District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Texas National Guard Recruiter and Assistant Convicted in Bribery and Fraud SchemeRead the Press Release
An Army National Guard recruiter and recruiting assistant were convicted today for their roles in a bribery and fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Jammie T. Martin, 37, and Michelle H. Davis, 34, both of Katy, Texas, were convicted today of conspiracy, bribery, wire fraud and aggravated identity theft. The defendants were indicted on Aug. 7, 2013, and will be sentenced on May 7, 2015, by U.S. District Judge David Hittner of the Southern District of Texas.
From February 2009 through April 2011, Martin served as an Army National Guard recruiter. Davis served as a recruiting assistant with the Guard Recruiting Assistance Program (G-RAP), which was a recruiting program that offered monetary incentives to soldiers of the Army National Guard who referred others to join the National Guard. Both defendants worked out of a Texas National Guard Armory known as the Westheimer Armory.
According to evidence presented at trial, Martin—who, as a recruiter, was ineligible for the G-RAP incentives—provided the personal identifying information of potential soldiers to Davis and at least three other National Guard soldiers. Davis and the others then falsely claimed they were responsible for referring the potential soldiers to join the military and fraudulently received referral bonus payments through the G-RAP program. Davis and the others paid approximately half of each fraudulent bonus payment to Martin as a kickback.
To date, this investigation has led to the conviction of 26 individuals, including Martin and Davis.
This case is being investigated by the San Antonio Fraud Resident Agency of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit and prosecuted by Trial Attorneys Sean F. Mulryne and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John P. Pearson of the Southern District of Texas.
Massachusetts Tax Return Preparer and Business Owner Pleads Guilty to Tax FraudRead the Press Release
A tax return preparer in Worcester and Hyde Park, Massachusetts, pleaded guilty today in the U.S. District Court for the District of Massachusetts to two counts of filing false claims with the Internal Revenue Service (IRS), the Department of Justice announced today.
Yaw Aboagye-Marfo, 42, of Worcester and Hyde Park, Massachusetts, was charged in a superseding indictment in August 2014 with filing false tax returns that claimed refunds to which clients were not entitled. According to the indictment, Aboagye-Marfo also filed false tax returns on his own behalf that claimed refunds from the IRS to which he was not entitled.
According to the indictment, Aboagye-Marfo owned and operated People’s Choice Tax Service and National Taxpert, located in Worcester and Hyde Park, respectively. Aboagye-Marfo used other individuals to recruit taxpayers for their personal identifying and related information so that he could use the information to file false tax returns on their behalf. In some cases, Aboagye-Marfo obtained only the personal identifying information of individual taxpayers and filed tax returns that claimed false Schedule C businesses, regardless of the individual’s income or employment status, qualifying that individual for large tax refunds. In some instances, Aboagye-Marfo also reported false dependents on the tax returns. Aboagye-Marfo charged a fee for his services and he also claimed a portion of the false tax refund proceeds for himself.
Sentencing is scheduled for May 15 before U.S. District Court Judge George A. O’Toole. Aboabye-Marfo faces a statutory maximum sentence of five years in prison and a $250,000 fine for each count.
This case was investigated by the special agents of IRS - Criminal Investigation. Trial Attorney Jeffrey B. Bender and Assistant Chief Karen Kelly of the Justice Department’s Tax Division are prosecuting the case.
California Charter Bus Company Owners Sentenced to Prison for Tax Fraud and Bank Home Mortgage FraudRead the Press Release
Two San Jose, California, brothers were sentenced to prison for committing tax fraud and bank fraud, Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Melinda Haag of the Northern District of California announced.
Fidencio Moreno, 52, was sentenced to serve 41 months in prison and three years of supervised release, and Arturo Moreno, 38, was sentenced to serve 28 months in prison and three years of supervised release. The court also ordered Arturo Moreno to pay $422,962 in restitution and to forfeit $3,328,600 and his interest in two pieces of real property. In January 2015, Elena Moreno, 40, the wife of Fidencio Moreno, was sentenced to serve 22 months in prison and three years of supervised release for her role in the conspiracies as a bookkeeper at the company. Prior to pleading guilty in this case, the three co-defendants collectively paid more than $200,000 in restitution to the Internal Revenue Service (IRS) for losses associated with their conspiracy to defraud the United States by filing false and fraudulent tax returns.
According to court documents, beginning in 2005 and continuing through at least 2010, Arturo, Fidencio and Elena Moreno conspired to defraud the United States by failing to report substantial amounts of gross receipts from their charter bus company, Quality Assurance Travel (QAT), on the federal corporate tax returns for QAT and on their personal income tax returns that they filed with the IRS. The total amount of unreported gross receipts of QAT during those years exceeded $966,908. Arturo and Fidencio Moreno were each 50 percent owners of QAT. The unreported income consisted primarily of cash receipts that were paid by passengers as they boarded the bus, but that were not deposited into the business bank accounts or disclosed to the Morenos’ tax return preparer.
According to court documents, between 2005 and July 2013, Arturo, Elena and Fidencio Moreno also conspired to commit bank fraud and wire fraud by submitting false and fraudulent home mortgage loan applications that overstated the applicants’ income and assets in order to acquire and refinance homes located in San Jose. In total, the defendants fraudulently obtained more than $3.3 million in home loans. After the defendants fell behind on the loan payments, they attempted to avoid foreclosure by submitting false and fraudulent applications to modify these loans. Two of the financial institutions approved the fraudulent applications, reducing the principal due on these loans. One of the four properties was ultimately sold via a short sale in 2013, while another was foreclosed upon in 2014. The total losses to the financial institutions resulting from the foreclosure and short sale exceeded $325,000.
The case was investigated by special agents of IRS-Criminal Investigation. Trial Attorney Todd P. Kostyshak of the Tax Division and Assistant U.S. Attorneys Thomas Moore and Katherine Wong prosecuted the case.
Two Former Police Officers Sentenced for July 2012 Robbery in Puerto RicoRead the Press Release
A former sergeant from the Police of Puerto Rico (POPR) was sentenced today to serve 101 months in prison for his involvement in a July 2012 home invasion robbery in Bayamon, Puerto Rico. A second former POPR officer was also sentenced today to serve 24 months in prison for lying to federal agents about his role in the same robbery and for his participation in a second, unrelated robbery.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico made the announcement.
Jorge Fernandez-Aviles, 49, of Carolina, Puerto Rico, pleaded guilty on Oct. 7, 2014, to robbery and firearms charges, and was sentenced to 101 months in prison today. According to admissions made in connection with his guilty plea, on July 14, 2012, Sergeant Fernandez and other POPR officers, armed with their POPR weapons, robbed a house in Bayamon. They drove to the robbery in a marked patrol car loaned to them by a POPR officer. Upon entering the house, the officers identified themselves as police, falsely claimed they were executing a search warrant, and searched and detained the individuals who were present. They then stole money and cocaine. Fernandez-Aviles later received payment from the proceeds of the sale of the stolen cocaine for his participation in the robbery.
Former POPR Officer Alexander Mir-Hernandez, 40, of Carolina, Puerto Rico pleaded guilty on Oct. 3, 2014, to making false statements to federal agents and to a separate civil rights crime in connection with a December 2013 robbery, and was sentenced to serve 24 months in prison today. According to admissions made in connection with his guilty plea, when he was interviewed by FBI agents in June 2014, Mir made several false statements and falsely denied providing the patrol car that was used to commit the July 2012 robbery. Mir also admitted to stealing thousands of dollars in drug trafficking proceeds from a money courier at Luis Munoz Marin International Airport in December 2013 while he was on duty as a POPR officer.
Both defendants were sentenced by U.S. District Judge José Antonio Fusté of the District of Puerto Rico. The remaining four defendants are scheduled to be sentenced in February and March 2015.
This case was investigated by the FBI’s San Juan Division. The case is being prosecuted by Trial Attorneys Heidi Boutros Gesch and Brian K. Kidd of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mariana Bauzá of the District of Puerto Rico.
Justice Department and State Partners Secure $1.375 Billion Settlement with S&P for Defrauding Investors in the Lead up to the Financial CrisisRead the Press Release
Attorney General Eric Holder announced today that the Department of Justice and 19 states and the District of Columbia have entered into a $1.375 billion settlement agreement with the rating agency Standard & Poor’s Financial Services LLC, along with its parent corporation McGraw Hill Financial Inc., to resolve allegations that S&P had engaged in a scheme to defraud investors in structured financial products known as Residential Mortgage-Backed Securities (RMBS) and Collateralized Debt Obligations (CDOs). The agreement resolves the department’s 2013 lawsuit against S&P, along with the suits of 19 states and the District of Columbia. Each of the lawsuits allege that investors incurred substantial losses on RMBS and CDOs for which S&P issued inflated ratings that misrepresented the securities’ true credit risks. Other allegations assert that S&P falsely represented that its ratings were objective, independent and uninfluenced by S&P’s business relationships with the investment banks that issued the securities.
The settlement announced today is comprised of several elements. In addition to the payment of $1.375 billion, S&P has acknowledged conduct associated with its ratings of RMBS and CDOs during 2004 to 2007 in an agreed statement of facts. It has further agreed to formally retract an allegation that the United States’ lawsuit was filed in retaliation for the defendant’s decisions with regard to the credit of the United States. Finally, S&P has agreed to comply with the consumer protection statutes of each of the settling states and the District of Columbia, and to respond, in good faith, to requests from any of the states and the District of Columbia for information or material concerning any possible violation of those laws.
“On more than one occasion, the company’s leadership ignored senior analysts who warned that the company had given top ratings to financial products that were failing to perform as advertised,” said Attorney General Holder. “As S&P admits under this settlement, company executives complained that the company declined to downgrade underperforming assets because it was worried that doing so would hurt the company’s business. While this strategy may have helped S&P avoid disappointing its clients, it did major harm to the larger economy, contributing to the worst financial crisis since the Great Depression.”
Attorney General Holder was joined in announcing the settlement with Acting Associate Attorney General Stuart F. Delery, Acting Assistant Attorney General for the Civil Division Joyce R. Branda and Acting U.S. Attorney for the Central District of California Stephanie Yonekura. Also joining the Department of Justice in making this announcement are the attorneys general from Arizona, Arkansas, California, Connecticut, Colorado, Delaware, Idaho, Illinois, Indiana, Iowa, Maine, Mississippi, Missouri, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee, Washington and the District of Columbia.
“This resolution provides further proof that the Department of Justice will vigorously pursue investigations and litigation, no matter how challenging, to protect the best interests of the American people,” said Acting Associate Attorney General Delery. “As part of the resolution, S&P admitted facts demonstrating that it misrepresented itself to investors and the public, allowing the pursuit of profits to bias its ratings. S&P also agreed to retract its unsubstantiated claim that this lawsuit was initiated in retaliation for the decisions S&P made about the credit rating of the U.S. government. Today's announcement is the latest result of our dedicated effort to address misconduct of every kind that contributed to the financial crisis.”
“Today’s historic settlement demonstrates that we will use all of our resources and every legal tool available to hold accountable those who commit financial fraud,” said Acting Assistant Attorney General Branda. “Thanks to the tireless efforts of our team in Washington and California, S&P has not only paid a record-setting penalty, but has now admitted to the American people facts that make clear its own unlawful role in the financial crisis.”
Half of the $1.375 billion payment – or $687.5 million – constitutes a penalty to be paid to the federal government and is the largest penalty of its type ever paid by a ratings agency. The remaining $687.5 million will be divided among the 19 states and the District of Columbia. The allocation among the states and the District of Columbia reflects an agreement between the states on the distribution of that money.
In its agreed statement of facts, S&P admits that its decisions on its rating models were affected by business concerns, and that, with an eye to business concerns, S&P maintained and continued to issue positive ratings on securities despite a growing awareness of quality problems with those securities. S&P acknowledges that:
- S&P promised investors at all relevant times that its ratings must be independent and objective and must not be affected by any existing or potential business relationship;
- S&P executives have admitted, despite its representations, that decisions about the testing and rollout of updates to S&P’s model for rating CDOs were made, at least in part, based on the effect that any update would have on S&P’s business relationship with issuers;
- Relevant people within S&P knew in 2007 many loans in RMBS transactions S&P were rating were delinquent and that losses were probable;
- S&P representatives continued to issue and confirm positive ratings without adjustments to reflect the negative rating actions that it expected would come.
In addition, S&P acknowledges that the voluminous discovery provided to S&P by the United States in the litigation does not support their allegation that the United States’ complaint was filed in retaliation for S&P’s 2011 decisions on the credit rating of the United States. S&P will formally retract that claim in the litigation.
“S&P played a central role in the crisis that devastated our economy by giving AAA ratings to mortgage-backed securities that turned out to be little better than junk,” said Acting U.S. Attorney Yonekura. “Driven by a desire to increase profits and market share, S&P blessed innumerable securitizations that were used by aggressive lenders to offload the risks of billions of dollars in mortgage loans given to homeowners who had no ability to pay them off. This conduct fueled the meltdown that ultimately led to tens of thousands of foreclosures in my district alone. This historic settlement makes clear the consequences of putting corporate profits over honesty in the financial markets.”
Today’s settlement was announced 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 including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
- S&P promised investors at all relevant times that its ratings must be independent and objective and must not be affected by any existing or potential business relationship;
Justice Department Seeks to Shut Down Maryland Tax Return PreparerRead the Press Release
The Justice Department announced today that it has asked a federal court in Greenbelt, Maryland, to permanently bar a Silver Spring, Maryland, tax preparer, doing business as Eplanet, Eplanet LLP, Eplanet Corp., and Eplanete Corp., from preparing tax returns for others.
The government also filed a motion for a preliminary injunction seeking to prevent Komi Gbotcho from filing any returns for the 2014 tax year.
According to the complaint, the Internal Revenue Service (IRS) estimates that Gbotcho, through Eplanet, has prepared more than 1,300 tax returns for the 2010 through 2013 tax years. The suit alleges that Gbotcho prepared returns claiming false or inflated deductions, such as deductions for personal property rental expenses, unreimbursed employee business expenses and home improvement expenses, without some customers’ knowledge. The suit contends that the false and inflated deductions generated larger refunds for Gbotcho’s customers than they were entitled to receive, and that the losses to the U.S. Treasury could amount to as much as $3.4 million.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2015. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Justice Department Reaches Settlements with Four Cities Across the Country to Remove Disability-Related Questions from Job Applications and Ensure Web AccessibilityRead the Press Release
The Justice Department announced today that it has reached settlement agreements with the cities of DeKalb, Illinois; Vero Beach, Florida; Fallon, Nevada; and Isle of Palms, South Carolina. The agreements resolve investigations of each city under Title I of the Americans with Disabilities Act (ADA). The investigations found that each city’s online employment application asked questions about disabilities in violation of the ADA. The ADA does not permit employers to inquire as to whether an applicant is an individual with a disability or as to the nature of such disability before making a conditional offer of employment. Under Section 503 of the Rehabilitation Act of 1973, however, federal contractors subject to affirmative action requirements may invite an applicant voluntarily to self-identify as an individual with a disability, consistent with certain requirements.
The investigations also found that each city’s online employment opportunities website or job applications were not fully accessible to people with disabilities, such as those who are blind or have low vision, are deaf or hard of hearing, or have physical disabilities affecting manual dexterity (such as limited ability to use a mouse). In recent months, the department reached similar settlement agreements with the city of Hubbard, Oregon, and Florida State University.
“Congress intended for people with disabilities to be able to compete for jobs on a level playing field,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Including disability-based questions on a job application is illegal and creates barriers for people with disabilities. These agreements ensure that people with disabilities will have an equal chance to compete for public sector jobs. We commend each city for its cooperation and efforts to ensure accessibility and fairness in the job application process.”
Under the settlement agreements, each city agrees to ensure that its hiring policies and procedures do not discriminate against any applicant on the basis of disability, including by:
-
not conducting a medical examination or making a disability-related inquiry of a job applicant before a conditional offer of employment is made;
-
not requiring a medical examination or making inquiries of an employee as to whether such employee is an individual with a disability or as to the nature or severity of the disability, unless such examination or inquiry is shown to be job-related and consistent with business necessity;
-
maintaining the medical or disability-related information of applicants and employees in separate, confidential medical files;
-
training employees who make hiring or personnel decisions on the requirements of the ADA, designating an individual to address ADA compliance matters, and reporting on compliance; and
-
ensuring that its online employment opportunities website and job applications conform with the Web Content Accessibility Guidelines 2.0, which are industry guidelines for making web content accessible.
Those interested in finding out more about the ADA may call the Justice Department’s toll-free ADA information line at 800-514-0301 (TDD 800-514-0383) or visit www.ada.gov.
-
Home Health Agency Owner Sentenced to 10 Years in Prison for Role in Miami Health Care Fraud SchemeRead the Press Release
Patient Recruiter Sentenced To Two Years In Prison For Participating In The Same Scheme
A South Florida man was sentenced to 10 years in prison today in connection with a long-running $6.2 million Medicare fraud scheme involving Professional Medical Home Health LLC (Professional Home Health), a Miami home health care agency that purported to provide home health and therapy services, as well as similar schemes at two additional Miami home health care agencies. A second defendant was also sentenced to two years in prison today for his role as a patient recruiter in the fraud scheme at Professional Home Health.
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. Chief U.S. District Judge K. Michael Moore of the Southern District of Florida imposed the sentence.
Ernesto Fernandez, 48, of Miami, pleaded guilty on Nov. 26, 2014, to one count of conspiracy to commit health care fraud. In addition to the 10-year prison sentence, Fernandez was also ordered to pay $2,163,057 in restitution and to forfeit $9,061,867, which represents the proceeds traceable to his criminal conduct at all three home health agencies. Fernandez has been in custody since his bond was revoked on Jan. 30, 2015, for violating the condition of his bond prohibiting contact with victims or witnesses in the case except through counsel.
According to documents filed with his plea agreement, Fernandez was an owner and operator of Professional Home Heath. He was also the owner and operator of two other South Florida home health agencies. At each of these companies, Fernandez and his co-conspirators billed the Medicare program for expensive physical therapy and home health services that were not medically necessary or were not provided. Fernandez admitted that he caused patient documentation to be falsified, and planned, organized and oversaw the submission of fraudulent claims to the Medicare program.
Fernandez also admitted to being a patient recruiter for all three home health agencies. In that capacity, Fernandez recruited patients for the agencies in exchange for kickbacks, knowing that the agencies would bill the Medicare program on behalf of the recruited patients for expensive home health and therapy services that were not medically necessary or not provided.
Juan Valdes, 37, of Palm Springs, pleaded guilty on Nov. 10, 2014, to one count of conspiracy to defraud the United States and receive health care kickbacks. In addition to the two-year prison sentence, Valdes was also ordered to pay 204,526 in restitution.
According to documents filed with his plea agreement, Valdes was a patient recruiter for Professional Home Health. In that role, he solicited kickbacks and bribes from the owners and operators of Professional Home Health in exchange for providing beneficiaries to allow Professional Home Health to bill Medicare for home health services that were not medically necessary or not provided.
Fernandez and Valdes are the seventh and eighth defendants to be sentenced in connection with the fraudulent schemes at Professional Home Health. Dennis Hernandez and Jose Alvarez, both owners and operators of Professional Home Health, were each sentenced to 10 years in prison on Jan. 29, 2015. Joel San Pedro, a manager and supervisor of Professional Home Health, was sentenced to 97 months in prison on Jan. 29, 2015. Annarella Garcia, an owner of Professional Home Health, was sentenced to 70 months in prison on Aug. 27, 2014. Annilet Dominguez, an administrator of Professional Home Health, was sentenced to 68 months in prison on Sept. 29, 2014. Alina Hernandez, a patient recruiter for Professional Home Health, was sentenced to two years in prison on Jan. 29, 2015.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Trial Attorney Anne P. McNamara of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Former Supervisory Contracting Officer Arrested in Navy Bribery ScandalRead the Press Release
A former senior federal contracting officer was arrested this morning for conspiracy to commit bribery in connection with his alleged role in a scheme to steer contracts and benefits to Glenn Defense Marine Asia (GDMA), a defense contracting firm headquartered in Singapore.
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, Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Deputy Inspector General of Investigations James B. Burch of the Department of Defense (DCIS) made the announcement.
“Today’s arrest in this ongoing investigation demonstrates our continued resolve to root out all of the corrupt officials involved in this bribery scheme,” said Assistant Attorney General Caldwell. “As alleged, Paul Simpkins misused his position as a contracting officer at the U.S. Navy to obtain bribes of cash, air travel, hotel rooms, and prostitutes, and his actions tarnish the reputation earned by the vast majority of U.S. Navy officers and enlisted and civilian personnel.”
“With the arrest of Paul Simpkins, who was recently among the Defense Department’s high ranking civilians we have uncovered yet another tentacle of this pervasive bribery scheme,” said U.S. Attorney Duffy. “The more we learn about the extent of the greed and corruption, the more determined we are to eviscerate it.”
“As we've mentioned previously, the GDMA investigation is far from over,” said Director Traver. “NCIS will follow the evidence wherever it leads, to bring to justice those who were involved in perpetrating this massive fraud on the Department of the Navy and the American taxpayer. Active leads remain and NCIS will stay on the case until our work is done.”
“As the filing of today's Criminal Complaint and subsequent arrest of Paul Simpkins shows, the Defense Criminal Investigative Service and its law enforcement partners will continue to identify and investigate those individuals who seek to defraud the U.S. taxpayer," said Deputy Inspector General of Investigations Burch. “Any individual, regardless of position, who allowed Glenn Defense Marine Asia Ltd. to prosper at the expense of the American taxpayer, will be brought to justice.”
Paul Simpkins, 60, of Haymarket, Virginia, is the latest individual to be arrested in connection with a corruption probe involving the U.S. Navy, GDMA, and its owner, Leonard Glenn Francis. At this morning’s hearing, United States Magistrate Judge Jones of the Eastern District of Virginia ordered Simpkins to be detained pending a bond hearing set for Feb. 4, 2015. To date, seven individuals, including Francis, and GDMA have entered guilty pleas as part of the investigation.
According to a criminal complaint unsealed today, Simpkins held several manager-level contracting positions throughout the federal government, including Supervisory Contract Special at the U.S. Navy Regional Contracting Center in Singapore from April 2005 through June 2007, and manager in the Department of Defense’s Office of Small Business Programs from December 2007 to August 2012. The complaint alleges that between May 2006 and September 2012, Simpkins accepted several hundred thousand dollars in cash and wire transfers, travel and entertainment expenses, hotel rooms and the services of prostitutes. In return, Simpkins allegedly helped steer lucrative U.S. Navy contracts to Francis and GDMA, advocated for and advanced the interests of GDMA in contract disputes, and assisted in preventing GDMA’s competitors from receiving U.S. Navy business.
The complaint specifically alleges that, beginning in early 2006, Simpkins and Francis held a series of meetings at a hotel in Singapore in which Francis agreed to provide Simpkins with things of value in return for help in steering lucrative ship husbanding contracts to GDMA. Specifically, the complaint alleges that Francis paid Simpkins by hand-delivering over $150,000 in cash and by making several wire transfers to a bank account held in the name of Simpkins’s wife at the time. To conceal the true nature of the wire transfers, Simpkins allegedly used an email account belonging to his mistress to advise Francis of the routing and account information of the bank account belonging to his wife.
In return for the things of value, Simpkins allegedly used his influence within the U.S. Navy to benefit GDMA, including by helping GDMA to secure lucrative ship husbanding contracts to service U.S. Navy vessels in Thailand and the Philippines. In addition, Simpkins allegedly interceded on GDMA’s behalf in contract disputes with the U.S. Navy. The complaint specifically alleges that in 2006, Simpkins’s subordinate recommended that GDMA’s husbanding contract in Thailand not be extended due to “many exceedingly high cost” items. Simpkins allegedly overruled his subordinate and extended GDMA’s contract.
In another example, Simpkins allegedly instructed U.S. Navy officials in Hong Kong to discontinue the use of meters that monitored the volume of liquid waste that GDMA removed from U.S. Navy ships under its husbanding contracts. The use of these meters would have ensured proper accounting of the actual amount of waste removed to ensure that no overbilling occurred. Simpkins also allegedly instructed a U.S. Navy official not to review invoices that GDMA submitted in connection to a recent port call in Hong Kong after Francis complained that U.S. Navy personnel were asking questions.
The charges contained in a complaint are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
The ongoing investigation is being conducted by NCIS and DCIS.The case is being prosecuted by Director of Procurement Fraud Catherine Votaw and 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 at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.
District Court Enters Permanent Injunction Against New Hampshire Company and Senior Executives to Stop Distribution of Adulterated and Misbranded ProductsRead the Press Release
The U.S. District Court for the District of New Hampshire entered a consent decree of permanent injunction against Atrium Medical Corporation (Atrium), Maquet Holding B.V. & Co. KG (Maquet), Maquet Cardiovascular LLC (Maquet CV), Maquet Cardiopulmonary AG (Maquet CP), Heinz Jacqui and Gail Christie to prevent the distribution of adulterated and misbranded medical devices, the Department of Justice announced today.
The department filed a complaint on Feb. 3 in the U.S. District Court for the District of New Hampshire, at the request of the U.S. Food and Drug Administration (FDA), alleging that defendants introduced adulterated and misbranded medical devices into interstate commerce. According to the complaint, Atrium manufactures medical devices for cardiovascular-related uses, including chest drains, surgical meshes, vascular grafts and stent systems.
The FDA’s Quality System (QS) regulation sets forth current good manufacturing practice requirements for medical devices. The QS regulation governs the methods used in, and the facilities and controls used for, the design, manufacture, packaging, labeling, storage, installation and servicing of all finished devices intended for human use. The regulation is intended to ensure that finished devices will be safe and effective and otherwise in compliance with the federal Food, Drug and Cosmetic Act (FDCA). A medical device that has been manufactured, packed, stored or installed in violation of the QS regulation is deemed to be adulterated.
“The American public needs to have the confidence that medical devices on the market are safe and effective,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “The failure to comply with the quality system regulation for medical devices can pose a serious risk to the public health.”
According to the complaint, Atrium manufactures its medical devices at a facility in Hudson, New Hampshire. As set forth in the complaint, Maquet CV has a manufacturing facility in Wayne, New Jersey; Maquet CP has manufacturing facilities in Hechingen and Rastatt, Germany; and Maquet manages quality operations for the corporate defendants: Heinz Jacqui has been Maquet’s Chief Executive Officer and Managing Director since April 2012 and Gail Christie has been Maquet’s Corporate Chief Quality Assurance/Regulatory Affairs and Compliance Officer since October 2013.
According to the complaint, FDA inspections of Atrium’s New Hampshire facility revealed deviations from current good manufacturing practice requirements for medical devices. Specifically, the complaint alleges that during a 2013 inspection, FDA observed numerous deviations from regulations for medical devices, including a failure of the company to establish and maintain procedures for implementing corrective and preventive action. As alleged in the complaint, the violations of the QS regulation observed in 2013 were similar to observations FDA made in separate inspections in September 2012, March 2010, and March 2009.
In addition, according to the complaint, as part of the 2013 inspection of Atrium’s manufacturing facility, FDA documented a violation of the Medical Device Reporting regulation given the company’s failure to submit a medical device report within 30 days of receiving or otherwise becoming aware of information that reasonably suggested that a marketed device may have caused or contributed to a death or serious injury.
The complaint also alleges that FDA performed inspections at the Maquet CV’s and Maquet CP’s manufacturing facilities, and documented numerous violations of the QS regulation for medical devices.
In conjunction with the filing of the complaint, all of the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction, which requires the defendants to come into compliance with the FDCA and remedy past deficiencies in their current good manufacturing practices. The consent decree requires that Atrium’s manufacturing facility in Hudson, New Hampshire, be shut down (with limited exceptions) until corrective actions described in the consent decree are completed. Corrective actions include addressing the deficiencies previously identified by FDA.
Under the consent decree, Atrium is permitted to continue to manufacture and distribute certain medical devices deemed to be medically necessary. In order to do so, the defendants must comply with specific notification and other provisions in the consent decree. The consent decree also provides that the corporate defendants shall pay the United States $6 million in equitable disgorgement within 28 days after the entry of the consent decree.
“Patients must be assured that medical devices are safe, effective and high quality,” said Jan Welch, Acting Director of the Office of Compliance in the FDA’s Center for Devices and Radiological Health. “The FDA will remain vigilant in bringing companies that do not meet our regulatory requirements back to a sustainable state of compliance.”
The government is represented by Trial Attorney Dan Baeza of the Civil Division’s Consumer Protection Branch, with the assistance from Assistant U.S. Attorney Michael McCormack of the District of New Hampshire and Assistant Chief Counsel Shannon Singleton of the Department of Health and Human Services’ Office of General Counsel’s Food and Drug Division.
Army National Guard Official Pleads Guilty for Accepting $30,000 BribeRead the Press Release
An Army National Guard official pleaded guilty today for accepting a $30,000 bribe in exchange for steering a $3.6 million contract to a retired sergeant major of the Minnesota Army National Guard and his consulting company. Today’s guilty plea is the eighth in connection with an investigation into corruption within the National Guard Bureau related to the awarding of millions of dollars of Army National Guard marketing, retention and recruitment contracts.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office, Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Director Frank Robey of the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit (Army-CID) made the announcement.
Jason Rappoccio, 39, of Hampton, South Carolina, pleaded guilty before U.S. District Judge Liam O’Grady of the Eastern District of Virginia to one count of conspiracy to commit bribery and one count of bribery. Rappoccio was indicted on Sept. 25, 2014, and will be sentenced on May 22, 2015.
According to plea documents, Rappoccio, who was an active duty sergeant first class in the Army National Guard, admitted to accepting a $30,000 bribe from Timothy Bebus, a retired sergeant major of the Minnesota Army National Guard and owner of Mil-Team Consulting and Solutions LLC (Mil-Team). In exchange, Rappoccio agreed to recommend the award of a $3.6 million contract to Mil-Team and to steer the contract to a Small Business Administration (SBA) 8(a) certified company, chosen by Bebus, that would sub-contract the work to Mil-Team.
Rappoccio admitted that he received the $30,000 bribe in installments to conceal the payment. Bebus gave $6,000 in cash directly to Rappoccio at a meeting in Arlington, Virginia. The remaining $24,000 was paid in a cashier’s check in the name of Rappoccio’s wife.
Rappoccio also admitted that days after receiving the $30,000 bribe, he solicited and received airline tickets for two of his family members from Bebus. Three months later, Rappoccio also received NFL tickets worth $1,328 from another co-conspirator. At the time that he accepted these additional benefits, Rappoccio agreed to steer an additional $4 million contract to Bebus and his company.
The case is being investigated by the FBI’s Washington Field Office, with assistance from DCIS’s Mid-Atlantic Field Office and Army-CID’s Expeditionary Fraud Resident Agency’s Major Procurement Fraud Unit. The case is being prosecuted by Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Jonathan Fahey of the Eastern District of Virginia and Assistant U.S. Attorneys Marisa Seifan and Martin Coffey of the Eastern District of New York.
Minebea Co. Ltd. Agrees to Plead Guilty and Pay a $13.5 Million Criminal Fine for Price Fixing on Small Sized Ball BearingsRead the Press Release
Minebea Co. Ltd., a small sized bearings manufacturer based in Nagano, Japan, has agreed to plead guilty and to pay a $13.5 million criminal fine for its role in a conspiracy to fix prices for small sized ball bearings sold to customers in the United States and elsewhere, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court for the Southern District of Ohio in Cincinnati, Minebea conspired to fix the prices of small sized ball bearings in the United States and elsewhere. In addition to the criminal fine, Minebea has agreed to cooperate in the department’s ongoing investigation. The plea agreement is subject to court approval.
According to the charge, Minebea and its co-conspirator discussed and agreed upon prices to be submitted to small sized ball bearings customers. Minebea’s participation in the conspiracy lasted from at least as early as early-to-mid 2008 and continued until at least October 2011.
“Because of the unlawful price-fixing by the defendant and its co-conspirators, American businesses paid more for small-sized bearings than they otherwise would,” said Bill Baer, Assistant Attorney General of the Department of Justice’s Antitrust Division. “Working with the Federal Bureau of Investigation and our other law enforcement partners, the Antitrust Division will continue our efforts to ensure American businesses and consumers benefit from competitive markets.”
“Any agreement that restricts price competition violates the law,” said U.S. Attorney Carter Stewart of Southern District of Ohio. “We will continue to work to protect consumers’ right to free and open competition.”
Bearings are used in industry in numerous products to reduce friction and help parts roll smoothly past one another; they “bear” the load. Small sized ball bearings are those ball bearings whose outside diameter is 26 millimeters or less.
Minebea is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The charge today is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the bearings industry, which is being conducted by the Antitrust Division’s Chicago Office and the FBI’s Cincinnati Field Office. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the bearings industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, visit www.justice.gov/atr/contact/newcase.html, or call the FBI’s Cincinnati Field Office at 513-421-4310.
Justice Department Warns Employers Not to Discriminate Against Salvadoran Workers with Temporary Protected Status in Newly-Released VideoRead the Press Release
The Justice Department announced today the launch of an educational video reminding employers that Salvadorans with Temporary Protected Status (TPS) may continue working beyond the March 9, 2015, expiration date of their employment authorization documents. The Justice Department also cautions employers that requesting additional work-authorization documents from these workers may violate anti-discrimination law.
Released by the Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC), the video explains that the Department of Homeland Security automatically extended the validity of employment authorization documents for Salvadorans with TPS for an additional six months. Requesting additional work-authorization documents from these employees may violate the anti-discrimination provision of the Immigration and Nationality Act. This provision prohibits employers from making additional and unauthorized documentary demands because of an employee’s citizenship status, immigration status or national origin when verifying or re-verifying an employee’s employment eligibility.
The newly released video may be viewed at https://www.youtube.com/watch?v=9B3RKCX6dkM.
“We hope this video will prevent discrimination against work-authorized immigrants and help employers across the country understand employment eligibility verification rules,” said Acting Assistant Attorney General Vanita Gupta of the Civil Rights Division. “Federal law prohibits discrimination in the employment eligibility verification process, and the Justice Department is committed to enforcing the law.”
TPS is a temporary immigration benefit that allows qualified individuals from designated countries who are in the United States to stay and work for a limited period of time. A foreign country is designated for TPS due to conditions in the country that temporarily prevent the country’s nationals from returning safely, such as on-going armed conflict, environmental disasters or other extraordinary and temporary conditions in the designated country. Individuals with TPS can obtain employment authorization documents to work legally in the United States. The Department of Homeland Security has automatically extended employment authorization documents for individuals with TPS from El Salvador until Sept. 9, 2015.
The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) within the Justice Department is responsible for enforcing the anti-discrimination provision of the Immigration and Nationality Act. Among other things, the statute prohibits citizenship status and national origin discrimination in hiring, firing, and recruitment or referral for a fee; unfair documentary practices; retaliation; and intimidation.
For more information about protections against employment discrimination under immigration laws, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired), call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired), sign up for a free webinar at www.justice.gov/crt/about/osc/webinars.php, email [email protected] or visit OSC’s website at www.justice.gov/crt/about/osc.
Department of Justice Will Not Challenge Standards-Setting Organization's Proposal to Update Patent PolicyRead the Press Release
The Department of Justice announced today that it will not challenge a proposal by the Institute of Electrical and Electronics Engineers, Inc. (IEEE) to update the IEEE Standards Association’s (IEEE-SA) patent policy. That policy governs the incorporation of patented technology in IEEE standards and explains the terms under which holders of patents essential to IEEE standards commit to make licenses available for use in implementing IEEE standards.
The department’s position was stated in a business review letter to counsel for IEEE and IEEE-SA from Renata B. Hesse, Acting Assistant Attorney General for the Antitrust Division for this matter.
IEEE requested a business review letter from the Antitrust Division expressing its enforcement intentions regarding a proposed update to its patent policy. According to representations made by the applicant, the update revises the policy’s provisions regarding commitments from parties holding patent claims that are essential to IEEE-SA standards to license those claims on reasonable and non-discriminatory (RAND) terms. The update addresses the availability of injunctive relief, the meaning of a reasonable licensing rate, permissible requests for reciprocal licensing, and the production levels to which the commitment applies.
Standards can offer significant procompetitive benefits. For example, they may facilitate product interoperability, lower costs, foster innovation and efficiency, and increase competition among technologies for inclusion in standards. The stated purpose of the IEEE’s update is to add clarity to the commitment patent holders voluntarily make regarding the licensing of patent claims essential to IEEE standards on RAND terms.
The department supports standards setting organizations’ efforts to clarify their patent licensing policies,” said Acting Assistant Attorney General Hesse. “IEEE’s decision to update its policy, if adopted by the IEEE Board, has the potential to help patent holders and standards implementers to reach mutually beneficial licensing agreements and to facilitate the adoption of pro-competitive standards. Where, as here, the department does not believe that adoption of a policy change is likely to result in harm to competition, IEEE and other standards setting organizations are free to adopt those modifications to their policies that they believe will benefit their standards setting activities. The U.S. government does not dictate patent policy choices to private standards setting organizations."
The department issued similar guidance to VITA in 2006 and to IEEE in 2007 regarding changes to their patent policies that allowed patent holders to commit publicly to specific restrictions on their future licensing terms and conditions for the use of essential patents.
Under the department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves the right to challenge the proposed action under the antitrust laws if it produces anticompetitive effects.
A file containing the business review request and the department’s response may be examined in the Antitrust Documents Group of the Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure.
Department of Justice FY 2016 Budget RequestRead the Press Release
President Obama’s FY 2016 budget proposal totals $28.7 billion for the Department of Justice to support federal law enforcement priorities and the criminal justice priorities of our state, local and tribal law enforcement partners. The request represents a comprehensive investment in the Justice Department’s mission and includes increases in funding for countering violent extremism and other national security areas, civil rights and advancing equality under the law, Smart on Crime activities, including increased funds for prisoner reentry initiatives, and other key enforcement initiatives. The request represents a $1.3 billion increase over the comparable FY 2015 enacted level.
“The Department of Justice is dedicated to advancing the safety, the security, and the rights of all Americans – and the vital investments detailed in the department’s FY 2016 budget reflect that commitment,” said Attorney General Eric Holder. “From our global efforts to safeguard the American people against terrorist attacks and prevent violent extremism, to the work we are doing through the Smart on Crime initiative to make our criminal justice system more fair and more effective, to our ongoing focus on building trust between law enforcement officers and the communities they serve, we are working every day to protect the American people and extend this nation’s promise of equal justice under law. And as we move forward – with the resources outlined in this budget proposal – the Department of Justice will build on its groundbreaking work to strengthen our communities, to preserve our cherished values, and to build the safer, more just society that all Americans deserve.”
The Department of Justice’s areas of investment include:
- +$65 million for the department’s law enforcement components, including the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Marshals Service, and the Organized Crime Drug Enforcement Task Force program.
- +$125 million for our litigating components, including the U.S. Attorneys, National Security Division, Criminal Division, Civil Rights Division, Civil Division, and the Environment and Natural Resources Division.
- +$217 million for the prisons and detention functions of the Federal Bureau of Prisons.
- +$146 million for immigration and administration, technology, and other support functions, including the Executive Office for Immigration Review, Office of the Pardon Attorney, Office of the Inspector General, Community Relations Service, General Administration, and Justice Information Sharing Technology.
- +$154 million for DOJ grant programs overall (Office of Justice Programs, Office of Community Oriented Policing Services, and Office on Violence Against Women), for a total grant program request of $2.4 billion.
National Security
Defending U.S. citizens from both internal and external threats remains the department’s highest priority. National security threats are constantly evolving, requiring additional investments to adapt to those threats in innovative ways. The FY 2016 budget request provides $106.8 million in program increases to develop the department’s capacity in a number of critical national security areas including: countering violent extremism and domestic radicalization; counterterrorism; cybersecurity both domestic and abroad; information sharing and collaboration with the intelligence community; and training and technical assistance for our foreign partners.
The FY 2016 request supports a comprehensive national security strategy that includes countering violent extremism (CVE) and cybersecurity. Through grants provided by the Office of Justice Programs and the Community Oriented Policing Services, the department will foster community-led CVE efforts and emphasize trusted partnerships between public safety agencies and local residents and community organizations. Funding is also requested to build upon recent cyber investments that address computer intrusions and defend the security of the department’s critical information networks from cyber threats.
To maintain its role as a national security leader, the department must continue to improve its coordination with both domestic and foreign partners through training and technical assistance. The FY 2016 request includes resources for both the FBI and Drug Enforcement Administration to enhance collaboration with the intelligence community through improved IT infrastructure and counterintelligence programs. In addition, the FY 2016 request includes resources for improving the process of sharing evidence with our foreign partners, coordinated investigations, and operating overseas security sector assistance programs. The department’s foreign experts are best situated to build the strong overseas partnerships that are essential to joint efforts to fight terrorism and transnational crime.
For more information, view the National Security Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Civil Rights
The department’s mission is to uphold the civil and constitutional rights of all Americans, particularly the most vulnerable members of our society—thus extending equality under the law to all Americans. Accomplishing this requires resources both to investigate and to litigate.
Protecting the nation’s most vulnerable populations is a top priority of this Administration and the department. These issues remain a highly relevant to the American people and a significant focus of both the Civil Rights Division and the Community Relations Service. The FY 2016 request includes $102.8 million in new investments addressing ongoing and growing threats of human trafficking, hate crimes, and campus sexual assaults. The request includes funds to expand civil and criminal enforcement efforts to ensure that all communities have effective and democratically accountable policing.
Our request supports the health of our democracy by augmenting our Voting Rights Act enforcement to protect each citizen’s fundamental right to vote. Further, our request creates a sustainable and lasting legacy of civil rights enforcement in U.S. Attorneys Offices and the coordination of our efforts with state and local partners across the nation.
Increases for grant programs will provide technical assistance and training to improve the public’s access to counsel and legal assistance in state, local, and tribal courts and juvenile justice systems. The resources will also help to implement the recommendations of the White House Task Force to Protect Students from Sexual Assault and assist law enforcement agencies on criminal justice issues, including use of force practices and the deployment of crisis intervention teams.
For more information, view Civil Rights Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Smart on Crime
In total, our budget invests an additional $247 million to support Smart on Crime initiatives. At the direction of the Attorney General, in early 2013 the Justice Department launched a comprehensive review of the criminal justice system in order to identify reforms that would ensure federal laws are enforced fairly and—in an era of reduced budgets—efficiently. As part of its review, the department studied all phases of the criminal justice system, including charging, sentencing, incarceration, and reentry, to identify the practices that are successful at deterring crime and protecting the public.
We must remain vigilant in our efforts to stop violent crime. However, for far too long, well-intentioned policies created to lower criminal activity perpetuated a cycle of poverty, criminality, and incarceration that broke too many families and weakened too many communities. The Smart on Crime initiative focuses on effectively using federal resources for the most important law enforcement priorities, addressing the disparate impact of the criminal justice system on vulnerable communities, and implementing a series of commonsense reforms to create a fundamental shift in response to certain crimes—particularly low-level, nonviolent offenses. The new guidance also bolstered prevention and reentry programs to deter crime, reduce recidivism, and create pathways of opportunity for eligible candidates.
The Attorney General’s plan focuses federal resources and places the harshest sentences on the most violent offenders rather than prioritizing the sheer number of prosecutions. Considering alternatives to incarceration for low-level, non-violent offenses also strengthens our justice system and places a lower financial burden on the budget. This means increased use of diversion programs, such as drug courts, that reduce taxpayer expense and have the potential to be successful at preventing recidivism. Even when imprisonment is appropriate, sentencing should reflect the individualized circumstances of the case.
We must also pay attention to what happens to inmates after prison. To better prevent recidivism, it is important to reduce barriers to reentry for formerly incarcerated individuals. This includes emphasizing reentry programs, and revisiting rules and regulations that make it harder for these individuals to find a job, an education, or affordable housing.
For more information, view the Smart on Crime Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Prisons and Detention
Maintaining safe and secure detention and prison facilities, while investing in ways to reduce recidivism, is critical to the department’s ongoing efforts to reform the criminal justice system and be Smart on Crime. To continue this commitment, the department requests $217 million in program increases for prisons and detention.
The Administration is committed to a comprehensive strategy to contain incarceration costs over the long term by facilitating inmates’ transition into society in order to reduce recidivism rates, increase public safety, and strengthen communities. The budget reflects these commitments and takes steps to address the cycle of incarceration by investing additional resources in the BOP re-entry programs for the approximately 45,000 federal inmates that return to our communities each year.
The request increases staffing at BOP’s 17 high security institutions. The request would provide funding to have two correctional officers on duty in each housing unit for all three shifts, increasing officer and inmate safety at high security institutions. The request also funds additional medical beds at Federal Correctional Institution Fort Worth that will house and treat severely ill inmates currently housed in community hospitals. Finally, the request also increases funding for BOP to undertake essential rehabilitation, modernization, and renovation of BOP institutions, one third of which are 50 years old or older. Adequately maintaining structures preserves capital investments and ensures sufficient security within institutions.
For more information, view the Prisons and Detention Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Immigration
The department plays an integral role in the immigration system by ensuring the fair, expeditious, and uniform application of the Nation’s immigration laws. The department’s Executive Office for Immigration Review (EOIR) oversees the immigration court and Board of Immigrant Appeals. In recent years, in response to the Department of Homeland Security’s (DHS) increased enforcement efforts along the borders, EOIR has sought to keep pace with the rising number of immigration cases, in order to maintain the effectiveness and efficiency of immigration enforcement, adjudication and detention programs. But EOIR’s immigration court caseload continues to increase to record levels.
To process this increasing workload and improve the efficiency of the immigration court system, the Department requests an increase of $124 million to support additional Immigration Judge (IJ) Teams and Board of Immigration Appeals attorneys and provide for other improvements to the immigration system. This enhancement will help IJ Teams and attorneys adjudicate rising immigration caseloads resulting from the increase in Southwest Border crossings. Also included in this program increase are funds to expand legal representation for unaccompanied children and to improve efficiencies in immigration court proceedings by expanding the Legal Orientation Program.
For more information, view the Immigration Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Enforcement Priorities
The department’s mission and responsibility is to investigate and punish those who break federal laws and harm innocent citizens. Continued investments to uphold its commitments and obligations are needed to strengthen the department’s ability to protect the health and well-being of our nation’s citizens, and have the flexibility to address threats as they emerge; simply maintaining existing law enforcement capacity is not sufficient. For FY 2016, the department requests $43 million in additional investments to address violent crime and illicit drugs, along with health care fraud and environmental crime.
For more information, view the Enforcement Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
State, Local and Tribal Law Enforcement
The department strongly supports its partnerships with state, local, and tribal entities.
The FY 2016 budget maintains its commitments to state, local, and tribal law enforcement partners without reducing the department’s federal operational role. Simultaneously, efficiencies are identified to ensure that federal resources are being targeted to the most effective grant programs.The FY 2016 discretionary and mandatory request for state, local, and tribal law enforcement assistance is $3.5 billion. The request for state, local, and tribal assistance includes $15 million for implementation of the Administration’s Countering Violent Extremism Initiative, discussed under National Security above. The budget also targets $97 million for the President’s new Community Policing Initiative to build and sustain trust between law enforcement and the people they serve. Both the Office of Community Oriented Policing Services (COPS) and Office of Justice Programs (OJP) budgets include enhancements to support these two initiatives.
The request also includes $249.5 million for the Community Oriented Policing Services (COPS) Hiring Program and a $14 million increase to the Office on Violence Against Women Campus Violence Program.
For more information, view the State, Local and Tribal Law Enforcement Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Public Safety in Indian Country
The United States has a unique legal and political relationship with American Indian tribes and Alaska Native communities as provided by the Constitution, treaties, court decisions and federal statutes. The Department of Justice has an important legal and moral responsibility to prosecute violent crime in Indian Country because under current law, in much of Indian Country, the department alone has the authority to seek an appropriate sentence when a major crime has been committed. Federal investigation and prosecution of serious violent crime in Indian Country is often both the first and only avenue of protection for the victims of these crimes.
The FY 2016 President’s budget requests $417 million in total resources for public safety initiatives in Indian Country. Investments include significant and versatile grant funding for addressing a range of criminal justice issues, among which is a $5 million request for a new Tribal Domestic Violence Criminal Jurisdiction program authorized by Congress in the Violence Against Women Reauthorization Act of 2013. This program would provide grants to tribal governments and their designees to support tribal efforts to exercise special domestic violence criminal jurisdiction over non-Indian offenders who commit violence against Indian spouses, intimate partners or dating partners, or who violate protection orders, in Indian Country.
For more information, view the Public Safety in Indian Country Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
Infrastructure
In order to maintain an effective and efficient Department of Justice, the department must invest in its physical and non-physical infrastructure to support its investigative and prosecutorial enterprises. The department’s request addresses gaps in critical infrastructure including information technology systems, facility construction and maintenance, litigation support services, operational oversight and other investments.
The investments requested for FY 2016 build on many DOJ investments already made and will allow the department to make significant strides in several areas. With these investments, the department will be able to make forward progress in consolidating its data centers, reduce the significant backlog for U.S. Marshals Service construction projects in federal courthouses, direct and oversee administration and operation of the department activities, and provide data transparency to the public.
For more information, view the Infrastructure Fact Sheet at http://www.justice.gov/about/fy16-budget-fact-sheets.
- +$65 million for the department’s law enforcement components, including the Federal Bureau of Investigation, Drug Enforcement Administration, Bureau of Alcohol, Tobacco, Firearms and Explosives, U.S. Marshals Service, and the Organized Crime Drug Enforcement Task Force program.
Community Health Systems Professional Services Corporation and Three Affiliated New Mexico Hospitals to Pay $75 Million to Settle False Claims Act AllegationsRead the Press Release
Community Health Systems Professional Services Corporation (CHSPSC) and three affiliated New Mexico hospitals (collectively CHS) have agreed to pay the United States $75 million to settle allegations that they violated the False Claims Act by making illegal donations to county governments which were used to fund the state share of Medicaid payments to the hospitals, the Justice Department announced today. CHSPSC is based in Franklin, Tennessee, and manages more than 200 affiliated hospitals in 29 states. The three New Mexico hospitals are Eastern New Mexico Medical Center in Chaves County, Mimbres Memorial Hospital and Nursing Home in Luna County and Alta Vista Regional Medical Center in San Miguel County.
“Congress expressly intended that states and counties use their own money when seeking federal matching funds in order to encourage them to join the federal government in ensuring that Medicaid funds are spent on the needs of beneficiaries,” said Acting Assistant Attorney General for the Justice Department’s Civil Division Joyce R. Branda. “When private hospitals violate the rules against hospital donations funding the state share, that important protection of the Medicaid program is destroyed.”
New Mexico’s Sole Community Provider (SCP) program, which was discontinued in 2014, provided supplemental Medicaid funds to hospitals in mostly rural communities. The federal government reimbursed the state of New Mexico for approximately 75 percent of its health care expenditures under the SCP program. Under federal law, New Mexico’s 25 percent “matching” share of SCP program payments had to consist of state or county funds, and not impermissible “donations” from private hospitals. This restriction on the use of private hospital funds to satisfy state Medicaid obligations was enacted by Congress to curb possible abuses and ensure that states have sufficient incentive to curb rising Medicaid costs.
The United States alleged that from Aug. 1, 2000, through Dec. 31, 2010, CHS knowingly caused the state of New Mexico to present false claims to the United States for payments made to CHS under the SCP program by making improper donations to Chaves, Luna and San Miguel counties, which were then used by the counties, and subsequently the state, to obtain federal matching payments. The government alleged that CHS concealed the true nature of these donations to avoid detection by federal and state authorities, and as a result of its scheme, received SCP payments which were funded by the United States in the amount of three times CHS’ “donations.”
“Hundreds of thousands of New Mexicans depend on Medicaid for medical care and other services,” said U.S. Attorney Damon P. Martinez for the District of New Mexico. “This litigation underscores the importance of maintaining the integrity of the Medicaid Program. Those who violate the law in order to profit from the Medicaid Program undercut the financial integrity of the program and can thus put at risk the availability of medical care and other services to those in need. We are committed to protecting the integrity of the Medicaid Program no matter the effort required or the time it may take, even in the face of the most vigorous litigation.”
“Hospitals that make provider donations with the expectation that they will receive a windfall from the Medicaid program threaten the integrity of the Medicaid program and will be held accountable,” said Special Agent in Charge Mike Fields for the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG) Dallas region.
The settlement announced today stems from a whistleblower complaint filed by a former CHSPSC revenue manager, Robert Baker, pursuant to the qui tam provisions of the False Claims Act, which permit persons to bring a lawsuit on behalf of the government and to share in the proceeds of the suit. The act also permits the government to intervene in and take over the lawsuit, as it did in this case as to some of Baker’s allegations. The United States did not intervene in Baker’s allegations as to SCP payments made to two other affiliated New Mexico hospitals, Carlsbad Medical Center and Lea Regional Medical Center. Today’s settlement also resolves these other allegations. Baker will receive $18,671,561 as his share of the government’s recovery.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $23.5 billion through False Claims Act cases, with more than $15 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation and litigation of this case was conducted by the U.S. Attorney’s Office for the District of New Mexico and the Justice Department’s Civil Division, with assistance from HHS-OIG and the HHS Office of General Counsel. The case is captioned United States ex rel. Baker v. Community Health Systems Professional Services Corporation, et al., Civ. Action No. 05-279 (D. N.M.). The claims settled by this agreement are allegations only and there has been no determination of liability.
California Doctor Pleads Guilty to Failing to Report Foreign Account at Bank Leumi in LuxembourgRead the Press Release
Laguna Beach Resident is the Latest in a Series of Defendants Charged with Concealing Bank Accounts at Israeli Banks
Dr. Baruch Fogel of Laguna Beach, California, pleaded guilty today in the U.S. District Court for the Central District of California to willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR) for tax year 2009, announced the Justice Department’s Tax Division, the U.S. Attorney’s Office for the Central District of California and Internal Revenue Service-Criminal Investigation (IRS-CI).
According to court documents, Fogel, a U.S. citizen, maintained an undeclared bank account held in the name of a foreign corporation at the Luxembourg branch of Bank Leumi. The undeclared foreign bank account and foreign corporation were set up with the assistance of David Kalai, a tax return preparer who owned United Revenue Service (URS). In December 2014, David Kalai and his son, Nadav Kalai, were convicted in the Central District of California of conspiracy to defraud the United States for helping certain URS clients set up foreign corporations and undeclared bank accounts to evade U.S. income taxes and for willfully failing to file FBARS for an undeclared foreign account that they controlled.
According to court documents and evidence introduced at the trial of David and Nadav Kalai, Fogel was a doctor who operated several managed health care businesses. David Kalai suggested to Fogel that he could reduce his taxes by transferring money to a foreign bank account held in the name of a foreign corporation. David Kalai advised Fogel to open up the bank account that was set up in the name of a British Virgin Islands corporation. At a meeting facilitated and attended by David Kalai at the Beverly Hills branch of Bank Leumi, Fogel executed documents to open his Luxembourg bank account at Bank Leumi. According to court documents, Fogel diverted at least $8 million to his undeclared bank account at Bank Leumi’s branch in Luxembourg.
U.S. citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file a FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.
Fogel has agreed to pay a civil penalty in the amount of approximately $4.2 million to resolve his civil liability with the IRS for failing to file FBARs. Fogel faces a statutory maximum sentence of five years in prison and a maximum fine of $250,000 or twice the gross gain or loss to any person, whichever is greater.
Principal Deputy Assistant Attorney General for the Tax Division Caroline D. Ciraolo and Acting U.S. Attorney Stephanie Yonekura of the Central District of California thanked special agents of IRS-CI, who investigated the case, Tax Division Trial Attorneys Christopher S. Strauss and Ellen M. Quattrucci who prosecuted the case, and Assistant U.S. Attorney Sandra R. Brown of the Central District of California, who assisted with the prosecution.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Third Defendant Charged with Violating the Neutrality Act by Planning and Participating in a Plot to Overthrow the Gambian GovernmentRead the Press Release
Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Andrew M. Luger for the District of Minnesota announced today a criminal complaint charging Alagie Barrow, 41, for his role in a recent attempted coup in The Gambia. Barrow is charged with conspiracy to violate the Neutrality Act by making an expedition against a friendly nation from the United States and conspiracy to possess a firearm in furtherance of a crime of violence.
On Dec. 30, 2014, there was an unsuccessful attempted coup against the government of The Gambia. The Gambia is a country in West Africa bordered by Senegal and the Atlantic Ocean.
According to the criminal complaint, in December 2014, Barrow traveled from the United States to The Gambia for the purpose of overthrowing the Gambian government. Barrow is a dual U.S./Gambian citizen and a resident of Tennessee. A separately charged co-conspirator, Cherno Njie, a U.S. citizen of Gambian descent and a resident of Texas, is a businessman who served as a financier and a leader of the conspiracy. Had the coup attempt succeeded, Njie and his co-conspirators expected that Njie would have served as the interim leader of the Gambia had the coup attempt succeeded.
According to the criminal complaint, before departing the United States for The Gambia, Barrow participated in conference calls to discuss the operational plan of the coup. Barrow and two others were the primary authors of the operational plan. Prior to departing for The Gambia, the members of the conspiracy purchased multiple firearms, including M4 semi-automatic rifles, and shipped them to The Gambia for use in the coup attempt. Members of the conspiracy also acquired night-vision goggles, body armor, ammunition, black military style uniform pants, boots, and other personal equipment.
According to the criminal complaint, Barrow traveled to The Gambia as part of the “advance party.” Barrow assisted other members of the group when they arrived in The Gambia and was responsible for delivering them to safe houses. Barrow also conducted reconnaissance of the group’s target, the State House.
According to the criminal complaint, on Dec. 30, 2014, a number of the co-conspirators met in the woods near the State House in Banjul, which is the home of the Gambian President, and split into two assault teams. Barrow was not present at that meeting, and waited with Njie in a safe place until the assault teams took control of the facility. Barrow was supposed to escort Njie to the State House and elsewhere after the coup.
According to the criminal complaint, when one of the assault teams approached the State House and fired a shot into the air, the team began taking heavy fire from the guard towers. Numerous conspirators on the assault teams were killed or injured during the failed attempt to take control of the government building. Both Barrow and Njie have since returned to the U.S. and been arrested.
This investigation is being led by the Federal Bureau of Investigation and its partners on Joint Terrorism Task Forces in multiple field offices. Assistant Attorney General Carlin and U.S. Attorney Luger thank the many agents, analysts, and prosecutors in multiple offices who are responsible for this ongoing investigation.
Assistant U.S. Attorneys Charles Kovats and John Marti of the District of Minnesota are prosecuting this case, with assistance from Richard Scott, a Deputy Chief in the Counterespionage Section of the Justice Department's National Security Division. A number of other U.S. Attorney’s Offices, including those in the Middle District of Tennessee, District of Maryland and the Western District of Texas provided critical support during the investigation.
Ocean Shipping Executive Pleads Guilty to Price Fixing on Ocean Shipping Services for Cars and TrucksRead the Press Release
An executive of Japan-based Kawasaki Kisen Kaisha Ltd. (K-Line) pleaded guilty today and was sentenced to 18 months in a U.S. prison for his involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice announced today.
According to the one-count felony charge filed today in U.S. District Court for the District of Maryland in Baltimore, Hiroshige Tanioka, who was at various times an assistant manager, team leader and general manager in K-Line’s car carrier division, conspired to allocate customers and routes, rig bids and fix prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore. Tanioka participated in the conspiracy from at least as early as April 1998 until at least April 2012.
Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and off of an ocean-going vessel. Examples of this cargo include new and used cars and trucks and construction and agricultural equipment.
"For more than a decade this conspiracy has raised the cost of importing cars and trucks into the United States,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division. “Today’s sentencing is a first step in our continuing efforts to ensure that the executives responsible for this misconduct are held accountable.”
Today’s sentence was the first to be imposed against an individual in the division’s ocean shipping investigation. Previously, three corporations have agreed to plead guilty and to pay criminal fines totaling more than $136 million, including Tanioka’s employer K-Line, which was sentenced to pay a criminal fine of $67.7 million in November 2014.
Pursuant to the plea agreement, which was accepted by the court today, Tanioka was sentenced to serve an 18-month prison term and pay a $20,000 criminal fine for his participation in the conspiracy. In addition, Tanioka has agreed to assist the department in its ongoing investigation into the ocean shipping industry.
Tanioka was charged with a violation of the Sherman Act, which carries a maximum sentence of 10 years in prison and a $1 million criminal fine for an individual. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s plea agreement is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit. Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Baltimore Field Office at 410-265-8080.
Los Angeles Pharmaceutical Company Barred from Distributing Unapproved Prebiotic Feminine Health Care ProductsRead the Press Release
The Department of Justice today announced the entry of a consent decree of permanent injunction involving pharmaceutical company, Laclede Inc. and its president, Michael A. Pellico, concerning the distribution of unapproved over-the-counter vaginal drug products made by the company.
The consent decree, approved by U.S. District Judge Percy Anderson for the Central District of California on Jan. 29, permanently enjoins Laclede and Pellico from interstate distribution of unapproved drug products sold under the name Luvena Prebiotic unless and until these products receive approval by the U.S. Food and Drug Administration (FDA). The drug products include: Luvena Prebiotic Vaginal Moisturizer & Lubricant; Luvena Prebiotic Feminine Wipes; Luvena Prebiotic Enhanced Personal Lubricant; and Luvena Prebiotic Daily Therapeutic Wash.
Among other things, the decree also authorizes the FDA to order Laclede and Pellico to stop manufacturing products or to recall distributed products should the FDA determine that there is a violation of the terms of the decree.
Moreover, for the next five years, Laclede must notify the FDA before the company markets any new Luvena product or modify product labeling, and the company may not legally market such products until the FDA tells the company it may do so.
“We are pleased that the court has approved the consent decree,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The department will continue to partner with the FDA to vigorously enforce laws that protect women and other consumers against companies that make unapproved claims about health care products that are sold over the counter, as was the case with Laclede’s Luvena Prebiotic products.”
The consent decree resolves a lawsuit brought by the department in June 2014. According to the allegations in the complaint, the sale and distribution of the Luvena Prebiotic products, which were manufactured by Laclede at its Rancho Dominguez, California, facility, violated various provisions of the Federal Food, Drug, and Cosmetic Act.
The act generally prohibits the distribution in interstate commerce of any drug for which the FDA has not given the required premarket approval. Moreover, the act prohibits the distribution of drugs that are misbranded, including drugs that fail to comply with FDA labeling regulations for over the counter drugs.
The complaint alleged that since 2010, Laclede had sold one or more of the Luvena Prebiotic products without the required FDA approval. The complaint also alleged that Laclede and Pellico ignored repeated FDA warnings that the company must obtain FDA approval before distributing one or more of the Luvena Prebiotic products in interstate commerce.
Furthermore, the complaint alleged that the company had made unapproved claims on its websites, Facebook page and Twitter feed that the Luvena Prebiotic products balanced vaginal bacterial flora and/or treated or prevented vaginal infections. For instance, according to examples described in the government’s complaint, Laclede made numerous unapproved claims on its product labels or on the company’s websites, Facebook page or Twitter feed that its Laclede Prebiotic products would “rebalance” vaginal bacterial flora, correct pH and reduce or minimize vaginal infections.
For instance, the company’s Twitter feed posted: “If your vagina pH isn’t slightly acidic, correct it with Luvena Prebiotics and rebalance the flora for fewer infections.”
Moreover, Laclede’s Facebook page posted: “Yes, Luvena Prebiotics absolutely do help dryness, but their enzymes help with pH also . . . If you have frequent vaginal infections, use Luvena Prebiotics every two weeks — see if it stops your infections.”
The lawsuit was filed by the Civil Division’s Consumer Protection Branch in Washington, D.C., and was handled by Trial Attorney David A. Frank. Assistance for the lawsuit was provided by Yen P. Hoang of the FDA’s Office of Chief Counsel in Silver Spring, Maryland.
Justice Department Reaches Agreement with Nueces County, Texas, to Improve Accessibility of Services and ProgramsRead the Press Release
The Department of Justice announced today an agreement with Nueces County, Texas, to resolve issues of accessible entry inside buildings that offer county services and programs, in violation of the Americans with Disabilities Act (ADA). This year marks the 25th anniversary of the ADA, which the Civil Rights Division plays a critical role in enforcing. In honor of the anniversary, each month the Department of Justice will spotlight efforts that are opening gateways to full participation and opportunity for people with disabilities.
Nueces County and the U.S. Department of Justice reached an agreement under Project Civic Access (PCA), the department’s wide-ranging initiative to ensure that cities, towns and counties throughout the country comply with the ADA. One of the hallmarks of the agreement is the requirement that the county will assess all existing web content and online services for conformance with industry guidelines—the Web Content Accessibility Guidelines (WCAG) 2.0—for making web content accessible.
The agreement with Nueces County will allow people with disabilities, like Marshall Burns, who was invited to present at the Coastal Bend Hurricane Conference in Nueces County. Unfortunately, when Burns tried to register online for the conference, he wasn’t able to do so because he is blind. The forms on the county website were incompatible with the software program that reads text out loud to him. Experiences like this, however, will become a thing of the past over the next three years thanks to the PCA agreement. You can learn more about Burns’ story by checking out the Justice Department blog where we will highlight each month different ways the ADA benefits people with disabilities.
Under the agreement announced today, Nueces County, Texas, will also ensure that people with disabilities—especially people who use wheelchairs and other mobility devices—can get inside buildings that offer county services and programs. That means the county will renovate everything from entrances, service areas and counters, restrooms, and parking so that people with disabilities can get into county buildings and use services and programs the county offers. Sidewalks and curb cuts all over the county will also be targeted—another change that promises to significantly improve life for people with disabilities in Nueces County.
“Over the past 15 years, nearly 220 communities have signed agreements with the Department of Justice to ensure that their citizens with disabilities enjoy the same services, programs and activities that all others enjoy,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “Participation in and enjoyment of the benefits of the services, programs and activities provided by local government is a fundamental civil right and the ADA is shaping the way local municipalities deliver their services to people with disabilities.”
For more information about the ADA, today’s agreement, the Project Civic Access initiative, individuals may access the ADA Web page at http://www.ada.gov/civicac.htm or call the toll-free ADA Information Line at (800) 514-0301 or (800) 514-0383 (TTY).
Former Liberty Reserve IT Manager Sentenced to 36 Months in PrisonRead the Press Release
The former information technology manager for Liberty Reserve, a company that operated one of the world’s most widely used digital currency services, was sentenced today to 36 months in prison for conspiring to operate an unlicensed money transmitting business.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Preet Bharara of the Southern District of New York made the announcement.
Maxim Chukharev, 28, of San José, Costa Rica, pleaded guilty in September 2014 before U.S. District Judge Denise L. Cote, who also imposed today’s sentence.
According to allegations contained in the indictment and statements made in related court proceedings, Chukharev was an associate of Liberty Reserve founder Arthur Budovsky and served as Liberty Reserve’s information technology manager in Costa Rica. In that role, Chukharev was principally responsible, along with co-defendant Mark Marmilev, formerly Liberty Reserve’s chief technology officer, for maintaining Liberty Reserve’s technological infrastructure.
According to allegations in the indictment and statements made in related court proceedings, Liberty Reserve was incorporated in Costa Rica in 2006 and billed itself as the Internet’s “largest payment processor and money transfer system.” Liberty Reserve was created, structured and operated to help users conduct illegal transactions anonymously and launder the proceeds of their crimes, and it emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store and launder the proceeds of illegal activity. Liberty Reserve was used extensively for illegal purposes, functioning as the bank of choice for the criminal underworld because it provided an infrastructure that enabled cybercriminals around the world to conduct anonymous and untraceable financial transactions.
According to court records, before being shut down by the government in May 2013, Liberty Reserve had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions through its system totaling more than $6 billion in funds. These funds encompassed suspected proceeds of credit card fraud, identity theft, investment fraud, computer hacking, child pornography, narcotics trafficking and other crimes.
Chukharev, Marmilev and Budovsky were among seven individuals charged in the indictment, which was unsealed on May 28, 2013. Three co-defendants—Marmilev, Vladimir Kats and Azzeddine El Amine—previously pleaded guilty. Marmilev was sentenced to five years in prison in December 2014; Kats and El Amine await sentencing. The indictment also charged Liberty Reserve with conspiracy to commit money laundering and operation of an unlicensed money transmitting business, and the charges remain pending.
The charges contained in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.
This case is being investigated by the U.S. Secret Service, the Internal Revenue Service-Criminal Investigation and the U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, with assistance from the Secret Service’s New York Electronic Crimes Task Force. The Judicial Investigation Organization in Costa Rica, the National High Tech Crime Unit in the Netherlands, the Financial and Economic Crime Unit of the Spanish National Police, the Cyber Crime Unit at the Swedish National Bureau of Investigation and the Swiss Federal Prosecutor’s Office also provided assistance.
This case is being prosecuted jointly by the Criminal Division’s Asset Forfeiture and Money Laundering Section (AFMLS) and the U.S. Attorney’s Office’s Complex Frauds Unit and Asset Forfeiture Unit in the Southern District of New York, with assistance from the Criminal Division’s Office of International Affairs and Computer Crime and Intellectual Property Section.
Trial Attorney Kevin Mosley of AFMLS and Assistant U.S. Attorneys Serrin Turner, Andrew Goldstein and Christine Magdo of the Southern District of New York are in charge of the prosecution, and Assistant U.S. Attorney Christine Magdo is in charge of the forfeiture aspects of the case.
Tax Preparation Business Owner and Son Convicted of Conspiring to Defraud the United States and Preparing False Tax ReturnsRead the Press Release
A Washington, D.C., tax return preparer and former Washington, D.C., public school teacher and her son, a current Washington, D.C., public school teacher, were convicted today by a federal jury of conspiracy and preparing and filing false tax returns, the Justice Department and the Internal Revenue Service (IRS) announced.
According to the evidence presented at trial, Sherri Davis, 42, of Washington, D.C., was the owner and operator of 2FT Fast Facts Tax Service, a tax return preparation business operating in Washington, D.C., from 2003 to 2012. In 2012, Sherri Davis changed the business name to Davis Financial Services and her son, Andre Davis, 24, was listed as the owner and operator of the business.
Sherri and Andre Davis were each convicted on one count of conspiracy to defraud the United States. Sherri Davis was also convicted of 25 counts of aiding and assisting in the preparation and filing of false federal income tax returns and three counts of filing false personal income tax returns. Andre Davis, a Washington, D.C., resident, was also convicted of one count of aiding and assisting in the preparation and filing of false tax returns.
“As we enter the 2015 filing season, tax return preparers should take note of today’s conviction,” said Principal Deputy Assistant Attorney General Caroline D. Ciraolo for the Department of Justice’s Tax Division. “The Department of Justice’s Tax Division, working with IRS-Criminal Investigation, the Offices of the U.S. Attorneys and other local, state and federal law enforcement partners, will identify, investigate and prosecute to the fullest extent of the law those individuals who willfully participate in the preparation and filing of false returns. These individuals are a threat to the integrity of the tax system, and will face felony charges, incarceration and substantial economic sanctions.”
At trial, the evidence established that Sherri and Andre Davis prepared and filed false tax returns for clients that included various false and fraudulent schedules, deductions, expenses and credits with the goal of reducing the amount of taxes owed by the taxpayers and obtaining larger refunds for the taxpayers than they were entitled to receive. In some instances, Sherri and Andre Davis and those working for them attached to the false tax returns false and fraudulent Schedules C that reported false business losses and false Schedules A that reported fraudulent itemized deductions. On some returns, the Schedule C business claimed on the return was completely fabricated. On other returns, the Schedule A included false or grossly inflated gifts to charity, job expenses and other miscellaneous expenses.
The evidence at trial further established that for calendar years 2007 through 2009, Sherri Davis filed her own false income tax returns in which she failed to report more than $300,000 in tax preparation fees that she received from her business.
“Intentionally preparing false tax returns is a criminal offense that reflects badly on the entire industry,” said Special Agent in Charge Thomas J. Kelly of IRS-Criminal Investigation’s Washington, D.C., Field Office. “As Sherri and Andre Davis found out today, it is not a good idea to file false tax returns and expect the IRS not to investigate and recommend prosecution. IRS-Criminal Investigation is committed to holding individuals accountable for their criminal actions.”
Sherri and Andre Davis will be sentenced on April 29 in the U.S. District Court for the District of Columbia by U.S. District Judge Thomas Hogan. The conspiracy conviction has a statutory maximum sentence of five years in prison and a $250,000 fine. Each of the remaining counts of conviction has a statutory maximum sentence of three years in prison and fine of $250,000.
Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS-Criminal Investigation and the D.C. Office of Tax and Revenue Criminal Investigation Division, who investigated the case, as well as Trial Attorneys Jessica Moran, Tiwana Fleming and Mark McDonald for the Tax Division, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office for the District of Columbia for their substantial assistance.
Georgia Real Estate Investors Plead Guilty to Bid Rigging and Fraud at Public Foreclosure AuctionsRead the Press Release
Two Georgia real estate investors pleaded guilty today for their roles in a conspiracy to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.
Separate felony charges were filed against Mohammad Adeel Yoonas and Kevin Shin on Dec. 23, 2014, in the U.S. District Court for the Northern District of Georgia in Atlanta. According to court documents, from at least as early as April 2008 until at least March 2012, Yoonas conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County, Georgia. Yoonas was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire titles to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.
Shin, according to court documents, conspired with others not to bid against one another, but instead designated a winning bidder to obtain selected properties at public real estate foreclosure auctions in Gwinnett County from at least as early as March 2009 until at least March 2012. Shin was also charged with a conspiracy to use the mail to carry out a scheme to fraudulently acquire title to selected Gwinnett County properties sold at public auctions, to make and receive payoffs and to divert money to co-conspirators that would have gone to mortgage holders, homeowners and others by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.
“These six guilty pleas result from the Antitrust Division’s ongoing investigation into schemes to rig public real estate foreclosure auctions in Georgia,” said Assistant Attorney General Bill Baer for the Department of Justice’s Antitrust Division. “The division will continue working with its law enforcement partners to expose cartels that harm distressed homeowners and lenders.”
The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Gwinnett County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage, and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. According to court documents, these conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“The criminal actions of the defendants in this case provide a clear example of why enforcement of the Sherman Act remains necessary in maintaining a level and competitive field within commerce,” said Special Agent in Charge J. Britt Johnson for the FBI Atlanta Field Office. “The FBI will continue to work with the U.S. Department of Justice’s Antitrust Division in identifying such financial schemes that attempt to take unfair advantage, to include those targeting the foreclosure auction process.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine in an amount equal to the greatest of $250,000, twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime by the conspirators.
The investigation is being conducted by Antitrust Division’s Washington Criminal II Section and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Washington Criminal II Section of the Antitrust Division at 202-598-4000, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258, or visit www.justice.gov/atr/contact/newcase.htm.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
Four Former Puerto Rico Police Officers Sentenced for Running Criminal Organization Out of Police DepartmentRead the Press Release
All 16 Former Officers Charged Have Now Been Sentenced
Four additional former Puerto Rico police officers have been sentenced for using their law enforcement affiliation and equipment to commit robbery and extortion, and to sell illegal narcotics and manipulate court records.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement.
Jose Sanchez-Santiago, Miguel Perez-Rivera and Carlos Laureano-Cruz were each sentenced to 63 months in prison. Luis Suarez-Sanchez was sentenced to 87 months in prison. All four defendants were former officers from the Police of Puerto Rico, and all four pleaded guilty in January 2014 to conspiracy to violate RICO.
The officers admitted to being members of a criminal organization that sought to enrich its members through a pattern of illegal conduct. Over the course of the conspiracy, the officers worked together to conduct traffic stops and enter homes or buildings used by suspected criminals to steal money, property and narcotics. The officers also planted evidence to make false arrests, and then extorted money in exchange for their victims’ release from custody. In exchange for bribe payments, the officers gave false testimony, manipulated court records and failed to appear in court when required so that cases would be dismissed. Additionally, the officers sold and distributed wholesale quantities of narcotics.
The officers frequently shared the proceeds they illegally obtained and used their power, authority and official positions as police officers to promote and protect their illegal activity. Among other things, the officers used their police firearms, badges, patrol cars, tools, uniforms and other equipment to commit the crimes, and concealed their illegal activity with fraudulently obtained court documents and falsified police paperwork to make it appear that they were engaged in legitimate police work.
The other 12 defendants charged in this case were sentenced in December 2014. All defendants were sentenced by Senior U.S. District Judge Daniel R. Dominguez of the District of Puerto Rico.
The case was investigated by the FBI’s San Juan Division and prosecuted by Trial Attorneys Brian K. Kidd, Emily Rae Woods and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Mariana E. Bauzá of the District of Puerto Rico.
Four Florida Residents Sentenced to Federal Prison for Roles in $6 Million Miami Home Health Care Fraud SchemeRead the Press Release
Four South Florida residents were sentenced today in connection with a long-running $6.2 million Medicare fraud scheme involving Professional Medical Home Health LLC (Professional Home Health), a Miami home health care agency that purported to provide home health and therapy services. Two of the defendants were also sentenced in connection with their conduct in similar schemes at other Miami home health care agencies.
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. Chief U.S. District Judge K. Michael Moore of the Southern District of Florida imposed the sentences.
Dennis Hernandez, 32, of Miami, was sentenced to serve 120 months in prison and ordered to pay $1,438,186 in restitution. Jose Alvarez, 48, of Miami, was sentenced to serve 120 months in prison and ordered to pay $2,972,570 in restitution. Joel San Pedro, 45, of Miami, was sentenced to serve 97 months in prison and ordered to pay $4,938,432 in restitution. Alina Hernandez, 38, of West Palm Beach, was sentenced to serve 24 months in prison and ordered to pay $204,526.05 in restitution.
Dennis Hernandez, Alvarez, San Pedro and Alina Hernandez each pleaded guilty to one count of conspiracy to commit health care fraud in November 2014.
In connection with their guilty pleas, each of the defendants admitted that Professional Home Health was actually operated for the purpose of billing the Medicare program for expensive physical therapy and home health services that were not medically necessary or not provided. Dennis Hernandez, San Pedro and Alvarez admitted to being managers, supervisors, owners and operators at Professional Home Health. In those capacities, they coordinated and oversaw the submission of fraudulent claims at Professional Home Health, and falsified patient documentation to make it appear that Medicare beneficiaries qualified for and received home health services that were, in fact, not medically necessary or not provided. Dennis Hernandez and Alvarez also admitted to partaking in similar schemes at additional Miami-area home health agencies.
Additionally, all four defendants admitted to acting as patient recruiters for Professional Home Health. In this role, they solicited and received kickbacks and bribes from other co-conspirators at Professional Home Health in exchange for recruiting beneficiaries who neither needed, nor, in some cases, received services.
From December 2008 through February 2014, Medicare paid Professional Home Health more than $6.2 million for fraudulent home health claims.
Earlier this year, two other individuals pleaded guilty and were sentenced in connection with the same scheme. Annarella Garcia, an owner of Professional Home Health, was sentenced to 70 months in prison. Annilet Dominguez, an administrator of Professional Home Health, was sentenced to 68 months in prison. Both were also ordered to pay $6,257,142 in restitution. A sentencing hearing for Ernesto Fernandez and Juan Valdes, co-defendants in the case, is scheduled for Feb. 3, 2015.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Trial Attorney Anne P. McNamara of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS 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.
Opening Statement of Attorney General-Designate Loretta E. Lynch at U.S. Senate Confirmation HearingRead the Press Release
Attorney General-Designate Loretta E. Lynch released the following statement today at the opening of the U.S. Senate confirmation hearing:
“Thank you, Chairman Grassley, Senator Leahy, and distinguished members of the Committee. I am honored to appear before you in this historic chamber, among so many dedicated public servants. I want to thank you for your time this morning – and President Obama for the trust he has placed in me by nominating me to serve as Attorney General of the United States.
“It is a particular privilege to be joined today by members of my family – including my husband, Stephen Hargrove, my father, Rev. Lorenzo Lynch, my brother, Rev. Leonzo Lynch and his wife NiCole, as well as several other family members who are here today.
“Mr. Chairman, one of the privileges of my position as United States Attorney for the Eastern District of New York is welcoming new attorneys into the office and administering to them the oath of office. It is a transformative moment in the life of a young prosecutor. As they stand before me, prepared to pledge their honor and their integrity, I remind them that they are making their oath not to me, not to my office, or even to our Attorney General, but to our Constitution, the fundamental foundation for all that we do. It is that document and the ideals embodied therein to which I have devoted my professional life. Senators, if confirmed as Attorney General I pledge to you and to the American people that the Constitution, the bedrock of our system of justice, will be my lodestar as I exercise the power and responsibility of that position.
“I owe much to those who have worked to make its promise real for all Americans, beginning with my own family. All of them – and so many others – have supported me on the path that has brought me to this moment, not only through their unwavering love and support, but through their shining examples, and the values that shaped my upbringing.
“My mother, Lorine, who was unable to travel here today, is a retired English teacher and librarian for whom education was the key to a better life. She recalls people in her rural community pressing a dime or a quarter into her hands to support her college education. As a young woman she refused to use segregated restrooms because they did not represent the America in which she believed. She instilled in me an abiding love of literature and learning, and taught me the value of hard work and sacrifice. My father, Lorenzo, is a fourth-generation Baptist preacher who in the early 1960’s opened his Greensboro church to those planning sit-ins and marches, standing with them while carrying me on his shoulders. He has always matched his principles with action – encouraging me to think for myself, but reminding me that we all gain the most when we act in service to others.
“It was the values my parents instilled in me that led me to the Eastern District of New York, and from my parents I gained the tenacity and resolve to take on violent criminals, to confront political corruption and to disrupt organized crime. They also gave me the insight and compassion to sit with the victims of crime and share their loss. Their values have sustained me as I have twice had the privilege of serving as United States Attorney, leading an exceptional office staffed by outstanding public servants, and these values guide and motivate me even today.
“Should I be confirmed as Attorney General, my highest priorities will continue to be to ensure the safety of our citizens, to protect the most vulnerable among us from crime and abuse, and to strengthen the vital relationships between America’s brave law enforcement officers and the communities they are entrusted to serve.
“In a world of complex and evolving threats, protecting the American people from terrorism must remain the primary mission of today’s Department of Justice. If confirmed, I will work with colleagues across the executive branch to use every available tool to continue disrupting catastrophic attacks against our homeland and bringing terrorists to justice. I will draw upon my extensive experience in the Eastern District of New York, which has tried more terrorism cases since 9/11 than any other office. We have investigated and prosecuted terrorist individuals and groups that threaten our nation and its people – including those who have plotted to attack New York City’s subway system, JFK airport, the Federal Reserve Bank of New York, and U.S. troops stationed abroad, as well as those who have provided material support to foreign terrorist organizations. And I pledge to discharge my duties always mindful of the need to protect not just American citizens but also American values.
“If confirmed, I intend to expand and enhance our capabilities in order to effectively prevent ever-evolving attacks in cyberspace, expose wrongdoers, and bring perpetrators to justice. In my current position, I am proud to lead an office that has significant experience prosecuting complex, international cybercrime, including high-tech intrusions at key financial and public sector institutions. If I am confirmed, I will continue to use the combined skills and experience of our law enforcement partners, the department’s Criminal and National Security Divisions, and the United States Attorney community to defeat and to hold accountable those who would imperil the safety and security of our citizens through cybercrime.
“I will also do everything I can to ensure that we are safeguarding the most vulnerable among us. During my tenure as U.S. Attorney, the Eastern District of New York has led the prosecution of financial fraudsters who have callously targeted hard working Americans, including the deaf and the elderly, and stolen their trust and their hard-earned savings. We have taken action against abusers in over one hundred child exploitation and child pornography cases, and have prosecuted brutal international human trafficking rings that sold victims as young as 14 and 15 years old into sexual slavery. If confirmed as Attorney General, I will continue to build upon the department’s record of vigorously prosecuting those who prey on those most in need of our protection and I will continue to provide strong and effective assistance to survivors who we must both support and empower.
“Throughout my career as a prosecutor, it has been my honor to work hand in hand with dedicated law enforcement officers and agents who risk their lives every day in the protection of the communities we all serve. I have served with them. I have learned from them. I am a better prosecutor because of them. Few things have pained me more than the recent reports of tension and division between law enforcement and the communities we serve. If confirmed as Attorney General, one of my key priorities would be to work to strengthen the vital relationships between our courageous law enforcement personnel and all the communities we serve. In my career, I have seen this relationship flourish – I have seen law enforcement forge unbreakable bonds with community residents and have seen violence-ravaged communities come together to honor officers who risked all to protect them. As Attorney General, I will draw all voices into this important discussion.
“In that same spirit, I look forward to fostering a new and improved relationship with this committee, the United States Senate, and the entire United States Congress – a relationship based on mutual respect and constitutional balance. Ultimately, I know we all share the same goal and commitment: to protect and serve the American people.
“Now, I recognize that we face many challenges in the years ahead. But I have seen – in my own life and in my own family – how dedicated men and women can answer the call to achieve great things for themselves, for their country, and for generations to come.
“My father – that young minister who carried me on his shoulders – has answered that call. As has my mother, that courageous young teacher who refused to let Jim Crow define her. Standing with them are my uncles and cousins who served in Vietnam – one of whom is with me here today - and my older brother, a Navy SEAL, who answered that call with their service to our country.
“As I come before you today in this historic chamber, I still stand on my father’s shoulders, as well as on the shoulders of all those who have gone before me and who dreamed of making the promise of America a reality for all and worked to achieve that goal.
“I believe in the promise of America because I have lived the promise of America.
“If confirmed to be Attorney General of the United States, I pledge to all of you and to the American people that I will fulfill my responsibilities with integrity and independence. I will never forget that I serve the American people, from all walks of life, who continue to make our nation great – as well as the legacy of all those whose sacrifices have made us free. And I will always strive to uphold the trust that has been placed in me to protect and defend our Constitution, to safeguard our people, and to stand as the leader and public servant that they deserve.
“Thank you all, once again, for your time and your consideration. I appreciate the opportunity to speak with you today. I look forward to your questions – and to all that we may accomplish in the days ahead, together, in the spirit of cooperation, shared responsibility, and justice.”
Former Los Alamos National Laboratory Scientist Sentenced to Prison for Atomic Energy Act ViolationsRead the Press Release
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Damon P. Martinez for the District of New Mexico, Assistant Director Randall C. Coleman of the FBI’s Counterintelligence Division and Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division announced that Pedro Leonardo Mascheroni, a scientist formerly employed at the Los Alamos National Laboratory (LANL), was sentenced this morning for Atomic Energy Act and other violations relating to his communication of classified nuclear weapons data to a person he believed to be a Venezuelan government official.
Mascheroni, 79, a naturalized U.S. citizen from Argentina, was sentenced in Albuquerque, New Mexico, by U.S. District Judge William P. Johnson to 60 months in federal prison followed by the three years of supervised release. His wife, Marjorie Roxby Mascheroni, 71, previously was sentenced in August 2014 to a year and a day of imprisonment followed by three years of supervised release for her conviction on conspiracy and false statement charges.
“The public trusts that the government will do all it can to safeguard Restricted Data from being unlawfully transmitted to foreign nations not entitled to receive it,” said Assistant Attorney General Carlin. “We simply cannot allow people to violate their pledge to protect the classified nuclear weapons data with which they are entrusted. Today’s sentencing should leave no doubt that counterespionage investigations remain one of our most powerful tools to protect our national security. I thank the many people who worked to bring these convictions to fruition.”
“Our laws are designed to prevent ‘Restricted Data’ from falling into the wrong hands because of the potential harm to our national security,” said U.S. Attorney Martinez. “Those who work at our country’s national laboratories are charged with safeguarding that sensitive information, and we must and will vigorously prosecute anyone who compromises our nation’s nuclear secrets for profit. I commend the many agents, analysts and prosecutors who worked tirelessly to bring about the convictions in this case. I also thank the Los Alamos National Laboratory for cooperating fully in the investigation and prosecution of this case.”
“This case demonstrates the consequences that result when those charged with protecting our nation’s secrets violate the trust placed in them by the American people,” said Assistant Director Coleman. “Safeguarding classified material is vital to the public interest, and the FBI will continue to hold accountable those who knowingly and willfully threaten the national security of the United States through the unauthorized disclosure of protected information.”
“America trusts those who work with our country's classified information to keep it away from those who would harm us. Anyone who betrays that trust for his own gain puts our nation's security up for auction, and the price for us all could be very high indeed,” said Special Agent in Charge Lee. “Since World War II, the FBI has worked tirelessly to protect U.S. nuclear weapons data, and we are proud of our investigation in this case.”
Mascheroni, a Ph.D. physicist, worked as a scientist at LANL from 1979 to 1988 and held a security clearance that allowed him access to certain classified information, including “Restricted Data.” Roxby Mascheroni worked at LANL between 1981 and 2010, where her duties included technical writing and editing. She also held a security clearance at LANL that allowed her access to certain classified information, including “Restricted Data.” As defined under the Atomic Energy Act, “Restricted Data” is classified information concerning the design, manufacture or use of atomic weapons; the production of special nuclear material; or the use of special nuclear material in the production of energy.
Mascheroni and Roxby Mascheroni were indicted in September 2010 and charged with conspiracy to communicate and communicating Restricted Data to an individual with the intent to secure an advantage to a foreign nation, as well as conspiracy to convey and conveying classified information. The indictment also charged Mascheroni with concealing and retaining U.S. records with the intent to convert them to his own use and gain, and both defendants with making false statements.
Mascheroni pleaded guilty in June 2013, to counts seven and eight of the indictment, charging him with conversion of government property and retention of U.S. records, and counts 10 through 15, charging him with making false statements. Mascheroni also pleaded guilty to a felony information charging him with two counts of communication of Restricted Data and one count of retention of national defense information.
In entering his guilty plea, Mascheroni admitted that in November 2008 and July 2009, he unlawfully communicated Restricted Data to another individual with reason to believe that the data would be utilized to secure an advantage to Venezuela. He also admitted unlawfully converting Department of Energy information to his own use and selling the information in November 2008 and July 2009, and failing to deliver classified information relating to the United States’ national defense to appropriate authorities and instead unlawfully retaining the information in his home. Finally, Mascheroni admitted making materially false statements to the FBI when he was interviewed in October 2009.
Roxby Mascheroni pleaded guilty in June 2014, to count six of the indictment, charging her with conspiracy, and counts 16 through 22, charging her with making false statements. She also pleaded guilty to a felony information charging her with conspiracy to communicate Restricted Data. Roxby Mascheroni admitted that between October 2007 and October 2009, she conspired with Mascheroni to convey Restricted Data belonging to the United States to another person with reason to believe that the information would be used to secure an advantage to Venezuela. She also admitted making materially false statements to the FBI when she was interviewed in October 2009.
The indictment in this case did not allege that the government of Venezuela or anyone acting on its behalf sought or was passed any classified information, nor did it charge any Venezuelan government officials or anyone acting on their behalf with wrongdoing. The indictment also did not allege any wrongdoing by other individuals working at LANL.
This investigation was conducted by the FBI’s Albuquerque Division with assistance from the Department of Energy and LANL. The prosecution was handled by Senior Counsel Kathleen Kedian and Trial Attorney David Recker of the Counterespionage Section of the Justice Department’s National Security Division and Assistant U.S. Attorneys Fred J. Federici, Dean Tuckman and Holland S. Kastrin of the U.S. Attorney’s Office for the District of New Mexico.
Department of Justice Diagnostic Center Provides Final Assessment to Minneapolis Police Department to Help Build Trust Between Police and the CommunityRead the Press Release
Today, the U.S. Department of Justice’s Office of Justice Programs’ (OJP) Diagnostic Center and the Minneapolis Police Department (MPD) released the final assessment and implementation plans to support the MPD’s accountability procedures. The Diagnostic Analysis will allow MPD to implement changes that will improve police and community trust in the Minneapolis community. The assessment focused on goals set by MPD including improving police accountability and preventing officer misconduct.
The Diagnostic Center analyzed citizen complaints over a six-year period, identified strengths and gaps in oversight, discipline and accountability, and evaluated MPD’s current early-intervention system and how it compares to other model systems. The full report is available at the Diagnostic Center’s website.
“Strengthening relationships between law enforcement agencies and the communities they serve is one of the defining public safety challenges of our time,” said Assistant Attorney General Karol V. Mason for the Office of Justice Programs. “I commend Chief [Janeé] Harteau for calling on the resources of the OJP Diagnostic Center and for her commitment to building trust with the citizens of Minneapolis.”
In 2014, the Diagnostic Center conducted an independent assessment including community stakeholder interviews and data analysis to identify promising practices for police accountability related to managing oversight and preventing misconduct. In October 2014, the Diagnostic Center presented its assessment findings to the MPD and broader Minneapolis community. Since the presentation of the Diagnostic Center’s Analysis, the MPD has moved forward with creating five committees comprising representatives from MPD, the Office of Police Conduct Review, city leadership and the community to address recommendations on police conduct, early interventions systems, community outreach, and coaching and strategic communications.
“The work that the Minneapolis Police Department and the Diagnostic Center have embarked on fits squarely into the goals of community safety, officer safety and criminal justice reform that the Justice Department has made a top priority,” said Deputy Assistant Attorney General Mark Kappelhoff for the Justice Department’s Civil Rights Division. “I applaud Chief Harteau, the Minneapolis Police Department and the community on their leadership and commitment to implementing sustainable solutions that will lead to increased public trust and safety for everyone.”
The Diagnostic Center provides customized technical assistance to help state, county, city and tribal communities identify and confront persistent, systemic public safety challenges. In addition to addressing a particular public safety concern, engagement with the Diagnostic Center is intended to build the community’s capacity to act independently and use data to make future policy and programming decisions. Federal agencies and experts across the Department of Justice are available to leverage resources and develop a coordinated federal response to community-specific public safety issues and provides customized assistance to communities by collecting and analyzing data to identify the factors contributing to the public safety issue and then mapping those factors to strategies and solutions that have demonstrated success in reducing crime.For more information or to request assistance go to https://www.ojpdiagnosticcenter.org/.
OJP, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice and assist victims. OJP has six components: the Bureau of Justice Assistance, the Bureau of Justice Statistics, the National Institute of Justice, the Office of Juvenile Justice and Delinquency Prevention, the Office for Victims of Crime and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering and Tracking. More information about OJP can be found at www.ojp.gov.Sanden Corp. Agrees to Plead Guilty to Price Fixing on Automobile Parts Installed in U.S. CarsRead the Press Release
Sanden Corp., an automotive parts manufacturer based in Gunma, Japan, has agreed to plead guilty and to pay a $3.2 million criminal fine for its role in a conspiracy to suppress and eliminate competition for the purchase of compressors used in air conditioning systems sold to Nissan North America Inc. for installation in vehicles manufactured and sold in the United States and elsewhere, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court for the Eastern District of Michigan in Detroit, Sanden conspired to fix the prices of compressors sold to Nissan. In addition to the criminal fine, Sanden has agreed to cooperate in the department’s ongoing investigation. The plea agreement is subject to court approval.
“Today’s charge is the latest in the Antitrust Division’s ongoing investigation of automobile parts suppliers,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division continues to vigorously prosecute companies and individuals that seek to maximize their profits through illegal, anticompetitive means.”
The department said that Sanden and its co-conspirator held meetings and conversations to discuss and agree upon the bids and price quotations submitted to Nissan for the purchase of compressors used in automotive air conditioning systems. Sanden’s involvement in the conspiracy lasted from as early as August 2008 until at least April 2009.
Including Sanden, 33 companies and 50 individuals have been charged in the department’s ongoing investigation into price fixing and bid rigging in the automotive parts industry. All of the charged companies have pleaded guilty or have agreed to plead guilty and to pay a combined total of more than $2.4 billion in fines.
Sanden is charged with fixing prices in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s New York Office and the FBI’s New York Field Office, with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1–888–647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s New York Field Office at 212-384-1000.
Peruvian Man Sentenced for Defrauding and Extorting Spanish-Speaking U.S. Residents through Fraudulent Call CentersRead the Press Release
A Peruvian man charged with running an operation that threatened and defrauded Spanish-speaking U.S. residents was sentenced today to more than 17 years in prison in federal district court in Miami, the Department of Justice and U.S. Postal Inspection Service (USPIS) announced.
Juan Alejandro Rodriguez Cuya, 35, was sentenced to serve 210 months in federal prison to be followed by three years of supervised release for his operation of Angeluz Florida Corporation and call centers in Peru that lied to and threatened Spanish-speaking victims into paying fraudulent settlements for nonexistent debts. In addition to his prison sentence, Rodriguez Cuya was ordered to forfeit assets.
In October 2014, Rodriguez Cuya was convicted by a jury after less than two hours of deliberation following a two-week trial before U.S. District Court Judge Patricia A. Seitz. The 26 charges against him included conspiracy, mail fraud, wire fraud and attempted extortion. His mother, Maria Luzula, pleaded guilty to all counts against her midway through trial and on Dec. 18, 2014, was sentenced to serve 165 months in prison.
“The victims of this case tell horrible stories of false threats made against them – threats of seized property, arrest and sometimes even deportation,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The Justice Department will be particularly vigilant in cases such as this, in which individuals target and exploit specific populations.”
According to evidence presented at trial, the defendants’ employees in Peru used Internet-based telephone calls to threaten Spanish-speaking victims in the United States. The Peruvian callers falsely accused the victims of having failed to accept delivery of certain products and claimed that the victims owed thousands of dollars in fines and that lawsuits would be brought against them. In reality, the victims had never ordered these products and nothing had been delivered.
Additional evidence at trial established that the call center employees claimed that the consumers could resolve the fines if they immediately paid a “settlement fee.” Consumers who contested these settlement fees were told that failure to pay could lead to arrest, deportation or seizure of property. Thousands of victims succumbed to these threats and paid fees that they did not owe.
Victims who testified at trial spoke of how anxious the calls made them. The victims were so afraid of the threats that they paid fees they simply could not afford. At sentencing, victims told the judge that they have lost trust in people and that they still become nervous when their phones ring. Also at sentencing, a victim told the judge that, like many other people, she came to this country for opportunity and a better life, but the crime made her feel she was not in the United States. It made her feel assaulted without any recourse.
“Consumer fraud that targets a specific population is shameful,” said U.S. Attorney Wilfredo A. Ferrer for the Southern District of Florida. “In this case, the defendants targeted Spanish-speaking consumers and falsely threatened them with arrest, deportation, forfeiture of property or harm to their credit scores when the consumers refused to settle claims for products that were not delivered or ordered. Such tactics are intolerable. The U.S. Attorney’s Office is committed and stands united with the Department of Justice’s Civil Division Consumer Protection Branch to protect our consumers from fraud.”
“The USPIS will continue to aggressively investigate and go after those who defraud citizens of their hard earned money through the use of threats and other abusive tactics,” said Postal Inspector in Charge Ronald Verrochio of the USPIS Miami Division.
Acting Assistant Attorney General Branda commended the USPIS for its investigative efforts and thanked the U.S. Attorney’s Office for the Southern District of Florida for their contributions to the case. The case was prosecuted by Trial Attorney Phil Toomajian and Assistant Director Richard Goldberg of the Civil Division’s Consumer Protection Branch.
New York Attorney Found Guilty of Subscribing to False Federal Tax ReturnsRead the Press Release
An attorney licensed to practice in New York was found guilty yesterday of three counts of subscribing to false tax returns for the 2007, 2008 and 2009 tax years following a bench trial before U.S. District Judge Vincent L. Briccetti, Principal Deputy Assistant Attorney General Caroline D. Ciraolo for the U.S. Department of Justice’s Tax Division and U.S. Attorney Preet Bharara for the Southern District of New York, announced today.
Matthew Libous was found not guilty by Judge Briccetti of false subscription counts for his 2010, 2011 and 2011 amended returns and not guilty of one count of obstructing the Internal Revenue Service (IRS).
“Yesterday’s verdict was a just conclusion for Matthew Libous’s repeated, willful failure to report all his income to the IRS over a period of years,” said U.S. Attorney Bharara. “As a practicing attorney, Libous knew better. My office will continue to make every effort to ensure that everyone pays his or her fair share of taxes.”
“Yesterday’s conviction should serve as clear notice that the Tax Division, working with IRS Criminal Investigation and the Offices of the U.S. Attorneys, will vigorously enforce our nation’s criminal tax laws and prosecute those individuals, including legal professionals, who willfully file false federal tax returns,” said Principal Deputy Assistant Attorney General Ciraolo.
According to the superseding indictment and the evidence presented at trial, Libous engaged in the practice of law from 2006 through 2008. Libous deposited the fees he received into his personal bank account but never reported them on his tax return. In 2008, Libous became a minority partner and manager of Wireless Construction Solutions LLC (WCS), a company that maintained cellular telephone towers. Libous caused WCS to pay thousands of dollars in his personal expenses on his behalf from 2008 to 2011. In returning yesterday’s verdict following a three-day bench trial, Judge Briccetti said that he found that Libous willfully failed to report the income from his law practice in 2007 and 2008, and the income he received as a result of his causing WCS to pay his personal expenses in 2008 and 2009.
Libous faces a statutory maximum sentence of three years in prison for each of the false subscription convictions. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. Sentencing is scheduled for April 29.
This prosecution is being handled by the U.S. Attorney’s Office for the Southern District of New York, White Plains Division. Assistant U.S. Attorney James McMahon for the Southern District of New York and Special Assistant U.S. Attorney Andrew Kameros of the Tax Division are in charge of the prosecutions.
Attorney General Holder Statement on the Nomination of Stuart Delery as the Associate Attorney GeneralRead the Press Release
Attorney General Eric Holder released the following statement today on Stuart F. Delery’s nomination to be Associate Attorney General:
“I am delighted to join President Obama in congratulating Stuart Delery on his nomination as Associate Attorney General – an office in which he has distinguished himself in an acting capacity over the last four months.
“Throughout his tenure at the Department of Justice – from his time as Chief of Staff to the Deputy Attorney General, to his service as Senior Counselor in my office, and his leadership of the Department’s Civil Division, Stuart has proven himself to be an outstanding attorney, an extraordinarily dedicated public servant, and an indispensable part of our senior leadership team.
"In the last few years alone, Stuart has made significant contributions in our ongoing efforts to ensure the integrity of America’s financial system, to safeguard the health and safety of our citizens, to protect consumers throughout the nation, and to bolster national security. I am confident that, should he be confirmed by the U.S. Senate, Stuart will continue to build on the record of progress he has already established – and to uphold the standards of excellence that have always defined his work. I join the President in urging Senate leaders to confirm Stuart Delery as Associate Attorney General in a timely manner, and look forward to all that he will help this Department achieve in the days ahead.”
Webb County, Texas Commissioner Sentenced to 76 Months in Prison for Accepting Bribes in Exchange for Official ActionsRead the Press Release
An elected county commissioner for Precinct 1 of the Webb County Commissioners Court in Texas was sentenced today to 76 months in prison for accepting bribes in exchange for official actions.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division made the announcement. U.S. District Judge Marina Garcia Marmolejo of the Southern District of Texas imposed the sentence.
Kristopher Michael Montemayor, 37, of Laredo, Texas, pleaded guilty to one count of federal programs bribery on June 19, 2014. In addition to the prison sentence, he was ordered to pay a fine of $109,405.72 and to forfeit $13,721.16.
In his plea agreement, Montemayor admitted that he solicited and accepted multiple bribes in exchange for promising to perform official acts. Specifically, Montemayor admitted that he accepted three separate bribe payments totaling $11,000 and over $2,700 in electronics and other merchandise, including two Apple iPads and two pairs of Dr. Dre Beats Solo HD headphones, from a businessman who, unbeknownst to Montemayor, was an undercover law enforcement agent. In exchange for the cash and the other items, Montemayor promised to take various forms of official action to promote the business interests of the undercover agent.
Montemayor also admitted to accepting a 2012 Ford F-150 pick-up truck, worth approximately $37,000, in exchange for providing government jobs to the vehicle owner and his spouse. As a result of these appointments, the vehicle owner and his wife received salaries of $26,000 and $45,553 from Webb County. Montemayor admitted that the vehicle owner performed little or no work in exchange for his government salary.
The case was investigated by the Laredo Resident Agency of the FBI’s San Antonio Division. The case was prosecuted by Trial Attorneys Emily Rae Woods and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section.
Real Estate Businessman Convicted of Tax Fraud by Concealing Income Using Nominee Entities and AliasesRead the Press Release
A federal jury sitting in Providence, Rhode Island, convicted a Cranston, Rhode Island, man of one count of corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS), one count of tax evasion and two counts of aiding and assisting in the preparation and filing of false corporate tax returns, the Justice Department and the IRS announced.
John Fall was remanded into custody after the jury verdict. Fall faces a statutory maximum sentence of 14 years in prison and a $1 million fine at his sentencing on April 28 before U.S. District Judge John J. McConnell Jr. for the District of Rhode Island.
According to the evidence presented at trial, Fall was a real estate consultant who bought, sold and brokered real estate. Fall also participated in handling the financial affairs of his wife and her businesses, including her dental practice, Comfort Dental Inc., and Broad Street Investments. Between 1999 and 2010, Fall used numerous nominee entities and business names to conceal his business and financial transactions. Fall also used multiple bank accounts, including commingled or “warehouse” bank accounts, in at least six states to conceal his financial transactions, as well as certain financial transactions of Comfort Dental and Broad Street Investments. To further disguise business and financial transactions, Fall used fake names and aliases to conceal his ownership and control over his nominee entities.
The evidence at trial proved that Fall filed false federal income tax returns for 1998 and 1999, and failed to file any tax returns for the years 2000 through 2010. The IRS audited Fall for 1998 through 2000, assessing him taxes totaling approximately $72,000.
The evidence at trial further established that Fall caused the filing of false tax returns on behalf of Comfort Dental for the years 2005 through 2007. Fall caused his wife’s businesses to make payments to his various entities which were falsely recorded on the corporate tax returns as deductible business expenses. When Comfort Dental and Fall’s wife were audited civilly by the IRS in late 2008, Fall attempted to obstruct the audit by encouraging his wife’s accountant not to provide the IRS with information requested through an IRS summons, and instead provided false and fraudulent information and documentation to the IRS concerning the nature of the payments by Comfort Dental and Broad Street Investments to his various entities. Fall also attempted to obstruct his wife’s compliance with an IRS summons.
This case was investigated by special agents with the IRS – Criminal Investigation. The case is being prosecuted by Assistant Chief John Kane and Trial Attorney Jeffrey Bender with the Justice Department’s Tax Division.
Owner of Miami Home Health Company Sentenced to 106 Months in Prison for $30 Million Health Care Fraud SchemeRead the Press Release
The owner and operator of a Miami home health care agency was sentenced today to 106 months in prison for his participation in a $30 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.
Ramon Regueira, 66, of Miami, pleaded guilty to one count of conspiracy to commit health care fraud on Nov. 13, 2014. In addition to the prison sentence, U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida ordered Regueira to pay $21 million in restitution, both jointly and severally with his co-conspirator.
According to his plea agreement, Regueira was an owner of Nation’s Best Care Home Health Corp. (Nation’s Best), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries. Regueira admitted that he and his co-conspirators operated Nation’s Best 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.
Specifically, Regueira admitted that he and his co-conspirators paid kickbacks and bribes to patient recruiters who provided patients to Nation’s Best, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services. Regueira and his co-conspirators then used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for unnecessary home health care services.
From January 2007 through January 2011, Nation’s Best submitted approximately $30 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $21 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 Attorney Kelly Graves 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.
Ninth Circuit Affirms Former Nevada Lobbyist’s Conviction for Making Unlawful Campaign ContributionsRead the Press Release
The U.S. Court of Appeals for the Ninth Circuit today affirmed the convictions of a former Nevada lobbyist for making excessive campaign contributions and contributions in the name of another person, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.
“We're pleased that today's decision confirms that the cornerstones of our campaign finance laws - contribution limits and transparency - are not subject to creative misinterpretations of those determined to break the law,” said Assistant Attorney General Caldwell.
“Harvey Whittemore knew the law, he knew how to raise money the right way, he knew right from wrong, and he knew how he could violate the law and avoid detection,” said U.S. Attorney Bogden. “He made a conscious and willful choice to violate federal elections laws in order to increase his own power and influence at the expense of the voting public and the election process.”
F. Harvey Whittemore, 62, of Reno, Nevada, a prominent Nevada lawyer, former lobbyist and land developer, was convicted by a jury in the District of Nevada in May 2013 of making excessive campaign contributions, making contributions in others’ names, and causing a materially false statement to be made to the Federal Election Commission (FEC). He was sentenced on Sept. 30, 2013, to two years in prison and a $100,000 fine.
According to evidence presented at trial, Whittemore was aware of the strict limits on individual federal campaign contributions. In an effort to circumvent those limits, he devised a scheme to unlawfully funnel more than $130,000 of his own money through approximately 29 family members, employees and their spouses to the campaign committee for a U.S. senator. This scheme allowed Whittemore to make an individual campaign donation in excess of the federal limits. Whittemore concealed the scheme from the FEC, the senator, and the senator’s campaign committee.
The case was investigated by the FBI and prosecuted by Deputy Chief Eric G. Olshan of the Criminal Division’s Public Integrity Section and First Assistant U.S. Attorney Steven W. Myhre of the District of Nevada. Appellate Chief and Assistant U.S. Attorney Elizabeth Olson White of the District of Nevada argued the appeal.
Mexican National Sentenced to 15 Years for Participating in a Brutal Family Run Sex Trafficking OrganizationRead the Press Release
The Department of Justice today announced a sentencing and guilty plea for two members of a family run sex trafficking organization based in southern Florida. Rafael Alberto Cadena-Sosa was sentenced by U.S. District Court Judge Joes E. Martinez to serve 15 years in prison and Carmen Cadena pleaded guilty before U.S. District Court Judge Jose Martinez for participating in a brutal family run sex trafficking organization.
Rafael Alberto Cadena-Sosa
Cadena-Sosa, 46, a Mexican national, was sentenced to serve 15 years in prison for conspiring and holding a person in a condition of involuntary servitude. Judge Martinez also ordered Cadena-Sosa to pay $1,261,563 in restitution to sixteen different victims.
On Oct. 9, 2014, Cadena-Sosa pleaded guilty to conspiracy and to holding a person in a condition of involuntary servitude. As part of his plea, Cadena-Sosa admitted that he, along with other family members and associates, approached women and girls, some as young as fourteen years old, in Veracruz, Mexico, and lured them into coming to the United States using false promises of legitimate jobs. After illegally smuggling women and girls into the United States, Cadena-Sosa and other family members imposed a smuggling debt and used brutal physical force and violence, sexual assaults, and threats of death and bodily harm to the victims and their families to compel the victims to engage in prostitution 12 hours a day, six days a week and turn over the proceeds to the defendants to pay down the smuggling debts the defendants imposed. Cadena-Sosa and other family members would also search for victims who had run away from a brothel and subject them to beatings and rapes upon capture.
Carmen Cadena
Cadena, 48, a Mexican national, pleaded guilty to one count of conspiracy for conspiring with other members of the Cadena organization to unlawfully encourage and bring undocumented victims into the U.S.; unlawfully transport victims within the U.S.; unlawfully harbor victims within the U.S.; unlawfully coerce and transport victims, including victims as young as 14-years-old, into the U.S. for purposes of illegal sexual activity; and unlawfully use extortionate means to collect extensions of credit made to the victims.
Cadena faces a maximum sentence of five years in prison and a fine of $500,000. Sentencing is scheduled to occur on May 18, 2015. According to the terms of the plea agreement, the parties will jointly recommend the maximum sentence of five years in prison and $1,261,563 in restitution to 16 victims.
Sixteen defendants were charged in a superseding indictment filed in 1998. Mexican authorities arrested Rafael Alberto Cadena-Sosa and Carmen Cadena and extradited them to the United States in November 2013 and December 2014, respectively. Four other members of the Cadena sex trafficking organization have been convicted, including Cadena-Sosa’s uncle, Rogerio Cadena, who pleaded guilty in 1999 and was sentenced to 15 years; Cadena-Sosa’s brother, Abel Cadena-Sosa, who was convicted in Mexico and sentenced to 24 years, and two other brothers, Hugo and Juan Luis Cadena-Sosa—Carmen Cadena’s husband—, who pleaded guilty in 2002 and 2008, and were sentenced to five years and 15 years respectively. Six other defendants previously pleaded guilty in federal court in connection with the scheme, and one was convicted in state court for a murder outside a Cadena-run brothel.
Since 2009, the Departments of Justice and Homeland Security as well as law enforcement agencies in Mexico, have worked to develop high-impact prosecutions to dismantle human trafficking networks operating across the U.S.-Mexico border, bring human traffickers to justice, restore the rights and dignity of human trafficking victims, and reunite victims with their children held under the trafficking networks’ control. These efforts have resulted in numerous successful prosecutions, including U.S. federal prosecutions of over 50 defendants in multiple cases in Georgia, New York, Florida, and Texas since 2009.
“No human being should have to endure the violence and brutality these young women and girls suffered at the hands of the Cadena organization,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “These violations of the victims’ individual rights and freedom are intolerable and the Department of Justice will continue in its commitment to bringing human traffickers to justice and restore the rights and dignity of the courageous survivors of this crime.”
“Rafael Cadena-Sosa and Carmen Cadena preyed on vulnerable girls and young women and lured them to the United States with the promise of a better life,” said U.S. Attorney Wilfredo A. Ferrer for the Southern District of Florida. “Instead, Cadena-Sosa and his family and associates robbed these victims of their freedom and dignity, brutally beat them and subjected them to modern-day slavery. The dismantling of the Cadena organization reaffirms our unwavering commitment to prosecute those who seek to profit at the expense of the suffering of to others. We will continue to work with our domestic and international law enforcement partners to bring justice to those who engage in this inhumane practice. This case is one example of bilateral progress to effectively dismantle human trafficking networks operating across the U.S.-Mexico border.”
“The long prison sentence imposed upon Rafael Alberto Cadena-Sosa is a testament to the cooperation and commitment of numerous law enforcement agencies both here and in Mexico to stop this appalling criminal activity,” said Special Agent in Charge George L. Piro of the FBI Miami Office. “We will continue working with our partners to dismantle human trafficking networks such as this one that operate in the shadows and brutalize their victims.”
Acting Assistant Attorney General Gupta and U.S. Attorney Ferrer praised the collaborative efforts of multiple law enforcement agencies throughout the investigation and prosecution, including the Federal Bureau of Investigation, the Department of Homeland Security’s Customs and Border Protection and Immigration and Customs Enforcement, the Bureau of Alcohol, Tobacco and Firearms, the Office of International Affairs, Criminal Division, U.S. Department of Justice, Florida Department of Law Enforcement, Palm Beach County Sheriff’s Office, West Palm Beach Police Department, Okeechobee County Sheriff’s Office, Fort Pierce Police Department, Avon Park Police Department, Boynton Beach Police Department, and Lee County Sheriff’s Office. The case is being prosecuted by Assistant United States Attorney Adam McMichael and Trial Attorney Matthew Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Justice Department and Huntsville City Schools Announce Proposed Consent Decree to Provide Equal Educational OpportunitiesRead the Press Release
The Department of Justice announced today that it has filed a proposed consent order in Hereford v. Huntsville Board of Education, a longstanding school desegregation case, to resolve issues related to school attendance zones, black students’ access to quality academic offerings and student discipline, among other areas. The department and counsel for the Huntsville City Schools in Alabama jointly filed the proposed consent order in district court in Birmingham, and are now seeking public comment prior to presentation of the proposed consent order to the Huntsville Board of Education and to the court for final approval.
The proposed agreement, if approved, would resolve the parties’ dispute over the district’s 2014 plan to reconfigure student attendance zones. The Justice Department had objected that the plan did not further desegregation or address racial inequalities in students’ access to quality academic offerings. If approved by the court, the proposed consent order would require the district to provide equal educational opportunities to black students by taking steps including:
-
revising attendance zones and growing and strengthening magnet programs to improve diversity at many of its schools;
-
expanding access for black students to pre-kindergarten, gifted programs, advanced course offerings such as Advanced Placement and International Baccalaureate, academic after-school programs, and college counseling;
-
implementing measures to promote faculty and administrator diversity;
-
ensuring that all students are aware of and can equally participate in extracurricular activities;
-
creating positive, inclusive school climates, and ensuring that student discipline is fair, non-discriminatory, and does not unnecessarily remove students from classrooms;
-
establishing a desegregation advisory committee consisting of students and parents to advise the district and inform the court about implementation of the consent order;
-
providing professional development for teachers on such topics as strategies for teaching students from diverse backgrounds, understanding implicit bias, and supporting positive student behavior; and
-
continuously monitoring racial disparities to ensure meaningful and sustained improvement in areas including student performance, students’ access to courses, and rates of student discipline.
“A quality education is the key that opens the door to a better future,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “This agreement aims to ensure that African American students in Huntsville schools can access that quality education on an equal basis. We look forward to working with the district to implement the measures required by this proposed order, if approved, and eventually bring this case to successful resolution after so many years.”
“The Department of Justice is committed to ensuring that Alabama schools provide African American students, and all students, with the equal educational opportunities guaranteed under federal law,” said U.S. Attorney Joyce White Vance for the Northern District of Alabama.
If the proposed consent order is approved, the Justice Department will monitor and enforce the district’s compliance. The district may seek a declaration of unitary status and dismissal of the case when it can demonstrate sustained compliance with the terms of the consent order.
The proposed consent order can be found at www.proposedconsentorder.com, which also provides information regarding opportunities for public comment, including a series of community forums.
The enforcement of Title IV of the Civil Rights Act of 1964, which prohibits discrimination on the basis of race and other factors in public schools, is a top priority of the Justice Department’s Civil Rights Division. Additional information about the Civil Rights Division of the Justice Department is available on its web site at www.justice.gov/crt.
-
Former CIA Officer Convicted for Unauthorized Disclosure of National Defense Information and Obstruction of JusticeRead the Press Release
A former CIA officer was convicted today by a federal jury in Alexandria, Virginia, of illegally disclosing national defense information and obstructing justice.
Attorney General Eric Holder, FBI Director James B. Comey, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Dana J. Boente of the Eastern District of Virginia made the announcement.
“This is a just and appropriate outcome,” said Attorney General Holder. “The defendant’s unauthorized disclosures of classified information compromised operations undertaken in defense of America’s national security. The disclosures placed lives at risk. And they constituted an egregious breach of the public trust by someone who had sworn to uphold it. As this verdict proves, it is possible to fully prosecute unauthorized disclosures that inflict harm upon our national security without interfering with journalists' ability to do their jobs. And I want to thank the investigators, prosecutors and support staff who made this outcome possible for their relentless efforts in advancing a complex case that spanned multiple years.”
“He violated his sworn duty to protect our nation's secrets and he betrayed our country,” said Director Comey. “The FBI will continue to pursue these cases vigorously.”
“Jeffrey Sterling was trusted with the nation's most sensitive secrets and chose to expose them - putting our national security at risk, and endangering lives in the process,” said Assistant Attorney General Caldwell. “These cases are challenging, but vitally important to our efforts to secure critical intelligence on behalf of the American people.”
“Over 10 years ago a disgruntled former CIA employee disclosed extremely sensitive classified information to a journalist,” said U.S. Attorney Boente. “That classified information was critical to our national defense, and releasing it was illegal and went against Mr. Sterling's professional commitments to the CIA. Mr. Sterling's vindictive and careless choices ultimately led us here today and to this unanimous verdict. I would like to thank the trial team and our partners at the FBI's Washington Field Office and the Central Intelligence Agency for their hard work and commitment to this case.”
Jeffrey Alexander Sterling, 47, of O’Fallon, Missouri, was convicted today in the Eastern District of Virginia of six counts of unauthorized disclosure of national defense information, and one count each of unlawful retention of national defense information, unauthorized conveyance of government property and obstruction of justice. Sterling was indicted on Dec. 22, 2010, and arrested on Jan. 6, 2011. Sentencing is scheduled for April 24, 2015.
According to evidence presented at trial, Sterling was employed by the CIA from May 1993 to January 2002. From November 1998 through May 2000, he was assigned to a classified clandestine operational program designed to undermine the Iranian nuclear weapons program. He was also the operations officer assigned to handle a human asset associated with that program, a person identified at trial as Merlin. Sterling was reassigned in May 2000, at which time he was no longer authorized to receive or possess classified documents concerning the program or the individual.
In connection with his employment, Sterling, who is a lawyer, signed various security, secrecy and non-disclosure agreements in which he agreed never to disclose classified information to unauthorized persons, acknowledged that classified information was the property of the CIA and also acknowledged that the unauthorized disclosure of classified information could constitute a criminal offense. These agreements also set forth the proper procedures to follow if Sterling had concerns that the CIA had engaged in any “unlawful or improper” conduct that implicated classified information. These procedures permit such concerns to be addressed while still protecting the classified nature of the information. The media was not an authorized party to receive such classified information.
In August 2000, Sterling pursued administrative and civil actions against the CIA. Evidence at trial showed that Sterling, in retaliation for the CIA’s refusal to settle those actions on terms favorable to him, disclosed information concerning the classified operational program and the human asset to a New York Times reporter working on an unpublished article in early 2003 and a book the reporter published in January 2006. Sterling’s civil and administrative claims were ultimately dismissed by the court.
Evidence demonstrated that in February and March 2003, Sterling made various telephone calls to the reporter’s residence and e-mailed a newspaper article about the weapons capabilities of a certain country that was within Sterling’s previous clandestine operational assignment. While the possible newspaper article containing the classified information Sterling provided was ultimately not published in 2003, evidence showed that Sterling and the reporter remained in touch from December 2003 through November 2005 via telephone and e-mail. In January 2006, the reporter published a book that contained classified information about the program and the human asset.
Evidence at trial showed that Sterling was aware of a grand jury investigation into the matter by June 2006, when he was served a grand jury subpoena for documents relating to the reporter’s book. Nevertheless, between April and July 2006, Sterling deleted the e-mail containing the classified information he had sent from his account in an effort to obstruct the investigation.
This case was investigated by the FBI’s Washington, D.C., Field Office, with assistance in the arrest from the FBI’s St. Louis Field Office. This case was prosecuted by Deputy Chief Eric G. Olshan of the Criminal Division’s Public Integrity Section and Senior Litigation Counsel James L. Trump and Assistant U.S. Attorney Dennis Fitzpatrick of the Eastern District of Virginia.
Attorney General Holder Announces Charges Against Russian Spy Ring in New York CityRead the Press Release
Spy Ring Attempted to Collect Economic Intelligence and Recruit New York City Residents as Intelligence Sources
Evgeny Buryakov, aka “Zhenya,” Worked Under “Non-Official Cover” as a Bank Employee in Manhattan
Attorney General Eric Holder, Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Preet Bharara for the Southern District of New York and Assistant Director Randall C. Coleman of the FBI’s Counterintelligence Division announced charges today against Evgeny Buryakov, aka “Zhenya,” Igor Sporyshev and Victor Podobnyy in connection with Buryakov’s service as a covert intelligence agent on behalf of the Russian Federation (Russia) in New York City, without notifying the U.S. Attorney General of Buryakov’s status as an agent of Russia, as required by federal law. Buryakov was placed under arrest earlier today in Bronx, New York, and is scheduled to appear before U.S. Magistrate Judge Sarah Netburn in federal court in Manhattan later today. Sporyshev and Podobnyy no longer reside in the United States and have not been arrested. By virtue of their prior positions in the United States on behalf of Russia, both of them were protected by diplomatic immunity from arrest and prosecution while in the United States.
“These charges demonstrate our firm commitment to combating attempts by covert agents to illegally gather intelligence and recruit spies within the United States,” said Attorney General Holder. “We will use every tool at our disposal to identify and hold accountable foreign agents operating inside this country – no matter how deep their cover. I want to thank the dedicated men and women of the FBI’s Counterintelligence Division and New York Field Office, the National Security Division’s Counterespionage Section and the U.S. Attorney’s Office for the Southern District of New York for their skilled handling of this complex and highly sensitive matter.”
“The attempt by foreign nations to illegally gather economic and other intelligence information in the United States through covert agents is a direct threat to the national security of the United States, and it exemplifies why counterespionage is a top priority of the National Security Division,” said Assistant Attorney General Carlin. “I want to thank the FBI’s New York Field Office and Counterintelligence Division as well as the U.S. Attorney’s Office for the Southern District of New York for their continued effort to conduct these highly complex and sensitive counterespionage investigations and prosecutions, and for their continued close partnership with the National Security Division and the Counterespionage Section.”
“Following our previous prosecution with the FBI of Russian spies, who were expelled from the United States in 2010 when their plan to infiltrate upper levels of U.S. business and government was revealed, the arrest of Evgeny Buryakov and the charges against him and his co-defendants make clear that – more than two decades after the presumptive end of the Cold War – Russian spies continue to seek to operate in our midst under cover of secrecy,” said U.S. Attorney Bharara. “Indeed, the presence of a Russian banker in New York would in itself hardly draw attention today, which is why these alleged spies may have thought Buryakov would blend in. What they could not do without drawing the attention of the FBI was engage in espionage. New York City may be more hospitable to Russian businessmen than during the Cold War, but my office and the FBI remain vigilant to the illegal intelligence-gathering activities of other nations.”
“This investigation is one of many that highlight the determined and prolific efforts by foreign governments to target Americans for the purposes of collecting intelligence and stealing secrets,” Assistant Director Coleman. “This case is especially egregious as it demonstrates the actions of a foreign intelligence service to integrate a covert intelligence agent into American society under the cover of an employee in the financial sector. Espionage is as pervasive today as it has even been, and FBI counterintelligence teams will continue to aggressively investigate and expose hostile foreign intelligence activities conducted on U.S. soil.”
According to the complaint unsealed in Manhattan federal court today:
Buryakov worked in the United States as an agent of Russia’s foreign intelligence agency, known as the SVR. Buryakov operated under “non-official cover,” meaning he entered and remained in the United States as a private citizen, posing as an employee in the Manhattan office of a Russian bank. SVR agents operating under such non-official cover – sometimes referred to as NOCs – typically are subject to less scrutiny by the host government, and, in many cases, are never identified as intelligence agents by the host government. As a result, a NOC is an extremely valuable intelligence asset for the SVR.
Federal law prohibits individuals from acting as agents of foreign governments within the United States without prior notification to the U.S. Attorney General. Department of Justice records indicate that Buryakov has never notified the U.S. Attorney General that he is, in fact, an agent of Russia.
Sporyshev and Podobnyy are also SVR agents who worked in the United States to gather intelligence on behalf of Russia by posing as official representatives of Russia. From Nov. 22, 2010, to Nov. 21, 2014, Sporyshev served as a trade representative of the Russian Federation in New York. From Dec. 13, 2012, to Sept. 12, 2013, Podobnyy served as an attaché to the Permanent Mission of the Russian Federation to the United Nations. Based on their official government postings on behalf of Russia, Sporyshev and Podobnyy are exempt from notifying the U.S. Attorney General of the true nature of their work. However, that exemption does not permit them to conspire with, or aid and abet, Buryakov in his work as an unregistered agent of Russia operating within the United States.
The intelligence-gathering efforts of Sporyshev and Podobnyy included, among other things, attempting to recruit New York City residents as intelligence sources for Russia; tasking Buryakov to gather intelligence; and transmitting intelligence reports prepared by Buryakov back to SVR headquarters in Moscow. Specifically, during the course of the charged offenses, Sporyshev was responsible for relaying assignments from the SVR to Buryakov, and Sporyshev and Podobnyy were responsible for analyzing and reporting back to the SVR about the fruits of Buryakov’s intelligence-gathering efforts.
The directives from the SVR to Buryakov, Sporyshev and Podobnyy, as well as to other covert SVR agents acting within the United States, included requests to gather intelligence on, among other subjects, potential U.S. sanctions against Russian banks and the United States’ efforts to develop alternative energy resources.
Clandestine Meetings and Communications
During the course of their work as covert SVR agents in the United States, Buryakov, Sporyshev and Podobnyy regularly met and communicated using clandestine methods and coded messages, in order to exchange intelligence-related information while shielding their associations with one another as SVR agents. These efforts were designed, among other things, to preserve their respective covers as an employee of a bank in Manhattan (Buryakov), a trade representative of the Russian Federation in New York (Sporyshev) and an attaché to the Permanent Mission of the Russian Federation to the United Nations (Podobnyy). In particular, the defendants worked to safeguard Buryakov’s work as a NOC.
Sporyshev and Podobnyy acted as covert intermediaries for Buryakov to communicate with the SVR on intelligence-related matters. As an agent posing as someone without any official ties to the Russian government or the SVR, Buryakov was unable to access the SVR New York Office – which is located within an office maintained by Russia in New York City – without potentially alerting others to his association with the SVR. As such, Buryakov required the assistance of other SVR agents, like Sporyshev and Podobnyy, to exchange communications and information with the SVR through the communications systems located in the SVR New York Office.
From as early as March 2012 through as recently as mid-September 2014, the FBI has conducted physical or electronic surveillance of Buryakov and Sporyshev engaging in over 48 brief meetings, several of which involved Buryakov passing a bag, magazine or slip of paper to Sporyshev. These meetings typically took place outdoors, where the risk of effective surveillance was reduced relative to an indoor location.
These meetings were nearly always preceded by a short telephone call between Buryakov and Sporyshev, during which one of the men typically told the other that he had an item to give to him. Typically, during these telephone calls, which were intercepted by the FBI, the item in question was referred to as some non-specific ticket, book, list or other ordinary item (e.g., umbrella or hat).
Subsequently, at each meeting surveilled by the FBI, Buryakov and Sporyshev met and sometimes exchanged documents or other small items. Notably, despite discussing on approximately 12 occasions the need to meet to transfer “tickets,” Buryakov and Sporyshev, were – other than one occasion where they discussed going to a movie – never observed attending, or discussing in any detail, events that would typically require tickets, such as a sporting event or concert. In fact, Buryakov and Sporyshev used this coded language to signal that they needed to meet, and then met to exchange intelligence information.
Attempts by Sporyshev and Podobnyy to Recruit Intelligence Sources in New York City
In numerous recorded communications, Sporyshev and Podobnyy discussed their attempts to recruit U.S. residents, including several individuals employed by major companies, and several young women with ties to a major university located in New York City (University-1), as intelligence sources for the SVR. On these recordings, the defendants discussed the potential value of these sources and identified particular sources by use of a “source name,” which appears to be a coded name. In addition, during these recordings, Sporyshev and Podobnyy discussed the efforts of other SVR agents to recruit a number of other Russian-origin individuals associated with University-1 as intelligence sources.
For example, Sporyshev and Podobnyy discussed Podobnyy’s efforts to recruit a male working as a consultant in New York City as an intelligence source. During this conversation, Podobnyy explained his source recruitment method, which included cheating, promising favors and then discarding the intelligence source once the relevant information was obtained by the SVR: “This is intelligence method to cheat. . . . You promise a favor for a favor. You get the documents from him and tell him to go [expletive] himself.”
In other recorded conversations, Sporyshev and Podobnyy made clear that they worked for the SVR. For example, on Jan. 31, 2013, Sporyshev and another SVR agent not charged in the complaint (CC-1) had a discussion inside the SVR New York Office about their contracts with the SVR. Sporyshev stated that, “Everyone has a five-year contract,” and explained, in response to CC-1’s question about reimbursement for the travel of SVR agents’ family members, that “travel for military personnel and their families on authorized home leave is paid, and in our, in our SVR, this, the payment for getting to and from the duty station.” In addition, on April 25, 2013, Sporyshev and Podobnyy discussed the use of nontraditional cover for Russian intelligence officers and, in particular, the Illegals program that ended with the arrest of 10 “deep cover” SVR agents in July 2010.
Buryakov’s Intelligence Taskings
Sporyshev was responsible for relaying intelligence assignments from the SVR to Buryakov. The FBI obtained electronic recordings of several conversations relating to such intelligence directives being communicated to and carried out by Buryakov in his position as an SVR agent acting under non-official cover. For example, on May 21, 2013, Sporyshev called Buryakov to ask for Buryakov’s help in formulating questions to be used for intelligence gathering purposes by others associated with a leading Russian state-owned news organization (the News Organization). Buryakov responded by supplying Sporyshev with a particular line of questioning about the New York Stock Exchange for use by the News Organization.
Buryakov’s Receipt of Purported Official U.S. Government Documents
In the summer of 2014, Buryakov met numerous times with a confidential source working for the FBI (CS-1). CS-1 posed as the representative of a wealthy investor looking to develop casinos in Russia. During the course of these meetings, and consistent with his interests as a Russian intelligence agent, Buryakov demonstrated his strong desire to obtain information about subjects far outside the scope of his work as a bank employee. During these meetings, Buryakov also accepted documents that CS-1 claimed he had obtained from a U.S. government agency and which purportedly contained information potentially useful to Russia, including information about U.S. sanctions against Russia.
* * *
Buryakov, 39, Sporyshev, 40, and Podobnyy, 27, are charged on two counts. The first count charges the defendants with participating in a conspiracy for Buryakov to act in the United States as an agent of a foreign government without first notifying the Attorney General, and carries a statutory maximum penalty of five years in prison. The second count charges Buryakov with acting in the United States as an agent of a foreign government without first notifying the Attorney General, and charges Sporyshev and Podobnyy with aiding and abetting that offense. The second count carries a statutory maximum penalty of 10 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
The Attorney General is grateful for the investigative work of the FBI’s Counterintelligence Division.
The prosecution is being handled by Senior Trial Attorney Heather Schmidt of the National Security Division’s Counterespionage Section and Assistant U.S. Attorneys Adam Fee, Ian McGinley and Anna M. Skotko for the Southern District of New York’s Terrorism and International Narcotics Unit.
The charges in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Buryakov, et al Complaint
Police Officer in Fulton, New York, Sentenced for Assaulting a Man in His CustodyRead the Press Release
Joseph Arigo, 47, a former sergeant with the Fulton Police Department in Fulton, New York, was sentenced today in federal court to 15 months in prison and three years probation for beating a handcuffed man inside the Fulton police station. In September 2014, Arigo pleaded guilty in federal court to one count of deprivation of rights under color of law.
According to court documents filed in connection with his guilty plea, Arigo was sitting at the sergeant’s desk on June 28, 2014, when a handcuffed man, G.B., was brought into the police station. G.B. was yelling, but was not physically threatening any officers or himself. Arigo pulled the video camera out of the wall to stop it from recording, walked into the room where G.B. was, shoved his head into the bench and punched him in the head multiple times. G.B. suffered cuts and bruising, lost consciousness and required seven stitches. After the incident, Arigo lied to his supervisors and in two official reports in an attempt to conceal his actions.
This case was investigated by the Syracuse Resident Agency of the Albany Division of the FBI and was prosecuted by Trial Attorney Dana Mulhauser of the Civil Rights Division of the Department of Justice.
Palm Beach County Resident Pleads Guilty Under the Espionage Act and Computer Fraud and Abuse Act for Accessing and Removing Classified Information from Military ComputersRead the Press Release
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Wifredo A. Ferrer for the Southern District of Florida, Special Agent in Charge George Piro for the FBI’s Miami Field Office and the members of the South Florida Joint Terrorism Task Force announced that a West Palm Beach resident pleaded guilty to willful retention of classified national defense information pursuant to the Espionage Act, one count of computer intrusion pursuant to the Computer Fraud and Abuse Act, and one count of conspiracy to commit naturalization fraud, while employed as a computer systems administrator at a U.S. Military installation in Honduras.
Christopher R. Glenn, 34, gained unauthorized access to classified computer files containing national defense information that belonged to the Department of Defense and U.S. Southern Command’s Joint Task Force Bravo in Soto Cano Air Base, Honduras. Once Glenn accessed those files, he copied classified information stored under the Joint Task Force Commander’s account, which information he retained.
Glenn also conspired with his wife, Khadraa A. Glenn, 28, to commit naturalization fraud for her benefit by fabricating fraudulent documents and submitting false statements and the documents to the U.S. Citizenship and Immigration Services (USCIS). Khadraa A. Glenn previously pleaded guilty to naturalization fraud conspiracy and was sentenced on Oct. 7, 2014.
“Christopher Glenn accessed, copied and retained classified information that belonged to the Department of Defense and the U.S. Southern Command’s Joint Task Force, without authorization,” said Assistant Attorney General Carlin. “Systems administrators occupy a place of unique trust in an organization due to their extensive access to the cyber systems they maintain. With today’s plea, Mr. Glenn is being held accountable for his violation of that trust.”
“Obtaining national defense information when you are not entitled to it is a serious threat to our national security,” said U.S. Attorney Ferrer. “In committing this crime, Christopher Glenn abused his position of trust. Violations of the espionage act and computer intrusion are unacceptable and we will continue to investigate and seek to hold accountable those who engage in it.”
“The Cold War may be over, but espionage, spies trying to steal our nation’s most valuable secrets are still at it,” said Special Agent in Charge Piro. “More than ever, the FBI remains vigilant to protect critical national secrets and assets. If you are aware of this type of activity, report it immediately to the FBI.”
Glenn is scheduled to be sentenced by U.S. District Judge Kenneth A. Marra, on April 17, 2015.
Assistant Attorney General Carlin would like to thank the investigative efforts of the FBI, U.S. Army’s 470th Military Intelligence Brigade, U.S. Army’s Criminal Investigations Division, the U.S. Southern Command (SOUTHCOM), USCIS, Internal Revenue Service, Department of Homeland Security and the South Florida Joint Terrorism Task Force. The case is being prosecuted by Trial Attorney Christian Ford of the Counterespionage Section of the Department of Justice’s National Security Division and Assistant U.S. Attorney Ricardo Del Toro of the Southern District of Florida.
Michigan Man Sentenced to Prison for Home Mortgage Fraud ConspiracyRead the Press Release
A Northville, Michigan, resident was sentenced today in U.S. District Court for the Eastern District of Michigan to serve 15 months in prison, five years of supervised released and was ordered to pay $394,000 in restitution to five defrauded banks for committing bank fraud, the Department of Justice announced.
Wasseem Shamoun pleaded guilty on Aug. 12, 2014, to conspiracy to commit bank fraud. The superseding indictment alleged that from approximately January 2006 to December 2008, Shamoun and his six other co-defendants conspired to defraud financial lending institutions to obtain residential mortgage loans by providing fraudulent information on loan applications. According to court documents, the defendants devised a scheme to purchase single-family homes for approximately $5,000 to $40,000 each, and then recruited straw buyers to submit fraudulent loan applications for home mortgages substantially above the original purchase price. The loan applications falsified the straw buyers’ assets, income and down payment, among other things. The straw buyers were paid fees for their participation, which were sometimes falsely disguised as “landscaping” or “construction” fees. The conspirators made a substantial profit and paid themselves commissions on the sales. Every home purchased and sold as part of the scheme went into foreclosure. According to court documents, Shamoun’s role in the conspiracy was to sell properties to the straw buyers. He was directly responsible for a criminal loss of approximately $394,000.
In addition to the seven individuals indicted in the case, two others connected to the scheme have pleaded guilty. One individual is a straw buyer of multiple properties who received substantial fees as part of the scheme. The other individual is a mortgage broker who assisted in the preparation of the false mortgage loan applications. Both are awaiting sentencing in their cases.
This case was investigated by the FBI, IRS-Criminal Investigation and the Drug Enforcement Administration. Senior Litigation Counsel Corey Smith and Trial Attorney Mark S. McDonald of the Justice Department’s Tax Division prosecuted the case.
Michigan Company President Sentenced for Fraud and Tax EvasionRead the Press Release
A Plymouth, Michigan, resident was sentenced today in the U.S. District Court for the Eastern District of Michigan to serve 42 months in prison to be followed by one year of supervised release for committing wire fraud and tax evasion, the Justice Department and the Internal Revenue Service (IRS) announced.
According to court documents, Michael Stover was the president of Omni Facility Services (Omni), a janitorial company located in Southfield, Michigan. As part of his responsibilities as president, Stover approved and paid subcontractors of Omni. Stover incorporated a fictitious subcontractor called Envirovac Inc., and from 2004 through 2010, he created fictitious invoices from Envirovac that billed Omni for work that was never performed. Stover then approved payment of those invoices on Omni’s behalf. The payments to Envirovac actually went to Stover. Over the course of this scheme, Stover embezzled approximately $2.178 million from Omni. On his federal income tax return for 2007, Stover failed to report the income that he had embezzled from Omni.
The case was investigated by special agents of IRS-Criminal Investigation. Trial Attorneys Yael T. Epstein and Kenneth C. Vert of the Tax Division prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
Las Vegas Federal Court Permanently Bars Husband and Wife from Preparing Federal Tax Returns for Others and from Giving any Advice Related to Federal TaxesRead the Press Release
A federal court in Las Vegas has permanently barred a husband and wife from preparing federal tax returns for others and from providing any advice related to federal taxes, the Justice Department announced today.
Judge Richard F. Boulware II entered the injunction order after sanctioning Wayne Reeves and Diane Vaoga for willfully refusing to comply with previous court orders directing them to participate in discovery. The court had warned Reeves and Vaoga that sanctions, including entry of the injunction against them, might be imposed for failure to comply with court orders.
In its injunction order, the court found that Reeves orchestrated and promoted, and that Vaoga assisted in, an illegal tax scheme. According to the order, Reeves advised clients to set up sham trusts and have their wages directed into accounts for those trusts as a way to improperly reduce their tax liability. Reeves also instructed clients to name him, Vaoga or another trusted third party as a signatory on their trust accounts. Both Reeves and Vaoga acted as trustees and sent clients pre-signed blank checks to allow them access to their money, collecting fees in the process. Reeves and Vaoga advised clients that there were numerous tax benefits associated with these trusts, including that the income from the trusts was nontaxable and did not need to be reported on tax returns; that clients could deduct personal expenses and count them as business expenses of the trusts; that clients worked for the trusts and thus were paid in tax-deductible management fees; that clients no longer needed to file federal tax returns; and that there were no problems with the Internal Revenue Service (IRS) in making these financial arrangements. The court found that Reeves engaged in this conduct knowing that such actions would improperly result in the understatement of his customers’ tax liability.
Return preparer fraud is one of the IRS’s Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers and tax scheme promoters. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Historic $5.15 Billion Environmental and Tort Settlement with Anadarko Petroleum Corp. Goes into EffectRead the Press Release
A historic settlement reached with Anadarko Petroleum Corp. and Kerr McGee has gone into effect, allowing funds to be disbursed for cleanups across the country, announced Assistant Attorney General John C. Cruden for the Department of Justice’s Environment and Natural Resources Division, U.S. Attorney Preet Bharara of the Southern District of New York, and Assistant Administrator Cynthia Giles of the U.S. Environmental Protection Agency (EPA).
This settlement resolves fraudulent conveyance claims brought by the United States and the Anadarko Litigation Trust, the trust against Anadarko Petroleum Corporation and its affiliates, the defendants, in the bankruptcy of Tronox Inc. and its subsidiaries. Today, pursuant to the settlement agreement, the defendants paid $5.15 billion, plus interest, to the trust. The trust is expected to distribute more than $4.4 billion to fund environmental clean-up and for environmental claims. The settlement constitutes the largest payment for the clean-up of environmental contamination ever obtained in a lawsuit brought by the Department of Justice.
“This recovery will lead to cleanups across the country that will undo lasting damage to the environment, including contamination of tribal lands, by Kerr-McGee’s businesses,” said Assistant Attorney General Cruden. “This result emphatically demonstrates the Justice Department’s commitment to environmental justice for all Americans, and it fulfills the department’s promise to hold accountable those who pollute and those who try to foist their responsibility for cleanup on the American taxpayer.”
“The Kerr-McGee Corporation spent decades despoiling our nation’s natural resources, leaving a toxic legacy for communities across the nation, from Sidney, New York, to the Navajo nation,” said U.S. Attorney Bharara. “Then, Kerr-McGee tried to escape the consequences of its misdeeds by transferring its most valuable assets to affiliates, leaving an insolvent shell behind, unable to pay its environmental liabilities. As today’s historic payment shows, the government will not allow polluters to escape paying for the damage they inflict on our land, water and people, and we will hold accountable those who attempt to shield themselves from responsibility behind improper corporate transactions.”
“If you pollute the environment, you should be responsible for cleaning it up,” said EPA Assistant Administrator Giles. “From the Navajo Nation to low income neighborhoods across America, more than $4.4 billion will be put to work cleaning up toxic pollution. This historical environmental cleanup will have a lasting impact on American communities.”
As noted by U.S. District Judge Katherine B. Forrest, in approving the settlement in November, this case arises from a “series of transactions by the Kerr-McGee Corp. that resulted in the spin-off of Tronox, which Kerr-McGee left saddled with the massive environmental and tort liabilities it had accumulated over the course of decades of operating in the chemical, mining, and oil and gas industries, but without sufficient assets with which to address these liabilities.” For this reason, as the district court explained, both the United States and the Tronox estate, now represented by the trust, brought fraudulent conveyance claims against the defendants.
On April 3, 2014, the United States announced this settlement resolving the claims against the defendants, which was then subject to a period of public comment and judicial approval. After receiving and considering comments from the public, the United States sought approval of the settlement agreement, and on Nov. 10, 2014, the district court approved the settlement as “fair and reasonable.” The deadline for any appeals from the district court’s decision passed on Jan. 20, 2015, without any appeals having been taken and therefore the settlement agreement went into effect on Jan. 21, 2015.
Today, under the settlement agreement, the defendants paid $5.15 billion, plus interest from Apr. 3, 2014, to the trust. Pursuant to the terms of prior agreements in the Tronox bankruptcy, the government estimates that more than $4.4 billion of this recovery will be paid to the United States, state governments, the Navajo nation and four environmental response trusts created in the bankruptcy to clean up contaminated property. An estimated more than $600 million will be paid to a trust created to pay tort victims.
This case was handled by the Environmental Protection Unit and the Tax and Bankruptcy Unit of the Office’s Civil Division. Assistant U.S. Attorney Robert William Yalen is in charge of the case, which he handled along with Assistant U.S. Attorney Joseph Pantoja and Alan S. Tenenbaum, Katherine Kane, Frederick S. Phillips, Marcello Mollo, and Erica Pencak of the Department of Justice’s Environment and Natural Resources Division.
Department of Justice and Federal Trade Commission to Hold Public Workshop on Examining U.S. Health Care CompetitionRead the Press Release
The Department of Justice and the Federal Trade Commission (FTC) will host a joint public workshop, Examining Health Care Competition, on Feb. 24 and 25, 2015, in the Constitution Center Auditorium located at 400 7th Street, S.W., Washington, D.C., 20024.
The workshop will study recent developments related to health care provider organization and payment models, with an emphasis on how they may affect competition in the provision of health care services. Specific discussion topics may include early observations regarding accountable care organizations; alternatives to traditional fee-for-service payment models; trends in provider consolidation; trends in provider network and benefit design strategies, as well as contracting practices and regulatory activity that may enhance or undermine these strategies; and early observations regarding health insurance exchanges.
The workshop will be webcast live on the FTC’s website. Registration information, an agenda, directions to the FTC Conference Center and a list of speakers will be available on the event web page. Advance registration is not required, but is strongly encouraged.
Public comments should be submitted by Feb. 16, 2015, to be considered for the workshop. Interested persons can continue to submit comments through April 30, 2015. Suggested comment topics, and instructions on how to submit comments online and by mail, can be found in the Federal Register notice.
Reasonable accommodations for people with disabilities who wish to attend the workshop in person are available upon request. Requests should be submitted via email to [email protected] or by calling Lara Kittelson at 202-326-3388. Requests should be made in advance. Please include a detailed description of the accommodation needed and provide contact information.
Press contacts:
Department of Justice
Office of Public Affairs
Emily Pierce
202-514-2007Federal Trade Commission
Office of Public Affairs
Betsy Lordan
202-326-3707Staff contacts:
Department of Justice
Antitrust Division, Office of Legal Policy
Patrick M. Kuhlmann
202-305-4639Federal Trade Commission
Office of Policy Planning
Stephanie A. Wilkinson
202-326-2084Colorado Woman Sentenced for Conspiracy to Provide Material Support to a Designated Foreign Terrorist OrganizationRead the Press Release
Assistant Attorney General for National Security John P. Carlin, U.S. Attorney John Walsh of the District of Colorado and Special Agent in Charge Thomas Ravenelle of the FBI’s Denver Division announced that Shannon Conley, 19, of Arvada, Colorado, was sentenced today by U.S. District Court Judge Raymond P. Moore to serve 48 months in federal prison, followed by 3 years on supervised release with 100 hours of community service, for conspiracy to provide material support to a designated foreign terrorist organization. Conley, who appeared at the hearing in custody, was remanded at its conclusion.
Conley was first charged by criminal complaint on April 9, 2014. She was indicted by a federal grand jury in Denver on Sept. 10, 2014.
According to court documents, including the stipulated facts in the plea agreement, from about February 2014 and continuing through April 8, 2014, Conley and a co-conspirator unlawfully worked together and with other individuals to provide and attempt to provide material support and resources to a designated foreign terrorist organization, specifically Al-Qaeda (AQ) and Al-Qaeda in Iraq (AQI), aka the Islamic State of Iraq (ISI), aka the Islamic State of Iraq and Al Sham (ISIS), aka the Islamic State of Iraq and the Levant (ISIL).
The conspiracy was accomplished, in part, when Conley met the co-conspirator on the Internet. During their communications, they shared their view of Islam as requiring participation in violent jihad. The co-conspirator communicated to Conley that he was an active member of a group fighting in Syria known as ISIS. The two then decided to become engaged and worked together to have Conley travel to Syria to join her new fiancé. Before traveling to Syria, Conley refined and obtained additional training and skills in order to provide support and assistance to any AQ and/or ISIS fighter. Conley also intended to fight if it became necessary to do so.
In furtherance of the conspiracy, Conley joined the U.S. Army Explorers (USAE) to be trained in U.S. military tactics and in firearms. She traveled to Texas and attended the USAE training. She also obtained first aid/nursing certification and National Rifle Association certification. Conley knew that ISIS was a designated foreign terrorist organization. In fact, on numerous occasions, Special Agents with the FBI met with her in attempts to persuade her not to carry out her plans to travel overseas to provide support to a foreign terrorist organization and to engage in violent jihad. On March 29, 2014, the co-conspirator, together with others, arranged for an airline ticket to be purchased for Conley to travel to Turkey, departing from Denver on April 8, 2014. On April 8, 2014, Conley traveled to Denver International Airport and attempted to board the flight to Turkey. She was then arrested by FBI agents.
A subsequent search of Conley’s home revealed DVDs of Anwar Al-Awlaki lectures and a number of books and articles about AQ, other terrorist groups and jihad. Agents also recovered shooting targets labeled with the number of rounds fired and distances.
“Conspiring to providing material support to a foreign terrorist organization is a serious federal crime,” said U.S. Attorney John Walsh. “The defendant in this case got lucky. The FBI arrested her after determining that she had been radicalized and planned to travel to Syria to support the brutal foreign terrorist organizations operating there. Had she succeeded in her plan to get to Syria, she would likely have been brutalized, killed or sent back to the United States to commit other crimes. Today’s sentence underscores the seriousness of defendant’s conduct, but pales in comparison to the penalty she would have paid had she not been stopped.”
“This sentencing highlights the rapidly changing, shrinking nature of the world and the implications for law enforcement and public safety,” said Special Agent in Charge Thomas Ravenelle. “Terrorist groups now have the ability to directly attract and even recruit U.S. residents to commit violence or provide other support on their behalf. Anyone in our community who takes deliberate steps to commit federal crimes in support of a declared terrorist organization will have those steps disrupted and will be arrested and prosecuted whenever appropriate and necessary in order to preserve the safety of our community.”
This case was investigated by the FBI and the Arvada Police Department.
The defendant was prosecuted by Assistant U.S. Attorney Greg Holloway of the District of Colorado, with the assistance of Jennifer Levy of the National Security Division’s Counterterrorism Section.
Alleged Terrorist, Charged with Murder of Five American Soldiers, Extradited to United StatesRead the Press Release
Defendant Allegedly Aided Suicide Bomb Attack on U.S. Base in Iraq
U.S. Attorney Loretta E. Lynch for the Eastern District of New York, Assistant Attorney General for National Security John P. Carlin, Assistant Director-in-Charge George Venizelos of the FBI’s New York Field Office and Commissioner William J. Bratton of the New York City Police Department announced that tomorrow, Jan. 24, 2015, Faruq Khalil Muhammed ‘Isa, aka “Faruq Khalil Muhammad ‘Isa,” “Sayfildin Tahir Sharif,” and “Tahir Sharif Sayfildin,” will have his initial appearance at the federal courthouse in Brooklyn, New York, on charges of conspiring to kill Americans abroad; and providing material support to a terrorist conspiracy to kill Americans abroad. ‘Isa was extradited to the United States from Canada.
According to court documents, the defendant is charged in connection with his support for a multinational terrorist network that conducted multiple suicide bombings in Iraq. According to the complaint, filed on Jan. 14, 2011, in the Eastern District of New York, the defendant assisted in orchestrating an attack on the United States Military’s Forward Operating Base Marez (FOB Marez) in Mosul, Iraq, on April 10, 2009. A truck laden with explosives drove to the gate of FOB Marez and exchanged fire with Iraqi police officers guarding the base and then with an American convoy exiting the base. The truck detonated alongside the last vehicle in the U.S. convoy, leaving a 60-foot crater in the ground. Five American soldiers were killed in the blast. They are: Staff Sergeant Gary L. Woods, 24, of Lebanon Junction, Kentucky; Sergeant First Class Bryan E. Hall, 32, of Elk Grove, California; Sergeant Edward W. Forrest Jr., 25, of St. Louis, Missouri; Corporal Jason G. Pautsch, 20, of Davenport, Iowa; and Army Private First Class Bryce E. Gaultier, 22, from Cyprus, California.
“Today’s extradition demonstrates to those who orchestrate violence against our citizens and our soldiers that there is no corner of the globe from which they can hide from the long reach of the law,” said U.S. Attorney Lynch. “We will continue to use every available means to bring to justice those who are responsible for the deaths of American servicemen and women who paid the ultimate price in their defense of this nation.”
“Faruq Khalil Muhammed ‘Isa is alleged to have helped orchestrate an attack that killed five U.S. soldiers at the Forward Operating Base Marez in Mosul, Iraq, in 2009,” said Assistant Attorney General Carlin. “The families of these five Americans and all who have lost loved-ones to acts of terrorism should know that we will never cease seeking to hold terrorists accountable for their acts. I want to thank the many agents, analysts and prosecutors who are responsible for this matter.”
“As alleged, Faruq Khalil Muhammad ‘Isa was involved in the most callous act: a suicide bombing murdering U.S. soldiers in Iraq,” said Assistant Director in Charge Venizelos. “Our memory is long, and our reach is longer. Today we hope to bring some measure of justice to the families of those five servicemen who sacrificed their lives in defense of this nation.”
“I want to commend the United States Attorney Loretta Lynch and her team for working closely with the NYPD and the FBI to extradite this individual who is allegedly responsible for the death of soldiers sworn to protect and serve,” said Commissioner Bratton. “We hope today’s extradition will bring some closure to the families.”
The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The government’s case is being prosecuted by Assistant U.S. Attorneys Zainab Ahmad, Alexander Solomon and Peter Baldwin, with assistance provided by the Justice Department’s Counterterrorism Section and Office of International Affairs. The department extends its grateful appreciation to the Canadian government for its assistance and cooperation in the extradition.
Faruq Complaint
Faruq Indictment