eastern District of Pennsylvania and Trial Attorney Patrick Jasperse of the Civil Division’s Consumer Protection Branch.

  View the Original Release on justice.gov

• Attorney General Loretta E. Lynch Statement on the Shooting in Chattanooga, Tennessee

  2015-07-16 · District not recorded

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  Attorney General Loretta E. Lynch provided the following statement on the shooting in Chattanooga, Tennessee:

  “On behalf of the Department of Justice, I offer my heartfelt condolences and deepest sympathies to the loved ones of the U.S. servicemembers who were murdered and the law enforcement officer who was wounded in this shameful and cowardly act of violence.  I have directed the FBI to take the lead in the national security investigation of this heinous attack on members of our military.  The U.S. Attorney’s office and department prosecutors are also actively involved.  In the days ahead, we intend to work with our partners in law enforcement and the intelligence community to ensure that the American people are protected and that justice is served.”

  View the Original Release on justice.gov

• Three Owners and CEO of Contracting Company Indicted for Bribing Army National Guard Colonel

  2015-07-15 · District not recorded

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  Three owners and the CEO of a government contracting company headquartered in Falls Church, Virginia, all of whom are retired Army National Guard colonels, were indicted today for their alleged participation in a scheme to bribe an active-duty Army National Guard colonel in order to obtain millions of dollars of Army National Guard marketing, retention and recruitment contracts.

  Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington, D.C., Field Office, Acting Special Agent in Charge Paul Sternal of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Director Frank Robey of the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit (Army-CID) made the announcement.

  “As alleged in the indictment, four retired colonels have been charged with using their corporate marketing firm to funnel bribe payments to high-ranking accomplices in the Army National Guard to corruptly obtain lucrative marketing contracts,” said Assistant Attorney General Caldwell.  “This case is emblematic of the Criminal Division’s ongoing efforts to root out corruption wherever it may be found, including at the highest ranks of our armed services.”

  “These criminal charges reflect our continued commitment to rooting out public corruption wherever it occurs,” said U.S. Attorney Boente.  “The public contracting process should be one of integrity and fairness, and these cases should send a strong message that public corruption will be vigorously prosecuted in the military as well as other areas of government.”

  “The FBI’s top criminal priority is investigating and stopping corrupt officials and the organizations they do business with,” said Assistant Director in Charge McCabe.  “These indictments outline a significant bribery scheme that undermined a fair government contracting process.”

  “The actions of the defendants have brought them dishonor and erode confidence in the integrity of a contracting process intended to support their fellow citizen soldiers,” said Acting Special Agent in Charge Sternal.  “The Defense Criminal Investigative Service, alongside its law enforcement partners and the U.S. Attorney's Office, remain vigilant and committed to bringing individuals who subvert the acquisition system to justice.”

  “Today's indictment illustrates our commitment and cooperation shared between law enforcement agencies investigating this type of corruption and bribery,” said Director Robey.  “It is unconscionable how these former military officers betrayed the offices they once held for monetary gain.”

  Edwin Stuart Livingston III, 67, of The Villages, Florida; Ronald Joseph Tipa, 68, of Sunny Isles Beach, Florida; Thomas Edward Taylor, 66, of Alexandria, Virginia; and Ross Bernard DeBlois Sr., 55, of Fairfax Station, Virginia, are each charged by indictment with one count of conspiracy to commit bribery, one count of bribery of a public official, one count of conspiracy to commit honest services fraud and five counts of honest services fraud.

  According to the indictment, Livingston, Tipa, Taylor and John Jones, 77, a retired brigadier general from the New York Army National Guard, each owned 25 percent of MPSC and constituted MPSC’s Board of Directors.  DeBlois was the company’s CEO. 

  The National Guard Bureau (NGB) is a joint activity of the U.S. Department of Defense (DOD), the state units of the Army National Guard and the Departments of the Army and Air Force.  The NGB oversees the distribution of federal funding provided to the Army National Guard and its state units.

  The DOD provides millions of dollars in federal funds to the NGB for, among other things, advertising, marketing and sponsorships in order to recruit new Army National Guard members.  The NGB then uses these funds to promote the Army National Guard on a national level by entering into marketing contracts.

  According to the allegations in the indictment, in 2010 or 2011, Livingston and Tipa offered Robert Porter, 50, who then was an active-duty colonel in the Army National Guard who held a high-level position at the NGB, a deal in which MPSC would pay Porter 1 percent of the value of all contracts he steered to MPSC.  The indictment alleges that Porter was to receive the bribe payment after he retired from the NGB and began working for MPSC, and that the payment was to be concealed as an “incentive fee” or “bonus” payment in MPSC payroll records.

  According to the indictment, during 2011 and 2012, Porter allegedly steered at least three NGB marketing contracts to MPSC, which were worth a total of approximately $5.5 million.  The indictment alleges that, during a July 2014 meeting of MPSC’s board of directors, DeBlois confirmed that three contracts were awarded to MPSC while Porter was “in uniform.”  Thereafter, Livingston, Tipa, Taylor and Jones allegedly unanimously voted to make the promised bribe payment to Porter.  The indictment further alleges that, between July and September 2014, MPSC made three payments to Porter, each for over $10,000.

  In September 2014, Porter pleaded guilty to conspiracy to commit bribery and bribery of a public official, and in February 2015, Jones pleaded guilty to conspiracy to commit bribery and bribery of a public official in connection with this scheme.

  The charges and allegations contained in the indictment are merely accusations.  The defendants are presumed innocent unless and until proven guilty.

  The case was investigated by the FBI’s Washington Field Office, DCIS Mid-Atlantic Field Office and Army-CID’s Major Procurement Fraud Unit.  The case is being prosecuted by Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jonathan Fahey of the Eastern District of Virginia.

  Individuals with information regarding bribery or corruption within the NGB’s retention and recruitment contracting process or at MPSC should contact the FBI’s Washington Field Office at (202) 278–2000.

  MPSC Indictment

  View the Original Release on justice.gov

• Settlement with Interstate Power and Light to Reduce Emissions from Iowa Power Plants, Fund Projects to Benefit Environment and Communities

  2015-07-15 · District not recorded

  Read the Press Release

  In a settlement announced today by the Department of Justice and the Environmental Protection Agency (EPA), Interstate Power and Light, a subsidiary of Alliant Energy, has agreed to install pollution control technology and meet stringent emission rates to reduce harmful air pollution from the company’s seven coal-fired power plants in Iowa.  The settlement also requires Interstate Power and Light to spend a total of $6 million on environmental mitigation projects and pay a civil penalty of $1.1 million to resolve alleged violations of the Clean Air Act.  Linn County, Iowa, the state of Iowa and the Sierra Club join the United States as co-plaintiffs in the case.

  “This settlement is a victory for air quality and public health in Iowa,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “This agreement will cover all of Interstate’s coal-burning facilities in Iowa, requiring new pollution cutting technology and environmental projects to enhance air quality in surrounding communities, among other lasting benefits.” 

  “The emissions reductions required by this settlement will lead to cleaner air and significant environmental and public health benefits for Iowans," said U.S. Attorney Kevin W. Techau for the Northern District of Iowa.  “This settlement will eliminate thousands of tons of harmful air pollution each year significantly improving air quality in Iowa and throughout the Midwest.  The agreement demonstrates the Department of Justice’s strong efforts, along with EPA, to bring large sources of air pollution into compliance with the Clean Air Act.”

  “To serve the communities in which they operate, power plants must protect clean air for those living nearby,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.  “This case delivers on the goals of EPA’s national enforcement initiative to reduce air pollution from the largest sources.  By installing new equipment and funding mitigation projects, Interstate Power and Light can help conserve energy and cut pollution in communities across Iowa.”

  Under the settlement, Interstate Power and Light will install and continuously operate new and existing pollution control technology at its two largest plants in Lansing and Ottumwa, Iowa and will retire or convert to cleaner-burning natural gas its remaining five plants in Burlington, Cedar Rapids, Clinton, Dubuque and Marshalltown, Iowa.  The new, state-of-the-art pollution controls required by the settlement are expected to cost approximately $620 million.  EPA estimates that the settlement will reduce sulfur dioxide (SO2) emissions by 32,500 tons per year and nitrogen oxide (NOx) emissions by 3,800 tons per year once the settlement is fully implemented.

  Interstate Power and Light will also be required to spend $6 million on environmental mitigation projects.  The company will choose from five potential projects, including solar energy and anaerobic digester installations, replacing coal-fired boilers at schools with lower-emission equipment, an alternative fuel vehicle replacement program and a residential program to change out wood burning stoves and fireplaces. 

  SO2 and NOx, two predominant pollutants emitted from power plants, have numerous adverse effects on human health and are significant contributors to acid rain, smog and haze. These pollutants are converted in the air to particulate matter that can cause severe respiratory and cardiovascular impacts and premature death.

  This settlement is part of EPA’s national enforcement initiative to control harmful emissions from large sources of pollution, which includes coal-fired power plants, under the Clean Air Act’s New Source Review requirements.  The total combined SO2 and NOx emission reductions secured from all these settlements will exceed 2 million tons each year once all the required pollution controls have been installed and implemented.

  The settlement was filed with the U.S. District Court for the Northern District Court of Iowa for 30 days to allow for public comment.  The company is required to pay the penalty within 30 days after the court approves the settlement.

  More on the settlement: http://www.justice.gov/enrd/consent-decrees

  More information about EPA’s enforcement initiative: http://www.epa.gov/compliance/data/planning/initiatives/2011airpollution.html

  View the Original Release on justice.gov