District Not Recorded

Assistant Attorney General for National Security John P. Carlin, U.S Attorney A. Lee Bentley III for the Middle District of Florida and Special Agent in Charge Michelle S. Klimt of the FBI Jacksonville Division announced that Shelton Thomas Bell, 21, of Jacksonville, Florida, was sentenced to 20 years in federal prison for conspiring and attempting to provide material support to terrorists.  U.S. District Judge Timothy J. Corrigan also ordered Bell to a lifetime of supervision following his release from prison.  Bell pleaded guilty on March 19, 2014.

"We must be vigilant in investigating and prosecuting United States citizens who seek to travel overseas to assist terrorists," said U.S. Attorney Bentley.  "Not only do these individuals present an obvious threat abroad, they could also return to the United States after being radicalized and trained in the use of firearms, explosives, and weapons of mass destruction.  Cases such as these remain a top priority for the United States Attorney’s Office and the Department of Justice."

"With our local, state and federal agencies working together through the JTTF, we’re able to detect, deter and defend our nation from these types of threats," said Special Agent in Charge Klimt.  "We’re strongest working together and this is a perfect example of success through collaboration."

According to court documents, beginning in May 2012 and continuing through at least July 18, 2012, Bell conspired to train and prepare as a combatant for overseas violent jihad, then travel from Jacksonville to the Middle East for the ultimate purpose of providing the skills to terrorists, including members of Ansar al-Sharia in Yemen.  Once overseas, the plan included receiving further training and deadly weapons from Ansar al-Sharia, and then engaging in violent jihad against, and killing, others in Yemen and elsewhere.

In May 2012, Bell recruited a juvenile for the purpose of engaging in violent jihad and inspired him with the teachings of an Al Qaida spokesperson, Anwar al-Awlaki.  Bell suggested traveling to Yemen to fight because of al-Awlaki's teachings - that all young people should travel to Yemen to “take up the fight.”  Bell and the juvenile subsequently agreed to travel to Israel and then make Hajj.  As part of the plan, the conspirators told others, including their parents, that they were traveling overseas to make Hajj, to study, and to get an education.  By July 2012, the conspirators began taking actions to train for their unlawful activities by conducting mental training that included watching al-Awlaki videos and looking at images of dead Muslims. 

Another part of the training took place on July 4, 2012, when Bell conducted a late-night “jihadi training mission” that involved the destruction of religious statues in a multi-denominational cemetery located in Jacksonville.  In preparation for the mission, he dressed in all black clothing, wore tactical gloves, a mask, and wrapped his shoes in black duct tape to avoid leaving footprints.  Bell brought a loaded 9 mm pistol with him on the mission to use “in case any kuffar want to cause any trouble.”  Other training sessions conducted by Bell included a homemade firing range and impromptu battlefield lessons intended for recording and uploading to the Internet, to be used in the recruitment of others in the “the actions of jihad.”  At the conclusion of one training session, Bell placed an American flag on a machete, burned it, and commented that the flag was “burning to the ground by the mujahidin’s hands.”  To recruit other youth to travel and join in armed conflict, Bell and the juvenile also planned to take footage of their participation in armed conflict in the Middle East, once they made it there and began fighting. 

On Sep. 25, 2012, Bell and the juvenile left Jacksonville and flew to New York, Poland, and Tel Aviv, Israel, where they were detained by Israeli officials and deported to Poland.  From there, Bell and the juvenile traveled to Jordan to stay with the juvenile's relatives.  While in Jordan, Bell and the juvenile contacted another person to assist in their plan of joining up with Ansar al-Sharia.  Bell and the juvenile also bought airline tickets to Oman, believing they would fly to Oman and walk across the border to Yemen and join the armed conflict there.  During their overseas travel, Bell and the juvenile took steps to avoid detection by law enforcement.

Ultimately, Bell and the juvenile were deported from Jordan to the United States on Nov. 21, 2012.

This case was investigated by the FBI's Jacksonville Joint Terrorism Task Force (JTTF). The JTTF is a multi-agency task force comprised of full-time personnel from the FBI, U.S. Coast Guard Investigative Service, U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement's Homeland Security Investigations, the Jacksonville Sheriff's Office, Florida Highway Patrol, the Florida Department of Law Enforcement, and the Naval Criminal Investigative Service.  It was prosecuted by Trial Attorney Mara M. Kohn from the Department of Justice National Security Division’s Counter Terrorism Section and Assistant U.S. Attorney Mac D. Heavener III.

Assistant Attorney General for National Security John P. Carlin and Acting Special Agent in Charge John A. Barrios of the Cincinnati Division of the FBI announced today that the Joint Terrorism Task Force has arrested a Cincinnati-area man for a plot to attack the U.S. Capitol and kill government officials.  Acting Special Agent in Charge Barrios noted that the public was not in danger during this investigation.

Christopher Lee Cornell, 20, of Green Township, Ohio, was charged in a criminal complaint with attempting to kill officers and employees of the United States and possession of a firearm in furtherance of a crime of violence.

Cornell was taken into custody today by the FBI Joint Terrorism Task Force (JTTF).  The JTTF is made up of officers and agents from the Cincinnati Police Department, Colerain Police Department, Dayton Police Department, Ohio State Highway Patrol, United States Immigrations and Customs Enforcement, United States Secret Service, West Chester Police Department and the Xenia Police Department.

The department would also like to acknowledge the Cincinnati Police Department, Colerain Police Department, Green Township Police Department and the U.S. Capitol Police for the cooperation and assistance they provided during this investigation.

The criminal complaint was filed today before a U.S. District Court Magistrate Judge.  The public is reminded that criminal complaints contain only allegations of criminal misconduct and that defendants are presumed to be innocent unless proven guilty in a court of law.

Elite Estate Buyers Inc., doing business as Elite Decorative Arts, an auction house located in Boynton Beach, Florida, and the company’s president and owner, Christopher Hayes, pleaded guilty today in U.S. District Court in Miami to an illegal wildlife trafficking and smuggling conspiracy in which  the auction house sold rhinoceros horns and objects made from rhino horn, elephant ivory and coral that were smuggled from the United States to China.

The guilty plea was announced today by Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division, U.S. Attorney Wifredo Ferrer for the Southern District of Florida and Director Dan Ashe of the U.S. Fish and Wildlife Service (FWS).  The prosecution of Elite and Hayes is part of Operation Crash, a continuing effort by the Special Investigations Unit of the FWS’ Office of Law Enforcement in coordination with the Department of Justice to detect, deter and prosecute those engaged in the illegal killing of rhinoceros and the unlawful trafficking of rhinoceros horns.

According to records filed in court, Hayes and his company sold six endangered black rhino horns.  Two of the horns were sold for $80,500 to a Texas resident involved in smuggling the horns to China.  Two more rhino horns were purchased by an undercover FWS special agent.  Another undercover agent with the FWS consigned two horns for auction. 

As part of today’s plea agreement, Hayes and Elite have admitted to being part of a far reaching felony conspiracy in which the company helped smugglers traffic in endangered and protected species in interstate and foreign commerce, and falsified records and shipping documents related to the wildlife purchases in order to avoid the scrutiny of the FWS and U.S. Customs and Border Protection.  Elite aided foreign buyers by directing them to third-party shipping stores that were willing to send the wildlife out of the country with false paperwork.   

“In pleading guilty this auction house is admitting that it played a key role in the supply chain of rhino horn and elephant ivory to wildlife smugglers and foreign markets,” said Assistant Attorney General Cruden.  “Auction houses and art galleries should be especially mindful of abiding by the laws designed to prevent the extinction of these species rather than devoting their expertise to help smugglers evade the law.  This prosecution is the result of a sophisticated and long-ranging investigation into every aspect of the illegal wildlife trade and we will hold all law violators fully accountable for their actions.”

“Not only did Hayes and his company illegally profit from obtaining rhinoceros horns and elephant ivory, but his greed and indifference contributed to the senseless slaughter of these animals,” said U.S. Attorney Ferrer.  “Trafficking in endangered and threatened species is illegal.  Together with our law enforcement partners, we will strictly enforce the laws that protect our environment and our wildlife.”

“As this guilty plea demonstrates, ivory and rhino horn trafficking is not just a problem for other countries to solve,” said Director Ashe.  “The ongoing slaughter of rhinos and elephants in Africa is driven by rising consumer demand and United States citizens like Christopher Hayes are intimately involved in illegal trade both here and abroad.  We will continue to work with international law enforcement agencies and the international community to apprehend and bring to justice those whose callous disregard threatens the survival of the world’s wildlife heritage.”

Elite and Hayes also admitted to selling items made from rhinoceros horn, elephant ivory and coral to an antiques dealer in Canada, who they then directed to a local shipper that agreed to mail the items in Canada without required permits.  The defendants also admitted to selling raw rhinoceros horns, which they believed were from a black rhinoceros, to a person in Texas. 

Hayes, 55, of Wellington, Florida, will be sentenced by Judge Daniel T. K. Hurley on a date yet to be determined.  The maximum penalty is five years in prison and a maximum fine of $500,000 for Elite and $250,000 for Hayes, or up to twice the gross gain.  Elite has agreed to pay a $1.5 million fine and to no longer engage in the receipt, consignment or sale of endangered or protected wildlife, or items containing endangered or protected wildlife, including items containing rhinoceros horn, elephant ivory and red coral.     

The investigation is continuing and is being handled by the FWS Office of Law Enforcement, the U.S. Attorney’s Office for the Southern District of Florida and the Environment and Natural Resources Division’s Environmental Crimes Section.  The government is represented by Assistant U.S. Attorney Thomas Watts-FitzGerald for the Southern District of Florida and Trial Attorney Gary N. Donner of the Environmental Crimes Section.

WASHINGTON –Attorney General Eric Holder announced today expanded revisions to the Justice Department’s policy regarding obtaining information from, or records of, members of the news media.

The updated policy was announced via a memo by Attorney General Holder to all Justice Department employees.

“These revised guidelines strike an appropriate balance between law enforcement’s need to protect the American people, and the news media’s role in ensuring the free flow of information,” Attorney General Holder said.  “This updated policy is in part the result of the good-faith dialogue the department has engaged in with news industry representatives over the last several months.  These discussions have been very constructive and I am grateful to the members of the media who have worked with us throughout this process.”

Attorney General Holder first ordered a review of the department’s media guidelines in 2013.  He then announced initial revisions to those guidelines in February of last year.  The latest revisions arose following comments from federal prosecutors and other interested parties, including news media representatives.  These meetings with news media representatives included the inaugural convening of the Attorney General’s News Media Dialogue Group in May 2014.

Among the new revisions announced today, the Attorney General has directed that the guidelines eliminate the use of the word “ordinary” when describing newsgathering activities affected by the policy.  The revisions also serve to expand high-level review by the Attorney General for the use of certain law enforcement tools, such as subpoenas and applications for warrants, where the information sought from a member of the news media relates to newsgathering activities.

The updates announced today will revise existing department regulations, and the U.S. Attorney’s Manual will be updated to reflect the changes and provide further guidance to prosecutors as well.

A copy of the Attorney General’s memorandum accompanying the revised guidelines is attached.

The Department of Justice and the U.S. Environmental Protection Agency (EPA) today announced a proposed settlement with Pechiney Plastic Packaging Inc. (Pechiney), Albéa Americas Inc., Bristol-Myers Squibb Company, Citigroup Inc., and Rexam Beverage Can Company regarding the cleanup of the Pohatcong Valley Groundwater Contamination Superfund Site in Washington Borough, Washington Township, Franklin Township and Greenwich Township in Warren County, New Jersey.  The Pohatcong site is contaminated with trichloroethylene (TCE) and perchloroethylene (PCE).

Under the proposed settlement, Pechiney will have primary responsibility for cleaning up contaminated soil and groundwater at the site, connecting some residents to public water to avoid contaminated groundwater, and operating systems to capture vapors that are getting into a manufacturing facility.  As a precaution, Pechiney is continuing to monitor for vapor intrusion into homes at the site.  In addition, EPA will receive approximately $29.5 million for certain past costs.  Pechiney will also perform current and future cleanup work estimated to cost $62.5 million and will pay EPA’s future oversight costs.

As part of the settlement, EPA will recover civil penalties from Pechiney to resolve allegations that Pechiney violated a previous EPA order by failing to make satisfactory progress on a portion of the cleanup at the site.  Pechiney will pay a cash penalty of $282,000.  Pechiney will also restore and preserve approximately 60 acres of land, valued at $1.1 million, in Warren County, through a supplemental environmental project.  This land will be converted to native grassland and will become part of the Morris Canal Greenway.  The land will be managed by Warren County through its existing relationship with the New Jersey Youth Corps of Phillipsburg, a “second chance” program for young adults that provides opportunities to earn a GED while providing a valuable service to the community.

“This agreement will address a legacy of contaminated groundwater and soil in Warren County that exposed this community to dangerous health risks,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division.  “The settlement will help ensure residents have access to clean drinking water, require Pechiney to restore and preserve valuable native grasslands and pay for millions in past cleanup costs.”

“The settlement advances our cleanup and will help protect drinking water as well as safeguard people’s health,” said Regional Administrator Judith A. Enck for EPA.  “The remaining cleanup work at the Pohatcong Valley site will proceed and an area of open space that can be enjoyed by members of the public will be restored and preserved.”

EPA added the Pohatcong site to the Superfund list in 1989 because of elevated levels of volatile organic contaminants, including TCE and PCE, in the groundwater.  These contaminants were detected in public supply wells, which are now treated to meet drinking water standards before the water is distributed.  The site includes a contaminated groundwater plume that is approximately 10 miles long and approximately 1.5 miles wide; nearly 9,800 acres.

Because of the size and complexity of the site, EPA divided the site into three parts.  Today’s settlement covers work in all three portions of the site.

The first part is a large area of groundwater contamination located in Washington Borough.  Residents of this area do not drink the groundwater because they receive drinking water from a public water supply that meets drinking water standards.  For this part of the site, in 2006, EPA finalized a plan to pump out the contaminated groundwater and treat it using a technology that will strip out the pollutants by blowing air through the contaminated water to separate out the chemicals.  The resulting clean water will be pumped back into the ground.  An engineering design is underway to carry out this remedy.  EPA is also performing a pump and treat remedy for a portion of the groundwater that is primarily contaminated with PCE.  Some of the proceeds recovered through the settlement will fund this part of the site cleanup.

The second area of the site includes contaminated ground water in Franklin and Greenwich Townships.  There is no public water supply currently available in most of this area and drinking water wells that are impacted by contamination have received individual treatment systems to provide safe drinking water.  For this area, EPA is requiring the construction of water lines to provide potable water.  The engineering design for this part of the project in ongoing.

The third part of the site is the contaminated soil and sediment in and around the former American National Can facility in Washington Township.  EPA has determined that the primary source of TCE contamination in this area is the former American National Can facility, which was owned and operated by Pechiney in the 1990s and is currently owned and operated by Albéa Americas Inc.  EPA is continuing to investigate this contamination.  Pechiney has agreed to perform the cleanup on Albéa’s property, and the parties have reserved the issue of who will be responsible for remaining cleanup activities in this area.

In 2013, EPA’s indoor air sampling of the Albéa Americas facility showed unacceptable levels of TCE.  EPA worked with Albéa to take actions to protect workers from exposure to harmful gases by reducing the levels of toxic contaminants in the air in the facility to safe levels.  These steps included building a system that removes harmful chemicals from soil by extracting them in vapor form with a vacuum and then filtering the vapors through carbon filters to remove contaminants.  EPA will be reimbursed for this work through the settlement.

The Superfund program operates on the principle that polluters should pay for the cleanups, rather than passing the costs to taxpayers.  EPA searches for parties legally responsible for the contamination at sites, and it seeks to hold those parties accountable for the costs of investigations and cleanups.  Under today’s settlement, the parties responsible for the site are paying for or performing the cleanup work.

The proposed settlement will be subject to a 30-day public comment period upon the publication of a notice in the Federal Register.

Once it is published, a copy of the Federal Register notice with instructions about how to comment can be found on the Justice Department’s website.

The settlement requires approval by the U.S. District Court before becoming final.

For more information on the Pohatcong Valley Groundwater Contamination Superfund site, go to EPA’s website.

A former bank employee was sentenced today to serve 87 months in prison for her role in a far-reaching identity theft and tax fraud scheme in which she used her position to help process deposits and withdrawals of nearly $1.1 million in fraudulently obtained federal income tax refunds.

Yvette Haden, 50, of Suitland, Maryland, is among approximately a dozen people who have pleaded guilty in the U.S. District Court for the District of Columbia to charges in one of the largest prosecutions to date involving the use of stolen identifying information.  The overall case involves the filing of at least 12,000 fraudulent federal income tax returns.

The sentencing was announced by U.S. Attorney Ronald C. Machen Jr., Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department’s Tax Division, Special Agent in Charge Thomas J. Kelly of the Internal Revenue Service-Criminal Investigation’s (IRS-CI) Washington Field Office, Acting Inspector in Charge David M. McGinnis of the U.S. Postal Inspection Service’s Washington Division, Assistant Inspector General for Investigations John L. Phillips for the  U.S. Department of Treasury, and Special Agent in Charge Kathy A. Michalko for the U.S. Secret Service’s Washington Field Office.

Haden pleaded guilty in April 2014 in the U.S. District Court for the District of Columbia to one count of conspiracy to defraud the United States and one count of bank fraud.  She was sentenced by the Honorable Rosemary M. Collyer.  As part of her plea agreement, Haden must pay $973,376 in restitution to the IRS and she also is subject to a forfeiture money judgment of the same amount.  Upon completion of her prison term, Haden will be placed on three years of supervised release.

Haden was among participants in a massive and sophisticated identity theft and false tax refund scheme involving an extensive network of more than 130 people, many of whom were receiving public assistance.  At least 12,000 fraudulent federal income tax returns were filed for the tax years of 2005 through 2012, seeking refunds of at least $40 million.  The returns were often filed in the names of people whose identities had been stolen, including the elderly, people in assisted living facilities, drug addicts and incarcerated prisoners.  The refunds listed more than 400 “taxpayer” addresses in the District of Columbia, Maryland and Virginia.

The government’s evidence showed that participants in the schemes had various roles: some stole the identifying information; some permitted their personal identifying information to be used; some created and mailed the fraudulent federal tax returns; some permitted their addresses to be used for receipt of the refund checks; some helped cash the checks; some provided bank accounts for negotiation of checks; and some forged endorsements of identity theft victims on the refund checks.

According to the government’s evidence, from 2007 through 2010, Haden was employed as a financial services representative at a bank branch in Southeast Washington, D.C.  She assisted co-conspirators in the scheme and violated the bank’s policies and procedures through a series of actions, including opening three business checking accounts in the names of three purported sole proprietorships.  Haden, who at the time of her crimes had more than 25 years of banking industry experience, was solely responsible for verifying client identities and documents and entering client information directly into the computer.  Once the accounts were opened, Haden aided the co-conspirators by processing deposits of fraudulently obtained U.S. income tax refund checks, as well as withdrawals.  To hide her activity, she falsified slips documenting withdrawals.  Haden was compensated by one of the co-conspirators for her role in the offenses.

Also, according to the government’s evidence, Haden opened a checking account in her own name at a credit union in 2012 and deposited or transferred 14 refund checks to that account.

In total, from June 2010 through November 2012, Haden negotiated 398 fraudulent income tax refund checks totaling $1,024,271.

In announcing the sentence, U.S. Attorney Machen, Acting Deputy Assistant Attorney General Wszalek, Special Agent in Charge Kelly, Acting Inspector in Charge McGinnis, Assistant Inspector General Phillips and Special Agent in Charge Michalko commended those who investigated the case.  They also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including former Assistant U.S. Attorney Sherri L. Schornstein and Paralegal Specialist Donna Galindo.  Finally, they expressed appreciation for the work of Assistant U.S. Attorney Ellen Chubin Epstein of the U.S. Attorney’s Office’s Fraud and Public Corruption Section and Trial Attorneys Jessica N. Moran and Jeffrey B. Bender of the Tax Division, who are prosecuting cases in the investigation.

The Department of Justice announced today that it has reached a settlement with the National Museum of Crime and Punishment (Crime Museum) to address alleged violations of the Americans with Disabilities Act (ADA).  The settlement agreement resolves allegations that some of the Crime Museum’s programs, exhibits and facilities were not accessible to people with disabilities.  As a place of public accommodation under Title III of the ADA, the Crime Museum is required to be accessible to people with disabilities and provide full and equal enjoyment of its goods, services and facilities.

The Crime Museum, located in Washington, D.C., explores the history of crime, law enforcement, forensic science and crime scene investigation (CSI).  Displays and exhibits are spread across three stories and 28,000 square feet of gallery space focusing on law enforcement from medieval times, the time of pirates and the old west, up to the present.  The Crime Museum’s permanent exhibits include a CSI lab, a simulated FBI shooting range, a high speed police simulator, a galley of notorious criminals and America’s Most Wanted stage set.

Under the settlement, the Crime Museum must take steps to ensure that all of its programs, exhibits and facilities are accessible to people with disabilities, including by:

• providing staff assistance or pre-recorded audio description of program and exhibit information for patrons who are blind or have low vision;
• providing a printed copy of program information that is not currently available in print, such as daily and seasonal exhibits that are not in the printed brochure, for patrons who are deaf or hard of hearing;
• providing museum tours that are audio described and include tactile experiences for individuals who are blind or have low vision;
• providing printed materials, floor plans and maps in alternate formats (audio, large print and Braille); 
• providing a description in an accessible format of each museum-sponsored public program and special event;
• ensuring that its website conforms to the Level AA Success Criteria and Conformance Requirements of the Web Content Accessibility Guidelines 2.0; and
• remediating physical barriers such as protruding objects, inaccessible routes and restroom barriers.

“This agreement ensures that people with disabilities will be able to enjoy the fascinating elements of the history of crime and law enforcement together with their friends and family just like other patrons,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “The Justice Department is committed to removing these types of barriers, and we commend the Crime Museum’s efforts to improve accessibility for all patrons.”   

The agreement resolves a compliance review under the ADA.  People interested in finding out more about the ADA, the Standards for Accessible Design or this agreement can call the Justice Department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY), or visit the ADA website.

A leader of a street gang that operated on the east side of Detroit was sentenced to 346 months in prison today for aiding and abetting an armed robbery of a Little Caesars pizza restaurant, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan and Special Agent in Charge Steven Bogdalek of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) in Detroit.

Christopher LaJuan Tibbs, 38, of Detroit, was convicted on Aug. 29, 2014, of aiding and abetting an armed robbery after a three-day trial before U.S. District Judge Bernard A. Friedman of the Eastern District of Michigan.

The evidence at trial established that Tibbs, also known as “Chief Fatah,” was the leader of the Michigan branch of the Mafia Insane Vice Lords, a violent street gang that operated primarily on the east side of Detroit.  The Mafia Insane Vice Lords was a local faction of the national Vice Lord gang that originated in Chicago.  The evidence at trial further showed that, during his leadership of the Mafia Insane Vice Lords, Tibbs recruited and used young adults and children to commit crimes for the gang, and ordered the murder of a witness in connection with this case.

The evidence at trial showed that Tibbs helped plan an armed robbery of a Little Caesars restaurant in Redford, Michigan, in September 2013.  Tibbs “blessed” it as a mission for the gang, and sent four subordinate members to commit the crime.  As part of the planning for the robbery, Tibbs instructed the robbers to disable the cameras and phones in the Little Caesars.  Tibbs also told the robbers what to wear, had them diagram the Little Caesars, and instructed them how to use the gun during the robbery.  During the robbery, one of the robbers brandished a gun and forced the employees, including a pregnant woman, inside the store, where the robbers tore down the surveillance cameras.  At the robbers’ direction, the employees disabled the alarm and opened the safe.  Although he was not present for the robbery itself, Tibbs took a majority of the proceeds, some of which were spent on the gang.

This case marked the first time that the federal criminal street gang enhancement was charged in the Eastern District of Michigan.  Because the jury found that Tibbs committed the crime to advance the criminal activities of his gang, the maximum penalty for aiding and abetting the robbery was increased.

The case was investigated by the ATF, with assistance from the Redford Police Department, Detroit Police Department, and Chicago Police Department.  The case was prosecuted by Trial Attorney Joseph Wheatley of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Louis Gabel of the Eastern District of Michigan.

The Department of Justice filed today a civil forfeiture complaint seeking the forfeiture of nine properties worth approximately $1,528,000 that were allegedly purchased with funds traceable to a $2 million bribe paid by a Honduran information-technology company to the former Executive Director of the Honduran Institute of Social Security.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Polite, Jr. of the Eastern District of Louisiana and Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) made the announcement.

“Mario Zelaya was the director of Honduras’s social security agency, but instead of building a social safety net for his country’s citizens, he allegedly used his position of public trust to steal public money for himself,” said Assistant Attorney General Caldwell.  “Our action today highlights how the Criminal Division’s Kleptocracy Initiative, with our network of law enforcement partners around the globe, will trace and recover the ill-gotten gains of corrupt officials.  Criminals should make no mistake:  the United States is not a safe haven for the proceeds of your crimes.  If you hide or invest your stolen money here, we will use all the legal tools we have to find it and seize it.”

“The United States Attorney’s Office for the Eastern District of Louisiana is committed to working with our law enforcement partners, both domestically and internationally, to ensure that this district is not used to launder corruptly obtained funds, no matter the source of the corruption,” said U.S. Attorney Polite.

“ICE’s Homeland Security Investigations will continue to work in cooperation with our international law enforcement partners to ensure that our country is not used as a safe haven for corrupt foreign officials to hide their assets,” said HSI Executive Associate Director Edge.  

From 2010 to 2014, Dr. Mario Roberto Zelaya Rojas, 46, of Tegucigalpa, Honduras, served as the Executive Director of the Honduran Institute of Social Security (HISS), a Honduran Government agency that provides social security services, including workers’ compensation, retirement, maternity, and death benefits.  According to allegations in the forfeiture complaint, Zelaya solicited and accepted $2.08 million in bribes from Compania De Servicios Multiples, S. de R. L. (COSEM) in exchange for prioritizing and expediting payments owed to COSEM under a $19 million contract with HISS.  Zelaya also allegedly instructed COSEM to make bribe payments to two members of the Board of Directors of HISS charged with overseeing the COSEM contract.  To conceal the illicit payments, COSEM allegedly sent the bribes through its affiliate company, CA Technologies. 

As further alleged in the complaint, the bribe proceeds were then laundered into the United States and used by Zelaya and his brother, Carlos Alberto Zelaya Rojas, to acquire real estate in the New Orleans area.  Certain properties were titled in the name of companies nominally controlled by Zelaya’s brother in an effort to conceal the illicit source of the funds as well as the beneficial owner.  The current action seeks forfeiture of nine properties acquired with the proceeds of Zelaya’s alleged bribery scheme. 

The investigation was conducted by HSI’s New Orleans and Miami Field Offices.  The case is being handled by Trial Attorneys Stephen A. Gibbons and Marybeth Grunstra of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorney Daniel P. Friel of the Eastern District of Louisiana.  Substantial assistance was provided by the Public Ministry of the Republic of Honduras and the HSI Attaché Tegucigalpa.  The Criminal Division’s Office of Overseas Prosecutorial Development, Assistance and Training Resident Legal Advisor in Tegucigalpa also provided valuable assistance.

This case was brought under the Kleptocracy Asset Recovery Initiative.  Under that initiative, dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section work in partnership with U.S. Attorneys’ Offices and federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where possible and appropriate, put forfeited corruption proceeds to use for the benefit of the people of the country harmed by the abuse of public office.  Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected].

 Complaint

A Brooklyn man was sentenced yesterday in Honolulu for his involvement in a counterfeit DVD movie ring, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Florence T. Nakakuni of the District of Hawaii.

Yakov Meir Chazanow, 41, was sentenced yesterday by U.S. District Judge Leslie E. Kobayashi of the District of Hawaii to serve 21 months in prison for conspiring to commit criminal copyright infringement, manufacturing counterfeit goods and to traffic in goods bearing counterfeit Dolby trademarks and counterfeit labels. 

According to the evidence set forth in the record and at sentencing, from 2004 to 2011, Chazanow supplied over 30,000 high-quality pirated DVDs containing infringing copies of copyright-protected Asian action movies and corresponding counterfeit labels and packaging.  He then distributed them to co-conspirators, who in turn sold them to consumers in stores and online. 

Chazanow, Sharon Josef and Jeffrey Alan Stockton were all charged in June 2013, and Stockton pleaded guilty to the charged conspiracy and two counts of trafficking in counterfeit labels on Sept. 19, 2013.  On Feb. 3, 2014, Chazanow pleaded guilty to the above charges, and Josef pleaded guilty to misdemeanor copyright infringement.  On May 12, 2014, the court sentenced Stockton to 21 months in prison, ordered him to pay restitution of $150, and entered a preliminary order directing Stockton to forfeit $250,000 in illegal proceeds, $32,154 in U.S. currency, a 2003 Toyota Tundra, 29 gold bars, 62 gold coins, six palladium coins and five silver coins.  Josef, who supplied pirated DVDs from 2011 to 2012, was sentenced yesterday to serve four months in prison.

The case was investigated by Immigration and Customs Enforcement’s Homeland Security Investigations.  Assistance was provided by the Motion Picture Association of America, Dolby Laboratories, Inc. and DVD Format/Logo Licensing Corporation.  The case was prosecuted by Assistant Deputy Chief for Litigation John H. Zacharia of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorneys Andrea W. Hattan and Leslie E. Osborne, Jr. of the District of Hawaii.

Attorney General Eric Holder announced today that – as the nation observes National AMBER Alert Awareness Day – the Justice Department has partnered with Facebook and Bing to expand the reach of the AMBER Alert system.  Facebook will begin sending alerts to its members in designated search areas and Bing will allow users to access AMBER Alerts through its online tools.  Attorney General Holder continued to urge other companies and organizations to step forward and do their part by offering whatever assistance they can provide.

“Protecting the well-being of our young people is a responsibility that falls to every American,” said Attorney General Holder.  “Each of us can help by paying close attention to alerts that come in – and by making sure you are plugged into the AMBER Alert network via social media.  Remember: finding an abducted child and returning him or her to safety depends on a fast response.  The more vigilant citizens we have on the look-out, the better our chances of a quick recovery.”

The complete text of the Attorney General’s video message is below:

“At the Department of Justice, we are committed to ensuring the safety and security of everyone in this country – and especially our young people.  Over the last two decades, a key tool in this effort has been the AMBER Alert system – an early warning system that helps us find and return abducted children.

“Since the first AMBER Alert system became operational in 1996, AMBER Alert’s strong network of law enforcement and transportation officials, broadcasters, private-sector representatives – and dedicated ordinary citizens – has helped to rescue and safely return more than 700 abducted children.  Just last month, two young children were recovered.  In one incident, a three-year-old boy who had been taken in a domestic dispute was used as a shield by his abductor.  In another, an infant just 20 days old was abducted by a carjacker.  Fortunately, with the help of the AMBER Alert system, both children were rescued unharmed.

“Through radio announcements, highway signs, wireless notifications, and Web posts, AMBER Alerts are now capable of rapidly reaching millions of people across the country.  But we have a great deal more to do in order to ensure that we can spread the word about missing children as quickly and as widely as possible.

“Today – as our nation observes National AMBER Alert Awareness Day – I am pleased to announce that we are making two vital additions to our innovative national partnerships in order to expand the reach of the AMBER Alert system.  Facebook, already an AMBER Alert partner, will now begin sending alerts, along with detailed information and photographs, to its members in designated search areas.  And the search engine Bing will begin allowing users to access AMBER Alerts through its online tools.  These cutting-edge tools are available as a result of agreements with the National Center for Missing and Exploited Children, which coordinates our AMBER Alert distribution efforts.

“Facebook’s geo-targeted alerts and Bing’s online broadcast tools will give AMBER Alerts an expanded social media and Internet presence – extending our web of child protection resources into new and critical areas.  I am grateful for their involvement, and for the participation of so many organizations and agencies that have helped to make the AMBER Alert system such an important public safety asset.  And I urge other companies and organizations to step forward and do their part by offering whatever assistance they can provide.

“Protecting the well-being of our young people is a responsibility that falls to every American.  Each of us can help by paying close attention to alerts that come in – and by making sure you are plugged into the AMBER Alert network via social media.  Remember: finding an abducted child and returning him or her to safety depends on a fast response.  The more vigilant citizens we have on the look-out, the better our chances of a quick recovery.

“For more information on how to get involved, please go to AMBERAlert.gov or www.missingkids.com.”

The full video of the Attorney General’s message is available at http://www.justice.gov/opa/video/expanding-amber-alert-tools-recover-missing-children.

*****UPDATED MEDIA ADVISORY*****

Members of the President’s Task Force on 21st Century Policing will hold the first public listening session on TUESDAY, JAN. 13, 2015, AT 9:00 A.M., EST, at the Newseum in Washington, D.C.  The Task Force members will hear testimony from five panels of witnesses on ways to improve the collaborative relationship between law enforcement and the communities they serve, exchange best practices for policing strategies, promote effective crime reduction and address concerns about violence directed at law enforcement.

WHAT:          Task Force on 21st Century Policing’s First Listening Session

WHO:            Task Force on 21st Century Policing

WHEN:          TUESDAY, JANUARY 13, 2015

                          9:00 a.m. to 5:00 p.m. EST

WHERE:      The Newseum

                         555 Pennsylvania Avenue NW

                         Washington, DC 20001

                      OPEN PRESS (MEDIA PRE-SET 7:45 a.m. EST//FINAL MEDIA ACCESS TIME 8:30 a.m. EST)

NOTE: All media must present government-issued photo I.D. (such as a driver’s license as well as valid media credentials).  Due to space limitations, entrance is not guaranteed.  Media inquiries regarding logistics should contact Silas Darden at [email protected] or at (202) 307-0703.  This event will be live streamed on the Task Force on 21st Century Policing webpage.

 

Task Force on 21st Century Policing Listening Session

9:00 a.m. EST           Welcome Remarks and Task Force Overview

Ronald Davis, Executive Director of the Task Force and Director of the Office of Community Oriented Policing Services (COPS Office)

9:05 a.m. EST           Opening Statements by Task Force Chairs & Introduction of Task Force

Members

 

Task Force Co-Chairs:

Charles Ramsey, Commissioner of the Philadelphia Police Department

Laurie Robinson, Professor at George Mason University

 

Task Force Members:

Cedric Alexander, Deputy Chief Operating Officer for Public Safety of DeKalb County and President of the National Organization of Black Law Enforcement Executives

Jose Lopez, Lead Organizer of Make the Road New York

Tracey Meares, Walton Hale Hamilton Professor of Law at Yale Law School

Brittany Packnett, Executive Director of Teach for America – St. Louis

Susan Rahr, Executive Director of Washington State Criminal Justice Training Commission

Constance Rice, Co-Director of The Advancement Project

Sean Smoot, Director and Chief Counsel of Police Benevolent & Protective Association of Illinois and the Police Benevolent Labor Committee

Bryan Stevenson, Founder and Executive Director of the Equal Justice Initiative

Roberto Villaseñor, Chief of Police of the Tucson Police Department    

     

9:30 a.m. EST           Witness Panel Discussion I:

Jennifer Eberhardt, Associate Professor of Psychology at Stanford University

Charles Ogletree, Jesse Climenko Professor of Law and Director at Harvard Law School

Tom Tyler, Macklin Fleming Professor of Law and Professor of Psychology at Yale Law School

Samuel Walker, Emeritus Professor of Criminal Justice at the University of Nebraska–Omaha

 

10:30 a.m. EST         Witness Panel Discussion II:

Carmen Perez, Executive Director of The Gathering for Justice

Jim St. Germain, Founder of Preparing Leaders for Tomorrow

Jim Winkler, President and General Secretary of the National Council of Churches

Ashley Yates, Co-Founder of Millennial Activists United

 

11:30 a.m. EST         Witness Panel Discussion III:

Richard Beary, President of the International Association of Chiefs of Police (IACP)

Chuck Canterbury, National President of the Fraternal Order of Police

Andrew Peralta, National President of the National Latino Peace Officers Association

Richard Stanek, Past President and Executive Committee’s Sergeant-at-Arms of the Major County Sheriffs’ Association and National Sheriffs’ Association

 

1:30 p.m. EST          Witness Panel Discussion IV:

Sherrilyn Ifill, President and Director-Counsel of the NAACP Legal Defense and Educational Fund (NAACP LDF)

Laura Murphy, Director, Washington Legislative Office, American Civil Liberties Union (ACLU)

Vikrant Reddy, Senior Policy Analyst, Texas Public Policy Foundation’s Center for Effective Justice

Maria Teresa Kumar, President and CEO, Voto Latino

 

2:30 p.m. EST          Witness Panel Discussion V:

Kevin Johnson, Mayor of Sacramento

Michael Nutter, Mayor of Philadelphia

Stephanie Rawlings-Blake, Mayor of Baltimore

 

3:30 p.m. EST            Testimonies from the Audience

4:30 p.m. EST            Task Force Closing Remarks

5:00 p.m. EST            Meeting ends        

*Written testimonies and a live stream of the meeting will available on the Task Force on 21st Century Policing webpage. 

***

About the President’s Task Force on 21st Century Policing

The President’s Task Force on 21st Century Policing was established by an Executive Order signed by the President on Dec. 18, 2014.  The Task Force – which includes law enforcement representatives, community leaders, young adults and notable scholars – will examine, among other issues, how to strengthen public trust and foster strong relationships between local law enforcement and the communities that they protect, while also promoting effective crime reduction.  Members of the Task Force will engage federal, state, tribal and local officials, subject matter experts, young leaders, and nongovernmental organizations through meetings and 21st century technology.  The Task Force will also convene listening sessions where they will hear testimony, including proposed recommendations for consideration, from invited witnesses and also receive comments and questions from the public.

The two physician owners of a Houston-area mental health clinic were sentenced today to 148 months and 120 months respectively for their roles in a $97 million Medicare fraud scheme. A group home owner who sent residents to the clinic in exchange for kickbacks was also sentenced to 54 months in prison for her role.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth Magidson of the Southern District of Texas, Special Agent in Charge Perrye K. Turner of the FBI’s Houston Field Office, Special Agent in Charge Mike Fields of the U.S. Department of Health & Human Services-Office of the Inspector General (HHS-OIG) Dallas Regional Office, the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU), Special Agent in Charge Joseph J. Del Favero of the Railroad Retirement Board-Office of Inspector General (RRB-OIG) Chicago Field Office and Inspector General Patrick E. McFarland of the Office of Personnel Management-Office of Inspector General (OPM-OIG) made the announcement. 

“Doctors are not only bound by oath to serve the health of their patients, they are bound by duty to serve as gatekeepers for Medicare spending,” said Assistant Attorney General Caldwell.  “In this case, without the criminal participation of Drs. Sanjar and Sajadi, this fraud simply could not have happened.”                         

Physicians Mansour Sanjar, 81, and Cyrus Sajadi, 67, the owners of Spectrum Care P.A., a community mental health clinic, were each convicted following a jury trial on March 12, 2014, of conspiracy to commit health care fraud and conspiracy to pay and receive kickbacks, as well as related counts of health care fraud and paying illegal kickbacks.  Chandra Nunn, 36, a group home owner, was convicted of conspiracy to commit health care fraud and conspiracy to pay and receive kickbacks, as well as related counts of receiving illegal kickbacks.  In addition to the prison sentences, U.S. District Judge Vanessa D. Gilmore of the Southern District of Texas ordered Sanjar and Sajadi to pay $8,058,612.39 in restitution, and Nunn to pay $1,885,667.41 in restitution.  Co-defendants Adam Main, Shokoufeh Hakimi, Sharonda Holmes and Shawn Manney were also convicted and are scheduled to be sentenced on Jan. 20, 2015.

According to evidence presented at trial, Sanjar and Sajadi orchestrated and executed a scheme to defraud Medicare beginning in 2006 and continuing until their arrest in December 2011.  Sanjar and Sajadi owned Spectrum, which purportedly provided partial hospitalization program (PHP) services.  A PHP is a form of intensive outpatient treatment for severe mental illness.  The Medicare beneficiaries for whom Spectrum billed Medicare for PHP services did not qualify for or need PHP services. 

Evidence presented at trial showed that Sanjar and Sajadi signed admission documents and progress notes certifying that patients qualified for PHP services, when in fact, the patients did not qualify for or need PHP services.  Sanjar and Sajadi also billed Medicare for PHP services when the beneficiaries were actually watching movies, coloring and playing games, which are not activities covered by Medicare. 

Evidence presented at trial also showed that Sanjar and Sajadi paid kickbacks to group care home operators and patient recruiters, including Nunn, Holmes and Manney, in exchange for delivering ineligible Medicare beneficiaries to Spectrum.  In some cases, the patients received a portion of those kickbacks.  According to evidence presented at trial, Spectrum billed Medicare for approximately $97 million in services that were not medically necessary and, in some cases, not provided.

The case was investigated by the FBI, HHS-OIG, Texas MFCU, RRB-OIG and OPM-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Texas.  The case is being prosecuted by Assistant Chief Laura M.K. Cordova, Senior Trial Attorney Jonathan T. Baum and Trial Attorney William S.W. Chang of the Fraud Section.

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.

Andrew J. Zarauskas, a New Jersey resident, was sentenced to 33 months in prison for illegally importing and trafficking in narwhal tusks and associated money laundering crimes, announced Assistant Attorney General John C. Cruden for the Environment and Natural Resources Division.  Zarauskas was also ordered to forfeit $85,089, six narwhal tusks and one narwhal skull.  In addition, Zarauskas was ordered to pay a fine of $7,500.  His prison sentence will be followed by three years of supervised release.  

On Feb. 14, 2014, a federal jury in Bangor, Maine, convicted Zarauskas on six counts, including conspiracy, smuggling violations for buying and illegally importing narwhal tusks into the United States and money laundering violations associated with the illegal importations.  The market value of the teeth and tusks illegally imported by Zarauskas was determined to be between $120,000 and $200,000. 

Narwhals are marine mammals that are protected by the Marine Mammal Protection Act and are listed on Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). It is illegal to import parts of the narwhal into the United States without a permit and without declaring the parts at the time of importation to U.S. Customs and Border Protection and the U.S. Fish and Wildlife Service. 

“The Justice Department is committed to the fight to save the world’s protected wildlife species, many of which are under sustained attack by poachers and wildlife traffickers,” said Assistant Attorney General Cruden.  “We are particularly grateful to our federal and Canadian law enforcement partners for unraveling this scheme to traffic in narwhal tusks and for bringing Zarauskas and his co-conspirators to justice.”

“The significant penalties imposed today for Mr. Zarauskas send a powerful message to any individual that decides to engage in the trade of illegal wildlife,” said Deputy Assistant Director for Law Enforcement Edward Grace of the U.S. Fish and Wildlife Service.  “We will continue to work closely with our international, federal and state partners to root out those individuals who exploit protected wildlife species for their own financial gain.”

“This is yet another case where dedicated investigators helped stop an international smuggling ring attempting to profit from the illegal exploitation and trade of vulnerable and threatened marine species,” said Assistant Administrator Eileen Sobeck for National Oceanic and Atmospheric Administration (NOAA) Fisheries.  “NOAA will continue to work in collaboration with our international, federal and state law enforcement partners to make sure marine resources are protected now and into the future.”

According to the evidence presented a trial, Zarauskas purchased approximately 33 narwhal tusks over nearly six years from two Canadian co-defendants.  The Canadian co-defendants purchased the narwhal tusks in Canada and subsequently brought them into the United States illegally by concealing the narwhal tusks either under their truck or under a utility trailer and not declaring the wildlife to border officials as required.  Once in the United States, a Canadian co-defendant shipped the narwhal tusks to Zarauskas from Bangor, Maine.  Zarauskas knew that the co-defendants lived in Canada and had illegally imported the narwhal tusks into the United States.

The case was investigated by agents from the Law Enforcement Offices of NOAA, U.S. Fish and Wildlife Service, and Environment Canada.  The case was prosecuted by Trial Attorneys Todd S. Mikolop and James B. Nelson of the Department of Justice’s Environmental Crimes Section.

The Justice Department and the Office of the Director of National Intelligence released the following joint statement today:

On Dec. 8, 2014, the Director of National Intelligence declassified and disclosed publicly that the U.S. government had filed an application with the Foreign Intelligence Surveillance Court seeking renewal of the authority to collect telephony metadata in bulk, and that the FISC renewed that authority.

The FISC’s Dec. 4, 2014, primary order renewing the collection expires on Feb. 27, 2015.  The DNI also announced that the administration was undertaking a declassification of the Dec. 4, 2014, primary order.  Following this declassification review by the executive branch, the DNI has declassified and released in redacted form the Dec. 4, 2014, Primary Order signed by Judge Michael W. Mosman.

This order is now publicly available at the ODNI website, dni.gov, and the ODNI’s public website dedicated to fostering greater public visibility into the intelligence activities of the government, icontherecord.tumblr.com.

Acting Deputy Assistant Attorney General Larry J. Wszalek for the Department of Justice’s Tax Division, U.S. Attorney S. Amanda Marshall for the District of Oregon and Chief Richard Weber for the Internal Revenue Service-Criminal Investigation (IRS-CI) announced that Jheraun Dunlap, Ernest Bagsby, Jermaine Moore and Brandi McCall pleaded guilty today to a $1 million federal tax refund fraud scheme.

Dunlap admitted to filing 208 false federal income tax returns with false wages, false withholding and false refundable credits that claimed a total of more than $1 million in fraudulent refunds.  Dunlap filed false tax returns using the names and social security numbers of other individuals obtained directly and through Bagsby, Moore and McCall.  Dunlap filed a number of false tax returns using identities stolen by co-defendant Carolyn Gallagher, who previously pleaded guilty to identity theft.  Dunlap also used addresses obtained by Bagsby, Moore and McCall to receive stored-value debit cards loaded with fraudulent income tax refunds.

On Jan. 12, all four defendants pleaded guilty before Senior District Judge Robert E. Jones in the District of Oregon.  Dunlap pleaded guilty to conspiracy to defraud the government, wire fraud and aggravated identity theft.  Bagsby and Moore pleaded guilty to conspiracy to defraud the government, theft of government funds and aggravated identity theft.  McCall pleaded guilty to conspiracy to defraud the government.  All four defendants have agreed to pay full restitution to the U.S. Treasury in the amount of $427,896.

This case was investigated by the IRS-CI’s Stolen Identity Refund Fraud Task Force.  Trial Attorneys Leslie A. Goemaat and Lori A. Hendrickson of the Tax Division are prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.                                  

Former Police of Puerto Rico Officer Angel Torres Quinones was sentenced today to serve 46 months in prison for obstructing the civil rights investigation into the fatal beating of Jose Luis Irizarry Perez, 19, announced Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division, U.S. Attorney Rosa Emilia Rodriguez-Velez for the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI San Juan Field Office.  

Torres Quinones pleaded guilty to obstruction of justice for providing misleading information to the local Puerto Rico prosecutor who initially investigated the police-involved beating of Irizarry Perez.  Five other former Puerto Rico police officers, who also pleaded guilty, are currently awaiting sentencing for their roles in the beating of Irizarry Perez and subsequent obstruction of the investigation.  According to documents filed in connection with the guilty pleas, two former Puerto Rico police officers violated the constitutional rights of Irizarry Perez by striking him with their police batons while another former police officer physically restrained Irizarry Perez during an election evening celebration at the Las Colinas housing development in Yauco, Puerto Rico, on Nov. 5, 2008.    

U.S. District Court Judge Juan M. Perez Gimenez issued the sentence, which will be followed by three years of supervised release.  During the three-year term, the defendant will be under federal supervision, and risks additional prison time should he violate any terms of his supervised release. 

“The department will continue to ensure that those who cover up civil rights violations are brought to justice,” said Acting Assistant Attorney General Gupta.  “Like an officer who unnecessarily uses excessive force, a police officer who obstructs a civil rights investigation violates his oath to the people he serves.”

“Today’s sentencing brings a measure of justice to the family of Jose Luis Irizarry Perez,” said U.S. Attorney Rodriguez-Vélez.  “The U.S. Attorney’s Office and its law enforcement partners will hold accountable those who abuse their power and official positions at the expense of constitutionally guaranteed civil rights.”

This case was investigated by the FBI’s San Juan Division and is being prosecuted by Senior Litigation Counsel Gerard Hogan and Trial Attorneys Shan Patel and Olimpia E. Michel of the Civil Rights Division and Assistant U.S. Attorney Jose A. Contreras for the District of Puerto Rico.

A Miami owner of a home health care company pleaded guilty today in connection with a $32 million Medicare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.

Felix Gonzalez, 45, of Miami, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Kathleen M. Williams of the Southern District of Florida.  A sentencing hearing is scheduled for March 19, 2015.

According to his plea documents, Gonzalez was an owner of AA Advanced Care Inc. (AA Advanced), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.  In connection with his guilty plea, Gonzalez admitted that he and his co-conspirators operated AA Advanced for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or not provided at all.

Gonzalez further admitted that he negotiated and paid kickbacks and bribes to patient recruiters in exchange for patient referrals, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services for Medicare beneficiaries.  Gonzalez admitted that he and his co-conspirators used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for home health care services.   

From approximately January 2006 through March 2009, AA Advanced submitted approximately $32 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $22 million for these fraudulent claims.

The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.  This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer and Trial Attorney Kelly Graves of the Criminal Division’s Fraud Section. 

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 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 Action Team (HEAT), go to: www.stopmedicarefraud.gov.

Convicted After Trial of Multiple Counts of Providing Material Support to al Qaeda

Charges Based on Participating in a Deadly Hostage-Taking in Yemen,

Conspiring to Establish a Terrorism Training Camp in the United States, and

Sending One of his Followers to Train and Fight with al Qaeda in Afghanistan

Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Preet Bharara for the Southern District of New York announced that Mustafa Kamel Mustafa, aka “Abu Hamza,” aka “Abu Hamza al Masri,” (“Abu Hamza”) was sentenced today in Manhattan federal court to life imprisonment by U.S. District Judge Katherine B. Forrest for his participation in a hostage-taking in Yemen in 1998 that resulted in four deaths, a conspiracy to establish a terrorist training camp in Bly, Oregon, and sending a follower to train and fight with al Qaeda in Afghanistan in 2000.  Abu Hamza, who was extradited from the United Kingdom to the Southern District of New York in October 2012, was found guilty on May 19, 2014, following a four-week jury trial, of each of the 11 charges he faced. 

“Abu Hamza is an unrepentant all-purpose terrorist,” said Assistant Attorney General Carlin.  “With today’s sentence, he is being held accountable for the many ways in which he supported terrorism and other terrorists through much of his life, including his role in a hostage-taking in Yemen, his plot to create a terrorist training camp on U.S. soil, and his facilitation of violent jihad in Afghanistan.  This case was charged over ten years ago and was tried after years of extradition proceedings—and is but one example of our resolve to pursue those who threaten the United States and our interests anywhere in the world, no matter how long it takes.  I applaud the many prosecutors, agents, and analysts who have devoted years of hard work to the pursuit of justice in this case.”

“Abu Hamza’s blood-soaked journey from cleric to convict, from Imam to inmate, is now complete,” said U.S. Attorney Bharara.  “In May, after a fair and public trial, a jury pronounced Abu Hamza guilty for his leadership and support of, as well as participation in, terrorist activities, ranging from a fatal hostage-taking in Yemen to establishing a terrorist training camp in Oregon to sending a follower to aid Al Qaeda in Afghanistan.  After years of fighting extradition, Abu Hamza finally faced justice, as all those who engage in terrorism against innocent civilians must, here in the U.S., and all around the globe, as the terrible events in Paris remind us.”

According to the evidence presented at trial, statements made during other public proceedings including today’s sentencing, and other court documents:

Hostage-Taking in Yemen in December 1998

On Dec. 28, 1998, in Yemen, hostage-takers stormed a caravan of sport utility vehicles carrying 16 tourists, including two United States citizens, and took the tourists hostage by force.  Before the hostage-taking, Abu Hamza issued a public warning to “infidels” not to travel to Yemen.  In addition, five days prior to the hostage-taking, Abu Hamza’s stepson and other associates of Abu Hamza were arrested in Yemen.  During the hostage-taking, the hostages told their victims that they were taken prisoner to free the hostage-takers’ “friends.”

Before the hostage-taking, Abu Hamza provided the leader of the hostage-takers with a satellite telephone, and subsequently spoke with him on that satellite telephone the night before the hostage-taking and during the hostage-taking.  During the call on the day of the hostage-taking, Abu Hamza agreed to act as an intermediary on behalf of the hostage-takers.  Abu Hamza also provided advice to the leader of the hostage-takers over the telephone.

On Dec. 29, 1998, the Yemeni military launched a rescue operation to free the hostages.  The hostage-takers fought the Yemeni military, using the hostages as human shields.  During the rescue operation, four of the hostages were killed and several others were wounded.

Subsequently, in a recorded interview with one of the surviving hostages conducted at his mosque, Abu Hamza said that hostage-taking was “a good thing” under Islam, that people had been warned to stay out of Yemen, that the plan was to hold the tourists captive “until the government let my people go,” and that the hostage-takers “snatched you to exchange you.” 

Efforts to Create a Terrorist Training Camp in Bly, Oregon, in 1999

In late 1999, Abu Hamza and several of his followers, including Oussama Abdullah Kassir, Haroon Rashid Aswat, Earnest James Ujaama, and others, attempted to create a terrorist training camp to support al Qaeda on property located in Bly, Oregon.  The primary purpose of the Bly, Oregon, camp was to provide various types of terrorist training, including weapons training.  In late November 1999, at Abu Hamza’s direction, Kassir and Aswat traveled from London, England, to Bly to assist in setting up the camp.  Kassir brought with him to the camp a manual on the use of sarin nerve gas and letters of appreciation to Usama bin Laden and Abu Hamza.  Aswat subsequently was present at an al Qaeda guest house in Pakistan.

On May 12, 2009, after a four-week jury trial in this district, Kassir was convicted of various criminal offenses, including conspiring to provide material support to terrorists and to al Qaeda, and conspiracy to kill persons overseas, as a result of Kassir’s participation in the efforts to establish the Bly terrorist training camp.  On Sept. 15, 2009, United States District Judge John F. Keenan sentenced Kassir to multiple terms of life in prison.  The conviction was subsequently affirmed by the Court of Appeals.

Aswat was arrested in Zambia in July 2005 and then deported to England, where he was arrested at the request of the United States, pursuant to a warrant issued in this district.  Aswat was extradited to the United States on Oct. 21, 2014.  The charges against Aswat are currently pending, and trial is scheduled to commence before Judge Forrest on June 1, 2015.

Facilitating Violent Jihad in Afghanistan in 2000 and 2001

In November 2000, Abu Hamza requested that Ujaama escort another one of Abu Hamza’s followers, Feroz Abassi, from London to Ibn Sheikh al-Libi, a commander at a terrorist training camp in Afghanistan.  Thereafter, Ujaama and Abassi traveled from London to Pakistan. Ujaama and Abassi then separately entered Afghanistan. Abu Hamza subsequently conveyed instructions for Abassi to contact Ibn Sheikh al-Libi, who was expecting Abassi.  Thereafter, Abassi passed through an al Qaeda safe house in Afghanistan, attended al Qaeda’s al Faruq training camp, and met with senior al Qaeda leaders.  In December 2001, United States forces took Abassi into custody in Afghanistan.

In addition, from the spring of 2000 through late 2001, Abu Hamza provided goods and services to the Taliban by, among other things, directing Ujaama to deliver money to Taliban-controlled parts of Afghanistan.

Ujaama was arrested in 2002 and testified against Abu Hamza as a cooperating witness for the government.

*                      *                      *

Abu Hamza, 56, a naturalized citizen of the United Kingdom, was convicted after trial of 11 offenses, including conspiracy to take hostages; hostage-taking; conspiracy to provide material support to terrorists; providing material support to terrorists; conspiracy to provide material support to a foreign terrorist organization (al Qaeda); providing material support to a foreign terrorist organization (al Qaeda); and conspiracy to provide goods and services to the Taliban.

In addition to the prison term, Abu Hamza was ordered to pay a $1,100 special assessment fee.  In addressing Abu Hamza's conduct, Judge Forrest described it as "barbaric, misguided and wrong," and remarked, "It is important to me that you have not expressed sympathy for the victims of the Yemeni kidnappings."

Abu Hamza’s conviction is the result of the close cooperative efforts of the U.S. Attorney’s Office for the Southern District of New York, the Justice Department's National Security Division, the Federal Bureau of Investigation, the New York City Police Department, the United States Marshals Service, and New Scotland Yard in the United Kingdom.

The U.S. Department of Justice’s Office of International Affairs contributed extraordinary assistance with the extradition in this case.  The U.S. Attorney also thanked the FBI’s Seattle Field Office, the Home Office of the United Kingdom, the United States Department of State, and the United States Department of the Treasury’s Office of Foreign Assets Control for their assistance.

The prosecution is being handled by the Office’s Terrorism and International Narcotics Unit, with assistance from the Counterterrorism Section of the Justice Department's National Security Division. Assistant U.S. Attorneys John P. Cronan, Edward Y. Kim and Ian McGinley are in charge of the prosecution.

Justice Department Will Defend Constitutionality of Trademark Statute

Earlier today, the government filed a notice of intervention in Pro-Football, Inc. v. Amanda Blackhorse, et al. notifying the court in the Eastern District of Virginia that it would defend the federal authorities of the U.S. Patent and Trademark Office’s U.S. Trademark Trial and Appeal Board (TTAB), the Justice Department announced. 

In August 2006, five Native Americans, Amanda Blackhorse, Marcus Briggs, Philip Gover, Jillian Pappan and Courtney Tsotigh, sought the cancellation of six Washington Redskins trademark registrations under the Lanham Act on the grounds that the trademarks were disparaging to Native Americans at the time they were registered.  A panel of the TTAB agreed and issued a June 18, 2014 decision that the registrations should be canceled.

Pro-Football Inc., the owner of the Washington Redskins, filed a complaint in U.S. District Court on Aug. 14, 2014, against the five individuals who had petitioned the TTAB for invalidation of the Redskins trademarks.  Pro-Football Inc. is challenging the constitutionality of Section 2(a) of the Lanham Act, 15 U.S.C. § 1052(a) on the grounds that the act violates the First Amendment to the U.S. Constitution.  The Lanham Act permits denial or cancellation of a trademark application if the trademark is disparaging or falsely suggests a connection with persons living or dead, institutions, beliefs or national symbols.  The act further provides that if a private party believes that a trademark was improperly registered, the party may commence a review proceeding before the TTAB seeking to have the trademark canceled.

The United States will defend the constitutionality of the federal statute.

“The Department of Justice is dedicated to defending the constitutionality of the important statute ensuring that trademark issues involving disparaging and derogatory language are dealt with fairly,” said Acting

Assistant Attorney General Joyce R. Branda for the Civil Division.  “I believe strongly in the rights of all Americans to celebrate and maintain their unique cultural heritage.  Going forward, we will strive to maintain the ability of the United States Patent and Trademark Office to make its own judgment on these matters, based on clear authorities established by law.” 

The United States is specifically authorized by federal statute to intervene in any federal action in which the constitutionality of an act of Congress is drawn into question.  Intervention by the United States will not interfere with the timely adjudication of this action.

The case is being handled by the Justice Department’s Civil Division’s Federal Programs Branch with the assistance of the U.S. Attorney’s Office for the Eastern District of Virginia.

Today, the Department of Justice Civil Rights Division reached an agreement with the state of Kansas to reform the Kansas State Department of Corrections (KDOC) correctional practices at the Topeka Correctional Facility (TCF) to protect its women prisoners from sexual victimization.  The agreement resolves allegations that the state subjects women prisoners at TCF to harm due to sexual abuse and misconduct by correctional staff and other prisoners in violation of their constitutional rights.     

“This agreement will help ensure that women incarcerated at Topeka Correctional Center are safe and protected from sexual exploitation,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “As a result of this agreement, state officials will be required to protect women prisoners from sexual violence and abuse as is required under the Constitution.” 

“This will go a long way toward reducing the harm women have experienced while being held at the TCF,” said U.S. Attorney Barry Grissom for the District of Kansas.  “The state of Kansas and the KDOC are to be commended for working with the Justice Department to reform the state’s correctional practices.”   

On Sept. 6, 2012, the Justice Department issued a findings letter concluding that women prisoners were subjected to a pattern or practice of sexual abuse.  This finding was consistent with other state reports that recognized a long-standing problem of sexual assault in the prison.  The findings report identified several systemic failures that led to the pattern of abuse.  The state failed to employ accepted correctional practices designed to protect women prisoners from harm due to sexual abuse and misconduct.  TCF did not have effective procedures to classify and manage predatory guards andand prisoners.  Further, TCF lacked effective investigative and grievance processes, and did not have enough officers, including female officers, to appropriately supervise and monitor prisoners.      

The agreement requires numerous ways to remedy the deficiencies including the requirement that the state to abide by the Prison Rape Elimination Act National Standards.  The agreement details that the state must mandate zero tolerance toward all forms of sexual abuse and sexual harassment and implement specific policies and procedures designed to prevent, detect, and respond to such conduct. 

The state will work to prevent and detect sexual abuse of women prisoners by ensuring adequate levels of staffing supplemented by targeted video monitoring.  The state will also implement a classification system specific to the female population at TCF, and maintain a risk assessment process that adequately identifies potential victims and predators.  The state will maintain a grievance process and by provide multiple internal ways for prisoners to privately report sexual abuse and sexual harassment. 

The state will also effectively respond to any allegations of sexual abuse or sexual harassment by adhering to guidelines and timeframes for initiating and concluding investigations; ensuring prompt corrective action following any administrative or criminal finding of sexual abuse or sexual harassment; and holding culpable staff accountable through disciplinary sanctions up to and including termination.

Finally, TCF will ensure that all staff are trained on their responsibilities to prevent sexual abuse, and on how to indentify, detect, report, and respond to allegations of sexual abuse.  The women prisoners at TFC will similarly be educated on these issues.  Implementation of the agreement will be overseen by a monitor who will issue a compliance report every six months.  

The Civil Rights of Institutionalized Persons Act authorizes the department to seek a remedy for a pattern or practice of conduct that violates the constitutional rights of persons confined in a jail, prison, or other correctional facility.  Please visit the division website to learn more about this act and other laws enforced by the Civil Rights Division.

This agreement is due to the efforts of the Special Litigation Section of the Civil Rights Division, the U.S. Attorney’s Office for the District of Kansas and the leadership of the Governor of Kansas, the Kansas State Attorney General’s Office and the Kansas Department of Corrections.

A former London, Kentucky, doctor pleaded guilty today to filing false tax returns on which he falsely reported millions in fictitious business expenses to reduce his taxable income, announced Deputy Assistant Attorney General David A. Hubbert for the Justice Department’s Tax Division. 

According to the documents filed with the court, Dr. Visa Haran Sivasubramaniam owned and operated Hematology Oncology Physicians East (HOPE), where he offered medical oncology and hematology services.  During a three year period, from 2007 through 2009, Sivasubramaniam earned more than $16 million in total income from HOPE, but he reported nearly $13 million worth of false and fictitious medical supply expenses to offset that income.  Sivasubramaniam admitted that for 2008 and 2009, he signed false corporate tax returns for HOPE and false personal tax returns, which reported limited taxable income and ficticious losses from HOPE when he in fact knew that his net income was millions of dollars more.  According to court documents, Sivasubramaniam owes more than $4.5 million in taxes.

Sivasubramaniam faces a statutory maximum sentence of six years in prison and a $500,000 fine.  His sentencing is set for July 7 before U.S. District Judge Amul R. Thapar for the Eastern District of Kentucky.

This case was investigated by special agents of the Internal Revenue Service-Criminal Investigation.  Trial Attorneys Yael T. Epstein and Thomas G. Voracek of the Tax Division are prosecuting the case.

A former state circuit judge in Arkansas pleaded guilty today for accepting a bribe in exchange for reducing a negligence jury verdict against a Conway, Arkansas, company. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and First Assistant United States Attorney Patrick C. Harris of the Eastern District of Arkansas made the announcement.

Michael A. Maggio, 53, of Conway, Arkansas, pleaded guilty to a one-count information charging him with bribery concerning programs receiving federal funds.  A sentencing hearing before Chief U.S. District Judge Brian S. Miller of the Eastern District of Arkansas will be scheduled at a later date.

As part of his plea agreement, Maggio admitted that in 2013, he served as an elected circuit judge for the state of Arkansas, Twentieth Judicial District, Second Division, presiding over a civil matter in Faulkner County Circuit Court.  The plaintiff in that matter, the estate of a decedent, filed a complaint alleging, among other things, that a company, its owner, and others had neglected and mistreated the decedent leading to the decedent’s death while the decedent was in their care.  On May 16, 2013, a jury returned a verdict in the plaintiff’s favor, awarding damages against the sole-remaining defendant, the company, in the amount of $5.2 million.  Approximately one month later, the company filed a motion for new trial or to reduce the amount of damages awarded by the jury to the plaintiff. 

Maggio further admitted that he formally announced his candidacy for the Arkansas Court of Appeals on June 27, 2013, while the post-trial motions were pending.  On July 10, 2013, Maggio entered an order reducing the verdict against the company to $1 million.  Prior to that order, a fundraiser for Maggio’s campaign told Maggio that the company’s owner had committed money to support Maggio’s campaign.  The fundraiser also communicated with Maggio regarding the pending post-trial motions.  On July 9, 2013, the owner  donated approximately $24,000 to Maggio’s campaign.  As part of his plea, Maggio admitted that his decision to remit the judgment was improperly influenced by the donations that his campaign received from the company’s owner.  Maggio further acknowledged that he attempted to delete text messages between the fundraiser and himself after the media became aware of the illicit contributions to his campaign. 

The case was investigated by the FBI’s Little Rock Field Office, and is being prosecuted by Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Julie Peters of the Eastern District of Arkansas.

A southwest suburban Bolingbrook man who was arrested in October, was indicted by a federal grand jury for allegedly attempting to travel overseas to join a foreign terrorist organization operating inside Iraq and Syria, federal law enforcement officials announced today.  The defendant, Mohammed Hamzah Khan, 19, a U.S. citizen, was charged with attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL) in a single-count indictment returned late yesterday.

The indictment was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney for the Northern District of Illinois Zachary T. Fardon and Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation Robert J. Holley.  The investigation is continuing, they said.  

A date for Khan to be arraigned in U.S. District Court in Chicago has not yet been determined.  Khan has been detained in federal custody since he was arrested on Oct. 4, 2014, at O’Hare International Airport by members of the Chicago FBI’s Joint Terrorism Task Force before he attempted to fly to Vienna, Austria, on his way to Istanbul, Turkey.

Khan was initially charged in a criminal complaint with attempting to provide material support to a foreign terrorist organization, and the indictment formalizes that same charge.  According to the indictment, between February and Oct. 4, 2014, Khan attempted to provide material support and resources, specifically, personnel, to ISIL.

Attempting to provide material support to a foreign terrorist organization carries a maximum penalty of 15 years in prison and a $250,000 fine.  If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The Chicago JTTF is comprised of Special Agents of the FBI, officers of the Chicago Police Department, and representatives from an additional 20 federal, state and local law enforcement agencies.  U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), and the Illinois State Police also provided significant assistance in the investigation. 

The government is being represented by Trial Attorney Michael Dittoe of the National Security Division and Assistant U.S. Attorneys Matthew Hiller, Angel Krull, and Sean Driscoll.

The public is reminded that an indictment contains only charges and is not evidence of guilt.  The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.   

Indictment    

A federal court in Dallas has permanently barred Ricia Daniels and Ricia Daniels doing business as Ricia’s Convenience Tax Service and Ricia’s Convenience Tax Service Inc. from preparing tax returns for others, the Justice Department announced today.

U.S. District Judge Jorge A. Solis entered the order, which the defendants agreed to, on Jan. 9.

The order requires the defendants to turn over to the United States a list of all persons for whom they prepared federal tax returns since Dec. 1, 2013.  The order further authorizes the United States to monitor the defendants’ compliance with the terms of the injunction.

The complaint alleged that the defendants prepared returns for their customers that falsely claimed improper or inflated deductions of medical expenses, unreimbursed employee business expense and other deductions on the customers’ Schedule A (Itemized Deductions), improper or inflated business expense deductions on Schedule C (Profit and Loss from Business Sole Proprietorship), improper or inflated education expenses, and improper or inflated fuel taxes in order to understate income and overstate the taxpayers’ refunds.  The complaint also alleged that the defendants have filed tax returns without the permission of some customers.

Return preparer fraud is one of the Internal Revenue Service’s (IRS) 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.

Daiichi Sankyo Inc., a global pharmaceutical company with its U.S. headquarters in New Jersey, has agreed to pay the United States and state Medicaid programs $39 million to resolve allegations that it violated the False Claims Act by paying kickbacks to induce physicians to prescribe Daiichi drugs, including Azor, Benicar, Tribenzor and Welchol, the Justice Department announced today.

“The Anti-Kickback Statute prohibits payments intended to influence a physician’s ordering or prescribing decisions,” said Acting Assistant Attorney General Joyce R. Branda for the Civil Division.  “The Department of Justice is committed to preserving the independence and objectivity of those decisions, which are cornerstones of our public health programs.”

The Anti-Kickback Statute was enacted to ensure that physicians’ medical judgment is not compromised by improper payments and gifts by other health care providers.  The statute generally prohibits anyone from offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by federal health care programs, including Medicare and Medicaid. 

In this case, the government alleged that Daiichi paid physicians improper kickbacks in the form of speaker fees as part of Daiichi’s Physician Organization and Discussion programs, known as “PODs,” which were run from Jan. 1, 2005, through March 31, 2011, as well as other speaker programs that were run from Jan. 1, 2004, through Feb. 4, 2011.  Allegedly, payments were made to physicians even when physician participants in PODs took turns “speaking” on duplicative topics over Daiichi-paid dinners, the recipient spoke only to members of his or her own staff in his or her own office, or the associated dinner was so lavish that its cost exceeded Daiichi’s own internal cost limitation of $140 per person. 

“Drug companies are prohibited from using lavish entertainment and padded speaker program payments to induce physicians to prescribe their drugs for beneficiaries of federal health care programs,” said U.S. Attorney Carmen Ortiz for the District of Massachusetts.  “Settlements like this one show that the government will continue to pursue health care companies that use kickbacks to promote their products.”

As part of the settlement, Daiichi has agreed to enter into a corporate integrity agreement with the Department of Health and Human Services-Office of Inspector General (HHS-OIG), which obligates the defendants to undertake substantial internal compliance reforms for the next five years.

“Schemes such as this are particularly abhorrent,” said Inspector General Daniel R. Levinson for the U.S. Department of Health and Human Services.  “Manufacturers and physicians who engage in them are cheating Medicare and Medicaid out of millions of dollars and threatening programs upon which many elderly and disabled Americans rely.  My office will take whatever steps necessary to guard against improper alliances between manufacturers of drugs and those who prescribe them.  Through our corporate integrity agreement we will be closely monitoring Daiichi.”

The settlement announced today stems from a complaint filed by Kathy Fragoules, a former Daiichi sales representative, under the whistleblower provisions of the False Claims Act, which authorize private parties to sue on behalf of the United States, and to receive a portion of any recovery.  Fragoules will receive $6.1 million of the federal recovery.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $23.3 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 investigation and litigation was conducted by the Civil Division, the U.S. Attorney’s Office for the District of Massachusetts, the U.S. Department of Veterans Affairs, the Department of Defense Criminal Investigative Service, HHS-OIG and the FBI.  The claims settled by this agreement are allegations only and there has been no determination of liability.

The case is captioned U.S. ex rel. Fragoules v. Daiichi Sankyo, Inc., Civil Action No. 10-10420 (D. Mass.).

Andrew Weissmann has been selected as the Chief of the Criminal Division’s Fraud Section, announced Assistant Attorney General Leslie R. Caldwell.

“Andrew Weissmann is an extraordinary attorney with an incomparable dedication to the pursuit of justice,” said Assistant Attorney General Caldwell.  “As his deep experience demonstrates, many of the top officials throughout the Department of Justice have come to rely upon his wise counsel over the years, and I am pleased to welcome him back to the Criminal Division.” 

Weissmann has dedicated the majority of his 30-year professional career to public service and the Department of Justice.  He returns to the Criminal Division after serving as the FBI’s general counsel under former Director Robert S. Mueller and, most recently, teaching criminal procedure and national security law courses and seminars at NYU School of Law.  Before his tenure at the FBI, Weissmann was a partner at Jenner & Block in New York for five years, a member of its Management Committee, and co-chair of the firm’s White Collar Practice Group, where he worked on a broad range of matters including ones involving securities fraud, antitrust, health care fraud and the Foreign Corrupt Practices Act. 

Prior to joining that law firm, Weissmann served as special counsel to the Director of the FBI.  Before that he was the deputy director and then the director of the Enron Task Force from 2002 through 2005, where he oversaw the investigations and prosecutions of more than 30 individuals, including Jeffrey Skilling, Kenneth Lay, and Andrew Fastow, as well as the corporate prosecutions of Merrill Lynch and CIBC. 

Weissmann began his career with the Department of Justice in 1991 at the U.S. Attorney’s Office in the Eastern District of New York, where he served in various leadership positions, including as chief of the Criminal Division, until joining the Enron Task Force.  While at the U.S. Attorney’s Office, Weissmann tried more than 25 cases and was instrumental in bringing to justice high-ranking members of the Genovese, Colombo and Gambino crime families and combating the infiltration of organized crime on Wall Street.

During his tenure with the Department of Justice, Weissmann received many honors, including the Attorney General’s Award for Exceptional Service in 2006, Director’s Awards for Superior Performance in 1994, 1996, 1999 and 2000, and Special Achievement Awards in 2003 and 2004.

Weissmann joined the U.S. Attorney’s Office after working as an associate at Cleary Gottlieb Steen & Hamilton LLP.  He served as a law clerk for the Hon. Eugene H. Nickerson in the U.S. District Court for the Eastern District of New York.  He graduated magna cum laude from Princeton University, was awarded a Fulbright Fellowship to study at the University of Geneva, and graduated from Columbia Law School, where he served on its law review.  Weissmann has also taught at Fordham Law School and Brooklyn Law School.

Three former correctional officers with the Louisiana State Penitentiary in Angola, Louisiana, were sentenced today before United States District Judge James J. Brady for the Middle District of Louisiana for abusing an inmate and engaging in conduct to cover up the criminal conduct.  Mark Sharp, 33, received 73 months.  Kevin Groom, 47, was sentenced to one year probation and a $500 fine.  Matthew Cody Butler, 29, received two years probation and a $3,000 fine.

According to court documents filed in connection with their guilty pleas, on January 24, 2010, defendants Groom, Sharp and Butler were on duty as correctional officials when they learned that an inmate had escaped from his assigned location.  Shortly after the defendants joined the search for the escapee, the inmate surrendered to prison officials.  The inmate was handcuffed behind his back and placed in the back of a pick-up truck to be transported to the medical unit.  Groom, Butler, and Sharp escorted the inmate on the back of that truck.  During the drive to the medical unit, Sharp repeatedly struck the inmate with a baton.  During the investigation of the inmate’s complaint that officers had abused him, Groom and Butler engaged in various conduct to cover up the assault.

Sharp pleaded guilty to violating the civil rights of the inmate and to making false statements to the FBI.  Groom pleaded guilty to falsifying records in a federal investigation and making false statements to the FBI.  Butler pleaded guilty to misprision of a felony.

Another former officer, Jason Giroir, also pleaded guilty on May 29, 2013, to falsifying a report and making a false statement to the FBI.  He will be sentenced separately on January 29, 2015.

“The vast majority of American law enforcement officers conduct themselves with honor,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division.  “But when law enforcement officers abuse inmates and attempt to cover-up their misconduct, the Department of Justice stands ready to hold those officers accountable for their conduct.”

“It is unfortunate that the defendants’ criminal activities threaten to overshadow the courageous and outstanding work performed every day by the vast majority of law enforcement officers, both inside and outside the penal system,” said U.S. Attorney J. Walter Green for the Middle District of Louisiana.

“This thorough and patient investigation  not only resulted in the full accountability of all correctional officers involved, but also demonstrated unwavering adherence to the procedural rights of the victim and accused,” said Special Agent in Charge Michael J. Anderson of the FBI’s New Orleans Office.

The investigation in this matter was conducted by Special Agent Taneka Harris of the Federal Bureau of Investigation and prosecuted by Civil Rights Division Trial Attorney AeJean Cha and Assistant U.S. Attorney Robert W. Piedrahita.

The former International Program Director of International Adoption Guides Inc. (IAG), an adoption agency, pleaded guilty today to conspiring with others to defraud the United States by submitting fraudulent documents to the State Department for adoptions from Ethiopia and paying bribes to foreign officials.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Bill Nettles of the District of South Carolina made the announcement.

James Harding, 55, of Atlanta, Georgia, admitted as part of his guilty plea that, between 2008 and 2009, he and his co-conspirators submitted fraudulent documents to the State Department to facilitate adoptions of Ethiopian children by U.S. parents.  Harding admitted that, in support of U.S. visa applications for the Ethiopian children, he and others submitted false documentation, including contracts of adoption signed by orphanages that could not properly give the children up for adoption because, for example, the child in question was never cared for or never resided at the orphanage.

In entering his guilty plea, Harding also admitted that he and others paid bribes to two Ethiopian officials so that those officials would help with the fraudulent adoptions.  Specifically, Harding admitted that an audiologist and teacher at a government school was given money and other valuables in exchange for non-public medical information and social history information for potential adoptees.  Additionally, Harding and his co-conspirators provided cash and all-expense paid travel to the head of a regional ministry for women’s and children’s affairs in exchange for his approval of IAG’s applications for intercountry adoptions and ignoring IAG’s failure to maintain a properly licensed adoption facility. 

Harding pleaded guilty before Senior U.S. District Court Judge Sol Blatt Jr. of the District of South Carolina, and a sentencing hearing will be scheduled at a later date.

This ongoing investigation is being conducted by the Bureau of Diplomatic Security.  The department appreciates the assistance of the Office of Children’s Issues at the U.S. Department of State.  The case is being prosecuted by Trial Attorney John W. Borchert of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Jamie Lea Schoen of the District of South Carolina.

A federal court in Columbus, Georgia, has permanently barred Natashia and Detrick Tucker and their business, T&T Express Tax, from preparing federal tax returns for others, the Justice Department announced today. 

The civil injunction order, to which the defendants consented, was signed by Chief Judge Clay D. Land of the U.S. District Court for the Middle District of Georgia.

According to the complaint, the Tuckers prepared federal income tax returns for customers that understated the taxes due or generated inappropriate tax refunds.  The understatements were caused by improper earned income tax credits and education credits that the Tuckers claimed for their customers.  According to the complaint, the Internal Revenue Service (IRS) examined 337 returns of the 2,239 returns prepared by the Tuckers for the tax years 2009 through 2011.  Of those returns, the IRS determined that adjustments were needed on more than 87 percent of the examined returns.

On Jan. 9, 2014, Natashia Tucker pleaded guilty to conspiring to defraud the United States in the assessment and collection of federal income taxes and Detrick Tucker pleaded guilty to aiding and assisting in the preparation of false tax returns.  Natashia Tucker was later sentenced to serve 46 months in federal prison and was ordered to pay $1,483,025 in restitution to the IRS.  Detrick Tucker was sentenced to serve 12 months and one day in federal prison and ordered to pay $66,235 in restitution to the IRS.

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. 

The U.S. Departments of Education (ED) and Justice (DOJ) today released joint guidance reminding states, school districts and schools of their obligations under federal law to ensure that English learner students have equal access to a high-quality education and the opportunity to achieve their full academic potential.

“The diversity of this nation is one of its greatest attributes,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division at DOJ.  “Ensuring English learner students are supported in their education supports all of us.  Today’s guidance – 40 years after passage of the landmark Equal Educational Opportunities Act – will help schools meet their legal obligations to ensure all students can succeed.”

“Four decades ago, the U.S. Supreme Court held in Lau v. Nichols that all students deserve equal access to a high-quality education regardless of their language background or how well they know English,” said ED Assistant Secretary for Civil Rights Catherine E. Lhamon.  “Today’s guidance not only reminds us of the court’s ruling, but also provides useful information for schools as they work to ensure equity for students and families with limited English proficiency.”

In addition to the guidance, the departments also released additional tools and resources to help schools in serving English learner students and parents with limited English proficiency:

• A fact sheet in English and in other languages about schools’ obligations under federal law to ensure that English learner students can participate meaningfully and equally in school. 
• A fact sheet in English and in other languages about schools’ obligations under federal law to communicate information to limited English proficient parents in a language they can understand.
• A toolkit to help school districts identify English learner students, prepared by the Education Department’s Office of English Language Acquisition.  This is the first chapter in a series of chapters to help state education agencies and school districts meet their obligations to English learner students. 

This is the first time that a single piece of guidance has addressed the array of federal laws that govern schools’ obligations to English learners.  The guidance recognizes the recent milestone 40th anniversaries of Lau v. Nichols and the Equal Educational Opportunities Act of 1974 (EEOA), as well as the 50th anniversary of the Civil Rights Act.  The EEOA, similar to Lau, requires public schools to take appropriate action to help English learner students overcome language barriers and ensure their ability to participate equally in school.

The guidance explains schools’ obligations to:

• identify English learner students in a timely, valid and reliable manner;
• offer all English learner students an educationally sound language assistance program;
• provide qualified staff and sufficient resources for instructing English learner students;
• ensure English learner students have equitable access to school programs and activities
• avoid unnecessary segregation of English learner students from other students;
• monitor students’ progress in learning English and doing grade-level classwork;
• remedy any academic deficits English learner students incurred while in a language assistance program;
• move students out of language assistance programs when they are proficient in English and monitor those students to ensure they were not prematurely removed;
• evaluate the effectiveness of English learner programs; and
• provide limited English proficient parents with information about school programs, services, and activities in a language they understand.

Almost 5 million students in the United States are English learners - about 9 percent of all public school students.  From 2002 to 2011, the percentage of English learners in public schools increased in 40 states and the District of Columbia, and currently three out of every four public schools enroll English learner students. 

The mission of the ED Office for Civil Rights (OCR) is to ensure equal access to education and promote educational excellence throughout the nation through the vigorous enforcement of civil rights.  OCR is responsible for enforcing federal civil rights laws that prohibit discrimination by educational institutions on the basis of race, color, national origin, disability, sex and age, as well as the Boy Scouts of America Equal Access Act of 2001.  Additional information about OCR is available here and additional resources, including previous guidance released on this topic, is available here.

The enforcement of the EEOA and Title VI of the Civil Rights Act of 1964 to ensure that English learner students and limited English proficient parents receive the services to which they are entitled is a top priority of the DOJ’s Civil Rights Division.  Additional information on DOJ’s efforts to provide equal educational opportunities to all students is available here. 

Acting Assistant Attorney General Vanita Gupta for the Justice Department’s Civil Rights Division and U.S. Attorney Gregory K. Davis for the Southern District of Mississippi announced that John Louis Blalack, 20, and Robert Henry Rice, 24, both from Brandon, Mississippi, pleaded guilty today in U.S. District Court in Jackson to federal hate crime charges in connection with their roles in a series of assaults on African Americans in Jackson, Mississippi.  Blalack and Rice are the ninth and 10th individuals associated with a group of people who conspired to target and assault African Americans based on their race in the spring of 2011.

“Justice has been served,” said Attorney General Eric Holder.  “The hate crimes to which these defendants have pleaded guilty were as shocking as they were reprehensible—targeting innocent people for racially-motivated acts of violence that inflicted grievous harm and even claimed a life.  The Justice Department will never rest in our pursuit of those who victimize their fellow citizens.  This landmark case should send a clear message: that anyone who commits an act of bias-motivated violence, or who violates the civil rights to which all Americans are entitled, will be held accountable to the fullest extent of the law.”

Prior to today's guilty pleas, Deryl Paul Dedmon, 22; John Aaron Rice, 21; Dylan Wade Butler, 23; Jonathan Kyle Gaskamp, 22; and Joseph Paul Dominick, 23, all from Brandon, Mississippi, and William Kirk Montgomery, 25, from Puckett, Mississippi, Shelbie Brooke Richards, 21, from Pearl, Mississippi, and Sarah Adelia Graves, 21, from Crystal Springs, Mississippi, pleaded guilty in connection with their roles in these offenses.  The conspiracy culminated in the death of James Craig Anderson, who was assaulted and killed on June 26, 2011.   

Blalack pleaded guilty to two counts of violating the Matthew Shepard – James Byrd Jr. Hate Crimes Prevention Act.  Rice pleaded guilty to one count of violating the same act.  The statutory maximum sentence for these violations is 10 years in prison and a $250,000 fine.  Sentencing for Blalack is set for April 23, 2015, and sentencing for Rice is set for April 30, 2015.

The federal investigation revealed that beginning in the spring of 2011, Blalack, Robert Rice and others conspired with one another to harass and assault African-American people in and around Jackson.  On numerous occasions the co-conspirators used dangerous weapons, including beer bottles, sling shots and motor vehicles, to cause, and attempt to cause, bodily injury to African-American people.  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.   

On June 25, 2011, Blalack and others attended a birthday party/bonfire for a mutual friend in Puckett, Mississippi.  During the party, Blalack and others talked about going to Jackson to harass and assault African-American people.  By the early morning hours of June 26, 2011, Blalack, Montgomery, Dedmon, John Aaron Rice, Butler, Richards and Graves agreed to carry out their plan to find, harass and assault African-American people.  Robert Rice did not go to Jackson on June 26, 2011. 

At around 4:15 a.m., Blalack, Montgomery, John Aaron Rice, and Butler drove to Jackson in Montgomery’s white Jeep with the understanding that Dedmon, Richards and Graves would join them a short time later.  Blalack and the other three occupants of the Jeep then drove around Jackson and threw beer bottles from the moving vehicle at African-American pedestrians they encountered.  At approximately 5:00 a.m., Blalack and the other three occupants of the Jeep spotted Anderson in a motel parking lot off of Ellis Avenue.  The occupants of the Jeep decided that Anderson would be a good target for an assault because he was African-American and appeared to be visibly intoxicated.  Blalack and John Aaron Rice decided to get out of the Jeep to distract Anderson while they waited for Dedmon, Richards and Graves to arrive. 

After Dedmon Richards, and Graves arrived in Dedmon’s Ford F250 truck, Dedmon and John Aaron Rice physically assaulted Anderson.  Rice first punched Anderson in the face with sufficient force to knock Anderson to the ground, and then Dedmon punched Anderson in the face multiple times while he was on the ground.  After the assault, Blalack, Montgomery, Rice and Butler left the motel parking lot in the Jeep.  As they left, one of the occupants of the Jeep yelled, “White Power!”  Prior to getting back into his truck, Dedmon responded by also yelling “White Power!”

Once back in his Ford F250 truck, Dedmon deliberately used his vehicle to run over Anderson, causing injuries which resulted in his death.  Blalack’s guilty plea includes his role in this offense.

On a previous occasion, Blalack, Montgomery, Butler and Dominick drove around west Jackson to find and assault African Americans.  Blalack and the other occupants of the vehicle purchased bottles of beer to drink and then threw the beer bottles at African Americans.  The occupants of the vehicle also purchased a sling-shot.  Some of the occupants of the vehicle, including Blalack, threw beer bottles and shot metal ball bearings out of the moving vehicle at African American pedestrians.  Blalack pleaded guilty for his role in this offense.

Another previous occasion involved a racially motivated assault at or near a golf course in Jackson.  On this particular evening, Robert Rice, Blalack, Montgomery, Gaskamp, Dedmon and John Aaron Rice were in a vehicle, searching for, and eventually finding,  a vulnerable African-American man to assault.  The vehicle was stopped so Dedmon, John Aaron Rice and Gaskamp could chase the victim down.  The three men beat the man to the point that he begged for his life.  Robert Rice’s guilty plea includes his role in this offense.

“Today’s guilty pleas are the culmination of an extensive federal investigation into this violent hate crime conspiracy,” said Acting Assistant Attorney General Gupta.  “Ten defendants have now pleaded guilty to crimes associated with this conspiracy.  We hope that today’s guilty pleas provide closure to the victim’s family and to the community that has mourned Mr. Anderson’s tragic death and been shocked by the scope of the conspiracy to commit racially motivated assaults in Jackson by a group of ten co-conspirators.”

“There can be no tolerance for acts of gratuitous violence targeting innocent persons simply because of their race,” said U.S. Attorney Davis.  “This case is a testament to the United States Attorney’s Office’s dedication to vigorously investigate and prosecute violations of federal hate crime laws.  I commend not only Mr. Anderson’s family for their continued cooperation throughout this investigation, but our law enforcement partners, including the FBI and Jackson Police Department, who worked tirelessly in this case to ensure our hate crime laws are strictly enforced.”

“With today's guilty pleas, the FBI and its law enforcement partners have identified and brought to justice all those individuals who conspired to deprive Mr. Anderson and other citizens of their civil rights simply because of the color of their skin,” said Special Agent in Charge Donald Alway for the FBI in Mississippi.  “The FBI remains dedicated to protecting the cherished freedoms of all Americans, including aggressively investigating allegations of hate crimes and working to prevent them.”

These guilty pleas were the result of a cooperative effort between the Civil Rights Division, the U.S. Attorney’s Office for the Southern District of Mississippi and the Hinds County District Attorney’s office.  This case was investigated by the FBI’s Jackson Division and the Jackson Police Department.  It is being prosecuted by Trial Attorney Sheldon L. Beer and Deputy Chief Paige M. Fitzgerald of the Civil Rights Division, and Assistant U.S. Attorney Glenda R. Haynes of the U.S. Attorney’s Office for the Southern District of Mississippi. 

Randy Jones, 44, a former corrosion coordinator for Shell Pipeline Company L.P. (Shell), pleaded guilty in Milwaukee today to failing to conduct bi-monthly voltage readings and an annual survey of a pipeline used to transport jet fuel in violation of the Pipeline Safety Act (PSA) and making a false statement to the Pipeline and Hazardous Material Safety Administration (PHMSA).  

Jones, a resident of Louisiana, pleaded guilty to knowingly failing to conduct required safety test between January and December 2011 and submitting false data to PHMSA. The violations were in connection with a pipeline owned by Shell that delivered commercial aviation jet fuel to General Mitchell International Airport in Milwaukee, Wisconsin.  In January 2012 a hole was discovered in the pipeline at Mitchell Airport after jet fuel began showing up in soil surrounding the airport and in nearby Wilson Creek.  Fuel eventually reached and melted asphalt on airport property.  Shell reported that approximately 9,000 gallons of jet fuel was released.  The response and cleanup cost for the spill was approximately $19.3 million.     

Jones was employed by Shell from 1992 through 2012. From 2010 until 2012, Jones was employed as a corrosion coordinator and was responsible for Shell pipelines servicing Mitchell and Chicago O’Hare airports. Jones failed to conduct the required testing for 2011 and when advised of an audit by PHMSA scheduled for December 2011, he submitted false data indicating the required test had been conducted.      

Consistent with requirements of the PSA, which establishes standards for the safe operation of the hazardous materials in pipelines, buried or submerged metal pipelines must be protected to prevent corrosion.  This involves the use of a device called a rectifier which applies a negative current to soil near the pipeline to keep corrosion away from the pipe.  The operator of the pipeline is required to conduct bi-monthly readings of the voltage generated from a rectifier and conduct an annual survey of the pipeline to insure that the pipeline is adequately protected from corrosion.  PHMSA is the primary agency responsible for regulating and enforcing the PSA. 

An information charging Jones with two counts of violating the PSA and one false statement violation was filed on Nov. 14, 2014.  Under the terms of the plea agreement, each offense charged carries a maximum prison sentence of five years. The sentencing is set for April 30, 2015. 

The case was investigated by the U.S. Environmental Protection Agency Criminal Investigation Division, U.S. Coast Guard Investigative Service, U.S. Department of Transportation Office of Inspector General, and FBI, with assistance from PHMSA.  The case was prosecuted by Jennifer A. Whitfield of the Environmental Crimes Section of the Department of Justice and Tracy M. Johnson of the U.S. Attorney’s Office for the Eastern District of Wisconsin.

 Los departamentos de Educación (ED) y Justicia (DOJ) publicaron hoy una Guía de orientación para recordar a los estados, distritos escolares y escuelas que tienen la obligación, según la ley federal, de asegurar que los estudiantes en proceso de aprender inglés tengan igual acceso a una educación de alta calidad y la oportunidad de lograr su pleno potencial académico.

“La diversidad de nuestra nación es uno de nuestros mayores atributos”, dijo Vanita Gupta, fiscal general auxiliar (en fuciones) en la División de Derechos Civiles del DOJ. “Cuando apoyamos la educación de los estudiantes que aprenden inglés, nos apoyamos a nosotros también. La Guía publicada hoy —40 años después de que se promulgó la Ley de Igualdad de Oportunidad Educativa— ayudará a las escuelas a cumplir con su obligación legal de asegurar que todos los estudiantes puedan triunfar”.

“Hace cuatro décadas, la Corte Suprema de los Estados Unidos sostuvo en el caso Lau v. Nichols que todos los estudiantes merecen igual acceso a una educación de alta calidad, independiente de su origen lingüístico o lo bien que saben inglés”, dijo Catherine E. Lhamon, subsecretaria para derechos civiles de ED. “La orientación que hoy publicamos no sólo nos recuerda la sentencia del tribunal, sino que también proporciona información útil a las escuelas que trabajan para asegurar la equidad para los estudiantes y las familias con dominio limitado del inglés”.

Además de la Guía, ED y DOJ también han proporcionado herramientas y recursos adicionales para ayudar a las escuelas a prestar servicio a los estudiantes que aprenden inglés y a los padres con dominio limitado del inglés:

• Una hoja informativa en inglésy en otros idiomas sobre las obligaciones que tienen las escuelas, según la ley federal, de asegurar que los estudiantes que aprenden inglés puedan participar de manera significativa e igual en la escuela.

• Una hoja informativa en inglés y en otros idiomas sobre las obligaciones que tienen las escuelas, según la ley federal, de transmitir a los padres con dominio limitado del inglés información en un idioma que puedan entender.

Un paquete de herramientas preparado por la Oficina de Adquisición del Inglés de ED para ayudar a los distritos escolares a identificar a los estudiantes con dominio limitado del inglés. Este es el primer capítulo de una serie de capítulos para ayudar a las agencias de educación estatales y distritos escolares a cumplir sus obligaciones con los estudiantes que aprenden inglés.

Esta es la primera vez que una guía trata solo sobre las varias leyes federales que rigen las obligaciones que tienen las escuelas con los estudiantes de inglés. La guía reconoce el 40 aniversario de Lau v. Nichols y la Ley de Igualdad de Oportunidad Educativa de 1974 (EEOA), y también el 50 aniversario de la Ley de Derechos Civiles. Igual que la EEOA, Lau requiere que las escuelas públicas adopten medidas apropiadas para ayudar a los estudiantes de inglés a superar las barreras lingüísticas y asegurar su capacidad de participar por igual en la escuela.

La Guía explica las obligaciones que tienen las escuelas de:

• identificar a los estudiantes con dominio limitado del inglés de una manera oportuna, válida y fiable;

• ofrecer a todos los estudiantes que aprenden inglés un programa sólido de ayuda con el idioma;

• proporcionar personal calificado y recursos suficientes para instruir a los estudiantes que aprenden inglés;

• garantizar que los estudiantes que aprenden inglés tengan un acceso equitativo a los programas y actividades de la escuela;

• evitar que los estudiantes que aprenden inglés sean segregados o apartados sin necesidad de los demás estudiantes;

• vigilar el progreso de los alumnos en el aprendizaje del inglés y el trabajo en el aula a  nivel de grado;

• remediar cualquier falta académica que los estudiantes que aprenden inglés incurrieron mientras que asistían a programas de ayuda con el idioma;

• sacar a los estudiantes de los programas de asistencia de lenguaje cuando ya sean competentes en inglés y darles seguimiento para asegurar que no sean retirados de esos programas antes de tiempo;

• evaluar la eficacia de los programas para los estudiantes que aprenden inglés; y

• proporcionar a los padres con dominio limitado del inglés información sobre los programas escolares, servicios y actividades en un idioma que comprendan.

Casi cinco millones de estudiantes en Estados Unidos están aprendiendo inglés, y constituyen el nueve por ciento de todos los estudiantes en las escuelas públicas del país. Del 2002 al 2011, el porcentaje de estudiantes que aprenden inglés en las escuelas públicas aumentó en 40 estados y el Distrito de Columbia. En la actualidad, tres de cada cuatro escuelas públicas tienen estudiantes que aprenden inglés.

La aplicación de la Ley de Igualdad de Oportunidad Educativa y del Título VI de la Ley de Derechos Civiles de 1964, que asegura a los estudiantes que aprenden inglés y a los padres con dominio limitado del inglés acceso igual a los servicios que tienen derecho, es una prioridad de la División de Derechos Civiles del DOJ. Hay más información aquí sobre los esfuerzos de DOJ para brindar igualdad de oportunidad en la educación a todos los estudiantes.

La misión de la Oficina para Derechos Civiles de ED (OCR) es garantizar la igualdad de acceso a la educación y promover la excelencia educativa en todo el país mediante la aplicación rigurosa de las leyes de derechos civiles. La OCR es responsable de aplicar las leyes federales de derechos civiles que prohíben la discriminación por las instituciones educativas por motivos de raza, color, origen nacional, discapacidad, sexo y edad, así como la Ley de Igualdad de Acceso para los Boy Scouts of America de 2001. Hay información adicional sobre la OCR aquí, y hay recursos adicionales, incluido las guías publicadas anteriormente sobre este tema, aquí.

• Asegurar que los estudiantes aprendices del inglés participen de forma significativa y equitativa en programas educativos
• Tools and Resources for Identifying all English Learners
• Estimado colega
• Información para padres y tutores con dominio limitado del idioma inglés (LEP) y para las escuelas y distritos escolares que se comunican con ellos

A Queens, New York, man and his Israeli brother were charged in indictments unsealed today in federal courts in Philadelphia and Brooklyn, New York, with offenses related to a long-running odometer tampering and money laundering scheme, the Justice Department and the U.S. Attorney’s Office for the Eastern District of New York announced.

Chaim Gali aka Mike Gali and John Triculy, 40, of Queens Village, New York, and Shmuel Gali aka Sam Gali, 42, of Israel, are charged in a 15-count indictment in the Eastern District of Pennsylvania (EDPA) with conspiracy, securities fraud and false odometer statements.  The Galis are also charged in a related two-count indictment in the Eastern District of New York (EDNY) with mail and wire fraud conspiracy, and money laundering conspiracy.  If convicted of the charges in the EDPA indictment, the defendants face a statutory maximum of five years in prison on the conspiracy charge; a statutory maximum of 10 years in prison for each securities fraud charge and up to three years in prison for each false odometer statement charge.   If convicted of the charges in the EDNY indictment, they face a statutory maximum of 20 years in prison for each of the charges.

“Mileage is one of the most important factors in a consumer’s decision to purchase a used car,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “Misrepresenting the mileage on a used car fraudulently induces a consumer to pay more money for less value, and it hides necessary information that will affect how a consumer maintains and repairs that vehicle.” 

The indictments allege that the Galis devised a scheme to defraud buyers of used motor vehicles by misrepresenting the mileage of approximately 690 vehicles they sold beginning as early as 2006 and through at least 2011.  The indictments charge that the Galis used fictitious dealer names to purchase high-mileage, used motor vehicles from a national vehicle leasing company.  The defendants are charged with conspiring to alter the odometers in these vehicles, which they purchased in Florida, Maryland, Missouri and elsewhere, to reflect false lower mileages.  The indictments allege that the Galis then fraudulently altered the motor vehicle titles to reflect the false lower mileages and as a result, the commonwealth of Pennsylvania issued motor vehicle titles reflecting the altered mileages. 

The defendants subsequently sold the vehicles at wholesale automobile auctions in Pennsylvania and New Jersey using various dealerships, including Chase Auto Center and Conestoga City Autos.  At the auctions, the Galis provided the buyers with Pennsylvania vehicle titles bearing the false lower mileages.  The EDPA indictment alleges that in some instances, the title indicated mileage more than 100,000 miles less than the true mileage of the vehicle and as a result, the defendants received inflated sales prices for the vehicles they sold.

The defendants deposited the proceeds of the sales of the rolled-back vehicles into various bank accounts, mainly in Brooklyn.  Among other things, the defendants then used this money to purchase additional used vehicles and continue their fraud scheme.

“As alleged, the defendants created an elaborate odometer tampering and money laundering scheme to con would-be buyers into purchasing used cars at inflated prices,” said U.S. Attorney Loretta E. Lynch for the EDNY.  “They then used the proceeds of their crimes to continue their fraud against additional unsuspecting consumers.  This case demonstrates our commitment to protect consumers from fraud.” 

Acting Assistant Attorney General Branda and U.S. Attorney Lynch commended the investigative efforts of the Internal Revenue Service-Criminal Investigation and the U.S. Department of Transportation National Highway Traffic Safety Administration’s (NHTSA) Office of Odometer Fraud Investigation.

Chaim Gali was arrested today in New York.  Shmuel Gali is in Israel and the government will seek his extradition.

The case is being prosecuted by Trial Attorney Kathryn Drenning and Senior Litigation Counsel Linda I. Marks of the Civil Division’s Consumer Protection Branch, and Assistant U.S. Attorney Catherine M. Mirabile of the Eastern District of New York.     

NHTSA has established a special hotline to handle odometer fraud complaints.  Individuals who have information relating to odometer tampering should call (800) 424-9393 or (202) 366-4761. 

An update on the status of the case is available on the Consumer Protection Branch’s website.  More information on odometer fraud is available on NHTSA’s website, and tips on detecting and avoiding odometer fraud are also available on the NHTSA website. 

The charges in the indictments are merely allegations, and do not constitute proof of guilt.  Every defendant is presumed to be innocent unless and until proven guilty.

Second U.S. Navy Officer Indicted on Related Bribery Charges

A commander in the U.S. Navy pleaded guilty to federal bribery charges today, admitting that he provided a government contractor with classified ship schedules and other internal U.S. Navy information in exchange for cash, travel and entertainment expenses, as well as the services of prostitutes.  A second U.S. Navy officer was also indicted today on related bribery charges by a federal grand jury in the Southern District of California.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Deputy Inspector General of Investigations James B. Burch of the Department of Defense, Defense Criminal Investigative Service (DCIS) made the announcement. 

“Commander Sanchez sold out his command and country for cash bribes, luxury hotel rooms, and the services of prostitutes,” said Assistant Attorney General Caldwell.  “After today’s guilty plea, instead of free stays at the Shangri-La hotel, Sanchez is facing many nights in federal prison.  The Department of Justice’s Criminal Division is committed to prosecuting those who abuse positions of public trust for personal enrichment at the expense of national security and the American taxpayers.”

“During the course of the investigation into this criminal enterprise, investigators have compiled voluminous evidence identifying multiple persons of interest, generating numerous leads, and establishing and corroborating connections,” said Director Traver.  “NCIS and our law enforcement partners are committed to seeing this massive fraud and bribery investigation through to its conclusion, so that those responsible are held accountable.”

“This outcome yet again sends the message that corruption will be vigorously investigated and prosecuted,” said Deputy Inspector General of Investigations Burch.  “This is an unfortunate example of dishonorable Naval officers who recklessly risked the safety of our troops by trading classified information for cash, extravagant gifts and prostitutes.  Cases such as these are not motivated by need or other difficult personal circumstances; they are the product of simple greed.  This investigation should serve as a warning that those who compromise the integrity of the United States will face their day of reckoning.  DCIS and our law enforcement partners will pursue these crimes relentlessly.”

Jose Luis Sanchez, 42, an active duty U.S. Navy Officer stationed in San Diego, California, is one of seven defendants charged – and the fifth to plead guilty – in the corruption probe involving Glenn Defense Marine Asia (GDMA), a defense contractor based in Singapore that serviced U.S. Navy ships and submarines throughout the Pacific.  Sanchez pleaded guilty to bribery and bribery conspiracy before U.S. Magistrate Judge David H. Bartick of the Southern District of California.  A sentencing hearing was scheduled for March 27, 2015, before U.S. District Judge Janis L. Sammartino.

According to his plea agreement, from April 2008 to April 2013, Sanchez held various logistical positions with the U.S. Navy’s Seventh Fleet in Asia.  Sanchez admitted that, beginning in September 2009, he entered into a bribery scheme with Leonard Glenn Francis, the CEO of GDMA, in which Sanchez provided classified U.S. Navy ship schedules and other sensitive U.S. Navy information to Francis and used his position and influence within the U.S. Navy to benefit GDMA.  In return, Francis gave him things of value such as cash, travel and entertainment expenses, and the services of prostitutes.  Sanchez admitted that this bribery scheme continued until September 2013.  Francis was charged in a complaint unsealed on Nov. 6, 2013, with conspiring to commit bribery; that charge remains pending.

In his plea agreement, Sanchez admitted to seven specific instances in which he provided Francis with classified U.S. Navy ship and submarine schedules.  He also admitted using his position and influence with the U.S. Navy to benefit GDMA and Francis on various occasions.  Further, Sanchez admitted that he tipped Francis off about investigations into GDMA overbillings and briefed Francis on internal U.S. Navy deliberations.  

Sanchez further admitted that, in exchange for this information, Francis provided him with cash, entertainment and stays at high-end hotels.  For example, in May 2012, Francis paid for Sanchez to stay five nights at the Shangri-La, a luxury hotel in Singapore, and, two months later, Francis paid for Sanchez’s travel from Asia to the United States, at a cost of over $7,500.  Additionally, Francis arranged and paid for the services of prostitutes for Sanchez while Sanchez was in Singapore and elsewhere in Asia.

In addition to Sanchez, two other U.S. Navy officials – former NCIS Special Agent John Beliveau and Petty Officer First Class Dan Layug – have pleaded guilty in connection with this investigation.Two former GDMA executives, Alex Wisidagama and Edmond Aruffo, have likewise pleaded guilty.

Also today, an indictment was returned against U.S. Navy Captain-Select Michael Vannak Khem Misiewicz, 47, of San Diego, California, charging him with a bribery conspiracy and seven counts of bribery.  According to allegations in the indictment, from at least as early as July 2011 until  September 2013, Misiewicz provided classified U.S. Navy ship schedules and other sensitive U.S. Navy information to Francis and used his position and influence within the U.S. Navy to benefit GDMA.  In return Francis allegedly gave him things of value such as cash, travel and entertainment expenses, and the services of prostitutes. 

The charges contained in a criminal complaint and indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

The ongoing investigation is being conducted by NCIS, DCIS and the Defense Contract Audit Agency. The case is being prosecuted by Director of Procurement Fraud Catherine Votaw and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Mark W. Pletcher and Robert S. Huie of the Southern District of California.

Those with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

Attorney General Eric Holder released the following statement Tuesday on the passing of former Governor Mario Cuomo.  The Attorney General Holder’s travel to New York to attend former Governor Cuomo’s funeral was canceled due to inclement weather.

“With the passing of Mario Cuomo, America has lost a giant and a true statesman – a leader of strength and rare humility; of wit and ceaseless compassion. 

“Governor Cuomo was more than a distinguished public servant or a great American success story.  Throughout his extraordinary life, he was a tenacious champion for those too often forgotten and too long overlooked.  Through his words and his deeds, he gave voice to the voiceless, hope to the hopeless, and strength to all those who felt that they had been left out or left behind.   As the son of Italian immigrants – hailing from my own hometown of Queens, New York – he never forgot his roots.  He was always in step with the people he served, and with the glorious immigrant tradition that has always made America so great.  His life’s work was inflected with sincere concern for all of his fellow citizens – no matter what they looked like or where they happened to be from.  And in his own distinctive voice, he consistently challenged us not only to reach for great and untouched heights, but to extend a hand to those unable to make the journey alone.

“For decades, I have admired Governor Cuomo’s unwavering dedication to building an America that’s more fair, more free, and more equitable.  I last spoke with him a few months ago, and will always be grateful for the advice and support he offered throughout my career.  With his loss, a great progressive flame has gone out.  But in the hearts of millions of Americans who heard his message, who knew his story, and who benefited from his passionate service, the fire that he ignited burns on.”

The former Virginia Governor Robert F. McDonnell, 60, of Glen Allen, Virginia, was sentenced today to two years in prison for soliciting and obtaining payments, loans, gifts and other items from Star Scientific, a Virginia-based corporation, and Jonnie R. Williams Sr., Star Scientific’s then chief executive officer, in violation of federal public corruption laws.

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 Adam S. Lee of the FBI’s Richmond Field Office, Chief Richard Weber of the Internal Revenue Service – Criminal Investigation (IRS-CI) and Virginia State Police Superintendent Colonel W. Steven Flaherty made the announcement.  Senior U.S. District Judge James R. Spencer of the Eastern District of Virginia imposed the sentence.

Robert McDonnell and his wife, Maureen McDonnell, were convicted following a jury trial of one count of conspiracy to commit honest-services wire fraud and one count of conspiracy to obtain property under color of official right.  Robert McDonnell was also convicted of three counts of honest-services wire fraud and six counts of obtaining property under color of official right, while Maureen McDonnell was convicted of two counts of honest services wire fraud counts and four counts of obtaining property under color of official right.  In total, Robert McDonnell was convicted of 11 of 13 counts and Maureen McDonnell was convicted of eight of 13 counts.

“Robert McDonnell corrupted the most powerful office in Virginia and fractured the public’s trust,” said Assistant Attorney General Caldwell.  “Taking bribes in exchange for official actions is not politics as usual – it is an insidious crime that strikes at the heart of public service and will not be tolerated.”

According to the evidence presented at trial, from April 2011 through March 2013, the McDonnells participated in a scheme to use the former governor’s official position to enrich themselves and their family members by soliciting and obtaining payments, loans, gifts and other things of value from Star Scientific and Jonnie R. Williams Sr.  The McDonnells obtained these items in exchange for the former governor performing official actions to legitimize, promote and obtain research studies for Star’s products, including the dietary supplement Anatabloc.

According to evidence presented at trial, the McDonnells obtained from Williams more than $170,000 in direct payments as gifts and loans, thousands of dollars in golf outings, and numerous items.  As part of the scheme, Robert McDonnell arranged meetings for Williams with Virginia government officials, hosted and attended events at the Governor’s Mansion designed to encourage Virginia university researchers to initiate studies of Star’s products and to promote Star’s products to doctors, contacted other Virginia government officials to encourage Virginia state research universities to initiate studies of Star’s products, and promoted Star’s products and facilitated its relationships with Virginia government officials.

The evidence further showed that the McDonnells attempted to conceal the things of value received from Williams and Star to hide the nature and scope of their dealings with Williams from the citizens of Virginia by, for example, routing gifts and loans through family members and corporate entities controlled by the former governor to avoid annual disclosure requirements.

Maureen McDonnell is scheduled to be sentenced on Feb. 20, 2015.

The case was investigated by the FBI, IRS-CI and the Virginia State Police, and is being prosecuted by Deputy Chief David V. Harbach II of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Michael S. Dry, Jessica D. Aber and Ryan S. Faulconer of the Eastern District of Virginia.

A former executive of Japan-based Toyoda Gosei Co. Ltd. has agreed to plead guilty and to serve one year and one day in a U.S. prison for his role in a conspiracy to fix prices and rig bids of automotive hoses installed in cars sold in the United States, the Department of Justice announced today.

A one-count felony charge was filed today in the U.S. District Court for the Northern District of Ohio in Toledo against Makoto Horie, a Japanese national.  According to the charge, Horie along with co-conspirators, conspired to fix the prices of certain automotive hoses sold to Toyota Motor Corp. and certain of its subsidiaries, affiliates and suppliers, in the United States.  According to the charge, Horie participated in the conspiracy from at least as early as March 2007 until at least September 2010.  In addition to the prison term, Horie has agreed to pay a $20,000 criminal fine and to cooperate with the department’s ongoing investigation.  The plea agreement is subject to court approval.

“The charge today once again demonstrates the Antitrust Division’s vigorous commitment to holding individuals accountable for engaging in anticompetitive conduct,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “The division’s ongoing investigation has resulted in more than two dozen executives serving prison time for their participation in illegal conspiracies involving auto parts.”

Toyoda Gosei manufactures and sells a variety of automotive parts, including certain automotive hoses.  On Sept. 29, 2014, the Department of Justice announced that Toyoda Gosei had agreed to plead guilty and pay a $26 million criminal fine for its role in this conspiracy and another conspiracy involving automotive airbags and steering wheels. 

Horie, a Japanese national, was employed at Toyoda Gosei North America, in Troy, Michigan, a subsidiary of Toyoda Gosei, as Vice President of Sales between March 2007 and December 2007, and as Senior Vice President of Sales between January 2008 and January 2010; and was employed at Toyoda Gosei in Japan as a sales general manager between February 2010 and September 2010. 

To date, 49 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry.  Additionally, 32 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of over $2.4 billion in fines.

Horie is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals.  The maximum fine for an individual may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine. 

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by each of the Antitrust Division’s criminal enforcement sections and the FBI.  Today’s charge was brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, Lima Resident Agency with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio.  Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at 1-216-522-1400.

The former owner and President of Chestnut Consulting Group Inc. and Chestnut Consulting Group Co. (generally referred to as the “Chestnut Group”) was indicted by a federal grand jury today for his alleged participation in a scheme to pay bribes to a foreign official in violation of the Foreign Corrupt Practices Act (FCPA) and the Travel Act, and to launder proceeds of those crimes. 

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Special Agent in Charge Edward J. Hanko of the FBI’s Philadelphia Division made the announcement.

“We are committed to combating foreign corruption, across the globe and across all industries, through enforcement actions and prosecutions of companies and the individuals who run those companies,” said Assistant Attorney General Caldwell.  “As alleged, in this case, the owner and chief executive of a Pennsylvania financial consulting firm secured hundreds of millions of dollars in business by bribing a European banking official.  He now faces an indictment for corruption in federal court.  Bribery of foreign officials undermines the public trust in government and fair competition in business.  The charges returned today reflect the clear message that we will root out corruption and prosecute individuals who violate the Foreign Corrupt Practices Act.” 

“We will aggressively investigate and prosecute individuals in our district who use corrupt means like bribery to influence foreign officials,” said U.S. Attorney Memeger.  “Our criminal statutes in this arena must be enforced to ensure fair dealing in a competitive global marketplace where foreign officials often hold significant decision-making authority.  The alleged conduct here was particularly reprehensible because it undermined the legitimacy of a process designed to support businesses for the citizens of developing nations.”

“This is a great example of the FBI’s ability to successfully coordinate with our international law enforcement partners to tackle corruption,” said Special Agent in Charge Hanko.  “Bribery – foreign or domestic – cripples the notion of fair competition in the marketplace.”

Dmitrij Harder, 42, of Huntingdon Valley, Pennsylvania, the former owner and president of the Chestnut Group, was charged with one count of conspiracy to violate the FCPA and Travel Act, five counts of violating the FCPA, five counts of violating the Travel Act, one count of conspiracy to commit international money laundering, and two counts of money laundering. 

According to allegations in the indictment, the European Bank for Reconstruction and Development (EBRD) was a multilateral development bank headquartered in London, England, and was owned by over 60 sovereign nations.  Among other things, the EBRD provided financing for development projects in emerging economies, primarily in Eastern Europe. 

According to allegations in the indictment, Harder and others paid bribes for the benefit of a senior official at the EBRD in exchange for influencing the official’s actions on applications for financing submitted by the Chestnut Group’s clients and for directing business to the Chestnut Group.  The EBRD ultimately approved applications for financing from two of the Chestnut Group’s corporate clients; the first resulted in the EBRD providing an $85 million investment and a 90 million Euro loan, while the second resulted in a $40 million investment and a $60 million convertible loan.  The Chestnut Group allegedly earned approximately $8 million in “success fees” as a result of the EBRD’s approval of these two applications.    

The indictment alleges that Harder made five payments totaling more than $3.5 million to the sister of the EBRD official, in part as an effort to conceal the bribes.  These payments were allegedly made for purported consulting and other services provided to the Chestnut Group by the official’s sister, when in fact she provided no such services.  Harder also allegedly participated in creating fake documents to justify these payments. 

The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

The case is being investigated by the FBI’s Philadelphia Division.  The Criminal Division’s Office of International Affairs also provided assistance.

The case is being prosecuted by Assistant Chief Leo R. Tsao of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Michelle Morgan of the Eastern District of Pennsylvania.

Additional information about the Justice Department’s FCPA enforcement efforts can be found at www.justice.gov/criminal/fraud/fcpa.

Defendants Charged with Conspiracy to Violate the Neutrality Act and Conspiracy to Possess Firearms in Furtherance of a Crime of Violence

United States Attorney General Eric Holder, Assistant Attorney General for National Security John P. Carlin, United States Attorney Andrew M. Luger for the District of Minnesota, and Federal Bureau of Investigation Special Agent in Charge Richard T. Thornton of the Minneapolis Division today announced a criminal complaint charging Cherno Njie, 57, and Papa Faal, 46, for their role in a recent attempted coup in The Gambia.  Both men are in custody and are expected to have initial appearances in court today.  Njie will appear in United States District Court in Baltimore, Maryland.  Faal will appear in U.S. District Court in Minneapolis, Minnesota.  Both defendants are charged with conspiring to violate the Neutrality Act by making an expedition against a friendly nation from the United States and conspiring to possess firearms in furtherance of a crime of violence.

On Dec. 30, 2014, there was an unsuccessful attempted coup against the government of The Gambia.  The Gambia is a country in West Africa bordered by Senegal and the Atlantic Ocean.

“These defendants stand accused of conspiring to carry out the violent overthrow of a foreign government, in violation of U.S. law,” said Attorney General Eric Holder.  “The United States strongly condemns such conspiracies.  With these serious charges, the United States is committed to holding them fully responsible for their actions.”

According to the criminal complaint and documents filed in court, in December 2014, Cherno Njie and Papa Faal separately traveled from the United States to The Gambia for the purpose of overthrowing the Gambian government.  Faal is a dual U.S./Gambian citizen and a resident of Brooklyn Center, Minnesota.  Njie, a U.S. citizen of Gambian descent and a resident of Austin, Texas, is a businessman who served as financier and leader of the conspiracy.  Njie and his co-conspirators expected that Njie would have served as the interim leader of The Gambia had the coup attempt succeeded.

According to the criminal complaint, approximately 10-12 members of the conspiracy entered The Gambia to carry out the coup attempt, with the expectation that others in the country would join and assist them.  Prior to departing for The Gambia, between August and October 2014, Faal and other co-conspirators purchased multiple firearms, including M4 semi-automatic rifles, and shipped them to The Gambia for use in the coup attempt.  Members of the conspiracy also acquired night-vision goggles, body armor, ammunition, black military style uniform pants, boots, and other personal equipment.

According to the criminal complaint, on Dec. 30, 2014, a number of the co-conspirators, including Faal, met in the woods near the State House in Banjul, which is the home of the Gambian president, and split into two assault teams.  Njie was not present at that meeting, instead waiting in a safe place until the assault teams took control of the facility.  However, when one of the assault teams approached the State House and fired a shot into the air, the team began taking heavy fire from the guard towers.  Although numerous conspirators on the assault teams were killed or injured during the failed attempt to take control of the government building, Faal was able to flee the scene and he ultimately returned to the U.S.  Njie also returned to the U.S.  Both men have since been arrested.

This investigation is being led by the Federal Bureau of Investigation and its partners on Joint Terrorism Task Forces in multiple field offices.

Assistant U.S. Attorney Charles Kovats of the United States Attorney’s Office for the District of Minnesota is prosecuting this case, with assistance from Richard Scott, a Deputy Chief in the Counterespionage Section of the Justice Department's National Security Division.  A number of other U.S. Attorney’s Offices, including those in the District of Maryland and the Western District of Texas provided critical support during the investigation.

Defendant Information:

CHERNO NJIE, 57

Austin, Texas.

Charges:

• Conspiracy to violate the Neutrality Act, 1 count

• Conspiracy to possess a firearm in furtherance of a crime of violence, 1 count

PAPA FAAL, 46

Brooklyn Center, Minnesota.

Charges:

• Conspiracy to violate the Neutrality Act, 1 count

• Conspiracy to possess a firearm in furtherance of a crime of violence, 1 count

Defendant Harbored Undocumented Mexican Migrant for Labor on Tobacco Farm

The Department of Justice announced today that Pedra Perez-Gumeta, 52, of Lexington, Kentucky, was sentenced to serve 18 months in federal prison by United States Senior District Court Judge Joseph M. Hood for harboring an undocumented Mexican migrant for labor at a tobacco farm, illegally re-entering the United States after deportation and failing to pay a minimum wage to the undocumented Mexican migrant.  Judge Hood also ordered Perez-Gumeta to pay restitution to the Mexican migrant in the amount of $1,311 and mandatory special assessments totaling $210.

Perez-Gumeta previously admitted that she had brought a woman to Lexington from Mexico to provide the woman with a job.  Perez-Gumeta also admitted that she knew the woman was from Mexico and not legally within the United States, nor was the woman able to work legally in the United States.  Perez-Gumeta also admitted that she had been previously deported from the United States and that she had re-entered the United States illegally.  Perez-Gumeta further admitted that she did not pay the woman for all of the labor the woman performed, instead keeping a portion of the woman’s wages for herself.  Perez-Gumeta pleaded guilty to the charges in September of 2014.  In sentencing Perez-Gumeta, the court found that the defendant used coercion in the course of harboring the undocumented Mexican woman for financial gain.

Under federal law, Perez-Gumeta must serve 85 percent of her prison sentence, and, upon release, will be under the supervision of the United States Probation Office for one year, unless she is deported.

Kerry B. Harvey, United States Attorney for the Eastern District of Kentucky, Steven L. Igyarto, Resident Agent in Charge, Homeland Security Investigations (HSI), Department of Homeland Security (DHS), Rodney Brewer, Commissioner, Kentucky State Police (KSP), and Mark Barnard, Chief, Lexington-Fayette Urban County Government Division of Police, jointly made the announcement today after the sentencing.

The investigation was conducted by the DHS-HSI, the KSP, and the Lexington Police Department.  The United States was represented by Trial Attorney Victor Boutros of the Civil Rights Division’s Human Trafficking Prosecution Unit and Assistant United States Attorneys Hydee R. Hawkins and David A. Marye.

The government has intervened in two lawsuits against a Florida cardiologist, Dr. Asad Qamar, and his physician group, the Institute for Cardiovascular Excellence PLLC (ICE), alleging that Qamar and ICE billed Medicare for medically unnecessary peripheral artery interventions and paid kickbacks to patients by waiving Medicare copayments irrespective of financial hardship, the Justice Department announced today. 

“Performing medically unnecessary procedures puts patients at risk and contributes to the soaring costs of health care,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “Today’s action evidences the Department of Justice’s efforts both to safeguard federal health care program beneficiaries and to protect public funds.”

The lawsuits allege that Qamar and ICE performed excessive and medically unnecessary peripheral artery interventional services and affiliated procedures on Medicare patients.  One of the lawsuits further alleges that Qamar induced patients to undergo those unnecessary procedures by routinely waiving the 20 percent Medicare copayment, regardless of the patients’ financial need.

“Physicians should make medical decisions on the basis of their patients’ needs,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida.  “Performing medically unnecessary procedures solely to line a physician’s pockets strains our nation’s health care system, and can also jeopardize the health and safety of patients.  Fighting Medicare and other health care fraud is one of our office’s most important priorities.”

The lawsuits were filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government when they discover evidence that defendants have submitted false claims for government funds and to receive a share of any recovery.  The False Claims Act also permits the government to intervene in such lawsuits, as it has done in these cases.  The cases are captioned United States ex rel. Doe v. Institute of Cardiovasular Excellence, PLLC, ICE Holdings, PLLC, Dr. Asad Qamar, & Dr. Humera Qamar, Case No. 5:11-CV-406-OC-KRS (M.D. Fla.) and United States ex rel. Taylor & the State of Florida v. Institute of Cardiovascular Excellence & Dr. Asad Qamar, Case No. 8:14-CV-1454-T-35-EAS (M.D. Fla.)

“Physicians who try to enrich themselves and their practices by performing medically unnecessary, invasive procedures can cause patients very serious health issues, waste millions in taxpayer dollars each year, and undercut the public’s trust in the medical profession,” said Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG).  “We will continue to work with our law enforcement partners to protect beneficiaries and hold health care providers accountable for such outrageous fraud schemes.”

This matter 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 $23.3 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 investigation was conducted by HHS-OIG, the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the Middle District of Florida.  The claims asserted by the government are allegations only and there has been no determination of liability. 

Five Others Previously Sentenced to Substantial Prison Terms for Participation in the Same Tor-Network-Based Child Pornography Website

The former acting director of cyber security at the U.S. Department of Health and Human Services was sentenced to 25 years in federal prison today for engaging in a child exploitation enterprise and related charges in connection with his membership in a Tor-network-based child pornography website.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Deborah R. Gilg of the District of Nebraska and Special Agent in Charge Thomas R. Metz of the FBI’s Omaha Division made the announcement.

“Using the same technological expertise he employed as Acting Director of Cyber Security at HHS, DeFoggi attempted to sexually exploit children and traffic in child pornography through an anonymous computer network of child predators,” said Assistant Attorney General Caldwell.  “But dangerous criminals cannot be allowed to operate on-line with impunity.  Today’s sentence shows that the Department of Justice will bring criminals and child predators to justice, even when they employ anonymous networks like Tor.”

“Today's sentence and the others imposed earlier demonstrate that those who exploit children will be aggressively pursued and prosecuted to the full extent of the law,” said U.S. Attorney Gilg.  “Those who think they are acting anonymously on the Internet will be found and held accountable.”

“The production and distribution of child pornography is one of the most saddening, tragic crimes the FBI investigates,” said Special Agent in Charge Metz.  “Today’s sentencing sends a message to those who advertise, distribute, possess, and trade child pornography that the FBI will look for you, will find you and will make sure you are prosecuted to the fullest extent of the law.”

Timothy DeFoggi, 56, formerly of Germantown, Maryland, was convicted on Aug. 26, 2014, following a four-day jury trial before Chief U.S. District Judge Laurie Smith Camp in the District of Nebraska of engaging in a child exploitation enterprise, conspiracy to advertise and distribute child pornography and accessing a computer with intent to view child pornography.

According to evidence presented at trial, DeFoggi registered as a member of the Tor-network-based child pornography website on March 2, 2012, and maintained his membership and activity until Dec. 8, 2012, when the website was taken down by the FBI.  The website’s users utilized advanced technological means in order to undermine law enforcement’s attempts to identify them.  The website was accessible only through Tor, an Internet application specifically designed to facilitate anonymous communication.  Acting under the cloak of anonymity, users advised others on best practices to prevent detection by law enforcement, including advice about the proper use of encryption software, techniques to hide or password-protect child pornography collections, and programs to remove data from a user’s computer.

Through the website, DeFoggi accessed child pornography, solicited child pornography from other members, and exchanged private messages with other members in which he expressed an interest in the violent rape and murder of children.  DeFoggi suggested meeting one member in person to fulfill their mutual fantasies to violently rape and murder children.

DeFoggi was the sixth individual to be convicted as part of an ongoing investigation targeting three Tor-network-based child pornography websites.  The websites were run by a single administrator, Aaron McGrath, who was previously convicted in the District of Nebraska of engaging in a child exploitation enterprise in connection with his administration of the websites.  On Jan. 31, 2014, McGrath was sentenced to 20 years in prison by Senior U.S. District Judge Joseph F. Bataillon.

Four other members of the same website as DeFoggi were previously convicted and sentenced by Senior U.S. District Judge Bataillon in connection with their illegal activity on the site: 

• Jason Flanary, then 42, formerly of Chicago, Illinois, the Philippines, and Guam, was sentenced to 20 years in prison on June 30, 2014.

• Wesley Cameron, then 22, formerly of Ashford, Alabama, was sentenced to 15 years in prison on Oct. 24, 2014.

• Zackary Austin, 28, formerly of Reno, Nevada, was sentenced to 16 years in prison on Nov. 6, 2014.

• Charles MacMillan, 29, formerly of Rockville, Maryland, was sentenced to 12 years in prison on Nov. 7, 2014.

These cases were brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice.  Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section (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.

This case is a result of investigative efforts led by the FBI’s Omaha Field Office and the FBI’s Violent Crimes against Children Section, Major Case Coordination Unit, and Digital Analysis and Research Center.  The FBI was assisted in its investigation by Europol, the European Union’s law enforcement agency, as well as members of the FBI’s Violent Crimes Against Children International Task Force.  This case was prosecuted by Trial Attorneys Keith Becker and Sarah Chang of CEOS and Assistant U.S. Attorney Michael P. Norris of the District of Nebraska.

The Department of Justice, the U.S. Environmental Protection Agency (EPA) and the state of Arkansas today announced that the city of Fort Smith, Arkansas, will spend more than $200 million over the next 12 years on upgrades to its sewer collection and treatment system to reduce discharges of raw sewage and other pollutants into local waterways.  Under a settlement filed in federal court in the Western District of Arkansas, Fort Smith will also pay a $300,000 civil penalty and spend $400,000 on a program to help qualified low-income residential property owners to repair or replace defective private sewer lines that connect to the city collection system. 

“This settlement will achieve long overdue improvements in the city’s sewer system that will substantially reduce the number of sewage discharges and help assure that the citizens of Fort Smith reside in a safe and clean environment,” said Acting Assistant Attorney General Sam Hirsch for the Justice Department’s Environment and Natural Resource Division.

Today’s agreement resolves alleged Clean Water Act violations related to Fort Smith’s failure to properly operate and maintain its sewer collection and treatment system.  Since 2004, Fort Smith has reported more than 2,000 releases of untreated sewage from its municipal sewage system, resulting in more than 119 million gallons of raw sewage flowing into local waterways, including the Arkansas River.  These types of releases, known as sanitary sewer overflows, cause serious water quality and public health problems.  Fort Smith also violated limits for discharges of various pollutants from its Massard and P Street wastewater treatment plants numerous times over the last decade.

“This agreement means cleaner water for the residents of Fort Smith by reducing pollution flowing into local waterways,” said Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.  “EPA works with communities like Fort Smith to develop cost-effective and pragmatic solutions to protect residents from exposure to raw sewage.”

Many of the manholes and pump stations from which Fort Smith’s sanitary sewer overflows occur are located in low-income and minority communities.

To reduce sanitary sewer overflows Fort Smith will conduct a comprehensive assessment of its sewer system to identify defects and places where stormwater may be entering the system.  The city will also repair all sewer pipe segments and manholes that are likely to fail within the next 10 years, develop projects to improve its sewers’ performance and implement a program to reduce the introduction of fats, oil and grease into its system, to reduce root intrusion, and to clean the system of debris which can cause sanitary sewer overflows.  Fort Smith will also implement a program to determine whether human waste is entering and being released from the city’s stormwater system.

The implementation of the consent decree will reduce releases of approximately 3,492 pounds of total suspended solids, 3,343 pounds of biological oxygen demand, 543 pounds of nitrogen, and 78 pounds of phosphorus from the Fort Smith sewage system each year.  High levels of these pollutants can reduce oxygen levels in water bodies, which can threaten the health of aquatic plants and animals.  Too much nitrogen and phosphorus in the water cause algae to grow faster than ecosystems can handle.  Large growths of algae, known as algal blooms, contribute to the creation of hypoxia or “dead zones” in water bodies where oxygen levels are so low that most aquatic life cannot survive.

Sanitary sewer overflows and backups of raw sewage onto private property pose a risk to human health and the environment.  Untreated sewage contains organic matter, bacteria, viruses, parasites, toxics and metals, which may cause illness or even death when humans come into contact with them.  Most illnesses that arise from contact with sewage are caused by pathogens, which are biological agents that cause disease or illness in a host.  The most common pathogens in sewage are bacteria, parasites, and viruses.  They cause a wide variety of acute illnesses including diarrhea and infections.

Keeping raw sewage and contaminated stormwater out of the waters of the United States is one of EPA’s National Enforcement Initiatives.  EPA is working to reduce sanitary sewer overflows by obtaining commitments from cities to implement timely, affordable solutions.

The proposed settlement is subject to a 30-day public comment period and final court approval. The consent decree is available for review at www.justice.gov/enrd/Consent_Decrees.html.

The Department of Justice has announced today that Gerber Legendary Blades, a division of Fiskars Brands Inc., of Madison, Wisconsin, has agreed to pay a civil penalty of $2.6 million to settle allegations that it knowingly failed to immediately report to the U.S. Consumer Product Safety Commission (CPSC) a safety hazard associated with Fiskars’ Gator Combo Axe.  Fiskars has also agreed to establish and maintain a compliance program with internal recordkeeping and monitoring systems to keep track of information about product safety hazards.  The settlement agreement is awaiting judicial approval.

“Fiskars received numerous reports from consumers who were harmed by this product,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division.  “The company had an obligation to immediately report to the CPSC and it failed to do so.  We will take action against those who fail to abide by the law so that our partners at the CPSC can protect consumers from injuries.” 

The Axe was a combination product that had a knife embedded in its handle that was supposed to be secured by two small magnets.  In a complaint filed on behalf of the CPSC in U.S. District Court for the District of Oregon, the United States alleged that Fiskars became aware that the knife in the Axe handle could and did dislodge from the Axe’s handle when the Axe was in use, causing serious injuries to consumers.  Fiskars imported approximately 103,000 Axes from Taiwan through its Gerber Legendary Blades division in Portland, and distributed those Axes to retail sporting good chains and stores throughout the United States. 

“CPSC’s job is to protect consumers,” said Chairman Elliot F. Kaye. “The sooner a firm informs CPSC about incidents or injuries with defective products, the quicker we can act to protect the American public. Failure to report in a timely basis is not only illegal, it can endanger consumer safety. We will not tolerate such irresponsible and dangerous behavior.”

Under the Consumer Product Safety Act (CPSA), manufacturers, distributors and retailers are required to report product hazards to the CPSC.  A knowing violation of the CPSA subjects a firm to civil penalties.  The United States alleged that beginning as early as 2005 and continuing over the next several years, Fiskars received consumer complaints and warranty claims indicating that the knife fell out of the Axe handle while the Axe was being used to chop, pound or hammer.  In several instances, the knife dislodged from the handle during use and caused injuries including lacerations requiring stitches, permanent nerve damage and surgery to repair severed tendons.

“In this case, Fiskar's failure to report to the CPSC not only put consumers at risk, it contributed to people being injured as a result of the unsafe product design,” said U.S. Attorney S. Amanda Marshall for the District of Oregon.  “The settlement not only addresses the product safety issue, but also holds the company accountable and sends a message to others that these violations will be taken seriously.”

In March 2011, Gerber and the CPSC announced a voluntary recall of the Axe.  At that time, consumers were advised to remove the knife from the axe handle and contact Gerber to receive a free handle cap for holding the knife in the axe handle during transport and storage, instructions and a warning label.  Information on the recall can be found on the CSPC website. 

The matter is being handled by Trial Attorney Roger Gural of the Civil Division’s Consumer Protection Branch, Assistant U.S. Attorney Neil J. Evans for the District of Oregon and Harriet Kerwin of the CPSC Office of the General Counsel.

In agreeing to settle this matter, Fiskars has not admitted that it knowingly violated the CPSA. 

The Department of Justice announced today that it will require Verso Paper Corp. (Verso) and NewPage Holdings Inc. (NewPage) to divest two paper mills, one in Rumford, Maine, and another in Biron, Wisconsin, in order for Verso to proceed with its acquisition of NewPage.  Without this divestiture, the department said, the transaction would have risked higher prices in the United States and Canada for papers used for labels, magazines and catalogues.

The Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed acquisition.  At the same time, the division filed a proposed settlement that, if approved by the court, would resolve the competitive concerns alleged in the lawsuit.

“This deal threatened to weaken competition in key coated publication and label paper markets in the United States and Canada,” said William J. Baer, Assistant Attorney General of the department’s Antitrust Division.  “Competition between Verso and NewPage historically has resulted in lower prices, improved products, and better service.  By requiring the divestiture of mills that produce these products, today’s proposed settlement will ensure that consumers benefit from continuing competition in the sale of coated paper.  The Antitrust Division remains committed to preserving competitive vigor in markets for forest products.”  Baer also noted that this divestiture requirement follows two other proposed mergers between forest products suppliers that were abandoned after the department expressed concern. 

Coated freesheet web paper is bright, heavier-weight glossy paper with excellent print qualities that is used for magazine covers, premium magazines, and similar products.  Coated groundwood paper is typically used for the covers of low-cost magazines and the interior pages of magazines and catalogues.  Label paper, a type of freesheet paper, is coated on only one side to allow for the use of graphics on the coated side and adherence of the uncoated side to a product.  Coated label paper is used on a wide variety of products, from soup cans to wine bottles.

According to the department’s complaint, Verso’s acquisition of NewPage would significantly increase concentration in various coated paper markets in the United States and Canada.  Verso and NewPage’s combined share is approximately 50 percent in coated freesheet web paper, 40 percent in coated groundwood paper, and 70 percent in coated label paper.  Preserving competition between Verso and NewPage is particularly important in the shrinking coated freesheet web and coated groundwood markets, which are likely to see higher-cost competitors exit in the next few years.

The proposed divestitures address these competitive concerns.  Under the terms of the proposed consent decree, Verso must divest NewPage’s Rumford and Biron paper mills to Catalyst Paper Corporation (Catalyst) or an alternative, independent buyer approved by the United States.  Collectively, the mills to be divested produced approximately 940,000 tons of coated groundwood, coated freesheet, and other papers, which is approximately the same amount of production as Verso currently operates.

Verso is a Delaware corporation headquartered in Memphis, Tennessee.  It operates two mills that collectively produce coated freesheet web paper, coated groundwood paper, label paper, and other types of paper.  In 2013, Verso had approximately $1.4 billion in sales.

NewPage is a Delaware corporation headquartered in Miamisburg, Ohio.  NewPage operates eight mills that collectively produce coated freesheet web paper, coated groundwood paper, label paper, and other types of paper.  Its annual sales for 2013 were approximately $3.1 billion.

Catalyst is a Canadian corporation headquartered in Richmond, British Columbia. Catalyst operates three paper mills.  Catalyst’s 2013 sales totaled approximately $1 billion.

As required by the Tunney Act, the proposed settlement, along with a competitive impact statement, will be published in the Federal Register.  Any person may submit written comments concerning the proposed settlement during a 60-day comment period to Peter Mucchetti, Chief, Litigation I Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 4100, Washington, D.C. 20530.  At the conclusion of the 60-day comment period, the U.S. District Court for the District of Columbia may approve the proposed settlement upon finding that it is in the public interest.

The National Law Enforcement Officers Memorial Fund today released preliminary fatality statistics for 2014.  The data in the report shows that 126 federal, state, local, tribal and territorial officers were killed in the line of duty this year.  The report further showed that in 2014, 50 officers were killed by firearms, 49 officers were killed in traffic-related incidents, and 27 officers died due to other causes including 24 who suffered from job-related illnesses—such as heart attacks—while performing their duties.

Attorney General Eric Holder made the following statement today:

"These troubling statistics underscore the very real dangers that America's brave law enforcement officers face every time they put on their uniforms.  Each loss is both tragic and unacceptable -- a beloved father, mother, son, or daughter who never came home to their loved ones.

"That's why, over the last six years, my colleagues and I have taken action to support these courageous men and women.  As we speak, the Justice Department continues its efforts to empower local, state, tribal, and federal law enforcement personnel to do their jobs as safely and effectively as possible.  In 2011, I created an Officer Safety Working Group in response to concerns about violence directed at law enforcement.   The department is currently funding thorough analysis of 2014 officer fatalities, including ambushes of law enforcement and other incidents, so we can mitigate risks in the future.  And through groundbreaking initiatives like VALOR, we are providing cutting-edge training to help prevent violence against law enforcement, to improve officer resilience, and to increase survivability during violent encounters.

"Through our Bulletproof Vest Partnership Program, we're helping to provide lifesaving equipment to those who serve on the front lines.  And through the Public Safety Officers' Benefits Program, we're offering our strongest support to our brave officers and their loved ones in the toughest of times.

"Going forward, this unshakeable commitment to those who serve will continue to guide our efforts to improve 21st-century policing and build trust between law enforcement and the communities they protect.

"I have always been proud to support these selfless public servants.  All Americans owe our courageous law enforcement personnel a tremendous debt of gratitude for their patriotic service, for their often-unheralded sacrifices, and for the dangers they routinely face in the name of public safety."

Company Agrees to Pay $59.4 Million Criminal Fine

Nippon Yusen Kabushiki Kaisha (NYK), a Japanese corporation, has agreed to plead guilty and to pay a $59.4 million criminal fine for its involvement in a conspiracy to fix prices, allocate customers, and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice announced today. 

According to a one-count felony charge filed today in U.S. District Court for the District of Maryland in Baltimore, NYK conspired to suppress and eliminate competition by allocating customers and routes, rigging bids and fixing prices for the sale of international ocean shipments of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore.  NYK participated in the conspiracy from at least February 1997 until at least September 2012.  NYK has agreed to cooperate with the Department’s ongoing antitrust investigation.  The plea agreement is subject to court approval. NYK is the third company to agree to plead guilty in this investigation, bringing the total agreed-upon fines to over $135 million.

Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and rolled off of an ocean-going vessel. Examples of this cargo include new and used cars and trucks and construction and agricultural equipment.

“This is another step in the effort to restore competition in the ocean shipping industry to the benefit of U.S. consumers,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Including today’s charges, three companies have now agreed to plead guilty to participating in this long-running conspiracy.  We are not done.  Our investigation is ongoing.”

According to the charge, NYK and its co-conspirators conspired by agreeing on prices, allocating customers, agreeing to refrain from bidding against one another and exchanging customer pricing information.  The department said the companies then charged fees in accordance with those agreements for international ocean shipping services for certain roll-on, roll-off cargo to and from the United States and elsewhere at collusive and non-competitive prices.

NYK is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the international roll-on, roll-off ocean shipping industry, which is being conducted by the Antitrust Division’s Washington Criminal I Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection Office of Internal Affairs, Washington Field Office/Special Investigations Unit.  Anyone with information in connection with this investigation is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html, or call the FBI’s Baltimore Field Office at 410-265-8080.

A Northern California real estate investor pleaded guilty for his role in bid rigging and fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Charles Rock was indicted on Dec. 3, 2014, in the U.S. District Court for the Northern District of California in Oakland, California.  The indictment alleged that Charles Rock and others agreed not to compete at public foreclosure auctions in Contra Costa County, California, and diverted money to themselves that should have gone to mortgage holders and other beneficiaries.  Charles Rock pleaded guilty to one count of bid rigging and two counts of mail fraud. 

To date, 51 individuals have agreed to plead or have pleaded guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.  In addition, 21 real estate investors, including Charles Rock, have been charged in five multi-count indictments for their roles in bid-rigging and fraud schemes at foreclosure auctions in Alameda, Contra Costa, San Francisco, and San Mateo counties.

The indictment alleges, among other things, that as early as June 2008 until about January 2011, Charles Rock and others conspired to rig bids to obtain numerous properties sold at foreclosure auctions in Contra Costa County, negotiated payoffs for agreeing not to compete, held second, private auctions known as “rounds,” concealed those rounds and payoffs, and in the process, defrauded mortgage holders and other beneficiaries.

“This is the first post-indictment plea resulting from the investigation and marks a positive step forward in resolving the case,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program.  “It is important for those who conspired to profit from rigged bids and illegal payoffs to take responsibility for their actions.”

“These charges demonstrate our continued commitment to investigate and prosecute individuals and organizations responsible for the corruption of the public foreclosure auction process,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office.  “The FBI is committed to work these important cases and remains unwavering in our dedication to bring the members of these illegal conspiracies to justice.” 

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million.  Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine. 

Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.

Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ Offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants.  For more information on the task force, please visit www.StopFraud.gov.

**The fraud charge(s) referenced in this press release were

subsequently dismissed on the government’s motion.**