District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Justice Department and City of St. Anthony Village Resolve Lawsuit over Denial of Permit for Islamic CenterRead the Press Release
City of St. Anthony Village Agrees to Allow Abu Huraira Islamic Center a Permit to Worship in St. Anthony Business Center
Acting Assistant Attorney General for Civil Rights Vanita Gupta and U.S. Attorney for the District of Minnesota Andrew M. Luger today announced a settlement agreement in principle between the Department of Justice and the City of St. Anthony Village, Minnesota, resolving allegations that the city violated the Religious Land Use and Institutionalized Persons Act of 2000 (RLUIPA). In June 2012, the City of St. Anthony Village denied Abu-Huraira Islamic Center’s application for a conditional use permit (CUP) to use the basement of the St. Anthony Business Center for religious assembly. The agreement, which must still be approved by the Saint Anthony City Council and a federal district judge in Minneapolis, will resolve the lawsuit filed in August, 2014 by the United States against the City of St. Anthony Village.
“The Department of Justice will remain vigilant to ensure that the freedom to worship is a reality for all," said Acting Assistant Attorney General Vanita Gupta. “We are pleased that the city worked with us to ensure that the rights of this congregation and others will be protected.”
“Four months ago, my office filed a civil rights lawsuit to protect the religious freedoms of the congregants of the Abu-Huraira Islamic Center,” said U.S. Attorney Luger. “We made it clear then that an injustice had been done to these Somali Minnesotans. After lengthy negotiations involving attorneys from my office and the Department of Justice, St. Anthony Village, and Abu-Huraira, we have reached a resolution that respects the Constitution and provides the worship space that Abu-Huraira sought. This agreement would not have been possible without the guiding hand of Magistrate Judge Jeffrey J. Keyes, whose wisdom and hard work brought us to this resolution. Today we all join together to announce with great pride that the Abu-Huraira Islamic Center has a new home in St. Anthony Village.”
The city has agreed, in principle, to create a Planned Use Development (PUD) at the property in question. The PUD will allow Abu-Huraira to use the St. Anthony Business Center for religious worship. The agreed upon language also stipulates that the city of St. Anthony Village will not treat Abu-Huraira or any other religious groups in a discriminatory manner by application of its zoning laws. The agreement also indicates that elected leaders, managers, and certain city employees will participate in educational training about requirements of RLUIPA. The city of St. Anthony Village will also make RLUIPA information available to the public through its website and will report periodically to the Justice Department.
On Aug. 27, 2014, the United States filed a lawsuit to enforce Abu-Huraira Islamic Center’s constitutional rights under RLUIPA and require the city of St. Anthony Village to allow Abu-Huraira’s religious assembly. The United States’ complaint alleged that denial of the permit imposed a substantial burden on Abu-Huraira’s exercise of religious worship. Moreover, the denial unlawfully disfavored a religious use, because the light industrial district where Abu-Huraira’s building is located allowed other, non-religious assemblies.
The United States specifically alleged that the denial of the conditional use permit substantially burdened members of Abu-Huraira in practicing their faith. Abu-Huraira members’ ability to exercise their religion was limited by their worship site options, including, but not limited to, the fact that members in the northern Twin Cities were burdened from praying together based on the length of time to travel to worship centers in south Minneapolis. Moreover, prayer space at locations in south Minneapolis were too small to accommodate members, many of whom often prayed in hallways or entryways, and prayer sessions were held in shifts to accommodate crowds.
After conducting a search for adequate prayer space lasting nearly three years, Abu-Huraira entered into a purchase agreement for the St. Anthony Business Center. Abu-Huraira chose the property because it is centrally located, has a basement measuring approximately 11,600 square feet and has ample parking for its congregation. The business center is in St. Anthony’s “light industrial” district, which permitted conditional uses for “assemblies, meeting lodges, and convention halls” at that time.
In February 2012, after consulting St. Anthony Village officials, Abu-Huraira applied for a CUP for assembly. The permit was denied on June 12, 2012, by a St. Anthony Village City Council vote of 4-1.
Attorneys from the Civil Rights Division of the United States Department of Justice and Assistant United States Attorneys for the District of Minnesota, Bahram Samie, Ana Voss, and Gregory Brooker, represented the United States in this matter.
RLUIPA, enacted in 2000, contains multiple provisions prohibiting religious discrimination and protecting against unjustified burdens on religion exercise. Persons who believe that they been subjected to religious discrimination in land use or zoning may contact the Housing and Civil Enforcement Section of the Justice Department’s Civil Rights Division at 1-800-896-7743. More information about RLUIPA, including a report on the first ten years of its enforcement, may be found at http://www.justice.gov/crt/about/hce/rluipaexplain.php.
Italian Shipping Company Pleads Guilty to Environmental Crimes for Concealing Vessel PollutionRead the Press Release
An Italian shipping firm based in Genoa, Italy, pleaded guilty to violating the Act to Prevent Pollution from Ships by falsifying required ships’ documents to hide the fact that the ship had illegally discharged oil contaminated waste into the ocean on multiple occasions, announced the Department of Justice Environment and Natural Resources Division, the U.S. Attorney’s Office for the Middle District of Florida, and the U.S. Coast Guard.
Carbofin S.PA. (Carbofin) agreed to plead guilty to three counts of violating the Act to Prevent Pollution from Ships related to the deliberate concealment of vessel pollution from its ship, the M/T Marigola, which called on Tampa on three occasions in 2013 and 2014 with a falsified oil record book. Under the terms of its plea agreement, Carbofin agreed to pay a $2.75 million criminal penalty, $600,000 of which will be designated as community service and used to support the protection and preservation of natural resources located in and adjacent to the Florida National Keys Marine Sanctuary.
Alessandro Messore, who served as the second engineer aboard the M/T Marigola, pleaded guilty to one count of violating the Act to Prevent Pollution from Ships for his role in the offense. A second officer, Carmelo Giano, who served as the ship’s chief engineer and was the person responsible for maintaining the ship’s oil record book, is expected to enter a plea to one count of violating the Act to Prevent Pollution from Ships on Friday.
According to documents filed in this case and statements made in court:
Carbofin owns and operates a fleet of commercial liquefied gas vessels, including the M/T Marigola. The investigation began on April 16, 2014, when the vessel called on the Port of Tampa to unload its cargo. U.S. Coast Guard inspectors boarded the ship to conduct a Port State Control examination. During that examination, two crewmembers approached the inspectors and provided them with a cell phone video that showed a black hose connected between two points in the engine room. After reviewing the video and speaking with the crewmembers, the inspectors were able to determine that the hose, known in the maritime industry as a “magic hose,” had been used on multiple occasions to discharge sludge, waste oil, and machinery space bilge water directly into the sea, bypassing the ship’s required pollution prevention equipment. Crewmembers told the inspectors that Giano has directed them on at least two occasions to discharge sludge, waste oil, and bilge water directly into the sea, while in international waters. Even though required to be, none of the magic hose discharges were recorded as required in the ship’s official oil record book maintained by Giano, thereby giving the false and misleading impression that all of the ship’s sludge, waste oil and machinery space bilge water were being properly treated and disposed of. The investigation also revealed that Messore, at the direction of Giano, had on several occasions ordered the ship’s engineering cadet to hook up the magic hose and then personally discharged discharge sludge, waste oil, and machinery space bilge water directly into the sea, under the cover of darkness, while the vessel was in international waters.
On ships like the M/T Marigola oily engine room waste known as sludge, waste oil, and bilge water are generated on a regular basis. Sludge is the by-product of the purification of the vessel’s lubrication and fuel oils that are used in electrical generation machinery and the main propulsion engine. Waste oil is the result of oil leakages from various machinery as well as from replacing lubrication oils in the machinery. Bilge water refers to the accumulation in the bilge, which is the bottom-most portion of the engine room, of oil and water that drips and leaks from the machinery. Sludge and waste oil can only be legally disposed of in two ways: (1) incineration in the vessel’s onboard incinerator; or (2) disposal to a barge or other shore-based disposal facility. Bilge water can also be disposed of in only two ways: (1) process through the onboard oil water separator and oil content meter resulting in an overboard discharge of water with no more than 15 parts per million (“ppm”) of oil, or (2) disposal to a barge or other shore-based disposal facility. Bilge water is transferred to, and stored in, the vessel’s bilge water holding tank. All disposals and transfers of sludge, waste oil, or bilge water, whether through incineration, use of the oil water separator, or transfer to a shore-based facility, must be recorded by the person or persons in charge of those operations in the vessel’s oil record book. On the M/T Marigola, chief engineer Giano maintained the oil record book and recorded all entries therein.
The case was investigated by the Coast Guard Investigative Service. The case was prosecuted by the U.S. Attorney’s Office for the Middle District of Florida and the Environmental Crimes Section of the U.S. Department of Justice.
Iowa Man Sentenced to 20 Years in Prison for Using his Purported Photography Business to Entice a 10-Year-Old Girl to Pose Naked OnlineRead the Press Release
An Iowa man was sentenced to 20 years in prison today in the District of Massachusetts for enticing a 10-year-old girl to engage in sexually explicit conduct online, which he directed and watched live via a webcam.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Inspector in Charge Shelly Binkowski of the U.S. Postal Inspection Service (USPIS) made the announcement after sentencing by U.S. District Court Chief Judge Patti B. Saris of the District of Massachusetts.
Joshua Dunfee, 32, of Oxford Junction, Iowa, pleaded guilty in March 2014 to enticing a child to engage in illicit sexual activity and using a child to produce child pornography.
According to admissions in connection with his guilty plea, Dunfee posed as “John” from “Hunt Photography” on Facebook and communicated with a Massachusetts mother who was seeking employment as a model. In October 2011, Dunfee contacted the mother and told her that Hunt Photography had a client willing to pay $20,000 for a mother-daughter bikini modeling contract. Dunfee told the mother that in order to apply she would need to audition her daughter for him immediately, and persuaded the mother to take her 10 year-old daughter out of school.
Dunfee further admitted that he directed the mother to “audition” her daughter via webcam in a 48-minute video call. Knowing that she was a minor, Dunfee directed that the 10 year-old girl be posed in a bra and underwear and then completely naked.
On Nov. 3, 2011, federal agents executed a search warrant at Dunfee’s residence, where law enforcement had traced the illicit conduct via IP address records. A forensic examination of Dunfee’s computers revealed his use of Facebook, Skype and Windows Live Messenger Chat to communicate online while posing as Hunt Photography.
The case was investigated by the USPIS, the Jones County Iowa Sheriff’s Office, the Massachusetts State Police, the Attleboro Police Department and the Justice Department’s High Technology Investigative Unit. Substantial assistance was provided by the U.S. Attorney’s Office for the District of Iowa.
The case is being prosecuted by Trial Attorney Herbrina Sanders of the Justice Department’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Stacy Dawson Belf of the District of Massachusetts.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Former Employee of U.S. Contractor in Afghanistan Indicted for BriberyRead the Press Release
A former employee of a U.S. contractor was indicted today in the Eastern District of Texas for allegedly soliciting and accepting bribes in exchange for his influence in awarding U.S. government-funded contracts in Afghanistan, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney John Malcolm Bales of the Eastern District of Texas.
George E. Green, 57, of Carrollton, Texas, was charged with conspiracy to structure financial transactions to avoid currency transaction reporting requirements, wire fraud and receipt of bribes in connection with a program receiving federal funds.
According to the indictment, Green was the former director of contracts, procurement and grants for International Relief and Development Inc. (IRD), and was part of a cooperative agreement between IRD and the U.S. Agency for International Development (USAID) that sought to promote long-term agricultural development in specific areas in Afghanistan.
The indictment alleges that while working for IRD in Afghanistan, Green solicited and received bribes totaling $66,000 from a representative of an Afghan firm that contracted with IRD. Some of those bribe payments were allegedly wired directly to an Italian automobile dealer for Green’s benefit. After returning to Texas, Green allegedly attempted to conceal the bribe proceeds by engaging in a conspiracy to structure cash deposits into his bank and credit card accounts to avoid mandatory cash reporting requirements. Additionally, even after leaving IRD, Green allegedly continued to solicit bribes from the Afghan firm by falsely claiming that he still had the ability to influence the contracting process.
The charges and allegations contained in the indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the Office of Special Inspector General for Afghanistan Reconstruction (SIGAR), FBI and USAID Office of Inspector General. The case is being prosecuted by Trial Attorney Mark H. Dubester on detail to the Criminal Division’s Fraud Section from SIGAR and Assistant U.S. Attorney Kevin McClendon of the Eastern District of Texas.
Foreign National Sentenced to Three Years in Prison for Smuggling Undocumented Migrants from Africa into the United StatesRead the Press Release
An Eritrean national, who is also a citizen of the United Kingdom, was sentenced today to three years in prison for smuggling up to 99 undocumented migrants from Eritrea and Ethiopia into the United States.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Ronald C. Machen Jr. of the District of Columbia, and Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE-HSI) Washington, D.C., Field Office made the announcement. U.S. District Judge Reggie B. Walton of the District of Columbia imposed the sentence.
Habtom Merhay, 47, of the United Kingdom, pleaded guilty to human smuggling charges on Sept. 24, 2014. He was originally arrested by Moroccan authorities in August 2013 and extradited to the United States on April 25, 2014. He has been in custody since his arrest.
In his plea agreement, Merhay admitted that from May 2009 to September 2010, he operated a human smuggling scheme from his residence in Dubai. In exchange for fees of up to $14,000, he smuggled undocumented African migrants into the United States by purchasing airline tickets for their travel to South and Central America, and then coordinating with a global network of smugglers to facilitate the migrants’ travel into the United States.
The investigation was pursued under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates with and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
The investigation was led by HSI’s Washington, D.C., Field Office with the support of the Human Smuggling Trafficking Center and the U.S. Customs and Border Protection’s National Targeting Center. The case was prosecuted by Trial Attorney Jay Bauer of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Frederick Yette of the District of Columbia. The extradition was handled by Trial Attorney Dan E. Stigall of the Criminal Division’s Office of International Affairs.
The Department of Justice and HSI expressed their appreciation for the significant assistance provided by the Moroccan Ministry of Justice.
U.S. Attorney Alicia Limtiaco Presents at the University of Guam’s LW390 ClassRead the Press Release
ALICIA A.G. LIMTIACO, U.S. Attorney for the Districts of Guam and the Northern Mariana Islands (NMI) was invited to speak on December 6, 2014. at the University of Guam’s LW390 Class Production regarding Human Trafficking. The LW390 class is the Human Trafficking Conference course that is taken alongside PA390, which is the Special Topics: Human Trafficking class. The conference class is meant give students an experience in presenting in a formal conference setting, as well as to display what they have learned in class. The PA390 course teaches students about Human Trafficking. There were approximately 100 students, professors, and government officers and officials in attendance at the forum.
U.S. Attorney Limtiaco spoke on the topic of “Human Trafficking Red Flags” and “Preventing Human Trafficking in the Pacific Region,” and shared information on the Pacific Regional Response to Combat Human Trafficking Initiative (the “Initiative”), which is a collaborative effort among the U.S. Attorney’s Office for the Districts of Guam and the NMI, the National District Attorneys Association, the Department of State, the Department of the Interior, the Guam Human Trafficking Task Force, the NMI Human Trafficking Intervention Coalition, and other community partners. U.S. Attorney Limtiaco also discussed the intersection and relationship between human trafficking, sexual assault, child abuse and domestic and family violence, and prevention and enforcement efforts in the Pacific region.
The Initiative employs a multidisciplinary model, including participation, coordination, and collaboration among law enforcement, prosecution, victim service providers, social services, medical, mental and public health professionals, faith based organizations, educational institutions, Consulates, and other community stakeholders. The Initiative calls for the establishment and provision of victim services, investigation and prosecution of human trafficking, training opportunities, community outreach/ public awareness and prevention programs, and creation of human trafficking task forces and coalitions in the Pacific region island communities. The Initiatives also provides fundamental training in human trafficking, including victimization, investigation and prosecution, prevention efforts, and other related topics to law enforcement, prosecution, victim service providers, social services, medical, mental and public health professionals, faith based organizations, educational institutions, Consulates, and other community stakeholders in our Pacific region island communities, which is critical to effective prevention and enforcement efforts in the region.
Front Row: Dr. John Rivera, Dean Annette Santos, Lt. Gov. Ray Tenorio,
U.S. Attorney Limtiaco, Shirley Chu, Diana Reyes, Marlene Leon Guerrero,
Natasha Taitague, and James Chin. Back row: Dr. Terry Donaldson,
Dr. Ron McNinch, Dr. Ansito Walter and FBI SSRA Bill Corbett
U.S. Attorney Alicia Limtiaco addressing UOG Students and other attendees.
U.S. Attorney Alicia Limtiaco addressing UOG Students and other attendees.
The Justice Department's Civil Rights Division Issues Non-Discrimination Principles to Guide Federal, State and Local Governments' Response to the Ebola VirusRead the Press Release
The Justice Department’s Civil Rights Division issued non-discrimination principles today to guide federal, state and local governments’ response to the Ebola virus. The division also issued guidance for protecting civil rights while responding to the Ebola virus and a reference guide on what legal protections may apply.
As the global response to the Ebola virus continues, it is important to remain vigilant in ensuring that the civil rights of all people are respected. Both science and the law must lead our efforts to ensure that unfounded fear and/or prejudice do not limit access to housing, education, benefits, services, and employment on account of race, color, national origin, citizenship status, disability or any other protected status. In addition, access to accurate health information is critical to providing all people with the ability to make informed decisions about whether or how the virus might affect them, their families and the community at large.
The non-discrimination principles are:
1. Ensure that there is no bullying, harassment or other unlawful discrimination directed at people who are or are perceived to be from an African country, of African descent or against people who have the Ebola virus or are perceived as having the virus. As in all emergencies, the Ebola virus may affect people of different races, ethnicities, nationalities, immigration statuses and disability statuses. Harassment and other forms of unlawful discrimination are not only illegal, but may discourage affected persons from coming forward to seek treatment or information. In considering whether there is any significant risk of a person being infected with Ebola, it is essential to determine whether the individual has been in direct contact with the bodily fluids of someone who has exhibited Ebola symptoms within the past 21 days. Policies that are overbroad or that are motivated by fear rather than facts may lead to unlawful discrimination. The United States will vigorously enforce laws prohibiting discrimination and unlawful harassment.
2. Provide information in languages other than English. Timely and accurate dissemination of public information is crucial for a successful response to any threat to public health. Large numbers of people do not read or understand English. Yet it is important for all members of the community to have access to pertinent public information, including information on how Ebola is contracted and the symptoms of Ebola. Messages directed at the residents in states and localities should be provided in the languages spoken by people with limited English proficiency in those areas, and should be written as clearly as possible. More information about ensuring language access can be found at www.lep.gov. Multi-lingual brochures on language access rights can be found at http://www.lep.gov/dojbrochures.html.
3. Provide access to information and services to people with disabilities. Many traditional notification methods are not accessible to or usable by people with disabilities. For instance, individuals who are deaf or hard of hearing cannot hear radio, sirens or other aural alerts. Individuals who are blind or have impaired vision cannot read standard printed materials. Individuals with cognitive disabilities may not understand complex language. Health care providers and other involved entities must reach out to individuals with disabilities in formats that are accessible to them. For more information on access for individuals with disabilities, please see www.ADA.gov.
The Civil Rights Division of the U.S. Department of Justice, together with other agencies throughout the federal government, will continue to monitor all civil rights issues related to Ebola. The division will continue to work with our federal agencies to ensure that civil rights protections are integrated into emergency planning and response efforts.
Southern California Physician Sentenced to 22 Months in Prison for Medicare FraudRead the Press Release
A Southern California physician was sentenced to 22 months in federal prison today for his role in a conspiracy to commit Medicare fraud.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Los Angeles Region and Assistant Director in Charge Bill Lewis of the FBI’s Los Angeles Field Office made the announcement.
Dr. Jason C. Ling, 43, of Spring Valley, California, pleaded guilty in June 2014, to conspiracy to commit health care fraud. According to his plea agreement, between March and November 2010, Dr. Ling conspired with others to defraud the Medicare program by writing medically unnecessary prescriptions for expensive power wheelchairs and other durable medical equipment (DME). Dr. Ling obtained patients for his Spring Valley medical clinic from a street-level recruiter, or “marketer,” who referred Medicare beneficiaries for medically unnecessary DME prescriptions. Dr. Ling’s prescriptions were provided to owners of DME companies, including Eucharia Okeke, who used the fraudulent prescriptions to submit approximately $496,794 in false claims to Medicare.
In addition to the prison term, U.S. District Judge George H. Wu of the Central District of California ordered Dr. Ling to pay $311,145 in restitution to the Medicare program.
Eucharia Okeke, pleaded guilty for her role in the conspiracy on Aug. 25, 2014. Her sentencing hearing is scheduled for Feb. 26, 2015.
The case was investigated by the FBI and the Los Angeles Region of HHS-OIG. The case was prosecuted by Trial Attorney Alexander F. Porter of the Criminal Division’s Fraud Section.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Justice Department Seeks to Shut Down California Tax Return PreparersRead the Press Release
Tax Return Preparers Allegedly Claimed False Deductions and Credits on Tax Returns
The Justice Department announced today that it has asked a federal court in California to permanently bar Vida Farley and AJV Bookkeeping Inc. from preparing tax returns for others.
According to the complaint, the government alleges that, for the past several years, the defendants engaged in a pattern of claiming false education credits and false or grossly inflated Schedule A deductions for charitable contributions, unreimbursed employee business expenses and other expenses on behalf of their customers.
According to the suit, which was filed in the U.S. District Court for the Eastern District of California, Farley has been a tax return preparer for more than 20 years and since 2008, has operated a tax return preparation business through AJV Bookkeeping Inc. The defendants’ practices of claiming false deductions and education credits have resulted in significant lost tax revenues as they understate tax liabilities and claim improper refunds, according to the suit.
Specifically, the suit alleges that the Internal Revenue Service (IRS) examined more than 200 returns the defendants prepared between 2010 and 2014, and that more than 96 percent of these returns have resulted in adjustments to tax, with the proposed deficiencies averaging roughly $4,000 per return. The complaint alleges that the defendants prepared more than 17,000 returns between 2010 and 2014.
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. 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.
Jury Returns Guilty Verdicts Against Members of Violent Loan Sharking and Illegal Gambling RingRead the Press Release
A federal jury today returned guilty verdicts against four defendants charged in a loan sharking and illegal gambling ring that was run out of several Philadelphia businesses, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania.
Ylli Gjeli, 49, Fatimir Mustafaraj, aka “Tony,” 42, Gezim Asllani, aka “Sam,” 35, Rezart Rahmi Telushi, aka “Luigi,” 41, all of Philadelphia, were found guilty following a six-week jury trial of engaging in a racketeering conspiracy, racketeering collection of unlawful debts, making extortionate extensions of credit, collections of extensions of credit by extortionate means. Additionally, Gjeli, Mustafaraj and Aslanni were convicted of counts involving extortionate extension of credit. Finally, Gjeli and Mustafaraj were convicted of illegal gambling. U.S. District Judge William H. Yohn Jr. scheduled sentencing hearings for March 2015.
According to evidence presented at trial, the defendants’ enterprise used businesses in Philadelphia, including the Lion Bar & Grill, Blackbird Café and “Ylli’s 2 Brothers,” to conduct the illegal loan sharking and gambling activities. The enterprise generated money by making and collecting on loans with usurious rates of interest, and making loans to customers whose debts were incurred through the enterprise’s illegal gambling business. The evidence established that from October 2011 to 2013 alone, the enterprise extended 125 usurious loans totaling $1.78 million with annual interest rates ranging from 104 percent to 395 percent. Further, the evidence established that from February 2007 to August 2013, the organization’s online sports betting website contributed more than $2.9 million in gross profits.
Members and associates of the enterprise cultivated their reputations within the organization by threatening customers with dangerous weapons such as firearms and a hatchet, and threating to kill, assault or “break the legs” of delinquent customers if they did not pay their debts, and also by physically assaulting subordinate members and associates who stole from the organization.
The evidence at trial demonstrated that Gjeli was a “boss” of the organization, Mustafaraj served as “muscle” to forcefully collect debts owed to the organization, and Asllani and Telushi served as “collectors,” both making loans and collecting the weekly payments from customers. Gjeli and Mustafaraj directed the other members in the loan sharking activities and illegal gambling business, financed loans and the gambling operation, used intimidation and threats of violence against customers to collect loan payments, and physically assaulted subordinate members and associates who stole from the organization. Asllani and Telushi assisted Gjeli and Mustafaraj in making loans, and regularly collected weekly loan payments from customers.
The evidence also demonstrated that the defendants attempted to conceal the existence and operations of the enterprise from law enforcement by limiting their discussions of criminal activities when on the phone, using cryptic and coded language to describe criminal activities, conducting pat-downs and body searches of customers to check for weapons and recording devices, and conducting the enterprise’s transactions primarily in cash.
The case was investigated by the FBI, Pennsylvania State Police, New Jersey State Police, Montgomery County Detectives, and the Internal Revenue Service-Criminal Investigation. It is being prosecuted by Trial Attorney Margaret Vierbuchen of the Justice Department’s Organized Crime and Gang Section and Assistant U.S. Attorney Salvatore L. Astolfi of the Eastern District of Pennsylvania.
Former University Professor Sentenced to Prison for Engaging in Sexual Conduct with a MinorRead the Press Release
A former university professor was sentenced today to five years in prison for traveling in foreign commerce to engage in sexual conduct with a minor, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Walter Lee Williams, 66, of Palm Springs, California, was charged with engaging in sexual conduct with minors in the Philippines, and arrested in Mexico in 2013 after being placed on the FBI’s “Ten Most Wanted Fugitives” list. In connection with his guilty plea, Williams admitted that he traveled from Los Angeles to the Philippines to engage in sex acts with minor boys. Prior to his travel, Williams engaged in sexual activity via Internet webcam sessions with minors and expressed a desire to visit them in the Philippines to have sex.
In addition to the prison sentence, U.S. District Judge Philip S. Gutierrez of the Central District of California sentenced Williams to ten years of supervised release, and ordered him to pay $25,000 in restitution and to register as a sex offender for life.
The case was investigated by the FBI’s Los Angeles Field Office, and prosecuted by Trial Attorneys Ravi Sinha and Herbrina Sanders from the Criminal Division’s Child Exploitation and Obscenity Section (CEOS).
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov
Former Special Agent in Charge of the Department of Homeland Security's Office of Inspector General Sentenced to More Than Three Years in PrisonRead the Press Release
A former Special Agent in Charge of the Department of Homeland Security - Office of Inspector General (DHS-OIG) was sentenced to 37 months in prison today for a scheme to falsify records and obstruct an internal DHS-OIG inspection, announced 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 Field Office. The sentence was imposed by U.S. District Judge Andrew S. Hanen of the Southern District of Texas.
“While leading an office responsible for investigating misconduct at other government agencies, Pedraza sought to impede and obstruct the investigation of his own office,” said Assistant Attorney General Caldwell. “Pedraza’s criminal conduct resulted in the premature closing of criminal cases without resolution, potentially endangering our national security and allowing others to escape justice. We will root out and prosecute corruption wherever it may be found, including within the ranks of federal law enforcement.”
Former DHS-OIG Special-Agent-in-Charge Eugenio Pedraza, 50, of McAllen, Texas, was found guilty following a four-day jury trial on March 14, 2014, of conspiring with three other special agents to falsify criminal investigative reports to impede an internal DHS-OIG inspection and obstruct the underlying criminal investigations. The jury also found Pedraza guilty of five counts of falsifying records.
DHS-OIG is responsible for investigating alleged criminal activity by DHS employees, including corruption by Customs and Border Protection (CBP) and Immigration and Customs Enforcement personnel affecting the integrity of the U.S. borders. Pedraza headed DHS-OIG’s McAllen Field Office (MCA) from January 2009 to January 2012.
According to evidence presented at trial, in September 2011, DHS-OIG conducted an internal inspection of the MCA to evaluate whether the agency’s investigative standards and policies were being followed. In anticipation of the internal inspection, Pedraza and at least three other DHS-OIG agents, including Special Agent Wayne Ball, engaged in a scheme to falsify investigative documents to make it appear that criminal investigations were being conducted in a timely fashion and in accordance with DHS-OIG standard operating procedures. The scheme’s purpose was to conceal severe lapses in DHS-OIG’s investigative standards and policies at the MCA and Pedraza’s failure to properly supervise agents and investigations. Court documents reflect that Pedraza, Ball, and other special agents wrote and signed false criminal investigative reports. Pedraza then approved the reports for inclusion in the official investigative case files.
For example, the evidence at trial showed that, at Pedraza’s direction, a special agent drafted false memoranda of activity (MOAs) to fill gaps of inactivity in a criminal investigation to which he was assigned. The criminal investigation had been initiated in March 2010 and concerned allegations that a CBP officer was assisting the unlawful smuggling of undocumented aliens and narcotics into the United States. Because the MOAs were intended to describe investigative activities that occurred when the drafting agent was either not present at the MCA or not employed by DHS-OIG at all, Pedraza directed the agent to attribute the investigative activity to Ball. Ball then signed and backdated the false MOAs. Pedraza also signed and backdated the false MOAs, which were then placed in the investigation’s case file in advance of the internal inspection. Upon discovery of the falsified reports, the criminal investigation had to be closed without resolution. According to evidence presented at trial, Pedraza similarly directed other special agents to falsify records related to at least four other criminal investigations.
On Jan. 17, 2013, Ball pleaded guilty to one count of conspiring with Pedraza and at least two other special agents to falsify records in federal investigations and obstruct an agency proceeding. Ball is scheduled to be sentenced on Jan. 7, 2015, by U.S. District Judge Hilda G. Tagle of the Southern District of Texas.
This case was investigated by the FBI’s San Antonio Field Office and is being prosecuted by Trial Attorneys Eric Gibson, Brian Kidd and J.P. Cooney of the Criminal Division’s Public Integrity Section.
Federal Contractors Eyak Technology LLC and Eyak Services LLC Resolve False Claims Act and Anti-Kickback Act AllegationsRead the Press Release
Alaska and Virginia-based technology contractors Eyak Technology LLC (EyakTek) and Eyak Services LLC (ESL) have agreed to pay $2.5 million and relinquish any rights to additional payments from the United States to resolve allegations that they submitted false claims to the U.S. Army Corps of Engineers, the Justice Department announced today. EyakTek and its sister company, ESL, provide healthcare, information technology, communications and infrastructure services to the U.S. government. Both are subsidiaries of The Eyak Corporation, headquartered in Anchorage, Alaska.
“Federal government contractors and their employees must adhere to high standards in their dealings with the government,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “We will vigorously pursue those who pay kickbacks or otherwise engage in conduct that undermines the integrity of the contracting process.”
From 2005 to 2011, EyakTek held a $1 billion prime contract with the U.S. Army Corps of Engineers known as the Technology for Infrastructure, Geospatial, and Environmental Requirements contract.
The government alleged that, between Sept. 12, 2007, and Oct. 4, 2011, EyakTek’s then-director of contracts, Harold Babb, accepted kickbacks from several subcontractors of EyakTek and ESL in return for using his position to direct subcontracts to them. EyakTek and ESL allegedly submitted invoices to the Army Corps that included charges for work that was never performed by the subcontractors and lacked internal controls to detect the improper charges.
In March 2012, Babb pleaded guilty to bribery and kickback charges. The U.S. District Court for the District of Columbia sentenced him to serve 87 months in prison, to be followed by 36 months of supervised release and more than $9 million in restitution for his role in the kickback scheme.
The Army Corps stopped payments to EyakTek and ESL when the alleged scheme came to light. As part of the settlement, EyakTek and ESL will withdraw any appeals seeking the return of those funds, and relinquish all rights to any payments that have been withheld.
“This settlement demonstrates our willingness to use every tool of civil and criminal law in our arsenal to defend the American taxpayer from corruption in contracting,” said U.S. Attorney Ronald C. Machen Jr. for the District of Columbia. “The criminal investigation into this wide-ranging bribery and kickback scheme has now resulted in the convictions of 20 individuals, including EyakTek’s former contracts director. We have aggressively pursued asset forfeitures in the criminal proceedings to make the taxpayer whole and to deprive wrongdoers of their ill-gotten gains. This civil settlement sends a message to contractors who try to cheat in the competition for government funds.”
“This is yet another prime example of our commitment, along with other fellow law enforcement agencies to hold people and companies accountable for each and every detail of their contracts with the U.S. government and the U.S. Army,” said Director Frank Robey of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit. “Our agents will continue to aggressively investigate and identify any potential abuses that arise in regard to the contracting process.”
“Manipulations of the Department of Defense procurement process will not be tolerated,” said Special Agent in Charge Robert Craig for the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office. “Today’s settlement demonstrates the commitment by DCIS and its partner agencies to hold accountable companies who attempt to bypass federal contracting laws.”
Today’s settlement is the result of a coordinated effort among the department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia, the U.S. Army Corps of Engineers, DCIS, the Defense Contract Audit Agency, the Army’s Major Procurement Fraud Unit and the Small Business Administration.
The claims settled by this agreement are allegations only, and there has been no determination of liability.
Two Mississippi Women Plead Guilty to a Series of Racially-Motivated Assaults on African-AmericansRead the Press Release
The Justice Department announced today that Shelbie Brooke Richards, 21, and Sarah Adelia Graves, 21, from Brandon, Mississippi, pleaded guilty in U.S. District Court in Jackson to federal hate crime charges in connection with a series of racially-motivated assaults on African-Americans, which culminated in the death of James Craig Anderson, an African-American man, in the summer of 2011.
Richards and Graves each pleaded guilty to one count of conspiracy to violate the Matthew Shepard and James Byrd, Jr. Hate Crimes Prevention Act for their roles in a scheme to target African-Americans in Jackson for violent assaults with dangerous weapons, including their roles in the murder of Anderson, who was run over by a FordF250 truck driven by members of the conspiracy. The maximum penalty for this charge is five years in prison and a $250,000 fine. Richards pleaded guilty to an additional count of misprision of a felony for her role in concealing information about the murder of Anderson from investigating authorities. The maximum penalty for this charge is 3 years in prison and a $250,000 fine.
“The continuing investigation into the events surrounding the vicious murder of James Craig Anderson that resulted in today’s guilty pleas demonstrates that the Department of Justice will vigorously pursue justice for every victim of racially-motivated violence,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “No person should have to fear that they will be attacked because of the color of their skin as they walk the streets of their own city. We will continue to use the tools at our disposal to ensure that racial equality in America is a reality as well as an ideal.”
“Hate based crimes have no place in America,” said U.S. Attorney Gregory K. Davis for the Southern District of Mississippi. “In addition to the injury to the victim, these crimes damage the fabric of our society. The citizens of this district should know that this office will continue to vigorously enforce federal laws that guarantee the civil rights of all citizens.”
“This investigation started with the tragic death of James Anderson, “said Special Agent in Charge Donald Alway of the FBI Mississippi Division. “Since then, the FBI has continued its efforts to identify and bring to justice all those individuals who conspired to deprive Mr. Anderson and other African-American citizens of their civil rights simply because of the color of their skin.”
Today in court, Richards and Graves admitted that, beginning in the spring of 2011, they and others conspired with one another to harass and assault African-Americans in west Jackson. On numerous occasions, the co-conspirators used dangerous weapons including beer bottles, sling shots and motor vehicles to cause and attempt to cause bodily injury to African-Americans. They would specifically target African-Americans they believed to be homeless or under the influence of alcohol because they believed that such individuals would be less likely to report an assault. The co-conspirators would often boast about these racially motivated assaults. Richards and Graves admitted that on June 26, 2011, they encouraged their co-conspirators to leave Brandon with them to assault “niggers,” in Jackson. Richards further admitted that she encouraged her co-conspirator Deryl Paul Dedmon to hit Anderson with his truck. In addition, Richards admitted that she falsely told law enforcement officers that she did not remember a fight between Dedmon and Anderson, and that she did not encourage Dedmon to strike Anderson with his truck.
Defendants Deryl Paul Dedmon, John Aaron Rice, Dylan Wade Butler, William Kirk Montgomery, Jonathan Kyle Gaskamp, and Joseph Dominick, all from Brandon, have previously entered guilty pleas in connection with their roles in these offenses.
These guilty pleas were the result of a cooperative effort among the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Mississippi and the Hinds County, Miss. District Attorney’s Office. This case was investigated by the Jackson Division of the FBI and the Jackson Police Department. It is being prosecuted by Trial Attorney Sheldon L. Beer and Deputy Chief Paige M. Fitzgerald of the Civil Rights Division of the Department of Justice, and Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi.
Three Colombian Nationals Sentenced to Prison for the Kidnapping and Murder of DEA Agent Terry WatsonRead the Press Release
Two Additional Colombian Nationals Also Plead Guilty For Their Roles
Three Colombian nationals were sentenced to decades in prison today in the Eastern District of Virginia for their roles in the kidnapping and murder of Drug Enforcement Administration (DEA) Special Agent James “Terry” Watson in Bogotá, Colombia, on June 20, 2013.
Attorney General Eric H. Holder, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, DEA Administrator Michele M. Leonhart and Bill A. Miller, Director, U.S. State Department’s Diplomatic Security Service made the announcement.
“Throughout his law enforcement career, Special Agent Watson’s service was both selfless and courageous,” said Attorney General Holder. “With this action, we continue our work to hold accountable those who were responsible for his murder. In the weeks ahead, we expect to take additional steps to bring the perpetrators to justice. And in all that we do, our nation’s Department of Justice will continue to honor Special Agent Watson’s sacrifice, to safeguard the nation he served, and to protect the values and principles he defended all his life.”
“Terry Watson was a courageous and accomplished DEA Special Agent who we will forever honor and remember for his dedicated career and sacrifice,” said DEA Administrator Leonhart. “DEA is grateful that those who carried out this reprehensible and senseless act are now facing U.S. justice. We will honor his life and career by continuing our global crusade with our domestic and international partners to defeat violent drug trafficking networks.”
Héctor Leonardo López, 34, Julio Estiven Gracia Ramírez, 32, and Andrés Álvaro Oviedo García, 22, previously pleaded guilty to conspiracy to kidnap and aiding and abetting the murder of an internationally protected person. Today, U.S. District Judge Gerald Bruce Lee of the Eastern District of Virginia sentenced López to 25 years, Gracia Ramírez to 27 years, and Oviedo García to 20 years.
In addition, Wilson Daniel Peralta-Bocachica, 31, pleaded guilty today to obstruction of justice and Edwin Gerardo Figueroa Sepúlveda, 39, pleaded guilty on Dec. 9, 2014, to conspiracy to kidnap and aiding and abetting the murder of an internationally protected person. Sentencing hearings for Peralta-Bocachica and Figueroa Sepúlveda are scheduled for Feb. 18, 2015.
In the statements of facts filed with their plea agreements, López, Gracia Ramírez, Oviedo García, and Figueroa Sepúlveda admitted that they conspired to conduct “paseo milionarios” or “millionaire’s rides” in which victims were lured into taxi cabs, kidnapped and then robbed. They admitted that on the evening of June 20, 2013, they were part of a robbery crew that targeted Special Agent Watson. Gracia Ramírez picked up Special Agent Watson in his taxi, while López drove a second taxi carrying the assailants. Figueroa Sepúlveda entered the taxi carrying Special Agent Watson and shocked him with a stun gun while another defendant stabbed him. Special Agent Watson was able to escape from the taxi, but he later collapsed and died from his injuries. Oviedo García was part of the robbery crew, but shortly before Special Agent Watson was targeted, a third taxi encountered mechanical issues and Oviedo García stayed with the disabled taxi. Peralta-Bocachica admitted that in the days following the kidnapping and murder, he washed the taxi in which Special Agent Watson was stabbed, removing blood from the back seat then discarding the cleaning rags, before turning the taxi over to the Colombian National Police.
Two other defendants, Omar Fabián Valdes Gualtero, 27, and Édgar Javier Bello Murillo, 27, are charged with second degree murder, kidnapping and conspiracy to kidnap in connection with their alleged involvement in the murder. Trial is set for Jan. 12, 2015. The charges in the indictment against these defendants are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
This case was investigated by the FBI, DEA and the Diplomatic Security Service, in close cooperation with Colombian authorities and with assistance from INTERPOL and the Justice Department’s Office of International Affairs. The case is being prosecuted by Special Counsel Stacey Luck of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Michael P. Ben’Ary of the U.S. Attorney’s Office of the Eastern District of Virginia.
The Department of Justice gratefully acknowledges the Colombian Attorney General’s Office, Colombian National Police, Colombian Directorate of Criminal Investigation and Interpol (DIJIN), DIJIN Special Investigative Unit, Bogotá Metropolitan Police, Bogotá Police Intelligence Body (CIPOL) Unit and Colombian Technical Investigation Team for their extraordinary efforts, support and professionalism in responding to this incident.
The Department of Justice Releases Additional Documents Concerning Collection Activities Authorized by President George W. Bush Shortly After the Attacks of September 11, 2001Read the Press Release
Today the Department of Justice, in coordination with the Office of the Director of National Intelligence and other elements of the Intelligence Community, is releasing six Foreign Intelligence Surveillance Court (“FISC”) documents related to surveillance activities originally authorized by President George W. Bush shortly after the attacks of Sept. 11, 2001.
On Dec. 21, 2013, the DNI declassified the existence of collection activities authorized by President Bush. As described in the statement issued at that time, starting on Oct. 4, 2001, President Bush authorized the Secretary of Defense to employ the capabilities of the Department of Defense, including the National Security Agency, to collect foreign intelligence by electronic surveillance in order to detect and prevent acts of terrorism within the United States.
The collection of communications content under what has come to be known as the Terrorist Surveillance Program (“TSP”) and presidential authorization ended in January 2007 when the U.S. Government transitioned the program to FISA authority under orders of the FISC. The documents released today concern the transition of the TSP from presidential authority to FISC orders between January 2007 and August 2007 and include the FISC’s opinions authorizing this collection under Title 1 of FISA.
In August 2007, Congress enacted the Protect America Act (“PAA”) and the collection of communications of non-U.S. persons reasonably believed to be located outside of the United States for foreign intelligence information was transitioned to that authority. In 2008, the Foreign Intelligence Surveillance Court of Review upheld the constitutionality of the Government’s collection program under the PAA. As explained in the IContheRecord post on the PAA, the PAA expired in February 2008 and was replaced by the Foreign Intelligence Surveillance Act (“FISA”) Amendments Act of 2008 (“FAA”), which remains in effect. Today, Section 702 of the FAA authorizes, under FISC oversight, the targeting of non-U.S. persons reasonably believed to be located outside the United States to acquire foreign intelligence information.
Although no longer in effect, the documents disclosed today show the history of the government’s post-Sept. 11, 2001, collection of communications content for foreign intelligence purposes. The documents make clear the FISC’s independent and searching review of government applications and, together with Congress’ passage of the PAA and FAA, demonstrate the role of the judicial and legislative branches in regulating executive branch surveillance activities.
Memorandum of Law December 13, 2006
Supplemental Memorandum of Law and Declaration January 2, 2007
FISC Order January 10, 2007
FISC Order (Foreign Order) January 10, 2007
FISC Order and Memorandum Opinion April 3, 2007
FISC Order April 5, 2007Kenneth Huidong Kang Sentenced in U.S. District Court for Harboring Illegal AliensRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Defendant KENNETH HUIDONG KANG, age 39, was sentenced on December 11, 2014, by Chief Judge Frances Tydingco-Gatewood, in the District Court of Guam for Harboring Illegal Aliens and Criminal Conspiracy. Defendant KANG was sentenced to six months imprisonment and two years supervised release, to include six months home detention under the location monitoring program. Defendant KANG was also ordered to pay a $3,000 fine.
During the period from or about January 2006 and lasting until December 2008, Defendant KANG worked at Club Musha, later renamed to Club Music. KANG worked at the establishment as a manager where he conspired with others to conceal Korean women who had entered Guam as tourists under the Guam Visa Waiver Program. The Guam Visa Waiver Program allowed Korean citizens to enter Guam as tourists for a limited time of 15 days. The real purpose for these Korean women to enter Guam was for them to work at Club Music. Defendant KANG further allowed some of these Korean women to reside at his Yigo residence while they illegally worked at Club Music and he did so for the purpose of commercial advantage and private financial gain.
This case was investigated by Special Agents of the Department of Homeland Security/Homeland Security Investigations, and prosecuted by former Assistant U.S. Attorney Karon V. Johnson and Assistant U.S. Attorney Stephen F. Leon Guerrero.
Former Anderson, California, Police Officer Sentenced to Five Years in Prison for Sexually Assaulting a WomanRead the Press Release
Former Anderson, California, police officer Bryan Robert Benson, 30, of Shasta Lake, was sentenced today in federal court to five years in prison and 3 years of supervised release for violating the civil rights of a woman he arrested by sexually assaulting her while she was in his custody, announced the Justice Department and the U.S. Attorney’s Office for the Eastern District of California.
The federal indictment charged Benson with deprivation of rights under color of law in connection with the sexual assault of a woman he had placed under arrest on May 29, 2010. According to court documents, while Benson was transporting the victim to jail, he stopped in a parking lot and sexually assaulted her. Benson instructed the victim not to report it, and in order to impede any investigation, he reported to a police dispatcher that he and the victim had arrived at the Shasta County jail approximately eight minutes before they actually arrived. Benson was fired from his position with the Anderson Police Department as a result of this conduct.
“This defendant used his position as a police officer to prey on the vulnerable,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “He not only violated the victim, but also his oath to serve and protect, and the trust the community put in him. The Justice Department will continue to vigorously prosecute those who abuse their position and authority to harm those whom they have sworn to protect.”
“Police officers are sworn to protect and to serve the citizens of their community,” said U.S. Attorney Benjamin B. Wagner for the Eastern District of California. “Sexually assaulting a citizen in police custody is the worst betrayal of that duty. Officer Benson not only violated the trust of his community, he let down his fellow officers of the Anderson Police Department who work diligently every day to earn that trust.”
This case was investigated by the Federal Bureau of Investigation and was prosecuted by Trial Attorney Chiraag Bains from the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Matthew G. Morris for the Eastern District of California.
Former Alabama Hospital Employee Sentenced to Prison for Identity TheftRead the Press Release
A former Alabama hospital employee was sentenced to serve 24 months in prison today before the Honorable Judge Myron H. Thompson in U.S. District Court for the Middle District of Alabama in connection with his role in committing stolen identity tax refund fraud, announced Acting Deputy Assistant Attorney General Larry J. Wszalek of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.
Kamarian D. Millender was also ordered to pay $18,915 in restitution.
On July 8, 2014, Millender pled guilty to one count of aggravated identity theft. According to court documents, Millender worked as a lab technician at a medical facility in the Dothan, Alabama, area. He and others stole patient medical records that contained personal identification information, which Millender then used to file false tax returns in order to obtain fraudulent tax refunds from the Internal Revenue Service (IRS).
Millender’s actions aided in the filing of more than 100 false federal tax returns, which victimized approximately 73 individuals and attempted to defraud an estimated $536,028 from the IRS. The IRS was able to stop the vast majority of the falsely claimed refunds, but approximately $18,915 in refunds were issued.
This case was investigated by special agents of IRS-Criminal Investigation and inspectors from the U.S. Postal Inspection Service. Trial Attorneys Charles M. Edgar Jr. and Michael Boteler of the Tax Division are prosecuting the case.
More information about the Tax Division and its enforcement efforts can be found at the division website.
Costa Rican Woman Sentenced to Prison for Role in Human Smuggling ConspiracyRead the Press Release
A citizen and resident of Costa Rica was sentenced today to 30 months in prison for her leadership role in a conspiracy to smuggle undocumented migrants to the United States.
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, and Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations’ (ICE- HSI) Washington, D.C., Field Office made the announcement. U.S. District Judge Ursula M. Ungaro of the Southern District of Florida imposed the sentence.
Mercedes Morera Roche, 49, of Costa Rica, was extradited to the United States from Panama on Aug. 21, 2014, to face human smuggling charges. Roche pleaded guilty on Oct. 6, 2014, to conspiracy to smuggle more than 25 undocumented migrants from Cuba to the United States.
According to her plea agreement, Roche admitted that between 2004 and 2011, she was an organizer of a human smuggling network that provided instructions, fraudulent identity and travel documents, escorts, transport, safe house locations, and other assistance to facilitate the illicit travel of undocumented migrants to the United States. Roche admitted that in some cases, she provided fraudulent passports so that undocumented migrants could fly to the United States with the help of corrupt foreign airline and immigration officials. Roche directed the migrants to destroy the fraudulent documents during the flights to the United States, and instructed the migrants about what to do and say to U.S. immigration authorities upon landing. In other cases, Roche coordinated the smuggling of undocumented migrants over land routes through Latin America and Mexico into the United States. Roche solicited payments of up to $10,000 for each undocumented migrant.
The investigation was pursued under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates with and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
The investigation was conducted by ICE- HSI’s Washington, D.C. Field Office with support from the Human Smuggling Trafficking Center and U.S. Customs and Border Protection’s National Targeting Center. Critical assistance was also provided by HSI’s Miami Field Office and the ICE Attaché Office in Panama. Extradition assistance was provided by the Criminal Division’s Office of International Affairs, INTERPOL Washington and the United States Marshals Service. The Justice Department is grateful for the significant assistance provided by the Panamanian Ministry of Foreign Affairs. This case was prosecuted by Trial Attorney Michael Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Robert Emery of the Southern District of Florida.
Chief Technology Officer of Liberty Reserve Sentenced to Five Years in PrisonRead the Press Release
The former chief technology officer of Liberty Reserve was sentenced today to serve five years in prison for conspiring to operate an unlicensed money transmitting business that processed more than $16 billion through Liberty Reserve’s digital currency system. The Court found that Marmilev understood the illegal nature of Liberty Reserve’s business and that he knew that a wide array of criminal enterprises used Liberty Reserve to further their criminal activity.
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.
“Marmilev used his technical expertise to create a virtual currency business that was used extensively by criminals throughout the world,” said Assistant Attorney General Caldwell. “Marmilev boasted that the crime group was beyond the reach of U.S. law enforcement, but he couldn’t have been more wrong. Today’s prison sentence shows that those who hide their illegal activities on-line and off-shore will be caught and sent to prison.”
“Mark Marmilev spent years designing and maintaining the technological architecture that allowed Liberty Reserve to operate a global payment processor and money transfer system that catered to criminals,” said Manhattan U.S. Attorney Preet Bharara. “Now, he will pay for that crime with five years in federal prison.”
Mark Marmilev, 35, of Brooklyn, New York, pleaded guilty on Sept. 11, 2014, for his role in designing and maintaining the technological infrastructure for Liberty Reserve, a company that operated one of the world’s most widely used digital currency services. In addition to the prison sentence, U.S. District Judge Denise L. Cote also ordered Marmilev to pay a $250,000 fine.
According to allegations contained in the indictment, and statements made in other court documents filed in Manhattan federal court and 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. It emerged as one of the principal money transfer agents used by cybercriminals around the world to distribute, store, and launder the proceeds of their illegal activity because it provided an infrastructure that enabled cybercriminals to conduct anonymous and untraceable financial transactions.
Before being shut down by the U.S. government in May 2013, Liberty Reserve had more than five million user accounts worldwide, including more than 600,000 accounts associated with users in the United States, and processed tens of millions of transactions through its system, totaling more than $16 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.
According to court documents, Marmilev was a longtime associate of Liberty Reserve founder Arthur Budovsky, and he served as Liberty Reserve’s chief technology officer. In that role, Marmilev was principally responsible for designing and maintaining Liberty Reserve’s technological infrastructure. Marmilev also promoted Liberty Reserve to criminals on the Internet, where, using aliases, he touted Liberty Reserve’s lack of anti-money laundering policies and its tolerance for “shady businesses.”
In conjunction with the sentencing, a civil forfeiture complaint was filed today seeking the forfeiture of Gourmet Boutique, a retail grocery business located in Brooklyn, New York, and the forfeiture of Marmilev’s interest in Grimaldi’s, a pizzeria located in the Coney Island area of Brooklyn, New York; according to the complaint, Marmilev purchased these business interests using more than $1.6 million in Liberty Reserve proceeds.
This case is being investigated by the Internal Revenue Service-Criminal Investigation, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, with assistance fromthe United States 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 Spanish National Police’s Financial and Economic Crime Unit, 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 and Cybercrime Unit and Money Laundering 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.
Romanian Man Sentenced to Prison for Role in International Fraud Scheme Involving Online Marketplace WebsitesRead the Press Release
A Romanian man was sentenced today to serve 63 months in prison for his role in receiving and sending overseas approximately $690,000 in proceeds from an international fraud scheme involving online marketplace websites, as well as for the use of a fraudulent passport.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney David Rivera of the Middle District of Tennessee and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida made the announcement. U.S. District Judge Darrin P. Gayles of the Southern District of Florida imposed the sentence.
Razvan Caprarescu, 39, originally of Bucharest, Romania, was indicted in the Middle District of Tennessee in March 2014 for conspiracy to commit bank and wire fraud in connection with his participation in the online marketplace scheme. In June 2014, the case was transferred to the Southern District of Florida, where Caprarescu had already been indicted in March 2013 for use and attempted use of a false, forged, and counterfeit Belgian passport. Caprarescu pleaded guilty to both charges in August 2014. In addition to his prison term, Caprarescu was ordered to pay $658,441 in restitution.
In connection with his guilty plea, Caprarescu admitted that his co-conspirators fraudulently listed vehicles for sale at online marketplaces such as eBay. When victims expressed interest in purchasing the vehicles, the co-conspirators responded with emails directing the victims to wire payments to specified bank accounts. These bank accounts were opened by Caprarescu and another co-conspirator using false identities and fraudulent documents, including counterfeit passports. Eighteen victims sent approximately $367,036 to accounts opened by Caprarescu between October 2011 and June 2012. Another 17 victims sent approximately $321,389 to accounts opened by Caprarescu’s co-conspirator. Caprarescu and his co-conspirator subsequently sent the bulk of the money to co-conspirators located overseas. Caprarescu also admitted that he used a false Belgian passport bearing an alias to rent a mailbox at a U.S. Pak-n-Ship store located in Broward County, Florida.
The cases were investigated by Immigration and Customs Enforcement’s Homeland Security Investigations, the FBI, and the Tennessee Bureau of Investigation. The cases were prosecuted by Senior Counsel Mysti Degani of the Criminal Division’s Computer Crime and Intellectual Property Section, Assistant U.S. Attorney Byron M. Jones of the Middle District of Tennessee and Assistant U.S. Attorney Alicia Shick of the Southern District of Florida.
Justice Department Settles Lawsuit Against Equity Transportation Co., Inc. to Enforce Employment Rights of United States Army National Guard MemberRead the Press Release
The United States Justice Department’s Civil Rights Division and U.S. Attorney Patrick Miles Jr. announced today that a settlement has been reached with Equity Transportation Inc. (ETC) resolving claims that ETC violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), by failing to reemploy U.S. Army National Guard Member Johnathan Dunn following his military deployment.
According to documents filed today in the United States District Court for the Western District of Michigan, Dunn is a Sergeant in the United States Army National Guard serving with the 230th Sustainment Brigade DET1 out of Smyrna, Tennessee. In August 2012, Dunn notified his employer, ETC, that he was going to be deployed for one month of active-duty military service in September 2012 with the Army National Guard’s Counter-Drug Taskforce. The department alleges that Dunn served his active-duty and was released honorably after four weeks. Upon his release from active-duty on Sept. 27, 2012, Dunn notified ETC that he was ready to return to work immediately. Instead of promptly re-employing Dunn, ETC advised him that his employment had been terminated while he was on leave because of too many absences from work. The department alleges that not only did ETC fail to reemploy Dunn upon his return from military leave, but that the employer has also failed to reemploy him since that time. Under the terms of the settlement, filed as a consent decree, ETC has agreed to pay $11,000 as back pay and liquidated damages to Dunn.
USERRA protects the rights of uniformed servicemembers to retain their civilian employment following absences due to military service obligations, and provides that servicemembers shall not be discriminated against because of their military obligations.
“The men and women who wear our nation’s uniform need to know that they will be protected from the types of injustices experienced by Mr. Dunn when they return from military service,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “The Department of Justice, through its enforcement of USERRA, strongly supports the rights of service members in reclaiming their rightful positions in the workforce after they complete their military service to our country.”
“Members of the United States Army National Guard are often called to make many sacrifices, including spending months or years away from their jobs and families,” said U.S. Attorney Miles. “When they are deployed in the service of our country, their employment rights must be protected. Our office and the entire Department of Justice are committed to ensuring that individuals do not lose their rights while they are protecting ours.”
This case stems from a referral by the U.S. Department of Labor (DOL), pursuant to an investigation by the DOL’s Veterans’ Employment and Training Service. The case is being handled by the Employment Litigation Section of the Department of Justice Civil Rights Division and the U.S. Attorney’s Office for the Western District of Michigan, who work collaboratively with the DOL to protect the jobs and benefits of National Guard and Reserve servicemembers upon their return to civilian life.
The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Requires Divestiture of Commercial Air Springs Business in Connection with Continental AG Acquisition of Veyance Technologies, Inc.Read the Press Release
The Department of Justice announced today that it will require the divestiture of the North American commercial vehicle air springs business of Veyance Technologies, Inc. in order for Continental AG to proceed with its proposed $1.8 billion acquisition of Veyance. The department said that, without the divestiture, the proposed acquisition likely would leave just two dominant firms and risk higher prices and decreased service for commercial vehicle air springs customers in North America.
The Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed transaction. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the department's competitive concerns alleged in the lawsuit.
“The proposed acquisition would have eliminated one of only three significant suppliers of air springs for commercial vehicles in North America,” said Bill Baer, Assistant Attorney General in charge of the department’s Antitrust Division. “Today’s proposed settlement will ensure competitive marketplaces for both North American commercial vehicle manufacturers and vehicle owners who purchase replacement air springs.” Baer also noted the close cooperation between the department and foreign competition colleagues. “We are pleased to have worked closely with our counterparts in Canada, Brazil and Mexico to coordinate our analyses and the formulation of our respective remedies.”
Commercial vehicle air springs are used in trucks, trailers and buses to provide stability to the suspension system, keep the tires in contact with the road and provide comfort and reduced driver fatigue in cabins and seats.
According to the complaint, the proposed acquisition would have reduced the number of suppliers of air springs to North American commercial vehicle manufacturers from three to two. The creation of a virtual duopoly would have facilitated anticompetitive coordination between the two remaining suppliers and risked price increases and reductions in the quality of service by limiting availability or delivery options to original equipment manufacturers. Similarly, the proposed acquisition would have reduced the number of significant suppliers of replacement air springs to commercial vehicle owners, which likely would have lessened competition in the North American aftermarket for commercial vehicle air springs.
Under the terms of the proposed consent decree, Continental must divest Veyance’s North American air springs business, which includes air spring manufacturing and assembly facilities in San Luis Potosi, Mexico; research, development, engineering, and administrative assets in Fairlawn, Ohio; and certain other tangible and intangible assets.
In addition to the department’s competitive concerns relating to commercial vehicle air springs, the department was concerned that the proposed acquisition would reduce competition in the market for automotive air conditioning barrier hose (“barrier hose”), which is used to carry refrigerant in automotive air conditioning systems. Veyance manufactures barrier hose. Continental does not itself manufacture barrier hose, but does manufacture hose assemblies that incorporate barrier hose supplied by a third party. Because Continental had an exclusive supply agreement with the only significant firm that competes with Veyance in the manufacture and sale of barrier hose in North America, the proposed acquisition raised additional competitive concerns. Continental, however, has waived the exclusivity requirement in its supply agreement, so its supplier now may sell air conditioning hose products to any third party.
The department’s Antitrust Division, the Canadian Competition Bureau, the Administrative Council for Economic Defense in Brazil, and the Federal Competition Commission in Mexico cooperated closely throughout the course of their respective investigations.
Continental is a corporation organized and existing under the laws of Germany, with headquarters in Hanover, Germany. Continental is a leading German automotive manufacturing company, specializing in tires, brake systems, and components, and it is one of the world’s largest producers of rubber products. Its annual sales for 2013 were approximately $40 billion. ContiTech North America Inc., of Montvale, New Jersey, is a part of ContiTech AG, a division of Continental. ContiTech North America produces and sells parts, components, and systems, including commercial vehicle air springs, for the automotive engineering industry in North America.
Veyance, incorporated in Delaware, is headquartered in Fairlawn, Ohio. Veyance manufactures engineered rubber products for heavy-duty industrial, automotive, and military applications. Veyance also produces and sells automotive and commercial vehicle parts, including commercial vehicle air springs, in North America. In 2013, Veyance had $2.1 billion in sales.
As required by the Tunney Act, the proposed consent decree, along with the department's competitive impact statement, will be published in the Federal Register. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 8700, Washington, D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.
California Operator of myRedBook.com Website Pleads Guilty to Facilitating ProstitutionRead the Press Release
A California man pleaded guilty today in connection with his operation of the myRedBook.com website to facilitate prostitution. This represents the first federal conviction of a website operator for facilitation of prostitution.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Melinda Haag of the Northern District of California, Special Agent in Charge David J. Johnson of the FBI’s San Francisco Field Office and Special Agent in Charge José M. Martinez of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) San Francisco Office made the announcement.
Eric Omuro, also known as “Red,” 53, of Mountain View, California, pleaded guilty today before U.S. District Judge William H. Orrick of the Northern District of California to using a facility of interstate commerce with the intent to facilitate prostitution. His co-defendant, Annemarie Lanoce, 40, of Rocklin, California, pleaded guilty on Nov. 20, 2014, for assisting Omuro with the operation of the myRedBook.com website. Omuro’s sentencing hearing is set for March 26, 2015, and Lanoce’s sentencing hearing is set for March 19, 2015.
As part of the plea agreement, Omuro admitted that from April 2010 until June 25, 2014, he owned, managed, and operated a website known as myRedBook.com, which was previously known as sfredbook.com. Omuro admitted that the website hosted advertisements posted by prostitutes containing explicit photos, graphic descriptions of sexual services offered, and rates for the sexual services. The advertisements were searchable by geographic location, including cities throughout California, other U.S. states, and Canada.
Omuro admitted that members of his website and prostitutes typically used acronyms for sex acts, which were defined in graphic detail in the website’s “Terms and Acronyms” section. While prostitutes could post advertisements for free, myRedBook.com offered additional options for a fee. For example, prostitutes could pay a fee to have their advertisement featured more prominently on the website. Similarly, customers could access myRedBook.com for free. If a customer purchased a membership, however, the customer obtained early and enhanced access to prostitute reviews, enhanced prostitute review search options, and access to additional VIP forums, among other things.
As part of the plea agreement, Omuro agreed to the forfeiture of the domain names sfRedBook.com and myRedBook.com and more than $1.28 million in cash and property as proceeds and other property involved in his unlawful activity.
Omuro was arrested on June 25, 2014, on a warrant issued following his indictment.
This case was investigated by the FBI’s San Francisco Field Office, the IRS-CI, and the Oakland Police Department. The case is being prosecuted by the Criminal Division’s Child Exploitation and Obscenity Section and U.S. Attorney’s Office for the Northern District of California. The Criminal Division’s Office of International Affairs provided assistance to the prosecution.
Utah Accountant Sentenced for Filing over $9 Million in False Tax Refund Claims and $300 Million Fictitious Financial InstrumentRead the Press Release
A Heber City, Utah, man was sentenced today to serve 78 months in prison for filing false claims for income tax refunds and for filing a fictitious financial instrument, announced Acting Deputy Assistant Attorney General Larry J. Wszalek for the Department’s Tax Division and the Internal Revenue Service (IRS).
U.S. District Court Judge Clark Waddoups also ordered Dick Reid Jenkins, to pay $250,340 in restitution to the IRS and to serve three years of supervised released upon his release from prison.
In June 2014, Jenkins, a certified public accountant, was convicted at trial of 18 counts of filing false claims for tax refunds and one count of presenting a fictitious financial instrument to the United States. According to the superseding indictment and the proof at trial, in September 2008, Jenkins filed a false individual income tax return for himself for tax year 2007 which claimed an income tax refund of $402,920. Then, in October 2008, Jenkins filed a false amended 2004 individual income tax return, which claimed an income tax refund of $434,261. Both false claims were based on the use of a falsified IRS Form 1099-OID (Original Issue Discount), which is a form of accrued interest, to claim the false refunds. From 2009 through 2014, the IRS has listed this scheme as one of its “Dirty Dozen” worst tax scams.
According to both the superseding indictment and the proof at trial, in addition to his own false returns, from September 2008 through February 2009, Jenkins caused 16 other false federal individual income tax returns to be filed on behalf of other individuals. These false tax returns also used false Forms 1099-OID and claimed federal income tax refunds totaling $8,407,623.
Additionally, according to the superseding indictment and the proof at trial, on June 30, 2008, Jenkins presented a false and fictitious financial instrument to the U.S. Department of the Treasury in the amount of $300 million.
The case was investigated by special agents of IRS-Criminal Investigation. Trial Attorney Stuart Wexler for the Tax Division prosecuted the case.
Man Sentenced to Prison for Robbery of a Jewelry CourierRead the Press Release
An Atlanta man was sentenced to 70 months in prison today for his role in the robbery of a jewelry courier, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Sally Quillian Yates of the Northern District of Georgia.
Jose Vicente Ramirez-Rodriguez, 40, of Atlanta, pleaded guilty on Dec. 10, 2014, to conspiracy to commit Hobbs Act robbery and interstate transportation of stolen property. In addition to the prison sentence, U.S. District Judge Steve C. Jones of the Northern District of Georgia ordered Ramirez-Rodriguez to pay $122,398 in restitution.
According to admissions in his plea agreement, Ramirez-Rodriguez followed the jewelry courier to a QuikTrip gas station on Jan. 31, 2013. As he was following the courier, Ramirez-Rodriguez contacted a co-defendant to help him with the robbery. That co-defendant, in turn, contacted the other three defendants, all of whom came to the gas station together. When the courier was putting gas in his car, two of the defendants approached him, one restrained him with a knife, while the other smashed the car’s window and took a briefcase containing over $125,000 in assorted jewelry.
Honorio Sanchez-Valenica, John Rodriguez, Ali Alejandro Godoy-Maximo, and Michael Alejandro Tovar-Vargas, were sentenced to serve 137 months in prison, 63 months in prison, 68 months in prison and 87 months in prison respectively on Oct. 27, 2014, for their involvement in the robbery.
This case was investigated by the FBI, Immigration and Customs Enforcement, and the Gwinnett County Police Department, with assistance from the Dallas Police Department. The case is being prosecuted by Laura Gwinn of the Organized Crime and Gang Section and Assistant U.S. Attorney Kim Dammers of the Northern District of Georgia.
Justice Department Sues Scotland County, North Carolina, Public Housing Agency and Two Employees for Sexual HarassmentRead the Press Release
The Justice Department today filed a lawsuit against Southeastern Community and Family Services, Inc. (formerly Four-County Community Services, Inc.), a public housing agency that administers the Section 8 voucher program in Scotland County, North Carolina, along with two of its employees John Wesley and Eric Pender. The lawsuit alleges that Wesley, the Section 8 housing coordinator, and Pender, the housing inspector, have sexually harassed female voucher program participants and applicants, in violation of the Fair Housing Act.
The complaint, filed in the U.S. District Court for the Middle District of North Carolina, alleges, among other things, that Wesley and Pender have subjected voucher program participants and applicants to unwanted sexual comments, sexual touching and other sexual acts, conditioned or offered Section 8 benefits in exchange for sexual acts and took adverse housing actions against those who rebuffed their sexual advances. As alleged in the complaint, Pender and Wesley have engaged in this conduct while exercising their authority as employees of Southeastern Community and Family Services (SCFS), and SCFS has failed to take reasonable preventive or corrective measures.
“No one, including those who seek public assistance for housing benefits, should be subjected to sexual harassment, particularly by the very people tasked with providing critical assistance,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “The Justice Department will continue its vigorous enforcement of the Fair Housing Act against those who abuse their power and authority.”
“To invade the safety and security of someone’s home with sexually harassing and other abhorrent behavior will not be tolerated,” said U.S. Attorney Ripley Rand for the Middle District of North Carolina. “The goal of this lawsuit is to vindicate the rights of those subjected to the types of shameful conduct alleged in the Complaint – conduct that is a violation both of federal law and of basic human decency.”
The suit seeks monetary damages to compensate victims, civil penalties, and a court order barring future discrimination and requiring additional preventive measures.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination by Southeastern Community and Family Services, John Wesley, or Eric Pender or have other information about this matter can contact the Justice Department at 1-800-896-7743, mailbox 94, or e-mail the Justice Department at [email protected]. Persons who believe that they have experienced unlawful housing discrimination elsewhere can contact the Justice Department at 1-800-896-7743, or e-mail [email protected], or contact the Department of Housing and Urban Development at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must be proven in federal court.
Former CEO of TierOne Bank Charged in Scheme to Defraud Bank’s Shareholders and Mislead RegulatorsRead the Press Release
The former Chief Executive Officer of TierOne Bank, a publicly traded commercial bank formerly headquartered in Lincoln, Nebraska, was charged today for his role in a scheme to defraud TierOne’s shareholders and mislead regulators by concealing the declining value of its loan and real estate portfolio. Earlier this week, the former President and Chief Operating Officer pleaded guilty for his role in the scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge Thomas R. Metz of the FBI’s Omaha Division and Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Romero made the announcement.
“Today’s charges against the CEO of TierOne Bank represent our continuing drive to prosecute fraudulent conduct that jeopardizes our nation’s financial institutions,” said Assistant Attorney General Caldwell. “We will continue to investigate and prosecute bank executives who engage in deceptive and fraudulent behavior, fueled by greed.”
“What Gilbert G. Lundstrom’s indictment demonstrates is that cheating and breaking the law will not be tolerated,” said FBI Special Agent in Charge Metz. “This joint investigation, in conjunction with SIGTARP reflects the FBI’s nonstop commitment to protect our communities by aggressively investigating and bringing to justice individuals exploiting their influence or position for personal gain.”
“SIGTARP’s investigation with the FBI, DOJ, and the U.S. Attorney’s Office has resulted in criminal charges against Gilbert Lundstrom, former CEO of TARP applicant TierOne Bank, for hiding bank losses and past due loans arising from the bank’s aggressive expansion out of its traditional lending areas,” said Special Inspector General Romero. “Lundstrom is essentially charged with having two set of books, with the books shown to regulators concealing tens of millions of dollars in delinquent loans. Rather than tell the truth that this aggressive expansion resulted in a loan portfolio declining in value that threatened the bank’s capital position, this bank CEO is alleged to have engaged in a conspiracy to conceal the bank’s true financial condition from regulators who were examining the bank and reviewing the bank’s TARP application. Taxpayers shouldered the burden of TARP to make our system safer, not to fill holes on bank’s books caused by fraud.”
Gilbert G. Lundstrom, 72, of Lincoln, Nebraska was the CEO of TierOne Bank from 1999 to January 2010. According to allegations in the indictment, during that time, he and others concealed the true value of TierOne’s loan and real estate portfolio and provided falsely inflated figures in its required reports to the U.S. Securities and Exchange Commission (SEC) and the Office of Thrift Supervision (OTS). Specifically, Lundstrom and others allegedly used outdated property appraisals and rejected new appraisals that would have required TierOne to mark down the value of its real estate holdings. In addition, Lundstrom and others allegedly delayed seeking new appraisals to conceal the depreciating value of its loan collateral, and restructured loan terms to disguise the borrowers’ inability to make timely interest and principal payments. As a result, Lundstrom and others were allegedly able to hide millions of dollars in losses from regulators and investors.
In 2008, TierOne submitted an application to the OTS seeking Troubled Asset Relief Program (TARP) funding. Ultimately, TierOne withdrew its application and did not receive TARP funds. TierOne filed for bankruptcy shortly after the bank was shut down by OTS in June 2010.
The charges and allegations contained in the indictment are merely accusations and the defendant is presumed innocent unless and until proven guilty.
James A. Laphen, 65, of Omaha, Nebraska, the former President and Chief Operating Officer of TierOne, pleaded guilty earlier this week to conspiracy to commit securities fraud, wire fraud, making false entries in a bank’s books and records, and making false statements before U.S. Magistrate Judge Cheryl R. Zwart of the District of Nebraska. His sentencing hearing is scheduled for February 27, 2015. On Sept. 9, 2014, TierOne’s former Chief Credit Officer, Don A. Langford, also pleaded guilty for his role in the fraud. His sentencing hearing will be scheduled at a later date.
The case was investigated by the FBI’s Omaha Division and SIGTARP. The SEC also provided substantial assistance in the investigation. The case is being prosecuted by Trial Attorneys Henry P. Van Dyck and L. Rush Atkinson of the Criminal Division’s Fraud Section.
Dallas Airmotive Inc. Admits Foreign Corrupt Practices Act Violations and Agrees to Pay $14 Million Criminal PenaltyRead the Press Release
Dallas Airmotive Inc., a provider of aircraft engine maintenance, repair and overhaul services based in Grapevine, Texas, has admitted to violations of the Foreign Corrupt Practices Act (FCPA) and agreed to pay a $14 million criminal penalty to resolve charges that it bribed Latin American government officials in order to secure lucrative government contracts.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Special Agent in Charge Diego Rodriguez of the FBI’s Dallas Division made the announcement.
A criminal information, filed today in federal court in the Northern District of Texas as part of the deferred prosecution agreement, charges Dallas Airmotive with one count of conspiring to violate the FCPA and one count of violating the FCPA’s anti-bribery provisions.
According to Dallas Airmotive’s detailed admissions in the statement of facts accompanying the deferred prosecution agreement, between 2008 and 2012, the company bribed officials of the Brazilian Air Force, the Peruvian Air Force, the Office of the Governor of the Brazilian State of Roraima, and the Office of the Governor of the San Juan Province in Argentina. Dallas Airmotive used various methods to convey the bribe payments, including by entering into agreements with front companies affiliated with foreign officials, making payments to third-party representatives with the understanding that funds would be directed to foreign officials, and directly providing things of value, such as paid vacations, to foreign officials.
This case is being investigated by the FBI’s Dallas Field Office and is being prosecuted by Trial Attorney David M. Fuhr of the Criminal Division’s Fraud Section. Assistant U.S. Attorney Michael C. Elliott from the U.S. Attorney’s Office for the Northern District of Texas has provided assistance in the case. The department acknowledges the assistance of law enforcement counterparts in Brazil. The Criminal Division’s Office of International Affairs also provided significant assistance.
Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.
Albert Entera Pingul Sentenced in U.S. District Court for Abusive Sexual ContactRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that ALBERT ENTERA PINGUL was sentenced today by Chief Judge Frances Tydingco-Gatewood, in the U.S. District Court of Guam, to thirty seven months incarceration, and five years supervised release.
Defendant PINGUL pled guilty on March 25, 2014, to one count of Abusive Sexual Conduct in violation of Title 18 U.S.C. Section 2244(a)(1). Defendant PINGUL, a Manager at the Orote Point Bowling Lanes on the U.S. Naval Base, coerced a female employee to enter a mechanic room where he engaged in sexual contact through the use of force. Defendant PINGUL was ordered to register with the Sex Offender Registry wherever he lives, works or attends school for the duration of his life. PINGUL was also ordered to undergo a sex offender assessment.
U.S. Attorney Limtiaco states, “The aggressive prosecution of all sexual offenses is a priority of the United States Attorney’s Office. The U.S. Attorney’s Office acknowledges the victim’s courage and strength in coming forward and reporting to law enforcement the unwanted sexual contact.”
The U.S. Attorney notes that defendants who have committed sexual abuse of adults or children, have a duty to register and keep their registration current with the Sex Offender Registry in their jurisdiction. Sex offenders who travel to Guam and who reside on Guam must inform the Guam Sex Offender Registry where they reside, work, or attend school - they must also periodically update their registration information. The Sex Offender Registry was created in order to protect the public by protecting victims, preventing further victimization and informing the public of the whereabouts of sex offenders. Guam’s Sex Offender Registry can be found online at www.guamcourts.org.
U.S. Attorney Limtiaco also notes that this prosecution is part of the U.S. Department of Justice’s Project Safe Childhood (PSC) Initiative, a nationwide commitment to aggressively prosecute defendants who engage in the sexual victimization of children and adults, possess or receive child pornography, and sex offenders who fail to register with the jurisdiction’s Sex Offender Registry.
The investigation was conducted by Special Agents of the Naval Criminal Investigation Service (NCIS). The case was handled by Assistant U.S. Attorney R. San Nicolas.Yuba City, California, Man Sentenced to 46 Months in Prison for Racially Motivated Attack on White Man and African-American WomanRead the Press Release
Anthony Merrell Tyler, 34, of Yuba City, California, was sentenced today by U.S. District Court Judge John A. Mendez to serve 46 months in prison for violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act. The crime involved a racially motivated attack by Tyler and two co-defendants, Billy Hammett, 30, and Perry Jackson, 29, on a white man and an African-American woman in Marysville, California, in 2011. In addition to his term of incarceration, Tyler was ordered to serve three years of supervised release upon his release from prison and to pay $175 in restitution.
According to documents filed with the court, around 10:45 p.m. on April 18, 2011, a white man and an African-American woman parked their car at a convenience store in Marysville. Shortly afterward, the three defendants attacked the man and woman because of their race. Jackson punched him twice in the head through the open passenger window. At the same time, Hammett opened the driver-side door and kicked the woman in the chest. Seconds later, Tyler smashed the car’s windshield with a crowbar, sending shattered glass into the passenger compartment. As the attack continued, the woman managed to take refuge inside the convenience store and the man struggled to get away. All three assailants then descended upon the male victim and began attacking him in the parking lot. He sustained abrasions on his right forearm and knees, while the woman suffered bruising to her chest. None of the defendants knew their victims.
In today’s hearing, and during Hammett and Jackson’s proceedings, Judge Mendez considered the defendants’ backgrounds and criminal histories. Tyler has the words “white pride” tattooed down the backs of his arms and a swastika on his left upper arm. He has previously acknowledged being a member of the Yuba County Peckerwoods, a local white supremacist group. Hammett, who has a tattoo of the words “white power” across his abdomen, was previously convicted for the unprovoked assault on a 72-year-old African-American man and was sentenced on March 25, 2014, to 87 months in prison. Jackson, who has the words “white power” tattooed in block letters down his shins, was sentenced on April 29, 2014, to 70 months in prison. Tyler entered his guilty plea on March 11, 2014.
“These three defendants targeted the victims because of their race,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “This type of attack causes harm not only to the immediate victims, but tears at the fabric of our communities and society itself. The department will continue to vigorously prosecute such acts of racial violence.”
“Racially motivated violence not only threatens the harmony of our diverse communities, it undermines the principle of equality under law, which is a foundation of our society,” said U.S. Attorney Benjamin B. Wagner for the Eastern District of California. “For these reasons, prosecuting hate crimes will continue to be one of our highest priorities.”
This case was investigated by the FBI, with assistance from the Yuba County Sheriff’s Office and the Yuba County District Attorney’s Office. The case was prosecuted by U.S. Attorney Wagner and Trial Attorney Chiraag Bains of the Justice Department’s Civil Rights Division.
Three Sentenced for Involvement in Aryan Brotherhood of Texas Racketeering ConspiracyRead the Press Release
Three Aryan Brotherhood of Texas (ABT) gang members and associates from Houston and Dallas were sentenced to prison this week for their roles in the violent ABT enterprise, 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.
Today, James Francis Sampsell, 44, of Waco, Texas, Rusty Eugene Duke, 32, of Dallas, Texas, and Steven Worthey, 42, of Houston, Texas, were sentenced to serve respective terms of 140 months, 216 months and 240 months, in federal prison by U.S. District Judge Sim Lake in the Southern District of Texas.
According to information presented in court, the three men were admitted members of ABT, a powerful race-based organization that operates inside and outside of state and federal prisons throughout Texas and the United States. Along with other ABT gang members and associates, they agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang. ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.
The ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. Previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism, but over time, the ABT has expanded its criminal enterprise to include illegal activities for profit, according to court records.
In order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, arson, assault, robbery and threats against those who violated the rules or posed a threat to the enterprise. Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
The defendants sentenced this week are three of 36 defendants convicted of conducting racketeering activity through the ABT criminal enterprise, among other charges. The last defendants are set for sentencing next week.
This Organized Crime Drug Enforcement Task Force case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement, Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.
The case is being prosecuted by David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Ed Gallagher and Tim Braley of the Southern District of Texas.
Department of Justice Launches New Digital ServicesRead the Press Release
Today the U.S. Department of Justice is announcing the launch of two new digital services for the American people: the DOJ News API and the DOJ Law Jobs API. These web APIs (application programming interfaces) provide web developers the ability to build mobile apps and other software applications that can search, sort, and filter thousands of press releases, speeches, blog posts, and law job vacancy announcements published by the Department. Consistent with the President's technology vision described in the Digital Government Strategy and Open Data Policy, this launch transforms collections of website documents into a transparent, interactive dataset.
Today's API launch is made possible by an effort led by the Office of the Chief Information Officer to replace the aging technology infrastructure of Justice.gov with a cloud-based, open source website management platform that will be used by hundreds of Department of Justice component offices across the country. This website upgrade adds search, sort, and filter capabilities to thousands of Supreme Court briefs, legal opinions, Freedom of Information Act (FOIA) court decisions, Congressional testimony, and more. To get started using the APIs or to learn more about developer resources from the Department, see www.justice.gov/developer.
“The APIs are part of an effort to replace aging technology with a cloud-based, open source platform,” said Deputy Assistant Attorney General, Information Resources Management/Chief Information Officer Joseph F. Klimavicz. “Website content that has been migrated to the new platform automatically adjusts to fit any device, including mobile devices and tablets, as well as desktops, making the Department's information assets more accessible than ever before. The open source platform also enables the Department to refresh content rapidly, providing better access to information to the American public.
In developing the website management platform and APIs, the Department followed guidance from the U.S. Digital Service and collaborated with the 18F program at the General Service Administration.
“It’s wonderful to see the Justice Department building out their suite of APIs,” said GSA Senior API Strategist Gray Brooks. “There's fantastic potential in government APIs, for the public as well as for agency operations. Simply put, this is the future of digital government and the efforts that go into justice.gov/developer will result in a more efficient and productive operation.”
Additional details about digital strategy and open government at the U.S. Department of Justice are available at www.justice.gov/digitalstrategy and www.justice.gov/open.
Daniel J. Casamatta Is Appointed Acting U.S. Trustee for Arkansas, Missouri and NebraskaRead the Press Release
WASHINGTON – Daniel J. Casamatta has been appointed by Attorney General Eric Holder as Acting U.S. Trustee for Arkansas, Missouri and Nebraska (Region 13), effective on January 1, 2015, the Executive Office for U.S. Trustees announced today. Mr. Casamatta replaces Nancy J. Gargula, the U.S. Trustee for Region 10 (Indiana and Central and Southern Illinois), who concurrently has served as the U.S. Trustee for Region 13 since 2006.
Mr. Casamatta has served as the Assistant U.S. Trustee in the Kansas City, Mo., office of the U.S. Trustee Program (USTP) since 2008. Prior to that appointment, he served as Assistant U.S. Trustee in Grand Rapids, Mich., for 18 years, and for periods of time was also the Acting Assistant U.S. Trustee in Indianapolis and the Acting Chief of the USTP's National Bankruptcy Training Institute located in the National Advocacy Center in Columbia, S.C. Mr. Casamatta currently leads the USTP's Data Integrity Group to ensure the accuracy and completeness of data in the Program's enforcement reporting systems. Before joining the USTP more than 26 years ago, Mr. Casamatta engaged in the private practice of law in Cleveland, specializing in commercial litigation and bankruptcy matters. He received his law degree from Case Western Reserve University Law School in Cleveland, and his undergraduate degree from Cleveland State University.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 93 field office locations. Region 13 is headquartered in Kansas City, Mo., with additional offices in Little Rock, Ark., and Omaha, Neb.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Andrew R. Vara Is Appointed Acting U.S. Trustee for Delaware, New Jersey and PennsylvaniaRead the Press Release
WASHINGTON – Andrew R. Vara has been appointed by Attorney General Eric Holder as Acting U.S. Trustee for Delaware, New Jersey and Pennsylvania (Region 3), effective on January 1, 2015, the Executive Office for U.S. Trustees announced today. Mr. Vara replaces Roberta A. DeAngelis, who is retiring after more than 15 years with the U.S. Trustee Program (USTP), including more than eight years as Region 3 U.S. Trustee or Acting U.S. Trustee.
Mr. Vara has served as the Assistant U.S. Trustee in the USTP's Cleveland office since 2008. He also previously has headed the USTP's offices in Wilmington, Del., and Manhattan, as Assistant U.S. Trustee and Acting Assistant U.S. Trustee, respectively. He frequently serves as a faculty member and lecturer at the USTP’s National Bankruptcy Training Institute located in the National Advocacy Center in Columbia, S.C. Mr. Vara serves as co-chair of education for the American Bankruptcy Institute's (ABI) Ethics and Professional Compensation Committee and recently served as a member of the ABI's Ethics Task Force. Before joining the USTP more than 20 years ago, he clerked for Hon. Laurence Howard, Chief Judge of the U.S. Bankruptcy Court in the Western District of Michigan. Mr. Vara received his law degree with honors from Ohio State University Moritz College of Law in Columbus, Ohio, where he was awarded membership in the Order of the Coif, and his undergraduate degree magna cum laude from Duke University in Durham, N.C.
The USTP is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 93 field office locations. Region 3 is headquartered in Philadelphia, with additional offices in Wilmington, Del.; Newark, New Jersey; and Harrisburg and Pittsburgh, Pa.
Contact:Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411Two Florida Reptile Dealers Sentenced to Prison for Conspiring and Trafficking in Protected ReptilesRead the Press Release
Two Florida men were sentenced on charges of conspiracy and trafficking in protected timber rattlesnakes and endangered Eastern indigo snakes on Friday, Dec. 5. A federal judge in Philadelphia sentenced Robroy MacInnes, 55, of Inverness, Florida, and Robert Keszey, 48, of Bushnell, Florida, to 18 months and 12 months in prison respectively for their role in trafficking in state and federally protected reptiles. MacInnes and Keszey co-owned a well-known reptile dealership, Glades Herp Farm Inc., based in Florida, and Keszey formerly hosted the Discovery Channel show “Swamp Brothers.” The defendants will also serve three years of supervised release. MacInees was also sentenced to pay a $4,000 fine and Keszy will pay a $2,000 fine.
Between 2006 and 2008, the defendants collected protected snakes from the wild in Pennsylvania and New Jersey, purchased protected eastern timber rattlesnakes that had been illegally collected from the wild in New York, and transported eastern indigo snakes, which are listed under the federal Endangered Species Act, from Florida to Pennsylvania. The evidence at trial showed that the protected rattlesnakes were destined for sale at reptile shows in Europe, where a single timber rattlesnake can sell for up to $800. The eastern indigos were intended for domestic sale where a single snake is worth up to $1,000. In addition to trafficking in illegal animals, the defendants attempted to persuade a witness not to provide the government with information regarding their illegal dealings.
The eastern timber rattlesnake is a species of venomous pit viper native to the eastern United States, and is listed as threatened in New York. It is also illegal to possess an eastern timber rattlesnake without a permit in Pennsylvania. The eastern indigo snake, the longest native North American snake species, is listed as threatened by both Florida and federal law.
Both MacInnes and Keszey were convicted on Nov. 15, 2013 after a jury trial in Philadelphia. The case was investigated by the U.S. Fish and Wildlife Service, Office of Law Enforcement, with assistance from the New York Department of Environmental Conservation. The case was prosecuted by Trial Attorney Patrick M. Duggan of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division and Assistant U.S. Attorney Mary Kay Costello of the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
OtisMed Corporation and Former CEO Plead Guilty to Distributing FDA-Rejected Cutting Guides for Knee Replacement SurgeriesRead the Press Release
OtisMed Corp. and its former chief executive officer (CEO) admitted today to intentionally distributing knee replacement surgery cutting guides after their application for marketing clearance had been rejected by the Food and Drug Administration (FDA), and the corporation agreed to pay more than $80 million to resolve its related criminal and civil liability, the Justice Department announced today.
OtisMed and its CEO, Charlie Chi, 45, of San Francisco, pleaded guilty in federal court in Newark, New Jersey. OtisMed pleaded guilty before U.S. District Judge Claire C. Cecchi to an information charging it with distributing, with the intent to defraud and mislead, adulterated medical devices into interstate commerce in violation of the Food, Drug, and Cosmetic Act (FDCA). Judge Cecchi also sentenced the company today, fining OtisMed $34.4 million and ordering $5.16 million in criminal forfeiture. In a separate civil settlement, OtisMed agreed to pay $40 million plus interest to resolve its civil liability. Chi pleaded guilty before U.S. Magistrate Judge Mark Falk to three counts of introducing adulterated medical devices in interstate commerce. Chi will be sentenced by Judge Cecchi on March 18, 2015.
“Americans must be able to trust that they are treated with medical devices that have been shown to be safe and effective,” said Deputy Assistant Attorney General Jonathan Olin for the Justice Department’s Civil Division. “The Department of Justice will not tolerate companies and individuals that cut corners when it comes to the public’s health.”
“It is vital that products like the OtisKnee are subjected to the appropriate level of scrutiny,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “Patients seeking medical care are vulnerable; they are often afraid, and in pain. They should be able to trust their doctors. And they should be entitled to trust that the devices their doctors are using are safe, effective, tested and approved. OtisMed and Charlie Chi betrayed that trust.”
The civil settlement resolves claims filed under the whistleblower provisions of the False Claims Act, which permit private parties to file suit on behalf of the United States and obtain a portion of the government’s recovery. The civil lawsuit was filed in the District of New Jersey and is captioned U.S. ex rel. Adrian v. OtisMed Corp., et al.
OtisMed was a privately held company when OtisMed and Chi committed the criminal conduct, and was later acquired by Stryker Corp., a medical technology company based in Michigan, in November 2009. At the time the shipments were made in September 2009, Stryker executives were not aware that OtisMed and Chi had shipped cutting guides after the FDA had rejected the company’s application for marketing clearance for the device. Stryker, OtisMed’s parent corporation, cooperated with the government with regard to Otismed’s pre-acquisition conduct throughout the investigation. In addition to the criminal pleas and civil resolution, OtisMed also agreed to be excluded from participating in all federal health care programs for a period of 20 years and Stryker separately agreed to a series of compliance measures aimed at preventing future misconduct.
According to documents filed in this case and statements made in court:
Chi was among the founders of OtisMed in August 2005, and conceived of the OtisKnee orthopedic cutting guide, its primary product. Chi acted as OtisMed’s president, CEO and board of directors’ chairman until OtisMed was acquired by Stryker in November 2009. The OtisKnee was used by surgeons during total knee arthroplasty (TKA), commonly known as knee replacement surgery. The surgical procedure requires a surgeon to remove the ends of the leg bones and to reshape the remaining bone to accommodate the implantation of an artificial knee prosthesis. The cuts to the bone must be made at precise angles because they are critical to the clinical result; failure to achieve the correct angle in TKA procedures can result in failure of the bones and/or the implanted prosthetic joint.
OtisMed marketed the OtisKnee cutting guide as a tool to assist surgeons in making accurate bone cuts specific to individual patients’ anatomy based on magnetic resonance imaging (MRI) performed prior to surgery. None of OtisMed’s claims regarding the OtisKnee device were evaluated by the FDA before the company used them in advertisements and promotional material.
Between May 2006 and September 2009, OtisMed sold more than 18,000 OtisKnee devices, generating revenue of approximately $27.1 million.
On Oct. 2, 2008, OtisMed submitted a pre-market notification to the FDA seeking clearance to market the OtisKnee. The company had not previously sought the FDA’s clearance or approval and had been falsely representing to physicians and other potential purchasers that the product was exempt from such pre-market requirements.
On Sept. 2, 2009, the FDA sent OtisMed a notice that its submission had been denied, noting that the company had failed to demonstrate that the OtisKnee was as safe and effective as other legally marketed devices. The letter warned OtisMed that distribution of the OtisKnee prior to approval would be an FDCA violation, and indicated the FDA viewed the product as a “significant risk device system,” which is defined as presenting a potential for serious risk to the health, safety or welfare of a subject. Chi and others at OtisMed received advice from legal and regulatory counsel confirming it would be unlawful for OtisMed to continue distributing the OtisKnee.
Though the board of directors unanimously decided to stop further shipments of the devices, Chi and others at OtisMed were concerned that inconveniencing surgeons planning to use the OtisKnee in scheduled surgeries would exacerbate the negative impact of the FDA letter on the reputation of OtisMed and the device. Chi directed OtisMed employees to organize a mass shipment of all OtisKnee devices that had been manufactured but had not yet been shipped and suggested ways for the employees to hide the shipments from FDA regulators.
At Chi’s direction, OtisMed shipped approximately 218 OtisKnee guides from California to surgeons throughout the United States, including 16 to surgeons in New Jersey. Both Chi and OtisMed admitted that Chi ordered the distribution a week after the FDA denied OtisMed’s request for clearance.
“Companies and individuals put the public health at risk by not complying with FDA regulatory requirements for the pre-market review of medical devices,” said Acting Director Philip J. Walsky for the FDA’s Office of Criminal Investigations. “We will continue to assure consumer confidence in FDA-regulated products by investigating and bringing to justice those who endanger patient safety by distributing unapproved surgical devices.” “When OtisMed and its CEO, Charlie Chi, distributed medical devices that were not FDA-approved, they violated the trust that patients extend to health care professionals,” said Special Agent in Charge Thomas O’Donnell of the New York Regional Office of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “This outrageous behavior triggered our agency to exclude OtisMed from participating in Medicare and Medicaid for 20 years. We will continue to work with our law enforcement partners to protect federally funded health care programs and the patients who rely on those programs.”
The civil settlement resolves allegations arising from the marketing and distribution of the OtisKnee without receiving approval or clearance from the FDA for the device. Specifically, the settlement alleged that in May 2006, OtisMed, through co-promotion activities with Stryker Corporation, began commercially distributing the OtisKnee without having received clearance or approval from the FDA for the device. OtisMed continued to distribute the device while its application was pending and even after the FDA informed OtisMed that the product could not be lawfully distributed until FDA approved the device.
The settlement also alleged that OtisMed encouraged health care providers to submit claims for MRIs that were not reimbursable because they were not performed for diagnostic use, but rather solely to provide data for the creation of the OtisKnee. Except as admitted in the plea agreement, the claims settled by the civil settlement agreement are allegations only, and there has been no determination of liability as to those claims.
The company will pay approximately $41.2 million, including interest, to resolve its civil liability for submitting false claims to the Medicare, TRICARE, Federal Employees Health Benefits and Medicaid programs. Of that amount, approximately $41 million will be paid to the federal government. Medicaid is funded jointly by the states and the federal government and participating Medicaid states will receive approximately $376,700 of the settlement amount. As part of today’s resolution, the relator will receive approximately $7 million.
In addition to agreeing to continue to cooperate with the government’s investigation and maintain a compliance program, Stryker agreed to conduct a review and audit regarding whether other marketed devices have the appropriate FDA approvals and share the results of that audit with the government. Stryker also agreed to annual certifications from the president of Stryker’s orthopedics group and from Stryker’s board of directors regarding the effectiveness of the compliance program.
Chi faces a statutory maximum sentence of one year in prison and a $100,000 fine, or twice the gain or loss from the offense, for each of the three counts of introducing adulterated medical devices in interstate commerce.
The guilty pleas and civil settlement are the culmination of a long-term investigation conducted jointly by the FDA’s Office of Criminal Investigations, under the direction of Special Agent in Charge Antoinette V. Henry, and HHS-OIG, under the direction of Special Agent in Charge O’Donnell. Counsel to the HHS-OIG and FDA’s Office of Chief Counsel to the FDA also assisted. The National Association of Medicaid Fraud Control Units, along with the Medicaid Fraud Control Unit of the Massachusetts Attorney General’s Office, assisted in coordinating the settlements with the various states.
Additional assistance was provided by the Defense Health Agency and the Office of Personnel Management–Office of the Inspector General.
This resolution 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 $23.2 billion through False Claims Act cases, with more than $14.9 billion of that amount recovered in cases involving fraud against federal health care programs.
The government is represented in the criminal case by Chief Jacob T. Elberg of the U.S. Attorney’s Office Health Care and Government Fraud Unit and Trial Attorney Ross S. Goldstein of the Civil Division’s Consumer Protection Branch, and in the civil settlement by Assistant U.S. Attorney Charles Graybow of the District of New Jersey’s Health Care and Government Fraud Unit and Trial Attorney Charles Biro of the Civil Division.
U.S. Attorney Fishman reorganized the health care fraud practice at the U.S. Attorney’s Office for the District of New Jersey shortly after taking office, including creating the stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $620 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the FDCA and other statutes.
OtisMed Documents
Miami-Area Certified Nursing Assistant Sentenced to 150 Months in Prison for Role in $200 Million Medicare Fraud SchemeRead the Press Release
A Miami licensed nursing assistant was sentenced today to serve 150 months in prison for participating in a $200 million Medicare fraud scheme involving fraudulent billings by American Therapeutic Corporation (ATC), a mental health company headquartered in Miami.
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 Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement.
Rodolfo Santaya, 55, of Miami, was convicted on July 18, 2014, after a six-day jury trial, of conspiracy to commit health care fraud and wire fraud, conspiracy to pay and receive bribes and kickbacks, and two counts of receipt of bribes and kickbacks in connection with a federal health care benefit program. In addition to the prison sentence, U.S. District Judge Jose E. Martinez of the Southern District of Florida ordered Santaya to pay more than $18.2 million in restitution.
Evidence at trial demonstrated that, between 2006 and 2010, Santaya was paid thousands of dollars a month in cash kickbacks in exchange for referring Medicare beneficiaries to ATC, which operated purported partial hospitalization programs (PHPs) in seven locations throughout South Florida and Orlando. A PHP is a form of intensive treatment for severe mental illness.
Evidence at trial also demonstrated that the Medicare beneficiaries Santaya sent to ATC did not need, qualify for, nor receive PHP treatment. Nevertheless, ATC submitted false and fraudulent bills to Medicare for services purportedly provided to each of Santaya’s patients. In order to justify ATC’s fraudulent billings, medical professionals, including doctors, fabricated and signed fraudulent medical documentation and patient files.
ATC, an associated management company, and more than 20 individuals, including ATC’s owners, have all previously pleaded guilty or been convicted at trial. Santaya has been in federal custody since his conviction.
The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Assistant Chief Robert A. Zink and Trial Attorneys Nicholas E. Surmacz and 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 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Joint Statement from the Office of the Attorney General and the Office of the Director of National Intelligence on the Declassification of Renewal of Collection Under Section 501 of the Foreign Intelligence Surveillance ActRead the Press Release
Earlier this year in a speech at the Department of Justice, President Obama announced a transition that would end the Section 215 bulk telephony metadata program as it previously existed, and that the government would establish a mechanism that preserves the capabilities we need without the government holding this bulk data. As a first step in that transition, the President directed the Attorney General to work with the Foreign Intelligence Surveillance Court (FISC) to ensure that, absent a true emergency, telephony metadata can only be queried after a judicial finding that there is a reasonable, articulable suspicion that the selection term is associated with an approved international terrorist organization. The President also directed that the query results must be limited to metadata within two hops of the selection term instead of three. These two changes have been in effect since February 2014.
In addition, the President also directed the Intelligence Community and the Attorney General to develop options for a new approach to match the capabilities and fill gaps that the Section 215 program was designed to address without the government holding this metadata. After carefully considering the available options, the President announced in March that the best path forward is that the government should not hold this data in bulk, and that the data should remain at the telephone companies with a legal mechanism in place that would allow the government to obtain data pursuant to individual orders from the FISC approving the use of specific numbers for such queries. The President also noted that legislation would be required to implement this option, and he has called on Congress to enact this important change.
The Administration welcomes the opportunity to work with the new Congress to implement the changes the President has called for. Given that legislation has not yet been enacted, and given the importance of maintaining the capabilities of the telephony metadata program, the government has sought a 90-day reauthorization of the existing program, as modified by the changes the President directed in January.
Consistent with prior declassification decisions and in light of the significant and continuing public interest in the telephony metadata collection program, Director of National Intelligence James R. Clapper declassified the fact that the government filed an application with the FISC to reauthorize the existing program for 90 days, and that the FISC issued an order approving the government’s application. The order issued on Dec. 4, 2014, expires on Feb. 27, 2015. The Administration is undertaking a declassification review of this most recent court order, and when complete, the Office of the Director of National Intelligence will post the document to its website and icontherecord.tumblr.com.
Drilling Company Charged with Environmental and Maritime Crimes in AlaskaRead the Press Release
Noble Drilling (U.S.) LLC was charged with environmental and maritime crimes for operating the drill ship Noble Discoverer and the drilling unit Kulluk in violation of federal law in Alaska in 2012, the Department of Justice announced.
Under the terms of a plea agreement filed in federal court today, Noble will plead guilty to eight felony offenses, pay $12.2 million dollars in fines and community service payments, implement a comprehensive Environmental Compliance Plan, and will be placed on probation for four years. In addition, Noble’s parent corporation, Noble Corporation plc, headquartered in London, England, will implement an Environmental Management System for all Mobile Offshore Drilling Units (MODUs) owned or operated by Noble Corporation plc and its direct and indirect subsidiaries worldwide.
Noble Drilling (U.S.) LLC was charged in an eight-count Information with knowingly failing to maintain an accurate Oil Record Book and an accurate International Oil Pollution Prevention certificate, knowingly failing to maintain a ballast water record book, and knowingly and willfully failing to notify the U.S. Coast Guard of hazardous conditions aboard the drill ship Noble Discoverer. At the time of the offenses, the Noble Discoverer was operating under contract with Shell Offshore, Inc. and Shell Development, Ltd. for the purpose of drilling in the arctic in Alaska.
During the 2012 drilling season, Noble was the operator and bare boat charterer of the motor vessel Noble Discoverer and the drilling operator of the MODU Kulluk. The Kulluk was a conical-shaped vessel, weighing 27,968 gross tons, and measuring 265.7 feet in diameter. The Kulluk was not self-propelled, but rather had to be towed. The Noble Discoverer, a mobile drill ship, weighed approximately 15,296 gross tons, measured 572 feet long, and was propelled by a single main engine. In 2012, the Kulluk and the Noble Discoverer made several U.S. port calls in Washington and Alaska on their way to the Shell drilling site off the coast of Alaska. After leaving the drill site, the Kulluk ultimately ran aground off the coast of Unalaska when it broke free from its tow in bad weather, and the Noble Discoverer was dead-ship towed from Dutch Harbor to Seward due to failures with its main engine and other equipment.
Under the terms of the plea agreement, Noble admits that it knowingly made false entries and failed to record its collection, transfer, storage, and disposal of oil in the Noble Discoverer’s and the Kulluk’s oil record books in 2012. Oil record book entries falsely reflected that the Noble Discoverer’s Oil Water Separator (OWS) was used during periods of time when in fact the OWS was inoperable. Under the International MARPOL protocol and the Act to Prevent Pollution from Ships, all overboard discharges must pass through an operating OWS to insure that water pumped overboard does not contain more than 15ppm of oil.
Noble also admits that it failed to log numerous transfers and storage of machinery space bilge water and waste oil and failed to log that the Noble Discoverer’s oil content meter audible alarm was nonfunctional. Noble also made modifications to the Noble Discoverer’s new OWS system after the OWS system passed inspections by the Classification Society and the U.S. Coast Guard. Noble did not inform the U.S. Coast Guard or the Classification Society of the modifications and did not receive an International Oil Pollution Prevention certificate that documented the unapproved decanting system, the increased storage, or the new OWS piping arrangement.
Noble had problems managing the bilge and wastewater that was accumulating in the engine room spaces of the Noble Discoverer. This and other conditions led to a number of problems. Noble devised a makeshift barrel and pump system to discharge water that had entered the vessel’s engine room machinery spaces directly overboard from the Noble Discoverer without processing it through the required pollution prevention equipment as required by law. Noble failed to notify the Coast Guard about this system, and took steps to actively hide the fact that it was being used. These false and missing record entries and the use of the illegal overboard discharge system all violated the Act to Prevent Pollution from Ships.
In the factual basis of the plea agreement, Noble also admits that it negligently discharged machinery space bilge water from the Noble Discoverer into Broad Bay, Unalaska, on July 22, 2012. While anchored in Dutch Harbor, the Noble Discoverer’s bilge holding tank 27S overflowed and went overboard, creating a sheen in Broad Bay.
The Nonindigenous Aquatic Nuisance Prevention and Control Act requires vessels to maintain accurate ballast records reflecting the source of ballast water in the ballast water tanks, discharges from the tanks, and the total volume of ballast water onboard. By design, water ballast tanks should only contain uncontaminated seawater. Noble pumped oily skimmer tank fluids and deck water with a sheen into several ballast tanks on the Noble Discoverer. Noble then discharged those ballast tanks directly overboard instead of properly discharging the water through the OWS or transferring to a shore-side facility. Noble failed to record the transfers to the ballast tanks and the subsequent discharges in the ballast log.
The Ports and Waterways Safety Act regulations require that the owner, operator, or person in charge of a vessel must immediately notify the nearest Coast Guard office whenever there is a hazardous condition, either aboard a vessel or caused by the vessel or its operation. Noble knowingly and willfully failed on several occasions in 2012 to notify the U.S. Coast Guard of hazardous conditions aboard the Noble Discoverer. There were conditions aboard the Noble Discoverer that may have adversely affected the safety of the Noble Discoverer, other vessels, and the environmental quality of ports, harbors, and navigable waterways of the United States. During 2012, the Noble Discoverer experienced numerous problems with its main propulsion system, including its main engine and its propeller shaft, resulting in engine shut-downs, equipment failures, and unsafe conditions. At times, the condition of the Noble Discoverer’s main engine also created high levels of exhaust in the engine room, multiple sources of fuel and oil leaks, and backfires. Noble acknowledges that it failed to report any of these hazardous conditions to the U.S. Coast Guard.
The Noble Discoverer was initially detained in Seward by the Officer in Charge, Marine Inspection for the Western Alaska zone, following a Coast Guard Port State Control examination on November 29, 2012. This case was investigated by the U.S. Coast Guard Investigative Service and the U.S. Environmental Protection Agency Criminal Investigation Division and is being prosecuted by the Department of Justice’s Environmental Crimes Section and the United States Attorney’s Office for the District of Alaska.
Defense Contractor Pleads Guilty to Major Fraud in Provision of Supplies to U.S. Troops in AfghanistanRead the Press Release
Supreme Foodservice GmbH, a privately held Swiss company, and Supreme Foodservice FZE, a privately-held United Arab Emirates (UAE) company, pleaded guilty today to major fraud against the United States and agreed to resolve civil violations of the False Claims Act, in connection with a contract to provide food and water to the U.S. troops serving in Afghanistan, the Justice Department announced today. The companies pleaded guilty in the Eastern District of Pennsylvania (EDPA) and paid $288.36 million in the criminal case, a sum that includes the maximum criminal fine allowed.
In addition, Supreme Group B.V. and several of its subsidiaries have agreed to pay an additional $146 million to resolve a related civil lawsuit, as well as two separate civil matters, alleging false billings to the Department of Defense (DoD) for fuel and transporting cargo to American soldiers in Afghanistan. The lawsuit was filed in the EDPA, and the fuel and transportation allegations were investigated by the Southern District of Illinois and the Eastern District of Virginia, respectively, along with the Department’s Civil Division.
“The civil resolutions and agreements reflect the Justice Department’s continuing efforts to hold accountable contractors that have engaged in war profiteering,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The department will pursue contractors that knowingly seek taxpayer funds to which they are not entitled.”
“These companies chose to commit their fraud in connection with a contract to supply food and water to our nation’s fighting men and women serving in Afghanistan,” said U.S. Attorney Zane David Memeger for the Eastern District of Pennsylvania. “That kind of conduct is repugnant, and we will use every available resource to punish such illegal war profiteering.”
The Criminal Fraud
In 2005, Supreme Foodservice AG, now called Supreme Foodservice GmbH, entered into a contract with the Defense Supply Center of Philadelphia (DSCP, now called Defense Logistics Agency – Troop Support) to provide food and water for the U.S. forces serving in Afghanistan. According to court documents, between July 2005 and April 2009, Supreme Foodservice AG, together with Supreme Foodservice KG, now called Supreme Foodservice FZE, devised and implemented a scheme to overcharge the United States in order to make profits over and above those provided in the $8.8 billion subsistence prime vendor (SPV) contract. The companies fraudulently inflated the price charged for local market ready goods (LMR) and bottled water sold to the United States under the SPV contract. The Supreme companies did this by using a UAE company it controlled, Jamal Ahli Foods Co. LLC (JAFCO), as a middleman to mark up prices for fresh fruits and vegetables and other locally-produced products sold to the U.S. government, and to obscure the inflated price the Supreme companies were charging for bottled water. The fraud resulted in a loss to the government of $48 million.
Supreme AG, Supreme FZE and Supreme’s owners (referred to in court documents as Supreme Owners #1 and #2) made concentrated efforts to conceal Supreme’s true relationship with JAFCO, and to make JAFCO appear to be an independent company. They also took steps to make JAFCO’s mark-up on LMR look legitimate, and persisted in the fraudulent mark-ups even in the face of questions from DSCP about the pricing of LMR.
Even though the SPV contract stated that the Supreme food companies should charge the government the supplier’s price for the goods, emails between executives at the companies (referred to as Supreme Executive #1, #2, etc) reveal the companies’ deliberate decision to inflate the prices. Among other things, Supreme Owner #1 increased the mark-up that JAFCO would impose on non-alcoholic beer from 25 percent to 125 percent. On or about Feb. 16, 2006, during a discussion about supplying a new product to the U.S. government, one Supreme executive wrote to another, “I am very sure the best option is to buy it from Germany and mark up via [JAFCO], like [non-alcoholic] beer.”
In early March 2006, after a DSCP contracting officer told the Supreme food companies that she wanted to see a manufacturer’s invoice for specific frozen products, Supreme Foodservice GmbH lowered its prices for those products to prices that did not include a JAFCO mark-up. On March 14, 2006, instead of disclosing that the initial pricing had included a mark-up, a Supreme executive misled the DSCP representative by saying, “Based on more realistic quantities, we have been able to negotiate a better price,” to explain the change in pricing.
In June 2006, when a DSCP contracting officer raised questions about pricing focusing on four specific items, Supreme executives again misled the DSCP, claiming that the high prices were for a high quality of product, and offering to sell lower quality products for lower prices. Supreme Foodservice GmbH did this even after analyzing its JAFCO margin on the four items in question and finding its profit margins were between 41 and 56 percent.
In September 2007, after a fired Supreme executive threatened to tell the DSCP about the fraud, his former employer entered into negotiation of a “separation agreement” with that executive to induce that executive not to disclose the ways in which the Supreme food companies were overcharging the DSCP. The agreement stated that the executive would receive, among other things, a payment of 400,000 euros in September 2010, provided that the executive did not cause: a deterioration in the economic situation linked to the SPV contract; the termination of the SPV contract; or a decrease in the price levels for products, specifically including LMR and bottled water provided to the U.S. government.
Defendant Supreme GmbH pleaded guilty to major fraud against the United States, conspiracy to commit major fraud and wire fraud. Supreme FZE, which owns JAFCO, pleaded guilty to major fraud against the United States. The Supreme companies agreed to jointly pay $48 million in restitution and $10 million in criminal forfeiture. Each company also agreed to pay $96 million in criminal fines. In addition, as a result of the criminal investigation, the Supreme companies paid $38.3 million directly to the DSCP as a refund for separate overpayments on bottled water.
The Civil Settlements
In a related civil settlement, Supreme Group agreed to pay another $101 million to settle a whistleblower lawsuit, filed in the U.S. District Court for the EDPA by a former executive, which alleged that Supreme Group, and its food subsidiaries, violated the False Claims Act by knowingly overcharging for supplying food and water under the SPV contract. The payment also resolves claims that, from June 2005 to December 2010, the Supreme food companies failed to disclose and pass through to the government rebates and discounts it obtained from its suppliers, as required by its SPV contract with the United States.
“Today’s results are part of an ongoing effort by the Defense Criminal Investigative Service (DCIS) and its law enforcement partners to protect the integrity of the Department of Defense's acquisition process from personal and corporate greed,” said Deputy Inspector General for Investigations James B. Burch for the U.S. Department of Defense’s Office of the Inspector General. “The Defense Criminal Investigative Service will continue to pursue allegations of fraud and corruption that puts the Warfighter at risk.”
“We are very pleased with this resolution, and are gratified that the public can now see what we've been aggressively investigating,” said Director Frank Robey of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit (MPFU). “Companies that do business with the government must comply with all of their obligations, and if they overcharge for supplying our men and women in uniform who are bravely serving this nation, they must be held accountable for their actions.”
Separately, Supreme Site Services GmbH, a Supreme Group subsidiary, agreed to pay $20 million to settle allegations that they overbilled for fuel purchased by the Defense Logistics Agency (DLA) for Kandahar Air Field (KAF) in Afghanistan under a NATO Basic Ordering Agreement. The government alleged that Supreme Site Services’ drivers were stealing fuel destined for KAF generators while en route for which the company falsely billed DLA.
“It is important that government contractors supporting conflicts abroad be held accountable for their billings to the government,” said U.S. Attorney Dana J. Boente for the Eastern District of Virginia. “The DoD investigating components are instrumental in protecting the interests of the government, and their efforts in this investigation are to be commended.”
Supreme Group’s subsidiary Supreme Logistics FZE also has agreed to pay $25 million to resolve alleged false billings by Supreme Logistics in connection with shipping contracts between the U.S. Transportation Command (USTRANSCOM), located at Scott Air Force Base in Illinois, and various shipping carriers to transport food to U.S. troops in Afghanistan during Operation Enduring Freedom. The shipping carriers transported cargo destined for U.S. troops from the United States to Latvia or other intermediate ports, and then arranged with logistics vendors, including Supreme Logistics, to carry the cargo the rest of the way to Afghanistan. The United States alleged that Supreme Logistics falsely billed USTRANSCOM for higher-priced refrigerated trucks when it actually used lower-priced non-refrigerated trucks to transport the cargo.
“The U.S. Attorney’s Office for the Southern District of Illinois is committed to protecting the integrity of all of the vital missions carried out at Scott Air Force Base, including the mission of the U.S. Transportation Command,” said U.S. Attorney Stephen R. Wigginton for the Southern District of Illinois. “These vital services carried out by the brave men and women of the armed forces of the United States deserve, and will receive, our full support, and this office will do everything possible to protect their missions.”
“These settlements are victories for American taxpayers,” said Special Inspector General John F. Sopko for Afghanistan Reconstruction. “It sends a clear signal that whether a case involves a mom and pop outfit or a major multinational corporation, we will work tirelessly with our investigative partners to pursue justice any time U.S. dollars supporting the mission in Afghanistan are misused.”
The EDPA lawsuit was initially filed under the qui tam or whistleblower provisions of the False Claims Act, by Michael Epp, Supreme GmbH’s former Director, Commercial Division and Supply Chain. The False Claims Act prohibits the submission of false claims for government money or property and allows the United States to recover treble damages and penalties for a violation. Under the Act’s whistleblower provisions, a private party may file suit on behalf of the United States and share in any recovery. The case remained under seal to permit the United States to investigate the allegations and decide whether to intervene and take over the case. Epp will receive $16.16 million as his share of the government’s settlement of the lawsuit.
The criminal and civil matters in the EDPA were the result of a coordinated effort by the Department of Justice’s Civil Division, the U.S. Attorney’s Office for the Eastern District of Pennsylvania, DCIS, U.S. Army’s Criminal Investigative Command’s MPFU and the FBI.
The investigation of Supreme Site Services ’ alleged false billings for fuel was conducted by the Civil Division and the U.S. Attorney’s Office for the Eastern District of Virginia, and the investigation of Supreme Logistics’ alleged false invoices for transportation was handled by the Civil Division and the U.S. Attorney’s Office for the Southern District of Illinois. Both matters were investigated by the Defense Contract Audit Agency Office of Investigative Support, the Army Audit Agency, the International Contract Corruption Task Force, the U.S. Army’s Criminal Investigative Command’s Major Procurement Fraud Unit, the DoD Office of Inspector General’s DCIS, the Special Inspector General for Afghan Reconstruction, the U.S. Air Force Office of Special Investigations and the Naval Criminal Investigative Service.
The claims resolved by the civil settlements are allegations only, except for the conduct for which the Supreme food companies have pleaded guilty.
Attorney General Holder, Secretary Duncan, Announce Guidance Package on Providing Quality Education Services to America's Confined YouthRead the Press Release
Attorney General Eric Holder and Secretary of Education Arne Duncan today announced a Correctional Education Guidance Package aimed at helping states and local agencies strengthen the quality of education services provided to America’s estimated 60,000 young people in confinement every day.
This guidance package builds on recommendations in the My Brother’s Keeper Task Force report released in May to “reform the juvenile and criminal justice systems to reduce unnecessary interactions for youth and to enforce the rights of incarcerated youth to a quality education.” Today’s guidance package is a roadmap that states and local agencies can use to improve the quality of educational services for confined youth.
“In this great country, all children deserve equal access to a high-quality public education - and this is no less true for children in the juvenile justice system,” said Attorney General Holder. “At the Department of Justice, we are working tirelessly to ensure that every young person who's involved in the system retains access to the quality education they need to rebuild their lives and reclaim their futures. We hope and expect this guidance will offer a roadmap for enhancing these young people's academic and social skills, and reducing the likelihood of recidivism.”
“Students in juvenile justice facilities need a world-class education and rigorous coursework to help them successfully transition out of facilities and back into the classroom or the workforce becoming productive members of society,” said Secretary Duncan. “Young people should not fall off track for life just because they come into contact with the justice system.”
“Today's announcement directly responds to the call to action made by President Obama's My Brother's Keeper Initiative,” said Broderick Johnson, White House Cabinet Secretary and Chair of the My Brother’s Keeper Task Force. “It is imperative that we ensure that incarcerated youth are receiving a quality education and provide them with the necessary tools for a second chance. I applaud Attorney General Eric Holder and Secretary Arne Duncan for highlighting this critical issue.”
The guidance package includes four components:
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A set of Guiding Principles for Providing High-Quality Education in Juvenile Justice Secure Care Settings, outlines five principles and supporting core activities to improve education practices, or implement new ones. Authored jointly by the U.S. Departments of Education and Justice, the guide is meant to help agencies and facilities serving youth in correctional education provide education services comparable to those available to students in community schools.
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A Dear Colleague Letter on the Individuals with Disabilities Education Act for Students with Disabilities in Correctional Facilities from Education’s Office of Special Education and Rehabilitative Services to clarify state and public agency obligations to ensure the provision of a free appropriate public education to eligible students with disabilities in correctional facilities.
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A Dear Colleague Letter on the Civil Rights of Students in Juvenile Justice Residential Facilities clarifying how the Federal civil rights laws that prohibit race, color, national origin, sex, religion and disability discrimination against students in traditional public schools also apply to educational services and supports provided to youth in juvenile justice residential facilities.
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A Dear Colleague Letter on Access to Federal Pell Grants for Students in Juvenile Justice Facilities explains the extent to which confined youth may be eligible for the Federal Pell Grant Program, and is accompanied by a fact sheet for students and a detailed set of questions and answers for institutions of higher education
“High-quality correctional education is thus one of the most effective crime-prevention tools we have,” Attorney General Holder and Secretary Duncan wrote in a dear colleague letter to chief state school officers and state attorneys general. “High-quality Correctional education – including postsecondary correctional education, which can be supported by Federal Pell Grants – has been shown to measurably reduce re-incarceration rates. Less crime means not only lower prison costs – it also means safer communities.”
The President has set a goal that, by 2020, our nation will have the highest proportion of college graduates in the world and that all Americans complete at least one year or more of college or career training. The Administration believes that even youth in correctional facilities can play their part in helping us achieve that vision.
Providing young people in confinement with access to the education they need is one of the most powerful and cost-effectives strategies for ensuring they become productive members of their communities. The average cost to confine a juvenile is $88,000 per year – and a recent study showed that about 55 percent of youth were rearrested within 12 months of release. Inmates of all ages are half as likely to go back to jail if they participate in higher education – even compared to inmates with similar histories.
This joint effort by the Departments of Education and Justice is one of a number of notable actions that they have taken to ensure that education programming in juvenile justice residential facilities is comparable to services provided in any school. The departments have been working together to help communities reduce the number of youth entering the justice system and to ensure that those in the system return to their communities with dignity, skills and viable education and employment opportunities including the following efforts this year:
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Justice and Education jointly released a School Climate and Discipline Guidance Package to provide schools with a roadmap to reduce the usage of exclusionary discipline practice and clarify schools’ civil rights obligation to not discriminate on the basis of race, color, or national origin in the administration of school discipline.
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Education released the results of the 2011-2012 Civil Rights Data Collection, which includes school discipline data from most every school in the country and certain juvenile justice facilities.
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Justice and Education filed a joint Statement of Interest in the G.F. v. Contra Costa County lawsuit in support of confined youth with disabilities who alleged that they were placed in solitary confinement for 22 hours or more per day, discriminated against on the basis of their disability, and denied their right to a free, appropriate public education.
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Attorney General Holder and Secretary Duncan met with leaders from 22 agencies for a Federal Interagency Reentry Council meeting to discuss actions to reduce reentry barriers to employment, health, housing and education for individuals who are transitioning from incarceration to community.
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Justice and Education engaged with various philanthropies to commission a School Discipline Consensus Project, led by the Council of State Governments, to bring together practitioners from the fields of education, juvenile justice, behavioral health and law enforcement to develop recommendations to address the school-to-prison pipeline, including recommendations for strengthening services to youth in confinement.
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Justice and Education coordinated and supported the National Leadership Summit on School Climate and Discipline in Washington, D.C. The summit focused on deepening partnerships between local and state education and justice officials, and community stakeholders.
All youth are deserving of an appropriate, high-quality education. This guidance package clarifies that obligation for confined youth, as well as advocating that they have a real chance at a second chance in their lives. A solid education that unleashes and expands their potential to contribute to their communities is a step in the right direction.
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Attorney General Holder Announces Federal Law Enforcement Agencies to Adopt Stricter Policies to Curb ProfilingRead the Press Release
WASHINGTON – U.S. Attorney General Eric Holder announced Monday that the Justice Department will take new steps to bar profiling by federal law enforcement agencies, building upon a 2003 policy that had previously only addressed the consideration of race and ethnicity in conducting federal investigations. The new policy will address the use of other characteristics as well—including national origin, gender, gender identity, religion, and sexual orientation—and applies a uniform standard to all law enforcement, national security, and intelligence activities conducted by the Department’s law enforcement components. The new guidance also applies to state and local law enforcement law officers who participate in federal law enforcement task forces.
The issuance of the new policy completes a thorough review first launched by the Attorney General shortly after taking office, and reaffirms the federal government’s deep commitment to ensuring that its law enforcement agencies conduct their activities in an unbiased manner.
In announcing the new policy, the Attorney General said that biased law enforcement practices not only perpetuate negative stereotypes and promote mistrust of law enforcement, but also are counterproductive to the goal of good policing.
“As Attorney General, I have repeatedly made clear that racial profiling by law enforcement is not only wrong, it is misguided and ineffective – because it can mistakenly focus investigative efforts, waste precious resources and, ultimately, undermine the public trust. Particularly in light of recent incidents we’ve seen at the local level – and the concerns about trust in the criminal justice process which so many have raised throughout the nation – it’s imperative that we take every possible action to institute sound, fair and strong policing practices.”
The Attorney General added: “With this new Guidance, we take a major and important step forward to ensure effective policing by federal law enforcement officials – as well as state and local law enforcement participating in federal task forces throughout the nation. This Guidance is the product of five years of scrupulous review. It codifies important new protections for those who come into contact with federal law enforcement agents and their partners. And it brings enhanced training, oversight, and accountability to federal law enforcement across the country, so that isolated acts do not tarnish the exemplary work that’s performed by the overwhelming majority of America’s hard-working law enforcement officials each and every day."
The new policy, which is spelled out in a memorandum circulated Monday, instructs that, in making routine or spontaneous law enforcement decisions, officers may not use race, ethnicity, gender, national origin, religion, sexual orientation, or gender identity to any degree, unless listed characteristics apply to a suspect description. Under the policy, federal law enforcement officers will be prohibited from acting on the belief that possession of a listed characteristic by itself signals a higher risk of criminality.
In all activities other than routine or spontaneous law enforcement, officers may consider the listed personal characteristics only to the extent there is trustworthy information, relevant to the locality or timeframe, that links individuals with a listed characteristic to a particular criminal incident, criminal scheme, organization, a threat to national or homeland security, a violation of federal immigration law or an authorized intelligence activity. In relying on any of the listed characteristics, an officer must also reasonably believe that the activity to be undertaken is merited under the totality of the circumstances.
A copy of the memorandum outlining the new policy is available here.
Armed Drug Trafficker Sentenced to 57 Years in Prison for Firearms and Narcotics OffensesRead the Press Release
An armed drug trafficker was sentenced today to serve 57 years in prison for his involvement in a decade-long cocaine-trafficking conspiracy in Newport News, Virginia.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office and Chief Richard W. Myers of the Newport News Police Department made the announcement after U.S. District Judge Robert G. Doumar of the Eastern District of Virginia imposed the sentence.
Kelvin L. Brown, aka, “Doom,” 34, of Newport News, was convicted by a jury on July 30, 2014, of participating in a drug conspiracy, distribution of cocaine and crack cocaine, possession with intent to distribute cocaine and crack cocaine, two counts of possession of a firearm in furtherance of a drug trafficking crime, and being a felon in possession of a firearm. Evidence presented at trial detailed various drug sales by Brown and his coconspirators, the use of firearms by Brown and others to protect the drug-trafficking enterprise and its proceeds, and threats made by Brown against a cooperating witness to dissuade him from cooperating with police. In one incident, on Sept. 13, 2013, Newport News Police Department officers entered Brown’s apartment after he barricaded himself inside, and seized a firearm, scale and cocaine.
This investigation was led by the FBI Safe Streets Task Force, Newport News Police Department and Virginia State Police, and was prosecuted by Trial Attorney Joseph K. Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Howard J. Zlotnick of the Eastern District of Virginia.
Navy Engineer Arrested for Attempting to Send USS Gerald R. Ford Schematics to the Egyptian GovernmentRead the Press Release
Mostafa Ahmed Awwad, 35, of Yorktown, Virginia, was arrested today on charges of attempting to steal schematics of the Navy’s newest nuclear aircraft carrier, the USS Gerald R. Ford, and pass the schematics to whom he believed was an Egyptian government official.
Assistant Attorney General for National Security John Carlin, U.S. Attorney Dana J. Boente for the Eastern District of Virginia, Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office and Special Agent in Charge Susan Triesch of the Naval Criminal Investigative Service's Norfolk, Virginia, Field Office made the announcement.
Awwad is charged with two counts of attempting to export defense articles and technical data, and faces a statutory maximum sentence of 20 years in prison on each count if convicted. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors. Criminal indictments are only charges and not evidence of guilt. A defendant is presumed to be innocent until and unless proven guilty.
According to an FBI affidavit submitted to the court in support of search warrants, Awwad began working for the Department of Navy in February 2014 as a civilian general engineer in the Nuclear Engineering and Planning Department at Norfolk Naval Shipyard.
Based on joint investigation, an FBI undercover agent speaking in Arabic contacted Awwad by telephone on Sept. 18, 2014, and asked to meet him the following day. Without seeking additional information from the caller, Awwad agreed. The next day, Awwad met with the undercover FBI agent, who was posing as an Egyptian intelligence officer, in a park in Hampton, Virginia. During the meeting Awwad claimed it was his intention to utilize his position of trust with the U.S. Navy to obtain military technology for use by the Egyptian government, including but not limited to, the designs of the USS Gerald R. Ford nuclear aircraft carrier. Awwad agreed to conduct clandestine communications with the undercover FBI agent by email and unattributable telephones and to conduct “dead drops” in a concealed location in the park.
On Oct. 9, 2014, Awwad and the undercover FBI agent met at a hotel where Awwad described a detailed plan to circumvent U.S. Navy computer security by installing software on his restricted computer system that would enable him to copy documents without causing a security alert. At this time, Awwad also provided the undercover FBI agent four computer aided drawings of a U.S. nuclear aircraft carrier downloaded from the Navy Nuclear Propulsion Information system. These drawings were marked with warnings that foreign distribution could result in criminal prosecution. During the discussion, Awwad indicated his understanding that the drawings would be sent to and used in Egypt. Awwad also asked the undercover FBI agent for $1,500 to purchase a pinhole camera he would wear around the shipyard to photograph restricted material. At the conclusion of the meeting, Awwad agreed to provide the undercover FBI agent with passport photos which would be used to produce a fraudulent Egyptian passport so that Awwad could travel to Egypt without alerting U.S. government officials.
On Oct. 23, 2014, Awwad traveled to the pre-arranged dead drop site, situated on a secluded hiking trail in a park, and utilized a concealed container disguised in a hole in the ground. He retrieved $3,000 in cash before placing a one-terabyte external hard drive and two passport photos inside. The FBI later collected the contents of the dead drop container.
On Nov. 28, 2014, Awwad was observed entering his office at the Norfolk Naval Shipyard holding a cardboard tube about three feet long. Once in his office, Awwad opened the cardboard tube and took out several white sheets which appeared to be design schematics of an aircraft carrier. Awwad then placed the schematics on the floor of his office and photographed them. After approximately 45 minutes of viewing the schematics and taking photographs, Awwad placed all the schematics back in the cardboard tube and left his office.
Awwad made his initial appearance in federal court today, and is scheduled to appear for a detention hearing on Dec. 10, 2014, at 3:30 p.m. at the federal courthouse in Norfolk.
This case was investigated by the FBI’s Norfolk Field Office and the Naval Criminal Investigative Service, in cooperation with the Department of Navy. Prosecuting the case on behalf of the United States are Assistant U.S. Attorneys Benjamin L. Hatch and Joseph E. DePadilla for the Eastern District of Virginia and Department of Justice, Trial Attorney Heather M. Schmidt for the Justice Department’s National Security Division Counterespionage Section.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:14-cr-163.
Justice Department Announces Settlement with Virginia Bus Company to Ensure Accessibility for People with DisabilitiesRead the Press Release
The Justice Department announced today that it has entered into a settlement under the Americans with Disabilities Act (ADA) with DC Trails Inc., a bus transportation company in Lorton, Virginia, that ensures that their buses are accessible to people with disabilities, including individuals who use wheelchairs or other mobility aids. DC Trails is a covered large, fixed-route over-the-road bus operator under the ADA.
The settlement is the result of collaborative enforcement efforts between the Civil Rights Division at the Justice Department, the United States Attorney’s Office for the Eastern District of Virginia and the Federal Motor Carrier Safety Administration (FMCSA) of the U.S. Department of Transportation (DOT). The agreement remedies violations by DC Trails, including failing to provide accessible buses for all trips, failing to report the number of passengers with disabilities that used the lift to board, requiring individuals with disabilities to provide advance notice prior to a trip and failing to train its staff on accessibility requirements. The settlement agreement requires DC Trails to:
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Comply with all ADA requirements for accessible service, and not exclude persons with disabilities from their transportation services;
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Ensure that the company’s employees and contractors do not require or otherwise inform passengers with disabilities who use or seek to use DC Trails’ fixed route service that they must provide advance notice in order to use an accessible bus;
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Ensure that DC Trails only uses wheelchair-accessible buses for its fixed route service; and
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Train all employees and contractors on the requirements of the ADA for large, fixed-route over the road bus operators.
“Intercity bus service is a growing and effective means of affordable transportation across this country,” said Assistant Attorney General Vanita Gupta of the Civil Rights Division. “People with disabilities must be able to count on accessible bus service that is equal to the service provided to others.”
“This settlement agreement demonstrates the United States Attorney’s Office’s commitment to ensure that individuals with disabilities receive equal access to public accommodations, including transportation services that are operated out of Northern Virginia,” said U.S. Attorney Dana Boente for the Eastern District of Virginia.
This is the Justice Department’s 24th settlement with bus companies over the past several years to ensure compliance with accessibility obligations.
Title III of the ADA prohibits discrimination against people with disabilities by public accommodations, including large over-the-road bus companies. DOT’s regulations implementing the ADA require that these companies perform regular maintenance checks to ensure that wheelchair lifts work, provide prompt accessible service with an alternative carrier if the company does not have a lift-equipped bus, train their employees on accessibility requirements, and file annual accessibility reports with the FMCSA.
This matter was handled for the Department by Assistant United States Attorney Steven Gordon, Coordinator of the United States Attorney’s Office’s Civil Rights Enforcement Program, and David W. Knight of the Civil Rights Division.
People interested in finding out more about the ADA or this settlement can call the toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov.
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Child Sex Trafficker Sentenced to 17.5 Years in Federal PrisonRead the Press Release
(Saipan, MP), ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands (NMI), announced that ANNETTE NAKATSUKASA BASA, was sentenced today, December 5, 2014, in the U.S. District Court of the Northern Mariana Islands by Chief Judge Ramona V. Manglona, for sex trafficking of children. Defendant BASA received a sentence of 17.5 years incarceration with credit for time served, five years supervised release upon release from prison, 500 hours of community service, $100 special assessment fee and was ordered to pay restitution in the amount of $9,102.39. She was further ordered to undergo a mental health assessment and receive any corresponding treatment that may be appropriate while in the Bureau of Prisons custody. Defendant Basa is not to unlawfully use controlled substances or alcohol. Basa will also have to register as a sex offender under the SORNA program.
Defendant BASA pled guilty on February 20, 2014, to one count of sex trafficking of children, in violation of Title 18 U.S.C. Section 1591(a)(1). Defendant BASA took in minor runaways, allowed them to live with her, gave them methamphetamine and then demanded they perform sexual acts for money.
U.S. Attorney Limtiaco stated, “The sexual exploitation and abuse of vulnerable individuals is an affront to fundamental human rights and will not be tolerated. The defendant preyed on these young victims, manipulating and sexually exploiting them. Today’s sentence sends the critical message that human trafficking is a crime that violates the very core and dignity of a human being and traffickers face severe punishment. The Department of Justice and U.S. Attorney’s Office remain committed to vigorously prosecuting and holding accountable those who perpetrate these heinous crimes."
U.S. Attorney Limtiaco additionally reminds defendants who have committed sexual abuse of children, that under federal and local law, all sex offenders have a duty to register and keep their registration current with the Sex Offender Registry in their jurisdiction. Sex offenders who travel to the CNMI and who reside in the CNMI must inform the CNMI DPS Sex Offender Registry where they reside, work, or attend school - they must also periodically update their registration information. The U.S. Attorney notes that the sex offender registry was created in order to protect the public by protecting victims, preventing further victimization and informing the public of the whereabouts of sex offenders. CNMI’s Sex Offender Registry can be found online at http://cnmi.nsopw.gov/.
This prosecution is part of the U.S. Department of Justice’s Project Safe Childhood (PSC) Initiative, a nationwide commitment to aggressively prosecute defendants who engage in the sexual victimization of children and adults, possess or receive child pornography, and sex offenders who fail to register with the jurisdiction’s Sex Offender Registry. The investigation was conducted by the Federal Bureau of Investigations. The case was handled by Assistant U.S. Attorneys Rami Badawy and Ross Naughton.
Attorney Sentenced to 17 Years in Prison for Multi-Million Dollar Stock FraudRead the Press Release
A California attorney was sentenced to serve 17 years in prison today in the Southern District of Florida for operating a five-year, multi-million dollar market manipulation and fraud scheme, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.
Mitchell J. Stein, 53, of Hidden Hills, California, was convicted by a jury on May 20, 2013, of conspiracy to commit mail and wire fraud, three counts of wire fraud, three counts of securities fraud, three counts of money laundering, and one count of conspiracy to obstruct justice. In addition to the prison sentence, U.S. District Judge Kenneth A. Marra of the Southern District of Florida ordered Stein to forfeit $5.3 million. Restitution will be determined at a later date.
“Lawyers for companies are supposed to guide their clients through the important reporting and regulatory requirements that ensure the integrity of our financial markets,” said Assistant Attorney General Caldwell. “Stein abdicated his responsibility, and instead abused his position of trust to defraud a public company, its shareholders, and the investing public of millions of dollars.”
“The ‘pump and dump’ scheme orchestrated by Stein and his co-conspirators was extremely elaborate,” said U.S. Attorney Ferrer. “In an effort to conceal his fraudulent financial scheme, Stein falsely testified before the SEC and used his position of trust to arrange for others to do the same. The sentencing announced today underscores the department's commitment to hold liable those individuals who profit from manipulating the financial markets and violating securities and other laws that are intended to protect investors and markets.”
According to evidence presented at trial, Stein’s wife held a controlling majority interest in Signalife Inc., a publicly-traded company currently known as Heart Tronics that purportedly sold electronic heart monitoring devices. While acting as Signalife’s outside legal counsel, Stein engaged in a scheme to artificially inflate the price of Signalife stock by creating the false impression of sales activity at the company. Specifically, the evidence at trial showed that Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers, then caused Signalife to issue press releases and file documents with the Securities and Exchange Commission (SEC) trumpeting these fictitious sales. Evidence at trial also proved that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.
Evidence at trial further proved that Stein disguised his selling of Signalife stock at artificially inflated prices by placing shares in purportedly blind trusts, and having a co-conspirator sell the shares after Stein caused the false sales information to be disseminated to the public. Stein also caused Signalife to issue shares to third parties so that those third parties could sell the shares and remit the proceeds to Stein. From one co-conspirator alone, Stein received illicit gains of over $1.8 million from those sales.
In addition, evidence at trial proved that Stein conspired to obstruct the SEC investigation into Heart Tronics by testifying falsely and arranging for others to testify falsely in an effort to conceal the fraud scheme.
This case was investigated by the U.S. Postal Inspection Service, with assistance from the Office of the Special Inspector General for the Troubled Asset Relief Program. The SEC referred this matter to the Justice Department, conducted a parallel investigation resulting in a civil enforcement action against Stein and others, and provided substantial assistance in this investigation. The Financial Industry Regulatory Authority’s Criminal Prosecution Assistance Group likewise provided substantial assistance in this matter.
This case was prosecuted by Assistant Chief Albert B. Stieglitz Jr., Assistant Chief Kevin B. Muhlendorf, and Trial Attorney Andrew H. Warren of the Criminal Division’s Fraud Section and Assistant Chief Darrin McCullough of the Criminal Division’s Asset Forfeiture and Money Laundering Section.
Three Former Georgia Correctional Officers Sentenced for Offenses Related to beating of Inmate and Ensuing Cover-UpRead the Press Release
The Justice Department announced that Christopher Hall, a former Sergeant for the Correctional Emergency Response Team (CERT) at Macon State Prison (MSP) in Oglethorpe, Georgia, and two former CERT officers, Ronald Lach and Delton Rushin, were sentenced on Thursday, December 4, 2014, for offenses related to the beating of an MSP inmate in 2010 and the cover-up that followed. All three officers were convicted by a federal jury on June 20, 2014.
Hall was sentenced to 72 months in prison for conspiracy to obstruct justice and two obstruction-related offenses. Lach was sentenced to 90 months in prison for his involvement in the beating of the inmate, for conspiring to cover up the beating and for writing a false report. Rushin was sentenced to 60 months in prison for conspiring to obstruct justice and obstruction-related offenses. All three have two years of supervised release.
Evidence at trial, and a series of guilty pleas that preceded trial, showed that Lach was one of several MSP officers who participated in a retaliatory beating against an inmate in order to punish the inmate for his prior misconduct. Hall, Lach and Rushin then conspired with other officers to cover up the beating by providing false and misleading statements to investigators and writing false reports.
To date, eight former MSP officers have been convicted in connection with the beatings of inmates at Macon State in 2010 and the cover-up that followed.
“Eight former corrections officials from Macon State Prison now stand convicted for their involvement in beating inmates or in the coordinated cover-ups that followed each assault,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “These officers betrayed the public trust by using their official positions to commit violent civil rights abuses and then to try to hide what they had done. The Department of Justice will continue to vigorously prosecute corrections officers who use their power to violate federal law.”
"When individuals are sentenced to prison, we expect that they will serve their time under the supervision of dedicated correctional officers and staff,” said U.S. Attorney Michael J. Moore for the Middle District of Georgia. “What we don't expect, and will not tolerate, is for the people in charge of supervising and protecting the prisoners to beat the inmates and then try to cover it up when word of those crimes makes its way outside the prison walls. The inmates in prisons across the state are serving a sentence of incarceration, and that doesn't include being subject to beatings and the abuse of power by corrections officers. And while being a prison guard is both an important and challenging task, it is a job that requires adherence to the law. We are lucky in Georgia to have many outstanding corrections officers who do their jobs every day with unmatched professionalism. The defendants in this case broke the law and the trust they were given."
These cases were investigated by the Macon Resident Agency of the FBI, with the support of the Georgia Bureau of Investigation. The cases were prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Tona Boyd for the Civil Rights Division, with the assistance of the United States Attorney’s Office in Macon.