District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Department of Justice Releases Resource Guide to Help Law Enforcement Strengthen Relationships with CommunitiesRead the Press Release
The Bureau of Justice Assistance (BJA) today announced the release of a resource guide intended to help law enforcement officers build stronger community-police relations. The Resource Guide for Enhancing Community Relationships and Protecting Privacy and Constitutional Rights is a collaboration between BJA and the Office of Community Oriented Policing Services (COPS Office).
“The Justice Department encourages law enforcement officials, in every jurisdiction, to work with the communities they serve to minimize needless confrontation,” Attorney General Eric Holder said. “It is vital to engage in planning and preparation, from evaluating protocols and training to choosing the appropriate equipment and uniforms. This is the hard work that is necessary to preserve the peace and maintain the public trust at all times—particularly in moments of heightened community tension.”
“The role of law enforcement is not only to enforce the law, but to preserve peace, minimize harm, and sustain community trust,” said BJA Director Denise O’Donnell. “The resources available through this guide will help police departments and sheriffs’ offices maintain order and build effective police-community relationships, while promoting the rights and protecting the civil liberties of the citizens they serve.”
For many years, BJA and the COPS Office have developed guides, publications, webinars, checklists and tools for law enforcement agencies on community policing, building community trust, diversity training, privacy protections, and safeguarding first amendment rights. Building strong police-community relations requires a sustained effort over time, yet maintaining these relationships is exceedingly difficult during and in the aftermath of a high-profile incident or civil unrest. Professional law enforcement departments and effective operations require training and ongoing support from all partners. This guide helps law enforcement agencies locate these resources in one place, including in-person and online training opportunities, publications, reports, podcasts, and websites.
“Law enforcement officers are stewards of the peace and protectors of the people, but above all else, they are custodians of the public trust,” said COPS Office Director Ron Davis. “As a former police chief, I am proud of the work we are doing at the Department of Justice to help America’s public safety professionals carry out this sacred duty.”
The Resource Guide is available at www.bja.gov/Publications/CommRelGuide.pdf.
The Office of Justice Programs, headed by Assistant Attorney General Karol V. Mason, provides federal leadership in developing the nation’s capacity to prevent and control crime, administer justice, and assist victims. OJP has six components: the Bureau of Justice Assistance; the Bureau of Justice Statistics; the National Institute of Justice; the Office of Juvenile Justice and Delinquency Prevention; the Office for Victims of Crime and the Office of Sex Offender Sentencing, Monitoring, Apprehending, Registering, and Tracking. More information about OJP can be found at www.ojp.gov.
The COPS Office, headed by Director Ronald L. Davis, is the federal agency responsible for advancing community policing nationwide. Since 1995, the COPS Office has awarded over $14 billion to advance community policing, including grants awarded to more than 13,000 state, local and tribal law enforcement agencies to fund the hiring and redeployment of approximately 125,000 officers and provide a variety of knowledge resource products including publications, training, and technical assistance. For additional information about the COPS Office, please visit www.cops.usdoj.gov.
Credit Suisse Sentenced for Conspiracy to Help U.S. Taxpayers Hide Offshore Accounts from Internal Revenue ServiceRead the Press Release
Pays $1.8 Billion to Department of Justice and the Internal Revenue Service in a Fine and Restitution
Credit Suisse AG was sentenced today for conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the Internal Revenue Service (IRS). Credit Suisse pleaded guilty to conspiracy on May 19. The sentencing of the Swiss corporation is the result of a years-long investigation by U.S. law enforcement authorities that has also produced indictments of seven Credit Suisse employees and the owner of a trust company since 2011—two of those individuals have pleaded guilty so far—and of U.S. clients of Credit Suisse. The announcement was made by Deputy Attorney General James M. Cole, Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department's Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia and IRS Commissioner John Koskinen.
At sentencing in the U.S. District Court for the Eastern District of Virginia, U.S. District Chief Judge Rebecca Beach Smith entered judgment and conviction and a restitution order requiring Credit Suisse to pay approximately $1.8 billion dollars to the United States by Nov. 28, per the plea agreement. Credit Suisse will pay the Justice Department’s Crime Victims Fund, through the District Court Clerk’s Office for the Eastern District of Virginia, a fine of approximately $1.136 billion and will pay the IRS $666.5 million in restitution. The parties agreed that Credit Suisse cannot challenge the restitution amount, which can also provide a basis for an IRS civil tax assessment.
“Today, with its criminal conviction and the payment of $2.6 billion in fines and restitution, Credit Suisse is held fully accountable for helping U.S. taxpayers engage in tax evasion,” said Deputy Attorney General Cole. “As we expand our offshore investigations, not just in Switzerland, but around the world, the message to banks who engaged in these crimes is clear—step forward, accept responsibility for your past conduct, and help us hold responsible the U.S. taxpayers who benefitted, and the individuals who assisted them. Only through full cooperation will you avoid the most severe sanctions.”
The plea agreement, along with agreements made with state and federal agencies, provides that Credit Suisse will pay a total of approximately $2.6 billion—approximately $1.8 billion in a criminal fine and restitution, $100 million to the Federal Reserve and $715 million to the New York State Department of Financial Services. Earlier this year, Credit Suisse negotiated cease and desist orders with the Federal Reserve and the state of New York requiring the bank to take certain remedial steps to ensure its compliance with U.S. law in its ongoing operations in addition to the civil penalties. Credit Suisse also paid approximately $196 million in disgorgement, interest and penalties to the Securities and Exchange Commission (SEC) for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC. Together, these actions by U.S. law enforcement and state and federal partners appropriately punish Credit Suisse for its past behavior in these matters.
As part of the plea agreement, Credit Suisse acknowledged that, for decades prior to and through 2009, it operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and concealing their offshore assets and income from the IRS.
According to the statement of facts filed with the plea agreement, Credit Suisse employed a variety of means to assist U.S. clients in concealing their undeclared accounts, including by:
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Assisting clients in using sham entities to hide undeclared accounts;
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Soliciting IRS forms that falsely stated, under penalties of perjury, that the sham entities were the beneficial owners of the assets in the accounts;
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Failing to maintain records in the United States related to the accounts;
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Destroying account records sent to the United States for client review;
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Using Credit Suisse managers and employees as unregistered investment advisors on undeclared accounts;
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Facilitating withdrawals of funds from the undeclared accounts by either providing hand-delivered cash in the United States or using Credit Suisse’s correspondent bank accounts in the United States;
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Structuring transfers of funds to evade currency transaction reporting requirements; and
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Providing offshore credit and debit cards to repatriate funds in the undeclared accounts.
As part of the plea agreement, Credit Suisse further agreed to make a complete disclosure of its cross-border activities, cooperate in treaty requests for account information, provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed and to close accounts of account holders who fail to come into compliance with U.S. reporting obligations. Credit Suisse has also agreed to implement programs to ensure its compliance with U.S. laws, including its reporting obligations under the Foreign Account Tax Compliance Act and relevant tax treaties, in all its current and future dealings with U.S. customers.
“Today’s sentencing of Credit Suisse AG holds the bank responsible for its decades-long pervasive conduct of aiding U.S. taxpayers in the commission of tax crimes,” said Acting Deputy Assistant Attorney General Wszalek. “The Justice Department will continue to vigorously pursue our global enforcement efforts against individuals who avoid their tax obligations by hiding their assets in foreign bank accounts, and the financial institutions, bankers, and other professionals who facilitate these crimes.”
“Credit Suisse AG ran an illegal cross-border business which willfully aided U.S. clients in concealing their offshore assets and income from the U.S. government,” said U.S. Attorney Boente. “Simply put, if you are in the business of hiding money from the U.S. government you will be caught, you will be prosecuted and you will pay the price for your crime. The successful prosecution of Credit Suisse AG, and today’s sentencing is representative of the tireless commitment and hard work of this office and our partners at the Internal Revenue Service.”
“Today's sentencing is yet another striking example of what happens to those who help offshore tax evaders,” said IRS Commissioner Koskinen. “We owe it to the vast majority of honest U.S. taxpayers to tirelessly search for and prosecute those who dodge paying their fair share and the unprincipled professionals who assist them.”
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On December 5, two former employees of a Credit Suisse subsidiary will be sentenced for their involvement in assisting U.S. customers to evade their taxes. On March 12, Andreas Bachmann, a former banker at Credit Suisse Fides pleaded guilty to a superseding indictment in connection with his work as a banker at Credit Suisse Fides. On April 30, Josef Dörig, a former Credit Suisse Fides employee and owner/operator of a trust company, pleaded guilty to conspiring to defraud the IRS in connection with his role managing offshore entities used by U.S. taxpayers to conceal their accounts at Credit Suisse. The pleas were accepted by U.S. District Judge Gerald Bruce Lee in the Eastern District of Virginia. Bachmann and Dörig each face a statutory maximum sentence of five years in prison.
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This case was prosecuted by Assistant U.S. Attorney Mark D. Lytle and Senior Litigation Counsel Mark F. Daly and Nanette L. Davis of the Justice Department’s Tax Division. The case was investigated by IRS-Criminal Investigation.
The Department of Justice expressed gratitude to the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of New York, the SEC and the New York State Department of Financial Services for their significant and valuable assistance.
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Colorado Big Game Hunting Outfitter Sentenced to More Than Two Years for Role in Illegal Mountain Lion and Bobcat HuntsRead the Press Release
Christopher W. Loncarich, 55, of Mack, Colorado, was sentenced in federal court in Denver yesterday to serve 27 months in prison. The sentence was a result of Loncarich’s guilty plea to a felony conspiracy charge stemming from his sale of outfitting services for illegal mountain lion and bobcat hunts in Colorado and Utah, the Justice Department announced.
On Aug. 15, 2014, Loncarich pleaded guilty to one count of conspiracy to violate the Lacey Act. The Lacey Act is a federal law that makes it illegal to knowingly transport or sell in interstate commerce any wildlife that has been taken or possessed in violation of state laws or regulations.
According to the plea agreement, and an indictment returned by the grand jury for the District of Colorado on Jan. 7, 2014, Loncarich conspired with others to provide numerous illegal hunts of mountain lions and bobcats in Colorado and Utah from 2007 to 2010. In particular, Loncarich and his confederates trapped, shot and caged mountain lions and bobcats prior to hunts in order to provide easier chases of the cats for clients. Loncarich also admitted that he and his assistants guided several hunters that did not possess a Utah mountain lion or bobcat license on mountain lion or bobcat hunts in Utah. Loncarich’s base of operations in Mack, Colorado, is approximately five miles from the Utah-Colorado border. Loncarich sold mountain lion hunts for between $3,500 and $7,500 and bobcat hunts for between $700 and $1,500.
Four of Loncarich’s assistant guides have previously pleaded guilty to Lacey Act violations in connection with their guiding activities with Loncarich. On July 30, 2014, Loncarich’s lead assistant guide, Nicholaus J. Rodgers, pleaded guilty to felony conspiracy to violate the Lacey Act in connection with his work for Loncarich.
The case was investigated by the U.S. Fish & Wildlife Service, Colorado Parks and Wildlife and the Utah Division of Wildlife Resources. The case is being prosecuted by the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division.
Attorney General Holder Touts Release of New Guidance to Law Enforcement Officers About How to Maintain Order During First Amendment-Protected EventsRead the Press Release
In Video, Attorney General Also Reminds Potential Demonstrators That ‘History Shows That Most Successful Movements Adhere to Nonviolence’
Attorney General Eric Holder on Friday touted the Justice Department’s release of new guidance to law enforcement, which he said would help officers maintain public safety while safeguarding constitutional rights. The guidance was issued by the department’s Bureau of Justice Assistance and Office of Community Oriented Policing Services.
“The Justice Department encourages law enforcement officials, in every jurisdiction, to work with the communities they serve to minimize needless confrontation,” the Attorney General said in a video posted on the department’s website. “It is vital to engage in planning and preparation, from evaluating protocols and training to choosing the appropriate equipment and uniforms. This is the hard work that is necessary to preserve the peace and maintain the public trust at all times—particularly in moments of heightened community tension.”
The complete text of the Attorney General’s video message is below:
“At the United States Department of Justice, we are committed to ensuring that our local law enforcement partners have the resources they need to effectively serve and protect all members of their communities, particularly when citizens exercise their constitutionally protected rights. To that end, the Bureau of Justice Assistance and the Office of Community Oriented Policing Services are providing new guidance to law enforcement officers about how to approach maintaining order during First Amendment-protected events. This comprehensive new guide compiles information, tools, and best practices that will help law enforcement officers maintain public safety while safeguarding constitutional rights.
“As we’ve seen, durable relationships between the police and their communities do not develop overnight. But as someone who has spent a career at all levels of law enforcement—and as the brother of a retired police officer—I know the importance of these outreach efforts to ensuring effective neighborhood policing, officer safety, and community health. The Justice Department encourages law enforcement officials, in every jurisdiction, to work with the communities they serve to minimize needless confrontation. It is vital to engage in planning and preparation, from evaluating protocols and training to choosing the appropriate equipment and uniforms. This is the hard work that is necessary to preserve the peace and maintain the public trust at all times—particularly in moments of heightened community tension.
“Over the past few months, we’ve seen demonstrations and protests that have sought to bring attention to real and significant underlying issues involving police practices, implicit bias, and pervasive community distrust. And in most cases, these demonstrations have been both meaningful and responsible, and have brought vital issues to the attention of the public at large. Similarly, the vast majority of law enforcement officers have honorably defended their fellow citizens engaged in these peaceful protests.
“I know, from first-hand experience, that demonstrations like these have the potential to spark a sustained and positive national dialogue, to provide momentum to a necessary conversation, and to bring about critical reform.
“But history has also shown us that the most successful and enduring movements for change are those that adhere to non-aggression and nonviolence. And so I ask all those who seek to lend their voice to important causes and discussions, and who seek to elevate these vital conversations, to do so in a way that respects the gravity of their subject matter. Peaceful protest has been a hallmark, and a legacy, of past movements for change, from patriotic women who demanded access to the franchise, to the civil rights pioneers who marched for equal rights and equal justice. Americans exercising their First Amendment right to free assembly should look to those examples as they work to bring about real and lasting change for themselves and for future generations.
“Of course, I recognize that progress will not come easily, and long-simmering tensions will not be cooled overnight. These struggles go to the heart of who we are, and who we aspire to be, both as a nation and as a people—and it is clear that we have a great deal of important work to do. But as we move forward, the Department of Justice—and I personally—will continue to work with law enforcement and communities throughout the country to help build the more perfect Union—and the more just society—that all Americans deserve.”
The full video of the Attorney General’s message is available at http://www.justice.gov/opa/video/maintaining-public-safety-while-safeguarding-constitutional-rights.
Accused Member of Foreign Terrorist Organization Extradited to United States on Hostage-Taking ChargesRead the Press Release
Diego Alfonso Navarrete Beltran, 42, an accused member of the Fuerzas Armadas Revolucionarias de Colombia (FARC) terrorist organization, has been extradited from Colombia to face hostage taking and terrorism charges in the United States.
The extradition was announced by John P. Carlin, Assistant Attorney General for National Security, Ronald C. Machen Jr., U.S. Attorney for the District of Columbia and George L. Piro, Special Agent in Charge of the FBI’s Miami Division.
Navarrete Beltran was extradited from Colombia to the United States this week to face charges in a superseding indictment returned in the District of Columbia on Feb. 22, 2011. The indictment, which names as defendants 18 members of the FARC, charges Navarrete Beltran specifically with one count of conspiracy to commit hostage taking; three counts of hostage taking; one count of using and carrying a firearm during a crime of violence; one count of conspiracy to provide material support to terrorists and one count of conspiracy to provide material support to a designated foreign terrorist organization.
A second defendant, Alexander Beltran Herrera, 38, a FARC commander, was extradited to the United States from Colombia in March 2012. He pled guilty on March 18, 2014, in the U.S. District Court for the District of Columbia, to three counts of hostage-taking and he was sentenced on Oct. 24, 2014, to a 27-year prison term.
“Diego Alfonso Navarrete Beltran and his FARC accomplices are alleged to have been involved in the hostage-taking of three Americans in Colombia more than a decade ago,” said Assistant Attorney General Carlin. “Terrorists who target our citizens with violence anywhere in the world should know that we will pursue them and seek to bring them to justice, however long it takes.”
“In 2003, three U.S. citizens were taken hostage by Colombian terrorists and held captive with choke harnesses and chains for more than five years,” said U.S. Attorney Machen. “Last month, a commander of that Colombian terrorist organization was sentenced to nearly three decades in prison for his role in the hostage-taking. We have now extradited a second defendant to face charges for the role he allegedly played in their harrowing ordeal. These prosecutions are a reminder of our unwavering commitment to hold accountable anyone who harms American citizens abroad, no matter how long it takes.”
“Diego Alfonso Navarrete Beltran, a former member of the FARC terrorist organization, was extradited to the United States to face terrorism and hostage taking charges involving three U.S. Citizens,” said FBI Special Agent in Charge Piro. “There is a message here for would be terrorist hostage takers; don’t do it, you will be brought to justice.”
Navarrete Beltran was arraigned today in federal court in the District of Columbia. If convicted of all charges against him, he faces a maximum potential sentence of life in prison.
According to the indictment, the FARC is an armed, violent organization in Colombia, which since its inception in 1964, has engaged in an armed conflict to overthrow the Republic of Colombia, South America’s longest-standing democracy. The FARC has consistently used hostage taking as a primary technique in extorting demands from the Republic of Colombia. Hostage taking has been endorsed and commanded by FARC senior leadership. The FARC has characterized American citizens as “military targets” and has engaged in violent acts against Americans in Colombia, including murders and hostage taking. The FARC was designated as a foreign terrorist organization by the U.S. Secretary of State in 1997 and remains so designated.
The indictment alleges that Navarrete Beltran was a member of the 1st Front in the FARC’s Southern Block. He was allegedly involved in the hostage taking of three U.S. citizens, Marc D. Gonsalves, Thomas R. Howes and Keith Stansell. These three individuals, along with Thomas Janis, a U.S. citizen, and Sergeant Luis Alcides Cruz, a Colombian citizen, were seized on Feb. 13, 2003, by the FARC after their single engine aircraft made a crash landing near Florencia, Colombia. Janis and Cruz were murdered at the crash site by members of the FARC.
According to the indictment, Mr. Gonsalves, Mr. Howes and Mr. Stansell were held by the FARC at gunpoint and were advised by FARC leadership that they would be used as hostages to increase international pressure on the government of the Republic of Colombia to agree to the FARC’s demands.
The FARC at various times marched the hostages from one site to another, placing them in the actual custody of various FARC Fronts. At the conclusion of one 40-day march, in or about November 2004, the hostages were delivered to members of the FARC’s 27th Front, commanded by Daniel Tamayo Sanchez, who was responsible for the hostages for nearly two years, after which they were delivered to the FARC’s 1st Front. From approximately October 2006 through July 2008, according to the indictment, Navarrete Beltran and others kept the hostages under the control of the FARC’s 1st Front. In order to prevent the Colombian police and military from rescuing the hostages, he and other conspirators transported the hostages into the Republic of Venezuela.
Throughout the captivity of the hostages, FARC jailors and guards, including Naverrete Beltran, used choke harnesses, chains, padlocks and wires to restrain the hostages, and used force and threats to continue their detention and prevent their escape. The indictment also accuses Navarrete Beltran of using and carrying a military-type machine gun during the hostage taking and providing material support and resources to aid in the hostage taking and to aid the FARC.
In July 2008, the Colombian military conducted an operation which resulted in the rescue of the hostages. All told, members of the FARC held the Americans hostage for 1,967 days.
An indictment is merely a formal allegation that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.
This investigation is being led by the FBI’s Miami Field Division. The prosecution is being handled by Assistant U.S. Attorney Fernando Campoamor-Sanchez from the U.S. Attorney’s Office for the District of Columbia, and Trial Attorney David Cora from the Counterterrorism Section of the Justice Department’s National Security Division.
Substantial assistance in the case was provided by the Justice Department’s Office of International Affairs, the Department’s Judicial Attachés in Colombia, the FBI’s Office of the Legal Attaché in Colombia, and the FBI’s Washington Field Office.
The public is reminded that an indictment contains mere allegations and that defendants are presumed innocent unless and until proven guilty.
Twenty-Five Alleged Aryan Brotherhood Members and Associates Indicted on Federal Racketeering Charges in Mississippi and OklahomaRead the Press Release
Fourteen alleged members of the Aryan Brotherhood of Mississippi, including four of its most senior leaders, have been indicted by a federal grand jury in the Northern District of Mississippi for conspiring to participate in a racketeering enterprise. In a separate indictment, 11 alleged members and associates of the Universal Aryan Brotherhood of Oklahoma have been charged by a federal grand jury in the Northern District of Oklahoma for conspiring to participate in a racketeering enterprise, among other charges.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Felicia C. Adams of the Northern District of Mississippi and U.S. Attorney Danny C. Williams of the Northern District of Oklahoma made the announcement.
In the Northern District of Mississippi, the 10-count indictment was returned on Oct. 23, 2014, and unsealed today. Thirteen individuals were taken into custody today. In the Northern District of Oklahoma, the four-count indictment was returned on Nov. 5, 2014, and unsealed on Nov. 10, 2014. All of the charged defendants are in custody.
“The Aryan Brotherhood is a violent gang that has seeped from behind prison walls into communities throughout this nation,” said Assistant Attorney General Caldwell. “Working in lockstep with our law enforcement partners and U.S. Attorneys’ Offices throughout the country, we are targeting and dismantling these gangs from the top general to the foot soldier so they can no longer terrorize our communities.”
“These charges resulted from an unprecedented collaboration of federal, state, and local law enforcement officers targeting a large scale prison gang involved in violent organized crime throughout the state of Mississippi,” said U.S. Attorney Adams. “This indictment represents a critical first step toward dismantling this violent organization and clearly signals that the United States Attorney’s Office and our law enforcement partners have an unwavering commitment to hold those individuals accountable who insist on creating an atmosphere of violence and fear in our communities.”
“My office remains steadfast in its commitment to work in collaboration with law enforcement to disrupt and dismantle violent crime and gang activities,” said U.S. Attorney Williams.
According to the indictments, the Aryan Brotherhood of Mississippi (ABM) and Universal Aryan Brotherhood of Oklahoma (UAB) are violent, “whites only,” prison-based gangs with members operating inside and outside of state penal institutions in their respective states. The gangs allegedly modeled themselves after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. The ABM was allegedly founded in 1984, and in early 2013, pursued unification with the Aryan Brotherhood of California in order to achieve national recognition.
The UAB was allegedly founded in 1993. According to the Oklahoma indictment, the UAB has a militaristic structure comprised of a Main Council, Yard Captains and Soldiers. The Main Council has ultimate authority in all gang matters.
The indictment alleges that both gangs enforced their rules and promoted discipline among members, prospects and associates through violence and threats against those who violated the rules or posed a threat to the gangs. Members, and oftentimes associates, were required to follow the orders of higher-ranking members.
According to the Mississippi indictment, in order to be considered for ABM membership, a person must be sponsored by another ABM member. Once sponsored, a prospective member must serve a probationary term of not less than six months, during which he is referred to as a prospect, and his conduct is observed by the members of the ABM. The prospect is required to sign a “prospect compact,” swear to an oath of secrecy and declare a life-time commitment to the ABM.
The ABM allegedly has a detailed and uniform organizational structure divided into three separate geographic areas of control. The state is overseen and directed by a three-member “wheel” commonly referred to as “spokes.” The wheel has ultimate authority in all gang matters. The indictment charges four alleged wheel members: Frank Owens, Jr, 44, aka “State Raised,” of D’Iberville, Mississippi; Perry Mask, 46, of Corinth, Mississippi; Stephen Hubanks, 45, of Rienzi, Mississippi; and Brandon Creel, 46, aka “Oak,” of Ellisville, Mississippi, with conspiracy to participate in the racketeering activities of the ABM, among other charges. The indictment also charges 10 other alleged members of the ABM. All 14 alleged members of the ABM are charged with conspiracy to participate in the racketeering activities of the gang and with involvement in murder, attempted murder, kidnapping, assault, money laundering, firearms trafficking and conspiracy to distribute methamphetamine.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
The Mississippi case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF); Drug Enforcement Administration; FBI; U.S. Marshals Service; U.S. Immigration and Customs Enforcement, Homeland Security Investigations; Mississippi Highway Patrol; Mississippi Bureau of Investigation; Mississippi Bureau of Narcotics; Harrison County Sheriff’s Office; South Mississippi Metro Enforcement Team; Tupelo Mississippi Police Department; North Mississippi Narcotics Unit; Tishomingo County Sheriff’s Office; Lee County Sheriff’s Office; Forrest County District Attorney’s Office; Prentiss County Sheriff’s Office; Jones County Sheriff’s Office; Harrison County Sheriff’s Office; and South Mississippi Metro Enforcement Team.
The Oklahoma case is being investigated by a multi-agency task force consisting of the U.S. Immigration and Customs Enforcement, Homeland Security Investigations; Tulsa Police Department; ATF; Internal Revenue Service – Criminal Investigation Division; Tulsa County Sheriff’s Office; and Oklahoma Department of Corrections.
The cases are being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorneys’ Offices for the Northern District of Mississippi and the Northern District of Oklahoma.
ABM Indictment
Justice Department Recovers Nearly $6 Billion from False Claims Act Cases in Fiscal Year 2014Read the Press Release
First Annual Recovery to Exceed $5 Billion; Over 700 Whistleblower Lawsuits for Second Consecutive Year
The U.S. Department of Justice obtained a record $5.69 billion in settlements and judgments from civil cases involving fraud and false claims against the government in the fiscal year ending September 30, Acting Associate Attorney General Stuart F. Delery and Acting Assistant Attorney General Joyce R. Branda for the Civil Division announced today. This is the first time the department has exceeded $5 billion in cases under the False Claims Act, and brings total recoveries from January 2009 through the end of the fiscal year to $22.75 billion – more than half the recoveries since Congress amended the False Claims Act 28 years ago to strengthen the statute and increase the incentives for whistleblowers to file suit.
“In the past three years, we have achieved the three largest annual recoveries ever recorded under the statute,” said Acting Associate Attorney General Delery. “This sustained success demonstrates that these figures result not only from large individual matters, but from a continuous commitment year after year to pursue those who defraud taxpayers and to remain vigilant in identifying those who would unlawfully obtain money from the federal fisc.”
The recoveries reflect the administration’s priorities to hold the financial industry accountable for its part in the gross misconduct that led to the housing and mortgage crisis, and to continue to root out fraud in the health care industry. In fiscal year 2014, the department recovered an unprecedented $3.1 billion from banks and other financial institutions involved in making false claims for federally insured mortgages and loans. False claims against federal health care programs such as Medicare and Medicaid accounted for another $2.3 billion. These amounts reflect federal losses only. In many of these cases, the department was instrumental in recovering additional billions of dollars for consumers and state treasuries.
“It has been an extraordinary year for civil fraud recoveries, but the true significance is not in breaking records or making history; it is in the billions of dollars restored to the federal treasury,” said Acting Assistant Attorney General Branda. “The False Claims Act was enacted both to protect vital taxpayer dollars and deter those who would misuse public funds. The department will continue to enforce the law aggressively to ensure the integrity of government programs designed to keep us safer, healthier and economically more prosperous.”
The False Claims Act is the government’s primary civil remedy to redress false claims for government funds and property under government contracts, including national security and defense contracts, as well as under government programs as varied as Medicare, veterans’ benefits, federally insured loans and mortgages, transportation and research grants, agricultural supports, school lunches and disaster assistance. With more whistleblowers coming forward since the act was strengthened in 1986, the government opened more investigations, which led to the surge in recoveries we see today.
Most false claims actions are filed under the act’s whistleblower, or qui tam, provisions that allow individuals to file lawsuits alleging false claims on behalf of the government. If the government prevails in the action, the whistleblower, known as a relator, receives up to 30 percent of the recovery. The number of qui tam suits filed in fiscal year 2014 exceeded 700 for the second year in a row. Recoveries in qui tam cases during fiscal year 2014 totaled nearly $3 billion, with whistleblowers receiving $435 million.
Housing and Mortgage Fraud
The $3.1 billion in federal funds recovered in the wake of the housing and mortgage crisis this past fiscal year includes $1.85 billion from Bank of America Corporation, $614 million from JPMorgan Chase, $428 million from SunTrust Mortgage Inc. and $200 million from U.S. Bank. This brings recoveries for civil fraud and false claims against federal housing and mortgage programs from January 2009 through the end of fiscal year 2014 to $4.65 billion – an historic and important amount, especially as it restores scarce funds stolen from vital government programs. For details about the settlements, see previously issued press releases on Bank of America, JPMorgan Chase, SunTrust and U.S. Bank.
Bank of America paid $1.85 billion to settle allegations of false claims in connection with the bank’s practices in underwriting, origination and quality control of residential mortgages the bank sold to Fannie Mae and Freddie Mac, as well as loans insured by the Federal Housing Administration (FHA). The settlement also covered the bank’s alleged submission of inflated insurance claims to the FHA. Bank of America acknowledged that it had misrepresented the quality of loans to Fannie Mae, Freddie Mac and the FHA. The $1.85 billion paid by Bank of America to settle False Claims Act allegations was part of a broader settlement that included a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and $7 billion in relief to consumers harmed by the financial crisis to redress abuses in residential mortgage backed security practices. In total, Bank of America agreed to pay $16.65 billion under the global resolution – the largest civil settlement with a single entity in the department’s history.
SunTrust paid $418 million to settle allegations of false claims in connection with mortgages insured by the FHA. SunTrust admitted that from 2006 to 2012, it originated and underwrote FHA-insured mortgages that did not qualify for federal insurance under the FHA program, failed to institute an effective quality control program to identify noncompliant loans and failed to report the noncompliant loans it did identify to the FHA as required. In addition to the $418 million restored to the federal treasury, SunTrust agreed to pay $500 million in relief to struggling homeowners by various means, including reducing the principal on mortgages for borrowers who are at risk of default and reducing interest rates for homeowners who are current but underwater on their mortgages. SunTrust also agreed to pay $10 million to the federal government and an additional $40 million to state governments to remedy the effects of its improper loan servicing practices. This brings SunTrust’s total payment under the settlement to redress its abusive mortgage origination and servicing practices to $968 million.
These recoveries are part of the broader enforcement efforts by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency task force in 2009, to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. In September, Attorney General Eric Holder informed an audience at a financial fraud conference that the department had brought more than 60 cases against financial institutions since 2009, resulting in recoveries totaling more than $85 billion, including civil remedies, criminal fines and consumer relief. For more information about the task force, visit www.StopFraud.gov.
Health Care Fraud
The $2.3 billion in health care fraud recoveries in fiscal year 2014 marks five straight years the department has recovered more than $2 billion in cases involving false claims against federal health care programs such as Medicare, Medicaid and TRICARE, the health care program for the military. This steady, significant and continuing success can be attributed to the high priority the Obama Administration has placed on fighting health care fraud. In 2009, Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius announced the creation of an interagency task force, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), to increase coordination and optimize criminal and civil enforcement. This coordination has yielded historic results: from January 2009 through the end of the 2014 fiscal year, the department used the False Claims Act to recover $14.5 billion in federal health care dollars. Most of these recoveries relate to fraud against Medicare and Medicaid. Additional information on the government’s efforts in this area is available at StopMedicareFraud.gov, a webpage jointly established by the Departments of Justice and Health and Human Services.
The pharmaceutical industry accounted for a substantial part of the $2.3 billion in health care fraud recoveries in fiscal year 2014. Global health care giant Johnson & Johnson and its subsidiaries, Janssen Pharmaceuticals and Scios (J&J), paid $1.1 billion to resolve False Claims Act claims relating to the prescription drugs Risperdal, Invega and Natrecor. The government alleged that J&J promoted the drugs for uses not approved as safe and effective by the U.S. Food and Drug Administration (FDA). Because J&J marketed the drugs for uses not covered by federal health care programs, the company’s promotion of the drugs caused physicians and other health care providers to submit hundreds of millions of dollars in alleged false claims against Medicare, Medicaid, TRICARE and other federal health care programs. The government also alleged that J&J paid kickbacks to physicians and to Omnicare Inc., the nation’s largest provider of pharmaceuticals to nursing homes and long-term care facilities. In addition to the federal civil settlement, J&J paid more than $600 million in civil claims for state Medicaid programs and $485 million in criminal fines and forfeitures, making this $2.2 billion global resolution of the government’s claims one of the largest health care fraud settlements in U.S. history.
In a separate settlement, the department also recovered $116 million from Omnicare. The settlement resolved allegations that Omnicare engaged in a kickback arrangement with skilled nursing facilities to induce the facilities to select Omnicare as their pharmacy provider, in violation of the Anti-Kickback Statute, which prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid and other federally funded programs. The statute is designed to ensure that the decisions of doctors and other professionals in prescribing drugs or recommending providers are driven by the needs of the patient and not the prospect of personal gain. Since claims for services or supplies induced by kickbacks are not eligible for reimbursement under federal health care programs, the government alleged that these claims violated the False Claims Act. In addition to recovering $116 million in federal claims, the government recovered $8.2 million that will go to states that jointly funded the Medicaid programs impacted by Omnicare’s conduct.
Cases involving hospitals resulted in $333 million in fiscal year 2014 settlements and judgments, with significant recoveries from two hospital chains. Community Health Systems Inc., the nation’s largest operator of acute care hospitals, paid $98.15 million to settle allegations that it billed Medicare, Medicaid and TRICARE for inpatient services that should have been provided in a less costly outpatient or observation setting. Halifax Hospital Medical Center and Halifax Staffing Inc., hospital service providers in Florida, paid $85 million to resolve allegations that it violated the Stark Law, which prohibits hospitals from billing Medicare for certain services when referred by physicians who have a financial relationship with the hospital.
The government also had significant recoveries for home health services provided in alleged violation of the False Claims Act. Amedisys Inc., one of the nation’s largest providers of home health services, paid $150 million to resolve allegations that it billed Medicare for medically unnecessary services, for services to patients who were not homebound and for violations of the Anti-Kickback Statute. The government alleged that Amedisys management pressured nurses and therapists to provide care based on the financial benefits to Amedisys rather than the needs of patients.
In a trio of cases involving cardiac procedures, the government recovered $85 million based on claims involving potentially life threatening conduct. Boston Scientific Corp., which purchased Guidant LLC and Guidant Sales LLC, and Cardiac Pacemakers Inc. in 2006, paid $30 million to settle claims that Guidant sold defective heart devices to health care facilities that implanted them into Medicare patients. The devices were small defibrillators surgically implanted into patients’ chests. When a working device detects an irregular heartbeat, it sends an electrical pulse to shock the heart back to its normal rhythm. The Guidant devices allegedly short circuited, rendering them ineffective. In the other two cases, Kentucky hospitals King’s Daughters Medical Center and Saint Joseph Health System Inc. billed Medicare and Medicaid for coronary procedures that the government alleged were unnecessary. King’s Daughters paid $39 million in federal claims and $2 million in state Medicaid claims to settle allegations that it billed for medically unnecessary coronary stents and diagnostic catheterizations, and that it had prohibited financial relationships with physicians referring patients to the hospital. St. Joseph’s paid $16 million in federal claims and $366,000 in state Medicaid claims to settle allegations that St. Joseph Hospital in London, Kentucky, billed Medicare and Medicaid for numerous invasive cardiac procedures that were performed on patients who did not need them, including procedures involving coronary stents, pacemakers, coronary artery bypass graft surgeries and diagnostic catheterizations.
Other Fraud Recoveries and Actions
Although mortgage, housing and health care fraud dominated recoveries for fiscal year 2014, the department has aggressively pursued fraud in government procurement and other federal programs.
Significant recoveries include settlements with Hewlett-Packard Co. and The Boeing Co. Hewlett-Packard paid $32.5 million to resolve claims involving a contract for IT products and services with the U.S. Postal Service. Boeing paid $23 million to settle alleged false claims for labor on maintenance contracts for the C-17 Globemaster aircraft with the U.S. Air Force.
In addition, the government filed lawsuits against a number of government contractors.
In a lawsuit against Kellogg, Brown & Root (KBR) and two foreign subcontractors arising from claims in connection with KBR’s contract with the U.S. Army to provide wartime logistical support, the government alleged that KBR employees took kickbacks from two subcontractors in return for favorable treatment in the award and performance of numerous subcontracts for maintenance, transportation and other services in Iraq. The alleged scheme resulted in inflated prices for services and equipment that were often deficient or not provided at all. Three KBR employees previously pleaded guilty to taking kickbacks or making false statements in connection with the allegations made in the government’s complaint.
The government filed a complaint against global software provider CA Inc. after intervening in a whistleblower suit against the company. The government’s complaint alleges that CA knowingly overcharged the government for software licenses and maintenance in connection with a General Services Administration (GSA) Multiple Award Schedule (MAS) contract. Under the MAS program, GSA negotiates prices and contract terms for goods and services that are later purchased by federal agencies throughout the government. To gain access to the vast government marketplace, contractors agree to disclose their commercial pricing practices and discounts so GSA can negotiate fair prices for government customers. The government’s complaint alleges that CA provided incomplete and inaccurate information that resulted in the Departments of Defense, Energy, Health and Human Services, and Labor, and other federal agencies paying higher prices for software licenses and maintenance than they should have.
The government recovered an $80 million judgment against BNP Paribas, a global financial institution headquartered in Paris, France, for violations of the Department of Agriculture’s (USDA) Supplier Credit Guarantee Program. Under the program, the USDA guarantees credit extended to foreign importers to purchase grain and other agricultural commodities from domestic growers and distributers, which opens up foreign markets for U.S. commodities. To qualify for the program, the U.S. exporter and the foreign importer must be distinct companies, not under common ownership or control. BNP Paribas consented to an $80 million judgment entered by the court to resolve the government’s allegations that the bank knowingly entered into a scheme to defraud the Supplier Credit Guarantee Program by accepting the assignment of credit guarantees given by U.S. exporters on the sale of grain to Mexican importers under common ownership or control. The government alleged that BNP knew that the exporters and importers were disqualified from the program because of their common ownership and also knew that some of the transactions were total shams that did not involve a sale or shipment at all. Yet when the Mexican importers defaulted on the credit financing, BNP claimed reimbursement from the USDA on the guarantees. In 2012, BNP Paribas vice president Jerry Cruz, who had accepted bribes from the exporters, pleaded guilty to charges involving bank fraud, mail and wire fraud, and money laundering for his part in the scheme.
Recoveries in Whistleblower Suits
Of the $5.69 billion the government recovered in fiscal year 2014, nearly $3 billion related to lawsuits filed under the qui tam provisions of the False Claims Act. During the same period, the government paid out $435 million to the individuals who exposed fraud and false claims by filing a qui tam complaint, often at great risk to their careers.
The number of qui tam suits rose from 30 in 1987, to 300 to 400 a year from 2000 to 2009, to more than 700 for each of the last two fiscal years. The growing number of qui tam lawsuits filed since 2009 has led to increased recoveries, which exceeded $2 billion for the first time in fiscal year 2010, and has approached or exceeded $3 billion ever since. As recoveries increased, so have whistleblower awards. From January 2009 to the end of fiscal year 2014, the government paid awards in excess of $2.47 billion.
“We acknowledge the men and women who have come forward to blow the whistle on those who would commit fraud on our government programs,” said Acting Assistant Attorney General Branda. “In strengthening and protecting the False Claims Act, Congress has given us the law enforcement tools that are so essential to guarding the treasury and deterring others from exploiting and misusing taxpayer dollars. We are grateful for their continued support.”
In 1986, Senator Charles Grassley and Representative Howard Berman led successful efforts in Congress to amend the False Claims Act to, among other things, encourage whistleblowers to come forward with allegations of fraud. In 2009, Senator Patrick J. Leahy, along with Senator Grassley and Representative Berman, championed the Fraud Enforcement and Recovery Act of 2009, which made additional improvements to the False Claims Act and other fraud statutes. And in 2010, the passage of the Affordable Care Act provided additional inducements and protections for whistleblowers and strengthened the provisions of the federal health care Anti-Kickback Statute.
Acting Assistant Attorney General Branda also expressed her deep appreciation for the many dedicated public servants who investigated and pursued these cases – the attorneys, investigators, auditors and other agency personnel throughout the Civil Division and the U.S. Attorneys’ Offices, as well as the agency Offices of Inspector General, and the many federal and state agencies that contributed to the department’s recoveries this past fiscal year.
“Without the tremendous talent and dedication of the public servants who worked tirelessly to bring these matters to settlement or judgment, the nearly $6 billion in recoveries we announce today would not have been possible,” said Branda. “I commend them all for their exceptional efforts.”
Justice Department Announces Funding Opportunities for Public Safety Projects in Indian CountryRead the Press Release
The Department of Justice today announced the opening of the grant solicitation period for comprehensive funding to support public safety, victim services and crime prevention improvements in American Indian and Alaska Native communities. The department’s Fiscal Year (FY) 2015 Coordinated Tribal Assistance Solicitation (CTAS) was posted today at www.justice.gov/tribal/open-sol.html. The solicitation closes on Feb. 24, 2015.
“The Department of Justice is making a concerted effort – one that we are building on every year – to expand our reach to tribes and make resources more widely available to our partners in Indian country,” said Assistant Attorney General Karol V. Mason for the Office of Justice Programs. “This solicitation addresses an array of tribal justice system issues and will give tribes access to the support they need to keep their communities safe and ensure a just, fair, and effective system for fighting crime.”
CTAS is administered by the Justice Department’s Office of Justice Programs (OJP), Office of Community Oriented Policing Services (COPS), and Office on Violence Against Women (OVW). The funding can be used to enhance law enforcement; bolster adult and juvenile justice systems; prevent and control juvenile delinquency; serve sexual assault, domestic violence and elder victims; and support other efforts to combat crime. To view the FY 2015 CTAS, visit www.justice.gov/sites/default/files/tribal/pages/attachments/2014/11/19/ctas_fy-2015_solicitation.pdf.
Applications for CTAS are submitted through the Justice Department’s Grants Management System (GMS) which enables grantees to register and apply for CTAS online. Applicants must register with GMS prior to submitting an application. An applicant will not be able to submit an application without registering in GMS before the application deadline of 9:00 p.m. Eastern Time (ET), Feb. 24, 2015.
The FY 2015 CTAS reflects improvements and refinements from earlier versions. Feedback was provided to the department during tribal consultations and listening sessions, and includes tribal leaders’ request to improve and simplify the DOJ grant-making process. Changes to DOJ grant programs, enacted with the passage of the Tribal Law and Order Act, are incorporated into the CTAS solicitation and in the appropriate purpose areas. For more information about changes to the CTAS Solicitation from last year, read the FY 2015 CTAS fact sheet.
For the FY2015 CTAS, a tribe or tribal consortium may submit a single application and select from nine competitive grant programs referred to as Purpose Areas. This approach allows the department’s grant-making components to consider the totality of a tribal nation’s overall public safety needs.
The nine purpose areas are:
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Comprehensive Tribal Justice Systems Strategic Planning (OJP/COPS/OVW)
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Public Safety and Community Policing (COPS)
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Justice Systems, and Alcohol and Substance Abuse (BJA)
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Corrections and Correctional Alternatives (BJA)
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Violence Against Women Tribal Governments Program (OVW)
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Children’s Justice Act Partnerships for Indian Communities (OVC)
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Comprehensive Tribal Victim Assistance Program (OVC)
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Juvenile Justice Wellness Courts (OJJDP)
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Tribal Youth Program (OJJDP)
Tribes or tribal consortia may also be eligible for non-tribal government-specific federal grant programs and are encouraged to explore other funding opportunities for which they may be eligible. Additional funding information may be found at www.grants.gov or the websites of individual agencies.
Today’s announcement is part of the Justice Department’s ongoing initiative to increase engagement, coordination and action on public safety in tribal communities.
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Hammond Man Sentenced for Stolen Identity Refund FraudRead the Press Release
U.S. Attorney Kenneth A. Polite announced that DARRELL HARLAND, age 32, of Hammond, Louisiana, was sentenced today for stolen identity refund fraud.
U.S. District Judge Jane Triche Milazzo sentenced HARLAND to 32 months imprisonment, three years of supervised release, and ordered HARLAND to pay $65,168 in restitution to the IRS.
According to court documents, on May 3, 2012, the St. Tammany Parish Sheriff’s Office (STPSO) executed a search warrant at HARLAND’s residence. In the home, deputies found evidence of identity theft, including lists of names and social security numbers. HARLAND told deputies that he had purchased the stolen identities online.
At the request of the STPSO, the IRS determined that several of the stolen identities found in HARLAND’s residence had been used to file what appeared to be fraudulent tax returns. The IRS interviewed several of the individuals whose identities had been used and confirmed that these individuals had not given HARLAND the authority to file tax returns in their names and that all income and dependent information on the tax returns was false. IRS records show that HARLAND caused approximately $65,168 in loss to the IRS by filing fraudulent tax returns with stolen identities.
U.S. Attorney Polite praised the Internal Revenue Service in investigating this matter. Assistant United States Attorney G. Dall Kammer is in charge of the prosecution.
Eleven Northern California Real Estate Investors Indicted for Bid Rigging and Fraud at Public Foreclosure AuctionsRead the Press Release
A federal grand jury in San Francisco returned three multi-count indictments against eleven real estate investors for their role in bid rigging and fraud schemes at foreclosure auctions in Northern California, the Department of Justice announced.
The indictments, filed late yesterday in U.S. District Court for the Northern District of California in Oakland, California, charge Northern California real estate investors Michael Marr; Javier Sanchez; Gregory Casorso; Victor Marr; John Shiells; Miguel De Sanz; Alvin Florida Jr.; Robert A. Rasheed; John L. Berry III; Refugio Diaz; and Stephan A. Florida with participating in conspiracies to rig bids and schemes to defraud mortgage holders and others. The indictments allege that the defendants agreed not to compete at public auctions in return for payoffs and diverted money to themselves and others that should have gone to mortgage holders and other beneficiaries. All defendants were charged with bid rigging and fraud in Alameda County, California. Marr, Sanchez, Shiells, and De Sanz were also charged with bid rigging and fraud in Contra Costa County, California. Additionally, Shiells and De Sanz were charged with bid rigging and fraud in San Francisco County, California.
To date, 47 individuals have pleaded guilty to criminal charges as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public foreclosure auctions in Northern California. On Oct. 22, 2014, a federal grand jury in San Francisco returned an eight-count indictment against five additional real estate investors for their role in bid rigging and fraud schemes at foreclosure auctions in San Mateo and San Francisco Counties, California.
“Collusion at the foreclosure auctions created an unfair playing field where conspirators pocketed illegal payoffs at the expense of lenders and distressed homeowners,” said Brent Snyder, Deputy Assistant Attorney for the Antitrust Division’s criminal enforcement program. “The division will continue to investigate and prosecute local cartels that harm the competitive process.”
The indictments allege, among other things, that at various times between June 2007 and January 2011, the defendants conspired to rig bids to obtain numerous properties sold at foreclosure auctions in Alameda, Contra Costa, and San Francisco counties, 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.
“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.”
Each violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. Each count of mail fraud carries a maximum sentence of 20 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the mail fraud schemes. 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 victims if either amount is greater than $1 million.
These indictments are the latest charges 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.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
XS Platinum and Five Corporate Officials Indicted for Illegal Discharges from the Platinum Creek Mine and for False Statements to Federal OfficialsRead the Press Release
XS Platinum, Inc. and five of its officers and employess were indicted by a federal grand jury in Anchorage today for five felony violations, including conspiracy to violate the Clean Water Act and for submitting material false statements, announced Sam Hirsch, Acting Assistant Attorney General for the Environment and Natural Resources Division of the U.S. Department of Justice, and Karen L. Loeffler, U.S. Attorney for the District of Alaska.
The indictment charges XS Platinum, Inc. (XSP), a Delaware corporation, and five of its officers and employees, Dr. Bruce Butcher, age 59, and Mark Balfour, age 62 (both Australian citizens), James Slade, age 57 (a Canadian citizen), and Robert Pate, age 62 and James Staeheli, age 43 (both U.S. citizens residing in Washington state) with conspiracy to violate the Clean Water Act (CWA) during the defendants’ operation of the Platinum Creek Mine on the Salmon River in Western Alaska. In addition, the indictment charges XSP, Butcher, Balfour, Slade, and Pate with knowingly violating the terms of XSP’s CWA permit in 2010; and XSP, Butcher, Balfour, Slade, and Staeheli with knowingly violating the terms of XSP’s CWA permit in 2011. The indictment also charges XSP, Butcher, Balfour, Slade and Pate with submitting a false statement in violation of the CWA. Finally, the indictment charges XSP and Balfour with submitting a separate false statement.
According to the indictment, XSP held 159 placer mining claims and 36 hard-rock claims totaling more than 4,000 acres at the Platinum Creek Mine, which was situated along the Salmon River and its tributaries. The mine contains placer deposits of platinum metal, along with smaller amounts of gold and palladium. All but 21 of the claims were on land managed by the BLM, with the remaining (undeveloped) claims lying within the Togiak National Wildlife Refuge. The Salmon River is an anadromous fish stream that is important for the spawning of all five species of Pacific salmon (chinook, chum, coho, pink, and sockeye), and the rearing of coho and sockeye salmon. After flowing through BLM land, the Salmon River crosses the Togiak National Wildlife Refuge before entering the Pacific Ocean at Kuskokwim Bay.
The CWA prohibits discharges of industrial wastewaters from mining operations in violation of CWA permits which govern those discharges. According to the indictment, beginning in 2010 and continuing through 2011, XSP and the individual defendants knowingly discharged industrial wastewaters from XSP’s mechanical placer mining operation at the Platinum Creek Mine into the adjacent Salmon River in violation of the terms of XSP’s CWA General Permit. According to the indictment, XSP told federal regulators in its mining and CWA permit applications that the operation of the mine would recycle all of its wastewater and result in “zero discharge” of mine wastewater to the Salmon River. The indictment alleges that XSP and the individual defendants conspired to violate the CWA by concealing the 2010 and 2011 mine wastewater discharge violations from federal officials, and submitting material false statements to federal agencies. The indictment further alleges that the industrial wastewaters discharged from XSP’s operation of the Platinum Creek Mine included large amounts of sediment, turbidity, and toxic metals. It is further alleged that these discharges exceeded the CWA General Permit limits for those pollutants and that the defendants failed to report the violations as they were required. According to the indictment, XSP and its corporate officers submitted an annual report in 2011 to federal and state agencies which indicated that the mine had “zero discharge” during the 2010 mining season, when XSP’s own monitoring data showed that it had numerous discharges to the Salmon River.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The investigation is being conducted by the U.S. Department of Interior Bureau of Land Management Office of Law Enforcement and Security and the U.S. Environmental Protection Agency Criminal Investigation Division. The case is being prosecuted by First Assistant U.S. Attorney Kevin Feldis of the U.S. Attorney’s Office for the District of Alaska, Trial Attorney Todd S. Mikolop of the U.S. Justice Department’s Environmental Crimes Section, and U.S. Environmental Protection Agency Regional Criminal Enforcement Counsel Dean Ingemanson.
Registered Sex Offender Sentenced to 35 Years in Prison for Attempting to Engage in Sex with a Minor and Child Pornography-Related OffensesRead the Press Release
A registered sex offender with prior convictions for the possession of child pornography and attempted sexual conduct with minors was sentenced to 35 years in prison today for traveling across state lines to engage in sex with a minor and various child pornography-related offenses.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Josh Minkler of the Southern District of Indiana made the announcement. U.S. District Judge Jane E. Magnus-Stinson of the Southern District of Indiana imposed the sentence.
John Alan Lewis, 65, of Lima, Ohio, was convicted in August 2014 following a three-day trial for traveling across state lines to engage in illicit sexual conduct with a minor, attempted production of child pornography, and transportation and possession of child pornography.
According to evidence presented at trial, Lewis met an individual online that he believed to be a 14 year-old girl. The individual was actually an adult male registered sex offender from New York who was posing as a 14 year-old girl. From November 2011 until May 2012, Lewis exchanged numerous images of a minor under the age of 12 engaging in sexually explicit conduct via email with that individual, still believing that he was communicating with a 14 year-old girl.
Following the August 2012 arrest of the New York sex offender who was posing as the 14 year-old girl, law enforcement assumed the New York sex offender’s online profile and continued to communicate with Lewis. In the weeks leading up to his arrest, Lewis engaged in a series of online chats with the purported 14 year-old girl, during which he discussed his plan to travel from Ohio to Indiana to take her to a motel to engage in sexual acts. On Sept. 19, 2012, Lewis rented a car in Lima, Ohio, and drove to Plainfield, Indiana, to meet with the girl. He was arrested when he arrived at the agreed upon meeting location.
At the time of his arrest, Lewis had three electronic devices, each of which contained images depicting a minor, between the ages of 10 and 12, fully nude and engaging in sexually explicit conduct.
This case was investigated by the Indianapolis Metropolitan Police Department, the Indiana State Police Cyber Crime Unit, the FBI’s Violent Crimes Against Children Section and the Indiana Internet Crimes Against Children Task Force, which is made up of federal and state law enforcement agencies. The case was prosecuted by Trial Attorney Amy E. Larson of the Criminal Division’s Child Exploitation and Obscenity Section (CEOS) and Assistant U.S. Attorney Steven D. DeBrota of the Southern District of Indiana.
The National Center for Missing and Exploited Children assisted the investigation by providing information to the Indianapolis Police Department, which led to the identification of a minor child victim in Indiana.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse, launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ offices and CEOS, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.projectsafechildhood.gov. For more information about Internet safety education, please visit www.usdoj.gov/psc and click on the tab “resources.”
Justice Department's Civil Rights Lawsuit Leads to Improved Conditions at Terrebonne Parish Juvenile Detention CenterRead the Press Release
The Department Moves Court to Dismiss Civil Rights Case, Citing Reforms
Today, the Justice Department announced that its civil rights lawsuit involving the Terrebonne Parish Juvenile Detention Center in Houma, Louisiana, has resulted in improved conditions for the youth confined in the facility, and it asked the federal court to dismiss the case. Reforms Terrebonne Parish undertook over the past three years resulted in increased protections to prevent sexual abuse of youth by staff; reduce the use of isolation, inappropriate use of force and restraints by staff; to reduce physical abuse of youth by other youth; and to reduce suicide and other self-harming behavior.
In 2011, the department notified Terrebonne Parish officials that conditions at the detention center violated the constitutional rights of confined youth. Later that year, the department and Terrebonne Parish officials reached a settlement agreement to implement 43 specific substantive remedial measures to reform conditions at the facility. The parties appointed an independent monitor who closely monitored reform efforts and provided technical assistance to facility officials.
Although the settlement agreement pre-dated the Attorney General’s finalization of the National Standards to Prevent, Detect, and Respond to Prison Rape (PREA Standards), the required remedial measures incorporated several provisions eventually set forth in those Standards. For example, Terrebonne Parish began complying with PREA’s minimum staffing ratio requirements, ensuring that unannounced supervisory rounds were periodically conducted, established a zero-tolerance policy for sexual abuse, conducted post-incident reviews, ensured that all allegations of abuse were promptly investigated and referred to appropriate external investigative agencies, ensured that staff found to be violating agency policies were subject to formal discipline and trained all staff on sexual abuse identification and prevention practices.
In addition to remedial measures designed to eliminate sexual abuse of youth within the facility, the settlement also required several remedial measures to increase protections against suicide and other self-harming behavior, including a reduction in the facility’s over-reliance on isolation. For example, the settlement prohibited the routine use of isolation rooms for youth on suicide precautions, prohibited the use of isolation for all youth except where youth pose an imminent threat to themselves or others (or in rare cases where less severe disciplinary measures have proven ineffective), prohibited the use of any disciplinary isolation longer than 72 hours except in extraordinary circumstances and ensured that any use of isolation be accompanied by strict safeguards such as frequent youth welfare checks and frequent visits by clinicians. During the remedial action period, the facility proactively implemented an effective incentive-based behavior management program that rewarded youth for positive and pro-social behavior. In addition, the facility implemented and trained staff on Safe Crisis Management – a program for preventing and responding to disruptive behavior by youth. Implementation of these programs substantially reduced the frequency of serious incidents at the facility, and enabled facility-leadership to eliminate the use of sanctioned disciplinary isolation – an outcome that exceeded settlement agreement requirements.
In the spring of 2014, the monitor issued her fifth compliance report indicating that Terrebonne Parish had achieved substantial compliance with all required remedial measures in the settlement agreement. The department concurs with the monitor’s assessment.
During the course of the department’s investigation, including the enforcement period, Terrebonne Parish officials and the facility director have remained highly cooperative and steadfast in their commitment to improving conditions of confinement in the facility.
“We commend Terrebonne Parish for its commitment to protecting youth held in custody,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “These improvements will help to ensure the safety and security of all youth in the facility in a sustainable manner.”
“Rehabilitation of the district’s youth is the principal goal of juvenile justice and we are pleased that Terrebonne Parish has been diligent in remedying its facility,” said U.S. Attorney Kenneth A. Polite for the Eastern District of Louisiana. “These changes will help foster an environment where our at-risk youth can exit the juvenile justice system ready to positively contribute to their communities.”
The department initiated this investigation under the Violent Crime Control and Law Enforcement Act of 1994, which gives the department authority to seek a remedy for a pattern or practice of conduct that violates the constitutional or federal statutory rights of youth in juvenile justice institutions. Additional information about the Civil Rights Division is available on its website at www.justice.gov/crt.
Justice Department Files Enforcement Actions to Shut Down "Psychic" Mail Fraud SchemesRead the Press Release
The United States filed civil complaints in U.S. District Court for the Eastern District of New York today against individuals and entities alleged to be running two related multimillion-dollar mail fraud schemes. The United States also filed a motion seeking a temporary restraining order and a preliminary injunction to immediately put a stop to the ongoing schemes.
According to the complaints, the defendants operate two mail fraud schemes in which they send solicitation letters purportedly written by world-renowned psychics to consumers through the U.S. mail. The first scheme, operated by Destiny Research Center and the Canadian company Infogest Direct Marketing, sends direct mail solicitations allegedly written by psychics Maria Duval and Patrick Guerin. The second scheme, operated by Christine Moussu through New York companies CLGE Inc. and I.D. Marketing Solutions Inc., sends direct mail solicitations allegedly written by psychics David Phild, Sandra Rochefort, Antonia Donera and Nicholas Chakan.
“The complaints filed today charge that the companies and individuals made blatant misrepresentations in order to reap financial gain by scamming thousands of Americans, many of whom were elderly and in a vulnerable financial condition,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “Our job at the Justice Department is to put a stop to fraud schemes that seek to take advantage of vulnerable Americans.”
The complaints allege that in the letters, the purported psychics state that they are contacting the recipient based on a specific vision or psychic reading revealing that the recipient has the opportunity to dramatically improve his or her financial circumstance, including claims of winning millions in the lottery. The solicitation letters appear personalized, repeatedly referring to the recipient by first name and often containing portions that appear handwritten. The solicitations urge victims to purchase various products and services in order to ensure that the foreseen good fortune comes to pass. The complaints allege that in reality, the solicitations are identical, mass- produced form letters. Victims responded to the solicitations by completing a form and submitting a payment, usually around $20 to $50, via U.S. mail. Victims often also wrote personal, handwritten letters back to the purported psychics, which were never opened, and received worthless, mass-produced trinkets and further solicitations after sending these payments.
“Relying on superstition and fear, the defendants defrauded tens of millions of dollars from thousands of vulnerable citizens,” said U.S. Attorney Loretta Lynch for the Eastern District of New York. “We have, and will continue to, use all means at our disposal to protect our citizens from such schemes to defraud.”
“These mass solicitations containing purportedly personalized messages to unsuspecting victims were blatant fraud,” said Acting Inspector in Charge Troy Raper of the U.S. Postal Inspection Service's Criminal Investigation Group. “Postal Inspectors aggressively investigate any operations that use the U.S. mail to fleece unsuspecting victims.”
Metro Data Management Inc., doing business as Data Marketing Group Ltd., a company on Long Island, New York, along with its president, Keitha Rocco, performed “caging” services on behalf of both mail fraud schemes. According to the complaint, these services consisted of processing victim payments and maintaining databases of consumers who responded to the fraudulent solicitations. The government alleges that Data Marketing Group processed as much as $500,000 in victim payments in a given two-week period for the Destiny Research Center scheme, resulting in annual gross receipts of at least $13 million. The CLGE scheme brought in annual revenue of $1.5 to $2 million. Evidence presented by the United States in support of its motion indicates that victims of the mail fraud schemes were elderly, ill and in perilous financial condition.
The government is seeking an injunction under the Anti-Fraud Injunction Statute immediately shutting down the fraudulent schemes in order to protect victims from further harm. The injunctions sought by the United States would enjoin the defendants from using the mail to distribute the fraudulent solicitations or to collect victim payments, and from selling lists of consumers who have responded to the solicitations. The injunctions would also authorize the U.S. Postal Service to detain any outgoing solicitations mailed by the defendants and any incoming responses to solicitations.
The Justice Department’s case is being handled by the Civil Division’s Consumer Protection Branch and the U.S. Postal Inspection Service, in coordination with the U.S. Attorney’s Office in the Eastern District of New York.
The claims made in the complaints are allegations only, and there has been no determination of liability.
Justice Department Collects More Than $24 Billion in Civil and Criminal Cases in Fiscal Year 2014Read the Press Release
Attorney General Eric Holder announced today that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the Justice Department’s federal prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And it shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.”
The amount is more than three times the $8 billion collected in FY 2013. The largest civil collections were from affirmative civil enforcement cases, many of which were brought under the whistleblower provisions of the False Claims Act, in which the United States recovered government money lost to fraud or other misconduct or collected from individuals and/or corporations for violations of federal health, safety, civil rights, tax, or environmental laws. In addition, civil debts were collected on behalf of several federal agencies, including the U.S. Department of Housing and Urban Development, Health and Human Services, Internal Revenue Service, Small Business Administration and Department of Education.
The total includes all monies collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It includes approximately $13.7 billion in payments made directly to the Justice Department, and $11 billion in indirect payments made to other federal agencies, states and other designated recipients.
In measuring collections recovered in FY 2014, this figure necessarily includes some cases that were resolved in previous years but the proceeds of which were collected in FY 2014.
The largest single source of collections came from civil penalties paid by financial institutions to resolve financial fraud claims stemming from the 2008 financial crisis, including significant amounts paid by JPMorgan and Citigroup Inc, to resolve federal and state civil claims related to the packaging, marketing, sale and issuance of residential mortgage-backed securities (RMBS). Both resolutions include record penalties under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) and in addition, also provide billions of dollars of relief to struggling homeowners.
Department collections also included hundreds of millions in fines from an ongoing investigation into institutions involved in the manipulation of the London Interbank Offered Rate (LIBOR), including UBS Securities Japan Co. Ltd., and RBS Securities Japan Ltd., a wholly owned subsidiary of The Royal Bank of Scotland plc (RBS). Hundreds of millions in additional collections resulted from the department’s ongoing investigation into international price-fixing and bid rigging in the auto parts industry. For instance, Bridgestone Corp., a company based in Tokyo, Japan, agreed to plead guilty and to pay a criminal fine for its role in a conspiracy to fix prices of automotive anti-vibration rubber parts installed in cars sold in the United States and elsewhere.
The department continued to make polluters pay to safeguard the environment and the taxpayer, collecting several multi-million dollar payments in connection with environmental cleanups. This included a May 2014 settlement with Titanium Metals Corporation (TIMET) under which the titanium-parts manufacturer paid $14 million in civil penalties under the Toxic Substances Control Act (TSCA) and the Resource Conservation and Recovery Act (RCRA) and agreed to perform an extensive cleanup following the unauthorized manufacture and disposal of PCBs (polychlorinated biphenyls) at its manufacturing facility in Henderson, Nevada.
The department also collected millions in criminal penalties after resolving investigations into violations of the Foreign Corrupt Practices Act (FCPA). For instance, Diebold Inc., an Ohio-based provider of integrated self-service delivery and security systems, pleaded guilty to violating the FCPA by bribing government officials in China and Indonesia and falsifying records in Russia in order to obtain and retain contracts to provide ATMs to state-owned and private banks in those countries.
Happy's Pizza Founder Convicted of Multi-Million Dollar Tax Fraud SchemeRead the Press Release
On November 19, in the U.S. District Court for the Eastern District of Michigan, a federal jury after deliberating 4.5 hours convicted the president and founder of Happy’s Pizza of conspiracy to defraud the United States and 32 counts of tax crimes, the Justice Department announced today.
Happy Asker’s convictions include three counts of filing false federal individual tax returns for the years 2006 through 2008, 28 counts of aiding and assisting the filing of false federal income and payroll tax returns for several Happy’s Pizza Franchises restaurants for the years 2006 through 2009, and one count of engaging in a corrupt endeavor to obstruct and impede the administration of the Internal Revenue Code.
During trial, the evidence established that Asker was the president, founder and public face of the Farmington Hills, Michigan, based Happy’s Pizza franchise. He also had ownership interests in several Happy’s Pizza franchises located in Michigan, Ohio and Chicago. From June 2004 through April 2011, Asker, along with certain franchise owners and employees, executed a systematic and pervasive tax fraud scheme to defraud the Internal Revenue Service (IRS). Gross sales and payroll amounts were substantially underreported to the IRS on numerous individual corporate income tax returns and payroll tax returns submitted for nearly all 60 Happy’s Pizza franchise restaurants located in Michigan, Ohio and Illinois. Evidence admitted at trial established that from 2008 to 2010, more than $6.1 million in cash gross receipts were diverted from approximately 35 different Happy’s Pizza stores in the Detroit area, Illinois and Ohio. In total, the evidence at trial established that Asker and certain employees and franchise owners failed to report to the IRS approximately $3.84 million of gross income from the various Happy’s Pizza franchises and approximately $2.39 million in payroll. The evidence at trial further established that a portion of this unreported income was shared among most of the franchise owners, including Asker, in a weekly cash “profit split.” The cash was distributed among the investors and managers of the relevant franchises. The IRS is owed more than $6.2 million in taxes as a result of this fraud scheme.
The evidence at the two-week trial also established that Asker purposely misled IRS-Criminal Investigation special agents during voluntary interviews conducted on Nov. 5, 2010, and Dec. 1, 2010. Asker denied knowing co-defendant Arkan Summa, a convicted felon, and did not disclose Summa’s association with a number of Happy’s Pizza franchise restaurants. Documents admitted during trial indicate Summa shared in diverted gross receipts from at least one Happy’s Pizza franchise in Toledo, Ohio.
Four other defendants in the case pleaded guilty prior to Asker’s trial. On October 23, Maher Bashi, who served as Happy’s Pizza’s corporate chief operating officer, and Tom Yaldo, an owner of numerous Happy’s Pizza franchises, pleaded guilty to conspiracy to defraud the United States. According to the indictment, their conduct included, among other things, creating and maintaining fraudulent accounting records and falsely reporting income taxes and payroll taxes. On July 15, Summa pleaded guilty to engaging in a corrupt endeavor to obstruct and impede the due administration of the IRS, and Tagrid Summa, who is identified as a Happy’s Pizza franchise owner in documents admitted during trial, pleaded guilty to providing false documents to the IRS.
At sentencing, Happy Asker faces a statutory maximum sentence of five years in prison and a $250,000 fine for conspiracy to defraud the government. The charges of filing a false income tax return and aiding or assisting in filing a false return carry a statutory maximum sentence of three years in prison and a fine of $250,000 for each count. The obstruction charge carries a statutory maximum sentence of three years in prison and a fine of $250,000. Asker’s sentencing is scheduled for March 5, 2015, in the Eastern District of Michigan.
The case was investigated by special agents from IRS-Criminal Investigation and the Drug Enforcement Agency. Senior Litigation Counsel Corey Smith and Trial Attorney Mark McDonald for the Justice Department’s Tax Division prosecuted the case.
Former Las Cruces Detective Sentenced to Nine Years for Sexually Assaulting Police Department InternRead the Press Release
Michael Garcia, 38, a former detective with the Las Cruces Police Department (LCPD) in Las Cruces, New Mexico, was sentenced today for violating the civil rights of an LCPD student intern. Garcia was sentenced to nine years in prison followed by five years of supervised release. Garcia also was ordered to forfeit his law enforcement certification and comply with federal and state sex offender registration requirements.
Garcia pled guilty on April 17, 2014, to a one-count information charging him with violating the civil rights of the victim by sexually assaulting her. At the time of the assault, Garcia was assigned to a unit that focused on child abuse and sex crimes investigations. According to court documents, Garcia—in his role as a detective—worked with students who participated in Las Cruces High School’s Excel program, through which students interned at the LCPD. On or about May 4, 2011, Garcia took the victim on a ride-along in his department-issued vehicle to visit a crime scene. Afterward, instead of driving the victim directly back to the police department so that she could retrieve her belongings and go home, Garcia drove her to a secluded location where he sexually assaulted her.
“The defendant abused his authority as a sex crimes detective in the most horrific way, exploiting the victim’s trust in him to commit his egregious acts,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “The Civil Rights Division will continue to vigorously prosecute law enforcement officers who use the power of their position to engage in sexual abuse. The victim showed tremendous bravery when she came forward, and we are thankful for the law enforcement officers in this case, as well as the vast majority of others, who support and help victims of crime.”
“Our system of justice is clear and unequivocal – every law enforcement officer must follow the laws they are sworn to enforce,” said U.S. Attorney Damon P. Martinez for the District of New Mexico. “Any time a law enforcement officer breaks the law it undermines the public’s trust in the legal system, and we will do everything we can to ensure that trust is not compromised.”
“Law enforcement officers receive a lot of authority in order to serve their community, and the majority of them use that power wisely,” said Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division. “But when an officer tramples on the civil rights of someone he swore to protect, it's up to the FBI and our partners to make sure that violator is investigated and prosecuted to the full extent of the law. I would like to thank the Las Cruces Police Department for assisting with this investigation, and congratulate the U.S. Attorney's Office on its successful prosecution.”
This case was investigated by the Las Cruces Resident Agency of Albuquerque Division of the FBI and the LCPD and was prosecuted by Assistant U.S. Attorney Holland S. Kastrin for the District of New Mexico and Trial Attorney Fara Gold of the Justice Department’s Civil Rights Division.
Employee of Check-Cashing Company Pleads Guilty to Involvement in Identity Theft SchemeRead the Press Release
A Georgia woman pleaded guilty today to one count of conspiracy to commit wire fraud for her involvement in a stolen identity tax refund fraud (SIRF) scheme, Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama announced.
Lashelia Alexander worked for a check cashing business in a Columbus, Georgia, Walmart, according to court documents. In January 2014, Alexander was approached by several co-conspirators about cashing fraudulent tax refund checks issued in the names of third parties and in return, Alexander would receive a portion of the refunds. Alexander’s co-conspirators electronically filed fraudulent and unauthorized federal income tax returns for 2013 using the personal identifying information of numerous identity theft victims. Alexander’s co-conspirators printed out the fraudulent tax refund checks using check stock provided by a financial institution. Alexander cashed more than $100,000 in fraudulently obtained third-party refund checks containing forged endorsements.
Alexander’s sentencing date has not yet been scheduled. She faces a statutory maximum sentence of 20 years in prison and a maximum fine of $250,000 for the wire fraud conspiracy.
The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation. Trial Attorneys Michael C. Boteler and Gregory P. Bailey of the Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
ConvergEx Group Subsidiary Sentenced for Securities Fraud SchemeRead the Press Release
A brokerage subsidiary of ConvergEx Group LLC was sentenced and ordered to pay a criminal penalty and restitution of $26 million for wire fraud and conspiracy to commit securities and wire fraud in connection with a scheme to charge clients millions of dollars in unwarranted and hidden fees.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Director in Charge Andrew G. McCabe of the FBI’s Washington Field Office and Inspector in Charge Philip R. Bartlett of the U.S. Postal Inspection Service (USPIS) made the announcement.
“CGM Limited, a subsidiary of the global brokerage and trading firm ConvergEx, and certain executives and traders defrauded their clients by brazenly and repeatedly lying to them and then siphoning off millions of dollars through hidden fees,” said Assistant Attorney General Caldwell. “But they didn’t get away with it. Today’s sentence shows that the Justice Department will require financial companies to answer for taking advantage of their clients’ trust and violating the laws that protect investors in financial markets.”
“Today’s sentencing demonstrates that companies who hide earnings, fabricate transaction reports and provide clients with false details regarding their orders for the purpose of increasing their own bottom line will ultimately pay the price for their schemes,” said Assistant Director in Charge McCabe. “The FBI will continue to work with our partners to investigate complex international financial crimes and send a message that complete transparency is a requirement in the global trading market.”
“Today’s sentencing is an example of the dedicated work of law enforcement to stop fraud wherever it may be, safeguarding the investments of consumers and protecting the integrity of the financial markets,” said Inspector in Charge Bartlett.
ConvergEx Global Markets Limited (CGM Limited), a former broker-dealer registered in Bermuda, pleaded guilty on Dec. 18, 2013. Together with its parent company, ConvergEx Group, which entered into a deferred prosecution agreement on Dec. 18, 2013, CGM Limited will pay a criminal penalty of approximately $18.0 million, forfeit approximately $12.8 million, and will pay defrauded customers approximately $12.8 million in restitution. In total, CGM Limited and ConvergEx Group are paying $43.8 million in criminal penalties and restitution. U.S. District Judge Jose L. Linares in the District of New Jersey imposed the sentence.
As CGM Limited admitted when it pleaded guilty, certain ConvergEx Group broker-dealers that provided commission-based brokerage services regularly routed securities trading orders to CGM Limited in Bermuda so that it could take a mark-up (an additional amount paid for the purchase of a security) or mark-down (a reduction of the amount received for the sale of a security) when executing the orders. ConvergEx employees referred to such mark-ups and mark-downs as “spread,” “trading profits,” or “TP.”
To hide the increased fees, traders at CGM Limited and sales traders at ConvergEx Group subsidiaries sent false transaction reports to clients with fabricated details, including the number of shares involved in a trade, the time at which a trade was executed, and the price at which shares were purchased or sold. In total, CGM Limited took approximately $12.8 million in trading profits from these clients after it had sent the false statements to them.
CGM Limited admitted that its employees engaged in other fraudulent activities involving “spread.” As one example, CGM Limited traders violated a client’s trading instructions to allow them to take spread on the client’s trades, and then an employee of another ConvergEx Group subsidiary offered the client false explanations for the trading activity.
On Dec. 18, 2013, Jonathan Daspin, the head trader at CGM Limited, and Thomas Lekargeren, a sales trader at a different ConvergEx Group subsidiary, each pleaded guilty to conspiracy to commit securities and wire fraud.
On Aug. 6, 2014, Anthony Blumberg, the former CEO of CGM Limited, and Craig Marshall, a former trader at CGM Limited, were charged with wire fraud and conspiracy to commit securities and wire fraud. Blumberg was also charged with securities fraud. The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty
As part of the deferred prosecution agreement with ConvergEx Group, the department highlighted ConvergEx Group’s extensive cooperation, including its robust internal investigation, and as well as its extensive remediation and enhanced compliance program and internal controls.
The case was investigated by the FBI’s Washington Field Office and the Washington, D.C. and New York offices of the USPIS. The case is being prosecuted by Trial Attorneys Justin Goodyear, Jason Linder and Patrick Pericak of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Leslie Schwartz of the District of New Jersey. Fraud Section Assistant Chief Robert Zink also assisted with the investigation.
The SEC referred the matter to the Justice Department for investigation, and the department expresses its appreciation for the substantial assistance provided by the SEC.
Chicago Businessman Sentenced for Failing to File Tax ReturnsRead the Press Release
A prominent Chicago businessman was sentenced today to serve six months in prison and six months home confinement, to be followed by one year supervised release and ordered to cooperate in paying taxes owed to the Internal Revenue Service (IRS) for willfully failing to file federal individual income tax returns, announced the Justice Department.
On June 12, a criminal information filed in the U.S. District Court for the Northern District of Illinois in Chicago alleged that Jamie Viteri had willfully failed to file individual income tax returns for tax years 2007, 2008 and 2009. According to the plea agreement, Viteri earned substantial income that he did not report to the IRS from a company and a state agency. Viteri’s gross income exceeded $270,000 in 2008 and $290,000 in 2009. He was the president and chief executive officer of Viteri Inc., doing business as Chicago Latino Network (CLN), a solely owned media company focused on the Latino community in Chicago. Viteri was also an employee and managing director of the Bureau of Entrepreneurship and Small Business at the Department of Commerce and Economic Opportunity, an Illinois state government agency.
The case was investigated by special agents from IRS-Criminal Investigation and prosecuted by Trial Attorney Christopher Maietta of the Justice Department’s Tax Division.
Attorney General Holder Announces in Video that the Justice Department Collects More Than $24 Billion in Civil and Criminal Cases in Fiscal Year 2014Read the Press Release
Attorney General Eric Holder announced in a video today that the Justice Department collected $24.7 billion in civil and criminal actions in the fiscal year ending Sept. 30, 2014. The more than $24 billion in collections in FY 2014 represents nearly eight and a half times the appropriated $2.91 billion budget for the 94 U.S. Attorneys’ offices and the main litigating divisions of the Justice Department combined in that same period.
“Every day, the Justice Department’s prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people,” said Attorney General Eric Holder. “Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And as a result, I can report today that – during Fiscal Year 2014 – the Justice Department collected a total of $24.7 billion in civil and criminal actions.”
The complete text of the Attorney General’s video message is below:
“Every day, the Justice Department’s prosecutors and trial attorneys work hard to protect our citizens, to safeguard precious taxpayer resources, and to provide a valuable return on investment to the American people. Their diligent efforts are enabling us to achieve justice and recoup losses in virtually every sector of the U.S. economy. And as a result, I can report today that – during Fiscal Year 2014 – the Justice Department collected a total of $24.7 billion in civil and criminal actions.
“That’s more than three times the $8 billion total the Department collected in 2013. And it’s nearly eight and a half times the combined budgets of our 94 U.S. Attorneys’ Offices and all of our main litigating divisions.
“This year’s total includes every dollar collected as a result of Justice Department-led enforcement actions and negotiated civil settlements. It comprises roughly $13 billion in payments made directly to the Justice Department, as well as $11 billion in indirect payments made to other federal agencies, states, and other recipients. And it shows the fruits of the Justice Department’s tireless work in enforcing federal laws; in protecting the American people from violent crime, national security threats, discrimination, exploitation, and abuse; and in holding financial institutions accountable for their roles in causing the 2008 financial crisis.
“In fact, the largest single source of collections during 2014 came from civil settlements to resolve financial fraud claims, including record penalties paid by JPMorgan and Citigroup. These settlements also provide for billions of dollars of relief to struggling homeowners.
“As in past years, collections from civil and criminal health care fraud penalties – including hundreds of millions of dollars in fines from pharmaceutical companies accused of fraud, false claims, and drug safety violations – were among the largest sources of recovered funds. And all across the country – from Wall Street to Main Street – the Justice Department’s robust criminal and civil efforts, in these and many other areas, have made a tremendous, positive difference in the lives of countless people.
“These achievements owe a great deal to the leadership of dedicated career attorneys and support staff members – in Washington and throughout the U.S. Attorney community – who serve the American people every day with integrity, with professionalism, and with steadfast commitment to the highest ideals of justice. I want to thank each of them for their contributions, and their patriotic service, in securing these collections and returning stolen funds to the public coffers.
“In the days ahead, as this work goes on; as we plan for the next fiscal year; and as the new Congress begins its annual appropriations process early next year, I urge leaders from both parties to come together to increase investments in this critical work – so we can ensure that the Justice Department will continue to have the resources we need to build on these efforts, and keep serving the American people, in the months and years to come.”
The full video of the Attorney General’s message is available at http://www.justice.gov/agwa.php.
Alabama Woman Pleads Guilty for Involvement in Identity Theft Tax SchemeRead the Press Release
An Alabama woman pleaded guilty Tuesday to one count of conspiracy to file false claims and one count of aggravated identity theft for her involvement in a stolen identity tax refund fraud (SIRF) scheme, Acting Deputy Assistant Attorney General Larry J. Wszalek for the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama announced.
Charnesha Alexander and her co-conspirators filed false tax returns using stolen identities between January 2011 and December 2013, according to court documents. Alexander acquired stolen identities from various sources, including the identities of employees from a company in Columbus, Georgia. Alexander and her co-conspirators also filed the false income tax returns in question using several Electronic Filing Identification Numbers issued in the names of sham tax businesses. As a result, Alexander and her co-conspirators obtained possession of the fraudulent tax refunds in the form of U.S. Treasury checks, refund anticipation loan checks, and prepaid debit cards. Alexander and her co-conspirators cashed the fraudulently obtained checks at several businesses located in Alabama. Alexander also deposited fraudulent refund checks into a bank account that she controlled.
A sentencing date has not been scheduled for Alexander. She faces a statutory maximum sentence of 10 years in prison for the conspiracy charge and an additional statutory mandatory sentence of two-years in prison for aggravated identity theft.
The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the U.S. Postal Service’s Office of the Inspector General. Trial Attorneys Michael C. Boteler, Charles M. Edgar Jr. and Gregory Bailey of the Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown for the Middle District of Alabama.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
The DeKalb County School District Reaches Settlement Agreement with Federal Authorities for Harassment Based on Religion and National OriginRead the Press Release
The Department of Justice and United States Attorney’s Office reached a settlement agreement today with the DeKalb County, Georgia, school district to resolve the department’s inquiry into the district’s ability to prevent and effectively respond to peer-on-peer harassment based on national origin and religion.
The agreement ensures that the more than 100,000 students in DeKalb County school district (DeKalb County) will be protected by clear and comprehensive anti-harassment policies and procedures in compliance with federal civil rights laws. It also ensures that parents and students will have access to essential information, including discipline policies and procedures, in their preferred language.
In May 2013, DeKalb County, the Department of Justice and the United States Attorney’s Office reached a settlement agreement that resolved specific allegations of religious and national origin harassment of a Sikh student. At the time of the 2013 agreement, the Department of Justice, the United States Attorney’s Office and DeKalb County agreed to continue working collaboratively to resolve the remaining concerns regarding the content and implementation of the school district’s anti-harassment policies and the training of employees and students on such policies. Since then, DeKalb County has worked with the Justice Department and the United States Attorney’s Office to develop a plan for enhancing anti-harassment protections and increasing access to information for all parents and students; today’s agreement is the result of that collaboration.The agreement requires, among other things, that the DeKalb County school district develop and implement annual age and position appropriate trainings on religious and national origin harassment for all students, staff who interact with students (including administrators, teachers, counselors, and bus drivers), and district-level administrators who interact with students or who are involved in addressing harassment or bullying in the district. The training will include topics related to post-9/11 backlash and harassment that perpetuates negative stereotypes impacting the Sikh, Muslim, Arab-American and South Asian communities.
“We commend the DeKalb County School District’s commitment to ensuring that all students – including Sikhs, Muslims, Arabs, and South Asians – can grow and learn in a safe and supportive environment free from discrimination based on religion or national origin,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “DeKalb County school district has worked hand-in-hand with the department to identify and expand those policies that are successful at protecting kids while modifying those practices that need improvement, and we are confident that the district will continue its work to eliminate harassment in its schools.”
“Every child should be able to attend school without the fear of being taunted and physically assaulted based on his religion or national origin,” said United States Attorney Sally Quillian Yates for the Northern District of Georgia. “I am encouraged that DeKalb County School District has demonstrated a commitment to ensure that its schools are free of harassment.”
The enforcement of Title IV is a top priority of the DOJ’s Civil Rights Division. Additional information about the Civil Rights Division of the DOJ is available on its website at www.justice.gov/crt.
Assistant United States Attorney Aileen Bell Hughes handled this matter on behalf of the United States Attorney’s Office.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the home page for the U.S. Attorney’s Office for the Northern District of Georgia Atlanta Division is http://www.justice.gov/usao/gan/.
Miami-Area Hospital Chief Operating Officer Pleads Guilty in $67 Million Mental Health Care Fraud SchemeRead the Press Release
The former chief operating officer of a Miami-area hospital pleaded guilty today for his role in a mental health care fraud scheme that resulted in the submission of more than $67 million in fraudulent claims to Medicare by a state-licensed psychiatric hospital located in Hollywood, Florida, that purported to offer both inpatient and outpatient mental health services.
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. Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region made the announcement.
Christopher Gabel, 61, of Davie, Florida, the former Chief Operating Officer (COO) of Hollywood Pavilion LLC (HP), pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud and one count of conspiracy to defraud the United States and pay and receive health care kickbacks. Gabel was charged in an indictment returned on May 8, 2014.
According to Gabel’s admissions in connection with his guilty plea, between April 2003 and September 2012, HP submitted false and fraudulent claims to Medicare for treatment that was not medically necessary or not provided to patients. As COO during that time, Gabel supervised HP’s staff at both its inpatient and outpatient facilities, where Medicare beneficiaries were admitted to HP regardless of whether they qualified for mental health treatment, and were often admitted before seeing a doctor.
Gabel admitted that HP obtained Medicare beneficiaries from across the country by paying bribes and kickbacks to various patient brokers. Gabel instructed the patient brokers to falsify invoices and marketing reports in an effort to hide, and cover up the true nature of the bribes and kickbacks they were receiving from HP. From 2003 through August 2012, HP billed Medicare approximately $67 million for services that were not properly rendered, for patients that did not qualify for the services being billed, and for claims for patients who were procured through bribes and kickbacks. Medicare reimbursed HP nearly $40 million for those claims.
Karen Kallen-Zury, Daisy Miller, Michele Petrie and Christian Coloma were convicted at trial in June 2013 for their roles in this scheme. Kallen-Zury, HP’s former chief executive officer, was sentenced to 25 years in prison. Miller, the clinical director of HP’s inpatient facility, was sentenced to 15 years in prison; and Petrie, the head of HP’s intensive outpatient program, was sentenced to six years in prison. Coloma, the director of physical therapy for an entity associated with HP, was sentenced to 12 years in prison. Kallen-Zury, Miller and Petrie were ordered to pay nearly $40 million in restitution, and Coloma was ordered to pay more than $20 million in restitution.
The case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. The case is being prosecuted by Trial Attorneys Nicholas E. Surmacz, Andrew H. Warren and L. Rush Atkinson of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Committee Studying American Indian and Alaska Native Children Exposed to Violence Makes Recommendations to Justice DepartmentRead the Press Release
The Advisory Committee of the Attorney General’s Task Force on American Indian and Alaska Native Children Exposed to Violence released policy recommendations to the Justice Department today.
The report recommends a significant rebuilding of the current services provided to Indian Country, through increased partnering and coordination with tribes, and increased funding for programs to support American Indian and Alaska Native children. Each of the five chapters discusses the Advisory Committee’s findings and recommendations. The report provides the Advisory Committee’s vision for the development of effective, trauma informed, and culturally appropriate programs and services to protect American Indian and Alaska Native children exposed to violence.
“American Indian and Alaska Native children represent the future, and they face unprecedented challenges, including an unacceptable level of exposure to violence, which we know can have lasting and traumatic effects on body and mind,” said Attorney General Eric Holder. “We must understand these impacts well so we can pursue policies that bring meaningful change. That’s why I am deeply grateful for the work of this advisory committee and the continuing mission of this task force.”
Attorney General Eric Holder created the task force in 2013. It is composed of a federal working group that includes U.S. Attorneys and officials from the Interior and Justice Departments and a federal advisory committee of experts on American Indian studies, child health and trauma, victim services and child welfare. Former U.S. Sen. Byron Dorgan and Iroquois composer, singer and child advocate Joanne Shenandoah co-chaired the 13-member committee.
These recommendations are a culmination of the research and information gathered through four public hearings held between December 2013 and June 2014 in Bismarck, North Dakota; Scottsdale, Arizona; Fort Lauderdale, Florida; and Anchorage, Alaska, and five listening sessions in Arizona, Minneapolis and Alaska where over 600 people participated from over 62 Tribes and 15 States from across the nation. More than 70 experts and 60 community members testified at the hearings, addressing domestic and community violence in Indian Country; the pathway from victimization to the juvenile justice system; the roles of juvenile courts, detention facilities and the child welfare system; gang violence; and child sex trafficking.
The Task Force on American Indian and Alaska Native Children Exposed to Violence is part of the Attorney General’s Defending Childhood initiative. The task force is also a component of the Justice Department’s ongoing collaboration with leaders in American Indian and Alaska Native communities to improve public safety.
To read the entire report and for more information about the advisory committee and public hearings, please visit www.justice.gov/defendingchildhood.
Texas Man Sentenced to 183 Months for Violent Kidnapping of Gay ManRead the Press Release
Court Finds Defendant Acted Because of Victim’s Sexual Orientation
The Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the Northern District of Texas, and the FBI’s Dallas Division Office announced that Brice Johnson, 19, of Springtown, Texas, was sentenced today in federal court to 183 months imprisonment for kidnapping a young gay man after luring the victim to his home and brutally assaulting him because of his sexual orientation.
Johnson admitted in plea documents that, in the early morning hours of September 2, 2013, he connected with the adult male victim, identified as A.K., through the cell phone application for www.MeetMe.com. A.K.’s www.MeetMe.com page indicated he was a gay man, while Johnson’s web page indicated he was not gay. During their online communications, Johnson said that he was interested in engaging in sexual activity with A.K. Johnson invited A.K. to his home, gave A.K. his cell phone number and address, and exchanged text messages planning their sexual encounter. Just a few minutes after A.K. arrived at the house, Johnson severely beat him and bound A.K.’s wrists with an electrical cord.
After the beating, Johnson locked the victim in the trunk of his own car and drove the car to a family friend’s house. Individuals at the home repeatedly warned Johnson that he had to take A.K. to the hospital or they would call the police. Johnson eventually transported A.K. to an Emergency Medical Services (EMS) station in Springtown. A.K. was found to have suffered multiple skull and facial fractures from the beating, which required the victim to be hospitalized for ten days. Johnson admitted that he saved A.K.’s cell phone number using a gay slur as the contact name.
During the plea hearing, Johnson admitted that he held and confined the victim against his will in order to conceal the violent assault and to remove A.K’s severely injured body from the home where Johnson was a long-term houseguest. At sentencing, U.S. District Judge Reed O’Connor found that the kidnapping was perpetrated by the defendant because of the victim’s sexual orientation.
“Using violence against another person because of his sexual orientation will not be condoned,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “The department will continue to work with our state, local, and federal law enforcement partners to vigorously prosecute hate crimes.”
“Quite simply, hate crimes of any nature will not be tolerated,” said U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. “Prosecutions under this law are important to ensure all people in our community know they have the full protection of the law. I commend not only the victim for his continued cooperation throughout this investigation, but our law enforcement partners including the FBI, the Springtown Police Department and the Parker County Sheriff’s Office, who worked tirelessly in this case to ensure our hate crime laws are strictly enforced.”
“The FBI is committed to thoroughly investigating violent crimes of this nature, and will continue to work with our local and state law enforcement partners to ensure justice for victims of these crimes,” said Special Agent in Charge Diego Rodriguez of the FBI’s Dallas Division Office.
The investigation is being conducted by the FBI, the Springtown Police Department, and the Parker County Sheriff’s Office. The case is being prosecuted by Assistant U.S. Attorney Cara Foos Pierce and Trial Attorney Saeed Mody of the Civil Rights Division.
Sevenson Environmental Services Inc. Agrees to Pay $2.72 Million to Settle Claims of Alleged Bid-Rigging and KickbacksRead the Press Release
Sevenson Environmental Services Inc., an environmental remediation firm based in Niagara Falls, New York, has agreed to pay more than $2.72 million to resolve allegations that it violated the False Claims Act and the Anti-Kickback Act by accepting kickbacks, rigging bids and passing inflated charges to the U.S. Environmental Protection Agency (EPA) in connection with work performed at the Federal Creosote Superfund Site in Manville, New Jersey, the Department of Justice announced today. Sevenson was the prime contractor responsible for the cleanup of the Federal Creosote Site, which was funded by the EPA.
“The integrity of the public procurement process is severely undermined when federal contractors engage in anticompetitive contracting practices for their own personal gain,” said Acting Deputy Assistant Attorney General August E. Flentje for the Department of Justice’s Civil Division. “The Department of Justice will hold those accountable who abuse their positions at the public’s expense.”
“EPA is vigilant to ensure that the type of fraud perpetrated by Sevenson employees at Federal Creosote is not tolerated and that federal funds are recovered,” said EPA Regional Administrator Judith A. Enck.
The settlement announced today resolves allegations that Sevenson solicited and accepted more than $1.6 million in kickbacks from six companies in exchange for the award of subcontracts for work at the Federal Creosote Site. It also resolves allegations that Sevenson conspired with the subcontractors to pass the majority of those kickbacks to the EPA and that it conspired with one subcontractor to pass to the EPA additional inflated charges for soil disposal.
This case was handled by the Civil Division’s Commercial Litigation Branch, with assistance from the New York Field Office of the department’s Antitrust Division, the EPA Region 2, the EPA’s Office of the General Counsel and the Kansas City District of the U.S. Army Corps of Engineers. The claims resolved by this settlement are allegations only, and there has been no determination of liability.
Justice Department Enters into a Settlement Agreement with Peapod to Ensure that Peapod Grocery Delivery Website is Accessible to Individuals with DisabilitiesRead the Press Release
The Justice Department announced today that it has entered into a settlement agreement with Ahold U.S.A. Inc. and Peapod LLC, the owners and operators of www.peapod.com, to remedy alleged violations of the Americans with Disabilities Act (ADA). Peapod is America’s leading Internet grocer, delivering more than 23 million orders in 12 Midwest and East Coast states and the District of Columbia. The agreement resolves the department’s allegations that www.peapod.com is not accessible to some individuals with disabilities, including individuals who are blind or have low vision, individuals who are deaf or hard of hearing, and individuals who have physical disabilities affecting manual dexterity.
Many individuals with disabilities use computers and other electronic devices to access the Internet with the help of assistive technologies, including text-to-speech “screen reader” software programs, refreshable Braille displays, keyboard navigation and captioning. Such technologies have been readily available and widely used for decades; however, websites must include programming for the assistive technologies to function properly for users with disabilities. Inaccessible websites and mobile applications persist even while there are well-established industry guidelines – the Web Content Accessibility Guidelines (WCAG) 2.0 – for making web content accessible.
Under the agreement, Peapod is required to adopt measures to ensure that users with disabilities are able to fully and equally enjoy the various goods, services, facilities and accommodations provided through www.peapod.com including:
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ensure that www.peapod.com and its mobile applications conform to, at minimum, the Web Content Accessibility Guidelines 2.0 Level AA Success Criteria (WCAG 2.0 AA), except for certain third party content;
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designate an employee as web accessibility coordinator for www.peapod.com, who will report directly to a Peapod, LLC executive;
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retain an independent website accessibility consultant, who will annually evaluate the accessibility of the website and its mobile applications;
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adopt a formal web accessibility policy;
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provide a notice on www.peapod.com soliciting feedback from visitors on how website accessibility can be improved;
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provide automated accessibility testing and accessibility testing by individuals with a variety of disabilities of www.peapod.com and its mobile applications;
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provide mandatory annual training on website accessibility for Peapod’s website content personnel.
“This agreement ensures that people with disabilities will have an equal opportunity to independently and conveniently shop online for groceries,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “We applaud Peapod for working cooperatively with the department and for its commitment to customers with disabilities.”
Title III of the ADA prohibits discrimination on the basis of disability by public accommodations in the full and equal enjoyment of the goods, services, facilities, privileges, advantages and accommodations of places of public accommodations. Title III of the ADA also requires public accommodations to take necessary steps to ensure individuals with disabilities are not excluded, denied services, segregated, or otherwise treated differently because of the absence of auxiliary aids and services, such as accessible electronic information. The Justice Department has long considered Title III and its implementing regulation to apply to the online services and communications of public accommodations.
To find out more about federal disability rights laws, call the Justice Department’s toll-free ADA information line at 800-514-0301 or 800-514-0383 (TDD), or access its ADA website at www.ada.gov.
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Canadian Executive Extradited on Major Fraud Charges Involving a New Jersey Environmental Protection Agency Superfund SiteRead the Press Release
John Bennett, a Canadian national, was extradited Friday from Canada on a charge of participating in a conspiracy to pay kickbacks and commit fraud at the U.S. Environmental Protection Agency (EPA)-designated Superfund site Federal Creosote, located in Manville, New Jersey. He was also charged with a related count for major fraud against the United States related to contracts obtained at the Federal Creosote site, the Department of Justice announced today.
Bennett was the former Chief Executive Officer with Bennett Environmental Inc., a Canadian-based company that treated and disposed of contaminated soil. According to a felony indictment filed in the U.S. District Court for the District of New Jersey on Aug. 31, 2009 Bennett carried out the conspiracy by providing kickbacks to Gordon McDonald, the project manager at the Federal Creosote site, in order to influence the award of sub-contracts at the site and inflate the prices charged to the EPA by the prime contractor. The kickbacks were in the form of money transferred by wire to a co-conspirator’s shell company, lavish cruises for senior officials of the prime contractor, and various entertainment tickets. The department said the conspiracy began at least as early as December 2001 and continued until approximately August 2004.
The clean-up at Federal Creosote is partly funded by the EPA. Under an interagency agreement between the EPA and the Army Corps of Engineers, prime contractors oversaw the removal, treatment and disposal of contaminated soil as well as other operations at the Federal Creosote site.
Bennett arrived in the District of New Jersey, in Newark, on Nov. 14, 2014 and made his initial appearance today in the U.S. District Court for the District of New Jersey in Newark.
“The defendant is charged with thwarting the government’s competitive contracting practices,” said Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division. “This extradition demonstrates our resolve to pursue those who undermine competition. And it is yet another example of our longstanding cooperation with our enforcement colleagues in Canada’s Department of Justice, which helps ensure that those who subvert competition in the United States and elsewhere are brought to justice.”
The fraud conspiracy that Bennett is charged with carries a maximum penalty of five years in prison and a $250,000 fine. The major fraud against the United States charge carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. 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.
As a result of the department’s investigation, three companies, including Bennett Environmental Inc., and eight individuals have pleaded guilty. Bennett’s co-conspirator, Gordon McDonald, was convicted on Sept. 30, 2013, on 10 counts, including the two charges pending against Bennett. McDonald was sentenced on March 4, 2014 to a 14-year term of imprisonment.
The investigation was conducted by the Antitrust Division’s New York Field Office, the EPA Office of Inspector General and the Internal Revenue Service Criminal Investigation with assistance from the Antitrust Division’s Foreign Commerce Section and the Criminal Division’s Office of International Affairs. Anyone with information concerning bid rigging, kickbacks, tax offenses, or fraud relating to sub-contracts awarded at the Federal Creosote or Diamond Alkali sites should contact the New York Field Office of the Antitrust Division at 212-335-8000.
Alleged Leader of a Mexican Drug Cartel Extradited to United StatesRead the Press Release
One of the alleged leaders of the Beltran Leyva Organization, a Mexican drug-trafficking cartel responsible for importing multi-ton quantities of cocaine and methamphetamine into the United States, was extradited to the United States from Mexico on Nov. 15, 2014, and will be making an initial appearance this afternoon before U.S. Magistrate Judge Alan Kay of the District of Columbia.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Director Joseph S. Campbell of the FBI’s Criminal Investigative Division, New York Division Special Agent in Charge James J. Hunt of the Drug Enforcement Administration (DEA) and Executive Associate Director Peter T. Edge of U.S. Immigration and Customs Enforcement Homeland Security Investigations (ICE HSI) made the announcement.
“Over the past two decades, the Beltran Leyva Cartel has distributed tens of thousands of kilograms of dangerous narcotics and engaged in a campaign of violence that sparked drug wars and jeopardized public safety across North America,” said Assistant Attorney General Caldwell. “Today’s extradition of alleged kingpin Alfredo Beltran Leyva is an important step toward stamping out an organization that has ruined the lives of so many. The Justice Department is committed to working with our international partners to bring the rest of the organization to justice.”
“The arrest and extradition of Alfredo Beltran Leyva represents a significant milestone in combating transnational criminal organizations,” said FBI Assistant Director Campbell. “It is through collaborative efforts with our law enforcement partners that the United States will stem the tide of this continuing threat.”
“For years Alfredo Beltran Leyva, along with his brothers, was responsible for not only smuggling tons of cocaine to the United States, but also for the violence that has plagued the lives of Mexican citizens,” said DEA Special Agent in Charge Hunt. “His extradition to the United States is an example of a commitment to international cooperation and the rule of law.”
“The illegal drugs distributed throughout the United States by the Beltran Levya Cartel ruined countless lives in this country and sowed violence and chaos throughout Mexico,” said HSI Executive Associate Director Edge. “The arrest and extradition of Alfredo Beltran Levya to face justice here for his crimes is a great victory for ICE HSI and our partner agencies.”
Alfredo Beltran Levya, 43, was indicted on Aug. 24, 2012, for international narcotics trafficking conspiracy in connection with his leadership role in theinternational drug-trafficking cartel bearing his family name.
According to a motion for pretrial detention filed by prosecutors, between the early 1990s until his January 2008 arrest by Mexican law enforcement, Beltran Levya allegedly led the Beltran Levya Organization with his brothers Hector Beltran Levya and Arturo Beltran Levya, the latter of whom was killed in a December 2009 shootout with the Mexican army. Since the 1990s, the Beltran Levya Organization, together with the Sinaloa Cartel, allegedly directed a large-scale drug transportation network, shipping multi-ton quantities of cocaine from South America, through Central America and Mexico, and finally into the United States via land, air and sea. The organization also employed “sicarios,” or hitmen, who allegedly carried out hundreds of acts of violence, including murders, kidnappings, tortures and violent collections of drug debts, at the direction of the organization.
Following the January 2008 arrest of Alfredo Beltran Leyva by Mexican law enforcement authorities, the Beltran Leyva Organization severed its relationship with the Sinaloa Cartel, which was blamed for the arrest. This resultedin a violent war between the two drug cartels, and the murder of thousands of citizens in Mexico, including numerous law enforcement officers and officials.
On May 30, 2008, the President added the Beltran Leyva Organization to the Department of Treasury’s Office of Foreign Asset Control’s Specially Designated Nationals and Blocked Persons list pursuant to the Foreign Narcotics Kingpin Designation Act. On Aug. 20, 2009, the President specifically designated Beltran Leyva as a specially designated drug trafficker under the same Kingpin Act.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
The investigation is led by the FBI’s El Paso Office, in partnership with the DEA’s New York Field Division and HSI’s New York Office, as part of the Organized Crime Drug Enforcement Task Force. This case is being prosecuted by the Criminal Division’s Narcotic and Dangerous Drugs Section, with the assistance of the Criminal Division’s Office of International Affairs. The Justice Department thanks the government of Mexico for their assistance in this extradition.
Two Executives of Japanese Automotive Parts Manufacturers Indicted for Their Role in a Conspiracy to Fix Prices and Rig BidsRead the Press Release
A Kentucky federal grand jury returned a one-count indictment against two executives of Japanese automotive parts manufacturers for their participation in a conspiracy to fix prices and rig bids of bearings, the Department of Justice announced today.
The indictment, filed late yesterday in the U.S. District Court for the Eastern District of Kentucky in Covington, charges Hiroya Hirose an executive at NSK Ltd., and Masakazu Iwami an executive at Jtekt Corporation, with conspiring to fix the prices of bearings sold to Toyota Motor Corporation and Toyota Motor Engineering & Manufacturing North America Inc. (collectively, “Toyota”) in the United States and elsewhere, beginning at least as early as 2001 and continuing until as late as July 2011.
“The division will continue to pursue executives who violate the antitrust laws,” said Assistant Attorney General Bill Baer for the Antitrust Division. “American consumers deserve the benefit of free competition between auto parts suppliers.”
Hirose was a group sales manager in NSK’s Mid-Japan Automotive Department Office from at least as early as January 2006 until at least 2009, and a general manager in that office from 2009 until at least 2011. Iwami was a Section Manager, then General Manager, in Jtekt’s Toyota Branch office from at least as early as 1999 until at least October 2007, and then Vice Branch Manager in that office from October 2007 until at least June 2009.
The indictment alleges, among other things, that Hirose, Iwami, and co-conspirators participated in, and directed, authorized, or consented to the participation of subordinate employees in, meetings, conversations, and communications to discuss the bids and price quotations to be submitted to Toyota in the United States and elsewhere. Hirose, Iwami, and their co-conspirators submitted bids and price quotations in accordance with the agreements reached at these meetings.
NSK is a corporation organized and existing under the laws of Japan with its principal place of business in Tokyo, Japan. On Oct. 28, 2013, NSK pleaded guilty and agreed to pay a $68.2 million criminal fine for its role in the conspiracy. Jtekt is a corporation organized and existing under the laws of Japan with its registered headquarters in Osaka, Japan. On Dec. 3, 2013, Jtekt pleaded guilty and agreed to pay a $103.27 million criminal fine for its role in the conspiracy. Both NSK and Jtekt were engaged in the business of manufacturing and selling bearings to Toyota in the United States and elsewhere for installation in vehicles manufactured and sold in the United States and elsewhere.
Including Hirose and Iwami, 46 individuals have been charged in the government’s ongoing investigation into market allocation, price fixing, and bid rigging in the auto parts industry. Twenty-six of these individuals have pleaded guilty and have been sentenced to serve prison terms ranging from a year and one day to two years. Additionally, 31 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of now more than $2.4 billion in fines.
Hirose and Iwami are 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.
Yesterday’s indictment is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by four 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 Cincinnati Field Office. 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 Cincinnati Field Office at 513-421-4310.
Hirose & Iwami Indictment
Two Arrested in Illegal Kickbacks Case Involving Clinical Laboratory TestingRead the Press Release
A Florida man who is already facing health care fraud and money laundering charges in federal court in Tampa was arrested again today, along with the owner of a health care marketing company, in an alleged illegal cash-for-patients kickback scheme involving clinical laboratory testing.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney A. Lee Bentley III of the Middle District of Florida, Special Agent in Charge Paul Wysopal of the FBI’s Tampa 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.
David Brock Lovelace, 44, of Land O’ Lakes, Florida, and Dale B. DuBois, 61, of Melbourne, Florida, were arrested on a criminal complaint charging them with conspiracy to defraud the Medicare program and pay illegal kickbacks. Lovelace was charged by indictment in May 2014 with health care fraud and money laundering offenses in a case pending in the Middle District of Florida. After being arrested in that case, Lovelace was released on bond and ordered not to commit crimes or engage in any occupation relating to the health care services industry.
According to allegations in the criminal complaint filed in the new case, Lovelace and DuBois, a managing member of Healthcare Marketing Florida LLC, paid cash kickbacks to purported medical clinics in Miami-Dade County, Florida, in exchange for DNA test samples and patient information. Lovelace and DuBois then allegedly provided the test samples and patient information to laboratory companies for their submission of reimbursement claims to Medicare for clinical diagnostic laboratory services. Over the past 14 months, Lovelace has allegedly received more than $675,000 from one of the laboratory companies for the samples.
The charges contained in a complaint or indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
This case is being investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Middle District of Florida. This case is being prosecuted by Senior Trial Attorney Christopher J. Hunter of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Owner of 'Polygraph.com' Indicted for Allegedly Training Customers to Lie During Federally Administered Polygraph ExaminationsRead the Press Release
A former Oklahoma City law enforcement officer and owner of “Polygraph.com” has been indicted on obstruction of justice and mail fraud charges for allegedly training customers to lie and conceal crimes during polygraph examinations.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting Assistant Commissioner Mark Morgan of U.S. Customs and Border Protection’s Office of Internal Affairs and Special Agent in Charge James E. Finch of the FBI’s Oklahoma City Field Office made the announcement.
Douglas Williams, 69, of Norman, Oklahoma, was charged in a five-count indictment in the Western District of Oklahoma with mail fraud and obstruction. According to allegations in the indictment, Williams, the owner and operator of “Polygraph.com,” marketed his training services to people appearing for polygraph examinations before federal law enforcement agencies, federal intelligence agencies, and state and local law enforcement agencies, as well as people required to take polygraph examinations under the terms of their parole or probation.
The indictment further alleges that Williams trained an individual posing as a federal law enforcement officer to lie and conceal involvement in criminal activity from an internal agency investigation. Williams is also alleged to have trained a second individual posing as an applicant seeking federal employment to lie and conceal crimes in a pre-employment polygraph examination. Williams, who was paid for both training sessions, is alleged to have instructed the individuals to deny having received his polygraph training.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
The investigation is being investigated by U.S. Custom and Border Protection’s Office of Internal Affairs and the FBI’s Oklahoma City Field Office. The case is being prosecuted by Trial Attorneys Mark Angehr and Brian K. Kidd of the Criminal Division’s Public Integrity Section.
Michigan Physician Pleads Guilty for Role in $19 Million Medicare Fraud SchemeRead the Press Release
A Detroit-area physician, who orchestrated the submission of fraudulent claims for physician home visits and directed fraudulent referrals for home health care by his employee physicians as part of a $19 million home health care fraud scheme, pleaded guilty today for his role in the conspiracy.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.
Dr. Rajesh Doshi, 59, of Bloomfield Hills, Michigan, pleaded guilty before Senior U.S. District Judge Arthur J. Tarnow of the Eastern District of Michigan to conspiracy to commit health care fraud and one count of health care fraud. The sentencing hearing is set for March 3, 2015.
According to his plea agreement, Dr. Doshi admitted that between October 2005 and September 2012, he conspired with others to commit health care fraud by referring Medicare beneficiaries for home health care that was not medically necessary, and then submitting false and fraudulent claims for the purported care to Medicare for reimbursement. Dr. Doshi admitted that he submitted these false claims through Home Physicians Services (HPS), a medical practice he owned in Southfield, Michigan. Although Dr. Doshi owned HPS, he hid his ownership because of prior state court convictions.
Specifically, Dr. Doshi admitted that he paid kickbacks to recruiters to obtain Medicare beneficiaries for HPS and home health agencies owned by co-conspirators. Dr. Doshi and his co-conspirators then falsified medical and billing records for purported physician home visits, sometimes adding diagnoses to make it appear that the beneficiaries qualified for and required home care when they did not, and other times, “upcoding” physician home visits to higher levels of complexity than actually performed.
Dr. Doshi also admitted that he solicited and received kickbacks from home health agency owners in exchange for the referral of beneficiaries to those agencies, regardless of whether the beneficiaries qualified for or needed home health care. He then directed HPS physicians to falsify medical documentation and certify Medicare beneficiaries as homebound even though the HPS physicians had never met the beneficiaries or the beneficiaries were not actually homebound.
Between October 2005 and September 2012, Dr. Doshi and his co-conspirators caused Medicare to pay more than $19 million based on false claims. Three other physicians and one physician assistant have already pleaded guilty for their involvement in the health care fraud conspiracy related to the scheme at HPS.
This 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 Eastern District of Michigan. This case is being prosecuted by Trial Attorney Niall M. O’Donnell 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.
Justice Department Files Sexual Harassment Lawsuit in West Virginia Against Owner and Property Managers of Perkins Parke ApartmentsRead the Press Release
The Justice Department announced it has filed a lawsuit against Encore Management Co. Inc., Perkins Parke Limited Partnership and three former employees of Perkins Parke Apartments in Cross Lanes, West Virginia, alleging that female tenants have been subjected to sexual harassment and retaliation in violation of the Fair Housing Act.
The lawsuit, filed today in federal court for the Southern District of West Virginia, alleges that Perkins Parke’s district manager, Anthony James, and maintenance worker, Christopher T. James, have sexually harassed female tenants at the complex, and that Perkins Parke’s site manager, Kisha James, failed to take appropriate steps when residents complained about the harassment. The complaint alleges that such harassment has included entering the residences of female tenants without permission or notice; conditioning housing or housing benefits on female tenants’ agreement to engage in sexual acts; coercing female tenants to engage in unwelcome sexual acts; making unwelcome sexual comments and unwelcome sexual advances to female tenants; subjecting female tenants to unwanted sexual touching and other unwanted sexual acts; and taking adverse actions against female residents when they refused the sexual advances or reported the unwelcome conduct.
“No woman should have to live in fear of sexual harassment in her home,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “The Fair Housing Act protects tenants from sexual harassment and retaliation by their landlords, and the Justice Department enforces the Fair Housing Act to vindicate these important rights.”
“Safe and secure housing is one of humanity’s most basic needs,” said U.S. Attorney R. Booth Goodwin for the Southern District of West Virginia. “Threats to that safety and security, such as those alleged in the complaint, and making housing available contingent upon the performance of unwelcome acts is both a violation of federal law and human decency and will not be tolerated.“
“These housing providers preyed on poor women by sexually harassing them and retaliating against them,” said Gustavo Velasquez, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “HUD is committed to working with the Justice Department to stop this unacceptable and illegal behavior.” The suit seeks monetary damages to compensate the victims, civil penalties, and a court order barring future discrimination.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at http://www.justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination at Perkins Parke Apartments or elsewhere can contact the Housing Discrimination Tip Line at 1-800-896-7743, e-mail the Justice Department at [email protected] or contact HUD at 1-800-669-9777.
The complaint is an allegation of unlawful conduct. The allegations must be proven in federal court.
Cincinnati Man Pleads Guilty to Sex Trafficking by Force, Fraud and CoercionRead the Press Release
A Cincinnati resident, Christopher Hisle, 45, pleaded guilty today to one count of commercial sex trafficking by force, fraud or coercion, two counts of enticing a person to travel in interstate commerce for the purpose of prostitution and one count of interstate transportation for the purpose of prostitution. Police arrested Hisle on April 8, 2014, in Louisville, Kentucky, after discovering Hisle drove a young woman from Cincinnati to Louisville to engage in prostitution at a Red Roof Inn. A subsequent FBI investigation revealed Hisle’s involvement in forcing and compelling multiple young women to engage in commercial sex.
According to the plea agreement, Hisle physically assaulted several of the victims, including striking one of the victims in the face when she threatened to run away. Hisle locked the victims in his house in Cincinnati by boarding and locking all the doors and windows, including locking the women in the house when he left. On one occasion, a young woman escaped, but Hisle found her and brought her back.
“This defendant preyed on vulnerable young victims and cruelly exploited them for his profit,” said Acting Assistant Attorney General Vanita Gupta for the Civil Rights Division. “Our Constitution guarantees freedom from involuntary servitude and slavery to all members of our society, and we will continue to enforce our human trafficking laws to restore the rights, freedom and dignity to victims of modern-day slavery.”
“My office is committed to seeking justice for victims of human trafficking,” said U.S. Attorney David J. Hale for the Western District of Kentucky. “Tragically, these crimes so often pass without detection because victims live in fear from physical abuse, threats and other forms of coercion. My office has worked to improve detection and prosecution by sponsoring training for our federal and local law enforcement partners.”
“Sex Trafficking is a crime that victimizes people in a highly personal manner,” said Special Agent in Charge Howard S. Marshall of the FBI’s Louisville Office. “Victims often feel as if they have no options and no hope. Detecting sex trafficking is essential to stopping it. The FBI works with state and local partners to uncover this heinous crime. If you believe you are a victim of sex trafficking or may have information about a particular trafficking situation, please contact the FBI.”
Hisle faces a mandatory minimum sentence of 15 years in prison. Senior District Court Judge John G. Heyburn II set sentencing for Feb. 9, 2015. As part of his plea agreement, Hisle will pay restitution to 12 women identified as victims of Hisle’s human trafficking crimes.
This case was investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Amanda E. Gregory of the U.S. Attorney’s Office for the Western District of Kentucky and Trial Attorney William Nolan of the Civil Rights Division’s Human Trafficking Prosecution Unit.
Chief Engineer of Car-Carrier Vessel Pleads Guilty to Obstruction of Justice in Marine Oil Pollution CaseRead the Press Release
The chief engineer of the cargo vessel M/V Selene Leader pleaded guilty today in federal court in Baltimore, Maryland, to obstruction of justice and violating the Act to Prevent Pollution from Ships (APPS), announced Acting Assistant Attorney General Sam Hirsch and U.S. Attorney Rod J. Rosenstein of the District of Maryland.
Noly Torato Vidad was the chief engineer of the vessel, which was operated by Hachiuma Steamship Co LTD, a Japanese company, between August 2013 and the end of January 2014. The M/V Selene Leader According to the plea agreement, in January 2014, engine room crew members of the M/V Selene Leader under the supervision of the defendant transferred oily wastes between oil tanks on board the ship using rubber hoses and then illegally bypassed pollution control equipment and discharged the oily wastes overboard into the ocean. Before such waste can be discharged into the sea, the law requires that it must first pass through an oil water separator, and the operation must be recorded in the vessel’s oil record book for inspection by the United States Coast Guard.
When the Coast Guard boarded the vessel in Baltimore on Jan. 31, 2014, Mr. Vidad tried to obstruct the Coast Guard’s investigation and hide the illegal discharges of oil by falsifying the oil record book, destroying documents, lying to Coast Guard investigators and instructing subordinate crew members to lie to the Coast Guard.
Sentencing in this case is scheduled for Feb. 20, 2015.
This case was investigated by the U.S. Coast Guard Investigative Service and is being prosecuted by Assistant United States Attorney P. Michael Cunningham of the District of Maryland and Senior Trial Attorney David P. Kehoe of the Justice Department’s Environmental Crimes Section.
Vascular Solutions Inc. and its CEO Charged with Selling Unapproved Medical Devices and Conspiring to Defraud the United StatesRead the Press Release
UPDATE
The defendants in this case, Howard Root and Vascular Solutions Inc., were acquitted of the charges alleged in the indictment described in the press release below.
An indictment was filed today charging Vascular Solutions Inc. (VSI) and its chief executive officer, Howard Root, with selling medical devices without U.S. Food and Drug Administration (FDA) approval and conspiring to defraud the United States by concealing the illegal sales activity. The announcement was made today by Acting Assistant Attorney General Joyce R. Branda for the U.S. Department of Justice’s Civil Division, U.S. Attorney Robert Pitman for the Western District of Texas and Special Agent in Charge Antoinette V. Henry of the U.S. Food and Drug Administration (FDA)’s Office of Criminal Investigations, Metro Washington Field Office. The devices at issue are from VSI's “Vari-Lase” product line, a system designed to treat varicose veins by burning or “ablating” them with laser energy.
Root and VSI are each charged with one count of conspiracy and eight counts of introducing adulterated and misbranded medical devices into interstate commerce. The case is pending in the U.S. District Court for the Western District of Texas.
“These charges involve a deceptive sales campaign led by the CEO of a public company,” said Acting Assistant Attorney General Branda. “The indictment charges that the sales campaign persisted in the face of FDA warnings, a whistleblower’s complaint to the CEO and a failed clinical trial showing that the device was less safe and less effective than a product that had already been approved. We will take action to hold corporations and their leaders responsible when they violate laws intended to protect public health.”
According to the indictment, the Vari-Lase products were cleared by the FDA only for the treatment of superficial veins, but Root and VSI sold them for the ablation, or removal, of “perforator” veins, which connect the superficial vein system to the deep vein system. Because perforator veins come into direct contact with deep veins, treating them with lasers was a more difficult and risky procedure.
Root is charged with leading the illegal sales campaign, which lasted from 2007 until 2014, and conspiring with others to hide it from the FDA. The indictment alleges that Root authorized the campaign after VSI failed to obtain FDA authorization to sell the Vari-Lase system for ablation of perforator veins. The sales campaign is alleged to have ignored FDA concerns about the safety and effectiveness of the procedure and specific warnings from the FDA not to sell Vari-Lase products for treatment of perforator veins. The indictment alleges that, with Root’s approval, the sales continued even after the company sponsored an unsuccessful clinical trial that showed that the Vari-Lase system was less safe and effective than a competing device that the FDA had cleared for perforator vein treatment. According to the indictment, the sales continued even after a whistleblower complained to Root in 2009 and the government told the company about its investigation in 2011.
The indictment also charges VSI and Root with deceiving the FDA. In late 2007, Root decided to launch a special “Short Kit” designed for perforator vein treatment, despite the lack of FDA marketing authorization, by claiming that the product was intended for “short vein segments” or “short veins.” At the same time, the government alleged that internal company documents approved by Root taught the sales force that these terms included perforator veins and urged salespeople to suggest to health care providers that Vari-Lase devices could be used to treat perforator veins. After learning about the government’s investigation, members of the sales force began using the term “short vein segments” in field trip reports to disguise that they were still selling Vari-Lase devices for perforator vein treatment, according to the indictment. Two other members of the sales force are alleged to have misled investigators; in addition, the indictment charges that one member falsely denied his conduct and another tried to scapegoat a low-level salesman.
In July 2014, VSI agreed to pay $520,000 to resolve allegations that it caused false claims to be submitted to federal health programs by marketing the Vari-Lase devices for treating perforator veins. In that civil action, the government alleged that VSI knowingly caused physicians and other purchasers of the Short Kit to submit false claims to federal health care programs for uses of the Short Kit that were not reimbursable.
“FDA is committed to protecting the public health and the integrity of the regulatory system,” said Special Agent in Charge Henry.
The case is being prosecuted by Trial Attorney Timothy Finley of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Bud Paulissen of the Western District of Texas. The case was investigated by the FDA’s Office of Criminal Investigations and the U.S. Department of Health and Human Services’ Office of the Inspector General.
An indictment is merely an allegation, and every defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Two Sentenced for Roles in Bribery and Money Laundering Scheme Involving Former Ohio Deputy TreasurerRead the Press Release
A former lobbyist and a former securities broker have been sentenced for their roles in a bribery and money laundering scheme involving the Ohio Treasurer’s Office.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, First Assistant U.S. Attorney Mark T. D’Alessandro of the Southern District of Ohio, Special Agent in Charge Kevin R. Cornelius of the FBI’s Cincinnati Division and Ohio Attorney General Mike DeWine made the announcement after sentencing by U.S. District Judge Michael H. Watson of the Southern District of Ohio.
Douglas E. Hampton, 40, of Uniontown, Ohio, was sentenced today to serve 45 months in prison and ordered to forfeit $2,202,259. Mohammed Noure Alo, 35, of Columbus, Ohio, was sentenced yesterday to serve 48 months in prison and ordered to forfeit $123,622. Last year, Alo pleaded guilty to aiding and abetting honest services wire fraud, and Hampton pleaded guilty to conspiracy to commit honest services wire fraud, federal program bribery and money laundering. The former Deputy Treasurer for Ohio, Amer Ahmad, fled after pleading guilty to federal program bribery and conspiracy to commit honest services wire fraud, federal program bribery, and money laundering, and is currently in Pakistani custody pending an extradition request from the United States government.
Joseph Chiavaroli, 34, of Chicago, pleaded guilty to money laundering and is scheduled for sentencing on Dec. 1, 2014.
According to the defendants’ admissions in connection with their guilty pleas, from approximately January 2009 through January 2011, Ahmad, Alo, Hampton and Chiavaroli conspired to use Ahmad’s position as deputy treasurer to direct official state of Ohio business to Hampton in return for bribes from Hampton. Ahmad and Chiavaroli concealed the payments received from Hampton by passing them through the accounts of their landscaping business. Hampton also funneled more than $123,000 to Alo, an attorney and lobbyist who was Ahmad’s close personal friend and business associate. During the course of the scheme, Hampton paid in excess of $500,000 in bribes, and received, in exchange, approximately $3.2 million in commissions for 360 securities trades on behalf of the Ohio Treasurer’s Office.
The case was investigated by the FBI’s Central Ohio Public Corruption Task Force, which includes special agents from the FBI and the Ohio Bureau of Criminal Investigation. The case is being prosecuted by Trial Attorneys Eric L. Gibson and Menaka Kalaskar of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Douglas W. Squires of the Southern District of Ohio.
Seven Sentenced for Involvement in Aryan Brotherhood of Texas Racketeering ConspiracyRead the Press Release
Seven Aryan Brotherhood of Texas (ABT) gang members from Houston and Dallas were sentenced to prison this week for their roles in the violent ABT enterprise, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Today, Stephen Tobin Mullen, 45, of Dallas, and James Erik Sharron, 40, of Houston, were sentenced to respective terms of 156 months and 72 months in federal prison by U.S. District Judge Sim Lake in the Southern District of Texas. Yesterday, Larry Max Bryan, 52, of Houston, and Terry Ross Blake, 56, of Corpus Christi, both high-ranking leaders of the ABT, were sentenced to 300 months and 180 months in federal prison, respectively. Jamie Grant Loveall, 38, of Houston; Kelly Ray Elley, 37, of Houston; and Ronald Lee Prince, 44, of Dallas, were also sentenced to respective terms of 390 months, 270 months and 120 months in federal prison.
According to information presented in court, the seven defendants were admitted members of ABT, a powerful race-based, statewide organization that operates inside and outside of state and federal prisons throughout Texas and the United States. Along with other ABT gang members and associates, they agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang.
The ABT was established in the early 1980s within the Texas prison system. The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s. Previously, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism, but over time, the ABT has expanded its criminal enterprise to include illegal activities for profit, according to court records.
In order to be considered for ABT membership, a person must be sponsored by another gang member. Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.
Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, arson, assault, robbery and threats against those who violated the rules or posed a threat to the enterprise. ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things. Members were required to follow the orders of higher-ranking members, often referred to as “direct orders.”
The defendants sentenced this week are seven of 36 defendants convicted of conducting racketeering activity through the ABT criminal enterprise, among other charges.
This Organized Crime Drug Enforcement Task Force case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement, Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.
The case is being prosecuted by David Karpel of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Ed Gallagher and Tim Braley of the Southern District of Texas.
Owner of Miami Home Health Company Pleads Guilty for Role in $30 Million Health Care Fraud SchemeRead the Press Release
An owner of a Miami home health care company pleaded guilty today for his role in a $30 million home health Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement
Ramon Regueira, 66, of Miami, pleaded guilty before U.S. District Judge Cecilia M. Altonaga in the Southern District of Florida to one count of conspiracy to commit health care fraud. Sentencing is scheduled for Jan. 21, 2015.
According to his plea agreement, Regueira was an owner of Nation’s Best Care Home Health Corp. (Nation’s Best), a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries. Regueira admitted that he and his co-conspirators operated Nation’s Best for the purpose of billing the Medicare program for, among other things, expensive physical therapy and home health care services that were not medically necessary or were not provided.
Specifically, Regueira admitted that he and his co-conspirators paid kickbacks and bribes to patient recruiters who provided patients to Nation’s Best, as well as prescriptions, plans of care (POCs) and certifications for medically unnecessary therapy and home health services. Regueira and his co-conspirators then used these prescriptions, POCs and medical certifications to fraudulently bill the Medicare program for unnecessary home health care services.
From January 2007 through November 2012, Nation’s Best submitted approximately $35 million in claims for home health services that were not medically necessary or not provided, and Medicare paid approximately $21 million for these fraudulent claims.
The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Assistant Chief Joseph S. Beemsterboer 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.
Member of Organized Cybercrime Ring Responsible for $50 Million in Online Identity Theft Sentenced to 115 Months in PrisonRead the Press Release
A Georgia man who purchased stolen credit card data and other personal information through the identity theft and credit card fraud ring known as “Carder.su” was sentenced today to serve 115 months in federal prison. He was further ordered to pay $50.8 million in restitution.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Daniel G. Bogden of the District of Nevada and Assistant Special Agent in Charge Michael Harris of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (ICE HSI) in Las Vegas made the announcement. U.S. District Judge Andrew P. Gordon of the District of Nevada imposed the sentence.
“Cyber thieves created a real criminal organization through the virtual world of the Internet, stealing credit card data and relying on technology, perceived anonymity, and international borders to evade law enforcement,” said Assistant Attorney General Caldwell. “Cameron Harrison made a living by using that stolen financial information.. Applying time-honored techniques from mob and gang prosecutions to this new generation of cybercriminals, we were able to infiltrate and bring down the Carder.su ring.”
“The financial toll exacted by identity theft and credit card fraud can be crippling to victims both financially and emotionally,” said U.S. Attorney Bogden. “These are far from victimless crimes and the members of this organization were responsible for the theft of over $50 million. We are working diligently with our law enforcement partners to ensure that the people who commit these high-tech crimes are put out of business.”
“This significant sentence is entirely fitting given that this defendant’s actions and those of the larger criminal organization harmed countless innocent Americans and seriously compromised our financial system,” said Homeland Security Investigations Executive Associate Director Peter T. Edge. “Criminals like this defendant who believe they can elude detection by hiding behind their computer screens here and overseas are discovering that cyberspace affords no refuge from American justice. HSI will continue to work closely with its law enforcement partners to track down these violators and see that they face the full weight of the law.”
Cameron Harrison, aka “Kilobit,” 28, of Augusta, Georgia, admitted at his guilty plea hearing that he became associated with the Carder.su organization in June 2008. According to Harrison’s admissions, Carder.su was an Internet-based, international criminal enterprise whose members trafficked in compromised credit card account data and counterfeit identifications and committed money laundering, narcotics trafficking and computer crimes. Harrison admitted that the group tried to protect the anonymity and the security of the enterprise from both rival organizations and law enforcement. For example, members communicated through various secure and encypted forums, such as chatrooms, private messaging systems, encrypted email, proxies and encypted virtual private networks. Gaining membership in the group required the recommendation of two current members in good standing.
Harrison admitted that he purchased compromised credit card account data and other personal identifying information from fellow Carder.su members. He further admitted to possessing over 260 compromised credit and debit card numbers, which were recovered from his computer and email accounts following his arrest.
Harrison was identified when he purchased a counterfeit Georgia driver’s license from an undercover special agent through the Carder.su network. During interactions with the undercover special agent, Harrison admitted to having been a vendor of counterfeit identifications in the defunct cyberfraud organization “ShadowCrew.”
Fifty-five individuals were charged in four separate indictments in Operation Open Market, which targeted the Carder.su organization. To date, 26 individuals have been convicted and the rest are either fugitives or are pending trial. Harrison pleaded guilty in April 2014 to participating in a racketeer influenced corrupt organization, conspiracy to engage in a racketeer influenced and corrupt organization, and trafficking in and production of false identification documents.
The cases were investigated by HSI and the U.S. Secret Service, and are being prosecuted by Trial Attorney Jonathan Ophardt of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Kimberly M. Frayn and Andrew W. Duncan of the District of Nevada.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.gov/.
Five Florida Residents Plead Guilty for Roles in $6 Million Miami Home Health Care Fraud SchemeRead the Press Release
Five South Florida residents pleaded guilty this week in connection with a long-running $6.2 million Medicare fraud scheme involving Professional Medical Home Health LLC (Professional Home Health), a Miami home health care agency that purported to provide home health and therapy services. Two of the defendants also pleaded guilty in connection with their conduct in similar schemes at other Miami home health care agencies.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Dennis Hernandez, 32, of Miami, pleaded guilty to one count of conspiracy to commit health care fraud, and Juan Valdes, 37, of Palm Springs, Florida, pleaded guilty to one count of conspiracy to defraud the United States and receive health care kickbacks before U.S. Magistrate Judge Chris M. McAliley of the Southern District of Florida on Nov. 10. 2014. Jose Alvarez, 48, and Joel San Pedro, 44, both of Miami, and Alina Hernandez, 38, of West Palm Beach, Florida, each pleaded guilty to one count of conspiracy to commit health care fraud on Nov. 13, 2014 before Judge McAliley. Sentencing hearings are set for Jan. 29, 2015.
According to admissions in their plea agreements, Dennis Hernandez, San Pedro and Alvarez held positions of influence at Professional Home Health, including those of owner/operator and manager/supervisor. Through Professional Home Health, they billed the Medicare program for expensive physical therapy and home health services that were not medically necessary or were not provided. The three defendants admitted that they and their co-conspirators coordinated the submission of fraudulent claims at Professional Home Health, and falsified patient documentation to make it appear that Medicare beneficiaries qualified for and received home health services that were, in fact, not medically necessary or not provided.
Additionally, each of the five defendants admitted to being patient recruiters for Professional Home Health. In this role, they solicited and received kickbacks and bribes from other co-conspirators at Professional Home Health in exchange for recruiting beneficiaries who neither needed, nor, in some cases, received services.
Dennis Hernandez and Alvarez also admitted to participating in similar criminal conduct at additional Miami-area home health agencies.
From December 2008 through February 2014, Medicare paid Professional Home Health more than $6.2 million for these fraudulent home health claims.
Earlier this year, two other individuals pleaded guilty and were sentenced in connection with the same scheme. Annarella Garcia, an owner of Professional Home Health, was sentenced to serve 70 months in prison. Annilet Dominguez, an administrator of Professional Home Health, was sentenced to serve 68 months in prison. Both were also ordered to pay $6,257,142 million in restitution.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. This case is being prosecuted by Trial Attorney Anne P. McNamara of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 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.
District Court Enters Permanent Injunction Against California Dietary Supplement Company and Chief Executive Officer to Stop Distribution of Adulterated ProductsRead the Press Release
The U.S. District Court for the Central District of California entered a consent decree of permanent injunction against Scilabs Nutraceuticals Inc. of Irvine, California, and its board chairman and chief executive officer (CEO), Paul P. Edalat, to prevent the distribution of adulterated dietary supplements, the Department of Justice announced today.
SciLabs Nutraceuticals Inc. is a contract manufacturer of dietary supplements distributed under the brand name All Pro Science, including Complete Immune + capsules and various flavored powders called Complete, Recovery and Precharge. The department filed a complaint in the U.S. District Court for the Central District of California at the request of the U.S. Food and Drug Administration (FDA), alleging that the company’s dietary supplements are manufactured under conditions that are inadequate to ensure the quality of its products.
In conjunction with the filing of the complaint, the defendants agreed to settle the litigation and be bound by a consent decree of permanent injunction that prohibits them from committing violations of the Federal Food, Drug, and Cosmetic Act. The consent decree requires the dietary supplement manufacturer to cease all operations and requires that, in order for defendants to resume manufacturing dietary supplements, the FDA first must determine that Scilabs’ manufacturing practices have come into compliance with the law.
“The failure to comply with current good manufacturing practice requirements by a maker of dietary supplements can pose a risk to the public health,” said Acting Assistant Attorney General Joyce R. Branda of the Justice Department’s Civil Division. “The Department of Justice will continue to bring enforcement actions against those who do not follow the necessary procedures to comply with the safety laws for dietary supplements.”
According to the complaint, FDA inspections performed in 2012, 2013 and 2014 revealed that the company’s dietary supplements are adulterated within the meaning of the Food, Drug, and Cosmetic Act. The complaint alleges, for example, that the company failed to conduct at least one appropriate test or examination to verify the identity of every dietary ingredient before using them. The complaint also alleges that the company failed to establish product specifications for the identity, purity, strength and composition of finished batches of dietary supplements. In addition, as alleged in the complaint, defendants failed to document equipment use, maintenance, cleaning and sanitization in individual equipment logs as required by law.
The government is represented by Trial Attorney Heide L. Herrmann of the Civil Division’s Consumer Protection Branch, with the assistance of Senior Counsel Claudia Zuckerman of the Food and Drug Division of the U.S. Department of Health and Human Services’ Office of General Counsel.
Alleged Leader of the Lorenzana Drug Trafficking Organization Extradited to the United StatesRead the Press Release
An alleged leader of an international drug trafficking organization based in Guatemala was extradited to the United States today to face international narcotics trafficking charges in the District of Columbia, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division.
Waldemar Lorenzana-Cordon, 49, was arrested in Guatemala on Sept. 13, 2013, after being indicted for conspiracy to import cocaine into the United States, and has been detained since that time pending extradition. He arrived in the United States yesterday and was arraigned today before U.S. Magistrate Judge Alan Kay of the District of Columbia.
According to allegations contained in the indictment, Lorenzana-Cordon is a leader of an international drug trafficking organization that includes his father and several additional family members. Between 1996 and 2012, the organization allegedly received and stored multi-ton quantities of cocaine from Colombia for later importation into Mexico and the United States.
These cocaine shipments, worth millions of dollars, were allegedly transported to El Salvador on “go-fast” boats, and then smuggled into Guatemala by land and air. The cocaine was then inventoried and stored for later export to Mexico and eventually the United States.
On April 27, 2010, the Department of Treasury’s Office of Foreign Asset Control designated Lorenzana-Cordon as a Specially Designated Narcotics Trafficker pursuant to the Foreign Narcotics Kingpin Designation Act due to his significant role in international narcotics trafficking and his ties to the Sinaloa Cartel.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.
Lorenzana-Cordon’s father, Waldemar Lorenzana-Lima, was charged in the same indictment and pleaded guilty on Aug. 18, 2014, to conspiracy to import over 450 kilograms of cocaine into the United States.
The investigation was led by the DEA’s 959/Bilateral Investigations Unit and Guatemala City Country Office, and was part of the Organized Crime Drug Enforcement Task Force. The case is being prosecuted by the Criminal Division’s Narcotic and Dangerous Drug Section. The Criminal Division’s Office of International Affairs provided significant assistance in the extradition. The department appreciates the assistance provided by the government of Guatemala.
Aisin Seiki Co. Ltd. Agrees to Plead Guilty to Customer Allocation on Automobile Parts Installed in U.S. CarsRead the Press Release
Aisin Seiki Co. Ltd., an automotive parts manufacturer based in Kariya, Japan, has agreed to plead guilty and to pay a $35.8 million criminal fine for its role in a conspiracy to allocate customers of variable valve timing (VVT) devices sold to automobile manufacturers in the United States and elsewhere, the Department of Justice announced today.
According to a one-count felony charge filed today in U.S. District Court for the Southern District of Indiana in Indianapolis, Aisin conspired to allocate customers of VVT devices sold to various automobile manufacturers, including General Motors Company, Nissan Motor Company Ltd., Volvo Car Corporation and BMW AG, in the United States and elsewhere. In addition to the criminal fine, Aisin has agreed to cooperate in the department’s ongoing investigation. The plea agreement is subject to court approval.
“Today’s charge continues the Antitrust Division’s ongoing campaign to hold automobile part suppliers accountable for their illegal collusive conduct,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division continues to vigorously prosecute companies and individuals that seek to maximize their profits through illegal, anticompetitive means.”
The department said that Aisin and its co-conspirators held meetings and conversations to discuss and agree upon the customers to whom each would sell VVT devices, and the bids and price quotations each would submit for VVT devices. Aisin’s involvement in the conspiracy lasted from as early as September 2000 until at least February 2010.
VVT devices are installed in automobile engines and regulate the timing, extent, and duration of the opening of the engine’s intake and exhaust valves, thereby increasing fuel economy and engine performance.
Including Aisin, 31 companies and 44 individuals have been charged in the Justice Department’s ongoing investigation into the automotive parts industry. All 31 companies have either pleaded guilty or have agreed to plead guilty and have agreed to pay more than $2.4 billion in criminal fines. Of the 44 individuals, 26 have been sentenced to serve time in U.S. prisons or have entered into plea agreements calling for significant prison sentences.
Aisin is charged with allocating customers in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charges were brought by the Antitrust Division’s Chicago Office and the FBI’s Indianapolis Field Office and Bloomington Resident Agency, with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1–888–647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Indianapolis Field Office at 317-595-4000, or the FBI’s Bloomington Resident Agency at 812-332-9275.
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Real Estate Developer Sentenced to 121 Months in Prison for $50 Million Dollar Securities Fraud SchemeRead the Press Release
A commercial real estate developer and mortgage broker was sentenced to serve 121 months in prison today for his role in a $50 million securities fraud scheme.
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 and Special Agent in Charge Douglas G. Price of the FBI’s Phoenix Division made the announcement. U.S. District Judge Cathy Ann Bencivengo of the Southern District of California imposed the sentence.
Bradley Holcom, 57, of Canby, Oregon, previously pleaded guilty to wire fraud in connection with the sale of approximately $50 million worth of promissory notes to more than 150 investors located throughout the United States.
Holcom admitted that he solicited investors to provide funds for the development of raw land for commercial and residential purposes through an investment program he called the Trust Deed Investment Program. Holcom falsely told investors who purchased notes through the program that they would receive a lien on a specific piece of property, and that the lien would be in first position. Holcom admitted, however, that he never provided investors with a lien, and instead conveyed a lesser interest that did not allow investors to directly foreclose on the property to protect their investment. In addition, he admitted that while promising investors that their purported lien would be in first position, he knew the properties were already encumbered by first position liens. Holcom also admitted that he sold the properties that were supposedly serving as the security for the promissory notes without informing investors. Despite his declining financial condition in 2008 and 2009, Holcom continued to solicit investors by misrepresenting the manner in which he would use their investments. As a result of the scheme, Holcom admitted that his conduct caused approximately $50 million in losses to investors.
In addition to the prison sentence, Holcom was ordered to pay restitution to his victims, with the final amount to be determined at a subsequent hearing.
This case was investigated by the FBI’s Phoenix Division – Yuma Resident Agency. The case is being prosecuted by Trial Attorney Henry P. Van Dyck and Deputy Chief Daniel Braun of the Criminal Division’s Fraud Section, and Assistant U.S. Attorney Mark Pletcher of the Southern District of California. The U.S. Securities and Exchange Commission also provided substantial assistance.
Readout of Attorney General Holder's Phone Call with Elected Officials from MissouriRead the Press Release
The following statement is attributable to Justice Department spokesman Brian Fallon:
“The Attorney General participated in a conference call this afternoon with federal, state and local elected officials from Missouri. The Attorney General thanked the elected officials for their work in planning the local response to the ongoing demonstrations in and around Ferguson. He said he was encouraged by reports he has received about progress being made in those planning efforts, including dialogue with coalition leaders about constructive engagement in the weeks ahead. The Attorney General stressed that going forward, it will be more important than ever that the law enforcement response to the demonstrations always seek to deescalate tensions and respect the rights of protestors. At the same time, the Attorney General said, it must be clearly communicated that any acts of violence by the demonstrators, or other attempts to provoke law enforcement, are unacceptable.
“With respect to the Department’s ongoing investigations into both the shooting of Michael Brown and the Ferguson police department generally, the Attorney General said he could not provide a specific timeline for concluding those inquiries. He did stress, however, that he had devoted significant resources to these investigations in order to ensure they are conducted in as thorough and expeditious a manner as possible.
“The Attorney General concluded by offering the Department’s continued assistance, and by urging continued and direct communication between elected officials, law enforcement, and community leaders in the days ahead to help deescalate tensions and assist with planning.”
Careall Companies Agree to Pay $25 Million to Settle False Claims Act AllegationsRead the Press Release
CareAll Management LLC and its affiliated entities (collectively “CareAll”) have agreed to pay $25 million, plus interest, to the United States and the state of Tennessee to resolve allegations that CareAll violated the False Claims Act by submitting false and upcoded home healthcare billings to the Medicare and Medicaid programs, the Department of Justice announced today. CareAll is based in Nashville, Tennessee, and is one of Tennessee’s largest home health providers.
“Home health agencies may only bill Medicare and Medicaid for care that is necessary and covered by the programs,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “This settlement is another example of the department’s commitment to ensuring that home health care dollars – which are so vital to ensure the care of homebound patients – are spent for their intended purposes.”
This settlement resolves allegations that between 2006 and 2013, CareAll overstated the severity of patients’ conditions to increase billings and billed for services that were not medically necessary and rendered to patients who were not homebound.
“This case demonstrates that enforcement of the False Claims Act is a priority of the U.S. Attorney’s Office for the Middle District of Tennessee,” said U.S. Attorney David Rivera for the Middle District of Tennessee. “The U.S. Attorney’s Office and our law enforcement partners are committed to protecting the public and vigorously pursuing all those who knowingly submit false claims affecting the Medicare and Medicaid programs.”
This is CareAll’s second settlement of alleged False Claims Act violations within the last two years. In 2012, CareAll paid nearly $9.38 million for allegedly submitting false cost reports to Medicare. As part of the settlement announced today, the companies agreed to be bound by the terms of an enhanced and extended corporate integrity agreement with the Department of Health and Human Services-Office of Inspector General (HHS-OIG) in an effort to avoid future fraud and compliance failures.
“Fraudulent home-based services are surging across the country,” said Special Agent in Charge Derrick L. Jackson of HHS-OIG in Atlanta. “We will continue to protect both Medicare and taxpayers, and ensure that funds are not siphoned off by companies more concerned with the bottom line than patient care.”
Under the False Claims Act, private citizens, known as relators, can bring suit on behalf of the United States and share in any recovery. The relator in this case, Toney Gonzales, will receive more than $3.9 million as his share of the 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 HHS. 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 $23.1 billion through False Claims Act cases, with more than $14.8 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement was the result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the Middle District of Tennessee, HHS-OIG and the Tennessee Bureau of Investigation.
The case is docketed as United States ex rel. Gonzales v. J.W. Carell Enterprises, Inc., et al., No. 12-0389 (M.D. Tenn.). The claims resolved by the settlement are allegations only; there has been no determination of liability.
Armenian Power Leader Sentenced to 32 Years in Prison for Racketeering, Extortion and FraudRead the Press Release
A leader of the Armenian Power gang, who was convicted at trial of 57 counts for his role in a racketeering conspiracy that included extortion, bank fraud, and a sophisticated credit and debit card skimming scheme, was sentenced today to 32 years in prison.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Acting U.S. Attorney Stephanie Yonekura of the Central District of California made the announcement.
Mher Darbinyan, aka “Hollywood Mike” and “Capone,” 39, of Valencia, California, was sentenced by U.S. District Judge R. Gary Klausner of the Central District of California.
According to the evidence presented at trial, Darbinyan was a leader of Armenian Power, a gang responsible for extortion, firearms offenses, fraud, and identity theft throughout the Los Angeles-area. Among other activities, Darbinyan operated a sophisticated bank fraud scheme that used middlemen and runners to deposit and cash hundreds of thousands of dollars in fraudulent checks drawn on the accounts of elderly bank customers and businesses. Separately, Darbinyan also organized and operated a sophisticated debit card skimming operation targeting customers of 99 Cents Only Stores across Southern California. This expansive scheme involved the installation and use of skimmers to steal thousands of customers’ debit card numbers and PIN codes.
Evidence at trial also showed that Darbinyan conspired to extort money from a member of the Armenian community by threatening violence against the victim and his family members. On two separate occasions, Darbinyan also possessed firearms and ammunition after having previously been convicted of felony grand theft for his role in a 2004 debit card fraud scheme.
Darbinyan was among 90 individuals charged in 2011 in two indictments targeting Armenian Power. To date, 87 individuals have been convicted. Two defendants are fugitives, and prosecutors dismissed charges against one defendant.
According to evidence presented during the Armenian Power trials, the Armenian Power street gang formed in the East Hollywood district of Los Angeles in the 1980s. The gang’s membership consisted primarily of individuals of Armenian descent, as well as of other countries within the former Soviet bloc. Armenian Power has been designated under California state law as a criminal street gang and is believed to have more than 250 documented members, as well as hundreds of associates. According to evidence presented during the Armenian Power trials, Armenian Power members and associates regularly carry out violent criminal acts, including murders, attempted murders, kidnappings, robberies, extortions, and witness intimidation to enrich its members and associates and preserve and enhance the power of the criminal enterprise.
The trial evidence also showed that Armenian Power leaders worked closely with powerful organized crime figures in Russia and Armenia, known as “thieves-in-law,” and members of the Mexican Mafia prison gang to commit criminal activities in the Los Angeles area and elsewhere.
These cases were investigated by the Eurasian Organized Crime Task Force, which is comprised of the FBI, Glendale Police Department, Los Angeles Police Department, Burbank Police Department, Los Angeles Sheriff’s Department, Internal Revenue Service – Criminal Investigation, U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, and U.S. Secret Service. The Huntington Beach Police Department and Beverly Hills Police Department provided assistance.
The cases are being prosecuted by Trial Attorney Andrew Creighton of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorney Elizabeth Yang of the Central District of California.