District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Oregon Resident Sentenced to 87 Months in Prison in Connection with 2009 Suicide Bombing of ISI Headquarters in PakistanRead the Press Release
Reaz Qadir Khan, 51, a naturalized U.S. Citizen living in Portland, Oregon, was sentenced today to 87 months in prison by U.S. District Court Judge Michael W. Mosman of the District of Oregon in connection with the May 27, 2009, suicide bomb attack at Pakistan’s intelligence service (ISI) headquarters in Lahore, Pakistan. The attack killed approximately 30 people and injured some 300 more.
Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Billy J. Williams of the District of Oregon and Special Agent in Charge Greg Bretzing of the FBI’s Portland Division made the announcement.
Khan previously entered a guilty plea admitting that he acted as an accessory after the fact to the crime of providing material support to terrorists. In entering his plea, Khan admitted arranging for the delivery of approximately $2,450 to Maldivian Ali Jaleel, one of the suicide bombers responsible for the May 27, 2009, attack. Khan also admitted to providing advice and financial assistance to Jaleel’s wives after the bombing, while knowing that providing such assistance would hinder and prevent the apprehension of Jaleel’s wives and others who may have helped in the attack. The 87-month sentence was jointly recommended by the parties and concludes a lengthy investigation of Khan’s connection to the attack.
“With today's sentence, the court held the defendant accountable and made it clear that no community should be subjected to the dangers posed by those seeking to assist violent extremists whether here or abroad,” said Acting U.S. Attorney Williams. “Today's result would not have been possible without the hard work of the dedicated professionals in the law enforcement and intelligence communities. I look forward to our continued work with Muslim communities in Oregon who are committed to ensuring that all people are safe from the threat of violent extremism.”
“The threads of violent extremism are weaving a path through many American cities,” said Special Agent in Charge Bretzing. “As in the Khan case, sometimes that path leads to those who are willing to fund activities overseas. In other instances, the path leads to homegrown extremists who are willing to commit heinous acts or to those who inspire them to do so. As the threat becomes more insidious and difficult to track, we rely on our shared community to come forward to help us identify and isolate those who would do harm to our nation. I would ask anyone with information about potential threats to call their local FBI office.”
This case was investigated by the FBI’s Joint Terrorism Task Force. The prosecution was handled by Assistant U.S. Attorneys Ethan D. Knight and Charles F. Gorder Jr. of the U.S. Attorney’s Office in the District of Oregon. Trial Attorney David P. Cora from the Counterterrorism Section of the Depart of Justice’s National Security Division assisted.
Operator of O.I.D. Process Pleads Guilty for Involvement in $228 Million Fraudulent Tax Refund SchemeRead the Press Release
A California man pleaded guilty yesterday to one count of conspiracy to submit false claims, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Melinda Haag of the Northern District of California.
According to the plea agreement, Duffy R. Dashner, aka Kevin Dashner, 42, of Reseda, California, and his co-conspirators, including Mark R. Maness, operated a business called O.I.D. Process through which they helped others to prepare and file individual federal income tax returns that claimed false Original Issue Discount (OID) interest income and federal tax withholdings, resulting in fraudulent claims for tax refunds (OID returns). Dashner and Maness charged clients of O.I.D. Process a non-refundable registration fee to join the organization, and a 20 percent “refund acquisition fee” for any refund check issued by the Internal Revenue Service (IRS). Dashner and Maness also operated a website and conducted weekly conference calls with clients to promote their business and to assist clients in preparing and filing OID returns.
Dashner and Maness required clients of O.I.D. Process to change their mailing address with the IRS to the address of another co-conspirator who was an attorney in San Francisco. As a result, all correspondence from the IRS to the clients and the clients’ OID refund checks were sent to the attorney’s address rather than the clients’ home address. By receiving the refund checks, Dashner and Maness were able to ensure that they received their 20 percent refund acquisition fee. O.I.D. Process clients filed approximately 200 fraudulent OID returns claiming refunds that totaled approximately $228 million.
Dashner’s sentencing hearing is scheduled for Oct. 2 in San Francisco before U.S. District Judge Susan Illston of the Northern District of California. The statutory maximum sentence for conspiracy to submit false claims is 10 years in prison and a $250,000 fine. Maness previously pleaded guilty to conspiracy to submit false claims against the United States and was sentenced in February 2015 to serve 41 months in prison, and ordered to pay $1,176,668 in restitution to the IRS.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Haag commended the special agents of IRS–Criminal Investigation, who investigated the case, and Trial Attorney Matthew J. Kluge of the Tax Division and Assistant U.S. Attorney Michael G. Pitman of the Northern District of California, who are prosecuting this case.
Further Information:
Case #: CR 12-646-SI
Electronic court filings and further procedural and docket information are available on the U.S. District Court for the Northern District of California’s website. Judges’ calendars with schedules for upcoming court hearings can also be viewed on the court’s website.
Maryland Real Estate Businessman Indicted for Failing to File Income Tax ReturnsRead the Press Release
A Berwyn Heights, Maryland, resident was indicted by a grand jury sitting in Greenbelt, Maryland, on four counts of failure to file federal individual and corporate federal income tax returns, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced today.
David J. Simard purchased and sold real estate in the Maryland and Virginia areas, according to the superseding indictment filed in the District of Maryland. Simard failed to file income tax returns for tax years 2006 and 2009, and failed to file corporate tax returns for tax years 2009 and 2010. According to the superseding indictment, Simard was the owner, operator and president of Pegasus Home Corporation. From 2009 through 2010, Pegasus sold more than 100 real estate properties.
If convicted, Simard faces a statutory maximum penalty of one year in prison and a $100,000 fine for each count.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Christopher O’Donnell and Michael Vasiliadis of the Tax Division, who are prosecuting the case.
An indictment merely alleges that crimes have been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Justice Department Settles Immigration-Related Discrimination Claim Against Staffing CompanyRead the Press Release
The Justice Department reached an agreement today with Accountemps, a division of Robert Half International Inc., a company based in Menlo Park, California, resolving claims that the company engaged in citizenship status discrimination in violation of the Immigration and Nationality Act (INA).
The department’s investigation, based on a charge by a naturalized U.S. citizen, concluded that Accountemps refused to refer the charging party for a federal government contract position because, as a naturalized citizen, the charging party was not born in the United States. Under the INA, employers cannot discriminate against U.S. citizens based on their citizenship status, including refusing to hire them based on whether they were born in or outside the United States.
Under the settlement, Accountemps will continue to refer the charging party for positions for which she is qualified, pay a $2,500 civil penalty, train its staff on the anti-discrimination provision of the INA, and be subject to a one-year monitoring period.
“The INA’s anti-discrimination provision does not recognize different classes of U.S. citizens when it comes to the right to work in the United States,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “We applaud Accountemps for its cooperation in addressing the concerns raised in this matter.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits discrimination in hiring, firing, recruitment and referral for a fee based on citizenship or immigration status. For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they were subjected to: different documentary requirements based on their citizenship status, immigration status, or national origin; or discrimination based on their citizenship status, immigration status, or national origin in hiring, firing, or recruitment or referral, should contact the worker hotline above for assistance.
Justice Department Settles Immigration-Related Discrimination Claim Against Memphis Staffing CompaniesRead the Press Release
The Justice Department announced today that it reached a settlement agreement with three Memphis-area staffing agencies: Prestigious Placement; PFSWeb Inc.; and its subsidiary, Priority Fulfillment Services Inc. The agreement resolves two complaints alleging discrimination under the Immigration and Nationality Act (INA).
The Justice Department’s investigation found that the companies refused to hire two qualified, Puerto Rican-born individuals because the companies believed that they were born in a foreign country. The companies rejected the workers’ valid Puerto Rican birth certificates and demanded that the workers present naturalization certificates, even though Puerto Ricans are U.S. citizens by birth. Under the anti-discrimination provision of the INA, employers cannot discriminate in hiring or place additional documentary burdens on workers during the employment eligibility verification process based on their citizenship or perceived citizenship.
Under the settlement agreement, the companies will compensate the charging parties for lost wages; pay civil penalties to the United States; undergo training on the anti-discrimination provision of the INA; revise their employment policies and training materials; and be subject to monitoring of their employment eligibility verification practices for two years.
“Puerto Ricans are native-born U.S. citizens who have the same right to work as any other U.S. citizen,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “They should not have to face these types of discriminatory barriers, and the Justice Department is committed to ensuring equal employment opportunities.”
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email [email protected] or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they were subjected to: different documentary requirements based on their citizenship, immigration status or national origin; or discrimination based on their citizenship, immigration status or national origin in hiring, firing or recruitment or referral, should contact the worker hotline above for assistance.
Justice Department Reaches Settlement Agreements to Address Unconstitutional Youth Arrest and Probation Practices in Meridian, MississippiRead the Press Release
The Justice Department announced today that, jointly with the state of Mississippi and city of Meridian, Mississippi, it has reached settlement agreements to prevent and address unconstitutional youth arrests and probation practices by the Meridian Police Department and the Mississippi Division of Youth Services, and submitted them to the court for approval.
In 2012, the department filed a lawsuit against the city of Meridian, the state of Mississippi, the Lauderdale County, Mississippi, Youth Court and the Youth Court Judges, alleging systematic violations of youths’ due process rights, in the matter of United States v. City of Meridian, et al. If approved by the U.S. District Court in Jackson, Mississippi, the proposed agreements will resolve the department’s claims against the city of Meridian and state of Mississippi. The agreements incorporate and build on reforms the city and state began during the United States’ investigation and subsequent litigation.
The department’s allegations that defendants Lauderdale County and the Lauderdale County Youth Court Judges failed to provide basic due process protections for children have not been resolved, and remain in litigation.
The agreement with the city of Meridian addresses the Meridian Police Department’s prior practice of arresting students referred by the school district without assessing whether there was sufficient probable cause to justify the arrest. The settlement agreement prohibits the city police department from arresting youth for behavior that is appropriately addressed as a school discipline issue, and requires documented probable cause determinations for any youth arrested for criminal offenses. The agreement also requires the city police department to uphold constitutional protections following a youth’s arrest, mandating Miranda warnings as soon as a youth reasonably believes he or she is not free to leave and prohibiting officers from interviewing detained youth unless a guardian or attorney is present.
The agreement with the state of Mississippi addresses the department’s claims of unconstitutional youth probation practices by the Mississippi Division of Youth Services. The settlement agreement requires state probation officers to implement measures to protect youths’ privilege against self-incrimination, including providing youths with age-appropriate explanations of their rights and the probationary process. The agreement also includes requirements for the contracts that establish the restrictions and rules that youth on probation must comply with. These contracts must be written in terms that are easily understandable to youths and that prevent arbitrary and discriminatory enforcement, and include a clear explanation of the youth’s rights. The agreement prohibits probation officers from recommending incarcerating youths for violations of their probation contracts that would not otherwise amount to detainable offenses, unless and until all other reasonable alternatives to incarceration have been exhausted.
“We commend the city of Meridian and the state of Mississippi’s Department of Human Services and Division of Youth Services for taking these important steps toward ensuring that school disciplinary issues are not inappropriately criminalized, ” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Going forward, the Department of Justice expects to work with Meridian and the state of Mississippi to ensure that children’s constitutional rights are protected in police and probation practices.”
“These agreements will help protect the children of Meridian from deprivations of educational opportunity as well as due process,” said U.S. Attorney Gregory K. Davis of the Southern District of Mississippi.
Each agreement will be monitored by an independent auditor who will report publicly to the federal court.
Under the agreements, the city and state will work with the United States and independent auditors to establish community input programs. These programs shall include semiannual open meetings, to be held in a publicly-accessible location, where the state and city will inform the public about progress in implementing the agreements and address community concerns related to the substantive areas covered by the agreements.
These agreements also build on reforms that the department’s Educational Opportunities Section obtained in a 2013 settlement with the Meridian Public School District to address school discipline claims in a long-standing desegregation case. To see the consent order, visit http://www.justice.gov/crt/about/edu/documents/classlist.php#race.
The department filed this complaint under the Violent Crime Control and Law Enforcement Act of 1994, which gives the department the authority to seek a remedy for a pattern or practice of conduct that violates the constitutional or federal statutory rights of youths in the administration of juvenile justice. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.
The Justice Department will be hosting a telephonic community conference call open to members of the public on Monday, June 22, 2015, at 6:30 p.m., CDT. The purpose of this call is to provide community members with information about the investigation and complaint. To participate in the call, dial the following toll-free number: 877-675-0879. When prompted by the operator, provide your name and the pass code: 4611051.
Former CEO Pleads Guilty to Bribery and Fraud Scheme Involving Red Light Camera ContractsRead the Press Release
A former chief executive officer of a red light camera vendor pleaded guilty today to participating in an eight-year bribery and fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Field Office.
Karen L. Finley, 55, of Cave Creek, Arizona, pleaded guilty before U.S. Magistrate Judge Terence P. Kemp of the Southern District of Ohio to a one-count information charging her with conspiracy to commit federal programs bribery and honest services wire and mail fraud. Finley’s sentencing hearing will be scheduled at a later date.
From December 2005 to February 2013, Finley served as CEO of a red light camera enforcement company. As part of her plea agreement, Finley admitted that, between 2005 and 2013, she participated in a scheme in which the company made campaign contributions to elected public officials in the cities of Columbus and Cincinnati through a consultant retained by the company. According to admissions made in connection with her plea, Finley and others, including another executive of the company, agreed to provide the conduit campaign contributions with the understanding that the elected public officials would assist the company in obtaining or retaining municipal contracts, including a photo red light enforcement contract with the City of Columbus. Finley also admitted she and her co-conspirators concealed the true nature and source of the payments by the consultant’s submission and the company’s payment of false invoices for “consulting services,” which funds the consultant then provided to the campaigns of the elected public officials.
The case was investigated by the FBI’s Cincinnati Field Office, Columbus Resident Agency, with the assistance of IRS-Criminal Investigations and the Ohio Bureau of Criminal Investigation. The case is being prosecuted by Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney J. Michael Marous of the Southern District of Ohio.
Finley Plea Agreement
El Departamento de Justicia Resuelve una Queja de Discriminacion Relacionada a Inmigración en Contra de una Agencia de EmpleoRead the Press Release
WASHINGTON – El Departamento de Justicia llego a un acuerdo hoy con Accountemps, una división de la empresa Robert Half International, Inc., una compañía con sede en Menlo Park, California, resolviendo alegaciones de que la compañía estaba involucrada en discriminación a base del estatus de cuidadania en violación del Acto de Inmigración y Nacionalidad (INA por sus siglas en inglés).
La investigación del departamento, basada en una queja por una cuidadana Estadounidense naturalizado, concluyo que Accountemps se rehusó a referir a la denuciante para una posición de contrato con el gobierno federal por que, como cuidadana naturalizada, la denuciante no había nacido en los Estados Unidos. Bajo el INA, los empleadores no pueden discriminar en contra de cuidadanos Estadounidenses basado en su estatus de cuidadania, incluyendo reuirse a contratarlos a causa de que hayan sido nacidos fuera de los Estados Unidos.
Bajo el acuerdo, Accountemps continuará refiriendo a la denunciante a posiciones para las cuales ella califíque, pagará $2,500 en sanciones civiles, proveerá adistramiento para su personal acerca de la provision anti-discriminación del INA, y será sujeto a monitoreo por un periodo de un año.
“La provision anti-discriminación del INA no reconoce diferencias en clases de cuidadanos Estadounidenses cuando se trata de su derecho a trabajar en los Estados Unidos,” dijo la Principal Deputada Assistente Procuradora General Vanita Gupta para la Divisiόn de Derechos Civiles. “Nosotros aplaudimos a Accountemps por su cooperación en resolver las preocupaciones planteadas por este asunto.”
La Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a Inmigración es la oficina responsable por hacer cumplir con la provisión antidiscriminatoria de la INA. Entre otras cosas, la ley prohíbe discriminación por estatus de ciudadanía o del origen nacional durante la contrataciόn, el despido, el reclutamiento o la referencia por comisiόn, las prácticas injustas de documentación, represalias, e intimidación. Para más información sobre las protecciones contra discriminación en el empleo según las leyes migratorias, llame a la línea directa de OSC para trabajadores al 1-800-255-7688 (1-800-237-2515, TTY para personas con discapacidad auditiva), llame a la línea directa de OSC para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidad auditiva), o para registrarse para un seminario gratis ofrecido a través del internet visite www.justice.gov/crt/about/osc/webinars.php, envíe un correo electrónico al [email protected], o visite el sitio de Internet www.justice.gov/crt/about/osc.
Los solicitantes o empleados que consideren que fueron sujetos a (1) diferentes requisitos de verificación por su estatus de ciudadanía, estatus migratorio u origen nacional, o (2) discriminación por estatus de ciudadanía, estatus migratorio, u origen nacional con relación a la contratación, el despido y el reclutamiento o la referencia por comisión, deberán comunicarse a la línea dedicada a los trabajadores anteriormente citada para poderlos ayudar.
El Departamento de Justicia Resuelve Quejas de Discriminacion Contra Tres Agencias de Empleo en MemphisRead the Press Release
WASHINGTON – El Departamento de Justicia anunció que llegó a un acuerdo hoy con tres agencias de trabajo en Memphis: Prestigious Placement; PFSWeb, Inc.; y su sucursal, Priority Fulfillment Services, Inc. El acuerdo resuelve dos quejas alegando discriminación bajo la Ley de Inmigración y Nacionalidad (INA por sus siglas en inglés).
La investigación del Departamento de Justicia encontró que las compañías se rehusaron a contratar a dos individuos de Puerto Rico quienes tenían suficientes cualificaciones porque las compañías creían que ellas nacieron en un país extranjero. Las compañías negaron los certificados de nacimiento validos de Puerto Rico de las trabajadoras y exigieron que presentaran certificados de naturalización aunque los puertorriqueños son estadounidenses de nacimiento. Bajo la provisión anti-discriminación de la INA, los empleadores no pueden discriminar durante la contratación o ponerle barreras adicionales a los trabajadores durante el proceso de verificación de elegibilidad de empleo basado en su ciudadanía o la ciudadanía percibida.
Bajo del acuerdo, las compañías recompensarán a los denunciantes sus sueldos perdidos; pagarán sanciones civiles as los Estados Unidos; se someterán a adiestramiento sobre la provisión anti-discriminación de la INA; cambiarán sus políticas de empleo y materiales de adiestramiento; y serán sujetos a monitoreo de sus prácticas de verificación de empleo por dos años.
“Los puertorriqueños son ciudadanos nativos y tienen el mismo derecho a trabajar como cualquier otro estadounidense,” dijo la Principal Deputada Asistente Procuradora General Vanita Gupta para la División de Derechos Humanos “No deberían tener que enfrentar estos tipos de barreras discriminatorias, y el Departamento de Justicia está comprometido en asegurar la igualdad de oportunidades de empleo.”
La Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas a Inmigración (OSC por sus siglas en inglés) es la oficina responsable por hacer cumplir con la provisión anti-discriminación de la INA. La ley prohíbe, entre otras cosas, discriminación basada en el estatus de ciudadanía y en el origen nacional en la contratación, el despido, o el reclutamiento o la referencia por comisión, las prácticas injustas de documentación, y represalia e intimidación.
Para obtener más información acerca de las protecciones contra la discriminación en el empleo según las leyes de inmigración, o para registrarse para un seminario gratis ofrecido a través del Internet, llame a la línea directa de la OSC para trabajadores al 1-800-255-7688 o al 1-800-237-2515, TTY (para personas con problemas de audición); llame a la línea directa de la OSC para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con problemas de audición); o visite el sitio web de la OSC en www.justice.gov/crt/about/osc.
Solicitantes o trabajadores que creen que fueron sometidos a: (1) requisitos diferentes de documentación o discriminación por causa de su estatus de ciudadanía, estatus migratorio o su origen nacional; o (2) discriminación por causa de su estatus de ciudadanía, estatus migratorio o el origen nacional en la contratación, el despido o el reclutamiento o referencia por comisión, deben comunicarse a la línea del trabajador de la OSC para obtener ayuda.
Two Individuals Sentenced to Federal Prison for Participation in Long-Running Online Child Pornography RingRead the Press Release
Two men were sentenced today for their roles in a sophisticated conspiracy to distribute child pornography online, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Joshua J. Minkler of the Southern District of Indiana.
John D. Gries, 48, of Bayshore, New York, and James McCullars, 56, of Huntsville, Alabama, were sentenced to 30 years and to life in prison, respectively, by U.S. District Court Judge Sarah Evans Barker of the Southern District of Indiana. In November 2014, the defendants were convicted by a federal jury of conspiracy to distribute and receive child pornography, conspiracy to advertise child pornography and engaging in a child exploitation enterprise.
According to evidence presented at trial, from 2000 to 2012, Gries and McCullars operated various members-only online chat rooms dedicated to the advertisement, distribution, receipt and possession of child pornography. The trial evidence, as well as admissions by other defendants prosecuted in connection with “Operation Rounder,” showed that McCullars, Gries and other members of the conspiracy used these chat rooms and a number of online servers to expand their personal collections of materials depicting the exploitation of children, and sought to evade law enforcement through the use of sophisticated data encryption software.
Operation Rounder has identified nearly 100 children around the world who have been identified as victims of abuse. Other defendants who have been convicted in connection with this investigation include:
John Edwards, 62, of Indianapolis, sentenced to 17.5 years;
Thomas Vaughn, 45, of Anderson, Indiana, sentenced to 11 years;
John Rex Powell, 43, of Fort Myers, Florida, sentenced to 30 years;
Donald Printup, 36, of Niagara Falls, New York, sentenced to 14 years;
Michael Fredette, 46, of Waterford, New York, sentenced to 27 years;
Robert Guillen, 43, of Wesley Chapel, Florida, sentenced to 14 years;
David Bebetu, 51, of Agoura Hills, California, sentenced to 12.5 years;
Stephen Harvey Dault, 48, of McKinney, Texas, sentenced to 17 years; and
Rick Ricardo Leon, 53, of Arlington, Virginia, sentenced to 12.5 years.
This case was investigated by the U.S. Postal Inspection Service, with assistance from the Indiana Internet Crimes Against Children Task Force and the Department of Justice’s High Technology Investigative Unit, as a part of Project Safe Childhood. This case is being prosecuted by Trial Attorney Amy Larson of the Criminal Division’s Child Exploitation and Obscenity Section and Senior Litigation Counsel Steven D. DeBrota of the Southern District of Indiana.
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.
New Jersey Man Charged with Conspiracy to Provide Material Support to ISILRead the Press Release
A Bergen County, New Jersey, man was charged today with conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, announced Assistant Attorney General for National Security John P. Carlin, 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, New Jersey, Division.
Samuel Rahamin Topaz, 21, of Fort Lee, New Jersey, was arrested at his home on June 17, 2015, and is charged by complaint with one count of conspiring with others in New Jersey and New York to provide services and personnel to ISIL. He made his initial appearance this afternoon before U.S. Magistrate Judge Cathy L. Waldor of the District of New Jersey.
“Samuel Topaz is alleged to have conspired with others to travel abroad to provide material support to ISIL,” said Assistant Attorney General Carlin. “Counterterrorism is the National Security Division’s highest priority. Stemming the flow of foreign fighters abroad and prosecuting those who attempt to provide material support to designated foreign terrorist organizations is key to our national security and public safety.”
“Providing fighters and resources to a terrorist organization like ISIL is a threat to our country and its citizens,” said U.S. Attorney Fishman. “We will continue to use all the tools at our disposal to disrupt the efforts of those who are trying to do harm at home and abroad.”
“Material support of a terrorist organization is a violation of federal law,” said Special Agent in Charge Frankel. “Topaz conspired to provide services and personnel to ISIL. Topaz discussed his desire to travel to Syria to join ISIL. Fortunately, this threat did not materialize due to the indefatigable efforts of the FBI’s Joint Terrorism Task Force. Prevention of terrorism is the FBI’s top priority and I ask the citizens of New Jersey to assist us in this task by remaining vigilant and contacting the FBI or the police if they see or hear anything suspicious.”
According to documents filed in this case and statements made in court:
The FBI and the Joint Terrorism Task Force (JTTF) have been investigating a group of individuals from New York and New Jersey who have allegedly conspired to provide material support to ISIL. Conspirator 1 (CC-1) was a resident of Rutherford, New Jersey, until departing the United States on May 5, 2015, allegedly to join ISIL. Conspirator 2 (CC-2) was a resident of Queens, New York, until he was arrested June 13, 2015, in New York on terrorism charges. Conspirator 3 (CC-3) is a resident of New Jersey.
On May 1, 2015, Topaz discussed CC-1’s plan to travel overseas to join ISIL. CC-1 sent Topaz a message stating that he would be leaving in a few days and asked, “[d]id you do what i [sic] advised you to do.” Topaz responded, “I’m saving my money for it bro trust me I got it.” On May 4, 2015, Topaz stated that he had his passport but needed cash to purchase his ticket. CC-2 replied, “My trip is looking months away[.] if u can take a loan out for 5k or even 2.5k then ur [sic] good, they take US dollars in dawla so u can eat and buy stuff, and they provide u with housing when u reach the land of Islam.” Topaz and CC-2 then discussed that they would be reuniting with CC-1 in Turkey before going to the dawla. CC-2 stated that CC-1 would go first, and then they would join him soon thereafter.
On May 21, 2015, Topaz and CC-3 discussed that they needed to “lay low” and refrain from taking action in furtherance of the conspiracy to provide material support to ISIL that might be detected by law enforcement. Topaz also told CC-3 that they need to discuss “hijra” in person. Topaz later told members of the JTTF that he and his conspirators used the term “hijra” (often spelled “hijrah”) to refer to traveling overseas to join ISIL.
On June 13, 2015, CC-2 was arrested by the FBI and charged in a criminal complaint filed with the U.S. District Court of the Eastern District of New York with conspiring to provide material support to ISIL. On June 15, 2015, Topaz wrote to an unidentified individual that CC-2 had not been answering his phone and added, “We gotta leave ASAP.”
The count of conspiracy to provide material support to a designated foreign terrorist organization carries a maximum potential penalty of 15 years in prison and a fine of $250,000.
This case is being investigated by the FBI and JTTF. This case is being prosecuted by Assistant U.S. Attorneys L. Judson Welle, Dennis C. Carletta, and Francisco J. Navarro of the District of New Jersey, with assistance from the National Security Division’s Counterterrorism Section.
The charge and allegations contained in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Topaz Complaint
National Medicare Fraud Takedown Results in Charges Against 243 Individuals for Approximately $712 Million in False BillingRead the Press Release
Attorney General Loretta E. Lynch and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell announced today a nationwide sweep led by the Medicare Fraud Strike Force in 17 districts, resulting in charges against 243 individuals, including 46 doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $712 million in false billings. In addition, the Centers for Medicare & Medicaid Services (CMS) also suspended a number of providers using its suspension authority as provided in the Affordable Care Act. This coordinated takedown is the largest in Strike Force history, both in terms of the number of defendants charged and loss amount.
Attorney General Lynch and Secretary Burwell were joined in the announcement by FBI Director James B. Comey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Inspector General Daniel R. Levinson of the HHS Office of Inspector General (HHS-OIG) and Deputy Administrator and Director of CMS Center for Program Integrity Shantanu Agrawal, M.D.
The defendants are charged with various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes, money laundering and aggravated identity theft. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, psychotherapy, physical and occupational therapy, durable medical equipment (DME) and pharmacy fraud. More than 44 of the defendants arrested are charged with fraud related to the Medicare prescription drug benefit program known as Part D, which is the fastest-growing component of the Medicare program overall.
“This action represents the largest criminal health care fraud takedown in the history of the Department of Justice, and it adds to an already remarkable record of enforcement,” said Attorney General Lynch. “The defendants charged include doctors, patient recruiters, home health care providers, pharmacy owners, and others. They billed for equipment that wasn’t provided, for care that wasn’t needed, and for services that weren’t rendered. In the days ahead, the Department of Justice will continue our focus on preventing wrongdoing and prosecuting those whose criminal activity drives up medical costs and jeopardizes a system that our citizens trust with their lives. We are prepared – and I am personally determined – to continue working with our federal, state, and local partners to bring about the vital progress that all Americans deserve.”
“This Administration is committed to fighting fraud and protecting taxpayer dollars in Medicare and Medicaid,” said Secretary Burwell. “This takedown adds to the hundreds of millions we have saved through fraud prevention since the Affordable Care Act was passed. With increased resources that have allowed the Strike Force to expand and new tools, like enhanced screening and enrollment requirements, tough new rules and sentences for criminals, and advanced predictive modeling technology, we have managed to better find and fight fraud as well as stop it before it starts.”
According to court documents, the defendants participated in alleged schemes to submit claims to Medicare and Medicaid for treatments that were medically unnecessary and often never provided. In many cases, patient recruiters, Medicare beneficiaries and other co-conspirators allegedly were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit a total of approximately $712 million in fraudulent billing.
“The people charged in this case targeted the system each of us depends on in our most vulnerable moments,” said Director James Comey. “Health care fraud is a crime that hurts all of us and each dollar taken from programs that help the sick and the suffering is one dollar too many.”
“Every day, the Criminal Division is more strategic in our approach to prosecuting Medicare Fraud,” said Assistant Attorney General Caldwell. “We obtain and analyze billing data in real-time. We target hot spots – areas of the country and the types of health care services where the billing data shows the potential for a high volume of fraud – and we are speeding up our investigations. By doing this, we are increasingly able to stop schemes at the developmental stage, and to prevent them from spreading to other parts of the country.”
“Health care fraud drives up health care costs, wastes taxpayer money, undermines the Medicare and Medicaid programs, and endangers program beneficiaries,” said Inspector General Levinson. “Today’s takedown includes perpetrators of prescription drug fraud, home health care fraud, and personal care services fraud, three particularly harmful types of fraud plaguing our health care system. This record-setting takedown sends a message to would-be perpetrators that health care fraud is a risky way to line your pockets. Our agents and our law enforcement partners stand ready to protect these vital programs and ensure that those who would steal from federal health care programs ultimately pay for their crimes.”
The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since their inception in March 2007, Strike Force operations in nine locations have charged over 2,300 defendants who collectively have falsely billed the Medicare program for over $7 billion.
Including today’s enforcement actions, nearly 900 individuals have been charged in national takedown operations, which have involved more than $2.5 billion in fraudulent billings. Today’s announcement marks the first time that districts outside of Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.
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In Miami, a total of 73 defendants were charged with offenses relating to their participation in various fraud schemes involving approximately $263 million in false billings for home health care, mental health services and pharmacy fraud. In one case, administrators in a mental health center billed close to $64 million between 2006 and 2012 for purported intensive mental health treatment to beneficiaries and allegedly paid kickbacks to patient recruiters and assisted living facility owners throughout the Southern District of Florida. Medicare paid approximately half of the claimed amount.
In Houston and McAllen, Texas, 22 individuals were charged in cases involving over $38 million in alleged fraud. One of these defendants allegedly coached beneficiaries on what to tell doctors to make them appear eligible for Medicare services and treatments and then received payment for those who qualified. The company that paid the defendant for patients submitted close to $16 million in claims to Medicare, over $4 million of which was paid.
In Dallas, seven people were charged in connection with home health care schemes. In one scheme, six owners and operators of a physician house call company submitted nearly $43 million in billings under the name of a single doctor, regardless of who actually provided the service. The company also significantly exaggerated the length of physician visits, often times billing for 90 minutes or more for an appointment that lasted only 15 or 20 minutes.
In Los Angeles, eight defendants were charged for their roles in schemes to defraud Medicare of approximately $66 million. In one case, a doctor is charged with causing almost $23 million in losses to Medicare through his own fraudulent billing and referrals for DME, including over 1000 expensive power wheelchairs and home health services that were not medically necessary and often not provided.
In Detroit, 16 defendants face charges for their alleged roles in fraud, kickback and money laundering schemes involving approximately $122 million in false claims for services that were medically unnecessary or never rendered, including home health care, physician visits, and psychotherapy, as well as pharmaceuticals that were billed but not dispensed. Among these are three owners of a hospice service who allegedly paid kickbacks for referrals made by two doctors who defrauded Medicare Part D by issuing medically unnecessary prescriptions.
In Tampa, five individuals were charged with participating in a variety of schemes, ranging from fraudulent physical therapy billings to a scheme involving millions in physician services and tests that never occurred. In one case, a licensed pain management physician sought reimbursement for nerve conduction studies and other services that he allegedly never performed. Medicare paid the defendant over $1 million for these purported services.
In Brooklyn, N.Y., nine individuals were charged in two separate criminal schemes involving physical and occupational therapy. In one case, three individuals face charges for their roles in a previously charged $50 million physical therapy scheme. In the second case, six defendants were charged for their roles in a $8 million physical and occupational therapy scheme.
In New Orleans, 11 people were charged in connection with $110 million in home health care and psychotherapy schemes. In one case, four individuals who operated two companies – one in Louisiana and one in California – that mass-marketed talking glucose monitors (TGMs) across the country allegedly sent TGMs to Medicare beneficiaries regardless of whether they were needed or requested. The companies billed Medicare approximately $38 million for the devices and Medicare paid the companies over $22 million.
The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices of the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.
In addition to the Strike Force, today’s enforcement actions include cases brought by the U.S. Attorney’s Offices of the Southern District of California, Southern District of Illinois, Northern District of Ohio, Western District of Kentucky, District of Maryland, District of Connecticut, District of Alaska and the Southern District of Georgia.
A complaint or indictment is merely a charge, and defendants are presumed innocent until proven guilty.
The court documents for each case will posted online, as they become available, here: http://www.justice.gov/opa/documents-and-resources-june-2015-medicare-fraud-strike-force-press-conference.
The Affordable Care Act has provided new tools and resources to fight fraud in federal health care programs. The law provides an additional $350 million for health care fraud prevention and enforcement efforts, which has allowed the Justice Department to hire more prosecutors and the Strike Force to expand from two cities to nine. It also toughens sentencing for criminal activity, enhances provider and supplier screenings and enrollment requirements, and encourages increased sharing of data across government.
In addition to providing new tools and resources to fight fraud, the Affordable Care Act clarified that for sentencing purposes, the loss is determined by the amount billed to Medicare and increased the sentencing guidelines for the billed amounts, which has provided a strong deterrent effect due to increased prison time, particularly in the most egregious cases.
Miami Dade Police Department Detective Charged with Civil Rights Offenses for Stealing Property from Motorists and Obstructing JusticeRead the Press Release
Today, the Justice Department announced that a grand jury in the Southern District of Florida charged Miami Dade Police Department (MDPD) Detective William Kostopoulos, 47, with using his law enforcement authority to violate motorists’ civil rights.
The indictment charges Kostopoulos with making traffic stops of three motorists in order to steal their money and property, in violation of the motorists’ rights under the Fourth Amendment of the U.S. Constitution to be free from unreasonable seizures of their property. The indictment also charges Kostopoulos with making misleading statements in order to prevent the communication of information about his alleged crimes to federal law enforcement officers.
This case is being investigated by the Federal Bureau of Investigation (FBI), with assistance from the Homestead, Florida, Police Department. The matter is being prosecuted by Special Litigation Counsel Gerard Hogan and Trial Attorney Samantha Trepel of the Civil Rights Division as well as Assistant U.S. Attorney Tonya Long of the Southern District of Florida.
An indictment is a formal accusation of criminal conduct, not evidence of guilt. The defendant is presumed innocent unless proven guilty.
Media Firm Owner Sentenced to 135 Months in Prison in Scheme to Defraud Louisiana Car DealershipsRead the Press Release
A Louisiana media firm owner was sentenced yesterday to 135 months in prison for orchestrating an elaborate $1.2 million scheme to bill car dealerships in the Baton Rouge, Louisiana, and New Orleans areas for fictitious advertising services.
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 Jerome R. McDuffie of the IRS-Criminal Investigation (IRS-CI) New Orleans Field Office made the announcement.
Raymond C. Reggie, 52, of Mandeville, Louisiana, pleaded guilty on Oct. 27, 2014, to five counts of wire fraud. Some of the conduct to which Reggie pleaded guilty he committed while on supervised release from a prior fraud conviction. In addition to imposing the prison sentence, U.S. District Court Judge Shelly D. Dick of the Middle District of Louisiana ordered Reggie to pay $1,217,657 in restitution, and to forfeit the same amount.
Reggie owned and operated Nexlevel Group, a firm that purchased and managed advertising for car dealerships in Southeast Louisiana. According to admissions made in connection with his guilty plea, Reggie billed the dealerships for fictitious advertising expenses, falsely representing that such expenses were actually incurred. Reggie admitted that once the dealerships issued the checks for the bogus expenses, he diverted the funds for his personal use and enjoyment. In total, the car dealerships issued 138 checks for more than $1.2 million for fictitious advertising services.
This case was investigated by the IRS-CI New Orleans Field Office. The case was prosecuted by Senior Litigation Counsel Jack Patrick of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Rene Salomon and Ryan Crosswell of the Middle District of Louisiana.
Man Pleads Guilty to Civil Rights Charge in Connection with Rope Tied Around Neck of James Meredith Statue on Ole Miss CampusRead the Press Release
The Justice Department announced that Graeme Phillip Harris pleaded guilty today in federal court to threatening African-American students and employees at the University of Mississippi by helping place a rope around the neck of the James Meredith statue on campus.
According to documents filed in connection with the plea, Harris admitted to joining with others to use the cover of darkness to hang a rope and an outdated version of the Georgia state flag—which prominently depicts the Confederate battle flag—around the neck of the statue, with the intent to threaten and intimidate African-American students and employees at the university. The iconic statue honors Meredith’s role as the university’s first African-American student after its contentious 1962 integration. The incident occurred in the early morning hours of Feb. 16, 2014.
Harris was indicted by a federal grand jury on March 27 on one count of conspiracy to violate civil rights and one count of using a threat of force to intimidate African-American students because of their race or color. This plea resolves all charges against Harris in the matter.
“We will not tolerate threats of racial violence intended to intimidate students and university employees,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division. “No one should have to endure threats or intimidation at our nation’s universities because of their race or the color of their skin.”
“The reprehensible actions of the defendant evoke painful memories of a shameful period in our past when some American citizens were subjected to threats and intimidation by lynching solely because of the color of their skin,” said U.S. Attorney Felicia C. Adams of the Northern District of Mississippi. “Attempts to categorize the defendant’s offense conduct as a mere college prank only serve as a hollow denial of our collective history and a repudiation of the legacy of those who fought to obtain and preserve our historic civil rights. The U.S. Attorney’s Office, in conjunction with the DOJ Civil Rights Division, will aggressively prosecute hate crimes and other civil rights violations which occur in our district. I sincerely appreciate the assistance of the FBI and the University of Mississippi in the investigation and prosecution of this case.”
“What these individuals did was not a prank,” said Special Agent in Charge Donald Alway of the FBI Jackson, Mississippi, Division. “It was an intentional effort to belittle and intimidate persons of a particular race, and was exactly the type of action the federal civil rights statutes were enacted to prevent. The FBI is committed to the protection of the civil rights of all citizens and will continue to investigate allegations of crime motivated by hate.”
The investigation, which is ongoing, is being conducted by the FBI Jackson Division’s Oxford Resident Agency and the University of Mississippi Police Department. The case is being prosecuted by the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office of the Northern District of Mississippi.
Georgia Man Sentenced to More Than 21 Years in Prison for Sexually Exploiting Minors in ThailandRead the Press Release
A Georgia man was sentenced today to 262 months in prison for engaging in sexually explicit conduct with minors and producing images and videos of that conduct during trips to Thailand, and transporting the child pornography into the United States.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Florence Nakakuni of the District of Hawaii and Executive Associate Director Peter Edge of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) made the announcement.
Ronny Lee Waldrip, 64, of Douglasville, Georgia, pleaded guilty on Nov. 7, 2014, before U.S. Magistrate Judge Richard L. Puglisi to one count of sexual exploitation of a minor outside the United States for the purpose of producing visual depictions of such conduct. Senior U.S. District Court Judge Helen Gillmor of the District of Hawaii presided over Waldrip’s sentencing, and also ordered that he pay $45,000 in restitution.
In connection with his guilty plea, Waldrip admitted that he traveled to Thailand on numerous occasions to engage in sexual conduct with minor females. Specifically, he admitted that he traveled to Thailand in 2010 and 2011 for the purpose of inducing and enticing minors into engaging in sexual acts, and to photographing or recording such conduct without the victims’ knowledge or permission.
Waldrip also admitted that, on Feb. 13, 2012, he traveled from Bangkok to Honolulu knowingly transporting a laptop computer containing images and videos of child pornography, including videos of him engaging in sexual acts with minor females, including three victims who were 14 and 15 years old at the time. Waldrip further admitted to using the Internet to distribute the images and videos of the three minor victims to another U.S. citizen whom Waldrip knew was interested in child pornography.
This case was investigated by ICE-HSI in Honolulu and Bangkok. The Royal Thai Police and the Justice Department’s Office of International Affairs also provided assistance. This case was prosecuted by Trial Attorneys Sarah Chang and Michael Grant of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Ron Johnson of the District of Hawaii.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in 2006 by the Justice Department to combat the growing epidemic of child sexual exploitation and abuse. 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.
Former DeKalb Detention Officer Charged with Using Excessive Force on County InmatesRead the Press Release
Hamilton Allegedly Tased Inmates Without Justification and Wrote False Reports to Cover Up Abuse
Dwight Hamilton, 51, of Atlanta, Georgia, a former sergeant with the DeKalb County Sheriff's Office, was arraigned today on charges of using excessive force against inmates at the DeKalb County Jail and for writing false reports about the incidents, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division, U.S. Attorney John Horn of the Northern District of Georgia and Special Agent in Charge Britt Johnson of the Federal Bureau of Investigation (FBI).
According to the indictment and other information presented in court, Hamilton worked as a supervisory officer at the DeKalb County jail from 2005 to 2012, where, on two separate dates in January 2012, he used his taser multiple times on inmates without justification. The indictment charges that in both instances, Hamilton’s use of excessive force violated the inmates’ constitutional rights and resulted in bodily injury. The indictment also alleges that, following each of the tasing incidents, Hamilton wrote a false report with the intent to impede an investigation.
Hamilton was arraigned before Magistrate Judge Janet F. King.
Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.
This case is being investigated by the FBI and is being prosecuted by Trial Attorney Christopher Perras of the Civil Rights Division and Assistant U.S. Attorney Brent Alan Gray.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016.
Covenant Hospice Inc. to Pay $10.1 Million for Overcharging Medicare, Tricare and Medicaid for Hospice ServicesRead the Press Release
On June 18, Covenant Hospice Inc. agreed to pay $10,149,374 to reimburse the government for alleged overbilling of Medicare, Tricare and Medicaid for hospice services, the Department of Justice announced today. Covenant Hospice Inc. is a non-profit hospice care provider which operates in Southern Alabama and the Florida Panhandle.
“The hospice benefits provided by federal health care programs are intended to provide comfort and care to patients nearing the end of life,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “We will continue to ensure that these benefits are used for their intended purposes.”
The Medicare, Tricare and Medicaid hospice benefits are available for patients who have a life expectancy of six months or less if their disease runs its normal course. Patients admitted to a hospice stop receiving care to cure their illnesses and instead receive medical care focused on providing them with relief from the symptoms, pain and stress of a terminal illness.
Medicare, Tricare and Alabama and Florida Medicaid reimburse for four different levels of hospice care: routine home care, continuous home care, inpatient respite care and general inpatient care. The routine home care level is the lowest reimbursement rate and the highest reimbursement rate paid by the federal health care programs is for general inpatient care. The level of care provided to a patient is subject to change based upon a variety of factors, including the patient’s condition and needs, and the availability of family members or other caregivers to meet those needs. The reimbursement for general inpatient care is greater than that provided for routine home care based upon the expectation that patients requiring the former level of care have more acute medical and psychosocial needs that must be provided in an inpatient setting and are more costly to treat. It is the responsibility of the hospice provider to ensure that a patient’s medical record contains the appropriate documentation to support the level of hospice care that is billed.
“Careful and correct claims for reimbursement from critical federal health care programs are essential to the health of our economy,” said U.S. Attorney Pamela C. Marsh of the Northern District of Florida. “Those public servants who worked hard to investigate the conduct and obtain this settlement deserve our deepest gratitude. We will continue our efforts to ensure that federal dollars intended for compassionate care and legitimate patient needs are protected.”
Today’s settlement resolves allegations that between Jan. 1, 2009, and Dec. 31, 2010, Covenant Hospice Inc. improperly submitted hospice claims for general inpatient care that should have been billed at the routine home care level for Medicare, Tricare and Medicaid patients. The government alleged that Covenant Hospice Inc.’s medical records did not support the medical necessity of the general inpatient care.
The federal government will recover $9,597,118.44 for Covenant Hospice Inc.’s overbilling to Medicare, Tricare and Medicaid, and Alabama and Florida will collectively recover $552,255.56 as a result of overbilling of their respective Medicaid programs. The Medicaid program is jointly funded by the federal and state governments.
This matter was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Northern District of Florida, the Department of Health and Human Services’ Office of the Inspector General, the Defense Health Agency of the U.S. Department of Defense, the Alabama Attorney General’s Office and the Florida Attorney General’s Office.
Arkansas Man Sentenced to 15 Years for Attacks on Central Arkansas Power GridRead the Press Release
Jason Woodring, 38, of Jacksonville, Arkansas, was sentenced to 15 years in prison today on charges related to his attacks on Central Arkansas’ power grid between August and October 2013. In addition to the term of imprisonment, Woodring will be required to pay $4,792,224 in restitution to Entergy for his attacks on the power lines and electrical tower near Cabot, Arkansas, and a switching station in Scott, Arkansas. Woodring will also pay $48,729 to First Electric Cooperative for damage to the downed power lines and poles in Jacksonville.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Christopher R. Thyer of the Eastern District of Arkansas, Special Agent in Charge David T. Resch of the FBI’s Little Rock, Arkansas, Division and Resident Special Agent in Charge Grover Crossland of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) Little Rock Field Office made the announcement.
Today, U.S. District Court Judge Billy Roy Wilson of the Eastern District of Arkansas accepted the plea agreement and imposed the recommended 15-year sentence. On March 10, 2015, Woodring pleaded guilty to destruction of an energy facility for downing the Cabot power lines and for setting fire to the Scott power station. He also pleaded guilty to using fire to commit a felony in relation to the arson in Scott, and to being an illegal drug user in possession of various firearms and ammunition. Woodring also agreed to forfeit the firearms and ammunition.
Woodring’s 2013 attacks included sabotaging an electrical support tower and downing a 500,000-volt power line onto a railroad track near Cabot, which resulted in approximately $550,000 worth of damage; setting fire to and destroying an Extra High Voltage switching station in Scott, causing over $4 million in damages; and cutting down two power poles, which led to the temporary loss of power to approximately 9,000 people in Jacksonville. Woodring was charged in an eight-count indictment by a federal grand jury on Nov. 6, 2013.
The case was investigated by the FBI’s Joint Terrorism Task Force; ATF; Union Pacific Police; Entergy; First Electric; the Lonoke County, Arkansas, Sheriff’s Office; Cabot Police; Arkansas State Police; the Conway, Arkansas, Police Department; the Little RockPolice Department; and the Arkansas Game and Fish Commission. The case was prosecuted by Assistant U.S. Attorneys Michael S. Gordon and Cameron Charles McCree of the Eastern District of Arkansas, with the assistance of the National Security Division’s Counterterrorism Section.
United States Repatriates Seven Boa Constrictors to BrazilRead the Press Release
Seven boa constrictors seized in connection with an illegal wildlife smuggling scheme have been returned to the government of Brazil, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney John W. Huber of the District of Utah.
“This case exhibited many of the hallmarks that make illegal wildlife trafficking a growing international scourge, including actors motivated by greed who illegally smuggled rare and precious wildlife across international boundaries,” said Assistant Attorney General Caldwell. “The return of the precious snakes to Brazil brings to an end this years-long international saga, and serves as an example of our commitment to working with law enforcement partners in Brazil and elsewhere to combat transnational crime.”
“The successful prosecution of Mr. Stone and the recovery and repatriation of the offspring from this rare and valuable leucistic boa constrictor are due to the exceptional cooperation between the United States and Brazilian authorities,” said U.S. Attorney Huber. “The illegal wildlife trade threatens the survival of many threatened and endangered species and Mr. Stone’s conviction in this case demonstrates our resolve to prosecute those who engage in such activities.”
The seven boa constrictors are the offspring of a rare and extremely valuable white (leucistic) boa constrictor known as “Lucy” or “Diamond Princess” that was found in the Niterói district of Rio de Janerio in 2006. Because of its rarity, Brazilian authorities housed the white boa at the Niterói Zoo, a private foundation that rescued and rehabilitated injured wild animals. In January 2009, Jeremy Stone, a Utah-based collector, breeder and seller of reptiles, traveled to Brazil, secured possession of the snake and unlawfully returned with it back to the United States.
After learning that Stone was marketing snakes bred from a rare white boa, the Brazilian government requested assistance from the United States in securing the return of the leucistic boa and any offspring. Thereafter, pursuant to a mutual legal assistance treaty, federal investigators obtained a warrant authorizing the seizure of the snake and any offspring from Stone’s property in Utah. In executing the warrant, agents from the FBI learned that the leucistic boa constrictor had died. Agents turned the offspring over to the U.S. Marshals Service, which delivered the eight surviving offspring to the Hogle Zoo in Salt Lake City. One of the snakes died shortly thereafter.
In July 2014, Stone pleaded guilty plea to unlawfully transporting wildlife into the United States. As part of his plea agreement, Stone agreed to forfeit the boa’s offspring to the United States.
In October 2014, the government of Brazil filed a petition asserting its ownership of the white boa and its offspring because it had been caught in the Brazilian wild. Thereafter, the United States asked the court to amend the preliminary order of forfeiture to recognize Brazil’s claim to the snakes. In February 2015, the court entered a final order of forfeiture awarding the white boa’s seven surviving offspring to the government of Brazil.
The Criminal Division’s Asset Forfeiture and Money Laundering Section and Office of International Affairs, as well as the U.S. Attorney’s Office of the District of Utah and the FBI, worked jointly with the government of Brazil to secure the repatriation of the seven offspring.
United States Files Suit against Spectrum Brands for Failing to Report Safety Hazard in Defective CoffeemakersRead the Press Release
Dozens of Burns Reported When Coffee Pot Handle Repeatedly Broke
The Department of Justice and the Consumer Product Safety Commission (CPSC) jointly announced today the filing of a complaint against Spectrum Brands Inc., alleging that the company and its former subsidiary, Applica Consumer Products, failed to timely report a hazardous defect involving handles that detached from Black & Decker brand SpaceMaker coffee pots.
Spectrum Brands is a Delaware corporation headquartered in Middleton, Wisconsin, that distributes a wide variety of brand-name small appliances, hardware, and home and garden products. Applica Consumer Products was the Florida company that imported and distributed the coffeemaker. Applica became a subsidiary of Spectrum in 2010, and the two companies merged in 2014.
The complaint, filed in U.S. District Court for the Western District of Wisconsin, charges that the companies knowingly violated the reporting requirements of the Consumer Product Safety Act with respect to defective carafe handles that could detach and cause hot coffee to pour onto consumers. As set forth in the complaint, the coffeemakers generated hundreds of complaints from consumers over more than three years before Applica finally notified the CPSC of the carafe defect and recalled the product. Dozens of consumers contacted the company to report burns related to the handle suddenly detaching. The complaint, filed by the Department of Justice on behalf of the CPSC, seeks civil penalties and permanent injunctive relief.
The government also alleges that, in addition to failing to notify the CPSC of the defect “immediately” as required by law, the companies continued to distribute a small number of the defective coffeemakers to retailers even after the recall was announced.
“Hundreds of consumers complained to the company about this dangerous defect over the years,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “We rely on companies to report these safety issues immediately, as the law requires, to prevent unnecessary injuries. The Department of Justice will continue to protect the public against companies that put profits over safety.”
“We believe Spectrum Brands and Applica Consumer Products knew about the hazard with these coffeemakers for years,” said CPSC Chairman Elliot F. Kaye. “Despite the fact that these firms were required to report potential hazards and risks to CPSC immediately, it appears they chose to profit from continued sales instead. Their failure to follow the law and report, resulted in dozens of injuries to unsuspecting customers.”
The companies distributed the coffeemakers from 2008 to 2012. The complaint alleges that beginning as early as 2009 and continuing until April 2012, the companies received approximately 1,600 consumer complaints about defective carafe handles. The coffeemakers were recalled in June 2012.
The matter is being handled by the Civil Division’s Consumer Protection Branch and the CPSC’s Office of the General Counsel.
The claims made in the complaint are allegations only, and there has been no determination of liability.
Two U.S. Bureau of Prisons Corrections Officers Charged with Assaulting Prison Inmate and Obstructing JusticeRead the Press Release
Vanita Gupta, head of the Civil Rights Division, and U.S. Attorney A. Lee Bentley III of the Middle District of Florida announced today the indictment by a federal grand jury of U.S. Bureau of Prison (BOP) Correction Officers (COs) William Houghton and Eddie Rodas-Castro.
The indictment charges CO Houghton with violating the civil rights of an inmate inside the Coleman Correctional Facility in Coleman, Florida, on March 22, 2014, by striking the inmate repeatedly in the head and face, causing him injury. The indictment also charges CO Houghton and CO Rodas-Castro with obstruction of justice by falsifying BOP reports and making false statements to federal investigators regarding the assault.
This case is being investigated by the FBI and the U.S. Department of Justice’s Office of Inspector General, and is being prosecuted by Trial Attorney Roy Conn of the Civil Right Division and Assistant U.S. Attorney Robert Bodnar of the Middle District of Florida.
An indictment is merely an accusation and the defendants are presumed innocent unless proven guilty.
Chicago Resident Indicted for Using Stolen Identities to File False Tax ReturnsRead the Press Release
A Chicago man was indicted by a grand jury sitting in the Northern District of Illinois for using stolen identities to file false federal income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Zachary T. Fardon of the Northern District of Illinois.
Carlos L. Smith was arraigned earlier today on a 34-count indictment. He was charged with 14 counts of wire fraud, nine counts of theft of government funds, six counts of aggravated identity theft and five counts of filing false income tax returns. According to the allegations in the indictment, beginning in February 2013 and continuing through April 15, 2015, Smith operated CLS Financial Services, a company that assisted with credit repair, business consulting and tax return preparation. Smith used individuals’ names and social security numbers to prepare false tax returns that each claimed thousands of dollars in tax refunds. The U.S. Treasury refund checks were mailed to addresses linked to Smith or directly deposited into bank accounts that Smith controlled. Smith also filed fraudulent tax returns in his own name. In total, Smith prepared false tax returns that claimed refunds of more than $400,000.
If convicted, Smith faces a statutory maximum sentence of 20 years in prison for each wire fraud count, a statutory maximum sentence of 10 years in prison for each theft of government funds count, a mandatory minimum sentence of two years in prison for aggravated identity theft, and a statutory maximum sentence of three years in prison for each count of filing false income tax returns. Smith also faces potential financial penalties, including fines and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Fardon commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, and Trial Attorneys Sonia M. Owens, John T. Mulcahy and Ryan R. Raybould of the Tax Division, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office in Chicago for their substantial assistance.
Arkansas Man Sentenced to Prison for Federal Tax FraudRead the Press Release
A Springdale, Arkansas, man was sentenced today in the U.S. District Court in Fayetteville, Arkansas, for multiple tax crimes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Conner Eldridge of the Western District of Arkansas.
Doyle Smith, 56, was sentenced to serve 48 months in prison to be followed by five years of supervised release and ordered to pay a $5000 fine. On Feb. 11, following a three-day trial before U.S. District Judge Timothy L. Brooks of the Western District of Arkansas, a jury found Smith guilty of four counts of filing a false tax return, one count of corruptly endeavoring to obstruct and impede the administration of the internal revenue laws and one count of presenting a fictitious financial obligation.
According to evidence introduced at trial, in 2008 and 2009, Smith submitted four false individual federal tax returns for tax years 2005 through 2008, which falsely reported a total of more than $1.4 million in fictitious federal tax withholdings. Based on these fictitious withholding amounts, Smith claimed a total of $1,021,457 in income tax refunds that he was not entitled to receive. Smith also submitted false claims and correspondence to both the Internal Revenue Service (IRS) and third-parties in an attempt to cause the IRS and U.S. Treasury to pay his debts to third parties and to obstruct the IRS’ tax administration efforts. For example, in January 2010, Smith mailed to the Department of Arkansas Finance and Administration a fictitious financial instrument titled “U.S. Treasury Trust Account Money Order.” This fictitious document purportedly obligated U.S. Treasury funds in the amount of $129,439 to pay for outstanding sales taxes that Smith owed to the state of Arkansas.
“Individuals like Doyle Smith, who commit criminal tax offenses and attempt to use the U.S. Treasury as their personal slush fund, will be identified, investigated, prosecuted and incarcerated,” said Acting Assistant Attorney General Ciraolo. “The message from today’s sentencing is clear: those who attempt to cheat the system will pay a heavy price for their criminal conduct.”
“Smith, in his fraudulent scheme, attempted to steal taxpayer money from the U.S. Treasury for his own benefit,” said U.S. Attorney Eldridge. “Those who steal from the U.S. Treasury steal directly out of the pockets of the hard-working people of the Western District of Arkansas. With today’s sentence, a strong message has been sent that our office and our law enforcement partners will relentlessly pursue fraud wherever we find it.”
“Today’s sentencing is a reminder of the penalties individuals face when submitting false claims for federal income tax refunds,” stated Special Agent in Charge Christopher A. Henry of the IRS-Criminal Investigation (CI). “IRS-Criminal Investigation will continue their aggressive pursuit of those who use fraudulent methods in an attempt to corrupt our nation’s tax system, and our unwavering commitment to protecting the interests of law-abiding taxpayers.”
“It is the Treasury Inspector General for Tax Administration’s mission to protect the integrity of the Internal Revenue Service and promote the fair administration of our federal tax system,” said Special Agent in Charge Ruben Florez of the Treasury Inspector General for Tax Administration’s (TIGTA’s) Mid-States Field Division. “TIGTA and its law-enforcement partners will vigorously investigate individuals that attempt to corruptly interfere with the administration of the internal revenue laws through fraudulent means, and will do everything within its power to ensure that those involved will be prosecuted to the fullest extent of the law. Today’s sentencing demonstrates that our justice system will not tolerate these types of actions.”
Acting Assistant Attorney General Ciraolo and U.S. Attorney Eldridge commended the special agents of IRS-CI and TIGTA, who investigated the case, as well as Trial Attorneys Robert Kemins and David Zisserson of the Tax Division, who prosecuted the case.
Readout of First Meeting between U.S. Attorney General Lynch and Mexican Attorney General Gómez GonzálezRead the Press Release
Attorneys General of the United States and Mexico Agree to Boost Bilateral Collaboration
In their first meeting since assuming their current positions, Attorney General Loretta E. Lynch of the United States and Attorney General Arely Gómez González of Mexico reviewed the current law enforcement agenda between the two countries and pledged to work together to fight transnational crime, including drug trafficking organizations, fraud and financial crime, and human trafficking and smuggling.
During the meeting, which was held in the offices of the U.S. Department of Justice in Washington, D.C., both officials agreed to begin a new push for collaboration between the two nations in the context of reciprocity and respect.
“I am pleased to have had the opportunity to host this historic meeting, and to reaffirm our partnership with the Office of the Attorney General of Mexico,” said Attorney General Lynch. “Attorney General Gómez González and I are committed to working closely to fight transnational crime, whatever form it takes – whether trafficking in drugs, or trafficking in persons; whether violent gangs, or financial fraudsters. Together, we will build on the strong record of cooperation between our two countries to advance the common mission that our nations share.”
The Attorneys General discussed the process of institutional transformation that Mexico's justice system is undergoing, with the entry into force of the New System for Criminal Justice, as well as other reforms designed to move towards a modern Attorney General’s Office.
“We are changing the institution,” said Attorney General Gómez González. “We want modern, transparent law enforcement that guarantees full respect for human rights and is based on technical, scientific investigations which produce results. That is how we will strengthen public confidence.”
Attorney General Lynch was joined by Deputy Attorney General Sally Yates, Assistant Attorney General Leslie Caldwell of the Criminal Division and Bruce Swartz, Deputy Assistant Attorney General of the Criminal Division and Counselor for International Affairs.
Those from Mexico’s Attorney General's Office who participated in the meeting included Deputy Attorney General José Alberto Rodríguez Calderón of Legal and International Affairs, Deputy Attorney General Felipe de Jesús Muñoz Vázquez, Specializing in Organized Crime, Deputy Attorney General Eber Omar Betanzos Torres of Human Rights, Crime Prevention and Community Services, and Chief Director Tomás Zerón de Lucio of the Criminal Investigation Agency.
Justice Department Wins Lawsuit Against Texas Employer That Discriminated Against U.S. CitizenRead the Press Release
The Justice Department announced today that it won a lawsuit against Estopy Farms regarding allegations that the company discriminated against a U.S. citizen by preferring to hire foreign workers. The case was decided by the Office of the Chief Administrative Hearing Officer, the administrative court authorized to hear discrimination cases under the Immigration and Nationality Act (INA).
The court found that Estopy Farms, a farm that harvests crops in Texas, violated the INA when it refused to hire a qualified U.S. worker to operate agricultural equipment because the company preferred to hire foreign workers under the H-2 visa program. The case now moves to the remedial phase for the court to determine what Estopy Farms must do to remedy the violation, which includes the possibility of paying civil penalties.
“Companies cannot manipulate visa programs to discriminate against U.S. workers because of their citizenship,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “This ruling sends a strong message to all employers that discrimination against U.S. workers will not be tolerated.”
The case was litigated by the Justice Department’s Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), which is responsible for enforcing the anti-discrimination provision of the INA. The statute prohibits employers from discriminating because of citizenship or national origin in hiring, firing, or recruitment or referral for a fee. The statute also prohibits employers from placing additional documentary burdens on work-authorized applicants or employees during the employment eligibility verification process because of their citizenship status or national origin.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired); call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired); sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php; email [email protected]; or visit OSC’s website at www.justice.gov/crt/about/osc.
Applicants or employees who believe they were subjected to discrimination based on their citizenship, immigration status or national origin in hiring, firing, or recruitment or referral for a fee, or different documentary requirements based on their citizenship, immigration status or national origin, should contact OSC’s worker hotline for assistance.
IAP Worldwide Services Inc. Resolves Foreign Corrupt Practices Act InvestigationRead the Press Release
Former Company Vice President Pleads Guilty to Participating in Bribery Scheme
A Florida defense and government contracting company, IAP Worldwide Services Inc. (IAP), entered into a non-prosecution agreement and agreed to pay a $7.1 million penalty to resolve the government’s investigation into whether the company conspired to bribe Kuwaiti officials in order to secure a government contract. A former vice president of IAP also pleaded guilty today to conspiracy to violate the Foreign Corrupt Practices Act (FCPA) for his involvement in the bribery scheme.
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 and Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office made the announcement.
James Michael Rama, 69, of Lynchburg, Virginia, pleaded guilty before U.S. District Court Judge James C. Cacheris of the Eastern District of Virginia to one count of conspiracy to violate the anti-bribery provisions of the FCPA. Sentencing is scheduled for Sept. 11, 2015.
In 2004, Kuwait’s Ministry of the Interior (MOI) initiated the Kuwait Security Program (KSP), a project that was intended to provide nationwide surveillance capabilities for several Kuwaiti government agencies primarily through the use of closed-circuit television. The project was divided into two phases: a planning and feasibility period called “Phase I” and an installation period called “Phase II.” The MOI was responsible for overseeing the KSP, including selecting contractors to facilitate its implementation. Revenues from the Phase II contract were expected to be substantially greater than from Phase I.
According to admissions made in connection with both the non-prosecution agreement and Rama’s plea agreement, IAP and Rama schemed to ensure that IAP worked as the consultant for Phase I so that it could tailor the requirements for the Phase II contracts to IAP’s strengths, which would give the company an advantage in the Phase II bidding. To that end, both IAP and Rama admitted that in February 2006, executives and senior employees of IAP, including Rama, set up a shell company called “Ramaco” to bid on Phase I, in part to conceal IAP’s role in crafting the Phase II requirements and its conflict of interest in connection with securing the Phase II contract.
Ultimately, Ramaco secured the Phase I contract for approximately $4 million. According to admissions made in connection with both agreements, the Rama and IAP agreed that half of that amount would be diverted to a consultant who would pay bribes to Kuwaiti government officials to assist IAP in obtaining and retaining the Phase I contract and to obtain the Phase II contract. IAP and Rama admitted that they disguised the payments by transferring funds Ramaco received to an IAP bank account and then to the consultant through a series of accounts and intermediaries. According to the factual statements incorporated into both the non-prosecution agreement and Rama’s plea agreement, between September 2006 and March 2008, IAP and its co-conspirators paid the consultant approximately $1,783,688 understanding that some or all of the funds would be used to bribe Kuwaiti government officials.
Based on a variety of factors, including but not limited to IAP’s cooperation, the Criminal Division entered into a non-prosecution agreement with the company. The non-prosecution agreement requires IAP’s continued cooperation. In addition, the non-prosecution agreement requires IAP to conduct a review of its existing internal controls, policies and procedures, and make any necessary modifications to ensure that the company maintains accurate record keeping and a rigorous anti-corruption compliance program. The non-prosecution agreement further requires IAP to report periodically to the Criminal Division and to the U.S. Attorney’s Office of the Eastern District of Virginia regarding remediation and implementation of the aforementioned compliance program and internal controls, policies and procedures.
The investigation is being conducted by the FBI’s Washington, D.C., Field Office and the DCIS Mid-Atlantic Field Office. The case is being prosecuted by Assistant Chief Tarek Helou and Trial Attorney James P. McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Paul J. Nathanson of the Eastern District of Virginia. The United Kingdom’s Serious Fraud Office and the Criminal Division’s Office of International Affairs also provided assistance during the investigation.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
IAP NPA
Rama Plea Agreement
Florida Skilled Nursing Facility Agrees to Pay $17 Million to Resolve False Claims Act AllegationsRead the Press Release
Hebrew Homes Health Network Inc., its operating subsidiaries and affiliates, and William Zubkoff, the former president and executive director of Hebrew Homes Health Network Inc. (collectively Hebrew Homes), have agreed to pay $17 million to resolve allegations that Hebrew Homes violated the False Claims Act by improperly paying doctors for referrals of Medicare patients requiring skilled nursing care, the Department of Justice announced today. Hebrew Homes provided skilled nursing services at seven rehabilitation and skilled nursing facilities in Miami-Dade County, Florida. This is the largest settlement involving alleged violations of the Anti-Kickback Statute by skilled nursing facilities in the United States.
“Illegal inducements paid to physicians in exchange for patient referrals will not be tolerated,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Medicare funds should be used to provide care for our senior citizens, not as an inducement to physicians to refer business.”
From 2006 through 2013, Hebrew Homes allegedly operated a sophisticated kickback scheme in which they hired numerous physicians ostensibly as medical directors pursuant to contracts that specified numerous job duties and hourly requirements. The various facilities had several such medical directors under contract at any given time, paying each several thousand dollars monthly. The United States alleged that in reality these were ghost positions, and that most of the medical directors were required to perform few, if any, of their contracted job duties. Instead, they were allegedly paid for their patient referrals to the Hebrew Homes facilities, which increased exponentially once the medical directors were put on the payroll.
“The record settlement announced today demonstrates this office’s commitment to rooting out all forms of illegal kickback schemes,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “And that is certainly true in the context of nursing homes, where the Department of Justice will not allow healthcare decisions for elderly Medicare patients to be influenced by kickback payments to physicians. The integrity of our public health care program requires that such decisions be based on quality of care.”
“Hebrew Homes’ intricate kickback scheme in this record-setting case threatened the impartiality of physician referrals, the financial integrity of Medicare and the public’s trust in the health care system,” said Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG). “Our agency will continue to investigate nursing homes and other health care providers that seek to illegally boost profits at the expense of federal health care programs.”
The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives. The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare.
“Illegal kickbacks undermine the integrity of the Medicare system by putting profits in front of patient welfare,” said Special Agent in Charge George L. Piro of the FBI’s Miami Field Office. “The investigators who helped unravel this intricate scam are to be commended for their diligence and commitment to root out fraud within our health care system.”
As part of the settlement, Mr. Zubkoff has agreed to resign as Hebrew Homes’ Executive Director and to no longer be an employee of the company. Also, as part of the settlement announced today, Hebrew Homes has entered into a five-year corporate integrity agreement with HHS-OIG, and has agreed to change its policies on hiring and maintaining medical directors.
The settlement announced today resolves allegations made in a lawsuit filed by Stephen Beaujon, a former CFO of Hebrew Homes, under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private individuals to sue on behalf of the government for false claims and to share in any recovery. Mr. Beaujon will receive $4.25 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 $24.3 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Southern District of Florida, the FBI and HHS-OIG.
The case is captioned United States ex rel. Beaujon v. Hebrew Homes Health Network, Inc., et al., Case No. 12-20951 CIV (S.D. Fla.). The claims resolved by the settlement are allegations only and there has been no determination of liability.
Acuerdan Las Procuradoras De México Y Estados Unidos De América Dar Un Nuevo Impulso a LA Colaboración Bilateral En JusticiaRead the Press Release
Se reúnen por primera ocasión, Arely Gómez González y Loretta E. Lynch.
En su primera reunión de trabajo desde que asumieron su encargo, la Procuradora General de la República, Arely Gómez González y la Procuradora General de los Estados Unidos de América, Loretta E. Lynch, hicieron una revisión y balance del estado que guardan los temas de la agenda en materia de procuración justicia entre ambos países y se comprometieron a trabajar juntas para luchar contra el crimen organizado transnacional, incluyendo a las organizaciones de narcotráfico, fraude y delitos financieros, así como tráfico de personas y de bienes.
Durante el encuentro, que se llevó a cabo en las oficinas del Departamento de Justicia, en Washington, D. C., ambas funcionarias acordaron dar un nuevo impulso a la colaboración entre ambas naciones, en un contexto de reciprocidad y respeto.
La Titular de la PGR, abordó con su contraparte estadounidense el proceso de transformación de la institución, a partir de la entrada en vigor del Nuevo Sistema de Justicia Penal, así como de las reformas para transitar hacia una Fiscalía General.
“Estamos cambiando a la institución, queremos una procuración de justicia moderna, transparente, de pleno respeto a los derechos humanos, basada en investigaciones científicas y técnicas, que ofrezcan resultados. De esta forma, se fortalecerá la confianza ciudadana”, afirmó la Procuradora Gómez González.
Por su parte, la Procuradora General de los Estados Unidos de América, Loretta E. Lynch, indicó:
“Me complace haber tenido la oportunidad de auspiciar este encuentro histórico y de reafirmar nuestra sociedad con la Procuraduría General de la República de México,” dijo la Procuradora Lynch. “La Procuradora Gómez González y yo estamos comprometidas a trabajar muy de cerca para luchar contra el crimen transnacional, en cualquiera de sus formas, ya sea el narcotráfico o el tráfico de personas; contra grupos violentos o defraudadores financieros. Juntas, construiremos sobre la base sólida de cooperación entre nuestros dos países para avanzar en la misión común que nuestras naciones comparten”.
Por la Procuraduría General de la República participaron en la reunión, José Alberto Rodríguez Calderón, Subprocurador Jurídico y de Asuntos Internacionales; Felipe de Jesús Muñoz Vázquez, Subprocurador Especializado en Investigación de Delincuencia Organizada; Eber Omar Betanzos Torres, Subprocurador de Derechos Humanos, Prevención del Delito y Servicios a la Comunidad y Tomás Zerón de Lucio, Director en Jefe de la Agencia de Investigación Criminal.
Por el Departamento de Justicia, acompañaron a la Procuradora Loretta Lynch, Sally Yates, Subprocuradora General; Leslie Caldwell, Subprocuradora de la División Criminal y Bruce Swartz, Subprocurador Adjunto de la División Criminal y Consejero para Asuntos Internacionales.
Navy Civilian Engineer Pleads Guilty to Attempted EspionageRead the Press Release
Defendant Attempted to Pass Navy Supercarrier Schematics to Egypt
Mostafa Ahmed Awwad, 36, of Yorktown, Virginia, pleaded guilty today to charges of attempted espionage relating to his attempt to provide schematics of the nuclear aircraft carrier USS Gerald R. Ford to Egypt while serving as a Navy engineer. Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Assistant Director Randall C. Coleman of the FBI’s Counterintelligence Division and Special Agent in Charge Susan Triesch of the Naval Criminal Investigative Service (NCIS) Norfolk, Virginia, Field Office made the announcement.
“Awwad pleaded guilty to leveraging his position of trust within the Navy to share the schematics of the USS Gerald R. Ford nuclear aircraft carrier with what he believed to be a foreign government,” said Assistant Attorney General Carlin. “The National Security Division will continue to pursue and bring to justice those who abuse their access to sensitive defense information. I would like to thank all of the special agents, prosecutors and other personnel whose work led to the guilty plea in this case.”
“Today, Mr. Awwad is being held responsible for attempting to steal the valuable plans for the USS Ford and to provide them to a foreign government,” said U.S. Attorney Boente. “This office is committed to safeguarding our nation’s sensitive defense information, and we will bring to justice those who seek to steal it. I want to commend our partners at the FBI Norfolk and NCIS Norfolk for their excellent work on this case.”
“This case underscores the persistent national security threat posed by insiders stealing critical national defense information in order to benefit foreign governments,” said Assistant Director Coleman. “Fortunately, the aggressive counterintelligence posture of the FBI and our interagency partners enabled the identification and neutralization of Awwad’s efforts before he transferred any information to a foreign power. Working together, we prevented the loss of billions of dollars in research costs and the exposure of potential vulnerabilities to our newest generation of nuclear aircraft carrier.”
“This case demonstrates that NCIS aggressively pursues anyone who would endanger our national security by targeting critical platforms like the Ford class carrier,” said Special Agent in Charge Triesch. “The close collaboration between NCIS and the FBI thwarted this insider threat and we will continue cooperative efforts to safeguard those who protect and serve in the Department of the Navy.”
According to court documents, Awwad began working for the Department of the Navy in February 2014 as a civilian general engineer in the Nuclear Engineering and Planning Department at the Norfolk Naval Shipyard. Based on a joint investigation, an undercover FBI agent contacted Awwad by telephone on Sept. 18, 2014, and asked to meet him the following day. Without seeking additional information from the caller, Awwad agreed. The next day, Awwad met with the undercover FBI agent, who was posing as an Egyptian intelligence officer, in a park in Hampton, Virginia. During the meeting, Awwad claimed it was his intention to utilize his position with the U.S. Navy to obtain military technology for use by the Egyptian government, including but not limited to the designs of the USS Gerald R. Ford nuclear aircraft carrier, a new Navy “supercarrier.” Awwad agreed to conduct clandestine communications with the undercover FBI agent, and to conduct “dead drops” in a concealed location in the park.
On Oct. 9, 2014, Awwad and the undercover FBI agent met at a hotel where Awwad described a detailed plan to circumvent U.S. Navy computer security by installing software on his restricted computer system that would enable him to copy documents without causing a security alert. At this time, Awwad also provided the undercover FBI agent with four Computer Aided Drawings of a U.S. nuclear aircraft carrier downloaded from the Navy Nuclear Propulsion Information system. During the discussion, Awwad indicated his understanding that the drawings would be sent to and used in Egypt. Awwad also asked the undercover FBI agent for $1,500 to purchase a pinhole camera that he would wear around the shipyard to photograph restricted material. At the conclusion of the meeting, Awwad agreed to provide the undercover FBI agent with passport photos which would be used to produce a fraudulent Egyptian passport so that Awwad could travel to Egypt without alerting U.S. government officials.
On Oct. 23, 2014, Awwad traveled to the pre-arranged dead drop site situated on a secluded hiking trail and utilized a concealed container disguised in a hole in the ground. He retrieved $3,000 before placing an external hard drive and two passport photos inside.
On Dec. 5, 2014, Awwad and the undercover agent met in the Hampton Roads, Virginia, area. During this meeting, Awwad stated that he planned to travel to Egypt. Awwad subsequently said he wanted to meet with “high ranking” Egyptian intelligence and military officials in Cairo. Awwad also stated during the meeting that he had copied all of the schematics. During the meeting, Awwad provided the undercover FBI agent a thumb drive that contained more schematics of the USS Gerald R. Ford. The undercover FBI agent handed Awwad the “escape plan” – in actuality a manila envelope with no real plan inside – along with $1,000 in currency, shortly before Awwad was arrested.
The schematics of the USS Gerald R. Ford that Awwad provided are information related to the national defense of the United States. The USS Gerald R. Ford, which is currently under construction, is the first in a new class of aircraft carriers. When completed, the USS Ford will be the most advanced aircraft carrier in the world, with approximately 4,000 sailors on board. The schematics contain Naval Nuclear Propulsion Information and they are marked with the handling restriction “NOFORN,” which means they are not releasable to foreign persons.
Awwad pleaded guilty to a criminal information charging him with attempted espionage, and his plea was accepted by U.S. District Court Judge Raymond A. Jackson of the Eastern District of Virginia. He will be sentenced on Sept. 21, 2015. The maximum penalty for this offense is life in prison, but the plea agreement recommends that Awwad receive a sentence in the range of eight to 11 years. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
This case was investigated by the FBI’s Norfolk Field Office and NCIS, in cooperation with the Department of the Navy. The case is being prosecuted by Assistant U.S. Attorneys Benjamin L. Hatch and Joseph E. DePadilla of the Eastern District of Virginia, and Senior Trial Attorney Heather M. Schmidt of the Justice Department’s National Security Division.
Leader of Imperial Gangsters Sentenced to Life in Prison for Five Murders, One Attempted Murder and Other Gang-Related CrimesRead the Press Release
A leader of the Imperial Gangsters street gang was sentenced today to life in prison for five counts of murder in aid of racketeering and other RICO-related charges, 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.
Juan Briseno, aka Tito, 25, of Hammond, Indiana, was sentenced by Chief Judge Philip P. Simon of the Northern District of Indiana to a total of six life sentences plus 10 years in prison. The sentences will run consecutively.
On March 6, 2015, a federal jury in the Northern District of Indiana convicted Briseno of engaging in a RICO conspiracy, engaging in a drug distribution conspiracy, five counts of murder in aid of racketeering, one count of attempted murder in aid of racketeering, and a firearms count related to the attempted murder.
According to the evidence presented at trial, Briseno was a leader of the 149th Street Imperial Gangsters, a violent clique of the Imperial Gangsters based in East Chicago, Indiana. In his leadership role, Briseno supervised prospective gang members known as “shorties.”
The evidence showed that the Imperial Gangsters had a long-standing rule that gang members were to shoot rival gang members on sight, and that they had a policy to shoot anyone selling drugs in their neighborhood when such persons had not either purchased the drugs from the Imperial Gangsters or paid “taxes” to the gang for the right to sell drugs in their territory. The five murders of which Briseno was convicted were committed consistent with these directives.
According to witness testimony, Briseno expressed no remorse for his participation in various murders. Indeed, he bragged about killings and encouraged others to do the same.
With regard to the specific murders, the evidence at trial demonstrated that, on Sept. 26, 2007, Briseno knocked on Luis Ortiz’s apartment door in Hammond, Indiana, and shot him dead in the doorway. According to the evidence presented at trial, Briseno targeted Ortiz because he was a member of the rival Latin King Street Gang.
Additionally, the evidence showed that, on June 3, 2008, Briseno killed both Miguel Mejias, a former member of the Latin Kings, and Michael Sessum, an associate of Mejias, while they were unarmed and bringing takeout food to their pregnant girlfriends. According to the evidence presented at trial, Briseno fired multiple shots into Mejias’ residence, striking a female victim in the arm while she was holding her infant child. Another pregnant female victim and multiple minor victims also were inside the apartment at the time. According to testimony presented at trial, in the weeks prior to the confrontation, Mejias implored a common friend to tell Briseno that Mejias was no longer “gangbanging” and did not want any trouble. In response to this message, Briseno said, “[expletive] him, he was going to bring [Latin] Kings into our neighborhood.”
The evidence at trial also demonstrated that, on Feb. 7, 2010, Briseno and his associates murdered rival Two-Six gang member Miguel Colonas he was leaving a party in the Harbor Area of East Chicago. In this incident, Briseno and several associates laid in wait for Colon to leave the party, and then shot the unsuspecting Colon from a vehicle.
Finally, the evidence at trial demonstrated that, on June 19, 2010, Briseno murdered Latroy Howard because he was selling drugs in Imperial Gangster territory. A video introduced at trial showed Briseno’s vehicle circling the block several times prior to the murder, and then showed Briseno confronting Howard on foot and shooting him twice in the head at point-blank range.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives; the FBI; and the East Chicago Police Department. The Gary, Indiana, Police Department; the Hammond Police Department; and the Lake County High Intensity Drug Trafficking Area Program provided assistance. This case is being prosecuted by Assistant U.S. Attorney David J. Nozick of the Northern District of Indiana and Trial Attorney Bruce R. Hegyi of the Criminal Division’s Capital Case Section.
Kentucky Man Convicted of Evading Income Taxes and Providing False Document to Internal Revenue Service CollectionsRead the Press Release
A Russell Springs, Kentucky, man has been found guilty by a jury sitting in the U.S. District Court in Bowling Green, Kentucky, of multiple tax crimes, including failure to report hundreds of thousands of dollars on his income taxes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky.
On June 12, the jury found James S. Faller II, 54, guilty of one count of corruptly endeavoring to obstruct the Internal Revenue Code, four counts of evading federal individual income taxes, one count of falsifying a document submitted to the Internal Revenue Service (IRS) under the penalty of perjury and four counts of failing to file timely his 2006 through 2009 federal individual income tax returns. The jury returned the verdict after two hours of deliberation following a nine-day trial.
According to evidence introduced at trial, from at least April of 2006 through March of 2010, Faller provided consultation services involving criminal defense investigations and related services, for which he earned gross income of approximately $126,000 to $289,000 per year. During that time, Faller concealed his income from the federal government by arranging for his income to be made payable to another individual as a nominee and deposited the income into bank accounts that were not in his name. In March 2010, during an IRS civil collections action, Faller provided a false document to an IRS revenue officer wherein he lied about his true gross monthly income. Faller also did not file any individual federal income tax returns for those years on a timely basis. In March 2011, he filed false tax returns for 2006 and 2007.
Faller is scheduled to be sentenced on Sept. 17 in Bowling Green by Chief U.S. District Judge Joseph McKinley of the Western District of Kentucky. Faller faces a statutory maximum sentence of five years in prison and a $250,000 fine on the evasion charges, a statutory maximum sentence of three years in prison and a $250,000 fine on the corrupt endeavor to impede charge, a statutory maximum sentence of three years in prison and a $250,000 fine on the false document charge, and a statutory maximum sentence of one year in prison and a $100,000 fine for each count of failure to file income tax returns.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Harvey commended the special agents of the IRS-Criminal Investigation, who investigated the case, and Trial Attorney Thomas Voracek of the Tax Division and Assistant U.S. Attorney Lee Gentry of the Eastern District of Kentucky, who prosecuted the case.
Former Chief Executive Officer of Oil Services Company Pleads Guilty to Foreign Bribery ChargeRead the Press Release
The former co-chief executive officer (CEO) of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and formerly with an office in New Jersey – pleaded guilty today to conspiring to pay bribes to a foreign government official in violation of the Foreign Corrupt Practices Act (FCPA).
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.
Joseph Sigelman, 44, of Miami and the Philippines, pleaded guilty today in the District of New Jersey to conspiracy to violate the FCPA. His trial had commenced on June 1, 2015. Sigelman will be sentenced June 16, 2015.
At his plea hearing, Sigelman admitted to conspiring with co-CEO Knut Hammarskjold, PetroTiger’s former general counsel Gregory Weisman, and others to make illegal payments of $333,500 to David Duran, an employee of the Colombian national oil company, Ecopetrol. Sigelman admitted to making the payments in exchange for Duran’s assistance in securing a $45 million oil services contract for PetroTiger.
Sigelman is the third former PetroTiger executive to plead guilty in the case. On Nov. 8, 2013, Weisman pleaded guilty to conspiracy to violate the FCPA and to commit wire fraud. On Feb. 18, 2014, Hammarskjold pleaded guilty to conspiracy to violate the FCPA and to commit wire fraud.
The case was brought to the attention of the department through a voluntary disclosure by PetroTiger, which fully cooperated with the department’s investigation. Based on PetroTiger’s voluntary disclosure, cooperation, and remediation, among other factors, the department declined to prosecute PetroTiger.
The department has worked closely with, and has received significant assistance from, its law enforcement counterparts in the Republic of Colombia, which announced in March of this year the arrests of Duran, his wife, a former employee of PetroTiger, and several other officials from Ecopetrol. Those charges are pending, and a defendant is presumed innocent unless and until proven guilty.
The department also received significant assistance from Ecopetrol, the National Hydrocarbons Agency, the Office of the Secretary of Transparency of the Republic of Colombia, the Office of the Attorney General of the Republic of Colombia and other agencies within the Colombian government. The department also appreciates the assistance of the Republic of the Philippines, including the Bureau of Immigration and the Republic of Panama. The department would also like to thank the United Kingdom’s Metropolitan Police International Assistance Unit for their assistance.
The case is being investigated by the FBI’s Newark Division. The case is being prosecuted by Deputy Chief Patrick Stokes and Assistant Chief Tarek Helou, with support from Assistant Chief Daniel Kahn, of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Zach Intrater and Glenn Moramarco of the District of New Jersey. The Criminal Division’s Office of International Affairs also provided significant assistance.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Sigelman Plea Agreement
Children's Hospital to Pay $12.9 Million to Settle False Claims Act AllegationsRead the Press Release
Children’s Hospital, Children’s National Medical Center Inc. and its affiliated entities (collectively CNMC) have agreed to pay $12.9 million to resolve allegations that they violated the False Claims Act by submitting false cost reports and other applications to the components and contractors of the Department of Health and Human Services (HHS), as well as to Virginia and District of Columbia Medicaid programs, the Department of Justice announced today. CNMC is based in Washington, D.C., and provides pediatric care throughout the metropolitan region.
“The false reporting alleged in today’s settlement deprived the Medicare Trust Fund of millions of taxpayers’ dollars,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Such conduct wastes critical federal health care program funds and drives up the costs of health care for all of us.”
“The integrity of federal health care programs depends on honest and accurate reporting from the hospitals and other health care providers that receive hundreds of billions of tax dollars every year,” said Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia. “This settlement demonstrates our commitment to defending the integrity of the system and ensuring that taxpayer money goes to meet the most critical health care needs. We will continue to work with whistleblowers like the former employee who came forward in this case to battle waste, fraud and abuse that fuel the skyrocketing cost of health care.”
According to the settlement agreement, CNMC misstated information on cost reports and applications in two distinct manners to HHS. This false information was used by HHS and Medicaid programs to calculate reimbursement rates to CNMC. The United States contended that CNMC misreported its available bed count on its application to HHS’ Health Resources and Services Administration under the Children’s Hospitals Graduate Medical Education (CHGME) Payment Program. The CHGME Payment Program provides federal funds to freestanding children’s hospitals to help them maintain their graduate medical education programs that train pediatric and other residents. The United States further contended that CNMC filed cost reports misstating their overhead costs, resulting in overpayment from Medicare and the Virginia and District of Columbia Medicaid programs.
The settlement resolves allegations brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by James A. Roark Sr., a former employee of CNMC. Under the act, a private citizen can sue on behalf of the United States and share in any recovery. The United States is entitled to intervene in the lawsuit, as it did here. As part of the resolution, Mr. Roark will receive $1,890,649.98.
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 $24.3 billion through False Claims Act cases, with more than $15.3 billion of that amount recovered in cases involving fraud against federal health care programs.
This matter was handled by the U.S. Attorney’s Office of the District of Columbia with assistance from the Civil Division’s Commercial Litigation Branch and the HHS’ Office of Inspector General.
The case is United States ex rel. Roark v. Children’s Hosp., et al., No. 1:14-cv-00616 (D.D.C.).
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
Norwegian Shipping Company and Engineering Officers Charged in Second Indictment with Environmental Crimes and Obstruction of JusticeRead the Press Release
A federal grand jury in Lafayette, Louisiana, has returned a three-count indictment charging Det Stavangerske Dampskibsselskab AS (DSD Shipping) and four employees with violating the Act to Prevent Pollution from Ships (APPS) and obstruction of justice in connection with the illegal discharge of contaminated waste-water directly into the sea, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Stephanie A. Finley for the Western District of Louisiana. DSD Shipping is a Norwegian-based shipping company that operates the oil tanker M/T Stavanger Blossom, a vessel engaged in the international transportation of crude oil. Also indicted were four engineering officers employed by DSD Shipping to work aboard the vessel: Daniel Paul Dancu, 51, of Romania; Bo Gao, 49, of China; Xiaobing Chen, 34, of China; and Xin Zhong, 28, of China.
The operation of marine vessels, like the M/T Stavanger Blossom, generates large quantities of waste oil and oil-contaminated waste water. International and U.S. law requires that these vessels use pollution prevention equipment to preclude the discharge of these materials. Should any overboard discharges occur, they must be documented in an oil record book, a log that is regularly inspected by the U.S. Coast Guard.
“Companies operating vessels in navigable waterways have a responsibility to prevent oil spills and protect the public and the environment,” said U.S. Attorney Finley. “One of our priorities is to help preserve the natural resources of this state. Violators should be clear - charges will be filed against entities and persons who harm these resources and obstruct investigations.”
According to the indictment, in 2014, DSD Shipping and its employees discharged oil-contaminated waste water generated aboard the M/T Stavanger Blossom directly into the sea. To hide the illegal discharges, DSD Shipping and its employees maintained a fictitious oil record book that failed to record the disposal, transfer, or overboard discharge of oil from the vessel. The indictment further alleges that prior to an inspection by the U.S. Coast Guard, Chen ordered crewmembers to remove piping connected to the vessel’s overboard discharge valve, install new piping, and repaint the piping to hinder an inspection by the U.S. Coast Guard.
DSD Shipping and the engineering officers were charged with violating the APPS for failing to record overboard discharges in the vessel’s oil record book and with obstruction of justice for presenting false documents and deceiving the Coast Guard during an inspection in the Port of Lake Charles. If convicted, DSD Shipping could be fined up to $500,000 per count, in addition to other possible penalties. Dancu, Gao, Chen and Zhong face a maximum penalty of 20 years in prison for the obstruction of justice charges. An indictment is merely a formal charge that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until and unless proven guilty.
This is the second indictment arising from a joint, multi-district investigation by the U.S. Coast Guard, Sector Mobile, U.S. Coast Guard Investigative Services and the Criminal Investigation Division for the Environmental Protection Agency. DSD Shipping, Dancu, Gao, Chen and Zhong were previously indicted in the Southern District of Alabama with a seven-count indictment charging related conduct. Assistant U.S. Attorney Howard Parker with the U.S. Attorney's Office for the Western District of Louisiana, Assistant U.S. Attorney Mike Anderson with the U.S. Attorney’s Office for the Southern District of Alabama and Trial Attorney Shane N. Waller Environmental Crimes Section are prosecuting the case.
Campaign Manager Sentenced to 24 Months for Coordinated Campaign Contributions and False StatementsRead the Press Release
A former campaign finance manager and political consultant was sentenced today in the Eastern District of Virginia to 24 months for coordinating $325,000 in federal election campaign contributions by a political action committee (PAC) to a congressional campaign committee. This is the first U.S. prosecution based on the coordination of campaign contributions between political committees.
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 and Acting Special Agent in Charge Jennifer Leonard of the FBI Washington, D.C., Field Office’s Criminal Division made the announcement.
“The significant prison sentence imposed on Tyler Harber should cause other political operatives to think twice about circumventing laws that promote transparency in federal elections,” said Assistant Attorney General Caldwell. “As the first conviction for illegal campaign coordination, this case stands as an important step forward in the criminal enforcement of federal campaign finance laws. Illegal campaign coordination can be difficult to detect, which is why we strongly encourage party or campaign insiders to come forward and blow the whistle.”
“Campaign finance laws exist to guard against illegal activity such as coordinated campaign contributions,” said U.S. Attorney Boente. “The citizens of the commonwealth of Virginia can rely on this office enforce federal campaign finance law.”
“As the 2016 election gears up, there may be others, similar to Mr. Harber, who may view campaigns as a venue to misappropriate funds,” said Acting Special Agent in Charge Leonard. “With millions of dollars in play, donors should be aware of how their money will be spent prior to making a donation to a super Pac to ensure that their contributions are being legally expended.”
Tyler Eugene Harber, 34, of Alexandria, Virginia, previously pleaded guilty before U.S. District Judge Liam O’Grady to one count of coordinated federal election contributions and one count of making false statements to the FBI.
Harber was the campaign manager and general political consultant for a candidate for Congress in the November 2012 general election. At the same time, Harber participated in the creation and operation of a PAC, which, unlike the campaign of an individual candidate, may raise and spend money in unlimited amounts from otherwise prohibited sources to influence federal elections so long as it does not coordinate expenditures with a federal campaign.
In connection with his guilty plea, Harber admitted, among other things, that he caused $325,000 in coordinated contributions by directing the PAC to purchase political advertising opposing a rival candidate. Harber admitted that he knew this coordination of expenditures was unlawful.
Harber admitted that he used an alias and other means to deflect inquiries by a political party official. He also admitted that he told multiple lies when interviewed by the FBI concerning his activities.
This case was investigated by the FBI’s Washington, D.C., Field Office’s Northern Virginia Resident Agency. The case is being prosecuted by Director Richard C. Pilger of the Criminal Division’s Public Integrity Section Election Crimes Branch and Chief Mark D. Lytle of the U.S. Attorney’s Office of the Eastern District of Virginia’s Financial Crimes and Public Corruption Unit.
Virginia Teen Pleads Guilty to Providing Material Support to ISILRead the Press Release
Seventeen-year-old Facilitated Travel to Syria for 18-year-old Prince William County, Virginia, Resident
Ali Shukri Amin, 17, of Manassas, Virginia, pleaded guilty today to charges of conspiring to provide material support and resources to the Islamic State in Iraq and the Levant (ISIL), a designated foreign terrorist organization.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Andrew McCabe of the FBI’s Washington, D.C., Field Office.
“Ali Shukri Amin is a 17-year-old American who pleaded guilty to providing material support to ISIL, and he used social media to do so,” said Assistant Attorney General Carlin. “Around the nation, we are seeing ISIL use social media to reach out from the other side of the world. Their messages are reaching America in an attempt to radicalize, recruit and incite our youth and others to support ISIL's violent causes. This case serves as a wake-up call that ISIL's propaganda and recruitment materials are in your communities and being viewed by your youth. This challenge requires parental and community awareness and action to confront and deter this threat wherever it surfaces.”
“Today’s guilty plea demonstrates that those who use social media as a tool to provide support and resources to ISIL will be identified and prosecuted with no less vigilance than those who travel to take up arms with ISIL,” said U.S. Attorney Boente. “The Department of Justice will continue to pursue those that travel to fight against the United States and our allies, as well as those individuals that recruit others on behalf of ISIL in the homeland, and prosecute them to the full extent of the law.”
In a statement of facts filed with the plea agreement, Amin admitted to using Twitter to provide advice and encouragement to ISIL and its supporters. Amin, who used the Twitter handle @Amreekiwitness, provided instruction on how to use Bitcoin, a virtual currency, to mask the provision of funds to ISIL, as well as facilitation to ISIL supporters seeking to travel to Syria to fight with ISIL. Additionally, Amin admitted that he facilitated travel for Reza Niknejad, an 18-year-old Prince William County resident who traveled to Syria to join ISIL in January 2015. Niknejad was charged yesterday in the Eastern District of Virginia with conspiring to provide material support to terrorists, conspiring to provide material support to ISIL and conspiring to kill and injure people abroad.
Amin’s plea was accepted by U.S. District Court Judge Claude M. Hilton of the Eastern District of Virginia. Amin was charged by criminal information during the court hearing today, and faces a maximum penalty of 15 years in prison if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
This case was investigated by the FBI’s Washington, D.C., Field Office. Assistant U.S. Attorney Michael P. Ben’Ary and Special Assistant U.S. Attorney Caroline H. Friedman of the Eastern District of Virginia are prosecuting the case, with the assistance of Trial Attorney Stephen Sewell of the National Security Division’s Counterterrorism Section.
Amin Plea Agreement
Amin Statement of Facts
Utah Man Sentenced to 27 Months in Federal Prison for Possession of Unregistered Destructive DeviceRead the Press Release
John Huggins, 48, of Tremonton, Utah, was sentenced to 27 months in federal prison for possession of an unregistered destructive device, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Carlie Christensen of the District of Utah.
In July 2014, Huggins was charged in an indictment with possession of an unregistered destructive device, possession of an explosive by a restricted person, and unlawful distribution of information relating to the manufacture and use of explosives or destructive devices. Huggins pleaded guilty in February 2015 to possession of an unregistered destructive device.
Huggins admitted in court documents that in July 2014, he possessed a partially assembled explosive device, and that he possessed the knowledge and the materials necessary, including an explosive substance, to readily assemble the device into a functioning explosive device.
According to a sentencing memorandum filed in the case, law enforcement officers received information from a confidential informant that Huggins was planning to use explosives to target the Tremonton Police Department. The FBI then made contact with the defendant through another confidential informant. This confidential informant met with Huggins and purchased a thumb drive containing references on how to start and train militias, and how to produce explosives. An undercover agent, posing as a representative of an anti-government militia group, was introduced to the defendant and told Huggins he was looking for someone who could make explosives and train people in his group. Huggins responded that he could do that, according to the sentencing memorandum. Huggins described what he could do and expressed an extreme dislike of law enforcement based on prior interactions with police officers.
During a second meeting with the undercover agent, Huggins went to great lengths to convince the undercover agent that he could build explosives capable of killing people. The defendant offered to come and train the undercover agent’s group for a month for a fee. Huggins also presented and sold a notebook to the undercover agent. The notebook included drawings detailing explosives production and writings on topics such as explosive theory and how to produce different types of explosives.
Huggins was arrested in July 2014. According to court filings, he admitted that he was meeting with a man he believed to be a member of an extremist militia group. He admitted that although he did not provide the undercover agent with an explosive device at their meeting, he did have an inert explosive device in his trailer that he planned to show the undercover agent. He admitted that the device would need to be loaded first to become a bomb, but that all of the necessary components to fully assemble the explosive device were at his residence.
A further search of Huggins’ trailer yielded notebooks containing entries ranging from anti-government ideology to a system to watch and track police officers.
The case was investigated by members of the FBI’s Joint Terrorism Task Force, the Utah Department of Public Safety and the Tremonton Police Department. The case was prosecuted by Assistant U.S. Attorneys Andrew R. Choate and Carlos A. Esqueda of the District of Utah, and Trial Attorney Clem McGovern of the National Security Division’s Counterterrorism Section.
The Executive Office for Immigration Review to Host Stakeholder Teleconference and Webinar on Recognition and Accreditation ProgramRead the Press Release
SUMMARY: The Executive Office for Immigration Review (EOIR) invites interested parties to participate in a teleconference and webinar providing a general overview of EOIR’s recognition and accreditation program. This event is intended to educate interested parties about the process for obtaining recognition for an organization and accreditation for individuals.
DATE: Friday, June 19, 2015, at 2 p.m.
RSVP: To RSVP for the meeting, please contact Lauren Alder Reid, Counsel for Legislative and Public Affairs at 703-305-0289 or email [email protected] by noon on Wednesday, June 17, 2015. Please note that there will be no in-person attendance for this event. EOIR will send call-in and web access information on Thursday, June 18, to those who RSVP. To attend the meeting via conference call and web, please RSVP with the name(s) of the attendee(s), the attendee’s organization, and an email address where instructions may be sent for accessing the conference call and web meeting.- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR's immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR's Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Retired Master Deputy Sheriff Convicted of Child Pornography ChargesRead the Press Release
A federal jury returned unanimous verdicts of guilty today against a former master deputy sheriff, announced 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 Alysa D. Erichs of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) Miami Field Division and Sheriff Kenneth J. Mascara of the St. Lucie County, Florida, Sheriff’s Office.
Cameron Dean Bates, 49, of Port St. Lucie, Florida, was found guilty of receiving, distributing and possessing child pornography. U.S. District Court Chief Judge K. Michael Moore of the Southern District of Florida presided over the four-day trial and set sentencing for Sept. 15, 2015.
According to testimony at trial, in March 2011, St. Lucie County Sheriff’s Office detectives and members of the South Florida Internet Crimes Against Children Task Force (ICAC) began an internet investigation using peer-to-peer (P2P) software. During this investigation, law enforcement found that between December 2010 and June 2012, several internet protocol (IP) addresses linked to Bates in both St. Lucie County and Palm Beach County were used to download and share child pornography files. Detectives reviewed a number of the files associated with the IP addresses and confirmed that the files contained child pornography.
On June 29, 2012, a search warrant was executed at Bates’ residence in Port St. Lucie. During the search, law enforcement seized a Dell laptop computer from Bates’ car. An on-sight forensic preview scan of the computer found numerous, non-deleted child pornography images and videos, which included a minor child engaging in sexually explicit conduct. A full forensic analysis of Bates’ laptop revealed numerous images and videos of child pornography, along with adult pornography personally produced by Bates.
At trial, the government also introduced evidence recovered during a search of Bates’ residence, including a Dell laptop computer, which contained numerous, non-deleted, child pornography images and videos. At least one image depicted a prepubescent child under the age of 12.
This case was investigated by the St. Lucie County Sheriff’s Office, the South Florida ICAC and ICE-HSI, with assistance from the Palm Beach County, Florida, Sheriff’s Office.
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 Ben Widlanski of the Southern District of Florida.
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.
Qazi Brothers Sentenced on Terrorism Violations and Assault on Two Deputy U.S. MarshalsRead the Press Release
Younger Sibling Plotted to Attack New York City with a Weapon of Mass Destruction
Brothers Raees Alam Qazi, 22, and Sheheryar Alam Qazi, 32, both naturalized U.S. citizens from Pakistan, were sentenced today to 35 years and 20 years in prison for terrorism violations and assaulting two Deputy U.S. Marshals while in custody, announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Director Stacia A. Hylton of the U.S. Marshals Service and Special Agent in Charge George L. Piro of the FBI’s Miami Division.
Raees Qazi and Sheheryar Qazi were sentenced by U.S. District Court Judge Beth Bloom of the Southern District of Florida, and their prison term will be followed by a term of 10 years and five years of supervised release, respectively.
“With the sentences handed down today, Raees Qazi and his brother Sheheryar Qazi are being held accountable for their roles in a plot to conduct a terrorist attack using a weapon of mass destruction in New York City and their assault on two federal officers during their pretrial detention,” said Assistant Attorney General Carlin. “This case highlights our commitment to pursue any individuals who would seek to conduct an attack on U.S. soil or to injure law enforcement officials who risk their lives to protect us. I want to thank the U.S. Marshals, agents, analysts, and prosecutors who are responsible for this successful result.”
“Protecting the homeland and our national security remains our number one priority,” said U.S. Attorney Ferrer. “Today’s sentences demonstrate this Office’s unwavering commitment to work with our law enforcement partners to combat all forms of terrorism by proactively finding and prosecuting those who actively seek to kill or harm innocent citizens in the name of violent extremism.”
“Today’s sentencing of the Qazi brothers represents the final chapter for two men who wished to bring harm and mass destruction to Americans on U.S. soil,” said Director Hylton. “Their sentences demonstrate that justice prevailed. I am proud of our brave men and women who participated in this process, and thank the prosecutors who worked tirelessly for this successful conclusion.”
“The threat of a terrorist attack against innocent Americans is real as demonstrated by the actions of these two brothers,” said Special Agent in Charge Piro. “The fact that their terrorist aspirations were cut short didn’t stop Raees and Sheheryar Qazi from attempting to use potentially lethal force against two U.S. Marshals while they were in custody. This case highlights outstanding work and team effort of our South Florida Joint Terrorism Task Force.”
On March 12, 2015, Raees Alam Qazi pleaded guilty to one count of conspiring to provide material support and resources to terrorists in preparation for the use of a weapon of mass destruction, one count of attempting to provide material support to a designated foreign terrorist organization and one count of conspiring to assault a federal employee. Sherheyar Alam Qazi pleaded guilty to one count of conspiring to provide material support and resources to terrorists in preparation for the use of a weapon of mass destruction and one count of conspiring to assault a federal employee.
The brothers acknowledged during the plea hearing that Raees Alam Qazi was going to initiate an attack using a weapon of mass destruction in New York City and that he had been financially and emotionally supported by his older brother, Sheheryar Alam Qazi, who encouraged him to launch the attack. Among other things, the brothers acknowledged that Sheheryar Alam Qazi had encouraged his younger brother to travel from Pakistan to Afghanistan in 2011, and that when Raees Alam Qazi had been unsuccessful in his attempt to enter Afghanistan, he returned to his older brother. The brothers acknowledged that Raees Alam Qazi had been trying to reach the “guys from Yemen” aka Al Qaeda in the Arabian Peninsula (AQAP) on the internet and that they told him not to come to Afghanistan because there were enough people, but instead suggested they do something in the United States. Raees Alam Qazi admitted that he had taken “hints” from an AQAP online publication entitled Inspire Magazine, including building an explosive device using Christmas tree light bulbs. Raees Alam Qazi also conceded that he had used information in Inspire to communicate with AQAP, and that his communications with Al Qaeda dealt with his desires to launch an attack in the United States.
The brothers acknowledged that Raees Alam Qazi travelled to New York in November 2012 to conduct an attack with a weapon of mass destruction while Sheheryar Alam Qazi actively misled friends and family members about Raees Alam Qazi’s true whereabouts and activities. The brothers acknowledged that Raees Alam Qazi called Sheheryar Alam Qazi from New York to notify him that he had not been successful in his task. Sheheryar Alam Qazi encouraged Raees Alam Qazi to return to “practice over here [Florida] then you may return [to New York] you know…. I will give you complete freedom.”
The brothers additionally admitted their participation in a conspiracy to assault federal officers. They conceded that on April 8, 2014, while being moved within the U.S. Courthouse complex in Miami, they simultaneously punched two Deputy U.S. Marshals in the face and struggled with them and attempted to use potentially lethal force on them. Raees Alam Qazi and Sheheryar Alam Qazi acknowledged that while struggling with the Deputy U.S. Marshals, the defendants simultaneously exclaimed “Allahu Akbar,” an Arabic exhortation meaning “God is Great.”
The case was investigated by the FBI’s South Florida Joint Terrorism Task Force. The case is being prosecuted by Assistant U.S. Attorneys Karen E. Gilbert and Adam S. Fels of the Southern District of Florida, and Trial Attorney Jennifer E. Levy of the National Security Division’s Counterterrorism Section.
Puerto Rico Superior Court Judge Sentenced to 10 Years in Prison for Accepting Bribes in Connection with Vehicular Homicide TrialRead the Press Release
A Puerto Rico Superior Court Judge was sentenced today to 10 years in prison today after being convicted earlier this year of accepting bribes to acquit a businessman of vehicular homicide charges. Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico made the announcement.
In January, a federal jury convicted Judge Manuel Acevedo-Hernandez, 63, of Aguadilla, Puerto Rico, of conspiracy to commit federal programs bribery and receipt of a bribe by an agent of an organization receiving federal funds. Chief U.S. District Judge Aida M. Delgado of the District of Puerto Rico imposed the sentence.
Acevedo-Hernandez presided over the trial of Lutgardo Acevedo-Lopez, 39, a certified public accountant in Aguadilla, Puerto Rico. Acevedo-Lopez was charged with criminal vehicular homicide based on his role in a June 2012 collision involving the vehicle he was driving and another car, which resulted in the death of the other driver.
According to the evidence presented at trial, Acevedo-Lopez used an intermediary to bribe Acevedo-Hernandez by paying taxes owed by Acevedo-Hernandez; paying for the construction of a garage for Acevedo-Hernandez's home; and providing Acevedo-Hernandez with a motorcycle, clothing and accessories, including cufflinks and a watch. In exchange, Acevedo-Hernandez acquitted Acevedo-Lopez of all charges.
In August 2014, Acevedo-Lopez pleaded guilty to conspiracy to commit federal programs bribery and to paying a bribe to an agent of an organization receiving federal funds. Acevedo-Lopez has not yet been sentenced.
The case was investigated by the FBI’s San Juan Division. The case was prosecuted by Trial Attorneys Peter Mason and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and First Assistant U.S. Attorney Timothy Henwood and Assistant U.S. Attorney Jose Capó of the District of Puerto Rico.
Leaders of Violent Loan Sharking Ring Sentenced to 168 Months and 147 Months in PrisonRead the Press Release
The leaders of a violent loan sharking and illegal gambling ring that operated out of several Philadelphia businesses were sentenced today to serve 168 months and 147 months in prison, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.
Ylli Gjeli, 49, and Fatimir Mustafaraj, also known as Tony, 42, both of Philadelphia, were previously convicted following a six-week jury trial of engaging in a racketeering conspiracy, collection of unlawful debts, extortion and illegal gambling. Two other defendants were convicted of various related charges in the same trial and are scheduled to be sentenced at a later date. Gjeli and Mustafaraj were sentenced today by U.S. District Court Judge William H. Yohn Jr. of the Eastern District of Pennsylvania.
According to evidence presented at trial, the defendants’ enterprise used businesses in Philadelphia, including the Lion Bar & Grill, Blackbird Café and Ylli’s 2 Brothers, to conduct the illegal loan sharking and gambling activities. The enterprise generated money by making and collecting on loans with usurious rates of interest, and making loans to customers whose debts were incurred through the enterprise’s illegal gambling business. The evidence established that from October 2011 to 2013 alone, the enterprise extended 125 usurious loans totaling $1.78 million with annual interest rates ranging from 104 percent to 395 percent. Further, the evidence established that from February 2007 to August 2013, the organization’s online sports betting website contributed more than $2.9 million in gross profits.
The evidence showed that members and associates of the enterprise cultivated their reputations within the organization by threatening customers with dangerous weapons such as firearms and a hatchet, threatening to kill, assault or “break the legs” of delinquent customers if they did not pay their debts, and physically assaulting subordinate members and associates who stole from the organization.
According to the evidence presented at trial, Gjeli was a “boss” of the multi-million dollar criminal organization. Mustafaraj served as “muscle” to forcefully collect debts owed to the organization. Both defendants directed the other members in the loan sharking activities and illegal gambling business, financed loans and the gambling operation, used intimidation and threats of violence against customers to collect loan payments, and physically assaulted subordinate members and associates who stole from the organization.
The evidence also demonstrated that the defendants attempted to conceal the existence and operations of the enterprise from law enforcement by limiting their discussions of criminal activities when on the phone, using cryptic and coded language to describe criminal activities, conducting pat-downs and body searches of customers to check for weapons and recording devices, and conducting the enterprise’s transactions primarily in cash.
Five co-defendants who previously pleaded guilty are awaiting sentencing.
The case was investigated by the FBI, Internal Revenue Service-Criminal Investigation, the Pennsylvania State Police, Montgomery County, Pennsylvania, Detectives and the New Jersey State Police. The case is being prosecuted by Trial Attorney Margaret Vierbuchen of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Salvatore L. Astolfi and Jerome Maiatico of the Eastern District of Pennsylvania.
Justice Department Announces Investigation into Allegations of Sexual Abuse at the McPherson Women's Prison in Newport, ArkansasRead the Press Release
The Justice Department announced today that it has opened an investigation of the Arkansas Department of Corrections’ McPherson Unit, the state prison for women in Newport, Arkansas. The investigation will focus on whether women confined at McPherson have been subjected to sexual abuse and sexual harassment by correctional staff. The investigation will also examine the prison’s treatment of transgender prisoners.
The department has received numerous allegations of sexual abuse and sexual harassment of prisoners by multiple members of McPherson Unit staff. Allegations include staff engaging in sexual intercourse and other sexual acts with prisoners; exchanging commissary money for sexual favors; and inappropriately watching prisoners while they shower or change clothes, commenting on their private parts and, at times, taking photos or video for reasons unrelated to correctional goals.
“Staff sexual abuse of prisoners violates the constitutional rights of prisoners, undermines prison safety and security and can lead to other crimes,” said the head of the Civil Rights Division, Principal Deputy Assistant Attorney General Vanita Gupta. “This investigation furthers the Justice Department’s goal of zero-tolerance for sexual abuse and sexual harassment in our nation’s jails and prisons. We hope to work cooperatively with the state of Arkansas in conducting our inquiry and ensuring that prisoners in its custody are not being sexually abused.”
The department has not reached any conclusions regarding the allegations in this matter. As the investigation moves forward, the department will work to determine whether McPherson prisoners are subjected to a pattern or practice of sexual abuse and sexual misconduct in violation of their constitutional rights.
The investigation will be conducted under the Civil Rights of Institutionalized Persons Act (CRIPA). Under CRIPA, the department is authorized to investigate potential violations of the constitutional rights of prisoners in prisons or jails operated by state or local governments when there appears to be a pattern or practice of such violations. The department has conducted similar investigations in other jurisdictions, and recently entered into settlement agreements that are expected to lead to important reforms following its investigations of staff sexual abuse of women prisoners in Kansas and Alabama.
The Special Litigation Section of the Civil Rights Division is conducting this investigation. Individuals with relevant information are encouraged to contact the department via email at [email protected].
Fifth Defendant Charged with Attempt and Conspiracy to Provide Material Support to ISILRead the Press Release
Defendant Allegedly Was Part of ISIL Foreign Fighter Support Network and Solicited Funds to Send a Co-Defendant Overseas to Join ISIL
Earlier today, a second superseding indictment was unsealed charging Akmal Zakirov, 29, an Uzbeki national, with attempt and conspiracy to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. The defendant, who is charged along with four Brooklyn, New York, residents whose arrests have previously been announced, is scheduled to be arraigned at 2:00 p.m. today before U.S. Magistrate Judge Viktor V. Pohorelsky of the Eastern District of New York.
The charges were announced by Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Kelly T. Currie of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office, Commissioner William J. Bratton of the New York City Police Department (NYPD) and Special Agent in Charge Raymond R. Parmer Jr. of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE-HSI) New York Field Office.
As alleged in the indictment and other court filings, the investigation began last year when Abdurasul Hasanovich Juraboev, one of Zakirov’s co-defendants, came to the attention of law enforcement. Juraboev posted on an Uzbek-language website that propagates ISIL’s ideology his offer to engage in an act of martyrdom on U.S. soil on behalf of ISIL, such as killing the President of the United States. The investigation subsequently revealed that Juraboev and another co-defendant, Akhror Saidakhmetov, planned to travel to Turkey and then to Syria for the purpose of waging violent jihad on behalf of ISIL. Saidakhmetov was arrested on Feb. 25, 2015, at John F. Kennedy International Airport in New York City, where he was attempting to board a flight to Istanbul. Juraboev previously purchased a plane ticket to travel from New York to Istanbul and was scheduled to leave the United States in March 2015.
Zakirov, co-defendant Abror Habibov and others allegedly helped to fund Saidakhmetov’s efforts to join ISIL. Specifically, Zakirov and Habibov discussed providing their own money to purchase Saidakhmetov’s plane ticket and to cover his travel expenses, and they also solicited money for that purpose from other individuals. In the week leading up to Saidakhmetov’s scheduled departure, several individuals transferred a total of approximately $2,400 into Zakirov’s personal bank account, funds which were intended to facilitate Saidakhmetov’s travel to join ISIL.
“Zakirov is the fifth to be charged as part of the network of individuals alleged to have conspired and attempted to provide material support to ISIL,” said Acting U.S. Attorney Currie. “Our efforts to investigate terrorist support groups are ongoing -- we are committed to disrupting and deterring those who seek to support ISIL, whether by lending themselves or their funds to ISIL’s cause.”
“Any material support of a terrorist organization not only threatens our national security but violates federal law,” said Assistant Director in Charge Rodriguez. “In this case, Zakirov is alleged to have been part of a team committed to financing terrorist efforts. Fortunately, the FBI’s Joint Terrorism Task Force identified and stopped such activity. We will continue to work with our partners to uphold our mission and proactively protect the people of the U.S., both home and abroad, through these types of intelligence-based investigations.”
“This indictment illustrates the NYPD’s ongoing commitment to stem the efforts of organizations such as ISIL who do not hesitate to promote their violent ideology both here and abroad,” said Commissioner Bratton. “I would like to commend the efforts of the Joint Terrorism Task Force investigators, along with our many law enforcement partners, who continue to thwart the efforts of those who would advance a terrorist agenda.”
“Providing material support to terrorist organizations that seek to do us harm represents a clear and present danger to the United States,” said Special Agent in Charge Parmer. “Today’s indictment should serve as a warning to all those who attempt to assist ISIL and other terrorist organizations that no stone will go unturned to identify, apprehend, and have them prosecuted to the fullest extent of the law.”
If convicted, Zakirov faces a maximum sentence of 30 years in prison. The charges in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.
Assistant Attorney General Carlin joined Acting U.S. Attorney Currie in extending his grateful appreciation to the FBI’s Joint Terrorism Task Force, which comprises a large number of federal, state and local agencies from the region. The case is being prosecuted by Assistant U.S. Attorneys Alexander A. Solomon, Douglas M. Pravda and Peter W. Baldwin of the Eastern District of New York, with assistance provided by Trial Attorney Danya Atiyeh of the Justice Department’s Counterterrorism Section.
Zakirov Superseding Indictment
Department of Justice Announces 50 States and Territories Have Committed to Ending Prison RapeRead the Press Release
In the second year of the implementation of the standards set forth in the Prison Rape Elimination Act (PREA), 50 jurisdictions submitted statements of compliance or assurances that they commit to spend 5 percent of certain Department of Justice grant funds to come into compliance. In FY 2015, 10 states certified that they are in full compliance with the PREA standards. These states are Iowa, Maine, Mississippi, Missouri, New Hampshire, New Jersey, North Dakota, Oregon, Tennessee and Washington. In FY 2015, 40 jurisdictions submitted an assurance. In FY 2014, the first year of implementation of the PREA standards, 48 of the 56 jurisdictions subject to PREA were either in compliance or submitted assurances to spend 5 percent of certain grant funds to come into compliance. The department saw a significant increase in states that have attained full compliance this year. In FY2014 two states submitted certifications.
“The very hard work of implementing new policies and practices, and transforming cultures in confinement agencies and facilities in ways that promote the sexual safety of inmates, residents and detainees, is well underway,” said Assistant Attorney General Karol V. Mason of the Office of Justice Programs. “The large number of jurisdictions that submitted certifications and assurances this year to the Department of Justice, the significant numbers of agencies and facilities that are conducting PREA audits and the increasing support for PREA in the law enforcement and corrections fields suggest a building momentum. We are committed to increasing this momentum, and working with the remaining five states and the one territory that did not respond.”
Certifications, assurances and related documentation were submitted to the Bureau of Justice Assistance (BJA), a component of Department of Justice’s Office of Justice Programs (OJP), and are available at https://www.bja.gov/Programs/15PREA-AssurancesCertifications.pdf.
The PREA statute, which was passed in 2003 with unanimous support from both chambers of Congress, required the establishment of the national PREA standards for the detection, prevention, reduction and punishment of prison rape. The standards took effect on Aug. 20, 2012, and apply to federal, state and local confinement facilities which includes adult prisons and jails, juvenile facilities, lockups and community confinement facilities.
Understanding that the standards could take a number of years to fully implement, the PREA statute allows a governor whose state or territory is not yet in full compliance to submit an assurance to the Department of Justice that not less than 5 percent of certain Department of Justice grant funds will be used solely for the purpose of enabling the jurisdiction to achieve and certify full compliance with the standards in future years. A total of 56 jurisdictions are subject to PREA – 50 states, five territories and the District of Columbia. The six jurisdictions that are unwilling to commit department grant funds to implement the national PREA standards are subject to the loss of 5 percent of certain Department of Justice grant funds they would otherwise receive. In FY2014, eight jurisdictions were unwilling to commit department grant funds to implement the standards.
Information about grant funds impacted by PREA in FY 2014 and FY 2015 is available in the PREA section of BJA’s web page. This information includes lists of FY 2014 department grant reductions (in jurisdictions that submitted neither an assurance nor a certification) and reallocations (in jurisdictions that submitted an assurance) amounts by state and territory, and a summary of PREA implementation activities supported by FY 2014 Department of Justice reallocation grants. Department grant reduction and reallocation amounts for FY 2015, along with a summary of activities supported by reallocation grants, will be posted on BJA’s web page as soon as they are finalized.
To assist states and localities with implementation, BJA has funded the National PREA Resource Center to provide training and technical assistance for those in the field who are working to come into compliance with the standards. These resources are available at www.prearesourcecenter.org.
About the Office of Justice Programs (OJP)
OJP, headed by Assistant Attorney General Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six components: BJA, the Bureau of Justice Statistics, the National Institute of Justice, the Office of Juvenile Justice and Delinquency Prevention, the Office for Victims of Crime and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. To learn more about OJP, visit www.ojp.gov.
Two Georgia Sisters-in-Law and Former Tax Return Preparers Sentenced to Prison for Conspiring to Defraud the United StatesRead the Press Release
Two Georgia sisters-in-law were sentenced today in the U.S. District Court in Macon, Georgia, for their involvement in a conspiracy to defraud the United States, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.
Angela Miller, 48, of Milledgeville, Georgia, and Lee Lynwood, 47, of Eatonton, Georgia, were each sentenced to serve 12 months and one day in prison to be followed by one year of supervised release, and ordered to pay restitution in the amount of $44,214.62. On Feb. 10, Miller and Lynwood pleaded guilty to conspiracy to defraud the United States.
According to court documents, from at least January 2008 through at least March 2010, Miller and Lynwood operated a tax return preparation business and conspired to inflate their clients’ federal tax refunds by manipulating the tax returns to reflect false business income or loss amounts and to claim deductions and credits, such as the First-Time Homebuyer Credit, that the clients were not entitled to receive.
Miller and Lynwood also took steps to continue their scheme by impeding the Internal Revenue Service’s (IRS) efforts to shut down their ability to electronically file tax returns. In May 2008, the IRS notified Miller and Lynwood that their Electronic Filing Number (EFIN) for filing electronic returns at their tax preparation business, A&L Tax Services, was being revoked. Miller and Lynwood then had an acquaintance apply for another EFIN in her name, which Miller and Lynwood used to continue to file fraudulent tax returns and conceal their preparation from the IRS. Further, Miller and Lynwood changed the name of their business to B&F Tax Services and caused a bank account for the B&F Tax Services to be opened in the acquaintance’s name as a nominee.
Acting Assistant Attorney General Ciraolo commended special agents of IRS–Criminal Investigation, who investigated the case, and thanked the U.S. Attorney’s Office of the Middle District of Georgia for their assistance, as well as Trial Attorneys Alexander R. Effendi and Hayden M. Brockett of the Tax Division, who prosecuted the case.
Deputy Sheriff Convicted for Withholding Evidence Favorable to a DefendantRead the Press Release
Three Deputies Also Convicted of Obstructing Justice by Covering Up a Fellow Officer’s Use of Force
A federal jury in Albany, Georgia, today convicted three sheriff’s deputies on various federal offenses related to the cover-up of a 2012 incident in which a fourth deputy used force during the arrest of a civilian. The charges against Decatur County Captain Elizabeth Croley, Decatur County Deputy Christopher Kines and Decatur County Deputy Robert Wade Umbach related to a September 2012 incident in which former Grady County Deputy Sheriff Wiley Griffin, IV—who is the son of Decatur County Sheriff Wiley Griffin, III— used force against Aaron Parrish during an arrest at the Bainbridge BikeFest. The jury found that Croley, Kines and Umbach obstructed justice when they later helped cover up defendant Griffin’s actions. Specifically, the jury convicted Croley of obstructing justice by writing a false report and convicted Kines and Umbach of engaging in misleading conduct by lying to an FBI agent about the incident. Croley was also convicted of violating Aaron Parrish’s constitutionally protected right to a fair trial by intentionally withholding material exculpatory evidence from the District Attorney’s Office, and, in turn from Aaron Parrish’s criminal defense attorney, during a criminal prosecution of Parrish arising out of the same BikeFest incident.
Croley, Kines and Umbach will be sentenced by the Honorable W. Louis Sands, Senior U.S.District Court Judge for the Middle District of Georgia, at a later date to be set by the court.
The same jury that convicted the three Decatur County officers of obstruction acquitted Griffin on a civil rights count charging him with having used excessive force against Parrish and acquitted Kines and Umbach of obstructing justice by writing false reports.
During a trial that lasted more than two weeks, the jury heard evidence that Griffin struck Parrish in the eye with a metal flashlight while Parrish was being restrained on the ground by other deputies, including Kines and Umbach. The government presented evidence that Captain Croley and Deputies Kines and Umbach then helped cover up the incident by, among other things, Croley writing a false report and Kines and Umbach misleading the FBI by stating that they did not see Griffin at the scene.
The government also presented evidence that, after Parrish complained to the Decatur County Sheriff’s Office about the abuse he had suffered at BikeFest, the Sheriff’s Office opened a criminal investigation led by Croley that eventually resulted in felony criminal charges against Parrish. During that investigation, Croley took a witness statement from a civilian eyewitness who provided information that would have been materially helpful to Parrish’s defense. However, rather than providing that statement to the District Attorney so that it could then be provided to Parrish’s defense attorney for use at trial, Croley intentionally removed the exculpatory statement from the case file. This conduct formed the basis of the civil rights charge on which defendant Croley was convicted.
At sentencing, Croley will face a maximum sentence of 20 years for her false report and one year for the civil rights violation involving hiding exculpatory evidence. Kines and Umbach face maximum sentences of 20 years for making misleading statements to the FBI.
“As the jury recognized through its verdict, there are serious consequences when law enforcement officers lie to cover up the misconduct of a fellow officer and when an officer intentionally stacks the deck against an accused person by hiding evidence that could show the person’s innocence,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “When officers engage in this type of outrageous behavior, the Department of Justice stands ready to enforce the law and protect the civil rights of all Americans.”
“This case reflects that the rule of law applies to all and that the FBI will present for prosecution the facts as it finds them,” said Special Agent in Charge J. Britt Johnson of the FBI Atlanta Field Office. “Today's verdicts conclude an extensive investigation and prosecution that needed to be heard and the FBI is satisfied that it was."
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Trial Attorneys Christine M. Siscaretti and Risa Berkower of the Justice Department’s Civil Rights Division, with support from the U.S. Attorney’s Office for the Middle District of Georgia.
Universal Aryan Brotherhood Member and Associates Plead Guilty to Racketeering ChargesRead the Press Release
One member of the Universal Aryan Brotherhood (UAB) prison gang pleaded guilty today to an indictment charging him with conspiracy to participate in a racketeering enterprise and conspiracy to possess with intent to distribute methamphetamine, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Danny C. Williams Sr. of the Northern District of Oklahoma.
Anthony Ramon Hall, 39, of Tulsa, Oklahoma, pleaded guilty before U.S. District Court Judge Claire V. Eagan of the Northern District of Oklahoma. In addition, on June 2, 2015, UAB associate Carl Matthew Smith, 37, of Tulsa, pleaded guilty to conspiracy to participate in a racketeering enterprise and conspiracy to possess with intent to distribute methamphetamine. On June 4, 2015, UAB associate Robert Allen Paul Bryan, 40, of Tulsa, pleaded guilty to one count of violence in aid of racketeering connected to the maiming of a former UAB member. Hall’s sentencing is set Sept. 24, 2015, Smith’s sentencing is set for Sept. 3, 2015. Bryan’s sentencing is set for Sept. 22, 2015.
In connection with their guilty pleas, Hall and Smith acknowledged their membership in or association with the UAB, a violent, “whites only” prison-based gang with members and associates operating inside and outside of state prisons throughout Oklahoma. Hall also admitted that he held a leadership position in the UAB’s “main council,” which is the supreme governing body of the UAB. The main council has the authority to issue direct orders, vote on the admission of new members or prospects, declare war on rival gangs and mete out punishment for violation of UAB bylaws.
Hall and Smith further admitted to advancing the UAB enterprise by selling methamphetamine. Specifically, Hall admitted to using smuggled cell phones to coordinate the delivery, receipt and sale of methamphetamine from prison by UAB members and associates outside of prison who would then return profits to him. Hall also admitted to coordinating the firebombing of a car belonging to a person he believed had stolen from UAB’s methamphetamine enterprise. Smith admitted to selling methamphetamine and marijuana for the benefit of the UAB as well, and to delivering drug proceeds to UAB members in prison.
During his plea proceedings, Bryan admitted to participating in the May 2013 maiming of a former UAB member. Specifically, Bryan admitted that he and UAB members, operating on orders from the main council, restrained the victim while additional gang members used a heated knife to burn off the victim’s UAB neck tattoo.
This case was investigated by the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations; Tulsa, Oklahoma, Police Department; Bureau of Alcohol, Tobacco, Firearms and Explosives; Internal Revenue Service-Criminal Investigations Division; FBI; Tulsa County Sheriff’s Office; and the Oklahoma Department of Corrections. The case is being prosecuted by John C. Hanley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Allen Litchfield and Jan Reincke of the Northern District of Oklahoma.
Two More Banks Reach Resolutions under Justice Department's Swiss Bank ProgramRead the Press Release
Société Générale Private Banking Will Pay $17.807 Million Penalty and Berner Kantonalbank AG Will Pay $4.619 Million Penalty; Both Continue to Cooperate With Department of Justice
The Department of Justice announced today that two banks, Société Générale Private Banking (Suisse) SA (SGPB-Suisse) and Berner Kantonalbank AG (BEKB), have reached resolutions under the department’s Swiss Bank Program.
“As the agreements reached today confirm, Swiss banks that helped U.S. taxpayers to hide foreign accounts and evade their U.S. tax obligations are providing a detailed account of their cross-border banking activities. The banks are naming officers, employees and others who facilitated this conduct, and providing information that helps us track assets that accountholders moved to other banks and other countries,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division. “Using information gathered from the banks in this program, we have identified and are investigating individuals, both domestic and foreign, who helped U.S. taxpayers dodge their obligations.”
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of accountholders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Swiss banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreements signed today, each bank agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute these banks for tax-related criminal offenses.
SGPB-Suisse has had a presence in Switzerland since 1926, and had a U.S.-licensed representative office in Miami from the early 1990s until it closed on Aug. 26, 2013. SGPB-Suisse opened and maintained accounts for accountholders who had U.S. tax reporting obligations, and was aware that U.S. taxpayers had a legal duty to report to the Internal Revenue Service (IRS) and pay taxes on all of their income, including income earned in SGPB-Suisse accounts. SGPB-Suisse knew that it was likely that certain U.S. taxpayers who maintained accounts at the bank were not complying with their U.S. income tax obligations.
SGPB-Suisse’s U.S. cross-border banking business aided and assisted some U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income the clients held in their accounts from the IRS. SGBP-Suisse used a variety of means to assist U.S. clients in hiding their assets and income, including opening and maintaining accounts for U.S. taxpayers in the name of non-U.S. entities, including sham entities, thereby assisting such U.S. taxpayers in concealing their beneficial ownership of the accounts. Such entities included Panama and British Virgin Island corporations, as well as Liechtenstein foundations. In two instances, an SGPB-Suisse employee acted as a director of entities that had U.S. taxpayers as beneficial owners. In another instance, upon the death of the beneficial owner of an entity, the heirs opened accounts held by sham entities at SGPB-Suisse to receive their shares of the assets from the entity account.
SGPB-Suisse further provided numbered accounts, allowing the accountholder to replace his or her identity with a code name or number on documents sent to the client, and held statements and other mail at its offices in Switzerland, rather than sending them to the U.S. taxpayers in the United States. In addition to these services, SGPB-Suisse:
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Processed requests from U.S. taxpayers for cash or gold withdrawals so as not to trigger any transaction reporting requireents;
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Processed requests from U.S. taxpayers to transfer funds from U.S.-related accounts at SGPB-Suisse to accounts at subsidiaries in Lugano, Switzerland, and the Bahamas;
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Opened accounts for U.S. taxpayers who had left UBS when the department was investigating that bank;
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Processed requests from U.S. taxpayers to transfer assets from accounts being closed to other SGPB-Suisse accounts held by non-U.S. relatives and/or friends; and
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Followed instructions from U.S. beneficial owners to transfer assets to corprate and individual accounts at other banks in Switzerland, Hong Kong, Israel, Lebanon, Liechtenstein and Cyprus.
Throughout its participation in the Swiss Bank Program, SGPB-Suisse committed to full cooperation with the U.S. government. For example, SGPB-Suisse described in detail the structure of its U.S. cross-border business, including providing a list of the names and functions of individuals who structured, operated or supervised the cross-border business at SGPB-Suisse; a summary of U.S.-related accounts by assets under management; written narrative summaries of 98 U.S.-related accounts; and the circumstances surrounding the closure of relevant accounts holding cash or gold. SGPB-Suisse also provided information to make treaty requests to the Swiss competent authority for U.S. client account records.
Since Aug. 1, 2008, SGPB-Suisse held and managed approximately 375 U.S.-related accounts, which included both declared and undeclared accounts, with a peak of assets under management of approximately $660 million. SGPB-Suisse will pay a penalty of $17.807 million.
BEKB was founded in 1834 as Kantonalbank von Bern, the first Swiss cantonal bank. BEKB is based in the Canton of Bern and presently has 73 branches in Switzerland. BEKB knew or had reason to know that it was likely that some U.S. taxpayers who maintained accounts at BEKB were not complying with their U.S. reporting obligations. BEKB opened, serviced and profited from accounts for U.S. clients who were not complying with their income tax obligations.
BEKB provided services that facilitated some U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets in those accounts and related income. These services included opening and maintaining numbered accounts, allowing clients to use code names rather than full account numbers and providing hold mail services. BEKB opened accounts for account holders who exited other Swiss banks and accepted deposits of funds from those banks. BEKB also processed standing orders from U.S. persons to transfer amounts under $10,000 from their U.S.-related accounts. In one instance, a relationship manager asked an accountholder, who was a dual Swiss-U.S. citizen living in the United States, about the Foreign Account Tax Compliance Act (FATCA) and voluntary disclosure. When the accountholder failed to execute FATCA-related documents, BEKB took steps to close the account. In connection with that closing, the accountholder withdrew $70,000 and approximately 500,000 Swiss francs in cash.
BEKB committed to full cooperation with the U.S. government throughout its participation in the Swiss Bank Program. As part of its cooperation, BEKB provided a list of the names and functions of 16 individuals who structured, operated or supervised its cross-border business. These individuals served as the chairman of the board of directors, members of the executive board, regional managers, heads of departments or heads of divisions. BEKB additionally provided information concerning its relationship managers and external asset managers, and it described in detail the structure of its cross-border business with U.S. persons, including narrative descriptions of high-value U.S.-related accounts and U.S.-related accounts held by entities.
Since Aug. 1, 2008, BEKB held approximately 720 U.S.-related accounts, which included both undeclared and not undeclared accounts, with total assets of approximately $176.5 million. BEKB will pay a penalty of $4.619 million.
In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations. While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
“These two resolutions with Société Générale Private Banking (Suisse) SA and Berner Kantonalbank AG represent the ongoing commitment by the IRS and the Department of Justice to ensure that U.S. taxpayers report foreign bank accounts and pay taxes on all income earned from those accounts,” said Deputy Commissioner Douglas O’Donnell of the IRS Large Business & International Division. “We are encouraged by the Justice Department’s program success and look forward to additional information to further our investigations of those who have evaded detection and reporting as well as those who have aided them.”
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.
“The bank agreements announced today continue to change the landscape in the offshore banking world,” said Chief Richard Weber of IRS-Criminal Investigation. “With each additional agreement, the world where criminals can hide their money is becoming smaller and smaller. Those who circumvent offshore disclosure laws have little room to hide.”
Acting Assistant Attorney General Ciraolo thanked the IRS, in particular, IRS-Criminal Investigation and the IRS Large Business & International Division for their substantial assistance, as well as Karen M. Quesnel, who served as counsel on these matters, Senior Litigation Counsel Nanette L. Davis, and Senior Counsel for International Tax Matters and Coordinator of the Swiss Bank Program Thomas J. Sawyer of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
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