District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Former Bank of America Executive Sentenced to Serve 26 Months in Prison for Role in Conspiracy and Fraud Involving Investment Contracts for Municipal Bond ProceedsRead the Press Release
A former Bank of America executive was sentenced today for his participation in a conspiracy and scheme to defraud related to bidding for contracts for the investment of municipal bond proceeds and other municipal finance contracts, the Department of Justice announced today.
Phillip D. Murphy, the former managing director of Bank of America’s municipal derivatives group from 1998 to 2002, was sentenced to serve 26 months in prison by U.S. District Judge Max O. Cogburn Jr. of the U.S. District Court of the Western District of North Carolina.
On Feb. 10, 2014, Murphy pleaded guilty to participating in multiple fraud conspiracies and schemes with various financial institutions and brokers from as early as 1998 until 2006. Bank of America and other financial institutions, acting as “providers,” offered a certain type of contract – known as an investment agreement – to state, county and local governments and agencies, and not-for-profit entities, throughout the United States. These public entities sought to invest money from a variety of sources, primarily the proceeds of municipal bonds that they had issued to raise money for, among other things, public projects. Public entities typically hire a broker to assist them in investing their money and to conduct a competitive bidding process to determine the winning provider.
“Individual accountability is the cornerstone of protecting the integrity of our financial markets,” said Deputy Assistant Attorney General Brent Snyder of the Antitrust Division’s Criminal Enforcement Program. “This sentence is a result of our continued resolve to vigorously prosecute bank executives whose greed and illegal schemes undermine our free and fair financial markets.”
According to court documents, Murphy conspired with employees of Rubin/Chambers Dunhill Insurance Services Inc., also known as CDR Financial Products, a broker of municipal contracts, and others. Murphy also pleaded guilty to conspiring with others to make false entries in the reports and statements originating from his desk, which were sent to bank management. Murphy conspired with CDR and others to increase the number and profitability of investment agreements and other municipal finance contracts awarded to Bank of America. Murphy won investment agreements through CDR’s manipulation of the bidding process in obtaining losing bids from other providers, which is explicitly prohibited by U.S. Treasury regulations. As a result, various providers won investment agreements and other municipal finance contracts at artificially determined prices. Murphy also submitted intentionally losing bids for certain investment agreements and other contracts when requested, and, on occasion, agreed to pay or arranged for kickbacks to be paid to CDR and other co-conspirator brokers.
In conjunction with the bid rigging, Murphy and his co-conspirators submitted numerous intentionally false certifications that were relied upon by both municipalities and the Internal Revenue Service (IRS). These false certifications misrepresented that the bidding process had been conducted in a competitive manner that was in conformance with U.S. Treasury regulations. These false certifications caused municipalities to award contracts to Bank of America and other providers based on false and misleading information. The false certifications also impeded and obstructed the ability of the IRS to collect revenue owed to the U.S. Treasury.
“We trust those in positions of leadership and power to do the right thing when it comes to taking care of our money,” said Chief Richard Weber of the IRS’s Criminal Investigation. “When that trust is broken through these types of criminal activities, than those individuals need to be held accountable. Today's sentencing reflects our commitment to ensuring fairness for those engaged in these types of investments.”
“By knowingly exploiting vulnerabilities in the bidding process, Murphy ignored policies put in place to allow for the ethical distribution of municipal bond proceeds,” said Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office. “In the end, he brokered a deal that served his own best interests. Today’s sentence is proof of our continued determination to root out those whose business practices contribute to the deterioration of healthy competition in the municipal bidding process.”
Including Murphy, 17 individuals and one corporation have been convicted or pleaded guilty as a result of the Antitrust Division’s municipal bonds investigation.
The sentence announced today resulted from an investigation conducted by the Antitrust Division’s New York Office, the FBI and IRS-CI. The division also coordinated its investigation with the U.S. Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York. The U.S. Attorney’s Office of the Western District of North Carolina provided valuable assistance in this matter.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Anyone with information concerning bid rigging and related offenses in any financial market should contact the Antitrust Division’s New York Office at 212-335-8000, the FBI at 212-384-5000, the IRS-CI at 212-436-1761, or visit www.justice.gov/atr/contact/newcase.html.
Attorney General Lynch Launches National Community Policing Tour in CincinnatiRead the Press Release
Justice Department Announces $163 Million in Grant Opportunities to Advance 21st Century Policing Recommendations
WASHINGTON – Attorney General Loretta E. Lynch will travel to Cincinnati TOMORROW, TUESDAY, MAY 19, 2015, as part of a national Community Policing Tour that will highlight collaborative programs and innovative policing practices designed to advance public safety, strengthen police-community relations and foster mutual trust and respect. The Attorney General will be joined by U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Director Ron Davis of the Community Oriented Policing Services (COPS) Office, Mayor John Cranley of Cincinnati, and Cincinnati Police Chief Jeffrey Blackwell for a convening with city officials, law enforcement, local leaders, young people and other members of the community at the National Underground Railroad Freedom Center.
While in Cincinnati, the Attorney General will also visit the Right to Read Program at Chase Elementary School where Cincinnati police officers work with University of Cincinnati students to tutor and mentor children. Later in the day, the Attorney General will visit with the Cincinnati Police Department where she will have an opportunity to thank officers for their hard work and speak to officers that were hired with COPS Office hiring grants.
The Community Policing Tour will build on President Obama’s commitment to engage with law enforcement and other members of the community to implement key recommendations from the 21st Century Policing Task Force report. To help with that effort, the Justice Department through its COPS Office announced five separate grant funding opportunities of up to $163 million for law enforcement agencies to help implement the recommendation made by the President’s Task Force on 21st Century Policing.
Additional cities on the tour will be announced at the convening on community policing in Cincinnati.
ATTORNEY GENERAL TOURS CHASE ELEMENTARY SCHOOL WITH STUDENTS AND LAW ENFORCEMENT:
WHO:
Attorney General Loretta E. Lynch
Cincinnati Police Chief Jeffrey Blackwell
WHEN:
TUESDAY, MAY 18, 2015
11:00 a.m. EDT
WHERE:
Chase Elementary School
4154 Turrill Street
Cincinnati, OH 45223
OPEN PRESS
(Media Gather Time: 10:00-10:20 a.m. EDT; main entrance)
ATTORNEY GENERAL HOLDS COMMUNITY POLICING CONVENING AT NATIONAL UNDERGROUND RAILROAD FREEDOM CENTER:
WHO:
Attorney General Loretta E. Lynch
U.S. Attorney Carter M. Stewart for the South District of Ohio
Director Ron Davis of the COPS Office
Mayor John Cranley of Cincinnati
Cincinnati Police Chief Jeffrey Blackwell
WHEN:
TUESDAY, MAY 18, 2015
2:00 p.m. EDT
WHERE:
National Underground Railroad Freedom Center
50 East Freedom Way
Cincinnati, OH 45202
OPEN PRESS
(Media Gather Time: 1:00 p.m. EDT; check-in location in lobby)
NOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials. Members of the media must RSVP to [email protected] by Tuesday, May 19, 2015, at 9:00 a.m. EDT. Cameras planning to cover the event should arrive an hour prior to the start time. Space is limited and not guaranteed. Press inquiries regarding logistics should be directed to Kevin Lewis at [email protected] and Sabrina Curtis at [email protected].
Administrator and Biller of Illinois Physician Group Convicted in $4.5 Million Medicare Fraud SchemeRead the Press Release
A federal jury in Chicago on May 15, 2015, convicted the administrator and biller of a Schaumburg, Illinois, in-home visiting physician group for their participation in a $4.5 million health care fraud scheme that included billing Medicare for services rendered to patients who were dead and services rendered by medical professionals who worked over 24 hours in a day.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zachary T. Fardon of the Northern District of Illinois, Special Agent in Charge Robert J. Holley of the FBI’s Chicago Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.
According to evidence presented at trial, Rick E. Brown, 58, of Rockford, Illinois, the President of Home Care America Inc., controlled the daily operations of a physician practice, Medicall Physicians Group Ltd. Mary C. Talaga, 54, of Elmwood Park, Illinois, was the company’s biller who submitted Medicall’s Medicare claims and was employed by Home Care America. Brown and Talaga falsely billed Medicare for services that were never provided to patients. The services fraudulently billed included services rendered to patients who were actually dead, as well as services purportedly provided by medical professionals after they had ended their employment and by medical professionals who worked over 24 hours per day. Evidence showed that Brown forged physician signatures on medical documents, and Talaga directed physicians to create false documentation after she had billed for services that had not been documented or provided.
Brown and Talaga were each found guilty of one count of conspiracy to commit health care fraud, six counts of health care fraud and three counts of false statements relating to a health care matter. They were charged in a superseding indictment returned on March 25, 2015. Medicall submitted approximately $12 million in claims to Medicare, approximately $4.5 million of which were shown to be fraudulent at trial.
The sentencing hearing for Brown is scheduled for Aug. 10, 2015, and the sentencing hearing for Talaga is scheduled for Aug. 7, 2015.
The investigation was conducted jointly by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Northern District of Illinois. The case is being prosecuted by Trial Attorney Brooke Harper and Senior Trial Attorney Jon Juenger of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: stopmedicarefraud.gov.
Three Defendants Sentenced for Conspiracy to Advertise Child Pornography in Connection with Web-Based Bulletin BoardRead the Press Release
Three defendants were sentenced for their roles in an international child pornography web-based bulletin board that was targeted by state and federal investigators and prosecutors participating in Operation Moon Runner.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Michael W. Cotter of the District of Montana and Special Agent in Charge Mary Frances Rook of the FBI’s Salt Lake City Division made the announcement.
On May 14, 2015, Daniel Brown, 26, of Taylor, South Carolina, was sentenced to 180 months in prison after a jury convicted him of conspiracy to advertise child pornography. On May 15, 2015, John Merchberger, 48, of Dayton, Maine, was sentenced to 220 months in prison and Marc Edoria, 24, of Elk Grove, California, was sentenced to 180 months in prison. Chief U.S. District Judge Dana L. Christensen of the District of Montana imposed the sentence.
According to court documents, the board was created in September 2011 and specialized in the advertisement, distribution and receipt of child pornography. The board was broken-up into subforums where members were required to post images that corresponded to specific child pornography studios or topics such as webcams or candid photographs. The rules of the board required members to post images of minor females once every certain number of weeks. Failure to post images within the required time period resulted in suspension from the board. The board permitted members to leave comments and to request more images of child pornography from board members.
According to admissions made in connection to their guilty pleas, Merchberger assisted in running the board at various times, while Edoria was an advanced member of the board. According to evidence presented at trial, Brown was also an advanced member of the board. All three defendants posted notices and advertisements of child pornography on the board, along with images of children being sexually abused.
The investigation, referred to as Operation Moon Runner, is an ongoing cooperative effort between the Criminal Division’s Child Exploitation and Obscenity Section; FBI; Montana Department of Criminal Investigations; Helena, Montana, Police Department; Polson, Montana, Police Department; U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, Montana Internet Crimes Against Children Task Force and the Northumbria Police Department in the United Kingdom.
Trial Attorney Maureen C. Cain of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorney Cyndee L. Peterson of the District of Montana prosecuted the case.
This case was initiated under the Department of Justice’s Project Safe Childhood initiative which was launched in 2006 to combat the proliferation of technology-facilitated crimes involving the sexual exploitation of children. Through a network of federal, state and local law enforcement agencies and advocacy organizations, Project Safe Childhood attempts to protect children by investigating and prosecuting offenders involved in child sexual exploitation. It is implemented through partnerships including the Montana Internet Crimes Against Children (ICAC) Task Force. The ICAC Task Force Program was created to assist state and local law enforcement agencies by enhancing their investigative response to technology facilitated crimes against children.
Statement by Attorney General Lynch on the Sentencing of Dzhokhar TsarnaevRead the Press Release
Attorney General Loretta E. Lynch released the following statement on the sentencing of Dzhokhar Tsarnaev:
“Dzhokhar Tsarnaev coldly and callously perpetrated a terrorist attack that injured hundreds of Americans and ultimately took the lives of three individuals: Krystle Marie Campbell, a 29-year-old native of Medford; Lingzi Lu, a 23-year-old Boston University graduate student from China; and Martin Richard, an 8-year-old boy from Dorchester who was watching the marathon with his family just a few feet from the second bomb. In the aftermath of the attack, Tsarnaev and his brother murdered Sean Collier, a 27-year-old patrol officer on the MIT campus, extinguishing a life dedicated to family and service.
“We know all too well that no verdict can heal the souls of those who lost loved ones, nor the minds and bodies of those who suffered life-changing injuries from this cowardly attack. But the ultimate penalty is a fitting punishment for this horrific crime and we hope that the completion of this prosecution will bring some measure of closure to the victims and their families. We thank the jurors for their service, the people of Boston for their vigilance, resilience and support and the law enforcement community in Boston and throughout the country for their important work.”
High-Ranking al Qaeda Terrorist Sentenced for Conspiring to Kill Americans and Other Terrorism OffensesRead the Press Release
Khalid al Fawwaz, 52, a citizen of Saudi Arabia, was sentenced today to life in prison for multiple terrorism offenses relating to his participation in al Qaeda’s conspiracy to kill Americans.
Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara of the Southern District of New York made the announcement. U.S. District Court Judge Lewis A. Kaplan of the Southern District of New York imposed the sentence in a proceeding attended by victims of the 1998 bombings of the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania. Fawwaz’s sentencing follows a six-week jury trial in January and February of this year, at which Fawwaz was convicted of all four counts with which he was charged.
“Fawwaz is a terrorist who for years served Usama bin Laden and held many positions within al Qaeda,” said Assistant Attorney General Carlin. “With this sentence, he is being held accountable for his role in al-Qaeda's conspiracy to kill U.S. nationals worldwide during the 1990s. This case is a testament to our commitment to bringing to justice those who threaten the United States and our interests around in the world, no matter how long it may take.”
“Khalid al Fawwaz, who played a critical role for al Qaeda in its murderous conspiracy against America, will now spend the rest of his life in a federal prison,” said U.S. Attorney Bharara. “As one of Osama bin Laden's original and most trusted lieutenants, Fawwaz led an al Qaeda training camp in Afghanistan and a terrorist cell in Kenya before serving as bin Laden’s media adviser in London. Fawwaz was bin Laden's bridge to the West, facilitating interviews of bin Laden in Afghanistan by Western media and disseminating bin Laden's 1996 declaration of jihad against America and his 1998 fatwah directing followers to kill Americans anywhere in the world. To that end, on Aug. 7, 1998, al Qaeda operatives bombed our embassies in Kenya and Tanzania, murdering 224 innocent people and wounding thousands more. Fawwaz conspired with a murderous regime, and the result was a horrific toll of terror and death. The price he will pay, appropriately severe as it is, cannot possibly compensate his victims and their families.”
According to the evidence presented at trial:
During the early 1990s, Fawwaz trained at al Qaeda’s Jawar military training camp in Afghanistan and then became the emir, or head, of al Qaeda’s al Siddiq military training camp in Afghanistan. In approximately 1993, Fawwaz moved to Nairobi, where he served as one of the leaders of the al Qaeda members there, during a time that al Qaeda was sending fighters through Nairobi to Somalia to fight, and to train Somalis to fight, U.S. and U.N. forces in Somalia. Fawwaz was also a leader of al Qaeda in Nairobi when al Qaeda began its preparations to attack the U.S. Embassy there.
The evidence further showed that, in 1994, Fawwaz began to act as Osama bin Laden’s media representative in London. Fawwaz served as bin Laden’s conduit to Western media, screening requests for interviews of bin Laden and facilitating travel to Afghanistan for journalists who were permitted interviews. Fawwaz also publicized bin Laden’s threats of violence against the United States. Among other things, Fawwaz delivered bin Laden’s August 1996 Declaration of Jihad against the United States to a journalist for publication and helped arrange for the publication of a February 1998 fatwa, signed by bin Laden and others, that claimed it was the individual duty of every Muslim to kill Americans, civilian and military, in any country where it was possible to do so. In addition, Fawwaz provided al Qaeda with advice about how best to disseminate its message of terror to the West, and helped obtain items that were difficult to obtain in Afghanistan, such as generators, vehicles and communications equipment, for al Qaeda. In addition, a list of al Qaeda members recovered in Kandahar, Afghanistan, by the U.S. military in late 2001 contained Fawwaz’s alias and had him numbered ninth on the list.
Following Fawwaz’s arrest in England in September 1998, Fawwaz challenged his extradition to the United States for more than a decade. He arrived in the Southern District of New York in October 2012.
* * *
Fawwaz’s sentencing follows convictions for conspiring to kill U.S. nationals, conspiring to murder officers and employees of the United States and conspiring to destroy buildings and property of the United States, each of which carried a maximum term of life in prison. Fawwaz was also convicted of conspiring to attack national defense utilities, which carried a maximum term of 10 years in prison.
Assistant Attorney General Carlin joined U.S. Attorney Bharara in praising the outstanding efforts of the FBI’s New York Joint Terrorism Task Force – which principally consists of agents from the FBI and detectives from the New York City Police Department. Carlin and Bharara also thanked the U.S. Marshals Service and the U.S. Department of Justice’s Office of International Affairs for their efforts, as well as the New Scotland Yard for its cooperation in the investigation and prosecution.
The case is being prosecuted by the Terrorism and International Narcotics Unit of the U.S. Attorney’s Office of the Southern District of New York. The case was prosecuted by Assistant U.S. Attorneys Sean S. Buckley, Adam Fee, Nicholas J. Lewin and Stephen J. Ritchin of the Southern District of New York, with assistance from Trial Attorney Joseph N. Kaster of the National Security Division’s Counterterrorism Section.
Finter Bank Zurich AG Reaches Resolution under Department of Justice Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Finter Bank Zurich AG (Finter), located in Zurich, Switzerland, reached a resolution under the department’s Swiss Bank Program.
The Swiss Bank Program, which was announced on Aug. 29, 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States. Swiss banks eligible to enter the program were required to advise the department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are required to:
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Make a complete disclosure of their cross-border activities;
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Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
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Cooperate in treaty requests for account information;
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Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
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Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations; and
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Pay appropriate penalties.
Banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, Finter 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 a $5.414 million penalty in return for the department’s agreement not to prosecute Finter for tax-related criminal offenses.
Finter was founded in 1958 in Chiasso, Switzerland, and has a branch office in Lugano, Switzerland. Since Aug. 1, 2008, Finter has maintained 283 U.S.-related accounts with an aggregate maximum balance of approximately $235 million.
Since its establishment and continuing through at least October 2011, Finter, through its managers, employees and others, aided and assisted U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the Internal Revenue Service (IRS). After August 2008, when Swiss bank UBS AG publicly announced that it was the target of a criminal investigation by U.S. tax authorities, Finter accepted accounts from U.S. persons exiting other Swiss banks.
Finter provided services that allowed U.S. clients to eliminate the paper trail associated with the undeclared assets and income, including “hold mail” services and numbered and coded accounts. In addition, Finter assisted clients in using sham entities as nominee beneficial owners of undeclared accounts, solicited Forms W-8BEN that falsely stated under penalties of perjury that the sham entities beneficially owned the assets in the undeclared accounts, and provided cash cards and credits cards linked to the undeclared accounts.
In resolving its criminal liabilities under the program, Finter encouraged U.S. accountholders to come into tax compliance and participate in the IRS Offshore Voluntary Disclosure Program. While Finter’s U.S. accountholders who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of Finter’s non-prosecution agreement, its noncompliant U.S. accountholders must now pay that 50 percent penalty to the IRS if they wish to enter the IRS Offshore Voluntary Disclosure Program.
Acting Assistant Attorney General Caroline D. Ciraolo of the Tax Division thanked the IRS and in particular, IRS-Criminal Investigation and IRS’s Large Business and International Division for their substantial assistance, as well as Senior Litigation Counsel John E. Sullivan and Trial Attorney Mark Kotila of the Tax Division, who served as counsel on this matter, 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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Federal Court Prohibits Western Louisiana Tax Preparer from Preparing Tax Returns for OthersRead the Press Release
A federal court has barred a New Iberia, Louisiana, woman and her business from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction order, to which Joyce Bougere-Keyes consented, was entered by U.S. Magistrate Judge Patrick Hanna of the Western District of Louisiana. The government’s complaint alleged that Bougere-Keyes, and her business, Joyce Tax & Financial Service LLC, prepared federal income tax returns for customers that reported fabricated and/or inflated business income and expenses on Schedules C (Profit or Loss from Business) to fraudulently maximize the amount of the earned income tax credit for her customers. As described in the complaint, many of the defendant’s customers reported that they were unaware their returns contained business income or expenses, or confirmed that the returns otherwise misrepresented these items. The Internal Revenue Service (IRS) audited 71 federal income tax returns filed by the defendant’s customers for tax year 2010, which resulted in the disallowance of $210,571 in improperly claimed earned income tax credits on those returns alone, according to the suit.
The complaint further alleged that Bougere-Keyes improperly claimed education credits for taxpayers who were not entitled to them.
Bougere-Keyes has prepared more than 7,500 individual income tax returns since 2009, according to the suit. Based on the number of years the defendant has been preparing tax returns and the types of fraudulent conduct alleged, the loss to the U.S. Treasury caused by the defendant’s conduct is likely more than $1 million, according to the complaint.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on here. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Texas Antiques Appraiser Sentenced to 25 Months in Prison for Rhino and Ivory Smuggling ConspiracyRead the Press Release
Ning Qiu, 43, of Frisco, Texas, an appraiser of Asian art, was sentenced today by U.S. District Judge Thad Heartfield, in Beaumont, Texas, to 25 months in prison to be followed by three years of supervised release for conspiring to smuggle rhinoceros horns and objects made from rhino horn and elephant ivory, worth nearly $1 million, from the United States to China. Qiu was also directed to pay a $150,000 fine, which was directed to the Lacey Act Reward Fund.
The sentence was announced by Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, U.S. Attorney John M. Bales for the Eastern District of Texas and Director Dan Ashe for the U.S. Fish and Wildlife Service (USFWS).
Qiu had worked for seven years as an Asian antique appraiser for an auction house in Dallas, Texas. Qiu previously pleaded guilty before U.S. Magistrate Judge Don D. Bush to an information charging him with conspiracy to smuggle and violate the Lacey Act. Qiu was identified as part of “Operation Crash” – a nationwide effort led by the USFWS and the Department of Justice to investigate and prosecute those involved in the black market trade of rhinoceros horns and other protected species.
In papers filed in federal court, Qiu admitted to acting as one of three antique dealers in the United States who Zhifei Li, the admitted “boss” of the conspiracy, paid to help obtain wildlife items and smuggle them to Li via Hong Kong. Li was sentenced to serve 70 months in prison on May 27, 2014, in federal district court in Newark, New Jersey, for playing a leadership and organizational role in the smuggling conspiracy by arranging for financing to pay for the wildlife, purchasing and negotiating the price, directing how to smuggle the items out of the United States and obtaining the assistance of additional collaborators in Hong Kong to receive the smuggled goods and then smuggle them to mainland China.
“Qiu was a key player in a web of wildlife traffickers who used his role as an antique dealer to illicitly smuggle wildlife items, including rhino horn and elephant ivory, from the United States to China,” said Assistant Attorney General Cruden. “We will continue to investigate and prosecute those who are involved in this dark trade, which fuels poaching and is driving some of the world’s most iconic species to the brink of extinction.”
“Ning Qiu’s unseemly business of trafficking in the horns of endangered rhinos is over and now he will serve a just sentence of imprisonment,” said U.S. Attorney Bales. “I only hope that others still involved in what is a nasty, brutally cruel exercise will observe the outcome of “Operation Crash” and immediately cease and desist their detestable practices. I commend the excellent work by the agents and prosecutors.”
“The sentencing today of Ning Qiu is yet another successful prosecution resulting from Operation Crash and a further step in the global fight against wildlife trafficking and its dire consequences for rhinos, elephants and other wildlife,” said Director Ashe for USFWS. “This case is a stark reminder of the role businesses and criminals based in the United States play in driving the current illegal slaughter of wildlife. It also illustrates the consequences these criminals will inevitably face for their greed and indifference to its horrific result.”
Rhinoceros are a herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), a treaty signed by over 175 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.
Qiu admitted to meeting Li in 2009 through his work at the auction house in Dallas, Texas, and entering into a conspiracy with Li whereby Qiu traveled throughout the United States to purchase raw and carved rhinoceros horns and elephant ivory for Li, often receiving specific instructions from Li on which items to buy and how much to pay. Upon purchasing the items, Li transferred funds directly into Qiu’s bank accounts in the United States and China. After acquiring the items for Li, Qiu arranged for them to be smuggled to a location in Hong Kong, which was provided by Li. In December 2013, another one of Li’s suppliers, Qiang Wang aka Jeffrey Wang was sentenced in the Southern District of New York to 37 months in prison.
As part of his plea, Li admitted that he sold raw rhinoceros horns worth approximately $3 million, approximately $17,500 per pound, to factories in China where raw rhinoceros horns are carved into fake antiques known as Zuo Jiu, which means “to make it as old” in Mandarin. In China, there is a centuries-old tradition of drinking from an intricately carved “libation cup” made from a rhinoceros horn. Owning or drinking from such a cup is believed by some to bring good health and true antiques are highly prized by collectors. The escalating value of such items has resulted in an increased demand for rhinoceros horn that has helped fuel a thriving black market, including recently carved fake antiques. The leftover pieces from the carving process were sold for alleged “medicinal” purposes even though rhino horn is made of compressed keratin, the same material in human hair and nails and has no proven medical efficacy.
Between 2009 and 2013, Qiu purchased and smuggled to Hong Kong at least five raw rhinoceros horns weighing at least 20 pounds. Qiu smuggled the raw rhino horns by first wrapping them in duct tape, hiding them in porcelain vases and falsely describing them on customs and shipping documents, including by labeling them as porcelain vases or handicrafts. Qiu purchased several of the horns he smuggled to China from Elite Decorative Arts, an auction house located in Boynton Beach, Florida. Elite Decorative Arts has entered a guilty plea in District Court in West Palm Beach, Florida, for its role in illegally trafficking and smuggling wildlife, including rhinoceros horns, elephant ivory and items made from coral. Elite is scheduled to be sentenced on May 20, 2015.
The investigation is continuing and is being handled by the USFWS’s Office of Law Enforcement, the U.S. Attorney’s Office for the Eastern District of Texas and the Department of Justice’s Environmental Crimes Section. The government is represented by Assistant U.S. Attorney James Noble and Trial Attorney Gary N. Donner of the Environmental Crimes Section of the Environment and Natural Resources Division.
South Bend Police Officer Charged for Assaulting and Injuring an ArresteeRead the Press Release
The Justice Department announced that South Bend, Indiana, Police Department Officer Theodore Robert, 40, has been charged with a criminal civil rights violation for allegedly assaulting and injuring an arrestee at the St. Joseph County Jail. The incident at the jail occurred on May 30, 2010.
According to the indictment, South Bend Police Officer Theodore Robert, while acting under the color of law, willfully deprived G.H., an arrestee, of the right to be free from unreasonable searches and seizures. This includes the right to be free from the use of unreasonable force by a person acting under color of law. Specifically, Officer Robert assaulted G.H., resulting in bodily injury to G.H.
An indictment is merely an allegation, and the defendant is presumed innocent until proven guilty.
The Department of Justice Civil Rights Division enforces a federal provision regarding deprivation of rights under color of law. This provision makes it a crime for a person acting as a law enforcement officer to willfully deprive a person of a right or privilege protected by the Constitution or laws of the United States.
The investigation by the South Bend Resident Agency of the FBI is ongoing. The case is being prosecuted by Trial Attorneys Stephen Curran and Sanjay Patel of the Civil Rights Division, with the assistance of the U.S. Attorney’s Office for the Northern District of Indiana.
New Orleans Jury Convicts Two Doctors, a Nurse and an Office Manager for Roles in $50 Million Fraud SchemeRead the Press Release
A jury in New Orleans convicted four employees of medical service clinics yesterday for their roles in a $50 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Michael J. Anderson of the FBI’s New Orleans Field Office, Special Agent in Charge Mike Fields of the Department of Health and Human Services’ Office of the Inspector General (HHS-OIG) Dallas Regional Office and Louisiana Attorney General James D. “Buddy” Caldwell made the announcement.
Barbara Smith, M.D., 66, of Metairie, Louisiana; Roy Berkowitz, M.D., 69, of Slidell, Louisiana; Beverly Breaux, 67, of New Orleans; and Joe Ann Murthil, 57, of New Orleans, were convicted on all counts after a five-day jury trial before Chief U.S. District Court Judge Sarah S. Vance of the Eastern District of Louisiana.
Evidence introduced at trial showed that the defendants and others carried out a home health care fraud scheme in and around New Orleans through multiple companies over the course of more than 10 years. Smith and Berkowitz falsely claimed that thousands of Medicare recipients were homebound and required nursing or therapy services to be provided in their homes. Breaux was a registered nurse who falsely certified that these patients were homebound, and falsely claimed to have treated patients that she had not seen. Murthil was an office manager and biller at one home health company who assisted with the payment of illegal kickbacks to patient recruiters. Murthil also submitted false claims to Medicare stating that patients were homebound when some of these patients had jobs, had not received services or did not want services. From 2007 through 2014, the companies in this scheme submitted more than $56 million in claims to Medicare, the vast majority of which were fraudulent. Medicare paid approximately $50.7 million on these claims.
Sentencing for the defendants is scheduled for Aug. 26, 2015. In total, 13 defendants have been charged for their roles in this scheme. Nine other defendants previously pleaded guilty.
This case was investigated by the FBI, HHS-OIG and the Louisiana Attorney General’s Medicaid Fraud Control Unit, and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Eastern District of Louisiana. This case was prosecuted by Trial Attorneys William Kanellis and Antonio Pozos and Assistant Chief Ben Curtis of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Long-Term Care Pharmacy to Pay $31.5 Million to Settle Lawsuit Alleging Violations of Controlled Substances Act and False Claims ActRead the Press Release
PharMerica Corporation has agreed to pay the United States $31.5 million to resolve a lawsuit alleging that they violated the Controlled Substances Act by dispensing Schedule II controlled drugs without a valid prescription and violated the False Claims Act by submitting false claims to Medicare for these improperly dispensed drugs, the Justice Department announced today.
“Pharmacies put patients at risk when they dispense Schedule II narcotics, which have the highest potential for abuse of any prescription drug, without a valid prescription from a physician,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Department of Justice’s Civil Division. “Today’s settlement demonstrates our commitment to the fight against the misuse of controlled substances.”
PharMerica is a long-term care pharmacy that dispenses medications to residents of long-term care facilities, including nursing homes and skilled nursing facilities. Many of the prescriptions filled by PharMerica are for controlled substances listed in Schedule II under the Controlled Substances Act. Schedule II drugs, such as oxycodone and fentanyl, can cause significant harm if used improperly and have a high potential for abuse.
The government’s suit alleged that PharMerica pharmacies operating across the country routinely dispensed Schedule II controlled drugs in non-emergency situations without first obtaining a written prescription from a treating physician. According to the complaint, PharMerica’s actions violated the Controlled Substances Act by enabling nursing home staff to order narcotics, and pharmacists to dispense them, without confirming that a physician had made a medical judgment as to whether the narcotics were necessary and should be administered to the resident. Under the settlement, PharMerica has agreed to pay $8 million to resolve these allegations.
The government’s complaint also alleged that PharMerica violated the False Claims Act by knowingly causing the submission of false claims to Medicare Part D for improperly dispensed Schedule II drugs. The False Claims Act imposes treble damages and penalties for the knowing submission of false claims for federal funds. PharMerica has agreed to pay $23.5 million to resolve its alleged False Claims Act violations.
“Today’s significant settlement represents a single but critical significant step toward promoting integrity in the administration of public health programs,” said U.S. Attorney James L. Santelle of the Eastern District of Wisconsin. “This civil litigation and its meaningful resolution demonstrates that our fight against health care fraud is helping to protect all Americans, including the elderly, people with disabilities and other who may be vulnerable to mistreatment and abuse.”
The False Claims Act claims resolved by today’s settlement were originally brought by Jennifer Denk, a pharmacist formerly employed by PharMerica, under the whistleblower provisions of the act, which authorize private parties to sue on behalf of the United States and to receive a portion of any recovery. The act permits the United States to intervene and take over the lawsuit, as it did in this case with respect to some of Ms. Denk’s allegations. Ms. Denk will receive $4.3 million as her share of the settlement.
“DEA registrants are responsible to handle controlled substances in compliance with the Controlled Substances Act,” said Special Agent in Charge Dennis Wichern of the Drug Enforcement Administration (DEA) Chicago Field Division. “Failure to do so increases the potential for diversion and jeopardizes the public health and safety”.
“The DEA is committed to investigating organizations that are not in compliance with the Controlled Substances Act,” said Special Agent in Charge Michael J. Ferguson of the DEA New England Field Division. “Our obligation is to ensure public safety and public health and we are committed to working with our law enforcement and regulatory partners nationwide to ensure that these rules and regulations are followed.”
“The legal requirement that narcotics like oxycodone be prescribed by a physician is a crucial patient protection, which is especially important to safeguard the health of the vulnerable elderly and disabled patients in long term care facilities,” said Special Agent in Charge Lamont Pugh of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG). “Our agency is dedicated to protecting the taxpayer-funded Medicare and Medicaid programs as well as the millions of beneficiaries who rely on those programs for their health and well-being.”
As part of the settlement announced today, the settling defendant has also agreed to enter into a corporate integrity agreement with the HHS-OIG, which obligates PharMerica to undertake substantial internal compliance reforms and to submit federal health care program claims for an independent review for the next five years.
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 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 with PharMerica was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office of the Eastern District of Wisconsin, the U.S. Attorney’s Office of the District of Rhode Island, HHS-OIG and the DEA.
The lawsuit is captioned U.S. ex rel. Denk v. PharMerica Corp., No. 09-cv-720 (E.D. Wis.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Judge Orders Injunction to Stop Sale of Dangerous MagnetsRead the Press Release
A federal judge today ordered a Colorado company to stop selling hazardous high-powered magnets that had been the subject of a product recall by their manufacturer as part of an agreement with the Consumer Product Safety Commission (CPSC), the Justice Department announced. U.S. District Court Judge Christine M. Arguello of the District of Colorado found that Zen Magnets LLC and its owner, Shihan Qu, were violating the Consumer Product Safety Act by selling magnets that were purchased from a New Jersey company shortly before the magnets were recalled.
Last week, the department filed a complaint seeking injunctive relief and civil penalties against Zen Magnets and Qu.
The complaint alleged that Zen Magnets purchased 917,000 tiny, high-powered magnets from a New Jersey firm one week before that firm signed an agreement with the CPSC to recall the magnets. Once the magnets were recalled, their sale by any party was prohibited. Nonetheless, despite repeated warnings by the CPSC, Qu’s Denver-based company continued to sell the magnets.
The magnets are sold in sets and generally marketed as desk toys. When swallowed by children or teens, the magnets clamp together and can cause serious internal injuries.
“The Department of Justice will continue to work with the Consumer Product Safety Commission to enforce our consumer protection laws and protect consumers from dangerous products,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “Efforts to evade the law and sell products that have already been recalled will not be tolerated.”
In issuing the preliminary injunction, Judge Arguello found a substantial likelihood that the defendants had violated the Consumer Product Safety Act and a cognizable danger of recurring violations in the future. The ruling said that Zen Magnets “has essentially turned its pledge to continue to defy the CPSC into a marketing campaign” and has “openly vowed” not to stop selling the recalled magnets absent an injunction. Thursday’s ruling followed a three-hour evidentiary hearing on Monday in Denver.
“Zen Magnets insisted on selling a dangerous product to the public, even after repeatedly being warned to stop by the Consumer Product Safety Commission,” said U.S. Attorney John Walsh of the District of Colorado. “The magnets in this case can cause serious harm to people – particularly to children – if swallowed, by causing rips in the digestive system leading to grave infection. Given the company’s refusal to stop selling the product, this office, working with the Consumer Product Safety Commission, did not hesitate to seek a court order to protect the public. Today’s order is a victory for public safety, and for the safety of young children.”
Zen Magnets is separately challenging a rule issued by the CPSC that went into effect April 1, but was temporarily stayed until April 20. The rule requires magnets or magnet sets to be large enough so that they cannot be swallowed or weak enough so they are unlikely to clamp together if ingested.
In issuing that rule, the CPSC noted the risk of injury that the rule addresses. When a person ingests more than one magnet from a magnet set, there is potential for damage to intestinal tissue. The magnets are attracted to each other in the digestive system, damaging the tissue that becomes trapped between the magnets. In several incidents, surgery was required to remove magnets that children had swallowed.
The rule, which Zen Magnets is challenging before the 10th Circuit Court of Appeals, applies only prospectively. The preliminary injunction issued by Judge Arguello applies to the 917,000 tiny magnets that Zen Magnets acquired in July 2014, shortly before the manufacturer agreed to recall the magnets, and all other magnets that were commingled with the recalled magnets.
The case is being handled by Trial Attorney Patrick Jasperse of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Jamie Mendelson of the District of Colorado.
Iraqi-Born U.S. Citizen Arrested for Making False Statement to the FBIRead the Press Release
Defendant Allegedly Lied About Pledging Allegiance to Self-Proclaimed Leader of ISIL
A Mesquite, Texas, man was arrested earlier today by the FBI on a criminal complaint charging him with making a false statement to the FBI, announced Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney John Parker of the Northern District of Texas and Special Agent in Charge Thomas M. Class Sr. of the FBI’s Dallas Field Office.
Bilal Abood, 37, an Iraqi-born naturalized U.S. citizen who migrated to the United States in 2009, made his initial appearance in federal court the Northern District of Texas this afternoon. Abood will remain in custody pending a probable cause and detention hearing set for May 15, 2015.
According to the complaint, on March 29, 2013, Abood attempted to depart the United States from Dallas Fort Worth International Airport, but was not allowed to board the flight. While at the airport, FBI agents asked Abood about his planned travel, and he initially advised agents that he was merely planning to travel to Iraq to visit family. During a subsequent interview, agents asked Abood again about his attempted travel – specifically asking if he intended to go to Syria to fight, and Abood stated that was not his intent. Later in that interview, however, Abood admitted that his intent on March 29, 2013, was to go to Syria to fight against the Assad regime, claiming he wanted to fight with the Free Syrian Army (FSA).
On approximately April 29, 2013, Abood left the United States through Mexico and traveled through various countries in order to get to Turkey. Upon Abood’s return to the United States on Sept. 16, 2013, the FBI interviewed him again. In that interview, Abood admitted traveling to Syria through Turkey, and claimed that he went there to fight with the FSA and that he had stayed in an FSA camp. Abood stated that he became frustrated with a lack of action and wanted to return to the United States. He denied ever providing financial support to al-Nusrah Front (ANF), the Islamic State of Iraq and the Levant (ISIL) or any other terrorist organization.
A review of Abood’s computer on July 9, 2014, pursuant to a federal search warrant, revealed Abood pledged an oath to Abu Bakr al-Baghdadi, the leader of ISIL, on June 19, 2014. The search warrant also revealed that Abood had been on the internet viewing ISIL atrocities such as beheadings, and had used his twitter account to tweet and retweet information on al-Baghdadi.
On April 14, 2015, FBI agents went to Abood’s residence to return his computer that was seized in the 2014 search warrant. Abood admitted that he knew it was a crime to lie to an FBI agent, and Abood denied to the agents that he had ever pledged allegiance to al-Baghdadi.
The maximum statutory penalty for the offense charged in the complaint is eight years in federal prison and a $250,000 fine.
A complaint is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until and unless proven guilty.
The matter is being investigated by FBI’s Dallas Division. The prosecution is being handled by the U.S. Attorney’s Office of the Northern District of Texas, with assistance from the National Security Division’s Counterterrorism Section.
Bilal Abood Complaint
Former Executive Director of the Virgin Islands Legislature Sentenced to Five Years in Prison for Bribery and ExtortionRead the Press Release
The former Executive Director of the Virgin Islands Legislature was sentenced to five years in prison today, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Ronald W. Sharpe of the District of the Virgin Islands.
Louis “Lolo” Willis, 57, a resident of St. Thomas, was sentenced by U.S. District Court Judge Curtis V. Gomez of the District of the Virgin Islands. On Nov. 19, 2014, a jury in the Virgin Islands convicted Willis of four counts of federal programs bribery and extortion under color of official right.
According to evidence presented at trial, Willis was the executive director of the Legislature between 2009 and 2012. His responsibilities included oversight of the major renovation of the Legislature building and awarding and entering into government contracts in connection with the project. Willis was also responsible for authorizing payments to the contractors for their work. Evidence presented at trial demonstrated that Willis accepted bribes, including $13,000 in cash and checks, from contractors in exchange for using his official position to secure more than $350,000 in work for the contractors and to ensure they received payment upon completion.
This case was investigated by the FBI’s San Juan Field Office’s St. Thomas Resident Agency, the Internal Revenue Service-Criminal Investigation and the Office of the Virgin Islands Inspector General. The case is being prosecuted by Trial Attorney Justin Weitz of the Criminal Division’s Public Integrity Section, Trial Attorney Traccee Plowell of the Criminal Division’s Office of Enforcement Operations, Trial Attorney Jennifer Blackwell of the Environment and Natural Resources Division’s Environmental Crimes Section and Assistant U.S. Attorney Delia Smith of the District of the Virgin Islands.
Former Automotive Parts Manufacturer Executive Indicted for Role in Conspiracy to Fix PricesRead the Press Release
A Detroit federal grand jury returned a one-count indictment against the former Executive Managing Director of a Japanese automotive parts manufacturer for his participation in a conspiracy to fix prices and rig bids of automotive parts, the Department of Justice announced today.
The indictment, filed today in the U.S. District Court of the Eastern District of Michigan, charges Michitaka Sakuma, a former director and member of the board of directors of T.RAD Co. Ltd., with conspiring to fix the prices of radiators sold to Honda Motor Co. Ltd., Toyota Motor Corp., and certain of their subsidiaries in the United States and elsewhere.
“Today’s charge demonstrates that the Antitrust Division will continue to hold senior executives accountable for directing and authorizing subordinate employees to engage in criminal conduct,” said Deputy Assistant Attorney General Brent Snyder of the Antitrust Division’s Criminal Enforcement Program. “Senior executives should expect that they will be pursued and prosecuted when they knowingly permit and direct collusive conduct to occur under their management.”
Sakuma participated in the conspiracy first as a general manager in charge of Toyota sales and then as the executive managing director in charge of all sales at T.RAD. Sakuma was also a member of the board of directors at T.RAD.
The indictment alleges, among other things, that beginning at least as early as October 2003 and continuing until at least February 2010, Sakuma and his co-conspirators participated in meetings with co-conspirators and reached collusive agreements to rig bids, allocate supply and fix the price of radiators sold to Honda and Toyota.
T.RAD is a corporation organized and existing under the laws of Japan with its principal place of business in Tokyo, Japan. On Nov. 12, 2013, T.RAD pleaded guilty and agreed to pay a $13.75 million criminal fine for its role in the conspiracy. On Dec. 9, 2014, Kosei Tamura, the general manager in charge of Honda sales at T.RAD, pleaded guilty of participating in the same conspiracy and was sentenced to serve one year and one day in a U.S. prison.
Including Sakuma, 53 individuals have been charged in the government’s ongoing investigation into market allocation, price fixing and bid rigging in the automotive parts industry. Additionally, 35 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.5 billion in criminal fines.
Sakuma is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s indictment is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charge was brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323
Enviro-Safe Refrigerants Agrees to Halt Sales of Unapproved Flammable Hydrocarbon Refrigerants as Direct Replacements for Ozone Depleting SubstancesRead the Press Release
Enviro-Safe Refrigerants Inc. of Pekin, Illinois, has agreed to pay a $300,000 civil penalty and cease marketing and sale of unapproved flammable hydrocarbon refrigerants as substitutes for ozone depleting substances (ODS). ODS are being phased out of production and importation because they deplete the Earth’s stratospheric ozone layer. As part of the United States’ transition away from ODS, the Environmental Protection Agency’s (EPA) Significant New Alternatives Policy (SNAP) Program evaluates and approves substitute refrigerants so that they can safely and legally replace ODS. EPA evaluates these potential substitute refrigerants according to health, safety and environmental criteria. The Clean Air Act addresses ODS and establishes standards and requirements where a substitute for an ODS is sought to be introduced to the marketplace.
According to the two-count complaint, filed simultaneously with the settlement today in the Central District of Illinois, Enviro-Safe allegedly violated Clean Air Act requirements through the marketing and sale of two flammable hydrocarbon refrigerant products, ES 22a and ES 502a, as substitutes for ODS without providing the requisite information to EPA for review and approval. EPA has not approved any flammable hydrocarbon as a replacement for ODS in systems not specifically designed for flammable refrigerants and has warned that use of flammable refrigerants in those systems presents a risk of fire or explosion.
“With this settlement, Enviro-Safe will pay a penalty, stop its nationwide sales of unapproved flammable refrigerants and ozone depleting substances, and notify consumers of potential safety hazards from these products,” said Assistant Attorney General John C. Cruden of the Department of Justice’s Environment and Natural Resources Division. “This civil action illustrates how the requirements of the Clean Air Act guard consumer safety and the health of our environment each and every day.”
“The actions Enviro-Safe will be required to take under this consent decree will protect consumers and the environment from a potentially dangerous product,” said Regional Administrator Susan Hedman of EPA.
In addition to paying a penalty and halting non-compliant sales, the company will also state on the label of any flammable refrigerant, its website and other marketing materials that the refrigerant is “flammable to an open flame or spark” and to “proceed with caution if used in systems designed for non-flammable refrigerants.” Labels must also include any use restrictions for approved substitutes. The company will notify by mail all known past customers that purchased products labeled “ES 12a,” “ES 22a” and “ES 502a” of potential safety hazards associated with such products.
The consent decree is subject to a 30-day comment period and final approval by the court. A copy of the consent decree is available on the Department of Justice website at www.usdoj.gov/enrd/Consent_Decrees.html.
El Departamento de Justicia y el Tribunal Superior del Condado de Mohave, Arizona Trabajan en Asegurar el Acceso Igualitario para Personas Que No Hablen InglésRead the Press Release
WASHINGTON – El Departamento de Justicia anunció hoy que ha cerrado su revisión del Programa de Acceso Idiomático del Tribunal Superior del Condado de Mohave, Arizona. El cierre se produce después de la conclusión exitosa por el tribunal de sus obligaciones bajo un acuerdo para brindar servicios de asistencia idiomática a todos los usuarios del tribunal con conocimientos limitados del idioma inglés [Limited English Proficient (LEP)]. La División de Derechos Civiles comenzó a trabajar con el Tribunal Superior del Condado de Mohave en 2013 después de haber recibido una queja de un usuario del tribunal en la que alegaba que el tribunal discriminaba con base en el origen nacional en violación del Título VI de la Ley de Derechos Civiles de 1964 al negarse a brindarle un intérprete sin cargo en un asunto de derecho de familia. El Título VI exige que los destinatarios de asistencia financiera federal, tal como los tribunales, brinden servicios idiomáticos competentes sin cargo a personas LEP en todos los procesos y trámites judiciales.
Con la asistencia del departamento, el Tribunal Superior del Condado de Mohave ha realizado una serie de mejoras a su Programa de Acceso Idiomático, entre las que se incluyen:
- Actualización del Plan de Acceso Idiomático del Tribunal de modo que indique claramente que todas las partes LEP, los testigos, las víctimas y cualquier persona con interés en un caso recibirán servicios de intérprete en todos los procesos judiciales sin cargo, independientemente del tipo de caso, de los ingresos del usuario del tribunal o del idioma que hable.
- Creación e implementación de un sistema de quejas acerca de servicios idiomáticos.
- Mejora del acceso a servicios fuera de la sala del tribunal para todos los usuarios del tribunal a través de empleados bilingües, tarjetas “Yo hablo” disponibles en la oficina del secretario del juzgado, carteles multilingües, formularios traducidos en el portal en Internet del tribunal y servicios de intérprete telefónicos o por video disponibles para el uso de todos los empleados.
- Capacitación de todo el personal del tribunal sobre la importancia de proveer servicios idiomáticos adecuados.
- Optimización de la comunicación con partes implicadas de la comunidad.
- Trabajar con el sistema judicial estatal en mejorar la eficiencia y la calidad de los servicios de interpretación y traducción.
“Felicito al liderazgo y al personal del Tribunal Superior de Mohave por su labor para brindarles a todas las comunidades acceso igualitario a la justicia, independientemente del idioma que hablen”, señaló la Secretaria de Justicia Auxiliar Adjunta Principal Vanita Gupta de la División de Derechos Civiles. “A medida que Mohave y otros tribunales de Arizona siguen mejorando los servicios idiomáticos, les brindaremos con gusto la asistencia que requieran”.
El departamento viene trabajando con tribunales de todo el país en mejorar el suministro de servicios idiomáticos a personas LEP. Se puede encontrar una serie de recursos de acceso idiomático de tribunales estatales en la siguiente dirección: http://www.lep.gov/resources/resources.html#SC. En 2014, el departamento lanzó una “Herramienta de planificación de acceso idiomático y asistencia técnica para tribunales” que les brinda a los sistemas judiciales una serie de preguntas que considerar al desarrollar e implementar planes para brindar asistencia idiomática.
Haga clic aquí para más información sobre la FCS. Para más recursos relacionados con las personas LEP, diríjase al portal Interagencias Federal sobre personas LEP.
Duke Energy Subsidiaries Plead Guilty and Sentenced to Pay $102 Million for Clean Water Act CrimesRead the Press Release
Three subsidiaries of North Carolina-based Duke Energy Corporation, the largest utility in the United States, pleaded guilty today to nine criminal violations of the Clean Water Act at several of its North Carolina facilities and agreed to pay a $68 million criminal fine and spend $34 million on environmental projects and land conservation to benefit rivers and wetlands in North Carolina and Virginia. Four of the charges are the direct result of the massive coal ash spill from the Dan River steam station into the Dan River near Eden, North Carolina, in February 2014. The remaining violations were discovered as the scope of the investigation broadened based on allegations of historical violations at the companies’ other facilities.
Under the plea agreement, both Duke Energy Carolinas and Duke Energy Progress, must certify that they have reserved sufficient assets to meet legal obligations with respect to its coal ash impoundments within North Carolina, obligations estimated to be approximately $3.4 billion.
Officials from the Justice Department’s Environment and Natural Resources Division and the three U.S. Attorney’s Offices in North Carolina, the Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance, EPA’s Office of Inspector General, the Internal Revenue Service (IRS) Criminal Investigations and the North Carolina State Bureau of Investigation (SBI) made the announcement following a plea hearing at the federal courthouse in Greenville, North Carolina today.
“The massive coal ash spill into North Carolina’s Dan River last year was a crime and it was the result of repeated failures by Duke Energy’s subsidiaries to exercise controls over coal ash facilities,” said Assistant Attorney General John C. Cruden of the Justice Department’s Environment and Natural Resources Division. “The terms of these three plea agreements will help prevent this kind of environmental disaster from reoccurring in North Carolina and throughout the United States by requiring Duke subsidiaries to follow a rigorous and independently verifiable program to ensure they comply with the law.”
“Duke Energy's crimes reflect a breach of the public trust and a lack of stewardship for the natural resources belonging to all of the citizens of North Carolina,” said U.S. Attorney Thomas G. Walker for the Eastern District of North Carolina. “The massive release at the Dan River coal ash basin revealed criminal misconduct throughout the state – conduct that will no longer be tolerated under the judgment imposed by the court today.”
“Duke’s subsidiaries discharged potentially toxic pollutants that put at risk North Carolina’s water quality and wildlife and today’s outcome ensures they will be held responsible for violating federal environmental requirements,” said Acting U.S. Attorney Jill W. Rose for the Western District of North Carolina. “The defendants will now have to comply with the terms imposed by the court, including paying hefty financial penalties and making significant financial contributions toward improving the quality of impacted waterways, wetlands and our water supply system.”
“Duke’s actions adversely impacted the Dan River ecosystem and caused residents who live near and rely on the water supply much apprehension about the safety of the river,” said Criminal Chief Cliff Barrett for the U.S. Attorney’s Office in the Middle District of North Carolina. “Today’s plea holds Duke accountable for this result and charts a course to remediate the impact of these spills.”
“Over two hundred sixteen million Americans rely on surface water as their source of drinking water,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance. “Duke Energy put that precious resource at risk in North Carolina as the result of their negligence. Companies that cut corners and contaminate waters on which communities depend, as Duke did here, will be held accountable.”
On Feb. 20, 2015, the three U.S. Attorney’s Offices in North Carolina filed separate criminal bills of information in their respective federal courts, alleging violations of the Clean Water Act at the following Duke facilities: the Dan River steam station (Rockingham County), the Cape Fear steam electric plant (Chatham County), the Asheville steam electric generating plant (Buncombe County), the H.F. Lee steam electric plant (Wayne County) and the Riverbend steam station (Gaston County). The alleged violations included unlawfully failing to maintain equipment at the Dan River and Cape Fear facilities and unlawfully discharging coal ash and/or coal ash wastewater from impoundments at the Dan River, Asheville, Lee and Riverbend facilities.
As part of their plea agreements, Duke Energy Business Services LLC, Duke Energy Carolinas LLC and Duke Energy Progress Inc. will pay a $68 million criminal fine and a total $24 million community service payment to the National Fish and Wildlife Foundation for the benefit of the riparian environment and ecosystems of North Carolina and Virginia. The companies will also provide $10 million to an authorized wetlands mitigation bank for the purchase of wetlands or riparian lands to offset the long-term environmental impacts of its coal ash basins. In addition, they will pay restitution to the federal, state and local governments that responded to the Dan River spill and be placed on a period of supervised probation for five years.
Duke’s subsidiaries operating 18 facilities in five states, including 14 in North Carolina, will also be required to develop and implement nationwide and statewide environmental compliance programs to be monitored by an independent court appointed monitor and be regularly and independently audited. Results of these audits will be made available to the public to ensure compliance with environmental laws and programs. The companies’ compliance will be overseen by a court-appointed monitor who will report findings to the court and the U.S. Probation Office as well as ensuring public access to the information.
Approximately 108 million tons of coal ash are currently held in coal ash basins owned and operated by the defendants in North Carolina. Duke Energy Corporation subsidiaries also operate facilities with coal ash basins in South Carolina, approximately 5.99 million tons of coal ash, Kentucky, approximately 1.5 million tons of coal ash, Indiana, approximately 35.6 million tons of coal ash and Ohio, approximately 5.9 million tons of coal ash.
The companies must also meet the obligations imposed under federal and state law to excavate and close coal ash impoundments at the Asheville, Dan River, Riverbend and Sutton facilities.
Additionally, at the insistence of the United States, the holding company Duke Energy Corporation has guaranteed the payment of the monetary penalties and the performance of the nationwide and statewide environmental compliance plans.
“Duke’s environmental crimes required a special financial review of their actions to which we were proud to join our partners in investigating,” said Special Agent in Charge Thomas J. Holloman, III of the IRS Criminal Investigation. “The considerable fines, formal apologies and massive cleanup initiatives will impact the Duke image and brand, assuring the public that corporations will be held accountable for their gross actions involving the environment, wildlife and the communities of this great state.”
“The SBI worked closely with the Environmental Protection Agency Criminal Investigation Division and the Internal Revenue Service in this matter,” said Acting Director B.W. Collier of the North Carolina SBI. “This type of collaboration is critical to ensuring a thorough and intensive review on cases such as this. The SBI remains committed to the public interest and is prepared to continue assisting the U.S. Attorney’s office.”
The criminal investigation was conducted by the Criminal Investigation Division, Region Four and the Office of Inspector General of EPA, Criminal Investigations of the IRS and North Carolina State Bureau of Investigation with assistance from the Federal Bureau of Investigation and the Department of Defense Criminal Investigative Service.
Department of Justice and Mohave County, Arizona, Superior Court Work to Ensure Equal Access for Non-English SpeakersRead the Press Release
The Justice Department announced today that it has closed its review of the Language Access Program of the Mohave County, Arizona Superior Court. The closure follows the court’s successful completion of its obligations under an agreement to provide language assistance services to all limited English proficient (LEP) court users. The Civil Rights Division began working with the Mohave County Superior Court in 2013 following the receipt of a complaint by a court user alleging that the court discriminated on the basis of national origin in violation of Title VI of the Civil Rights Act of 1964 by refusing to provide her an interpreter free of charge in a family law matter. Title VI requires recipients of federal financial assistance, such as courts, to provide competent language services free of charge to LEP individuals in all court proceedings and operations.
With the department’s assistance, the Mohave County Superior Court has made a number of improvements to its Language Access Program, including:
- Updating the Court Language Access Plan to clearly state that all LEP parties, witnesses, victims and anyone with an interest in a matter will be provided interpreter services in all court proceedings free of charge regardless of case type, court user income, or language spoken.
- Creating and implementing a language services complaint system.
- Improving access to services outside the courtroom for all court users through bilingual employees, “I Speak” cards available in the clerk’s office, multilingual signage, translated forms on the court’s website, and telephonic or video interpreter services available for all employees to use.
- Training all court staff on the importance of providing appropriate language services.
- Enhancing communication with stakeholders in the community.
- Working with the state court system to improve the efficiency and quality of interpreter services and translations.
“I commend the Mohave Superior Court leadership and staff for their efforts to provide all communities with equal access to justice regardless of the language they speak,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “As Mohave and other courts across Arizona continue to improve language services, we welcome the opportunity to provide assistance when needed.”
The department has worked with courts across the country to improve the provision of language services to LEP individuals. Information on an array of state court language access resources can be found here: http://www.lep.gov/resources/resources.html#SC. In 2014, the department released a “Language Access Planning and Technical Assistance Tool for Courts” which provides court systems with a series of questions to consider as they develop and implement plans to provide language assistance.
Please click here for further information about FCS. For additional LEP-related resources, please go to the Federal Interagency LEP website.
Statement by Attorney General Lynch on the Confirmation of Sally Quillian Yates as Deputy Attorney GeneralRead the Press Release
Attorney General Loretta E. Lynch released the following statement on the confirmation of Sally Quillian Yates as Deputy Attorney General:
“I am pleased to congratulate Sally Yates on her confirmation as Deputy Attorney General – a vital position she has already held in an acting capacity and in which I am confident she will continue to excel. I thank the members of the United States Senate for their prompt action on her nomination.
“At every stage of her career, Sally has demonstrated her dedication to the rule of law, her devotion to the cause of justice and her commitment to all those whom the law protects and empowers. Her leadership and her skill have earned her the respect and the trust of law enforcement professionals at every level. And her exemplary work on a wide range of issues – from combating public corruption to prosecuting acts of terrorism – has proven that she is equal to any task.
“During the time we served together as U.S. Attorneys and through these first few weeks of my tenure as Attorney General, Sally has been an indispensable ally, an outstanding professional, and a judicious and expert advisor. I congratulate her once again on her confirmation, and I look forward to all that the Department of Justice will continue to achieve with the help of her exceptional leadership.”
Southern California Medical Supply Company Owner Sentenced to Four Years in Prison for $8.3 Million Medicare Fraud SchemeRead the Press Release
A registered nurse who owned a medical supply company was sentenced today in Los Angeles to four years in federal prison for her role in an $8.3 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services, Office of Inspector General’s (HHS-OIG) Los Angeles Region, Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office and Special Agent in Charge Erick Martinez of the IRS-Criminal Investigation’s Los Angeles Field Office made the announcement.
Olufunke Ibiyemi Fadojutimi, 43, of Carson, California, was convicted by a jury on July 31, 2014, of conspiracy to commit health care fraud, seven counts of health care fraud and one count of money laundering. In addition to the prison term, U.S. District Judge Christina A. Snyder of the Central District of California ordered Fadojutimi was ordered to pay restitution in the amount of $4,372,466, jointly and severally with a co-defendant.
During trial, the evidence showed that Fadojutimi, a registered nurse and the former owner of Lutemi Medical Supply, fraudulently billed Medicare for more than $8 million of durable medical equipment that was not medically necessary. The evidence specifically showed that, between September 2003 and May 2010, Fadojutimi and others paid cash kickbacks to patient recruiters in exchange for patient referrals, and additional kickbacks to physicians for fraudulent prescriptions for medically unnecessary durable medical equipment, such as power wheelchairs. Fadojutimi and others then used these prescriptions to support fraudulent claims to Medicare.
As a result of this fraud scheme, Fadojutimi and others submitted approximately $8.3 million in false and fraudulent claims to Medicare, and received almost $4.3 million on those claims.
The case was investigated by the FBI, IRS, and HHS-OIG’s Los Angeles Regional Office, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The case was prosecuted by Trial Attorneys Fred Medick and Blanca Quintero of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Owner of ‘Polygraph.Com’ Pleads Guilty to Training Customers to Lie During Federally Administered Polygraph ExaminationsRead the Press Release
A former Oklahoma City law enforcement officer and owner of “Polygraph.com” pleaded guilty today to obstruction of justice and mail fraud for training customers to lie and conceal crimes during polygraph examinations.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting Assistant Commissioner Anthony Triplett of U.S. Customs and Border Protection’s Office of Internal Affairs and Special Agent in Charge James E. Finch of the Federal Bureau of Investigation’s (FBI) Oklahoma City Field Office made the announcement.
“Lying, deception and fraud cannot be allowed to influence the hiring of national security and law enforcement officials, particularly when it might affect the security of our borders,” said Assistant Attorney General Caldwell. “Today’s conviction sends a message that we pursue those who attempt to corrupt law enforcement wherever and however they may try to do so.”
Douglas Williams, 69, of Norman, Oklahoma, pleaded guilty to a five-count indictment charging him with mail fraud and obstruction. Williams was indicted on Nov. 14, 2014, in the Western District of Oklahoma.
According to admissions made in connection with his plea, Williams, the owner and operator of “Polygraph.com,” marketed his training services to people appearing for polygraph examinations before federal, state and local law enforcement agencies and federal intelligence agencies, as well as people required to take polygraph examinations under the terms of their parole or probation.
Williams further admitted that he trained an individual posing as a federal law enforcement officer to lie and conceal involvement in criminal activity from an internal agency investigation. Williams also admitted to having trained a second individual posing as an applicant seeking federal employment to lie and conceal crimes in a pre-employment polygraph examination. Williams, who was paid for both training sessions, admitted to having instructed the individuals to deny having received his polygraph training.
The investigation is being investigated by U.S. Custom and Border Protection’s Office of Internal Affairs and the FBI’s Oklahoma City Field Office. The case is being prosecuted by Trial Attorneys Heidi Boutros Gesch and Brian K. Kidd of the Criminal Division’s Public Integrity Section.
Norwegian Shipping Company and Engineering Officers Charged with Environmental Crimes and Obstruction of JusticeRead the Press Release
A federal grand jury in Mobile, Alabama, has returned a seven-count indictment charging Det Stavangerske Dampskibsselskab AS (DSD Shipping) and four employees with violating the Act to Prevent Pollution from Ships (APPS), conspiracy, obstruction of justice and witness tampering, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division and U.S. Attorney Kenyen R. Brown for the Southern District of Alabama. 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.
According to the indictment, in 2014, DSD Shipping and its employees conspired to bypass pollution prevention equipment aboard the M/T Stavanger Blossom and to conceal the direct discharge of waste oil and oil-contaminated waste water from the vessel into the sea. 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. Despite these requirements, DSD Shipping and its employees used a bypass pipe to circumvent pollution prevention equipment and discharge waste oil and oil-contaminated waste water directly into the sea. DSD Shipping and its employees also filled plastic bags with waste oil from a sludge tank aboard the vessel and then discarded the oil-filled plastic bags overboard into the sea.
The indictment further alleges that prior to an inspection by the U.S. Coast Guard, Chen ordered crewmembers to remove the bypass pipe, install a new pipe and repaint the piping to hide the illegal discharges. Chen and Zhong then ordered crewmembers to lie to the U.S. Coast Guard and instructed them to say that no plastic bags containing waste oil were discarded overboard, that all plastic bags remained aboard the vessel and to provide the incorrect quantity of bags generated from the cleaning of the sludge tank. To further hide the illegal discharges of waste oil and oil-contaminated waste water, 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 oil record book also contained false entries stating that pollution prevention equipment had been used when it had not.
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 garbage record book and with obstruction of justice and witness tampering for presenting false documents and deceiving the Coast Guard during an inspection. 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 case was investigated by the Sector Mobile of the U.S. Coast Guard, Investigative Services of the U.S. Coast Guard and the Criminal Investigation Division of the Environmental Protection Agency. Assistant U.S. Attorney Mike D. Anderson, with the U.S. Attorney's Office for the Southern District of Alabama and ECS Trial Attorney Shane N. Waller are prosecuting the case.
North Carolina Man Sentenced to Serve 243 Months in Prison for Attempting to Provide Material Support to a Designated Foreign Terrorist OrganizationRead the Press Release
A North Carolina man was sentenced to 243 months in federal prison, followed by a term of three years supervised release, for attempting to provide material support to a designated foreign terrorist organization and possession of firearm by a felon, announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Ripley Rand of the Middle District of North Carolina and Special Agent in Charge John Strong of the FBI’s Charlotte, North Carolina, Division.
Donald Ray Morgan, 44, of Rowan County, North Carolina, was sentenced by U.S. District Court Judge Thomas D. Schroeder of the Middle District of North Carolina. On Oct. 30, 2014, Morgan pleaded guilty to attempting to provide material support to a designated foreign terrorist organization and possession of firearm by a felon.
According to court documents, Morgan knowingly attempted beginning in or about January 2014 until on or about Aug. 2, 2014, to provide support and resources, including his own services, to the designated foreign terrorist organization the Islamic State of Iraq and the Levant (ISIL). On at least one occasion, Morgan unsuccessfully attempted to travel from Lebanon to Syria to join ISIL. Morgan also frequently used social media and an interview with an international journalist to express his support for ISIL and violent terrorist activities.
“Morgan attempted to travel to Syria in order to provide material support to ISIL,” said Assistant Attorney General Carlin. “The sentence in this case demonstrates that we will continue to bring to justice those who engage in this conduct, and that protecting the nation against these threats remains one of our highest priorities.”
“We will continue to do everything we can to shine a light on the false allure of violent extremism and protect innocent people from terrorist activity, whether inside or outside the United States,” said U.S. Attorney Rand.
“Donald Ray Morgan proved himself to be a threat to national security,” said Special Agent in Charge Strong. “He traveled overseas with intentions to join the violent terrorist group, ISIL in Syria. One of the FBI’s highest priorities is to stop American citizens who support terrorist organizations and ensure they are held accountable for their actions.”
Court documents also reveal that Morgan possessed and later sold an assault rifle in January 2012, after having been convicted of a North Carolina state felony offense in 1997.
Morgan was initially arrested on Aug. 2, 2014, at John F. Kennedy International Airport in New York on a federal indictment for possession of a firearm by a felon.
Assistant Attorney General Carlin joined U.S. Attorney Rand in commending the work of the FBI’s Charlotte Division and the Greensboro, North Carolina, Resident Agency Joint Terrorism Task Force (Greensboro Police Department; Guilford County, North Carolina Sheriff’s Office; High Point, North Carolina Police Department; and the Winston-Salem, North Carolina, Police Department), the ATF, the U.S. Marshals Service and U.S. Customs and Border Protection in bringing Morgan to justice.
The prosecution is being handled by Assistant U.S. Attorney Graham Green of the Middle District of North Carolina, with the assistance of Trial Attorney Paul Casey of the National Security Division’s Counterterrorism Section.
Justice Department Settles Claims Against Leflore County, Mississippi, to Address Security and Facility Conditions at the Leflore County Juvenile Detention CenterRead the Press Release
Today, the Justice Department announced that it has reached an agreement with Leflore County, Mississippi, to improve security and facility conditions at the Leflore County Juvenile Detention Center in Greenwood, Mississippi. Leflore County committed to numerous reforms to protect children in its care from abuse and self-harm, to improve its security and emergency preparedness and to improve its medical and mental health care. Leflore County also pledged to end the use of solitary confinement as a form of discipline and to limit solitary confinement to a cool-down period not to exceed one hour.
The department investigated conditions at Leflore County Juvenile Detention Center and in March 2011 found deficiencies in numerous areas, including the use of force and restraints, abuse investigations, suicide prevention and use of solitary confinement.
The agreement was filed today in the federal district court of the Northern District of Mississippi. Upon court approval, it will require significant reforms that will enhance safety and security for children held at the detention center. The reforms concern intake and classification, use of force and restraints, behavior management, solitary confinement, suicide prevention and mental health care, medical care, due process, incident reporting, sanitation, fire safety and security staffing. In addition, the agreement contains provisions governing data gathering, quality assurance and policy revision. The agreement requires Leflore County to obtain expert assistance to meet its reform obligations. The agreement will terminate once Leflore County has achieved 12 consecutive months of substantial compliance with all of the agreement’s provisions.
“This agreement will help protect children who are in custody and ensure that they are detained under conditions that are secure, safe and appropriate,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Leflore County should be credited for embracing reform, particularly in the use of solitary confinement.”
“Leflore County and the detention center administrators are to be commended for their commitment to reforming Leflore County’s juvenile detention facility and protecting children in custody,” said U.S. Attorney Felicia C. Adams of the Northern District of Mississippi. “The agreement will put in place reforms that will keep at-risk children safe as they prepare to return to their communities.”
The department also found violations of the Individuals with Disabilities Education Act (IDEA) in the detention center school. Because the state of Mississippi took control of the Leflore County schools in 2013, the county no longer has a role in providing education services. As a result, the agreement between the United States and Leflore does not resolve the United States’ findings of violations of children’s educational rights at the detention center. The department is working separately with the state of Mississippi to resolve the department’s concerns about education.
The Violent Crime Control and Law Enforcement Act of 1994 authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional or federal statutory rights of youth in juvenile justice institutions. Please visit the division’s website to learn more about this act and other laws the Civil Rights Division enforces.
This agreement is due to the efforts of the Special Litigation Section of the Civil Rights Division and the U.S. Attorney’s Office of the Northern District of Mississippi.
District of Columbia Man Sentenced to Prison for Role in Massive Identity Theft and Tax Fraud SchemeRead the Press Release
Worked With Others to Seek More Than $1.1 Million in Fraudulent Refunds
A 32-year-old Washington, D.C., man was sentenced today to serve more than three years in prison for various crimes he committed in a far-reaching identity theft and tax fraud scheme in which he and others filed fraudulent federal income tax returns seeking more than $1.1 million in refunds, the Justice Department announced.
James Nelson is among approximately 12 people who have pleaded guilty in the U.S. District Court for the District of Columbia to charges in one of the largest prosecutions to date involving the use of stolen identifying information. The overall case involves the filing of at least 12,000 fraudulent federal income tax returns that sought refunds of at least $40 million.
The sentencing was announced by Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia, Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation (IRS-CI) Washington, D.C. Field Office, Acting Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service’s (USPIS) Washington, D.C. Division, Assistant Inspector General for Investigations John L. Phillips of the U.S. Department of Treasury and Acting Special Agent in Charge James M. Murray of the U.S. Secret Service’s Washington, D.C. Field Office.
Nelson pleaded guilty on Jan. 29 to conspiracy to defraud the United States with respect to claims, aiding and abetting in the making of false claims for refund and aiding and abetting in fraud and related activity involving identification information. He was sentenced to serve 41 months in prison by the Honorable U.S. District Judge Ellen S. Huvelle of the District of Columbia. Upon completion of his prison term, he will be placed on three years of supervised release. In addition, as part of his plea agreement, Nelson must pay $636,026 in restitution to the IRS.
“One of the Tax Division’s highest priorities is prosecuting individuals who use stolen identities to file fictitious income tax returns and claim fraudulent refunds,” said Acting Assistant Attorney General Ciraolo. “As in this case, this street crime often victimizes the most vulnerable members of our communities. The Tax Division is committed to working with our partners in law enforcement to identify these schemes, dismantle the criminal operations and use all available tools to prosecute these offenders to the fullest extent of the law.”
“This criminal was part of a brazen scheme to flood the IRS with thousands of fake income tax returns and steal from honest taxpayers,” said Acting U.S. Attorney Cohen. “These thieves filed bogus tax returns with the stolen identities of people in nursing homes and prisons to generate fraudulent refunds. James Nelson is now headed to a federal penitentiary where he can no longer execute scams that drive up taxes on hardworking Americans who play by the rules.”
“Nelson’s greed will have a long-term impact on his victims and cause immeasurable harm to their financial well-being,” said IRS-CI Special Agent in Charge Kelly. “The selfish acts of criminals like Nelson have far-reaching consequences, and those like him, who steal from innocent victims and the U.S. Treasury, should be on notice that the government will aggressively pursue identity thieves and tax cheaters.”
“Today’s sentencing confirms that anyone who preys on citizens’ identification for financial gain, especially when they use the U.S. Mail to further their criminal activity, will be held accountable,” said Acting Postal Inspector in McGinnis. “The Postal Inspection Service values the collaboration with its law enforcement partners in the case.”
“This sentencing reinforces the commitment of Treasury’s Office of Inspector General and its law enforcement partners to pursue criminal charges against individuals and groups that prey on the public by stealing identities and fleecing the U.S. taxpayer and Treasury Department in their criminal schemes,” said Assistant Inspector General Phillips.
“The arrest of James Nelson is yet another example of how the Secret Service continues to successfully combat identity theft and financial crimes,” said Acting Special Agent in Charge Murray. “The Secret Service utilized state-of-the-art investigative techniques to dismantle this identity theft and tax fraud scheme. Our success in this case and other similar investigations is a result of extraordinary work of our investigators and our close work with our network of law enforcement partners.”
According to the government’s evidence, Nelson was among participants in a massive and sophisticated identity theft and false tax refund scheme involving an extensive network of more than 130 people, many of whom were receiving public assistance. The scheme started in 2006, and false claims for tax refunds were sought for tax years 2005 through 2012, often in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners. In other cases, the refunds were sent to people who were willing participants in the scheme. The refunds listed more than 400 “taxpayer” addresses in the District of Columbia.
From December 2007 through January 2012, according to the government’s evidence, Nelson used his residential addresses in the District of Columbia to receive some of the fraudulently obtained tax refunds. He also recruited others to receive fraudulent refunds at their addresses. For example, Nelson paid one woman about $150 per check for each refund check delivered to her residential address in the District of Columbia.
Approximately 360 fraudulent federal income tax returns listing the addresses that were under Nelson’s control were filed with the IRS. The returns sought refunds of approximately $908,500. As a result, the IRS sent out 238 checks, totaling about $524,795, and 184 of those checks, totaling $432,804, were ultimately cashed.
Nelson also recruited others to negotiate at least 86 other refund checks, totaling approximately $203,222, causing a total intended loss to the U.S. Treasury of more than $1.1 million.
In announcing the sentence, Acting Assistant Attorney General Ciraolo, Acting U.S. Attorney Cohen, Special Agent in Charge Kelly, Acting Inspector in Charge McGinnis, Assistant Inspector General Phillips and Acting Special Agent in Charge Murray commended those who investigated the case. They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office of the District of Columbia, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialist Donna Galindo. Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the District of Columbia’s Fraud and Public Corruption Section and Trial Attorneys Jessica N. Moran and Jeffrey B. Bender of the Tax Division, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Department of Justice Announces New Acting Administrator of Drug Enforcement AdministrationRead the Press Release
The Department of Justice today announced the appointment of Chuck Rosenberg to serve as Acting Administrator of the Drug Enforcement Administration (DEA).
“Throughout his distinguished career in law enforcement and public service, Chuck has earned the trust and the praise of his colleagues at every level,” said Attorney General Loretta E. Lynch. “He has proven himself as an exceptional leader, a skilled problem-solver, and a consummate public servant of unshakeable integrity. And he has demonstrated, time and again, his deep and unwavering commitment not only to the women and men who secure our nation, but to the fundamental values that animate their service. As Acting Administrator of the DEA, Chuck will play a vital role in the work of this Administration and this Department of Justice to pursue American priorities, protect American interests, and safeguard our way of life. I can think of no better individual to lead this storied agency, and I have no doubt that his tenure will be defined by the same commitment to honor and excellence that has guided him throughout his distinguished career. I congratulate him once again on this well-deserved appointment, and look forward to all that he will achieve in the days ahead.”
A veteran of the Justice Department, Rosenberg currently serves as Chief of Staff to the Director of the FBI. In this role, he works closely with Director James B. Comey and other senior FBI officials on counterterrorism, intelligence, cyber and criminal investigative issues, including with international, federal, state and local law enforcement partners. He also works closely with Director Comey on management, policy and personnel issues.
“Chuck Rosenberg is one of the finest people and public servants I have ever known,” said Director Comey. “His judgment, intelligence, humility, and passion for the mission will be sorely missed at FBI. I congratulate our friends at the Drug Enforcement Administration. This is good for the entire Department of Justice and the country.”
Rosenberg was presidentially appointed and confirmed as the U.S. Attorney of the Eastern District of Virginia, from 2006 through 2008, and appointed by the Attorney General to serve as the U.S. Attorney of the Southern District of Texas, from 2005 through 2006.
Rosenberg was hired out of law school through the Attorney General’s Honors Program and has served in numerous positions throughout the Department of Justice, including Chief of Staff to the Deputy Attorney General from 2004 through 2005, Counselor to the Attorney General from 2003 through 2004, Counsel to the Director of the FBI from 2002 through 2003, an Assistant U.S. Attorney in the Eastern District of Virginia from 1994 through 2000, and a Trial Attorney for the Tax Division’s Criminal Enforcement Section from 1990 through 1994.
Rosenberg has also spent time working in private practice as Counsel at Hunton and Williams, from 2000 through 2002, and as a partner at Hogan Lovells US LLP (2008-2013).
During his years as a federal prosecutor, Rosenberg conducted grand jury investigations and has been the lead trial lawyer in many federal prosecutions involving espionage, kidnapping, murder, crimes against children and complex financial fraud cases.
Rosenberg received his B.A. from Tufts University, his M.P.P. from Harvard University and his J.D. from the University of Virginia.
Rosenberg will assume the role of Acting Administrator on May 18, 2015. He will replace Administrator Michele Leonhart, who previously announced her retirement.
“Michele has devoted her professional career to the security of our nation and the protection of the American people,” said Attorney General Lynch. “I want to thank her for her 35 years of service to the DEA, to the Department of Justice and to the country, and I wish her well as she embarks on a new chapter in her already extraordinary life.”
United States Settles Disability Discrimination Case Involving Residents of a Continuing Care Retirement CommunityRead the Press Release
The United States announced today the filing of a consent order that resolves allegations that Fort Norfolk Retirement Community Inc. (Fort Norfolk) violated the Fair Housing Act by instituting policies that discriminated against residents with disabilities at Harbor’s Edge, a continuing care retirement community in Norfolk, Virginia.
The consent order, which still needs to be approved by the court, was filed yesterday, along with a complaint, in the U.S. District Court of the Eastern District of Virginia. The complaint alleges that beginning in May 2011, Fort Norfolk instituted a series of policies that prohibited, and then limited, residents in the assisted living, nursing and memory support units at Harbor’s Edge from dining in dining rooms or attending community events with independent living residents. The complaint also alleges that when residents and family members complained about these policies, Fort Norfolk retaliated against them. In addition, the complaint alleges that Fort Norfolk had polices that discriminated against residents who used motorized wheelchairs by requiring those residents to pay a non-refundable fee, obtain liability insurance and obtain Fort Norfolk’s permission.
Under the consent order, Fort Norfolk will pay $350,000 into a settlement fund to compensate residents and family members who were harmed by these policies. Fort Norfolk will also pay a $40,000 civil penalty to the United States. In addition, Fort Norfolk will appoint a Fair Housing Act compliance officer and will implement a new dining and events policy, a new reasonable accommodation policy and a new motorized wheelchair policy.
“This consent order will ensure that all residents with disabilities at Harbor’s Edge are treated equally and that spouses and friends will be able to eat and socialize together,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “We are very pleased with Fort Norfolk’s willingness to work with us to achieve this important resolution.”
Individuals who are entitled to share in the settlement fund will be identified through a process established in the consent order. Persons who believe they were subjected to unlawful discrimination at Harbor’s Edge should contact the Justice Department toll-free at 1-800-896-7743 mailbox #5 or e-mail the Justice Department at [email protected].
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact the Department of Housing and Urban Development at 1-800-669-9777 or through its website at http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp.
Three Members of al-Shabaab Plead Guilty to Conspiring to Provide Material Support to the Terrorist OrganizationRead the Press Release
Earlier today, Madhi Hashi, 25, of Somalia, Ali Yasin Ahmed, 30, of Sweden, and Mohamed Yusuf, 32, of Sweden, pleaded guilty to conspiring to provide material support to a designated foreign terrorist organization, al-Shabaab.
The guilty plea was 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 and Assistant Director in Charge Diego Rodriguez, of the FBI’s New York Field Office.
The guilty plea took place before U.S. District Judge John Gleeson of the Eastern District of New York. At sentencing, each of the defendants faces a maximum of 15 years in prison and automatic removal from the United States.
As stated in court today and according to court documents, between approximately December 2008 and August 2012, the defendants served as members of al-Shabaab in Somalia, where they agreed with others to support al-Shabaab and its extremist agenda. Defendants Mohamed Yusuf and Ali Yasin Ahmed fought in battles in Somalia against African Union forces. Defendant Madhi Hashi was a close associate of American-born jihadist Omar Hammami, with ties to a known al-Shabaab suicide bomber. In addition, defendant Yusuf is featured in an al-Shabaab propaganda video titled “Inspire the Believers.”
In early August 2012, the defendants were apprehended together in East Africa by local authorities shortly after leaving Somalia on their way to Yemen. On Nov. 14, 2012, the FBI took custody of the defendants and brought them to the Eastern District of New York for prosecution.
“Hashi, Ahmed and Yusuf all pleaded guilty to conspiring to provide material support to a designated foreign terrorist organization, al-Shabaab,” said Assistant Attorney General Carlin. “The National Security Division remains committed to identifying, disrupting and holding accountable all who seek to provide material support to terrorists both at home and abroad. I would like to thank all of the agents, analysts and prosecutors who are responsible for this case.”
“The defendants were committed supporters of al-Shabaab, a violent terrorist organization that has demonstrated its capabilities and motives in numerous terrorist attacks overseas, and has publicly called for attacks against the United States,” said Acting U.S. Attorney Currie. “We will use every tool at our disposal to combat terrorist groups, deter terrorist activity, and incapacitate individual terrorists around the world. Today’s convictions demonstrate that criminal prosecution is an effective tool in our efforts to combat international terrorism.”
Assistant Attorney General Carlin joined Acting U.S. Attorney Currie in thanking the federal, state and local law enforcement agencies who participate in the FBI’s Joint Terrorism Task Force in New York.
The government’s case is being prosecuted by Assistant U.S. Attorneys Shreve Ariail, Seth D. DuCharme and Richard M. Tucker of the Eastern District of New York and Trial Attorney Annamartine Salick of the National Security Division's Counterterrorism Section. Trial Attorneys Shanna Batten Aguirre and Dan Stigall of the Justice Department’s Office of International Affairs provided valuable assistance.
Settlement with Honolulu to Prevent Hazardous Air Emissions at Kapaa LandfillRead the Press Release
The Department of Justice and the Environmental Protection Agency (EPA) today announced a settlement with the city and county of Honolulu to resolve air violations at its closed Kapaa Landfill in Kailua, Oahu, by requiring the city and county of Honolulu to pay a civil penalty of $875,000 and build a $16.1 million solar power system. This environmental project involves the installation of photovoltaic arrays on more than 250,000 square feet of buildings and open space area at the city’s waste-to-energy H-POWER (Honolulu Program of Waste Energy Recovery) facility by 2020.
Because decomposing refuse in a large landfill generates hazardous air pollutants such as benzene, carbon tetrachloride, chloroform, ethylene dichloride, perchloroethylene, trichloroethylene, vinyl chloride and vinylidene chloride, the federal Clean Air Act requires a system to collect and control the gases. The city failed to install and operate the gas collection and control system by its deadline in 2002. The gas collection and control system at the landfill was not in place until April 2013 and is currently operational.
“This settlement holds Honolulu accountable for past failures to collect and control toxic gases and greenhouse gas emissions from the Kapaa Landfill, but it also lays the foundation for better environmental stewardship in the future,” said Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division. “Residents who call Oahu home will realize the benefits of this agreement – which includes clean solar power production and reduced reliance on fossil fuels – for many years to come.”
“Air emissions from a closed landfill are toxic and can contribute to global warming,” said Administrator Jared Blumenfeld of EPA for the Pacific Southwest. “If the proper systems had been in place at the landfill, over 343,000 tons of methane and 6,800 tons of hazardous air pollutants and volatile organics, would not have escaped to the atmosphere.”
Honolulu is the owner/operator of the landfill encompassing approximately 215 acres that includes the smaller Kalaheo Landfill. The landfill first received solid waste in 1969 and closed in May 1997. From 1990 to 2002, Gas Recovery Systems Inc. installed and operated a gas collection system and turbine on behalf of the city for the generation of electric energy. Gas Recovery Systems Inc. ceased operation of the gas turbine due to its failure in 2002.
Effective gas controls at a landfill reduce the release of these hazardous gases and poorly controlled gas. Many air pollutants identified in landfill gas are either known or suspected carcinogens. Air emissions of methane from landfills can also contribute to global methane emissions, a greenhouse gas with about 25 times the global warming potential of carbon dioxide.
The solar panels will be installed at the city’s H-POWER facility in Campbell Industrial Park. The new solar panels will have a capacity of 3.1 megawatts and will generate over five million kilowatt-hours of electricity per year, enough to power 800 Oahu households on average. This action will lead to less reliance on fossil fuels on Oahu.
Today’s proposed Clean Air Act consent decree, lodged in the U.S. District Court in Hawaii, is subject to a 30-day public comment period and court approval and is now available for review at www.justice.gov/enrd/Consent_Decrees.html
For more information about Clean Air Act landfill regulations, please visit the EPA’s web site at www.epa.gov/outreach/lmop/faq/landfill-gas.html
Owner of Miami Home Health Care Company Sentenced to 10 Years in Prison for Lead Role in $13 Million Medicare Fraud SchemeRead the Press Release
An owner of a Miami home health care company was sentenced today to 10 years in prison for his leading role in a $13 million Medicare fraud scheme that involved paying kickbacks and bribes to patient recruiters, Medicare beneficiaries and others in South Florida doctors’ offices and medical clinics.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Alexander Lara, 46, of Hollywood, Florida, pleaded guilty before U.S. Magistrate Judge Chris M. McAliley of the Southern District of Florida on Feb. 17, 2015, to one count of conspiracy to commit health care fraud. According to admissions made as part of his guilty plea, Lara was an owner and operator of Longcare Home Health Corporation (Longcare Home Health), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries, but the company fraudulently billed the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or not provided at all. From approximately January 2009 through November 2014, Medicare paid approximately $13.7 million for fraudulent claims submitted by Longcare Home Health, according to court documents.
Lara admitted that he personally paid kickbacks and bribes to patient recruiters and to Medicare beneficiaries in exchange for referrals. He also admitted to paying kickbacks and bribes in doctors’ offices and clinics in exchange for fraudulent home health prescriptions for medically unnecessary therapy and services. These prescriptions and recruited patients were used to fraudulently bill the Medicare program for home health care services.
In addition to his sentence, Lara was ordered to pay $13,771,528.94 in restitution and to forfeit $13,771,528.94, which represents the proceeds traceable to his criminal conduct at Longcare Home Health. Lara was sentenced by Chief U.S. District Judge K. Michael Moore of the Southern District of Florida.
The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Southern District of Florida. The case was prosecuted by Trial Attorney Anne P. McNamara of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS’s Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Justice Department Signs Agreements with Chaves County, New Mexico, to Ensure Civic Access for People with DisabilitiesRead the Press Release
The Justice Department announced today an agreement with Chaves County, New Mexico, to improve access to civic life for persons with disabilities. The agreement was reached under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the Americans with Disabilities Act (ADA). This agreement is the fifth so far this year, as the department recognizes the 25th anniversary of the ADA, which the Civil Rights Division plays a critical role in enforcing.
As part of PCA, Justice Department staff survey state and local government facilities, services and programs in communities across the country to identify changes needed to comply with the ADA. The agreements detail the remedial actions a city or county must take to improve access. The department has a PCA agreement in every state, and this is the first agreement in southern New Mexico.
Under the agreement, the county will remove barriers to accessibility at county facilities, including the county courthouse, administration building, health centers, medical complexes, detention center and juvenile detention center. The county will make physical modifications to those facilities so that parking, routes into buildings, entrances, service areas and counters, restrooms, elevators and drinking fountains are accessible to people with disabilities. The county will also survey other facilities and programs and make modifications wherever necessary to achieve full compliance with ADA requirements. In addition to physical accessibility, the county will administer a grievance procedure for resolving ADA complaints, provide effective communication for county programs and services including law enforcement, provide improved access to polling places and the voting process and ensure that the county’s official website and other web-based services are accessible to people with disabilities.
“Providing access to local government programs, services, and activities is critical to ensure equal opportunities for individuals with disabilities,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “I commend county officials for their cooperation in working with us and for making this commitment to provide equal access to their residents and visitors with disabilities.”
Today’s agreement was reached under Title II of the ADA, which prohibits discrimination against individuals with disabilities by state and local governments. The department will actively monitor compliance with the agreement, which will remain in effect for three years.
For more information about the ADA, today’s agreement, and the PCA initiative, individuals can access the ADA web page at www.ada.gov or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Justice Department Secures Statewide Training for Law Enforcement on Interacting with Persons with Intellectual or Developmental DisabilitiesRead the Press Release
Today, the Justice Department announced that, under a settlement agreement with the United States, the state of Tennessee is launching a training program available to all law enforcement personnel in Tennessee on effective interactions with people who have intellectual or developmental disabilities. The training, developed by Tennessee’s Department of Intellectual and Developmental Disabilities (DIDD), helps law enforcement officers communicate effectively with people who have disabilities and their families in order to improve the safety and effectiveness of those interactions and to enhance community policing efforts. DIDD has posted the training materials on its website and will present the materials at a statewide conference of law enforcement training officers later this month.
DIDD developed the training as part of a court-approved exit plan that resolves long running litigation between the United States and Tennessee concerning care for people with intellectual and developmental disabilities. The lawsuit will continue during DIDD’s performance of other exit plan provisions.
“We applaud the state’s efforts to ensure that law enforcement officers engage safely and effectively with people who have intellectual or developmental disabilities and their families,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “This initiative is good for those people, for officers who serve in communities across the state, and for effective law enforcement. Tennessee joins a new national trend in recognizing and preparing for the intersection between law enforcement and people with disabilities. We also recognize and appreciate the continued collaboration of important stakeholders in reaching agreement on this crucial training, including DIDD, People First of Tennessee and the Parent Guardian Associations of Clover Bottom and Greene Valley Developmental Centers.”
The United States brought suit against the state of Tennessee in 1996, concerning conditions of care and the right to care in integrated settings for residents of Clover Bottom Developmental Center, Greene Valley Developmental Center and Nat T. Winston Center. The state and the United States, along with two interveners, settled the case in 1996 through an agreement that called for both improved conditions within the centers and the integration of residents into community settings. Shortly after the initiation of the suit, the state closed Nat T. Winston Center. The state is now closing Clover Bottom Center and Greene Valley Developmental Centers. In 2015, the court approved an exit plan designed to resolve the litigation by bringing to fruition planned community improvements in respite care, individual support planning and other areas. The exit plan also required that the state develop the law enforcement training discussed above.
For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt.
Justice Department Moves to Intervene in Disability Discrimination Lawsuit Alleging that Miami University Uses Inaccessible Educational Technologies and Course MaterialsRead the Press Release
The Justice Department announced today that it has moved to intervene in Aleeha Dudley v. Miami University, et al., 14-cv-038 (S.D. Ohio), a private lawsuit alleging disability discrimination by Miami University in Oxford, Ohio. In the United States’ motion to intervene and complaint, the United States alleges that Miami University has violated Title II of the Americans with Disabilities Act (ADA) by requiring current and former students with disabilities to use inaccessible websites and learning management system software, and by providing these students with inaccessible course materials. The motion was filed in the U.S. District Court of the Southern District of Ohio.
As alleged in today’s filings, Miami University uses technologies that are inaccessible to current and former students who have vision, hearing or learning disabilities. Miami University has failed to ensure that individuals with disabilities can interact with its websites and learning management systems and access course assignments, textbooks and graphical materials on an equal basis with students without disabilities. Miami’s failures have deprived persons with disabilities of a full and equal opportunity to benefit from Miami University’s educational opportunities.
Many students with disabilities, including those who have vision, hearing or learning disabilities, require assistive technologies to use computers and interact with electronic content. Examples of assistive technologies include screen reader software, refreshable Braille displays, audio description, captioning and keyboard navigation. Screen reader software audibly reads aloud information that is otherwise presented visually on a computer screen; refreshable Braille displays convert digital text into Braille; captioning translates video narration and sound into text; and keyboard navigation allows individuals with visual or manual dexterity disabilities to access computer content using a keyboard rather than a mouse.
The complaint seeks a judgment from the court requiring Miami University to provide accessible materials to ensure that individuals with disabilities can equally participate in and benefit from Miami University’s educational opportunities, and to compensate aggrieved individuals.
“Education is said to be the great equalizer of American society, and educational technologies hold great promise to make this a reality,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “However, students with disabilities continue to encounter an impenetrable glass ceiling of opportunity when schools fail to comply with the ADA.”
Title II of the ADA prohibits discrimination on the basis of disability by state and local government entities, including colleges and universities. Title III of the ADA likewise prohibits disability discrimination by private educational institutions.
Those interested in finding out more about the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
Justice Department Files Federal Lawsuit Against Park City Business for Violating the Employment Rights of Utah Naval Reserve MemberRead the Press Release
The Justice Department’s Civil Rights Division and U.S Attorney Carlie Christensen of the District of Utah announced today the filing of a complaint in U.S. District Court in Salt Lake City against Veteran’s Trading Company (VTC), a business with headquarters in Park City, Utah. The complaint alleges the business violated the employment rights of Naval Reserve Captain Paul M. Costello under the Uniformed Services Employment and Reemployment Rights Act (USERRA). Costello is a Navy veteran with a disability who has served his country as an F-18 fighter pilot. Since 1997, he has served as a member of the United States Naval Reserve.
According to the complaint, filed by the United States on Costello’s behalf, Costello’s military service was a motivating factor in VTC’s decisions to deny his request for re-employment and, ultimately, to terminate his employment. The United States claims that both actions by VTC violated Costello’s USERRA rights.
The complaint further alleges that in July 2013, VTC fired Costello from his job as company President due to his military service and subsequently denied Costello’s application for reemployment following his active military duty in September 2013. On April 30, 2015, VTC pre-emptively filed its own suit against Costello in Utah state court claiming that he was inappropriately remunerated for his service to the company while he was on military leave; despite the fact that while he was on military he took personal leave in order to preside over company meetings. In addition to filing its federal complaint, the United States removed the employer’s action from state court to federal court.
“The brave men and women who serve in our Armed Forces should never have to fear losing their job while they’re deployed overseas,” said Acting Associate Attorney General Stuart F. Delery. “That’s why the Department of Justice is committed to protecting the employment rights of service members and we will continue to devote time and resources to hold bad actors accountable.”
“Captain Costello served our nation honorably, and USERRA guarantees his right to re-employment upon his return from service,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Through the department’s newly created Servicemembers and Veterans Initiative, we will continue to build on our strong ties with federal partners and continue using every tool at our disposal to protect the rights of the men and women who serve in our Armed Forces.”
“Members of our National Guard and Reserves make many sacrifices, including spending months or years away from their jobs and families,” said U.S. Attorney Christensen. “When our service members are deployed in the service of our country, they are entitled to retain their civilian employment and to the protections of federal law that prevent them from being subject to discrimination based upon their military obligations. We are filing suit today, on behalf of Captain Costello, a member of the U.S. Naval Reserve, to ensure that he does not lose his rights while he was protecting ours.”
USERRA protects the rights of uniformed service members to retain their civilian employment following absences due to military service obligations, and proved that service members cannot be discriminated against because of their military obligations.
The lawsuit filed by the United States seeks damages equal to the amount of Costello’s lost wages and other benefits caused by VTC’s failure to comply with USERRA and a dismissal of VTC’s complaint. It also seeks an order requiring VTC to return Costello’s ownership and distribution shares and pay him all amounts that were distributed to shareholders between June 9, 2013, and the date of judgment. The lawsuit seeks an order requiring VTC to pay for all litigation fees related to the court action.
Costello initially filed a complaint with the Labor Department’s Veterans’ Employment and Training Service, which investigated this matter and, after resolution failed, referred it to the Justice Department’s Civil Rights Division, Employment Litigation Section. This lawsuit followed as a collaborative initiative between the Civil Rights Division and the U.S. Attorney’s Office for the District of Utah. The Department of Justice has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s Web sites at http://www.usdoj.gov/crt/emp and http://www.servicemembers.gov, as well as on the Labor Department’s website at http://www.dol.gov/vets/programs/userra/main.htm.
Former Security Company Operator Pleads Guilty to Failing to Pay Employment TaxesRead the Press Release
A Temple Hills, Maryland, resident who operated a company that provided security guards to private businesses and apartment complexes pleaded guilty today in the U.S. District Court for the District of Columbia to failing to file employment tax returns and pay over approximately $600,000 in employment taxes to the Internal Revenue Service (IRS), announced Acting Deputy Assistant Attorney General Larry J. Wszalek of the Justice Department’s Tax Division.
Jeffrey Norman Jackson operated Innovative Security Services LLC in Washington, D.C., between 2005 and 2009, according to court documents. Jackson controlled the business’s finances and was responsible for filing the Employer’s Quarterly Federal Tax Returns (IRS Forms 941) and paying over to the IRS the business’ federal income, social security and Medicare taxes (known as FICA taxes) that were withheld from the wages of Innovative’s employees. For more than four years, Jackson willfully failed to comply with these legal obligations. He used the stolen funds to pay personal expenses, such as rent and gym membership fees.
The plea agreement requires Jackson to pay $595,687.39 in restitution to the IRS for the taxes due and owing. He faces a statutory maximum sentence of five years in prison and a $250,000 fine when he is sentenced on July 27.
Acting Deputy Assistant Attorney General Wszalek commended the special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney Melissa S. Siskind of the Tax Division, who is prosecuting the case. Wszalek also thanked the U.S. Attorney’s Office of the District of Columbia for their assistance.
Court Approves Dismissal of Longstanding School Desegregation Case in Wayne County, MississippiRead the Press Release
Today, the United States District Court for the Southern District of Mississippi approved the joint motion for unitary status filed by the Department of Justice and the Wayne County School District in Mississippi. At the department and school district’s request, the court dismissed this longstanding school desegregation case. The school district serves close to 3,500 students and has been operating under a desegregation order since 1970.
In 2006, the court entered an order specifically prohibiting the use of race in classroom assignments at Waynesboro Elementary School, one of the district’s four elementary schools. In 2012, after concerns continued about Waynesboro’s classroom assignment practices, the court approved a consent order directing the district to randomly assign students to classrooms in the school. The district has successfully used the new classroom assignment procedures for the last four school years.
The department recently determined that the district had complied fully with the terms of the 2012 consent order and is therefore eligible for unitary status and dismissal of the case.
“We commend the Wayne County School District for satisfying its remaining obligations in this case and ensuring equal educational opportunities for all students,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “We have been pleased to work with the district and other school systems under desegregation orders to resolve outstanding issues and seek dismissal of these cases when district have satisfied their obligations.”
Currently, the department monitors 178 school districts under active desegregation orders. Over the last year, several school districts under desegregation orders have successfully sought unitary status from the courts and the cases have been dismissed.
Promoting school desegregation is a priority of the department’s Civil Rights Division. Additional information about the division is available at www.justice.gov/crt.
Alabama Woman Charged with Conspiracy in $7.5 Million Stolen Identity Tax Refund Fraud RingRead the Press Release
A Phenix City, Alabama, resident was arrested today after being indicted on April 28 by a federal grand jury sitting in the Middle District of Alabama on charges of conspiracy to defraud the United States, wire fraud and aggravated identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. of the Middle District of Alabama.
The indictment charges Talashia Hinton, aka LayLay and LaLa, with one count of conspiracy to defraud the United States, five counts of wire fraud and five counts of aggravated identity theft. According to the allegations in the indictment, Hinton participated in a large-scale stolen identity tax refund scheme in which more than 3,000 false tax returns for 2012 and 2013 were filed that claimed more than $7.5 million in fraudulent federal income tax refunds from the Internal Revenue Service (IRS). Hinton worked with other individuals who supplied her with IRS electronic filing identification numbers (EFINs) and stolen identities that included personal information so that Hinton could prepare and file false tax returns to claim refunds using those stolen names. Hinton directed the IRS to pay the refunds by issuing U.S. Treasury checks and direct deposits onto prepaid debit cards.
If convicted, Hinton faces a statutory maximum sentence of 20 years in prison for each wire fraud count, a statutory maximum sentence of five years in prison for the conspiracy count and a mandatory minimum sentence of two years in prison for aggravated identity theft. Hinton also faces monetary penalties, including fines, forfeiture and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck Jr. commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Michael C. Boteler and Gregory P. Bailey of the Tax Division and Assistant U.S. Attorney Jonathan Ross of the Middle District of Alabama, who are prosecuting the case.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Virginia Woman Sentenced for Making False Statements in an International Terrorism InvestigationRead the Press Release
Heather Elizabeth Coffman, 29, of Glen Allen, Virginia, was sentenced today to 54 months in prison for making false statements in an international terrorism investigation.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Special Agent in Charge Adam S. Lee of the FBI’s Richmond Field Office made the announcement.
Coffman pleaded guilty to a one-count criminal information on Jan. 30, 2015. According to the statement of facts filed with the plea agreement, Coffman admitted that beginning prior to June 2014 and continuing up through November 2014, she used several Facebook accounts under different names showing her support for the Islamic State of Iraq and the Levant’s (ISIL, referred to as ISIS by the defendant and within court documents) cause. These accounts also revealed the defendant’s romantic involvement with an individual referred to as “N.A.,” a foreign national living outside of the United States. In the months leading up to September 2014, Coffman and N.A. communicated almost daily via Facebook and other communications platforms. During their conversations, Coffman and N.A. explored options for N.A. to travel to Syria in order to fight for ISIS and die a “Shaheed,” referring to a martyr who dies for “jihad.”
Coffman cultivated online relationships with individuals she believed were ISIS facilitators operating in Syria. She put N.A. in contact with a facilitator to assist with his travel and eventual training with ISIS (with the Coffman’s financial assistance for travel) before he was to cross the border into Syria to fight with ISIS. This plan was moving forward when the couple’s relationship deteriorated in early September 2014, and N.A. backed out of the plans. Coffman later communicated with others about her disappointment and expressed how she wished that the plan had succeeded.
According to the plea documents, Coffman admitted that she lied during the ongoing investigation on Nov. 13, 2014, when she told FBI agents that she did not know whether N.A. had talked to anybody else who supported ISIS, and that she did not know anybody N.A. had talked to when, as Coffman well knew, she had previously put N.A. in contact with ISIS fighters and N.A., in turn, had communicated with them to facilitate N.A.’s travel to Turkey to join ISIS.
This case was investigated by FBI’s Richmond Field Office and the Richmond Joint Terrorism Task Force (JTTF). Member agencies of the Richmond JTTF who assisted in this particular investigation include Virginia State Police, Henrico County Police, Chesterfield County Police, Richmond Police, Homeland Security Investigations, U.S. Secret Service, Bureau of Alcohol Tobacco and Firearms and Explosives, Department of State Diplomatic Security Service, Transportation Security Administration and Defense Criminal Investigative Service.
The prosecution is being handled by Assistant U.S. Attorneys Michael Gill and Jessica Aber of the Eastern District of Virginia, and Trial Attorney Annamartine Salick of the National Security Division's Counterterrorism Section.
Tonawanda Coke to Pay $12 Million in Civil Penalties, Facility Improvements and Environmental Projects to Benefit Tonawanda CommunityRead the Press Release
Under a $12 million settlement with the United States and the state of New York, Tonawanda Coke Corp. will pay $2.75 million in civil penalties, spend approximately $7.9 million to reduce air pollution and enhance air and water quality and spend an additional $1.3 million for environmental projects in the area of Tonawanda, New York. The agreement was announced jointly by Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, Regional Administrator Judith A. Enck for the Environmental Protection Agency (EPA), Commissioner Joseph Martens for the New York State Department of Environmental Conservation (NYSDEC) and Attorney General Eric T. Schneiderman for New York.
Under the consent decree lodged today in federal court in the Western District of New York, Tonawanda Coke must improve its processes, operations and monitoring for coke oven gas leaks, assess key equipment, repair or replace equipment, install new pollution controls and take many additional measures under a prescribed schedule. This work, estimated to cost approximately $7.9 million, will secure significant reductions of benzene, ammonia and particulate matter emissions from the plant, improving air quality in Tonawanda and protecting public health.
“The community that is home to the Tonawanda facility is finally receiving the protections it deserves from its neighbor,” said Assistant Attorney General Cruden. “We are pleased to be joining with the state of New York in this important environmental enforcement action, which holds Tonawanda accountable for its numerous violations of federal and state environmental laws and requires measures to achieve significant reductions in air and water pollution that will benefit Tonawanda residents for years to come.”
The settlement also requires Tonawanda Coke to pay a $1.75 million civil penalty to the United States to resolve violations of the Clean Air Act, the Clean Water Act and the Emergency Planning and Community Right-to-know Act, and pay a $1 million civil penalty to the state of New York, which is a co-plaintiff with the United States. In addition to the state penalty, Tonawanda Coke will pay another $1 million to fund projects that will benefit the environment and the residents of Tonawanda. Additionally, $357,000 will be provided to Ducks Unlimited, a nonprofit organization, to acquire and preserve wetlands. In addition to protecting and enhancing water quality, wetlands reduce flooding, filter pollutants and provide habitat for fish and wildlife.
“Tonawanda Coke has been an environmental outlaw for too long,” said Regional Administrator Enck. “Today’s legal settlement will provide greater public health protections for the people of Western New York. I particularly want to thank the residents of Tonawanda, their elected officials, the Clean Air Coalition of Western New York and the Citizen Science Community Resources who all shined a spotlight on these pollution problems. The community did their own air toxic monitoring, which revealed high levels of pollution. This fine example of citizen science spurred government action to protect the community.”
“For years, Tonawanda Coke recklessly ignored clean air, clean water and community right-to-know laws,” Attorney General Schneiderman said. “In doing so, the company ignored both its legal responsibilities and its responsibilities to the health and safety of the residents of the surrounding communities. With this settlement – which requires the company to clean up its operations and pay New York $2 million for penalties and local environment improvement projects – we are holding Tonawanda Coke accountable for its actions.”
“I would like to acknowledge the good work done by everyone involved in this joint state and federal enforcement action that has resulted in significant operational changes at the Tonawanda Coke facility and will continue to improve the air quality in the Tonawanda community,” said Commissioner Martens. “Importantly, a portion of the civil penalty assessed under the consent decree will be used to fund environmental benefit projects that will further improve public health and the environment in Tonawanda.”
The company’s violations of the Clean Air Act resulted in releases of coke oven gas, which contains benzene and other harmful chemicals. Tonawanda failed to install air pollution controls on its coke ovens, failed to properly monitor equipment for coke oven gas leaks, failed to conduct required annual maintenance inspections of emission controls and proper operations and maintenance and failed to complete multiple required reports among other violations. Exposure to benzene and other hazardous air pollutants found in coke oven gas can significantly harm human health and excessive exposure to benzene is a known cause of cancer.
Under the terms of the settlement, Tonawanda Coke is currently installing coke oven battery pollution controls to limit coke oven gas emissions from the battery. These controls are known as “pushing controls,” and are estimated to reduce particulate matter by up to 162 tons per year once fully operational.
Among the other actions that Tonawanda Coke is required to take are:
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Repair or replace equipment in the by-products area.
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Install and operate pushing controls at the coke oven battery by the end of 2015.
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Install a continuous monitoring system on the battery stack.
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Comply with the particulate emission limits at the bag house stack.
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Improve coke battery work practices, operations and maintenance.
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Expand and improve the facility’s leak detection and repair program.
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Adopt a plan to control dust that is generated by its operations at the facility and reduce particulate emissions.
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Undergo a comprehensive evaluation by a third-party to assess its furnace coke production, coke oven walls and other key elements.
In addition, Tonawanda Coke will conduct additional auditing of its operations to implement necessary and appropriate changes that may arise from the third party audit.
Tonawanda Coke’s Clean Water Act violations include discharging wastewater and other prohibited pollutants in its stormwater discharges to the Niagara River, discharging excessive amounts of cyanide, ammonia and naphthalene in its process wastewater and allowing process water holding tanks to decay, pipes to leak and spill containment structures to become ineffective. Tonawanda Coke’s illegal discharges and other Clean Water Act violations threatened human health and the ecology and economy of the Niagara River and Lake Ontario.
While Tonawanda Coke has largely resolved the Clean Water Act violations identified in the complaint, under the settlement, Tonawanda Coke’s facility will be subject to an independent, third-party audit of its Clean Water Act compliance and will be required to implement all necessary recommendations for improving facility operations. EPA’s oversight of the facility’s Clean Water Act compliance will be ongoing.
Under the Emergency Planning and Community Right-to-Know Act, Tonawanda Coke failed to report that it manufactured benzene and ammonia in quantities that exceeded the 25,000 pound per year reporting threshold. Companies that manufacture, process, import or otherwise use chemicals above a certain amount must annually submit chemical inventory information to local authorities and to the state, giving detailed information about the chemicals they have on location. Tonawanda Coke has agreed to submit several years’ worth of information about its use and emissions of ammonia and benzene under this law.
The proposed consent decree was filed in federal court in the Western District of New York and will be subject to a 30 day public commenting period following its publication in the federal registry. The consent decree can be viewed at http://www.justice.gov/enrd/Consent_Decrees.html
For more information about EPA’s actions at Tonawanda Coke and related legal documents, visit http://www.epa.gov/region02/capp/tonawanda.html.
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Statement by Attorney General Lynch on Officer Shootings in Hattiesburg, MississippiRead the Press Release
Attorney General Loretta E. Lynch released the following statement on the death of two officers in Hattiesburg, Mississippi:
“The shocking assault on law enforcement officers in Hattiesburg, Mississippi, struck at the heart of that great city. The Department of Justice stands ready to offer any possible aid to the Hattiesburg community as they investigate this appalling incident. And we will continue to do all that we can to protect our officers across the country and support all those who wear the badge.
“Officer Benjamin Deen and Officer Liquori Tate were committed and courageous public safety officials, dedicated to their community and devoted to their mission. They exemplified the very best that our country has to offer. And as we go forward, the Department of Justice intends to honor their service and their sacrifice by fighting for the values they protected every day, and defending the American people they were proud to serve.
“Their loss is made even more tragic by the fact that, on the day they were killed this past Saturday, the country began observing Police Week – a time when we pause to remember and honor the more than 20,000 law enforcement officers who have been killed in the line of duty. The murder of these young men is a devastating reminder that the work our brave police officers perform every day is extremely dangerous, profoundly heroic, and deeply deserving of our unequivocal support. All Americans owe these courageous citizens a debt of gratitude. The Department of Justice stands in solidarity with our brothers and sisters at every level of law enforcement as we mourn this most recent loss.”
North Carolina Man Pleads Guilty to Filing False Claims for Tax Refunds and Identity TheftRead the Press Release
A Raleigh, North Carolina, man pleaded guilty today to conspiracy to file false claims and identity theft, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Thomas G. Walker of the Eastern District of North Carolina.
According to court documents and court statements, Christian Rhodes and other co-conspirators recruited individuals to provide their personal information, which Rhodes and his co-conspirators used to prepare false federal individual income tax returns. The tax returns that Rhodes prepared and filed contained false wages, income tax withholdings and deductions, resulting in the false claims for tax refunds. Rhodes also used stolen identities to file false claims for tax refunds, and directed the Internal Revenue Service (IRS) to deposit these refunds electronically into bank accounts that he controlled, as well as accounts in the names of and controlled by third-party taxpayers. The tax loss as a result of these false claims is more than $3 million.
Rhodes faces a statutory maximum sentence of 10 years in prison for the conspiracy charge and a mandatory minimum sentence of two years in prison for aggravated identity theft. He also faces financial penalties, including fines and restitution. Senior U.S. District Judge James C. Fox scheduled sentencing for the Aug. 5th term in Wilmington, North Carolina.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Walker commended the special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Susan Menzer of the Eastern District of North Carolina, and Trial Attorneys Lauren Castaldi and Rebecca Perlmutter of the Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website. Additional information about tax fraud schemes to watch out for may be found on the IRS-Criminal Investigation website.
Justice Department Announces Missoula Police Department Has Fully Implemented Agreement to Improve Response to Reports of Sexual AssaultRead the Press Release
The Department of Justice announced today that the Missoula, Montana, Police Department (MPD) has fully implemented the requirements of its agreement with the department to improve the MPD’s response to reports of sexual assault. The agreement, which was entered into in May 2013, resolved part of the department’s comprehensive investigation of the response by the Missoula criminal justice system and the University of Montana to sexual assault. Thomas R. Tremblay, the independent reviewer who determines whether the terms of the agreement have been met, has determined, and the department has agreed, that the MPD has met all of its obligations under the agreement and achieved the overall purpose of the agreement.
The purpose of the agreement between the department and the MPD was to better protect and vindicate the rights of sexual assault victims by transforming the MPD’s response to allegations of sexual assault. To do this, the agreement required significant changes to the police department’s policies, practices and supervision. These changes promote more reliable sexual assault investigations, and effective, nondiscriminatory law enforcement and community support for victims, the police department and its officers. The MPD’s implementation of the agreement has resulted in a host of historic advances in the Missoula response to sexual assault, including the following:
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creation of a new Special Victims’ Unit in the MPD focusing on sex crimes cases, and an interview room specifically designed for interviews with victims of sexual assault;
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extensive specialized training for first responders and detectives in the response to sexual assault;
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development and institution of an external review panel – one of the first of its kind – to review closed sexual assault cases for investigative comprehensiveness and indications of gender bias;
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completion of an audit of the community-wide response to sexual assault – one of the first community audits to focus exclusively on sexual assault – including all of the key law enforcement agencies, advocacy organizations and medical service providers serving victims of sexual assault in Missoula County;
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community advocates reporting better communication and coordination with local law enforcement than ever before; and
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victim surveys indicating significant satisfaction with police officers’ and detectives’ treatment of victims reporting sexual assault to law enforcement.
“Our agreement with the Missoula Police Department following our investigation into the handling of sexual assault complaints made by women in Missoula has been a catalyst for powerful changes in both the law enforcement and the community’s coordinated response to sexual assault,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “We are grateful for the efforts of MPD and the entire Missoula community because, as a result of these reforms, the women of Missoula are safer, more trusting of the criminal justice system, and subject to more fair and respectful treatment by local law enforcement. Missoula’s police department had the courage and leadership to acknowledge that it had a problem and to address it, and as a result, is poised to become a model for communities struggling with these issues around the country.”
“We commend the Missoula Police Department and the city of Missoula for the leadership and commitment that they have demonstrated to transform the way in which their city police department responds to reports of sexual assault,” said U.S. Attorney Michael Cotter of the District of Montana. “We also recognize and appreciate the hard work that the detectives and officers of the Missoula Police Department have put into carrying out these reforms. In so doing, they have carried out the highest ideals of public service, making the safety and civil rights of their community a top priority, and their efforts should be an inspiration to us all.”
The full implementation of the department’s agreement with the MPD marks the first completion of the series of agreements stemming from the department’s multi-pronged investigation, launched in May 2012, regarding the handling of sexual assault complaints made by women in Missoula. The investigation, conducted under the Violent Crime and Law Enforcement act of 1994, the Safe Streets Act, Title VI of the Civil Rights Act of 1964 and Title IX of the Education Amendments of 1972, evaluated the response to sexual assault at the University of Montana at Missoula, the University of Montana Police Department (UMPD), the MPD, and the Missoula County Attorney’s Office. The department entered into agreements with the university, the UMPD and the MPD in May 2013, to resolve findings related to those parties and address deficiencies in their response to sexual assaults. The department, together with the Montana Attorney General’s Office, entered into agreements regarding the Missoula County Attorney’s Office the following year, in June 2014. The implementation of those agreements has already improved these parties’ response to sexual assaults.
These agreements, as well as a description of the department’s work regarding sexual assault in Missoula, are available at: http://www.justice.gov/crt/about/spl/. The independent reviewer’s final compliance report, describing in detail his determination that the MPD has successfully implemented the department’s agreement, is forthcoming, and will be available on the department’s website upon its release.
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Former CIA Officer Sentenced to 42 Months in Prison for Leaking Classified Information and Obstruction of JusticeRead the Press Release
Jeffrey A. Sterling, 47, of O’Fallon, Missouri, was sentenced today to 42 months in prison for disclosing national defense information and obstructing justice. Sterling disclosed classified information about a clandestine operational program concerning Iran’s nuclear weapons program to a New York Times reporter in 2003.
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 Assistant Director in Charge Andrew McCabe of the FBI’s Washington, D.C. Field Office made the announcement.
“For his own vindictive purposes, Jeffrey Sterling carelessly disclosed extremely valuable, highly classified information that he had taken an oath to keep secret,” said U.S. Attorney Boente. “His attempt to leverage national security information for his own malicious reasons brought him to this sentence today. I would like to thank the trial team and our partners at the FBI’s Washington Field Office and the Central Intelligence Agency for their hard work and commitment to this case.”
“The sentence handed down by a federal judge is the culmination of a lengthy investigation, a protracted prosecution and a unanimous decision by a federal jury to convict Mr. Sterling for the unauthorized disclosure of national security information,” said Assistant Director in Charge McCabe. “The time and effort dedicated to this case by FBI special agents, intelligence analysts and prosecutors working on this matter exemplify the extent the FBI will undertake in pursuit of justice.”
Sterling was found guilty by a federal jury on Jan. 26, 2015. According to court records and evidence at trial, Sterling was employed by the CIA from May 1993 to January 2002. From November 1998 through May 2000, he was assigned to a classified clandestine operational program designed to undermine the Iranian nuclear weapons program. He was also the operations officer assigned to handle a human asset associated with that program, a person identified at trial as Merlin. Sterling was reassigned in May 2000, at which time he was no longer authorized to receive or possess classified documents concerning the program or the individual.
In connection with his employment, Sterling, who is a lawyer, signed various security, secrecy and non-disclosure agreements in which he agreed never to disclose classified information to unauthorized persons, acknowledged that classified information was the property of the CIA, and also acknowledged that the unauthorized disclosure of classified information could constitute a criminal offense. These agreements also set forth the proper procedures to follow if Sterling had concerns that the CIA had engaged in any “unlawful or improper” conduct that implicated classified information. These procedures permit such concerns to be addressed while still protecting the classified nature of the information. The media was not an authorized party to receive such classified information.
In August 2000, Sterling pursued administrative and civil actions against the CIA. Evidence at trial showed that Sterling, in retaliation for the CIA’s refusal to settle those actions on terms favorable to him, disclosed information concerning the classified operational program and the human asset to a New York Times reporter working on an unpublished article in early 2003 and a book the reporter published in January 2006. Sterling’s civil and administrative claims were ultimately dismissed by the court.
Evidence demonstrated that in February and March 2003, Sterling made various telephone calls to the reporter’s residence and e-mailed a newspaper article about the weapons capabilities of a certain country that was within Sterling’s previous clandestine operational assignment. While the possible newspaper article containing the classified information Sterling provided was ultimately not published in 2003, evidence showed that Sterling and the reporter remained in touch from December 2003 through November 2005 via telephone and e-mail. In January 2006, the reporter published a book that contained classified information about the program and the human asset.
Evidence at trial showed that Sterling was aware of a grand jury investigation into the matter by June 2006 when he was served a grand jury subpoena for documents relating to the reporter’s book. Nevertheless, between April and July 2006, Sterling deleted the e-mail containing the classified information he had sent from his account in an effort to obstruct the investigation.
This case was investigated by the FBI’s Washington Field Office, with assistance in the arrest from the FBI’s St. Louis Field Office. This case was prosecuted by Deputy Chief Eric G. Olshan of the Criminal Division’s Public Integrity Section and Senior Litigation Counsel James L. Trump and Assistant U.S. Attorney Dennis Fitzpatrick of the Eastern District of Virginia.
Vadian Bank AG Reaches Resolution Under Department of Justice Swiss Bank ProgramRead the Press Release
The Department of Justice announced today that Vadian Bank AG (Vadian), located in St. Gallen, Switzerland, reached a resolution under the Department of Justice’s (DOJ) Swiss Bank Program.
“The department continues to work with Swiss banks to reach final resolutions in accordance with the terms of the program, and is focused on its goal of completing this process expeditiously,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Department of Justice’s Tax Division. “Simultaneously, the department has opened investigations of culpable individuals and entities based on information obtained from the Swiss banks in the program, and will pursue and prosecute those engaged or assisting others in evading U.S. tax 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:
- Make a complete disclosure of their cross-border activities;
- Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
- Cooperate in treaty requests for account information;
- Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
- Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations; and
- Pay appropriate penalties.
Banks meeting all of the above requirements are eligible for a non-prosecution agreement.
According to the terms of the non-prosecution agreement signed today, Vadian 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 a $4.253 million penalty in return for the department’s agreement not to prosecute Vadian for tax-related criminal offenses.
Vadian has one office and 26 employees. Prior to 2008, Vadian’s business predominantly consisted of savings accounts, residential mortgage lending and small business loans. In 2007, Vadian hired a marketing firm to assist with its planned growth into private banking, and focused its efforts on attracting external asset managers. In 2008, after it became publicly known that UBS was a target of a criminal investigation, Vadian accepted accounts from U.S. persons who were forced out of other Swiss banks. At this time, Vadian’s management was aware that the U.S. authorities were pursuing Swiss banks that facilitated tax evasion for U.S. accountholders in Switzerland, but was not deterred because Vadian had no U.S. presence. As a result of its efforts, after August 2008, Vadian attracted cross-border private banking business and increased its U.S. related accounts from two to more than 70, with $76 million in assets under management.
Through its managers, employees and/or other individuals, Vadian knew or believed that many of its U.S. accountholders were not complying with their U.S. tax obligations, and Vadian would and did assist those clients to conceal assets and income from the IRS. Vadian’s services included: “hold mail” services; numbered accounts, where the client was known to most bank employees only by a number or code name; opening and maintaining accounts for U.S. taxpayers through non-U.S. entities such as corporations, trusts or foundations; and accepting instructions from U.S.-based accountholders to prevent investments from being made in U.S.-based securities that would require disclosure to U.S. tax authorities.
In resolving its criminal liabilities under the program, Vadian provided extensive cooperation and encouraged U.S. accountholders to come into compliance.
While Vadian’s U.S. accountholders who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS’s offshore voluntary disclosure programs, the price of such disclosure has increased.
Most U.S. taxpayers who enter the IRS offshore voluntary disclosure program to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. On Aug. 4, 2014, the IRS increased the penalty to 50 percent if, at the time the taxpayer initiated their disclosure, either a foreign financial institution at which the taxpayer had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement had been publicly identified as being under investigation, the recipient of a John Doe summons or cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement. With today’s announcement of Vadian’s non-prosecution agreement, its noncompliant U.S. accountholders must now pay that 50 percent penalty to the IRS if they wish to enter the IRS’ program.
“Today’s action is another warning for those who are still considering hiding money offshore to evade U.S. tax laws,” said Chief Richard Weber of IRS-Criminal Investigation (CI). “The IRS and DOJ continue to aggressively work together to put an end to this abuse. When individuals and institutions allow this to happen, they are not only cheating the U.S. government, they are cheating the honest taxpaying citizens who are obeying the law and doing the right thing.”
Acting Assistant Attorney General Ciraolo thanked the IRS and in particular, IRS-CI and IRS’s Large Business and International Division (LB & I) for their substantial assistance, as well as Trial Attorney Michael Wilcove of the Tax Division, who served as lead counsel on this matter, 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.
Ruston, Louisiana, Housing Authority Agrees to Pay $175,000 and Stop Filling Vacancies Based on Race to Settle Justice Department LawsuitRead the Press Release
The Justice Department announced today that the Housing Authority of the city of Ruston, Louisiana, has agreed to pay $175,000 and adopt comprehensive new policies to settle a race discrimination lawsuit filed by the department. The settlement must still be approved by U.S. District Court Judge Robert G. James of the Western District of Louisiana.
The department’s lawsuit, filed in September 2013, alleged that the Ruston Housing Authority (RHA) had long segregated the 300 apartments in its five public housing developments by assigning vacancies to applicants based on their race, rather than on their place on the waiting list. Specifically, the department alleged that the RHA disproportionately assigned white applicants to its two developments that were located in the predominantly white neighborhoods of Ruston—Louise Homes and Maryland Plaza Homes. At the same time, the department alleged, RHA primarily assigned African-American applicants to the complexes located in predominantly African-American neighborhoods—Eastwood Homes, Greenwood Homes and Truman Homes. When it originally began developing housing in the 1950’s and early 1960’s, the RHA explicitly reserved Louise Homes and Maryland Plaza for “white” persons, while reserving Greenwood and Truman for what it termed “colored” persons.
Although the RHA no longer maintained this de jure system, the department alleged that it had continued to segregate its complexes in practice. During the litigation, the former Ruston Housing Authority project manager from 2003 to 2013 admitted in her sworn deposition testimony that on numerous occasions she skipped over earlier applying African-American applicants in order to fill vacancies at Louise Drive Homes with later applying white applicants. She also testified that on multiple occasions she did not offer eligible white applicants available apartments in the nearly all-black Eastwood Homes, Greenwood Homes and Truman Homes, but instead offered those units to later-applying African American applicants.
“People who seek public housing, like all other home seekers, have the right to access housing free from racial discrimination," said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “It is particularly distressing that, almost 50 years after the passage of the Fair Housing Act, this public housing authority was still filling vacancies based on the color of an applicant’s skin, rather than based on when he or she had applied. We are pleased that the Ruston Housing Authority has agreed to dismantle this segregated system and compensate its victims.”
“We have zero tolerance for housing providers that discriminate against individuals based on race,” said U.S. Attorney Stephanie A. Finley of the Western District of Louisiana. “Today’s settlement is an example of our continuing effort to end discrimination in such a vital need, housing. The U.S. Attorney’s Office is committed to addressing unlawful discriminatory practices and enforcing anti-discrimination laws that protect the rights of all people."
“Assigning persons housing based on the color of their skin not only robs them of the basic dignity everyone seeking housing should be afforded, it violates the Fair Housing Act,” said Assistant Secretary Gustavo Velasquez of the Department of Housing and Urban Development’s Fair Housing and Equal Opportunity Office. “HUD is committed to working with the Justice Department to take action against housing providers whose policies and practices are discriminatory.”
Upon court approval, the settlement, which is in the form of a consent decree, will require the RHA to implement nondiscriminatory policies and procedures to ensure compliance with the Fair Housing Act and to ensure that RHA housing units are made available for rent based on an applicant’s position on its waiting list, irrespective of race. The decree also requires that if RHA builds or acquires additional units, they are to be located in areas that do not further racial segregation. In addition, RHA employees who are responsible for making housing decisions will receive training on the new nondiscriminatory policies and procedures, the consent decree and the Fair Housing Act.
In addition, the RHA will pay $175,000 to compensate 19 individuals who suffered damages as a result of the RHA passing them over for available housing units because of their race. Additionally, for those 19 victims of the RHA’s discriminatory actions identified in the consent order, the RHA will allow those who are current tenants to request a transfer to another complex on a priority basis. It will also permit those identified individuals who are prior applicants and former tenants to reapply and, upon approval of their applications, give them priority for a unit at a complex of their choice.
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the division’s Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777.
Justice Department Settles Immigration-Related Discrimination Claim Against the Data Entry Company Inc.Read the Press Release
The Justice Department announced today that it reached a settlement with The Data Entry Company Inc., a government subcontractor headquartered in Bethesda, Maryland. The settlement resolves a charge filed with the Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), claiming that the company engaged in hiring discrimination in violation of the Immigration and Nationality Act (INA).
The department’s investigation found that on two occasions The Data Entry Company Inc., removed a U.S. citizen from its pool of applicants because she is a dual citizen, in violation of the INA. The INA’s anti-discrimination provision prohibits employers from engaging in hiring discrimination on the basis of citizenship.
“The Justice Department is committed to identifying and tearing down illegal barriers that prevent authorized workers from working,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The department commends The Data Entry Company Inc., for working to rectify this situation in a cooperative manner.”
Under the settlement agreement, The Data Entry Company Inc. will pay $7,007.75 in back pay to the charging party and will also pay a civil penalty to the United States. The company also will undergo training on the anti-discrimination provision of the INA.
OSC is responsible for enforcing the anti-discrimination provision of the INA. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing or recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation. Trial Attorney Silvia Dominguez-Reese investigated this charge.
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.
Justice Department Opens Pattern or Practice Investigation into the Baltimore Police DepartmentRead the Press Release
Attorney General Loretta E. Lynch announced today that the Justice Department has opened a civil pattern or practice investigation into Baltimore Police Department (BPD), pursuant to the Violent Crime Control and Law Enforcement Act of 1994. The department’s investigation of BPD will seek to determine whether there are systemic violations of the Constitution or federal law by officers of BPD. The investigation will focus on BPD’s use of force, including deadly force, and its stops, searches and arrests, as well as whether there is a pattern or practice of discriminatory policing.
While the pattern or practice investigation is ongoing, the department’s Office of Community Oriented Policing will continue to work with BPD and the collaborative reform process that was started in October 2014 will convert to the provision of technical assistance to the BPD allowing for changes and improvements even as the pattern or practice investigation is underway.
“Our goal is to work with the community, public officials and law enforcement alike to create a stronger, better Baltimore,” said Attorney General Loretta Lynch. “The Department of Justice’s Civil Rights Division has conducted dozens of these pattern or practice investigations, and we have seen from our work in jurisdictions across the country that communities that have gone through this process are experiencing improved policing practices and increased trust between the police and the community. In fact, I encourage other cities to study our past recommendations and see whether they can be applied in their own communities. Ultimately, this process is meant to ensure that officers are being provided with the tools they need – including training, policy guidance and equipment – to be more effective, to partner with civilians and to strengthen public safety.”
During the course of the investigation, the Justice Department will consider all relevant information, particularly the efforts that BPD has undertaken to ensure compliance with federal law, and the experiences and views of the community. The Justice Department has taken similar steps involving a variety of state and local law enforcement agencies, both large and small, in jurisdictions throughout the United States. These investigations have in many instances resulted in comprehensive, court-overseen agreements to fundamentally change the law enforcement agency’s police practices.
In addition to gathering information directly from community members, pattern or practice investigations involve interviewing police officers and local officials; gathering information from other criminal justice stake holders, such as public defenders and prosecutors; observing officer activities through ride-alongs and other means; and reviewing documents and specific incidents that are relevant to our investigation.
Pattern or practice investigations of police departments do not assess individual cases for potential criminal violations. The investigation into BPD is separate from the department’s concurrent criminal civil rights investigation related to the death of Freddie Gray.
This matter is being investigated by attorneys and staff from the Justice Department’s Civil Rights Division. They will be assisted by experienced law enforcement experts. The department welcomes the views of anyone wishing to provide relevant information. Individuals who wish to share information related to the investigation are encouraged to contact the department at 1-844-401-3733 or via email at [email protected].
Police Reform and Accountability Fact Sheet
How P&P Investigations Work
CRI Fact Sheet
Former U.S. Nuclear Regulatory Commission Employee Charged with Attempted Spear-Phishing Cyber-Attack on Department of Energy ComputersRead the Press Release
Defendant Arrested in the Philippines
An indictment has been unsealed charging Charles Harvey Eccleston, a former employee of the U.S. Department of Energy and the U.S. Nuclear Regulatory Commission (NRC), in connection with an attempted email “spear-phishing” attack in January 2015, targeting dozens of Department of Energy employee e-mail accounts.
The indictment was announced today by Assistant Attorney General for National Security John P. Carlin, Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia and Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office.
The indictment was unsealed, along with an earlier-filed complaint and affidavit, following Eccleston’s first appearance this afternoon in the U.S. District Court of the District of Columbia. The court ordered that he remain detained pending a hearing set for May 20, 2015.
According to the affidavit, the goal of the attack was to cause damage to the computer network of the Department of Energy through a computer virus that Eccleston believed was being delivered to particular department employees through emails, and to extract sensitive, nuclear weapons-related government information that Eccleston believed would be collected by a foreign country.
An email spear-phishing attack involves crafting a convincing email for selected recipients that appears to be from a trusted source and that, when opened, infects the recipient’s computer with a virus. Attackers may gather personal information about their target to increase their probability of success.
“Combating cyber-based threats to our national assets is one of our highest priorities,” said Assistant Attorney General Carlin. “As alleged in the indictment, Eccleston sought to compromise, exploit and damage U.S. government computer systems that contained sensitive nuclear weapon-related information with the intent to allow foreign nations to gain access to that material. We must continue to evolve our efforts and capabilities to confront cyber enabled threats and aggressively detect, disrupt and deter them. We are grateful for the tireless efforts of law enforcement in this case.”
“This former federal employee is charged with trying to launch a cyber-attack to steal sensitive information from the Department of Energy,” said Acting U.S. Attorney Cohen. “Thanks to an innovative operation by the FBI, no malicious code was actually transmitted to government computers. This prosecution demonstrates federal law enforcement’s vigorous efforts to neutralize cyber threats that put consumers, our economy, and our national security at risk.”
“Computer intrusions are among the greatest cyber threats to our national security,” said Assistant Director in Charge McCabe. “Cyber actors have become increasingly adept at exploiting our computer networks in order to exfiltrate our nation’s secrets and valuable research. As threats to the U.S. government become increasingly complex, the FBI will continue to evolve in order to counter these threats.”
Eccleston, 62, a U.S. citizen who had been living in Davos City in the Philippines since 2011, was terminated from his employment at the U.S. Nuclear Regulatory Commission in 2010. The attack targeted computers at the Department of Energy. Eccleston was detained by Philippine authorities in Manila on March 27, 2015, and deported to the United States to face U.S. criminal charges.
According to the affidavit, Eccleston initially came to the attention of the FBI after he entered a foreign embassy and offered to provide classified information, which he claimed had been taken from the U.S. government. Thereafter, Eccleston met with FBI undercover employees who were posing as representatives of the foreign country, and in exchange for a promised future payment, offered to design and send spear-phishing e-mails that could be used to damage the computer systems used by his former employer and to extract sensitive information from them.
The affidavit alleges that Eccleston sent those emails to over 80 Department of Energy computers in January 2015. The FBI was able to ensure that no computer virus or malicious code was actually transmitted to the government computers.
The indictment charges Eccleston with a total of four felony offenses. These include three counts of crimes involving unauthorized access of computers. Each of the crimes, as charged, is a felony punishable by a fine or imprisonment for various terms, the longest of which is ten years. The indictment also charges Eccleston with wire fraud. Such a violation is a felony punishable by a fine or imprisonment for not more than 20 years, or both. Eccleston is charged with attempted violations of the statutes because the FBI ensured that no computer virus was actually embedded in the spear-phishing emails.
Charges contained in an indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The investigation was conducted by the FBI’s Washington Field Office with assistance from the Nuclear Regulatory Commission and Department of Energy. The prosecution is being handled by Assistant U.S. Attorney Thomas A. Gillice of the District of Columbia. Trial Attorneys Scott Ferber and Julie A. Edelstein of the Justice Department’s National Security Division assisted in this matter.
The Department of Justice expressed appreciation to the Government of the Philippines for its assistance.
Eccleston Indictment