District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Three Additional Defendants Plead Guilty in Connection with Sex Trafficking SchemeRead the Press Release
Sex Trafficking Scheme Used Threats, Violence and Coercion to Compel Women into Prostitution in New Orleans and Elsewhere
Today, three additional defendants pleaded guilty in connection with a sex trafficking scheme operated out of the Riviera Motel in New Orleans, Louisiana, which compelled multiple women to engage in prostitution in New Orleans and elsewhere, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Justice Department’s Civil Rights Division and U.S. Attorney Kenneth Allen Polite Jr. of the Eastern District of Louisiana.
Defendants Duane Phillips, 29, and Christopher Williams, 30, both of whom are residents of Memphis, Tennessee, each pleaded guilty today to conspiring to commit sex trafficking of adult victims by force, fraud and coercion in New Orleans and elsewhere. Defendant Anthony Ellis, 26, also of Memphis, pleaded guilty to one count of conspiring to commit sex trafficking of adult victims and one count of transportation for purposes of prostitution.
“The Department of Justice will not tolerate trafficking in human beings, and will continue to relentlessly pursue justice on behalf of vulnerable members of our society, whether they are migrants from beyond our borders or whether they are young women from our own communities,” said Principal Deputy Assistant Attorney General Gupta. “We will continue in our steadfast determination to hold accountable those who use force and coercion to exploit other human beings.”
“These defendants recruited vulnerable victims from the New Orleans community and brought other victims to New Orleans to engage in commercial sex trafficking,” said U.S. Attorney Polite. “These crimes often pass without detection because victims live in fear from physical abuse, threats and other forms of coercion. My office is committed to prosecuting individuals who manipulate victims into committing commercial sex acts and profit from this illegal conduct.”
“This investigation and prosecution should serve as a clear reminder to all those individuals engaged in the heinous crime of sex trafficking that the full force of federal law enforcement, across geographical boundaries, will bring them to swift justice,” said Special Agent in Charge Michael Anderson of the FBI’s New Orleans Division.
“Human trafficking is a form of modern-day slavery that Homeland Security Investigations fights as one of its highest priorities via a coordinated global effort with the FBI and our state and local law enforcement partners,” said Acting Special Agent in Charge Cindy M. Johnson of Homeland Security Investigations’ (HSI) New Orleans Field Office. “The results speak for themselves; over the past two years HSI has doubled its number of human trafficking arrests. HSI will continue to investigate and seek prosecution of these criminals while also ensuring the victims of this terrible crime are rescued and get the care they need.”
Two defendants have previously pleaded guilty in connection with the case. On June 25, 2014, defendant Zacchaeus Taylor pleaded guilty to sex trafficking conspiracy and to Transportation for Purposes of Prostitution. On March 4, 2015, Laquentin Brown pleaded guilty to the same charges. Each face a maximum of five years on the conspiracy count and a maximum of 10 years on the transportation for prostitution count.
On Oct. 3, 2014, a grand jury in the Eastern District of Louisiana returned a Second Superseding Indictment charging defendants Phillips, Williams and Ellis, along with additional defendants Granville Robinson and Laquentin Brown, with sex trafficking conspiracy and varying counts of sex trafficking and transportation for prostitution. The Second Superseding Indictment also charged defendant Kanubhai Patel, who was the former owner of the Riviera Motel, with benefitting financially from the sex trafficking conspiracy. Defendant Taylor was charged separately on March 28, 2014. Of the seven defendants charged in connection with the sex trafficking scheme, five have entered guilty pleas. An indictment is merely an accusation and defendants are innocent until proven guilty beyond a reasonable doubt.
During their respective plea hearings and in their respective court filings, defendants Phillips, Williams and Ellis admitted that they, along with co-defendants Robinson and Brown, all of whom are from Memphis, conspired to recruit, groom, force, compel and coerce adult women to engage in prostitution, enforcing rules and means of control that included requiring the women to earn a certain amount of money each day, requiring them to turn over the proceeds and prohibiting them from speaking to or looking at other pimps. Williams admitted intentionally trying to impregnate women to make it harder for them to leave him, while some of the other defendants took the victims’ identification cards and documents. To enforce the rules, Phillips, Williams and Ellis each admitted that they and their co-conspirators used a variety of punishments, including withholding food, forcing the victims to engage in additional commercial sex acts, as well as physical assaults. Williams noted that he attempted to avoid visible bruising so that the victims would not draw the attention of the police or scare off prospective customers. Phillips, Williams and Ellis each admitted that they and their co-conspirators consulted one another on means of furthering their pimping activities, and would monitor each other’s victims when a co-conspirator was incarcerated. Phillips, Williams, Ellis and the other co-conspirators frequently stayed at the Riviera Motel because they knew that the hotel staff would not stop them from pimping women.
At sentencing, defendant Ellis faces a maximum sentence of 10 years on the transportation for prostitution charge and a maximum sentence of five years on the conspiracy charge. Defendants Phillips and Williams each face a maximum sentence of life imprisonment for the sex trafficking conspiracy.
This case was investigated jointly by agents from the New Orleans Field Offices of the Federal Bureau of Investigation (FBI) and Department of Homeland Security (DHS), with assistance from the FBI’s Memphis Field Office. This case is being prosecuted by Special Litigation Counsel John Cotton Richmond and Trial Attorney Christine M. Siscaretti of the Civil Right Division’s Human Trafficking Prosecution Unit, and Assistant U.S. Attorney Julia K. Evans of the Eastern District of Louisiana.
Six Minnesota Men Charged with Conspiracy to Provide Material Support to the Islamic State of Iraq and the LevantRead the Press Release
Four Defendants Arrested in Minneapolis; Two Arrested in San Diego
A criminal complaint was filed today charging six Minnesota men with conspiracy and attempt to provide material support to a designated foreign terrorist organization, namely, the Islamic State of Iraq and the Levant (ISIL).
Zacharia Yusuf Abdurahman, 19, Adnan Farah, 19, Hanad Mustafe Musse, 19, and Guled Ali Omar, 20, were arrested in Minneapolis yesterday. Abdirahman Yasin Daud, 21, and Mohamed Abdihamid Farah, 21, were arrested yesterday in California after driving from Minneapolis to San Diego.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Andrew M. Luger of the District of Minnesota and Special Agent in Charge Richard T. Thornton of the FBI’s Minneapolis Division made the announcement.
“The six defendants charged in the complaint allegedly planned to travel to Syria as part of their conspiracy to provide material support to ISIL,” said Assistant Attorney General Carlin. “One of the National Security Division’s highest priorities is to identify, disrupt, and hold accountable those who provide or attempt to provide material support to designated foreign terrorist organizations. I would like to thank the many agents, analysts, and prosecutors who are responsible for this investigation and the charges in this case.”
“As described in the criminal complaint, these men worked over the course of the last 10 months to join ISIL,” said U.S. Attorney Luger. “Even when their co-conspirators were caught and charged, they continued to seek new and creative ways to leave Minnesota to fight for a terror group. I applaud the hard work and tireless efforts of the FBI Minneapolis Division and their colleagues around the country.”
“Preventing acts of terrorism is the FBI's highest priority,” said Special Agent in Charge Thornton. “Disrupting individuals from traveling to join and fight for ISIL is an important part of our counter terrorism strategy. As a result of this investigation and arrests, these six Minnesota men who planned to travel and fight for ISIL will answer these charges in U.S. District Court instead of taking up arms in Syria. The FBI remains committed to ending both recruitment efforts and travel on the part of young people from Minnesota to fight overseas on behalf of terror groups. These arrests today signify this continued commitment.”
According to the criminal complaint and documents filed in court, the FBI has been conducting an investigation for the last 10 months into a group of individuals who have tried to join – and in some cases succeeded in joining – overseas designated foreign terrorist organizations. At least nine Minnesotans have now been charged as part of this conspiracy to provide material support to ISIL. The men are all alleged associates and friends of one another.
This case is the result of an investigation conducted by the FBI-led Joint Terrorism Task Force, U.S. Attorney’s Office of the District of Minnesota and the Counterterrorism Section of the Department of Justice National Security Division. Assistant Attorney General Carlin is also grateful to the U.S. Attorney’s Office of the Southern District of California and the FBI’s San Diego Division for their contributions to the investigation of this case.
The charges contained in the complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Farah et al Criminal Complaint
Long Island, New York, Man Sentenced to 25 Years in Prison for Attempting to Join Al-Qaeda in the Arabian PeninsulaRead the Press Release
Defendant Attempted to Travel to Yemen to Join al-Qaeda Affiliate, Assist Co-Conspirator’s Efforts to Join The Terrorist Group and Destroy Evidence of Terrorism Offenses
Earlier today at the federal courthouse in Central Islip, New York, Marcos Alonso Zea, also known as “Ali Zea,” an American citizen and resident of Brentwood, New York, was sentenced to 25 years in prison following his Sept. 9, 2014, guilty plea to attempting to provide material support to a foreign terrorist organization, al-Qaeda in the Arabian Peninsula, also known as Ansar al-Sharia (collectively AQAP), and obstruction of justice.
The sentencing was announced by U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Attorney General for National Security John P. Carlin, Assistant Director in Charge Diego Rodriguez of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York Police Department (NYPD).
Beginning in the fall of 2011, Zea planned to travel overseas in order to wage violent jihad against the perceived enemies of Islam, which included the government of Yemen and its allies. In furtherance of his plot, on Jan. 4, 2012, Zea boarded a flight at John F. Kennedy Airport (JFK) in Queens, New York, to London, en route to Yemen. Zea was not permitted to travel onward from London, however, and was returned to the United States by British authorities. Zea was interviewed and closely monitored by investigators following his return. Despite being prevented from traveling to Yemen, Zea continued to plot, including by encouraging and supporting his co-conspirator, Justin Kaliebe, who also was planning to travel to fight jihad. In January 2013, Kaliebe was arrested at JFK while attempting to travel to Yemen to join AQAP. Months later, after learning that he too was under investigation, Zea caused electronic media on his computer to be destroyed in an effort to obstruct the investigation. Notwithstanding his efforts, a forensic examination of Zea’s electronic media subsequently conducted by investigators revealed an assortment of violent Islamic extremist materials, including issues of Inspire magazine, part of AQAP’s English-language media operations.
“Marcos Alonso Zea presents a chilling reminder of the danger presented to the United States by homegrown terrorists,” said U.S. Attorney Lynch. “Born, raised and schooled in the United States, the defendant nevertheless betrayed his country by attempting to join al-Qaeda in the Arabian Peninsula, assisting a co-conspirator’s attempt to join that terrorist group, and, after learning he was under investigation, attempting to destroy evidence of his guilt. We will continue to work tirelessly to protect our national security from all enemies, both foreign and domestic.” U.S. Attorney Lynch expressed her grateful appreciation to all the members of the FBI’s Joint Terrorism Task Force and the NYPD’s Intelligence Division for their work on the investigation.
“One of our highest priorities is to protect our country by identifying, disrupting and holding accountable those who provide or attempt to provide material support to designated foreign terrorist organizations,” said Assistant Attorney General Carlin. “This sentence serves unambiguous notice that attempting to travel abroad to engage in such conduct has significant consequences.”
“The threat from al-Qaeda is real, look no further than Marcos Zea,” said Assistant Director in Charge Rodriguez. “Zea betrayed our country, attempting to first join al-Qaeda. When that failed, he helped others wage jihad. We continue working relentlessly to disrupt the plans of those who look to do us harm.”
“The New York City Police Department will continue to work closely with our federal counterparts to identify and arrest homegrown terrorists like Marcos Alonso Zea, and ensure all extremists bring no harm to American soil, especially here in New York City,” said Commissioner Bratton.
After being arrested in January 2013, Zea’s co-conspirator Kaliebe subsequently pleaded guilty to one count of attempting to provide material support to terrorists and one count of attempting to provide material support to AQAP. Kaliebe is pending sentencing by U.S. District Judge Denis R. Hurley of the Eastern District of New York.
The case is being prosecuted by Assistant U.S. Attorneys Seth D. DuCharme, John J. Durham and Michael P. Canty of the Eastern District of New York, with assistance provided by Trial Attorney Kelli Andrews of the National Security Division’s Counterterrorism Section.
Attorney General Statement on the 20th Anniversary of the Oklahoma City BombingRead the Press Release
Attorney General Eric Holder released the following statement to commemorate the 20th anniversary of the Oklahoma City bombing:
“Twenty years ago, domestic terrorists struck at the heart of all that this country stands for – liberty, democracy and the rule of law. The toll of their heinous and cowardly act – in lives lost and families shattered – devastated our public servant community and shook the confidence and faith of our nation. But through the resilience of Oklahomans and the strength of the American people, we recommitted ourselves to the fundamental values that make this country a beacon of freedom, fairness and opportunity. In the years since, the Department of Justice has rededicated itself to the fight against homegrown threats and has been aggressive in going after those who would inflict violence on their fellow citizens. Our measures have been effective and our record is strong, but we must remain vigilant – public servants and citizens alike – in our efforts to identify potential threats before they cause harm.
“To that end, last year, I relaunched the Justice Department’s Domestic Terrorism Executive Committee, which had originally been established by Attorney General Janet Reno in response to the bombing in Oklahoma City. Through its meetings and ongoing efforts, the committee serves as a vital forum for members of the Justice Department, the FBI and a number of other law enforcement agencies across the federal government to assess and share information about domestic terror threats and developments. It is a part of the critical progress we have made in the wake of Oklahoma City. And it is one of the many ways in which we pay tribute to the lives and the legacies of the 168 men, women, and children who were taken from us on that tragic day two decades ago.
“As we mark this somber anniversary and as many gather at what is now a beautiful and inspiring memorial in Oklahoma City, our thoughts and prayers are with those who lost lives and loved ones. We will continue to honor their memory. And in the days, months and years ahead, we will continue to uphold the values of this nation – a nation that stands strong, a nation that overcomes and a nation that moves forward, inexorably, toward that more perfect Union our founders imagined for us all.”
Four Companies and Five Individuals Indicted for Illegally Exporting Technology to IranRead the Press Release
Seven Foreign Nationals and Companies Placed on Department of Commerce’s Entity List
A 24-count indictment has been unsealed today charging four corporations and five individuals with facilitating the illegal export of high-tech microelectronics, uninterruptible power supplies and other commodities to Iran in violation of the International Emergency Economic Powers Act (IEEPA).
The announcement was made by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Assistant Director Randall Coleman of the FBI’s Counterintelligence Division, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Under Secretary of Commerce Eric L. Hirschhorn of the Department of Commerce, Special Agent in Charge Tracy E. Martin of the Department of Commerce’s Office of Export Enforcement’s Dallas Field Office and Special Agent in Charge Lucy Cruz of the IRS’ Houston Field Office.
“The nine defendants charged in the indictment allegedly circumvented U.S. sanctions and illegally exported controlled microelectronics to Iran,” said Assistant Attorney General Carlin. “Violations of the International Emergency Economic Powers Act not only can undercut the impact of U.S sanctions, but can also serve to undermine U.S. foreign policy and adversely affect national security. I want to thank all those in law enforcement whose tireless efforts led to these charges.”
“The prevention, investigation and prosecution of the illegal export of critical electronic system is one of the highest priorities of the Department of Justice,” said U.S. Attorney Magidson. “This indictment is evidence of our commitment to ensuring that our laws are enforced and our national security is protected.”
“The proliferation of sensitive U.S. technologies to Iran and the direct support to their military and weapons programs remains a clear threat to U.S. national security,” said Coleman. “The FBI and our interagency partners will continue to identify, penetrate and neutralize proliferation efforts aimed at circumventing our export control laws and economic sanctions to illegally obtain sensitive technologies.”
“IRS-CI will tenaciously pursue individuals who violate international emergency economic powers statutes,” said Special Agent in Charge Cruz. “Our role is to unravel the often concealed or disguised financial crimes that threaten our national security.”
“The Office of Export Enforcement and our law enforcement partners will continue to investigate, pursue and dismantle these procurement networks that violate U.S. export control laws whether they operate within our borders or anywhere else in the world,” said Special Agent in Charge Martin.
The indictment alleges Houston-based company Smart Power Systems Inc. (SPS); Bahram Mechanic, 69, and Tooraj Faridi, 46, both of Houston; and Khosrow Afghahi, 71, of Los Angeles, were all members of an Iranian procurement network operating in the United States. Also charged as part of the scheme are Arthur Shyu, and the Hosoda Taiwan Limited Corporation in Taiwan; Matin Sadeghi, 54, and Golsad Istanbul Trading Ltd. in Turkey; and the Faratel Corporation, co-owned by Mechanic and Afghahi in Iran.
The indictment was returned under seal on April16, 2015, and unsealed as Mechanic and Faridi made their initial appearances before U.S. Magistrate Judge Francis H. Stacy of the Southern District of Texas. Afghahi was taken into custody and will make an initial appearance in the Central District of California. Sadeghi and Shyu are believed to be out of the country and warrants remain outstanding for their arrests. Anyone with information is asked to contact the nearest embassy or local FBI office. They may also contact the FBI’s Houston Office at 713-693-5000.
In conjunction with the unsealing of these charges, the Department of Commerce is designating seven foreign nationals and companies, adding them to its Bureau of Industry and Security Entity List. The indictment alleges these individuals and companies received, transshipped or otherwise facilitated the illegal export of controlled commodities by the defendants. Designation on the Entity List imposes a license requirement before any commodities can be exported from the United States to these persons or companies and establishes a presumption that no such license will be granted.
The Entity List identifies foreign parties that are prohibited from receiving some or all items subject to the Export Administration Regulations (EAR) unless the exporter secures a license. Those persons present a greater risk of diversion to weapons of mass destruction (WMD) programs, terrorism or other activities contrary to U.S. national security or foreign policy interests. BIS can add to the Entity List a foreign party, such as an individual, business, research institution or government organization, for engaging in activities contrary to U.S. national security and/or foreign policy interests. In most instances, license exceptions are unavailable for the export, re-export or transfer (in-country) to a party on the Entity List of items subject to the EAR. Rather, a prior license is required, usually subject to a policy of denial.
According to the indictment, Mechanic and Afghahi are the co-owners of Iran-based Faratel and its Houston-based sister company SPS. Faratel designs and builds uninterruptible power supplies for various Iranian entities, including Iranian government agencies such as the Iranian Ministry of Defense, the Atomic Energy Organization of Iran, and the Iranian Centrifuge Technology Company. SPS designs and manufactures uninterruptible power supplies in cooperation with Faratel. Faridi currently serves as a vice president of SPS. Shyu is a senior manager at the Hosoda Tawain Limited Corporation, a trading company located in Taiwan, while Sadeghi is an employee of Golsad Istanbul Trading, a shipping company located in Turkey.
The indictment alleges that between approximately July 2010 and the present, Mechanic and the others engaged in a conspiracy to obtain various commodities, including controlled United States-origin microelectronics. They then allegedly exported these to Iran, while carefully evading the government licensing system set up to control such exports. The microelectronics shipped to Iran allegedly included microcontrollers and digital signal processors. According to the indictment, these commodities have various applications and are frequently used in a wide range of military systems, including surface-air and cruise missiles. Between July 2010 and the present, Mechanic’s network allegedly sent at least $24 million worth of commodities to Iran.
According to court documents, Mechanic, assisted by Afghahi and Faridi, regularly received lists of commodities, including United States-origin microelectronics, sought by Faratel in Iran. Mechanic would approve these orders and then send the orders to Shyu in Taiwan, according to the indictment. Shyu would allegedly purchase the commodities utilizing Hosoda Taiwan Limited and then ship the commodities to Turkey, where Sadeghi would act as a false buyer via his company, Golsad Istanbul Trading Ltd. The indictment further alleges that Sadeghi would receive the commodities from Shyu and then ship them to Faratel in Iran. Mechanic required his co-conspirators to notify him and obtain his approval for each of the transactions completed by the network, according to the allegations.
The individual defendants each face up to 20 years in federal prison, while the corporate defendants face fines of up to $1 million for each of the IEEPA counts, upon conviction.
Mechanic, Afghahi and Shyu are also charged with conspiring to commit money laundering and substantive money laundering violations, each charge carries a maximum potential term of imprisonment of 20 years. Mechanic further faces a charge of willful failure to file foreign bank and financial accounts for which he faces up to five years in federal prison. The charges also carry the possibility of substantial fines upon conviction.
The government’s case is being prosecuted by Assistant U.S. Attorneys S. Mark Mcintyre and Craig Feazel of the Southern District of Texas, as well as Trial Attorneys Casey Arrowood and Matt Walczewski of the Justice Department’s National Security Division.
In all cases, defendants are presumed innocent until and unless proven guilty. The indictment merely contains allegations of criminal activity.
IEEPA Indictment
Former Puerto Rico Police Officer Sentenced for Making False Statements to FBI During Civil Rights InvestigationRead the Press Release
Former Puerto Rico Police Officer Miguel Negron Vazquez was sentenced today to serve 12 months and one day in prison for making a false statement to a Special Agent of the Federal Bureau of Investigation (FBI) during a federal investigation into civil rights violations related to the fatal beating of Jose Luis Irizarry Perez, 19, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division, U.S. Attorney Rosa Emilia Rodriguez-Velez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI San Juan Field Office.
Negron Vazquez pleaded guilty to falsely telling the FBI that two officers, who later pleaded guilty to unnecessarily striking Irizarry Perez with their batons, never approached or interacted with the victim during the incident. In total, six Puerto Rico police officers have pleaded guilty for their roles in the beating and subsequent obstruction of the civil rights investigation, and two of those officers are still awaiting sentencing. According to documents filed in connection with the guilty pleas, two former Puerto Rico police officers violated the constitutional rights of Irizarry Perez by striking him with their police batons while another former police officer physically restrained Irizarry Perez during an election evening celebration at the Las Colinas housing development in Yauco, Puerto Rico, on Nov. 5, 2008.
U.S. District Court Judge Juan M. Perez Gimenez issued the sentence, which will be followed by two years of supervised release. During the two-year term, the defendant will be under federal supervision, and risks additional prison time should he violate any terms of his supervised release.
“Lying to the FBI or concealing information during the course of a federal civil rights investigation undermines the public’s trust in the criminal justice system and will not be tolerated,” said Principal Deputy Assistant Attorney General Gupta. “The department will aggressively investigate and prosecute those who seek to cover up or obstruct a federal investigation.”
“Today's sentence affirms that law enforcement officers are not above the very laws they are sworn to uphold,” said U.S. Attorney Rodriguez-Vélez. “The defendant’s conduct undermined law enforcement’s expectation of honesty from public officials and those who desire to serve.”
This case was investigated by the FBI’s San Juan Division and is being prosecuted by Senior Litigation Counsel Gerard Hogan and Trial Attorneys Shan Patel and Olimpia E. Michel of the Civil Rights Division and Assistant U.S. Attorney Jose A. Contreras of the District of Puerto Rico.
Federal Court in Memphis, Tennessee, Enters Injunction Against Tax Return PreparerRead the Press Release
The federal court in the Western District of Tennessee has enjoined Stephanie Edmond and her business, the Tax Factory and the Tax Factory Enterprise Inc., from preparing improper federal income tax returns. The court’s order, which was entered with the consent of the parties, prohibits Stephanie Edmond and her businesses from engaging in any conduct that interferes with administering the tax laws. Edmond and her businesses are also prohibited from preparing false returns that include schemes such as reporting non-existent businesses or claiming false education credits. The court also ordered that Edmond and her companies are required to hire a certified public accountant to act as a monitor who can inspect the company’s books and records. The monitor will then be required to report to the United States on a monthly basis as to whether the plaintiff has complied with the internal revenue laws.
Return preparer fraud is one of the Internal Revenue Service’S (IRS) Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on here. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Valencia, California, Doctor Indicted in $6.5 Million Medicare Fraud SchemeRead the Press Release
An indictment was unsealed today charging a doctor from Valencia, California, with operating a $6.5 million scheme to defraud the Medicare program by billing Medicare for medical services that were not actually provided.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California, Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Division and 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 made the announcement.
Gary J. Ordog, 60, of Valencia, California, was indicted by a federal grand jury in the Central District of California on March 27, 2015, for nine counts of health care fraud. The indictment alleges that Ordog billed Medicare for services that were not actually provided to the Medicare beneficiaries.
According to allegations in the indictment, Ordog was a physician who purportedly assisted beneficiaries with various toxicological symptoms, including those related to mold and chemical exposures. Ordog would allegedly see a beneficiary at least once in connection with the potential evaluation and management of his or her conditions. Subsequently, often several years after the last time he saw a particular beneficiary, Ordog would allegedly submit false claims to Medicare for purported additional visits with the same beneficiary, when the visits never actually occurred. In certain instances, Ordog allegedly billed Medicare for services provided to beneficiaries who were deceased as of the claimed date of service.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
This case is being investigated by HHS-OIG and the FBI, 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 for the Central District of California.This case is being prosecuted by Trial Attorney Ritesh Srivastava 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.
Ordog Indictment
Three Members of International Synthetic Drug-Trafficking Organization Arrested in Los AngelesRead the Press Release
Three members of an international synthetic drug-trafficking organization—responsible for selling synthetic drugs with brand names like Twilite, Passion Sense, Stoopid, Black Diamond, and Platinum—were arrested in Los Angeles on Tuesday. The federal charges were unsealed in the Northern District of New York today. According to documents also unsealed in the Southern District of Indiana today, a leader of the organization has already pleaded guilty to federal drug-trafficking charges.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Richard S. Hartunian of the Northern District of New York and U.S. Attorney Josh J. Minkler of the Southern District of Indiana made the announcement.
“The manufacture and distribution of synthetic narcotics is a growing problem that is especially dangerous to the young people of our communities,” said Assistant Attorney General Caldwell. “Drug traffickers peddle these illegal synthetic drugs with harmless sounding names to impressionable youth who are typically unaware of the harmful chemicals they actually are ingesting. The Criminal Division will continue to partner with local and federal law enforcement around the nation to stem the flow of these unsafe and illegal substances and bring the traffickers to justice.”
“Despite the efforts of these drug traffickers to evade prosecution through the creation of synthetic drugs, these indictments demonstrate the ability of law enforcement to effectively respond to those who market these dangerous substances,” said U.S. Attorney Hartunian. “We will continue to use all our resources to combat this national problem.”
“Synthetic narcotics are not the harmless product traffickers and users make them out to be,” said U.S. Attorney Minkler. “They are mind-altering substances that cause psychosis and even death with our nation’s youth.”
Andrew Raymond, 36, Brian Requena, 37, and Zefren Michael, 35, all of Los Angeles, California, were indicted in the Northern District of New York for conspiracy to possess with the intent to distribute and to distribute controlled substance analogues, intending that those analogues be used for human consumption. Raymond and Requena were also charged with a money laundering conspiracy.
In a related case, Roger Upchurch, 66, of Indianapolis, Indiana, pleaded guilty on March 11, 2015, before Chief U.S. District Judge Richard L. Young in the Southern District of Indiana, to conspiracy to distribute a controlled substance analogue and money laundering. Upchurch also forfeited over $2 million in cash and other assets obtained from his illegal activities, including a house, two cars and a Sweetwater pontoon boat. A sentencing date has not yet been scheduled.
As part of his guilty plea, Upchurch admitted that he was a leading member of the international drug-trafficking organization, working in the Los Angeles-area, to produce and distribute thousands of kilograms of smokable synthetic cannabinoids (SSCs) with brand names such as Twilite, Passion Sense, Stoopid, Black Diamond and Platinum. SSCs, also popularly known as “Spice,” are smokable drugs that are designed to mimic marijuana. The synthetic chemicals used to produce these SSCs were imported from China, then applied to a plant-like substance and sold like marijuana in a smokable form.
According to allegations in the indictment, Raymond, Requena, Michaels, and others conspired with Upchurch to manufacture SSCs for distribution throughout the United States. In an effort to avoid detection and prosecution by law enforcement, the drug-trafficking organization allegedly mislabeled and fraudulently labeled packages with “not for human consumption” and other false statements, including falsely marketing their products as potpourri, incense or aroma.
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This investigation is part of the Organized Crime Drug Enforcement Task Force (OCDETF) program, and these cases were supported under the DEA Special Operations Division’s Project Synergy. These cases are the result of investigative efforts led by the DEA’s Indianapolis Field Office, with valuable assistance provided by the U.S. Postal Inspection Service and the Indianapolis Metropolitan Police Department.
The case in the Southern District of Indiana is being prosecuted by Trial Attorney Brian Sardelli of the Criminal Division’s Narcotic and Dangerous Drug Section and Assistant U.S. Attorneys Matthew Brookman and Debra Richards of the Southern District of Indianapolis. The case pending in the Northern District of New York is being prosecuted by Assistant U.S. Attorney Carla Freedman.
Owner of Miami Home Health Company Sentenced to 113 Months in Prison for $32 Million Medicare Fraud SchemeRead the Press Release
An owner of a Miami home health care company was sentenced today to 113 months in prison in connection with a $32 million Medicare fraud scheme.
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 Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Felix Gonzalez, 45, of Miami, pleaded guilty on Jan. 9, 2015, to one count of conspiracy to commit health care fraud, and was sentenced today by U.S. District Judge Kathleen M. Williams of the Southern District of Florida. In addition to the prison sentence, Gonzalez was ordered to pay $21,423,160 in restitution.
Gonzalez was an owner of AA Advanced Care Inc. (AA Advanced), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries. As part of his guilty plea, Gonzalez admitted that he and his co-conspirators operated AA Advanced for the purpose of billing 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.
Gonzalez further admitted that he negotiated and paid kickbacks and bribes to patient recruiters in exchange for patient referrals, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries. Gonzalez admitted that he and his co-conspirators used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for home health care services.
From approximately January 2006 through March 2009, AA Advanced submitted approximately $32 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $22 million for these fraudulent claims.
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 for the Southern District of Florida. This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer and Trial Attorneys Kelly Graves and Lisa Miller 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.
New York City Tax Return Preparer Pleads Guilty to Preparing and Filing False Tax ReturnsRead the Press Release
A Queens, New York, tax return preparer pleaded guilty today in U.S. District Court in Brooklyn, New York, to 38 counts of aiding and assisting in the preparation of false federal income tax returns and four counts of filing false personal income tax returns, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to the allegations in the indictment, Celamour Berus, 61, owned and operated Celamour Enterprises, a tax return preparation business located at his home in Springfield Gardens, New York. For tax years 2007 through 2011, Berus prepared false individual income tax returns that claimed false charitable contributions, unreimbursed employee expenses and other itemized deductions for clients of Celamour Enterprises. Berus also falsified his own tax returns for tax years 2007 through 2010 by failing to report all of the gross receipts generated by his tax preparation business and claiming false itemized deductions for unreimbursed employee expenses.
Berus faces a statutory maximum sentence of three years in prison and up to a $250,000 fine for each count at his sentencing set for Aug. 18 before U.S. District Judge Allyne R. Ross of the Eastern District of New York.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-CI, who investigated the case, and Trial Attorneys Jeffrey Bender and Brittney Campbell of the Tax Division, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office for the Eastern District of New York for their substantial assistance.
Justice Department Asks Federal Court to Shut Down South Carolina Tax Return PreparersRead the Press Release
In separate actions, the United States has asked a federal court in South Carolina to permanently bar two South Carolina men from preparing federal income tax returns for others, the Justice Department announced today.
In 1997, Clinton A. Broomfield, of Lexington, South Carolina, Tony McGill, of Ladson, South Carolina, and Stacy Middleton formed MBM Tax and Accounting Services LLC to prepare tax returns and provide other financial services. In 2007, Broomfield, McGill and Middleton ended their formal partnership and opened separate tax preparation businesses. Broomfield currently manages Summerville MBM Tax Service, while McGill manages MBM Accounting and Tax Services LLC in North Charleston, South Carolina. Though the partnership ended in 2007, McGill, Broomfield and Middleton continue to share advertising expenses.
In July 2013, the U.S. District Court for the District of South Carolina permanently barred Middleton from preparing federal tax returns for others. He is not a defendant in the current lawsuit.
The complaints allege that, through Summerville MBM Tax Service and MBM Accounting and Tax Services LLC, Broomfield and McGill prepare returns for customers that unlawfully understate income tax liabilities and overstate refunds. According to the suit, the defendants fabricate bogus deductions on Forms 1040, Schedule A (Itemized Deductions) and Schedule C (Profit or Loss from Business) that report nonexistent business expenses and deductions on their customers’ returns. These phony business losses offset the customers’ wages and falsely reduce their income tax liability, according to the suit.
The complaints further allege that Internal Revenue Service (IRS) audited returns prepared by McGill, which revealed tax understatements on 58 of the 61 examined returns, resulting in an average tax deficiency of $5,709 per return. Of the 147 IRS- examined returns that Broomfield prepared, 123 resulted in an increase of his customer’s tax liability, resulting in an average tax deficiency of $2,817 per return, according to the suit. Based on the large percentage of audited returns that understate customers’ actual tax liability and the number of returns Bloomfield and McGill prepare, the complaints allege that the U.S. Treasury may have lost millions of dollars in tax revenue as a result of the defendants’ conduct.
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.
Justice Department Applauds Adoption of Police Department-Wide Tactical De-escalation Training Program in SeattleRead the Press Release
U.S. District Judge James L. Robart today approved a department-wide training program developed by the Seattle Police Department (SPD) and endorsed by the Justice Department, the Seattle City Attorney’s Office and the Federal Court Monitor Merrick Bobb, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division and Acting U.S. Attorney Annette L. Hayes of the Western District of Washington. The training is a key requirement of the 2012 consent decree entered by the city and the Justice Department to address a pattern and practice of excessive use of force by SPD officers.
All 1,300 sworn officers of the SPD will be trained in tactical de-escalation skills and strategies through the newly approved program. The goal of the training is to teach SPD officers that tactical de-escalation is more than a set of specific skills but also an overarching approach to incident resolution and community policing. De-escalation more broadly refers to the strategic slowing down of an incident in a manner that allows officers more time, distance, space and tactical flexibility during dynamic situations on the street. Applying these specific skills increases the potential for resolving the situation with minimized force or no force at all, which reduces the likelihood of injury to the public, increases officer safety and mitigates the immediacy of potential or ongoing threats. A reduction in use of force incidents also reduces community complaints, promotes the perception of procedural justice and, most importantly, promotes resolution of events with the public’s compliance.
The 2015 tactical de-escalation training builds upon training that officers received for the first time in 2014. Tactical de-escalation training has and will be woven into every aspect of more specific technical training that SPD officers will receive throughout the year, including firearms, individual and team defensive tactics and more.
As the Federal Court Monitor Bobb stated in his filing memo with the court:
For some time, many Seattle residents, like others throughout the country, have suggested that officers receive training on how to de-escalate situations in order to reduce the potential for force needing to be contemplated. However, in many instances, the concept of “de-escalation” has tended to be imprecisely defined and served as a kind of “catch-all” term or approach used to refer to anything that might defuse difficult police encounters. Clear and precise training on what de-escalation means in Seattle began in earnest last year. This year’s training will deepen officers’ understandings of how de-escalation is strategic, tactical, and valuable both to officers and the communities that they serve. By providing clear detail and real-world techniques that officers can apply immediately in the field, it puts substantial “meat on the bones” of what “de-escalation” is in its full scope and how, when, and why such techniques should be used. This training is a notable step forward.
“De-escalation tactics are essential skills for police officers and departments both to help to ensure constitutional policing and to improve public safety and officer safety,” said Principal Deputy Assistant Attorney General Gupta. “Force must be both reasonable and necessary, and this training will provide valuable guidance to officers when they make split-second decisions about when and how to use force. As the Seattle Police Department implements this training, it is taking a vital step forward toward compliance with the consent decree.”
“Tactical de-escalation goes to the heart of the consent decree,” said Acting U.S. Attorney Hayes. “Training in these skills will give officers the tools they need to avoid, mitigate, or minimize force encounters. When put to use, these skills keep both officers and the individuals they encounter safer, allowing officers to focus on their primary mission – service to their community.”
Judge Robart approved the consent decree in August 2012. The Justice Department and the city of Seattle jointly selected and the court approved the monitor in October 2012.
Former Alabama Nightclub Owner and Ringleader of Stolen Identity Tax Refund Fraud Scheme Sentenced to PrisonRead the Press Release
The ringleader of a stolen identity tax refund fraud scheme and former nightclub owner was sentenced yesterday in the U.S. District Court in Montgomery, Alabama, for stolen identity refund fraud related crimes, 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.
Tarrish Tellis, 38, of Montgomery, was sentenced to serve 223 months in federal prison, three years of supervised release and ordered to pay $694,366 in restitution. On Jan. 14, a federal jury convicted Tellis of conspiracy to commit theft of public money, theft of public money and aggravated identity theft.
“As evidenced by today’s sentence, individuals like Mr. Tellis, who commit stolen identity theft crimes and in doing so, victimize innocent American taxpayers and brazenly steal from the U.S. Treasury, face lengthy incarceration and substantial financial penalties,” said Acting Assistant Attorney General Ciraolo. “The Tax Division and its law enforcement partners stand ready to vigorously pursue and prosecute these offenders to the fullest extent of the law.”
According to evidence presented at trial, Tellis, the former owner of Club Iconz Bar and Grill in Montgomery, masterminded a more than $700,000 stolen identity tax refund scheme. Tellis’ co-conspirator, Nakia Jackson, obtained approximately 700 names, dates of birth and social security numbers from an employee of the Alabama Medicaid State Agency. Jackson provided some of the stolen names to Tellis, who in turn used them to file false income tax returns. In exchange, Tellis taught Jackson how to file false tax returns.
Tellis concealed the origin of the tax refund proceeds by recruiting friends and relatives, including Bobby Joe Means, Delancey Tolliver, Glen Powell Jr. and Tracey Montgomery, to open up bank accounts for the purpose of receiving the tax refunds. When the refunds were deposited into their bank accounts, Tellis directed them to withdraw the money and provide it to him. On the false tax returns submitted to the Internal Revenue Service (IRS), Tellis directed more than $300,000 in refunds to be deposited in those accounts. Tellis also recruited a bank teller, Laquanta Clayton, who used her position to open up bank accounts in the name of fictitious individuals and in the name of her daughter’s father. On the false tax returns submitted to the IRS, Tellis directed approximately $200,000 in refunds to be deposited into the accounts that Clayton controlled. Clayton withdrew the refund proceeds in cash and provided the majority of the money to Tellis. Tellis also took steps to conceal his involvement in the filing of false tax returns, including filing numerous tax returns by accessing another person’s residential wireless router that was not password protected so that it appeared as though the owner of the residence had filed the returns.
In 2014, Tellis’ co-conspirators were sentenced to prison for their involvement in the stolen identity refund fraud scheme. Jackson was sentenced to serve 87 months in prison, Clayton was sentenced to serve 21 months in prison, Tolliver was sentenced to serve 15 months in prison, Powell Jr. and Means were each sentenced to serve 12 months and one day in prison and Montgomery was sentenced to serve six months in prison.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Beck commended the special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Gregory P. Bailey, Charles M. Edgar Jr. and Michael C. Boteler of the Tax Division and Assistant U.S. Attorney Todd Brown of the Middle District of Alabama, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at the division website.
Federal Court Approves Justice Department Agreement to Protect the Rights of Military and Overseas Voters in IllinoisRead the Press Release
The Justice Department announced today that the federal court in Chicago has approved an agreement between the department and Illinois officials to help ensure that military service members, their family members and U.S. citizens living overseas have an opportunity to participate fully in the upcoming special primary election and special election to fill a vacated seat in the state’s 18th Congressional District. The agreement is necessary to ensure Illinois’ compliance with the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA).
The agreement, filed simultaneously with the complaint on April 6, 2015, requires that the state adopt an election calendar which enables local jurisdictions to transmit ballots to UOCAVA voters at least 45 days before the upcoming special elections as the federal law requires. The agreement establishes July 7, 2015, as the date for the special primary election and Sept. 10, 2015, as the date for the special election. These dates were selected to allow the election authorities sufficient time to complete all the pre-election steps necessary to timely transmit ballots to UOCAVA voters as required by the federal law. The agreement also requires that the state take measures to notify UOCAVA voters of the election dates and relevant deadlines.
“This agreement with Illinois reflects our continued commitment to ensure that members of our armed forces, their families and overseas U.S. citizens are offered a full and meaningful opportunity to vote in all federal elections, including the upcoming special elections for United States Representative from Illinois’ 18th Congressional District, and all future special elections,” said Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division. “The Department of Justice will always work to ensure U.S. citizens can exercise their right to vote.”
UOCAVA requires states to allow uniformed service voters, serving both overseas and within the United States, and their families and U.S. citizens overseas to register to vote and to vote absentee for all elections for federal office. In 2009, Congress enacted the Military and Overseas Voter Empowerment (MOVE) Act, which amended UOCAVA to require that states transmit absentee ballots to voters covered under UOCAVA, by mail or electronically at the voter’s option, no later than 45 days before federal elections.
The complaint and agreement were necessary because Illinois law mandates a truncated election schedule for holding special elections to fill vacancies for U.S. Representative that prevents Illinois from ensuring transmittal of ballots to UOCAVA voters at least 45 days before the special primary election and the subsequent special election. Under the terms of the agreement, Illinois is also required to take the necessary action to ensure that UOCAVA voters have a fair and reasonable opportunity to participate in future federal special elections for U.S. Representatives in Congress, including pursuing permanent changes to Illinois law governing the state’s special election calendar that will permit compliance with UOCAVA’s ballot transmission requirements. The agreement also requires that Illinois provide detailed reports to the department concerning the transmission of ballots for the scheduled special elections in the 18th Congressional District.
More information about UOCAVA and other federal voting laws is available on the Department of Justice website at www.justice.gov/crt/about/vot/misc/activ_uoc.php. Please report any complaints to the Civil Rights Division’s Voting Section at 1-800-253-3931.
Columbus, Ohio, Man Charged with Providing Material Support to TerroristsRead the Press Release
A federal grand jury has charged Abdirahman Sheik Mohamud, 23, of Columbus, Ohio, with one count of attempting to provide and providing material support to terrorists, one count of attempting to provide and providing material support to a designated foreign terrorist organization, and one count of making false statements to the FBI in an indictment returned in the Southern District of Ohio.
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Carter M. Stewart of the Southern District of Ohio and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Division announced the indictment returned today.
According to court documents, Mohamud left the United States in April 2014 for the purpose of training and fighting with terrorists in Syria.
As a naturalized citizen of the United States, he obtained a U.S. passport and purchased a one-way ticket to Greece. He did not board his connecting flight to Athens, Greece, during his layover in Istanbul, Turkey, and instead completed pre-arranged plans to travel to Syria.
According to the indictment, Mohamud stated that, after arriving in Syria, he obtained training from a group in shooting weapons, breaking into houses, explosives and hand-to-hand combat. Mohamed also stated that, after completing this training, he was instructed by a cleric in the organization to return to the United States and commit an act of terrorism.
“According to the charges in the indictment, Mohamud allegedly traveled to Syria to train with and fight alongside terrorists” said Assistant Attorney General Carlin. “Identifying and neutralizing the threat posed by foreign terrorist fighters who return to the United States is one of the National Security Division’s highest priorities. I want to thank the many agents, analysts, and prosecutors who are responsible for this ongoing investigation and today’s charges.”
“Mohamud sought and obtained terrorist training in Syria,” said U.S. Attorney Stewart. “Upon his return to the United States, he discussed carrying out acts in the United States.”
“The Joint Terrorism Task Force and our law enforcement partners work tirelessly to protect our community," said Special Agent in Charge Byers. “Cases like this are tangible reminders of the threats we face each day.”
Providing material support to terrorists and providing material support to a designated foreign terrorist organization – in this case, namely, Jabhat al-Nusrah – are each crimes punishable by up to 15 years in prison. Making false statements involving international terrorism carries a maximum sentence of eight years in prison.
Mohamud is scheduled to be transferred into federal custody based on today’s indictment. He was arrested and detained on state charges on Feb. 21, 2015.
Assistant Attorney General Carlin and U.S. Attorney Stewart commended the JTTF for its work on this investigation, and also thanked Franklin County Prosecutor Ron O’Brien and his office for their ongoing efforts in this investigation. The case is being prosecuted by Assistant U.S. Attorneys Doug Squires, Dana Peters and Salvador Dominguez of the Southern District of Ohio, Special Assistant U.S. Attorney Joseph Gibson with the Franklin County Prosecutor’s office, and Trial Attorney Bridget Behling of the Justice Department’s National Security Division.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Mohamud Indictment
U.S. Navy Officer Pleads Guilty to Selling Classified Ship Schedules as Part of Expanding Navy Bribery ProbeRead the Press Release
A lieutenant commander in the U.S. Navy pleaded guilty to bribery charges in federal court today, admitting that he accepted cash, hotel expenses and the services of a prostitute in return for providing classified U.S. Navy ship schedules and other internal Navy information to an executive of a defense contracting firm.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Deputy Inspector General for Investigations James B. Burch of the Defense Criminal Investigative Service (DCIS), Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Director Anita Bales of the Defense Contract Audit Agency (DCAA) made the announcement.
“Another Navy officer has now pleaded guilty and admitted to taking bribes to reveal classified military information to a major supplier,” said Assistant Attorney General Caldwell. “It is both troubling and disappointing how many Navy officers we have exposed as willingly falling prey to GDMA’s corruption, and our investigation remains active and ongoing. Those who serve in our nation’s military must uphold the public’s trust or pay the consequences for their crimes.”
“The receipt of envelopes of cash and lavish hotel stays by our public officials at whatever level erodes the public’s trust in our institutions and our government,” said U.S. Attorney Duffy. “Today’s guilty plea reflects the next step in our ongoing effort to regain that public trust.”
Todd Dale Malaki, 44, of San Diego, pleaded guilty before U.S. Magistrate Judge Mitchell D. Dembin of the Southern District of California to one count of conspiracy to commit bribery. A sentencing hearing is scheduled for July 6, 2015.
As part of his guilty plea, Malaki admitted that in 2006, while he was working as a supply officer for the U.S. Navy’s Seventh Fleet, he began a corrupt relationship with Leonard Glenn Francis, the former president and chief executive officer of Glenn Defense Marine Asia (GDMA), a company that provided services to the U.S. Navy. As part of the scheme, Malaki provided Francis with classified U.S. Navy ship schedules and proprietary invoicing information about GDMA’s competitors. In exchange, Malaki admitted that Francis provided him with luxury hotel stays in Singapore, Hong Kong and the island of Tonga, as well as envelopes of cash, entertainment expenses and the services of a prostitute. Malaki admitted that the total value of the benefits he received was approximately $15,000.
Malaki is the eighth individual to plead guilty in this expanding probe into corruption and fraud in the U.S. Navy. GDMA pleaded guilty in January. Two other individuals, Paul Simpkins, formerly a Department of Defense (DOD) contracting officer, and Michael Misiewicz, a Captain-select in the U.S. Navy, have been charged and entered pleas of not guilty.
The ongoing investigation is being conducted by NCIS and DCIS, with substantial assistance from the DCAA. The case is being prosecuted by Senior Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Robert S. Huie of the Southern District of California.
Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line awww.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
Two Detroit Women Sentenced for Filing False Tax Returns Using Identities of Dead PeopleRead the Press Release
Two Detroit residents were sentenced yesterday after pleading guilty to charges of wire fraud and aiding and abetting in identity theft, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan and Acting Special Agent in Charge Jarod Koopman of Internal Revenue Service-Criminal Investigation (IRS-CI) announced today.
U.S. District Court Judge Avern Cohn of the Eastern District of Michigan sentenced Brenda Knight to serve 24 months in prison and Adreann Turnage to serve 18 months in prison. Willie Watkins, Knight’s husband, was sentenced on April 29, 2014, to serve 30 months in prison and ordered to pay $410,949 in restitution for wire fraud and identity theft.
“The Tax Division has zero tolerance for stealing the identities of the deceased and other vulnerable members of our communities,” said Acting Assistant Attorney General Ciraolo. “The individuals perpetrating these egregious tax crimes will be identified, their criminal operations will be dismantled and they will be prosecuted and punished to the fullest extent of the law.”
According to court records, Knight and Turnage participated in a scheme with Watkins and others to defraud the United States by using the stolen names and social security numbers of recently deceased individuals to prepare fraudulent income tax returns. The defendants electronically filed more than 700 fraudulent 2010 tax returns falsely claiming the Earned Income Credit, Education Credits and the Making America Work Credit, resulting in refund claims of more than $1.8 million. The returns were transmitted utilizing public access internet connections from various locations including Starbucks and Red Roof Inns. A Comcast Communications account registered to Turnage transmitted 46 fraudulent returns. The refunds were directed to bank accounts, many of which were controlled by Watkins, established for the sole purpose of receiving the refunds. Knight helped recruit individuals to whom Watkins would issue checks written on the accounts, cash them and bring the proceeds back to Watkins for distribution to participants in the scheme.
“Using the identities of deceased individuals to commit crimes for financial gain is particularly egregious,” said Acting Special Agent in Charge Koopman. “Identity theft is a top priority for the IRS-Criminal Investigation and we will continue to detect and investigate these types of cases in order to protect taxpayers from being victimized.”
Acting Assistant Attorney General Ciraolo and U.S. Attorney McQuade thanked the special agents of IRS-CI, who investigated the case, and Assistant U.S. Attorney Ross I. MacKenzie of the Eastern District of Michigan and Trial Attorney Kenneth C. Vert of the Tax Division, who prosecuted the case.
New Jersey Companies and Owner Plead Guilty to Biodiesel Fuel Fraud SchemeRead the Press Release
Joseph Furando, 49, of Montvale, New Jersey, together with two companies he operated in New Jersey, pleaded guilty today for their parts in an Indiana-centered scheme to defraud biodiesel buyers and U.S. taxpayers by fraudulently selling biodiesel incentives, announced Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division and U.S. Attorney Josh J. Minker for the Southern District of Indiana.
From 2007 through 2012, e‑biofuels owned a biodiesel manufacturing plant in Middletown, Indiana. Biodiesel is a fuel that can be used in diesel engines and that is made from renewable resources, including soybean oil and waste grease from restaurants. Under the Energy Independence and Security Act, properly manufactured biodiesel was be eligible for a dollar per gallon tax credit as well as a another valuable credit, called a RIN, that petroleum refiners and importers could use to demonstrate compliance with federal renewable fuel obligations.
“Incentives for the production of biodiesel help promote energy independence, drive innovation in the fuel and agriculture sectors and have positive impacts on our environment,” said Assistant Attorney General Cruden. “Furando engaged in extensive criminal activity to gain advantage, all at the expense of the biofuels program and its benefits to our nation, and for that he has been vigorously prosecuted and convicted.”
“This plea represents a step along the way to closing the book on one of the largest fraud schemes in Indiana history,” U.S. Attorney Minker. “All told, this case involves nearly a dozen defendants and daunting investigative work. The intense, high-quality work of all of the law enforcement agents and prosecutors involved should make those who seek personal profit at taxpayer’s expense think twice before attempting such schemes.”
Furando has admitted that sometime in late 2009, he and his companies, defendants Caravan Trading Company and CIMA Green, began supplying e‑biofuels with biodiesel that had already been used to claim tax credits and RINs. Because these incentives had already been claimed, Furando could purchase the biodiesel at low prices, sometimes for more than two dollars per gallon less than biodiesel that was still eligible for the credits. Furando knew that once he supplied product, e‑biofuels and his individual co-defendants would illegally re-certify it and sell it at the much higher market price for incentivized biodiesel, known as B100 with RINs. Within the circle of those he trusted, Furando referred to this program of fraud as “Alchemy.”
Furando, his companies, and his Indiana co-defendants realized huge per gallon profits through this scheme, sometimes in excess of $12,000 per truckload. Furando realized his profits through the prices he charged e‑biofuels. Over the course of approximately two years, the defendants fraudulently sold more than 35 million gallons of fuel for a total cost of over $145.5 million. The defendants realized more than $55 million in gross profits, at the expense of their customers and U.S. taxpayers.
Today, Furando pleaded guilty to all of the charges against him, which included conspiracy, wire fraud, lying to investigators during a search of his offices and engaging in prohibited financial transactions, money laundering. He faces up to twenty years of imprisonment on some of the charges, as well as large fines and the requirement that he provide full restitution to the victims of this crime, which include U.S. taxpayers, truck stop companies, fuel traders and others. Furando has also agreed to forfeit biodiesel-powered motorcycles, sports cars, real estate, jewelry, watches and other luxury goods that he purchased with the proceeds of this fraud.
“The Renewable Fuel Standard was created to reduce the nation’s dependence on foreign oil and achieve important greenhouse gas reductions,” said Assistant Administrator Cynthia Giles of EPA for Enforcement and Compliance Assurance. “This criminal activity undercuts these benefits and puts businesses that follow the law at an unfair disadvantage. Today’s guilty plea upholds program integrity and protects companies that play by the rules.”
Today’s plea completes the part of this case involving New Jersey defendants. Four Indiana defendants remain, who face trial in the Southern District of Indiana on May 11, 2015.
The case is being prosecuted by Senior Litigation Counsel Steven D. DeBrota of the U.S. Attorney’s Office, Assistant Chief Thomas T. Ballantine of the Environmental Crimes Section in the Department of Justice’s Environment and Natural Resources Division and Special Assistant U.S. Attorney Jake Schmidt of the U.S. Attorney’s Office and Senior Attorney for the Securities and Exchange Commission.
The collaborative investigation that brought this case to fruition is the result of work by EPA’s Criminal Investigation Division, IRS- Criminal Investigation, the FBI and the Securities and Exchange Commission, with assistance during the investigation by the U.S. Secret Service and the U.S. Department of Agriculture.
Other defendants are scheduled for trial pursuant to the indictment in this case. An indictment is only a charge and is not evidence of guilt. All defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Michigan Home Health Agency Owner Pleads Guilty in Connection with $2.6 Million Home Health Care SchemeRead the Press Release
The owner of a greater Detroit-area home health care agency pleaded guilty today to fraud and money laundering charges in connection with her role in a $2.6 million home health care scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office and Special Agent in Charge Jarod Koopman of Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.
Rahmat Begum, 49, of Farmington Hills, Michigan, pleaded guilty today – during the second day of her trial – to all charges in a six-count indictment, including one count of conspiracy to commit wire fraud, one count of making false statements relating to health care matters, one count of conspiracy to violate the Anti-Kickback Statute and three counts of money laundering. A sentencing hearing is scheduled for Aug. 18, 2015, before U.S. District Judge Bernard A. Friedman of the Eastern District of Michigan.
According to admissions made as part of her guilty plea, Begum conspired to submit falsified claims to Medicare where the claims were based upon referrals obtained through illegal kickbacks to patient recruiters and physicians. Begum also admitted to conspiring to pay illegal kickbacks to patient recruiters and physicians and to making a false statement to Medicare pledging not to pay kickbacks, when in fact she was paying them. Finally, Begum admitted to laundering the proceeds of the wire fraud conspiracy.
This case was investigated by the FBI, HHS-OIG and IRS-CI and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Trial Attorneys Niall M. O’Donnell and James P. McDonald 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 Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Justice Department Asks Federal Court to Shut Down Fraudulent Florida Tax Return PreparerRead the Press Release
The United States has filed a complaint seeking to permanently bar a West Palm Beach, Florida, area man and his business from preparing federal tax returns for others, the Justice Department announced today.
The civil injunction complaint against Paul Jean, which was filed in the U.S. District Court for the Southern District of Florida, alleges that Jean prepares federal income tax returns for customers that understate their correct tax liabilities. The complaint alleges that Jean has operated under the business names Whiz Tax and Rejoice Tax Services.
According to the complaint, Jean intentionally misreports the information he receives from customers in order to fabricate or inflate tax credits, including claiming improper earned income tax credits, education credits or fuel credits. Because some of these credits are refundable, the improper claims often result in larger tax refunds than the customer would otherwise be entitled to, according to the suit.
The complaint alleges that Jean also prepares returns that report false or inflated deductions, such as mortgage interest deduction or contributions to charity, or business expense deductions reported on a Schedule C (Profit or Loss From Business), such as expenditures for supplies or office expenses.
According to the suit, the Internal Revenue Service (IRS) interviewed several of Jean’s customers who stated that they had not provided Jean with information to support a claim for a credit and that they were not aware that the improper credit was claimed on their tax return.
The suit also alleges that in some instances, Jean has prepared two returns for one customer. One return is shown to the customer but is not filed with the IRS, while the other return is filed with the IRS but not shown to the customer. The filed return claims a larger refund than the return shown to the customer by using at least one of the schemes described. Jean then allegedly keeps the fraudulent excess refund reported on the filed return.
The IRS estimates that Jean, directly or indirectly, has prepared and filed more than 3,000 tax returns since 2012, and that Jean’s conduct has potentially caused millions of dollars of harm to the U.S. Treasury, according to the complaint.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax preparer, and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Antitrust Division Issues 2015 Annual NewsletterRead the Press Release
The Department of Justice’s Antitrust Division today issued the 2015 edition of its annual newsletter. The newsletter highlights the Antitrust Division’s civil and criminal enforcement actions, international cooperation efforts and competition guidance and advocacy over the last year.
The newsletter includes a message from Assistant Attorney General Bill Baer discussing the division’s recent litigation successes, prosecution of domestic and international cartels, efforts to provide antitrust guidance as new business models and technologies emerge, and continued competition advocacy, both in the U.S. and abroad. Assistant Attorney General Baer emphasized that the division’s ability to enforce antitrust laws across many different industries requires adherence to certain core principles: “We do not pick winners and losers; we focus on removing obstacles to competitive markets and protecting market structures that encourage competition. We want innovators to innovate and disrupters to disrupt, and for American consumers to benefit from dynamic markets.”
This year’s newsletter describes the division’s criminal enforcement efforts, which included obtaining approximately $1.3 billion in criminal fines and penalties – the largest amount ever secured by the division in a single fiscal year – and the incarceration of 21 executives for criminal violations of U.S. antitrust laws. The division also brought its first prosecution against a conspiracy specifically targeting e-commerce, in which pricing algorithms were manipulated to fix prices on the internet.
The civil enforcement update in the newsletter discusses the successful challenge, after a seven-week trial, to American Express’s antisteering rules. The newsletter refers to the decision of National CineMedia and Screenvision to abandon their proposed merger to monopoly after the division sued to enjoin the deal, and details the division’s successful effort to unwind a consummated merger to monopoly in the New York City “hop-on, hop-off” tour bus market. The newsletter also reports on the division’s recent use of disgorgement to ensure that defendants do not profit from unlawful conduct.
Finally, the newsletter includes profiles on division attorneys and economists, as well as an article on the division’s diversity initiatives.
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Two Georgia Men Sentenced to Prison for Stolen Identity Tax Refund FraudRead the Press Release
Two Georgia residents were sentenced today in U.S. District Court in Atlanta for their involvement in a stolen identity tax refund fraud scheme, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and Acting U.S. Attorney John A. Horn of the Northern District of Georgia.
Obi Emelogu, 51, of Woodstock, Georgia, was sentenced to serve 45 months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $719,872. Oloh Samuel, 33, of Acworth, Georgia, was sentenced to serve 18 months in prison to be followed by three years of supervised release, and ordered to pay restitution in the amount of $146,179. On Oct. 10, 2014, Emelogu pleaded guilty to conspiracy to defraud the United States and aggravated identity theft. On Dec. 2, 2014, Samuel pleaded guilty to conspiracy to defraud the United States.
“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. “This street crime threatens the very fabric of tax administration and 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 seek to incarcerate the offenders who view the Federal Treasury as their own personal bank account.”
“These defendants brazenly stole money from the American taxpayers with little regard for whom they affect,” said Acting U.S. Attorney Horn. “We have committed resources to combat this kind of theft, and will aggressively pursue and prosecute those who believe they can file false tax returns.”
“IRS-Criminal Investigation will remain proactive in the investigation of individuals and groups especially return preparers, who engage in stealing the identities of innocent people,” said Special Agent in Charge Veronica F. Hyman-Pillot of Internal Revenue Service-Criminal Investigation (IRS-CI). “We will continue to utilize every tool available to investigate those who conspire with each other to victimize members of our community for their own personal gain.”
“These sentences send a clear message that the federal government will aggressively investigate and prosecute the crime of identity theft involving stolen tax refunds,” said J. Russell George, Treasury Inspector General for Tax Administration (TIGTA). “While criminals may find it easy to steal someone’s identity using their personal information, they need to know that the punishment for committing this crime will be commensurate with the devastating toll identity theft takes on its victims.”
According to court documents other information presented in court, Samuel and Emelogu participated in a scheme using stolen identities to file fraudulent federal income tax returns, including tax returns filed using stolen identities. The scheme involved businesses located in Georgia, including S & O Accounting Services LLC, which was controlled by Samuel, and Xpress Auto Parts & Towing LLC and O.B. Consulting & Tax Services LLC., which were controlled by Emelogu. In 2012, Emelogu filed hundreds of false federal income tax returns with the IRS that included fraudulent claims for tax refunds directed to be paid into his business bank accounts and into a bank account controlled by Samuel. Electronic evidence established that additional false tax returns were also filed from overseas and the refunds were deposited into Samuel’s bank account. At sentencing, the court found that the intended loss amount attributable to Emelogu was more than $400,000 and that the intended loss amount attributable to Samuel was more than $1 million.
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Horn commended the special agents of IRS-CI and the TIGTA, who investigated the case, and Assistant U.S. Attorney Thomas J. Krepp of the Northern District of Georgia and Trial Attorney Jason H. Poole of the Tax Division, who prosecuted the case.
Palm Beach County Sheriff's Deputy Indicted for Using Excessive Force and Filing False ReportRead the Press Release
A federal grand jury in West Palm Beach, Florida, returned a two-count indictment charging Palm Beach County Sheriff’s Deputy William D. Wheeler, 46, with unlawfully assaulting a man at the Palm Beach County Detention Center on Oct. 9, 2013, and filing a false report on the incident, announced Principal Deputy Assistant Attorney General Vanita Gupta of the Civil Rights Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida and Special Agent in Charge George L. Piro of the FBI.
According to the allegations contained in court documents, on or about Oct. 9, 2013, Wheeler was employed as a Palm Beach County Sheriff’s Office Deputy and was assigned to the Corrections Division (PBSO) West Detention Center located in Belle Glade, Florida. As part of his duties, the complaint alleges that Wheeler escorted an inmate, J.S., to the medical area of the facility where he was seated in a chair with his hands restrained behind his back with handcuffs. The complaint alleges that J.S. did not comply with the treating nurse’s attempt to review his medical bracelet. The complaint further alleges that as the defendant lifted the inmate’s arm to read the medical bracelet, the inmate pulled his arm away. The complaint alleges that Wheeler then placed his hands around the inmate’s neck, struck the inmate’s head against the wall and pulled the inmate to the floor. The complaint further alleges that the defendant then struck the inmate in the face with his knee. The inmate sustained facial injuries as a result of the incident, which was allegedly captured on a video recording.
According to the complaint, the defendant prepared an incident report regarding the use of force. The complaint further alleges that the defendant was later questioned regarding the incident and claimed to have been physically assaulted by the inmate. The complaint alleges that the defendant’s version of the events is not corroborated by the video footage.
If convicted, Wheeler faces a maximum punishment of 30 years in prison. An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.
This case commends the investigative efforts of the West Palm Beach Resident Agency of the FBI, Ric Bradshaw of the Palm Beach County Sheriff’s Office and State Attorney Dave Aronberg of the Palm Beach County State Attorney’s Office. It is being prosecuted by Trial Attorney D.W. Tunnage of the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Susan Osborne of the Southern District of Florida.
Justice Department Asks Federal Court to Shut Down Fraudulent Tax Return Business Operated by Retired Chicago Fire Department CaptainRead the Press Release
The United States has filed a complaint seeking to bar a retired Chicago firefighter from preparing federal tax returns for others, the Justice Department announced today.
The civil complaint against Irving Brown Sr., which was filed in the U.S. District Court for the Northern District of Illinois, alleges that Brown has prepared federal income tax returns for firefighters and other Chicago-area taxpayers which understate the customers’ correct tax liabilities in order to minimize the taxes they owe and maximize tax refunds. The suit alleges that Brown operates Irving Brown Sr. Tax Services out of his Chicago home.
The government alleges that Brown obtains inflated tax refunds for his customers through the use of fraudulent earned income tax credits, false charitable deductions and fake business expenses on a Schedule C (Profit or Loss From Business). The suit alleges that the customers own no business or, if they do, the business-related expenses are false. The Internal Revenue Service (IRS) interviewed several of Brown’s customers, who stated that the improper deductions, credits and Schedule C business expenses and income were false and not based on information they provided to Brown, according to the suit.
According to the complaint, Brown also frequently prepares returns claiming head of household filing status for customers who are ineligible for that status. For other customers, the complaint alleges that Brown created false Schedule E (Supplemental Income and Loss) expenses from fictitious rental real estate to create tax deductions. Among other things, a Schedule E is used to report income or loss from rental real estate property. The complaint alleges that, in some instances, Brown prepared false invoices and receipts in order to substantiate the false expenses for customers who were being examined by the IRS.
The lawsuit states that the IRS estimates Brown has prepared more than 2,000 tax returns since 2011. The IRS has completed examinations of 94 of those returns, and the total tax deficiency for those returns alone exceeds $740,000, according to the complaint. Based on the number of returns the defendant prepared, the complaint alleges that Brown’s actions could have cost the U.S. Treasury more than $1 million.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2015. The IRS has some tips on its website for choosing a tax preparer and has launched a free directory of federal tax preparers. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department’s website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Former DEA Employee Pleads Guilty to Credit Card Fraud SchemeRead the Press Release
A former Drug Enforcement Administration (DEA) employee pleaded guilty today to defrauding the government out of more than $113,000 using fraudulently issued government credit cards, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rod J. Rosenstein of the District of Maryland and Special Agent in Charge Michael P. Tompkins of the Justice Department’s Office of the Inspector General in Washington, D.C.
Keenya Meshell Banks, 42, of Upper Marlboro, Maryland, pleaded guilty today before U.S. District Judge Deborah K. Chasanow of the District of Maryland to one count of wire fraud. A sentencing hearing is scheduled for June 29, 2015.
According to her plea agreement, Banks was employed by the DEA as a Program Manager, and was responsible for the approval and issuance of government credit cards to DEA employees. While serving in that role, Banks admitted that she submitted dozens of fake credit card applications to JPMorgan Chase & Co. for fictitious DEA employees, using names and identifying information of individuals who did not work at the DEA. In at least one instance, however, Banks submitted the identifying information of an actual DEA employee. Through this scheme, Banks obtained at least 32 fraudulent credit cards, which she then used to withdraw more than $113,000 from ATMs in Maryland and Northern Virginia. As part of her plea agreement, Banks agreed to forfeit the proceeds she received as a result of the scheme and to pay full restitution.
The case is being investigated by the Department of Justice Office of Inspector General and is being prosecuted by Trial Attorneys Richard B. Evans and Justin Weitz of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Thomas P. Windom of the District of Maryland.
EOIR Announces Change to Immigration Judges Hearing Cases Out of Dilley (in Espanol)Read the Press Release
La agencia EOIR anuncia que habrá un cambio de jueces para las audiencias de inmigración en Dilley
FALLS CHURCH, VA – La Oficina Ejecutiva de Revisión de Casos de Inmigración (EOIR), ha anunciado en el día de hoy que las audiencias de inmigración localizadas en Dilley, se reasignarán al tribunal de inmigración en Miami, reemplazando al tribunal de inmigración en Denver, que ha estado tratando estos casos. Esto se debe a un informe por El Servicio de Inmigración y Control de Aduanas (ICE), una agencia del Departamento de Seguridad Nacional (DHS), con relación a la expansión del centro residencial y de detención en Dilley, Texas, que ahora tiene cupo para 2,400 camas.
Así como han estado haciendo los jueces de inmigración del tribunal de inmigración en Denver, los jueces de inmigración en Miami que se han asignados a los casos en Dilley, tratarán los casos por medio de videoconferencia (VTC). Los jueces de inmigración en Miami tratarán todos los procesos de expulsión de Dilley, excepto aquellos procesos en los que un juez de inmigración de Denver ya esté considerando las evidencias, o un caso donde los asuntos legales ya se estén disputando. También, a partir del 1º de mayo de 2015, los jueces de inmigración de Miami repasarán los casos de temor creíble (Credible Fear) referidos por DHS a EOIR. Por otro lado, los casos referidos por DHS antes del 1º de mayo de 2015, así como las audiencias ya iniciadas con los jueces de inmigración en Denver, o con asuntos legales que ya se estén disputando, continuarán asignados a los jueces del tribunal de inmigración en Denver. De todas formas, todas las partes recibirán notificación debida antes de cualquier audiencia. Ahora bien, se está pidiendo por favor, que toda presentación de documentos se someta al tribunal de inmigración en Miami, a menos que un juez de inmigración en Denver ya esté tratando el caso.De acuerdo a Juan P. Osuna, el director de la EOIR: “Después de haberse hecho una evaluación de la lista de los casos pendientes, como consecuencia de la decisión del Departamento de Seguridad Nacional de expandir el centro en Dilley, la EOIR ha determinado que el tribunal de inmigración en Miami puede hacerle frente al aumento de casos de inmigración de una forma más eficiente”.
Los jueces de inmigración en Miami que tratarán los casos de Dilley, estarán reprogramando los casos no prioritarios, y aquellos donde los comparecientes no estén detenidos, para así poder tratar los casos prioritarios.
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EOIR Announces Change to Immigration Judges Hearing Cases Out of DilleyRead the Press Release
FALLS CHURCH, Va. - The Executive Office for Immigration Review (EOIR) today announced that, following the Department of Homeland Security (DHS), Immigration and Customs Enforcements announcement of the Dilley, Texas, residential detention facility expansion to 2,400 beds, EOIR will reassign immigration cases originating at the Dilley hearing location from the Denver Immigration Court to the Miami Immigration Court.
As the Denver Immigration Court immigration judges do, the Miami immigration judges assigned to Dilley cases will hear those cases via video-teleconference (VTC). Miami immigration judges will hear all Dilley removal cases except those in which a Denver immigration judge has already begun to hear evidence on contested issues. Miami immigration judges will also conduct credible fear reviews in cases that DHS refers to EOIR on or after May 1, 2015. Credible fear reviews that DHS refers before May 1, 2015, and all cases in which a Denver immigration judge has begun to hear evidence on contested issues will remain before the Denver immigration judge. All parties will receive appropriate notice prior to their hearings. Please note that filings for Dilley cases should be submitted to the Miami Immigration Court location unless the Denver immigration judge retains the case.
"Following an evaluation of the available docket space, EOIR determined that the increase in immigration court cases due to the Department of Homeland Securitys decision to expand the Dilley facility will be most efficiently handled from the Miami Immigration Court," said EOIR Director Juan P. Osuna.
The immigration judges in Miami who will hear the cases from Dilley are rescheduling the non-detained, non-priority cases that are scheduled for docket time needed to hear the priority cases.
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The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR's immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR's Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Department of Justice Launches Collaborative Reform Process with Calexico, California, Police DepartmentRead the Press Release
The U.S. Department of Justice’s Office of Community Oriented Policing Services (COPS Office) today announced the start of the Collaborative Reform Initiative for Technical Assistance (CRI-TA) with the Calexico Police Department in California.
“The COPS Office will conduct a thorough, independent assessment of the Calexico Police Department’s policies, practices and responsiveness to the community to ensure that they are taking into account national standards and community expectations,” said COPS Office Director Ronald Davis. “Through this process, the Justice Department is committed to identifying organizational deficiencies, recommending best practices and providing technical assistance to help strengthen the Calexico Police Department.”
The COPS Office’s CRI-TA is an independent and objective way to transform a law enforcement agency through an analysis of policies, practices, training, tactics and accountability methods around key issues facing law enforcement today. The initiative is designed to provide technical assistance to agencies facing significant law enforcement-related issues. Using subject matter experts, interviews and direct observations, as well as conducting extensive research and analysis, the COPS Office assists law enforcement agencies in enhancing and improving their policies and procedures, operating systems and professional culture.
The COPS Office is currently providing CRI-TA in Spokane, Washington; Philadelphia; St. Louis; Baltimore; Salinas, California; and Fayetteville, North Carolina, and has completed the process in Las Vegas.
The COPS Office, headed by Director Ronald Davis, is a federal agency responsible for advancing community policing nationwide. Since 1995, the COPS Office has awarded more than $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of more than 126,000 officers and provide a variety of knowledge resource products including publications, training and technical assistance. For additional information about the COPS Office, please visit the office’s website.
Attorney General Holder Statement on the 75th Anniversary of the NAACP Legal Defense FundRead the Press Release
Attorney General Eric Holder released the following statement on the 75th anniversary of the NAACP Legal Defense Fund:
“On behalf of the United States Department of Justice, I congratulate the NAACP Legal Defense and Educational Fund on 75 years of passionate legal advocacy and extensive educational outreach in its tireless pursuit of equality and justice throughout the nation. Since 1940, the NAACP LDF has stood at the forefront of America’s struggle to ensure that equality under the law is protected by the law. From the historic victory in Brown v. Board of Education, achieved under the leadership of legendary founder Thurgood Marshall, to the wide-ranging efforts of the visionaries who continue to build on Brown’s promise today, the NAACP LDF has made once-unimaginable progress in expanding democracy, drawing attention to persistent disparities, and securing the more just society that all Americans deserve. As this vital organization celebrates 75 years of civil rights achievements, I look forward to all that it will accomplish in the days and years to come.”
Quality Egg, Company Owner and Top Executive Sentenced in Connection with Distribution of Adulterated EggsRead the Press Release
The company owner, a top executive and their company, Quality Egg LLC, were sentenced today in federal district court in Sioux City, Iowa, the Department of Justice announced.
Austin “Jack” DeCoster, 81, of Turner, Maine, who owned Quality Egg, was sentenced to serve three months in prison to be followed by one year of supervised release, and fined $100,000. His son, Peter DeCoster, 51, of Clarion, Iowa, who was Quality Egg’s chief operating officer, was also sentenced to serve three months in prison to be followed by one year of supervised release, and fined $100,000. Quality Egg was sentenced to pay a fine of $6.79 million and placed on probation for three years. All three defendants were ordered to make restitution in the total amount of $83,008.19. Quality Egg also agreed to forfeit $10,000 as part of its plea agreement with the government. The defendants were sentenced by U.S. District Court Judge Mark W. Bennett in the Northern District of Iowa.
On June 3, 2014, Quality Egg, an egg production company with operations in Wright County, Iowa, pleaded guilty to one count of bribery of a public official, one count of introducing a misbranded food into interstate commerce with intent to defraud and one count of introducing adulterated food into interstate commerce. Jack and Peter DeCoster each pleaded guilty to one count of introducing adulterated food into interstate commerce. In plea agreements, the company and the father and son admitted that the company’s shell eggs were adulterated in that they contained a poisonous and deleterious substance, Salmonella Enteriditis, which may have rendered the eggs injurious to health.
During the spring and summer of 2010, adulterated eggs produced and distributed by Quality Egg were linked to approximately 1,939 reported consumer illnesses in multiple states—a nationwide outbreak of salmonellosis that led to the August 2010 recall of millions of eggs produced by the defendants.
“The message this prosecution and sentence sends is a stern one to anyone tempted to place profits over people’s welfare,” said the U.S. Attorney Kevin W. Techau of the Northern District of Iowa. “Corporate officials are on notice. If you sell contaminated food you will be held responsible for your conduct. Claims of ignorance or 'I delegated the responsibility to someone else’ will not shield them from criminal responsibility.”
“American consumers deserve to feel secure that the eggs they eat are safe and produced in sanitary conditions,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “The Department of Justice will pursue and prosecute those whose criminal conduct compromises the safety of our food supply.”
“Food manufacturers have a responsibility to produce and sell food that is safe for consumers to eat,” said Dr. Stephen Ostroff, U.S. Food and Drug Administration (FDA) Acting Commissioner. “Eggs are commonly consumed nationwide, both on their own and as ingredients in other foods. When manufacturers fail to produce safe food, the FDA will take action to protect public health.”
As noted in the government’s memorandum regarding sentencing, Quality Egg personnel had, for years, disregarded food safety standards and practices and misled major customers, including Walmart, about the company’s food safety practices. In the memorandum filed with the court, the government noted that since 2006, the company had commissioned tests to detect Salmonella Enteriditis in its layer barns and in the organs of its layer hens, that the results came back positive on 47 percent of the days tested, and that the frequency of positive test results grew in the months leading up to the August 2010 recall. As part of the memorandum, the government also argued that the evidence indicated that Quality Egg personnel took steps to conceal from regulators and customers the company’s failures to follow food safety standards and practices, that Quality Egg created food safety plans that included inaccurate claims about the company’s biosecurity and pest control practices, and that Quality Egg falsified documents for the food safety audits required by various customers.
Quality Egg pleaded guilty to bribing an inspector of the U.S. Department of Agriculture (USDA) to release eggs that had been retained for quality issues. Quality Egg acknowledged that, on at least two occasions in 2010, its employees gave a cash bribe to a USDA inspector. The USDA inspector’s job responsibilities included inspecting shell eggs at one or more of Quality Egg’s production facilities in Iowa. Quality Egg admitted that its employees provided the bribe to the USDA inspector (now deceased) in an attempt to corruptly influence the inspector to exercise his authority to release pallets of retained eggs for sale without re-processing the eggs as required by law and USDA standards. The eggs had been retained or “red tagged” for failing to meet minimum USDA quality grade standards. Former Quality Egg employee Tony Wasmund, 64, of Willmar, Minnesota, pleaded guilty in September 2012 to one count of conspiracy to bribe a public official, sell restricted eggs with intent to defraud and introduce misbranded food into interstate commerce with intent to defraud and mislead. Wasmund is scheduled to be sentenced by U.S. District Court Judge W. Bennett on May 15 at 8:30 a.m.
Quality Egg also pleaded guilty to introducing misbranded eggs into interstate commerce with the intent to defraud. As part of its plea agreement, Quality Egg admitted that, beginning no later than January 2006 and continuing through Aug. 12, 2010, its employees affixed labels to egg shipments that indicated false expiration dates with the intent to mislead state regulators and retail egg customers regarding the true age of the eggs. Quality Egg acknowledged that there were a number of ways that the company mislabeled older eggs with newer processing and expiration dates prior to shipping the eggs to customers in California, Arizona and other states. Sometimes Quality Egg personnel did not put any processing or corresponding expiration dates on the eggs when they were processed. The eggs would be kept in storage for several days or up to several weeks. Then, just prior to shipping the eggs, Quality Egg personnel labeled the eggs with processing dates that were false in that the dates were more recent than the dates that the eggs had actually been processed and with corresponding false expiration dates.
The case was prosecuted by Assistant U.S. Attorney Peter Deegan of the Northern District of Iowa and Trial Attorneys Lisa Hsiao and Christopher Parisi of the Civil Division’s Consumer Protection Branch. They were assisted by Associate Chief Counsel Michael Varrone of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division. The case was investigated by FDA’s Office of Criminal Investigations, the USDA’s Office of Inspector General and the FBI.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-3024.
Major Egg Producer to Reduce Water Pollution Discharges at Mississippi FacilityRead the Press Release
The U.S. has reached a settlement with Cal-Maine Foods, Inc., one of the nation’s largest egg producers, that resolves Clean Water Act violations at the company’s poultry egg production facility in Edwards, Mississippi, announced the Justice Department’s Environment and Natural Resources Division and the U.S. Environmental Protection Agency (EPA). Under the settlement, Cal-Maine will bring the facility into compliance with its state-issued water discharge permit, significantly reduce nutrient pollution discharges and improve environmental data collection and reporting practices. The company will also pay a $475,000 penalty to be split evenly between the U.S. and Mississippi.
“The Justice Department is committed to protecting clean water for all Americans and ensuring large concentrated animal feeding operations are good neighbors to those communities living near them like Edwards,” said Assistant Attorney General John Cruden for the Justice Department’s Environment and Natural Resources Division. “This settlement will bring Cal-Maine into compliance with state and federal laws and cut nutrient pollution discharges into area waterways.”
“Clean Water Act violations from agricultural facilities can impair drinking water sources, transmit disease-causing bacteria and endanger our lakes and rivers,” said Assistant Administrator Cynthia Giles of EPA’s Office of Enforcement and Compliance Assurance. “When concentrated animal feeding operations discharge pollutants into U.S. waters, the law requires them to have a permit and comply with it. We’re committed to enforcing the law to protect water quality for communities like the one where this facility is located.”
“This is good news for water quality and health for the residents of Edwards by requiring that Cal-Maine's facilities operate in accordance with state and federal laws,” said U.S. Attorney Gregory K. Davis for the Southern District of Mississippi. “The settlement also represents the commitment by the Justice Department and our federal and state partners to protect water, air and land from health hazards and pollution.”
Today’s settlement, a consent decree filed in federal court in the Southern District of Mississippi, resolves alleged violations of Cal-Maine’s Clean Water Act National Pollutant Discharge Elimination System (NPDES) permit at its facility in Edwards, Mississippi, a large concentrated animal feeding operation that houses more than 2 million chickens. Cal-Maine discharged pollutants from the production area into a tributary of a nearby creek without NPDES permit authorization and applied nitrogen-laden wastewater on fields at the facility during winter months when land application was prohibited and sometimes at rates that exceeded their permit requirements. Cal-Maine also committed hundreds of water sampling, recordkeeping and reporting violations.
The facility is located in a community where close to half of the households have an annual income of less than $25,000. One of EPA's top priorities is to protect communities that are disproportionately affected by pollution.
Too much nitrogen and phosphorus in the water causes algae to grow faster than ecosystems can handle. Large growths of algae, known as algal blooms, contribute to the creation of hypoxia or “dead zones” in water bodies where oxygen levels are so low that most aquatic life cannot survive. Excessive nitrogen and phosphorus that washes into water bodies and is released into the air are often the direct result of human activities and agricultural operations are one of the major sources of nutrient pollution.
Under the settlement, Cal-Maine is already developing and implementing procedures for its egg production and land application areas to achieve compliance with its NPDES permit, an employee training policy and improved recordkeeping and reporting practices. The procedures were submitted to and reviewed and approved by EPA and Mississippi officials over the course of settlement negotiations. Cal-Maine has begun implementing these procedures and must comply with all the terms of the settlement by April 30, 2016.
Once the pollution controls required by the settlement are implemented, EPA estimates Cal-Maine will cut discharges of nitrogen by 89,000 pounds and phosphorous by 20,000 pounds per year. EPA estimates it will cost Cal-Maine approximately $418,000 to implement the settlement requirements and bring the Edwards, Mississippi, facility into compliance with state and federal clean water laws.
Cal-Maine Foods Inc. and Cal-Maine Farms Inc. merged into one corporate entity called Cal-Maine Foods Inc., effective January 1, 2015.
This case is part of EPA’s National Enforcement Initiative to prevent animal waste from contaminating surface and ground water. For more information on that initiative, visit http://www2.epa.gov/enforcement/national-enforcement-initiative-preventing-animal-waste-contaminating-surface-and-ground.
The proposed consent decree is subject to a 30-day public comment period. A copy of the consent decree is available at http://www.justice.gov/enrd/Consent_Decrees.html.
Justice Department Reminds Taxpayers that No One Is Above the Law or Below the RadarRead the Press Release
With the annual tax filing deadline approaching on Wednesday, April 15, the Justice Department’s Tax Division reminds U.S. taxpayers across the country and around the world of their obligation to file timely and accurate income tax returns.
“As U.S. taxpayers, we enjoy many benefits, including the security provided by our U.S. military, the ability to travel on public roads and highways, and the beauty and enjoyment of national parks and monuments,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Tax Division. “Those individuals who choose to accept these benefits and yet turn a blind eye to their federal tax obligations by failing to file required returns, filing false and fraudulent returns, and evading the assessment and payment of tax due will be pursued for their criminal conduct. No one is above the law or below the radar.”
The Justice Department works with the Internal Revenue Service (IRS) and other law enforcement partners to enforce the nation’s tax laws fully, fairly and consistently through both criminal and civil litigation. During the past year, the Tax Division’s prosecutions have included:
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April 2015 – Daniel Porter, a Chino, California, businessman, was sentenced by a federal court in Las Vegas to serve 55 months in prison for conspiring to defraud the United States by promoting and selling fraudulent tax products, including a product called Tax Break 2000. The intended tax loss of the scheme was more than $60 million. Porter designed and sold Tax Break 2000 directly and through other individuals and entities, including NADN, a company in Las Vegas. Alan Rodrigues, NADN’s former general manager and executive vice president, Weston Coolidge, the former president of NADN, and Joseph Prokop, a former NFL punter, were convicted at trial in a separate criminal case. In March 2015, Rodrigues was sentenced to serve 72 months in prison, Coolidge was sentenced to serve 70 months in prison and Prokop was sentenced to serve 18 months in prison to be followed by 30 months home confinement.
- < > 2015 – Arkan Summa, an owner of Happy’s Pizza franchises, was sentenced by a federal court in the Eastern District of Michigan to serve 18 months in prison and ordered to pay $199,847 in restitution for his role in a wide ranging conspiracy to defraud the IRS. The conspiracy involved diverting more than $6.1 million in gross receipts, underreporting wages and understating income and expenses of the pizza franchises. The total tax loss resulting from the scheme was more than $6.2 million. The founder of Happy’s Pizza, Happy Asker, was previously convicted at trial, and three others have also pleaded guilty to related charges.
March 2015 – Jon McBride, owner of a cell phone clip company and a real estate investor in Utah, was sentenced by a federal court in Utah to serve 27 months in prison and ordered to pay $174,684 in restitution following his conviction for filing a false return and tax evasion. McBride filed a false tax return for 2005 that failed to report his gross income. He later filed a false amended return for the same year and again failed to report his gross income. McBride created several nominees to conceal his income and ownership in real properties to evade the payment of his taxes for 1999 through 2002, tried to evade the assessment of his 2006, 2007, and 2009 taxes, filed false 2006 and 2009 returns, and failed to file a return for 2007.
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March 2015 – Paul DiLorenzo, a doctor from Ocean Township, New Jersey, was sentenced by a federal court in New Jersey to serve 46 months in prison and ordered to pay $304,293 in restitution for structuring cash transactions to avoid reporting requirements and for aiding and assisting in the filing of his own false tax returns. The court also ordered DiLorenzo to forfeit nearly $1 million in illegally derived proceeds.
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March 2015 – Yvette Johnson was sentenced by a federal court in Maryland to serve two years in prison for tax evasion. Her husband, Shannon Johnson, was previously sentenced to serve 72 months in prison for his role in the tax evasion and conspiracy to commit mail and wire fraud. Shannon Johnson held himself out as a wealthy international investment banker offering financing to businesses and investors, who wired and mailed advance banking fees to multiple bank accounts in different states controlled by the Johnsons. Shannon Johnson received millions in fees and payments, but never provided the promised financing. Yvette and Shannon Johnson filed false claims for refunds for the 1998 through 2001 tax years based on fictitious Forms W-2, and further evaded their taxes for the 2002 through 2006 tax years. The court also ordered Shannon Johnson to forfeit $3.7 million based on fraud committed against investors.
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February 2015 – Kenneth and Kimberly Horner, who owned and operated Topcat Towing and Recovery Inc., were each convicted by a federal court in Georgia of filing false personal and corporate tax returns. According to the charges and information presented in court, between 2005 and 2008, the Horners skimmed more than $1.5 million in cash receipts from their towing business and deposited that money into their personal bank account without disclosing the income to their tax return preparer or on corporate and personal tax returns filed with the IRS. They owe approximately $400,000 in taxes to the IRS for their unreported income.
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February 2015 – Thair Alwan, the owner of a pizza shop, was sentenced by a federal court in North Carolina to serve 12 months and one day in prison and ordered to pay $237,587 in restitution and a $10,000 fine for filing a false tax return for 2008. According to court filings, Alwan skimmed cash from pizza shops he owned, failed to report the cash on the corporate returns and under-reported his income on his personal income tax returns.
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February 2015 – Fidencio Moreno, owner of a charter bus company, was sentenced by a federal court in California to serve 41 months in prison for conspiring to defraud the United States. Arturo Moreno, also an owner of the company, was sentenced to serve 28 months in prison for conspiring to defraud the United States, and conspiring to commit wire fraud and mortgage fraud. According to court filings, from 2005 until 2010, Fidencio and Arturo Moreno, along with their co-defendant Elena Moreno, conspired to file false and fraudulent corporate and personal income tax returns, on which they failed to report cash receipts from the charter bus company. The defendants also submitted fraudulent loan applications to purchase or refinance real properties. Elena Moreno was sentenced to serve 22 months in prison in January 2015.
- January 2015 – Matthew Libous, an attorney licensed to practice in New York, was convicted by a federal jury in New York of filing false tax returns for tax years 2007, 2008 and 2009. According to court filings, Libous failed to report income from his law practice and tens of thousands of dollars in personal expenses that he caused to be paid by another company he operated.
- January 2015 – Michael Stover, a Michigan businessman, was sentenced by a federal court in Michigan to serve 42 months in prison for tax evasion and wire fraud. From 2004 through 2010, Stover was president of a company from which he embezzled more than $2 million, and he failed to report the income on his tax returns.
- December 2014 – Jesus Pons, a computer-services manager for Miami-Dade County, was sentenced by a federal court in Florida to serve 51 months in prison and ordered to pay $556,254 in restitution for tax evasion. According to court filings, from 2007 to 2011, Pons, who was in charge of managing information technology projects and county vendors, received illegal kickback payments in exchange for approving payments for consulting work that was never done and failed to report this income on his personal income tax returns.
- November 2014 – Joel Field, owner and operator of Cadillac Ranch restaurants and bars in Ohio and elsewhere, was sentenced by a federal court in Ohio to serve 12 months and one day in prison, to be followed by four months in a halfway house and four months of home confinement, and was ordered to pay $349,778 in restitution and a $4,000 fine for tax evasion. According to court documents, Field filed his 1997 through 2001 tax returns but failed to pay the full tax due and owing. While the IRS was attempting to collect his taxes, Field transferred assets into the names of nominees and submitted false IRS Forms 433-A (Collection Information Statements for Wage Earners and Self-Employed Individuals).
- October 2014 – Jeffrey Scott, owner and operator of Greenville Loop Seafood (GLS), a seafood distribution company, was sentenced by a federal court in North Carolina to serve 12 months and one day in prison and was ordered to pay $26,263 in restitution and a $25,000 fine for attempting to evade his 2007 taxes. According to court filings, between 2006 and 2010, Scott paid nearly all of his living expenses with checks from GLS, including his mortgage, utilities, insurance premiums, landscaping, home improvements, school fees and a country club membership. Scott also purchased five vehicles for more than $200,000, a $100,000 boat and a $2.1 million waterfront home. Scott did not report these funds as income. He also filed a false corporate tax return for 2011 claiming the painting of his personal residence, plumbing work at his personal residence and vet bills for his family dog as business expenses.
- October 2014 – Michael Mangold, a doctor specializing in emergency medicine and urgent care, was sentenced by a federal court in Wisconsin to serve 18 months in prison for tax evasion and making false statements. According to court filings, Mangold earned income working for various hospitals, emergency rooms, urgent care facilities and state and county correctional facilities. From 1997 through 2007, Mangold concealed his income by filing false tax returns and asserting frivolous legal arguments to the IRS.
- September 2014 – Nick Jodha, also known as Nick Persaud, an owner and operator of contracting company United HVAC Services Inc., was sentenced by a federal court in New York to serve 12 months and one day in prison and ordered to pay $214,529 in restitution for evading his 2007 through 2010 taxes. According to court filings, Jodha cashed checks written to United HVAC at a check-cashing service rather than depositing them into the business bank account. He failed to tell his accountant about these cashed checks, which were not reflected in the statements that the accountant used to prepare United HVAC’s corporate returns, or about the fact that he used a portion of the cashed checks to pay business and personal expenses.
- April 2014 – Amberula Levitt, who owned and operated Tax Time Tax Service, a tax-preparation business with multiple locations throughout Atlanta, was sentenced by a federal court in Georgia to serve 21 months in prison, ordered to pay $620,004 in restitution and ordered to complete 100 hours of community service for filing false tax returns for 2004 and 2005, assisting in filing a false tax return for 2006, and failing to file tax returns for 2007, 2008 and 2009.
Additional highlights from the U.S. Attorneys’ Offices include:
- April 2015 – William M. Weisberg, an attorney from Vienna, Virginia, was sentenced by a federal court in Virginia to serve 12 months and one day in prison and ordered to pay $451,955 in restitution for willful failure to pay tax due and owing. According to court filings, Weisberg filed his income tax returns, but failed to pay his taxes for 2008 and 2010, and paid only a portion of his taxes for 2009. During this time, Weisberg paid approximately $250,000 to rent a house in Vienna, $150,000 for private and parochial schools for his two children, $35,000 for maid service and $130,000 for travel and entertainment. When the IRS tried to work with Weisberg in 2010 to obtain the money he owed, Weisberg falsified a document from his law firm, which told the IRS that the firm was withholding money from his paychecks to give to the IRS, when, in fact, no money was being withheld.
- March 2015 – Gwendolyn Muller, a receptionist previously employed by a medical office in Kearny, New Jersey, was sentenced by a federal court in New Jersey to serve 34 months in prison and ordered to pay $556,000 in restitution for embezzlement, using fraudulent credit cards to obtain goods and services and tax evasion. According to court filings, from 2007 through 2011, Muller used her position at the medical practice to take cash and conceal more than $446,000 in checks paid by insurance companies to the medical practice for services to patients. At various times during this same period, Muller also fraudulently obtained 10 credit cards in the name of a principal of the medical practice and used those cards to charge more than $218,000 in goods and services – a portion of which Muller paid for with embezzled funds. Muller admitted to filing a false tax return to evade the payment of taxes on this illegally obtained income.
- February 2015 – Don F. Lindner, an attorney from Severna Park, Maryland, pleaded guilty to filing a false return and agreed to pay $341,730 in restitution. According to court filings, Lindner practiced law in Glen Burnie, Maryland, and treated his law practice as a sole proprietorship. For his tax returns for 2007 and 2011, Lindner omitted $1,230,614 in gross receipts from his law practice. He also maintained a rental property and falsely reported on his tax returns that he paid more than $82,700 in repairs on the rental property during the same tax years, when in fact no repairs were done, thereby fraudulently decreasing his purported taxable income.
- February 2015 – Rebecca Hoff, a former office manager and accounts payable bookkeeper from Ironwood, Michigan, was sentenced by a federal court in Wisconsin to serve 15 months in prison for filing a false income tax return. According to court filings, Hoff used company checks to pay her personal expenses, which included the purchase of a vehicle, home improvements and mortgage payments. Although the employer did not pursue charges for the embezzlement, Hoff never declared the money she embezzled as income on her federal tax returns, resulting in a tax liability of more than $300,000.
- February 2015 – Joel Carlson, an investment advisor, was sentenced by a federal court in Minnesota to serve 42 months in prison for tax evasion. Carlson deposited client investments and additional funds solicited from his father into a Trust Financial Group account, which he treated as his personal bank account. Carlson spent the money on personal items and, when confronted, lied to his clients about the existence of their investments. In addition to misappropriating assets, totaling more than $1.5 million, Carlson failed to file personal income tax returns for tax years 2010 and 2011. Carlson will pay approximately $3.1 million total in restitution, which includes $1.2 million in restitution to the IRS.
- November 2014 – Dennis Weiss, formerly a suburban home builder, was sentenced by a federal court in Illinois to serve 30 months in prison and ordered to pay $296,643 in restitution to the IRS for filing a false federal income tax return and making false statements in a bankruptcy petition. According to court documents, Weiss filed false individual federal income tax returns for 2005 through 2009 and failed to file corporate tax returns for both of his companies, Custom Homes by D.R. Weiss Inc. and Reliable Home Solutions Inc. Between 2005 and 2009, Weiss paid personal expenses from a business bank account, accepted cash payments from customers of his businesses and failed to record the receipt of these funds on the books and records of the corporations, resulting in a total federal tax loss of $1,271,280.
- October 2014 – Patrick J. Belzner, also known as Patrick McCloskey, a home builder residing in Selbyville, Delaware, was sentenced by a federal court in Maryland to serve 15 years in prison and ordered to pay $19.8 million in restitution on charges of wire fraud conspiracy, wire fraud and tax evasion. According to court filings, Belzner worked for the McCloskey Group, a real estate development business, and conspired with others to defraud investors through a fraudulent investment scheme. Belzner admitted that investor funds were used to pay personal and business expenses, as well as to make partial repayments to earlier lenders and to pay fees to some of the victim investors to keep them from demanding the return of their money. In addition, Belzner admitted to stealing more than $1 million from former employers and failing to report those sums on his federal tax returns. He further admitted evading the payment of the tax due and owing by placing his residences, other real estate and automobiles in the names of corporations that he formed, as well as by paying his personal expenses – including his mortgage, ground rent for a vacation home, construction costs on a house that he built, car payments, Baltimore Ravens season tickets and private school tuition – from bank accounts he opened in the names of the corporations or from payments out of the real estate development business. In 2006 and again in 2009, Belzner submitted forms to the IRS falsely claiming that he did not have sufficient income to make any payments on the assessed back taxes, penalties and interest. By August 2013, the total assessed tax, interest and penalties due and owing by Belzner exceeded $2.6 million.
The Justice Department will continue to vigorously pursue and prosecute those engaged in tax crimes. These efforts of the department, the IRS and its other law enforcement partners are critical to the continued integrity of our national tax system, and send a strong message to those individuals who make good faith efforts to comply with their tax obligations that we will hold accountable those who do not.
More information about the Tax Division’s civil and criminal enforcement efforts in these and other areas is available on the division’s website.
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International Gathering Marks Inauguration of INTERPOL Global Complex for InnovationRead the Press Release
SINGAPORE – Ministers and senior police officials from around the world have gathered at the official opening of the INTERPOL Global Complex for Innovation (IGCI) which is set to empower law enforcement officers worldwide with cutting-edge tools and knowledge against 21st century crime.
With the IGCI marking the transition of global policing into the digital age, Singapore’s Deputy Prime Minister, Coordinating Minister for National Security and Minister for Home Affairs, Teo Chee Hean, addressed its opening ceremony after chairing a ministerial cybercrime meeting involving INTERPOL’s President Mireille Ballestrazzi and Secretary General Jürgen Stock.
Underlining the growing complexity of today’s safety and security threats, Deputy Prime Minister Teo said: “Police and law enforcement agencies in the region can access INTERPOL’s tools and programs through the IGCI, to train and equip their officers to combat new and emerging threats, thereby enhancing collective regional safety and security.”
“The IGCI can use Singapore’s location in the heart of Asia to reach out to the rest of the region and beyond. Through the IGCI, INTERPOL can also gain a better understanding of Asian perspectives and expertise, to shape its research and development and operational responses against transnational threats,” added Singapore’s Deputy Prime Minister.
The opening ceremony also included representatives from international organizations and strategic partner organizations from the private sector. These include Entrust Datacard, Kaspersky Lab, NEC, Safran Morpho and Trend Micro Ltd.
INTERPOL President Ballestrazzi said that collaboration with the public and private sectors would allow the IGCI to benefit from the culture, innovation and dynamic spirit of all those involved.
“Today’s inauguration of the IGCI marks the end of a process that has mobilized our member countries and partners in a joint effort to strengthen the abilities of INTERPOL and law-enforcement agencies as they face the realities of modern crime. It also marks our joint resolve to build a safer world,” said President Ballestrazzi.
Highlighting Singapore’s thriving spirit as it celebrates its 50th anniversary, INTERPOL Secretary General Jrgen Stock said that the IGCI was born out of the Organization’s commitment to adapt to changes in the threat landscape.
“By establishing the IGCI, INTERPOL will ensure that it is best placed to help police around the world address emerging threats through innovation and training. The work of the IGCI will provide operational and forensic support, build capacity and identify cyber threats,” said Mr. Stock.
In this respect, the audience heard that intelligence from a prominent IT actor had led to an IGCI-coordinated operation which dismantled the Simda botnet through a joint international effort by law enforcement and the private sector.
“These achievements highlight the value of the IGCI and how it will help police adopt new technology and practices to outsmart cybercriminals,” added Mr. Stock.
In addition to cybercrime and capacity building and training, the IGCI’s Command and Coordination Centre operations room represents its third central pillar. It recently coordinated its first border security initiative, Operation Sunbird, leading to the arrest of international fugitives attempting to travel across ASEAN countries.
The IGCI inauguration begins a week of INTERPOL events in Singapore, including the INTERPOL World 2015 exhibition and the 22nd INTERPOL Asian Regional Conference.
Former Campaign Treasurer Sentenced for Tax Evasion and Filing False Campaign Reports Related to Diverting Money from Campaign's Bank AccountRead the Press Release
Defendant Worked on Unsuccessful Campaign of Washington, D.C., Council Candidate
A 33-year-old Washington, D.C., man was sentenced today to serve 16 months in prison for evading income taxes and violating campaign finance laws while working as the treasurer and custodian of records for a District of Columbia political campaign.
The sentence was announced by Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia, Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, Chief Cathy L. Lanier of the Metropolitan Police Department and Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Washington, D.C., Field Office.
Hakim J. Sutton pleaded guilty on Oct. 23, 2014, in the U.S. District Court for the District of Columbia to one count of income tax evasion, a federal offense, and one count of knowingly filing a false and misleading campaign finance report, a violation of District of Columbia law. He was sentenced by the Honorable U.S. District Judge Richard J. Leon. Under the plea agreement, Sutton is required to pay full restitution of $18,231 in taxes and interest to the IRS. Sutton was also ordered to three years of supervised release following his 16 month prison sentence.
According to a statement of offense, signed by the defendant as well as the government, Sutton was the principal owner of the Sutton Group, which performed political consulting services in the District of Columbia and elsewhere. In 2011 and 2012, Sutton served as the treasurer and custodian of records for the campaign of Michael A. Brown, a candidate seeking re-election to an at-large seat on the Council of the District of Columbia. Brown ultimately lost in the November 2012 election.
Between July 2011 and May 2012, Sutton diverted approximately $115,250 from the campaign bank account to himself by depositing the funds drawn from the campaign bank account into his own personal bank accounts, and converting funds drawn from the campaign bank account to cash. All told, Sutton wrote 36 checks payable to himself.
According to the statement of offense, some, but not all, of the money that Sutton diverted was compensation for Sutton’s work on the campaign. However, Sutton failed to file income tax returns for calendar years 2011 and 2012. He owes a total of $17,180 in federal income taxes for those years, along with an additional $1,051 in interest.
Sutton also omitted references to the checks that he had written to himself in a series of six reports he filed in 2011 and 2012 with the District of Columbia Office of Campaign Finance.
Acting Assistant Attorney General Ciraolo and Acting U.S. Attorney Cohen commended the Metropolitan Police Department and the special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney David A. Last and former Assistant U.S. Attorney Bryan Seeley of the District of Columbia and Trial Attorney Kenneth C. Vert of the Tax Division, who prosecuted the case. Ciraolo and Cohen thanked Assistant U.S. Attorney Anthony Saler of the Asset Forfeiture and Money Laundering Section, Legal Assistant Angela Lawrence, Paralegal Specialist Tasha Harris, former Paralegal Specialist Nicole Wattelet and Criminal Investigator John Marsh, all of the U.S. Attorney’s Office for the District of Columbia, for their assistance.
Final Two Defendants Sentenced to 440 and 348 Months in Prison for the Kidnapping and Murder of DEA Special Agent James “Terry” WatsonRead the Press Release
Two Colombian nationals were sentenced to decades in U.S. federal prison today for their roles in the kidnapping and murder of former Drug Enforcement Administration (DEA) Special Agent James “Terry” Watson in Bogotá, Colombia, on June 20, 2013.
Attorney General Eric Holder, 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, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, DEA Administrator Michele M. Leonhart and Bill A. Miller, Director, U.S. State Department’s Diplomatic Security Service (DSS) made the announcement.
“With these sentencings, all seven defendants involved in the kidnapping and murder of Special Agent Terry Watson have been found, prosecuted, and brought to justice,” said Attorney General Holder. “Special Agent Watson was a courageous patriot, a principled law enforcement agent, and a proud defender of the rule of law. Our nation owes him and his loved ones a debt we can never repay. And although our prosecution of his heinous attackers has come to its rightful close, the Department of Justice will never rest in our efforts to honor Special Agent Watson’s life of service and sacrifice by upholding the values that he served to protect.”
“DEA is grateful that the final two defendants connected to Terry Watson’s murder faced justice in a U.S. court of law for their heinous crime," said Administrator Leonhart. “Terry will be remembered for his bravery, dedication and loyalty to our agency’s mission, and his presence is missed every day by the men and women of DEA. Throughout this ordeal, the Watson family has remained in our thoughts and prayers, and we will never forget their sacrifice.”
Édgar Javier Bello Murillo, 28, and Omar Fabián Valdes Gualtero, 28, were sentenced today to 440 months in prison and 348 months in prison, respectively, by U.S. District Judge Gerald Bruce Lee of the Eastern District of Virginia. Both pleaded guilty to second degree murder and conspiracy to kidnap an internationally protected person on Dec. 19, 2014.
In the statements of facts filed with their plea agreements, Valdes Gualtero and Bello Murillo admitted that they conspired to conduct “paseo milionarios” or “millionaire’s rides” in which victims were lured into taxi cabs, kidnapped and then robbed. Both admitted that, on the evening of June 20, 2013, they were a part of a six-person robbery crew that targeted Special Agent Watson. One of the members of the crew picked up Special Agent Watson in his taxi, while another drove a second taxi carrying the assailants. Bello Murillo admitted that he entered the taxi in which Special Agent Watson was riding and stabbed him multiple times. Special Agent Watson was able to escape from the taxi, but he later collapsed and died from his injuries.
In total, seven defendants were arrested and extradited from Colombia to the United States to face charges in connection with Special Agent Watson’s murder and the subsequent attempt to cover up the crime. Six defendants pleaded guilty for their respective roles in the kidnapping and murder: Julio Estiven Gracia Ramírez, 32; Héctor Leonardo López, 34; Andrés Álvaro Oviedo García, 22; Edwin Gerardo Figueroa Sepúlveda, 40; Valdes Gualtero; and Bello Murillo. On Dec. 12, 2014, Gracia Ramírez was sentenced to 27 years in prison, López was sentenced to 25 years in prison and Oviedo García was sentenced to 20 years in prison. On Feb. 18, 2015, Figueroa Sepúlveda was sentenced to 30 years in prison. A seventh defendant, Wilson Daniel Peralta-Bocachica, 31, pleaded guilty to obstruction of justice for cleaning the taxi cab in which the attack occurred before turning it in to the Colombian National Police. On Feb. 18, 2015, Peralta-Bocachica was sentenced to 40 months in prison.
This case was investigated by the FBI, DEA and DSS, in close cooperation with Colombian authorities and with assistance from INTERPOL and the Criminal Division’s Office of International Affairs. The case is being prosecuted by Special Counsel Stacey Luck of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Michael P. Ben’Ary of the U.S. Attorney’s Office for the Eastern District of Virginia.
The Department of Justice gratefully acknowledges the Colombian Attorney General’s Office, Colombian National Police, Colombian Directorate of Criminal Investigation and Interpol (DIJIN), DIJIN Special Investigative Unit, Bogotá Metropolitan Police, Bogotá Police Intelligence Body (CIPOL) Unit and Colombian Technical Investigation Team for their extraordinary efforts, support and professionalism in responding to this incident.
Federal Inmate Sentenced to Life in Prison for Murder of Fellow PrisonerRead the Press Release
A federal inmate at the U.S. Penitentiary in Hazelton, West Virginia, pleaded guilty and was sentenced to life in prison today for the murder of another inmate, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney William J. Ihlenfeld II of the Northern District of West Virginia.
Patrick Andrews, 34, formerly of Washington, D.C., pleaded guilty to one count of murder by a federal prisoner serving a life sentence and one count of second degree murder in a federal facility for his role in the Oct. 7, 2007, murder of fellow inmate Jesse Harris. U.S. District Judge Irene M. Keeley of the Northern District of West Virginia sentenced Andrews to life in prison on both counts.
According to his plea agreement, Andrews and fellow inmate, Kevin Bellinger, stabbed Harris to death with homemade knives in an orchestrated attack. According to evidence introduced during Bellinger’s June 2014 trial in this case, while a group of inmates were being moved from the recreation yard back to their cells, Andrews and Bellinger confronted Harris and repeatedly stabbed him. In less than a minute, a correctional officer approached and the attackers fled. Officers apprehended Andrews after reviewing surveillance footage, which showed Andrews and Bellinger engaged in a verbal confrontation with Harris, followed by the two attackers wielding weapons and assaulting Harris, who was unarmed and backing away from them. Harris ultimately died from multiple stab wounds sustained during the attack.
At the time of the murder, Andrews was serving a sentence of 35 years to life in prison for two murders that took place in 1997 and 2000, and Bellinger was serving a sentence of 15 years to life for an assault with intent to kill that took place in 2000.
Bellinger was convicted in this case by a federal jury on June 16, 2014, of one count of murder by a federal prisoner serving a life sentence and one count of second degree murder in a federal facility. On Oct. 8, 2014, he was sentenced to life in prison.
This case was investigated by the FBI and the U.S. Bureau of Prisons. The case was prosecuted by Trial Attorney Richard Burns from the Criminal Division’s Capital Case Section and Assistant U.S. Attorney Andrew Cogar of the Northern District of West Virginia.
California Man Sentenced to Prison for Odometer Fraud SchemeRead the Press Release
A Tarzana, California, man was sentenced today in U.S. District Court in Los Angeles to serve two years in prison on charges related to an odometer tampering scheme, the Department of Justice announced.
Shamai Salpeter, 66, was sentenced by Chief Judge George H. King in the Central District of California to serve 24 months in prison followed by three years of supervised release. He was also ordered to pay $421,666 in restitution to victims who purchased vehicles without knowing the odometer readings were incorrect.
In November 2014, Salpeter pleaded guilty to one count of conspiracy and one count of tampering with an odometer. Salpeter admitted that from July 2008 through January 2012, he used electronic odometer tampering tools to alter hundreds of odometers at his residence in Woodland Hills, California. For a payment of $100 to $400, he reset the odometers to any mileage requested by his customers. Frequently, his customers were trying to avoid penalties for exceeding the maximum mileage for their vehicle lease or to make their vehicle more valuable as a trade-in. Many of the vehicles were subsequently sold to unsuspecting consumers who had no way to detect that the odometer readings were inaccurate.
“Each time this defendant altered an odometer with an electronic odometer tampering tool, he violated federal law,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “We will continue to prosecute individuals engaged in odometer tampering to protect innocent purchasers from odometer fraud.”
Many of Salpeter’s customers were referred to him by Jeffrey Levy, a salesman at Galpin Ford in North Hills, California. Levy also pleaded guilty to conspiracy to commit odometer fraud. On March 16, Levy was sentenced to serve one year in prison and ordered to pay $115,818 in restitution.
“Tampering with odometers is a crime that puts consumers’ lives and wallets at risk,” said Administrator Mark Rosekind of the U.S. Department of Transportation (DOT) National Highway Traffic Safety Administration (NHTSA). “We will continue to work with our Department of Justice and state DOT partners to deter odometer fraud and inform consumers of the potential signs and dangers associated with this crime.”
This case is being prosecuted by Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch. The case was investigated by the NHTSA’s Office of Odometer Fraud Investigation and California’s Department of Motor Vehicles Investigations Division.
The NHTSA estimates that odometer fraud in the United States results in consumer losses of more than $1 billion annually and has established a special hotline to handle odometer fraud complaints. Individuals who have information relating to odometer tampering should call (800) 424-9393 or (202) 366-4761.
More information on odometer fraud is available on the NHTSA’s website, and tips on detecting and avoiding odometer fraud are available at this page.
Topeka, Kansas, Man Charged in Plot to Explode Car Bomb at Military BaseRead the Press Release
A Topeka, Kansas, man has been charged in federal court with attempting to detonate a vehicle bomb at Fort Riley military base near Manhattan, Kansas, announced Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Barry Grissom of the District of Kansas and Special Agent in Charge Eric K. Jackson of the FBI’s Kansas City Division. The defendant was arrested as part of an FBI investigation, and the device used by the defendant was, in fact, inert.
John T. Booker Jr., 20, of Topeka, Kansas, was charged in a criminal complaint unsealed today with one count of attempting to use a weapon of mass destruction (explosives), one count of attempting to damage property by means of an explosive and one count of attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization. Booker is expected to make an initial appearance this afternoon before U.S. District Judge Daniel Crabtree of the District of Kansas in federal court in Topeka.
Booker was arrested this morning near Manhattan, as he completed his final preparations to detonate a vehicle bomb targeting U.S. military personnel.
“As alleged in the complaint, John Booker attempted to attack U.S. military personnel on U.S. soil purportedly in the name of ISIL,” said Assistant Attorney General Carlin. “Thanks to the efforts of the law enforcement community, we were able to safely disrupt this threat to the brave men and women who serve our country. Protecting American lives by identifying and bringing to justice those who wish to harm U.S. citizens remains the National Security Division’s number one priority.”
“We face a continued threat from individuals within our own borders who may be motivated by a variety of causes,” said U.S. Attorney Grissom. “Anyone who seeks to harm this nation and its people will be brought to justice.”
“I want to assure the public there was never any breach of Fort Riley Military Base, nor was the safety or the security of the base or its personnel ever at risk,” said FBI Special Agent in Charge Jackson. “Recently the Command Staff at Fort Riley has been working hand in hand with law enforcement to ensure the utmost security and protection for the men and women who serve our country, and the surrounding community that supports the base."
Booker is alleged to have spent months discussing multiple plans before deciding on a plan that involved the execution of a suicide bombing mission.
The complaint alleges Booker told another person “that detonating a suicide bomb is his number one aspiration because he couldn’t be captured, all evidence would be destroyed, and he would be guaranteed to hit his target.” Booker identified Fort Riley as a good target, “because the post is famous and there are a lot of soldiers stationed there,” the complaint alleges.
It is alleged that since March 2015, Booker plotted to construct an explosive device for an attack on American soil. It is alleged he repeatedly stated that he desired to engage in violent jihad on behalf of ISIL. Over a period of months, he took a series of actions to advance his plot. As alleged in the complaint, Booker assisted in acquiring components for a vehicle bomb, produced a propaganda video, rented a storage locker to store components for the explosive device, identified Fort Riley as the target and talked about his commitment to trigger the device himself and become a martyr.
FBI Evidence Response Teams are executing search warrants related to the case.
If convicted, Booker would face a maximum penalty of life in prison.
The investigation was conducted by the FBI Joint Terrorism Task Force, including members from the FBI’s Kansas City Division, the Topeka Police Department and the Kansas Highway Patrol.
The case is being prosecuted by Assistant U.S. Attorneys Tony Mattivi and David Smith of the District of Kansas, and Trial Attorneys Josh Parecki and Rebecca Magnone of the National Security Division’s Counterterrorism Section.
In all cases, defendants are presumed innocent until and unless proven guilty. The charges merely contain allegations of criminal activity.
Booker Complaint
Seven Louisiana Residents Indicted in Tax Fraud SchemeRead the Press Release
Seven Tangipahoa Parish, Louisiana, residents were indicted today on charges of conspiracy to defraud the United States, theft of public money, mail fraud, aggravated identity theft and conspiracy to commit money laundering, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kenneth Allen Polite Jr. of the Eastern District of Louisiana. According to the indictment, the defendants conspired to file false income tax returns using stolen identities and then launder the resulting fraudulent tax refunds.
The indictment charges Corey Lewis aka Coco, 37, Angela Chaney, 43, Cedrick Mitchell aka Skeet, 39, Craig Lewis, 40, Brad Lewis aka Bird, 32, Thaddeus Richardson, 49, and Martin Jackson Sr., 48, with conspiracy to defraud the United States, conspiracy to commit money laundering, conspiracy to commit mail fraud and conspiracy to commit theft of public money. In addition, Corey Lewis, Chaney, Richardson and Jackson Sr. were charged with various counts of theft of public money. Chaney was also charged with six counts of mail fraud and five counts of aggravated identity theft. Corey Lewis was additionally charged with three counts of aggravated identity theft.
According to the allegations in the indictment, the defendants used individuals’ names and social security numbers in order to prepare false tax returns that claimed large tax refunds. The refund checks were mailed to addresses in Louisiana, including to post office boxes that were opened by members of the conspiracy. Once the tax refund checks were received, members of the conspiracy falsely endorsed the checks and cashed them. Corey Lewis, Chaney and Mitchell deposited fraudulently obtained U.S. Treasury checks into bank accounts under their control. Richardson and Jackson Sr. deposited checks into their business accounts, then provided some of the proceeds to their co-conspirators and kept the remaining proceeds for themselves.
If convicted, the defendants each face a statutory maximum sentence of 20 years in prison for each mail fraud count and each money laundering conspiracy charge, a statutory maximum sentence of 10 years in prison for each theft of public money count, a statutory maximum sentence of five years in prison for each conspiracy count, and a mandatory minimum sentence of two years in prison for each count of aggravated identity theft. The defendants also face potential fines, forfeiture and restitution.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Polite commended special agents of IRS-Criminal Investigation and the U.S. Postal Inspection Service, who investigated the case, and Trial Attorneys Hayden Brockett and Lauren Castaldi of the Tax Division and Assistant U.S. Attorney Dall Kammer of the Eastern District of Louisiana, 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.
Second Topeka, Kansas, Man Charged in Connection with Car Bomb PlotRead the Press Release
A second Topeka, Kansas, man was charged Friday in connection with an alleged plot to detonate a vehicle bomb at the Fort Riley military base near Manhattan, Kansas, announced Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Barry Grissom of the District of Kansas.
Alexander E. Blair, 28, is charged with one count of failing to report a felony. A criminal complaint filed Friday in U.S. District Court in the District of Kansas alleges Blair knew of a plot by co-defendant John T. Booker Jr., 20, of Topeka, to detonate a bomb at Fort Riley.
The complaint alleges that in March 2014, the FBI began an investigation into Booker, who also called himself Mohammed Abdullah Hassan, concerning statements he made online indicating he wanted to wage jihad and to die in the process. Booker was arrested April 10, 2015, and charged with attempting to use a weapon of mass destruction and two other counts.
During the investigation of Booker, law enforcement officers learned that Blair shared some of Booker’s extremist views and loaned Booker money for the purpose of renting a storage unit that Booker used to store components for a bomb. The complaint alleges Blair knew of Booker’s intent to detonate a bomb at Fort Riley and to “kill as many soldiers as possible.” Despite being convinced that Booker was serious about carrying out the plot, the complaint alleges, Blair chose not to report what he knew to the authorities.
If convicted, he faces a maximum penalty of three years in federal prison. The case is being investigated by the FBI. The case is being prosecuted by Assistant U.S. Attorney Jared Maag of the District of Kansas.
In all cases, defendants are presumed innocent until and unless proven guilty. The charges merely contain allegations of criminal conduct.
Blair Complaint
First Jamaican Man Extradited to the United States in Connection with International Lottery Scheme Pleads GuiltyRead the Press Release
A Jamaican man pleaded guilty today in the U.S. District Court in the Southern District of Florida in Fort Lauderdale to one count of conspiracy to commit wire fraud, the Justice Department announced today.
Damion Bryan Barrett, 28, was extradited from Jamaica in February based on charges that he committed fraud as part of an international lottery scheme against elderly victims in the United States. The prosecution is part of the United States’ ongoing crackdown on fraudulent international lottery schemes.
“Scammers in foreign countries preying on elderly victims in the United States are not immune from prosecution in the United States,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “This case demonstrates that we will bring those responsible to justice, wherever they may seek to hide.”
“The protection of the most vulnerable members of our society, including the elderly, is one of the top priorities of the Department of Justice and of our office, and this case again shows that an international border is no defense for those who defraud our senior citizens,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida. “Regardless of where the criminals may be located, we will work together with our domestic and international law enforcement partners to bring them to the United States to hold them accountable for their crimes. In particular, we thank the Jamaican authorities for their cooperation and assistance in our continuing efforts to stamp out these long-running lottery schemes that target older Americans.”
Barrett was indicted by a federal grand jury in Fort Lauderdale on Aug. 9, 2012, and was arrested in Jamaica in January based on the United States’ request that he be extradited. On Feb. 12, Barrett was the first Jamaican to be extradited to the United States based on charges that he committed fraud as part of an international lottery scheme.
As part of his guilty plea, Barrett acknowledged that had the case gone to trial, the United States would have proved beyond a reasonable doubt that from 2008 through 2012, Barrett was a member of a conspiracy in which elderly victims were informed that they had won a large amount of money in a lottery and were induced to pay bogus fees in advance of receiving their purported lottery winnings. Barrett also admitted that the United States would have proved that he knew the claims of lottery winnings were completely fabricated and that he and his co-conspirators kept the victims’ money for their own benefit without paying any lottery winnings. Barrett also admitted that the United States would have proved that in an effort to convince the victims that the lottery winnings were real, the conspirators sent the victims communications discussing their purported lottery winnings, which falsely claimed to be from a genuine sweepstakes company and from federal agencies including the Internal Revenue Service and the Federal Reserve. In fact, these communications were not from a genuine sweepstakes company or from agencies of the United States.
At his June 19 sentencing, Barrett faces a statutory maximum sentence of 30 years in prison and mandatory restitution. Barrett’s co-defendant, Oneike Barnett, 29, pleaded guilty on Feb. 28, 2014, to conspiracy to commit wire fraud. On April 29, 2014, U.S. District Court Judge William J. Zloch sentenced Barnett to serve 60 months in prison and five years of supervised release, and to pay $94,456 in restitution for his role in this case.
Acting Assistant Attorney General Mizer and U.S. Attorney Ferrer commended the investigative efforts of the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, the U.S. Postal Inspection Service and the U.S. Marshals Service. The case is being prosecuted by Trial Attorney Kathryn Drenning of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Bertha R. Mitrani of the Southern District of Florida.
Designer of Fraudulent Tax Promotion Product Sentenced to PrisonRead the Press Release
A Chino, California, businessman was sentenced to serve more than four years in prison yesterday in the U.S. District Court in Las Vegas for his role in a conspiracy to promote and sell fraudulent tax products, including a product called Tax Break 2000, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Daniel William Porter pleaded guilty to one count of conspiracy to defraud the United States. U.S. District Judge Miranda Du sentenced Porter to serve 55 months in prison and three years of supervised release following his prison sentence. As part of his plea agreement, Porter agreed to cooperate with the government and assist with its ongoing investigation into entities and individuals involved in the sale and promotion of Tax Break 2000.
“Today’s sentence sends a clear and powerful message to those individuals who, like Mr. Porter, seek to evade and help others evade their federal tax obligations, that they will be prosecuted, convicted and sentenced to substantial terms of incarceration,” said Acting Assistant Attorney General Ciraolo. “No individual is above the law, and the Tax Division, working with its partners at IRS-Criminal Investigation and the Offices of the U.S. Attorneys, will hold accountable those who engage in criminal conduct at the expense of honest taxpayers and the U.S. Treasury.”
According to court documents and court statements, Porter conceived and designed Tax Break 2000, which purported to be an online shopping website. By at least November 2000 and continuing through at least July 2002, Porter conspired with others to promote and sell Tax Break 2000 to customers throughout the United States. Customers were falsely and fraudulently told that purchasing Tax Break 2000 would allow them to claim legitimate income credits and deductions under the Americans with Disabilities Act (ADA) by modifying the website each customer was provided to make it accessible to the disabled. The National Audit Defense Network (NADN) charged $10,475 for the product to maximize the fraudulent income tax credits and deductions that customers would claim on their federal income tax returns. However, the customers only paid between $2,000 and $2,695 for the product. The remainder of the cost was covered by a promissory note that customers were not expected to repay.
Porter sold Tax Break 2000 directly through Oryan Management and by contracting with other individuals and entities, including Donald Hicks, a tax return preparer in Gladstone, Missouri, and NADN in Las Vegas. Through Hicks and NADN, Tax Break 2000 was sold to thousands of customers. Alan Rodrigues, NADN’s former general manager and executive vice president, Weston Coolidge, the former president of NADN, and Joseph Prokop, the national director of marketing for Oryan Management and a former NFL punter, were convicted at trial in the District of Nevada for their roles in the sale and promotion of Tax Break 2000 in a separate criminal case.
On March 10, at the sentencing of Rodrigues, Coolidge and Prokop, Judge Du found that the intended tax loss to the Internal Revenue Service (IRS) associated with NADN’s sale of Tax Break 2000 was more than $60 million and that the fraud loss to the customers who purchased Tax Break 2000 was more than $36 million. Rodrigues was sentenced to serve 72 months in prison, Coolidge was sentenced to serve 70 months in prison, and Prokop was sentenced to serve 18 months in prison to be followed by 30 months home confinement. All three defendants were ordered to pay restitution of more than $35 million to customers of NADN who purchased the fraudulent tax product. Donald Hicks, who promoted the fraudulent tax products in Missouri, pleaded guilty in a separate criminal case in the Western District of Missouri.
Acting Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation, who investigated the case, and former Trial Attorneys Timothy J. Stockwell, Katherine L. Wong and Mark L. Williams, and Paralegal Larry Garland of the Tax Division, who prosecuted the case. Ciraolo also thanked the U.S. Attorney’s Office in the District of Nevada in Las Vegas for their substantial assistance.
Colorado Man Convicted of Kidnapping a Toddler and Producing Child PornographyRead the Press Release
A Colorado man was convicted by a federal jury of kidnapping a toddler and producing child pornography, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Benjamin B. Wagner of the Eastern District of California.
Shawn McCormack, 31, of Colorado Springs, Colorado, was found guilty following a four-day trial of four counts of sexual exploitation of a child and two counts of kidnapping. Senior U.S. District Judge Anthony W. Ishii of the Eastern District of California presided over the trial, and a sentencing hearing was scheduled for July 27, 2015.
According to evidence presented at trial, McCormack, feigning to be a friend, traveled to a couple’s residence in Bakersfield, California, and stayed as an overnight guest on multiple occasions. During several of the overnight stays, in the middle of the night, McCormack snuck the couple’s toddler out of the house and recorded his sexual abuse of the toddler in a nearby motel, outdoors and in his truck. McCormack then returned the toddler to the house before the parents awoke. The evidence demonstrated that McCormack distributed the images and videos of his abuse to others online, including an undercover officer with the Toronto Police Services.
According to the evidence presented at trial, Homeland Security Investigations agents in Boston found images and recordings distributed by McCormack on a separate defendant’s computer in Massachusetts. The agents were able to identify the date, time and hotel room where one of the videos had been produced. When agents visited that hotel, they learned that McCormack had rented that hotel room on the night when the recording was created. During the investigation, agents uncovered evidence that McCormack had recorded his abuse of both of the couple’s children.
The investigation is being conducted by U.S. Immigration and Customs Enforcement’s Field Offices in Bakersfield, California, Colorado Springs, Colorado, and Boston, Massachusetts, the Bakersfield Police Department, the Colorado Springs Police Department, Toronto Police Services, and the FBI.
The case is being prosecuted by Trial Attorney Maureen C. Cain of the Criminal Division’s Child Exploitation and Obscenity Section and Assistant U.S. Attorneys Patrick R. Delahunty and Megan A.S. Richards of the Eastern District of California.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Two Mississippi Women Sentenced for Their Roles in a Conspiracy to Commit Racially Motivated Assaults, Culminating in the Killing of an African-American Man Run over by TruckRead the Press Release
The Justice Department announced today that Shelbie Brooke Richards, 21, of Pearl, Mississippi, and Sarah Adelia Graves, 22, of Crystal Springs, Mississippi, were sentenced today in U.S. District Court in Jackson for their roles in a federal hate crime conspiracy involving racially motivated assaults, culminating in the death of James Craig Anderson, an African-American man, in the summer of 2011. Richards had previously pleaded guilty to one count of conspiracy and one count of misprision for her role in the conspiracy and the cover-up. Graves previously pleaded guilty to one count of conspiracy for her role. Richards was sentenced to 96 months in prison and Graves was sentenced to 60 months in prison. A restitution hearing will be set for a later date.
Six other defendants in related cases, Deryl Paul Dedmon, 22, John Aaron Rice, 22, Dylan Wade Butler, 23, Jonathan Kyle Gaskamp, 22, and Joseph Paul Dominick, 23, all of Brandon, Mississippi, and William Kyle Montgomery, 25, of Puckett, Mississippi, were previously sentenced to 600 months, 220 months, 78 months, 48 months, 48 months, and 224 months, respectively, for their roles in the conspiracy. Two other defendants involved in related cases—John Louis Blalack, 21, and Robert Henry Rice, 24, both of Brandon, Mississippi—are awaiting sentencing.
“The Justice Department will always fight to hold accountable those who commit racially motivated assaults,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “We hope that the prosecution of those responsible for this horrific crime will help provide some measure of closure to the victim’s family and to the larger community affected by this heinous crime.”
“This prosecution sends a clear message that this office, in partnership with the DOJ Civil Rights Division, will prioritize and aggressively prosecute hate crimes and others civil rights violations in the Southern District of Mississippi,” said U.S. Attorney Gregory K. Davis of the Southern District of Mississippi.
“The FBI takes very seriously its responsibility to uphold the civil rights of all citizens,” said Special Agent in Charge Donald Alway of the FBI in Mississippi. “Together with its law enforcement partners, the FBI will continue its efforts to aggressively pursue and bring to justice all those individuals who conspire to deprive others of their civil rights merely because of the color of their skin."
In prior court hearings, the defendants had admitted that beginning in the spring of 2011, they and others conspired with one another to harass and assault African Americans in and around Jackson. On numerous occasions, the co-conspirators used dangerous weapons, including beer bottles, sling shots and motor vehicles, to cause, and attempt to cause, bodily injury to African Americans. They would specifically target African Americans they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less likely to report an assault. The co-conspirators would often boast about these racially motivated assaults.
Richards and Graves admitted their involvement in two racially motivated assaults, including the beating and killing of James Craig Anderson. Specifically, they admitted that in the early morning hours of June 26, 2011, they and five other co-conspirators agreed to carry out their plan to find, harass and assault African Americans. At around 4:15 a.m., Montgomery, John Aaron Rice, Blalack, and Butlers drove to west Jackson in Montgomery’s white Jeep with the understanding that Richards, Graves and Dedmon would join them a short time later.
At approximately 5:00 a.m., the four occupants of the Jeep spotted Anderson in a motel parking lot off Ellis Avenue. They decided that Anderson would be a good target for an assault because he was African-American and appeared to be intoxicated. Rice and Blalack got out of the Jeep to distract Anderson while they waited for the Richards, Graves, and Dedmon to arrive. After Richards, Graves and Dedmon arrived in a Ford F250 truck, Rice and Dedmon physically assaulted Anderson. After the assault, the four occupants of the Jeep left the motel parking lot in the Jeep. Dedmon then deliberately used his truck to run over Anderson, causing injuries which resulted in Anderson’s death. Richards initially falsely told law enforcement officials that she did not know the reason for the assault and did not encourage Dedmon to hit the victim with the truck. Richards later admitted that she knew that the assault was racially motivated and that she and Graves encouraged Dedmon to commit the fatal assault.
This case was the result of a cooperative effort among the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Mississippi and the Hinds County, Mississippi, District Attorney’s Office. This case was investigated by the Jackson Division of the FBI and the Jackson Police Department. It is being prosecuted by Trial Attorney Sheldon L. Beer and Deputy Chief Paige M. Fitzgerald of the Civil Rights Division, and Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi.
Two Cardiovascular Disease Testing Laboratories to Pay $48.5 Million to Settle Claims of Paying Kickbacks and Conducting Unnecessary TestingRead the Press Release
United States Sues Two Other Companies and Three Individuals for Similar Violations
Cardiovascular testing disease laboratories Health Diagnostics Laboratory Inc. (HDL), of Richmond, Virginia, and Singulex Inc., of Alameda, California, have agreed to resolve allegations that they violated the False Claims Act by paying remuneration to physicians in exchange for patient referrals and billing federal health care programs for medically unnecessary testing, the Department of Justice announced today. Under the settlements, which stem from three related whistleblower actions filed under the federal False Claims Act, HDL will pay $47 million and Singulex will pay $1.5 million. The government also intervened in the lawsuits as to similar allegations against another laboratory, Berkeley HeartLab Inc.; a marketing company, BlueWave Healthcare Consultants Inc., and its owners, Floyd Calhoun Dent and J. Bradley Johnson; and former CEO Latonya Mallory of HDL.
“Health care providers that attempt to profit by providing illegal inducements will be held accountable,” said Acting Assistant Attorney General Benjamin C. Mizer for the Justice Department’s Civil Division. “We will continue to advocate for the appropriate use of Medicare funds and the proper care of our senior citizens.”
As alleged in the lawsuits, HDL, Singulex and Berkeley induced physicians to refer patients to them for blood tests by paying them processing and handling fees of between $10 and $17 per referral and by routinely waiving patient co-pays and deductibles. In addition, HDL and Singulex allegedly conspired with BlueWave to offer these inducements on behalf of HDL and Singulex. As a result, physicians allegedly referred patients to HDL, Singulex and Berkeley for medically unnecessary tests, which were then billed to federal health care programs, including Medicare.
The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federally funded programs. The Anti-Kickback Statute is intended to ensure that a physician’s medical judgment is not compromised by improper financial incentives and is instead based on the best interests of the patient.
“The District of South Carolina has more than doubled its resources allocated to the pursuit of fraud, including matters brought to our attention by whistleblowers,” said U.S. Attorney Bill Nettles of the District of South Carolina. “Whistleblower actions are a critical tool for holding health care providers accountable for fraudulent and abusive practices not only in South Carolina but nationwide.”
“When health care companies pursue profits by paying kickbacks to doctors, they undermine a patient’s ability to trust that medical decisions are being made for scientific reasons, not financial ones,” said Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia. “Those kickbacks also harm the taxpayer because they drive up the cost of federal health care programs with medically unnecessary tests. This significant settlement shows our determination to work with whistleblowers and our federal partners to defend the integrity of the health care system from illegal agreements that hurt patients and taxpayers.”
As part of the settlements, HDL and Singulex have agreed to enter into separate corporate integrity agreements with the Department of Health and Human Services’ Office of Inspector General (HHS-OIG). Those agreements provide for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to these settlements.
“Today’s announcement that DOJ has settled in part and intervened in part in these whistleblower actions reflects the commitment by DOJ, our agency and our other law enforcement partners to ferret out alleged improper Medicare billings by health care companies that are looking to increase their profits at the expense of taxpayers,” said Special Agent in Charge Derrick L. Jackson of the HHS-OIG Atlanta Regional Office.
The lawsuits were filed by Dr. Michael Mayes, Scarlett Lutz, Kayla Webster and Chris Reidel under the qui tam, or whistleblower, provisions of the False Claims Act. Under the act, private citizens can bring suit on behalf of the government for false claims and share in any recovery. The whistleblowers’ share of the settlements has yet to be determined. The act also permits the United States to intervene in and take over a whistleblower suit, as it has done in part in the three actions. The United States advised the court that it would be filing its own complaint against the corporate and individual defendants against whom it has intervened within 120 days.
Two of the lawsuits separately allege that the former CEO Phillipe Goix of Singulex and Quest Diagnostics Inc., parent of Berkeley, are liable for the scheme; the government declined to intervene in the allegations against Goix and Quest.
The government’s actions illustrate its emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.9 billion through False Claims Act cases, with more than $15.2 billion of that amount recovered in cases involving fraud against federal health care programs.
These matters were investigated by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Offices of the District of South Carolina, the District of Columbia and the Middle District of North Carolina, HHS-OIG, the FBI, the U.S. Office of Personnel Management’s Office of Inspector General, and the Department of Defense’s Office of Inspector General Defense Criminal Investigative Service.
The cases are captioned United States ex rel. Mayes v. Berkeley HeartLab Inc., et al., Case No. 9:11-CV-01593-RMG (D.S.C.); United States ex rel. Riedel v. Health Diagnostic Laboratory, Inc., et al., Case No. 1:11-CV-02308 (D.D.C.); and United States, et al. ex rel. Lutz, et al. v. Health Diagnostic Laboratory, Inc., et al., Case No. 9:14-CV-0230-RMG (D.S.C.). The claims settled by these agreements and asserted against these companies and individuals are allegations only, and there has been no determination of liability.
Three Alabama Men Sentenced for Participation in Stolen Identity Refund Fraud SchemeRead the Press Release
Three Montgomery, Alabama, men were sentenced to prison today in the U.S. District Court for the Middle District of Alabama for their participation in a stolen identity refund fraud (SIRF) tax scheme, 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.
Cruz Castillo Burnett, 28, Jacorey Giddens, 27, and Rodrickus Howard, 24, were each sentenced to serve 40 months in prison and three years of supervised release. Burnett was ordered to pay restitution in the amount of $209,041, Giddens was ordered to pay restitution in the amount of $151,260 and Howard was ordered to pay restitution in the amount of $220,136. Each defendant previously pleaded guilty to one count of conspiracy to defraud the government and one count of aggravated identity theft.
According to plea documents, Burnett, Giddens and Howard conspired to acquire the names, social security numbers and dates of birth of individuals without their knowledge or consent. The indictment alleged that from March 2011 to April 2013, the defendants used these stolen identities to file more than 500 false federal income tax returns that claimed refunds from the Internal Revenue Service (IRS). As part of the scheme, the defendants requested more than $1 million in refunds from the IRS. The defendants received the refunds in various forms, including U.S. Treasury checks, direct deposits to bank accounts and direct deposits onto prepaid debit cards in the names of identity theft victims.
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 Gregory P. Bailey and Michael C. Boteler of the Tax Division and Assistant U.S. Attorney Todd Brown of the Middle District of Alabama, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Michigan Resident Sentenced to Prison for Criminal Contempt Involving Federal Tax ObligationsRead the Press Release
A resident of Commerce Township, Michigan, was sentenced to serve 18 months in prison to be followed by one year of supervised release for criminal contempt, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
In July 2014, Doreen Hendrickson was convicted of criminal contempt following a federal jury trial in Detroit. Hendrickson violated an injunction involving federal tax obligations issued by U.S. District Judge Nancy Edmunds of the Eastern District of Michigan in May 2007. Today’s sentence was imposed by U.S. District Judge Victoria Roberts.
According to court filings and evidence presented at trial, Hendrickson and her husband, Peter Hendrickson, filed federal income tax returns for the years 2002 and 2003 on which they falsely claimed they earned zero wages. Based on these false returns, the Internal Revenue Service (IRS) issued the Hendricksons more than $20,000 in income tax refunds that they were not entitled to receive. In 2006, the Tax Division sued the Hendricksons to recover these refunds. As part of that litigation, Judge Edmunds ordered the Hendricksons to file corrected amended tax returns for 2002 and 2003 that reported all of their income, and further ordered them to repay their fraudulently obtained refunds to the IRS. Judge Edmunds also barred the Hendricksons from filing additional false tax returns.
In 2009, Peter Hendrickson was convicted of filing multiple false income tax returns, including the 2002 and 2003 returns that he filed jointly with his wife. The tax returns at issue were based on the false and frivolous tax theories that Peter Hendrickson promoted in his book, “Cracking the Code,” and on his website, Lost Horizons. Peter Hendrickson was sentenced to serve 27 months in prison in that case.
The evidence presented at Doreen Hendrickson’s trial showed that she violated the injunction issued by Judge Edmunds when she failed to file amended 2002 and 2003 tax returns. Also, in direct violation of Judge Edmunds’s order, Hendrickson filed a false income tax return for 2008 on which she falsely claimed that wages she earned as a movie extra were not taxable. This tax return was submitted while her husband was under indictment for filing false tax returns.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Melissa S. Siskind, Jeffrey B. Bender and Jeffrey A. McLellan of the Tax Division, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office of the Eastern District of Michigan for their substantial assistance.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Member of Organized Cybercrime Ring Sentenced to 150 Months in Prison for Selling Stolen and Counterfeit Credit CardsRead the Press Release
A member of the identity theft and credit card fraud ring known as “Carder.su” was sentenced today to 150 months in federal prison for selling stolen and counterfeit credit cards over the Internet. He was further ordered to pay $50.8 million in restitution.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Assistant Special Agent in Charge Michael Harris of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Las Vegas Field Office made the announcement. U.S. District Judge Andrew P. Gordon of the District of Nevada imposed the sentence.
“Criminal cyber organizations like Carder.su threaten not just U.S. citizens but people in every corner of the globe,” said Assistant Attorney General Caldwell. “Managers in Russia seamlessly ran their criminal enterprise online using, among others, a counterfeit card vendor from New Jersey, with whom they communicated through screen name aliases. The success in this case was achieved through equally seamless cooperation with our foreign law enforcement partners and effective use of the RICO statute. As more countries work with us to fight these organizations, we will continue to evolve to meet this growing threat.”
“Mr. Smith’s crimes were very serious and justify a lengthy prison sentence,” said U.S. Attorney Bogden. “He admitted that he caused a loss of seven to $20 million involving over 250 victims, and that he obstructed justice when he fled to Jamaica while released on bond awaiting trial. We are working closely with our international, federal, state and local law enforcement partners to make sure that the perpetrators of these sorts of crimes are prosecuted no matter where in the world they commit their crimes or attempt to flee.”
“As this sentence demonstrates, cyber-criminals who purposely harm innocent Americans and compromise our financial system and global commerce will be aggressively pursued, investigated and prosecuted,” said Assistant Special Agent in Charge Harris. “These criminals may believe they can escape detection by fleeing the country and hiding behind their computer screens, but as this case shows, cyberspace is not a refuge from justice.”
Jermaine Smith, aka “SirCharlie57,” aka “Fairbusinessman,” 34, of East Orange, New Jersey, pleaded guilty in October 2014 to one count of participating in a racketeer influenced corrupt organization.
During his guilty plea, Smith admitted that in May 2009 he became associated with the Carder.su organization, a criminal enterprise whose members trafficked in compromised credit card account data and counterfeit identifications, and committed money laundering, narcotics trafficking, and various types of computer crime. Specifically, Smith admitted that he operated as a vendor on the organization’s websites, using the “SirCharlie57” and “Fairbusinessman” nicknames. While acting as a vendor under those online monikers, Smith sold counterfeit credit cards to an undercover special agent. Those counterfeit credit cards were successfully processed for fingerprints, identifying Smith as the true user of the online screennames. In addition to the sale of the counterfeit credit cards, Smith admitted that he possessed over 2,150 stolen credit and debit card account numbers.
While on pretrial release in this case, Smith removed an electronic monitoring device from his person and fled to Jamaica. He was arrested four months later and returned to Nevada.
Fifty-six individuals were charged in four separate indictments in Operation Open Market, which targeted the Carder.su organization. To date, 26 individuals have been convicted and the rest are either fugitives or are pending trial.
The cases were investigated by ICE-HSI and the U.S. Secret Service, and are being prosecuted by Trial Attorney Jonathan Ophardt of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Kimberly M. Frayn and Andrew W. Duncan of the District of Nevada.
This prosecution is 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 is 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. For more information on the task force, please visit www.StopFraud.gov.
Madison, Wisconsin, Man Charged with Attempting to Provide Material Support to ISILRead the Press Release
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney John W. Vaudreuil of the Western District of Wisconsin and Special Agent in Charge Robert J. Shields Jr. of the FBI’s Milwaukee Division announced that Joshua Ray Van Haften, 34, of Madison, Wisconsin, has been charged with attempting to provide material support and resources, namely himself as personnel, to a foreign terrorist organization. As alleged in the complaint, Van Haften intended to travel into Iraq or Syria to join the Islamic State of Iraq and the Levant (ISIL).
The complaint alleges that Van Haften left the United States on Aug. 26, 2014, and traveled to Istanbul. As alleged in the complaint, Turkey shares a land border with Syria and is known to be an entry point into Syria for those who wish to join ISIL.
“Van Haften traveled overseas for the alleged purpose of joining and attempting to provide material support to ISIL,” said Assistant Attorney General Carlin. “Stemming the flow of foreign fighters to Iraq and Syria and holding accountable those who attempt to provide material support to designated foreign terrorist organizations remains a top priority for the National Security Division. I would like to thank all the agents, analysts and prosecutors who are responsible for this case.”
“We will continue to work with our law enforcement partners to investigate, arrest, and vigorously prosecute all extremists who choose to aid ISIL, or any other terrorist organization, and to stop them before they harm the United States or our allies,” said U.S. Attorney Vaudreuil. “We also remain committed to working with dedicated community members to bring this cycle to an end.”
“This arrest underscores the importance of our JTTF law enforcement partnerships to bring those to justice who provide support and resources to terrorist organizations such as ISIL,” said Special Agent in Charge Shields. “We hope this arrest will serve as a deterrent for others who may be terrorist sympathizers here in Wisconsin, across the nation or abroad: they will be held accountable for support of terrorism against our citizens and our international partners.”
Van Haften was arrested at O’Hare Airport in Chicago yesterday evening after his arrival in custody on an international flight from Turkey.
Van Haften will make an initial appearance in U.S. District Court at 9:45 a.m. CDT today before U.S. Magistrate Judge Stephen L. Crocker of the Western District of Wisconsin. If convicted, the defendant faces a maximum penalty of 15 years in federal prison.
This case was investigated by the Joint Terrorism Task Force, the members of which include the FBI, the Wisconsin Department of Justice’s Division of Criminal Investigation, the Dane County Sheriff’s Office and the University of Wisconsin Police Department. Assistance was also provided by the Department of Homeland Security. The case is being prosecuted by U.S. Attorney Vaudreuil and Assistant U.S. Attorney Jeffrey Anderson of the Western District of Wisconsin, and Trial Attorney Lolita Lukose of the Justice Department’s National Security Division.
The charges contained a complaint are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
Van Haften Complaint