District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Defense Contractor Agrees to Pay $13.7 Million to Settle Allegations of OverbillingRead the Press Release
DRS Technical Services Inc. (DRS) has agreed to pay $13.7 million to settle allegations that it violated the False Claims Act by knowingly overbilling the government for work performed by DRS personnel who lacked the job qualifications required by the contract, the Justice Department announced today. DRS is located in Herndon, Virginia, and is a subsidiary of DRS Defense Solutions LLC.
DRS designs, integrates, operates and maintains satellite and wireless network solutions and telecommunication services and security systems for government and private sector customers. DRS C3 & Aviation Company, which is headquartered in Gaithersburg, Maryland, is an indirect subsidiary of DRS and provides services to government agencies, including aircraft maintenance, logistics and depot support, and engineering support. Between March 2003 and Dec. 31, 2012, DRS and its predecessors were awarded time and materials contracts for services and supplies to be provided to the Army’s Communication and Electronics Command (CECOM) in Iraq and Afghanistan, and to the Coast Guard for aircraft maintenance.
“Contractors that fail to provide qualified labor as promised are not entitled to bill the government as though they had,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The Department of Justice will pursue contractors that claim taxpayer funds to which they are not entitled.”
The alleged labor mischarging occurred on the Rapid Response or “R2” contract issued by the U.S. Army Communication and Electronics Command (CECOM) located at the Aberdeen Proving Ground in Maryland. The U.S. Army used the R2 contract to purchase a variety of goods and services needed to support U.S. forces in Iraq, Afghanistan and elsewhere on a quick turnaround basis. The settlement also resolves labor mischarging on a similar U.S. Coast Guard contract.
The government contends that from Jan. 1, 2003, to Dec. 31, 2012, DRS billed CECOM for work performed by individuals whose job qualifications did not meet all the qualifications prescribed by the contracts for the labor categories under which their efforts were billed, thereby falsely increasing the amount of money DRS claimed and CECOM paid. Similarly, from Dec. 19, 2009, to Dec. 18, 2011, the government contends that DRS charged the Coast Guard’s Aviation Logistics Center for work performed by individuals whose job qualifications did not meet the qualifications prescribed by the contract, again, thereby inflating the cost of the services provided.
“Companies that submit false bills to the government must be held accountable,” said U.S. Attorney Rod J. Rosenstein for the District of Maryland.
“This settlement is yet another example of the tenacity and hard work of our Army CID agents,” said Director Frank Robey of the U.S. Army Criminal Investigation Command's Major Procurement Fraud Unit (MPFU). “It is a testament to MPFU's continued resolve to hold companies accountable for the work they do for the U.S. government.”
The settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the District of Maryland, the Civil Division, the Defense Contract Audit Agency, the Army’s Criminal Investigative Command’s MPFU and the Department of Defense Office of Inspector General’s Defense Criminal Investigative Service.
The claims resolved by the settlements are allegations only and there has been no determination of liability.
Two Michigan Men Sentenced to Prison for Filing False Claims Against Internal Revenue ServiceRead the Press Release
Two Detroit area men were sentenced today in the U.S. District Court for the Eastern District of Michigan for conspiracy and filing $3.4 million in false claims against the Internal Revenue Service (IRS), the Justice Department and IRS announced.
Jason McGuire, 38, of Detroit, was sentenced to serve 63 months in prison to be followed by three years of supervised release and to pay $1.675 million in restitution. Delvin Davis, 37, of Saint Clair Shores, Michigan, was sentenced to serve 42 months in prison to be followed by three years of supervised release and to pay $1.146 million in restitution.
On Jan. 30, McGuire and Davis were found guilty by a jury in Detroit of conspiracy to file false claims in the form of false individual income tax returns and false trust tax returns. The defendants were also found guilty of filing or aiding and abetting in the filing of false, fictitious and fraudulent claims; McGuire was found guilty of 18 such counts and Davis was found guilty of five counts. Witness testimony revealed that the defendants attended the same high school in Detroit and started the scheme in 2008. Prior to that time, McGuire had worked as a mechanic and Davis had worked as a mortgage broker and operated a credit repair business.
According to court documents and evidence introduced at trial, McGuire and Davis recruited individuals from the Detroit area with whom they had existing, long-standing business and personal relationships to sign fraudulent trust and income tax returns. McGuire had the taxpayers sign blank trust return forms, and the taxpayers never saw the filled-out forms before they were filed. McGuire attached bogus forms to the income tax returns. McGuire included fictitious withholdings in both types of return forms which resulted in the taxpayers receiving large refunds. The defendants recruited at least nine different taxpayers to participate in the fraudulent scheme. The IRS received returns requesting more than $3.4 million in false refunds and paid more than $1.5 million in false refunds as a result of the fraudulent scheme. Several taxpayers testified at trial that they were required to pay fines and interest to the IRS as a result of the false tax returns that the defendants submitted.
This case was investigated by special agents from IRS – Criminal Investigation and prosecuted by Assistant U.S. Attorney Elizabeth Stafford for the Eastern District of Michigan and Trial Attorney Mark McDonald of the Tax Division.
Additional information about the Tax Division and its enforcement efforts may be found on the division website.
Three Indicted in Prescription Drug Smuggling RingRead the Press Release
The Department of Justice announced today that three Athens, Texas, residents have been indicted on charges associated with their alleged smuggling of imitation, unapproved, and misbranded prescription drugs from China.
Wanda Hollis, 63, Tom Giddens, 57, and Catherine Nix, 41, were each charged with one felony count of conspiracy to smuggle merchandise into the United States, seven counts of causing the introduction of misbranded drugs into interstate commerce with the intent to defraud or mislead, seven counts of smuggling and one count of tampering with a witness. Giddens was also charged with two additional counts of tampering and Nix was charged with one additional tampering count. The defendants were also charged with misdemeanor counts of causing misbranded imitation drugs to be introduced into interstate commerce. Nix was arrested on October 2 in Athens. Giddens and Hollis surrendered this morning.
According to the indictment, the defendants conspired to smuggle at least 30 known shipments, totaling approximately 100,000 pills, from China to Texas. As alleged in the indictment, the shipments contained bogus imitations of Xanax, Valium, sibutramine, Cialis, Viagra and Stilnox, which is marketed in the United States as Ambien. None of the pills seized and tested were legitimate, and all either contained incorrect active ingredients or were sub-potent. The defendants also attempted to conceal their smuggling by using shipping labels that concealed the contents of their shipments, including customs declarations falsely describing the contents as “gifts” or “toys” with low declared monetary values, and by using multiple addresses in an effort to reduce the likelihood of seizures by U.S. Customs authorities. Additionally, the indictment states that the defendants instructed family members to destroy evidence once they became aware that the U.S. Food and Drug Administration (FDA) was investigating them.
“The smuggling and sale of counterfeit prescription drugs puts the public's health and safety at risk,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “Consumers should know that the drugs they are buying are what they purported to be and not misbranded to look like name-brand products that could ultimately do them more harm than good.”
“A key element of FDA’s mission to protect the public’s health is to ensure that safe and effective prescription drugs are properly distributed via the supply chain and dispensed to the ultimate consumer, and that includes ensuring that those prescription drugs contain the treatments that patients expect,” said Acting Director Philip J. Walsky of the FDA’s Office of Criminal Investigations. “We will continue to pursue and bring to justice those who would put the public’s health at risk by introducing illegal prescription drugs.”
This case was investigated by the FDA’s Office of Criminal Investigations and U.S. Immigration and Customs Enforcement-Homeland Security Investigations. The case is being prosecuted by Trial Attorney John W.M. Claud of the Civil Division’s Consumer Protection Branch and Assistant U.S. Attorney Allen Hurst for the U.S. Attorney’s Office for the Eastern District of Texas.
Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.
Justice Department Announces Fair Housing Settlement with Montana Builder and EngineerRead the Press Release
The Justice Department announced today that a Montana builder, Gabriel Nistler, and an engineer, Derek Brown, have agreed to pay over $26,000 and remove accessibility barriers at three apartment buildings in Helena, Montana, in order to settle a lawsuit alleging that they had violated the Fair Housing Act.
The settlement resolves a lawsuit filed in 2013 alleging that defendants violated the Fair Housing Act when they designed and constructed an eight-unit property located at 175 and 195 Silsbee Avenue in Helena, Montana, with steps and other features that made them inaccessible to persons with disabilities. Under the terms of the parties’ agreement, the owners and builders of the property, Gabriel and Sommer Nistler and Nistler Engineering LLC, and the designer of the property, Derek Brown and Derek Brown Consulting Inc., must take actions to remove accessibility barriers at the Silsbee Avenue property, and at two other properties they designed and constructed that Gabriel Nistler currently owns. Those two other properties are located at 109 and 111 Reed Avenue and 1220 and 1240 Laurel Street in Helena. The defendants have already taken actions during the course of the litigation to improve accessibility at the Silsbee Avenue property. The corrective actions at the three properties under the settlement include removing steps from sidewalks, installing properly sloped curb ramps to allow persons with disabilities to access their front doors from the parking areas, creating accessible routes from the units to common areas such outside such as mailboxes, providing accessible parking and garage units, moving outlets to accessible locations, and making modifications to the kitchens and bathrooms to improve accessibility. In addition, the defendants will pay $17,500 to Montana Fair Housing Inc., whose investigation revealed the violations at the Silsbee Avenue property and which intervened in the United States’ lawsuit, and $8,500 in civil penalties to the United States.
“The Fair Housing Act ensures that persons with disabilities do not face unnecessary barriers to access to housing of their choice and are able to make full use of that housing,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “The Justice Department is strongly committed to the enforcement of the fair housing laws that protect the rights of persons with disabilities to have equal opportunities to enjoy the housing of their choice.”
“This is a fair settlement that should be an important reminder to contractors and developers in Montana that persons with disabilities have the right, under the Fair Housing Act, to housing alternatives without barriers,” said U.S. Attorney Michael Cotter for the District of Montana. “Montana builders do not want to exclude buyers or renters with disabilities and Montanans in general do not want persons with disabilities to be further disadvantaged. Fair housing laws must be enforced to give substance to that shared community interest and provide notice that planning and construction must be consistent with its objectives.”
The lawsuit, filed in September 2013, arose as a result of a complaint filed by Montana Fair Housing with the U.S. Department of Housing and Urban Development (HUD). After HUD investigated the complaint, it issued a charge of discrimination and referred the matter to the Justice Department.
“The Fair Housing Act guarantees the right for people with mobility impairments to feel at home and live in a place that accommodates their disability,” said HUD Assistant Secretary Gustavo Velasquez for Fair Housing and Equal Opportunity. “HUD will continue to work with the Justice Department to enforce the nation’s fair housing laws and create more housing opportunities for persons with disabilities.”
More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they may have been victims of housing discrimination can call the Justice Department at 1-800-896-7743, email the Justice Department at [email protected], or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777 or through www.hud.gov.
FBI Arrests Suburban Chicago Man for Allegedly Attempting to Support Terrorism OverseasRead the Press Release
A southwest suburban Bolingbrook man was arrested Saturday night for allegedly attempting to travel overseas to join a foreign terrorist organization operating inside Iraq and Syria, federal law enforcement officials announced today. The defendant, Mohammed Hamzah Khan, 19, a U.S. citizen, was charged with attempting to join the Islamic State of Iraq and the Levant (ISIL), also known as the Islamic State of Iraq and Syria (ISIS).
Khan was taken into custody without incident at O’Hare International Airport by members of the Chicago FBI’s Joint Terrorism Task Force before he attempted to fly to Vienna, Austria, on his way to Istanbul, Turkey.
Khan was charged in a criminal complaint filed today in U.S. District Court with one count of attempting to provide material support to a foreign terrorist organization. He appeared this morning in U.S. District Court before U.S. Magistrate Judge Susan Cox, and remains in federal custody pending a detention hearing at 10:30 a.m. Thursday.
According to the complaint affidavit, a roundtrip ticket was purchased for Khan on Sept. 26 to travel from Chicago to Istanbul, departing on Saturday, and returning later this week.
Law enforcement agents observed Khan passing through the security screening checkpoint Saturday afternoon at O’Hare’s international terminal. Federal agents then executed a search warrant at Khan’s residence and recovered multiple handwritten documents that appeared to be drafted by Khan and/or others, which expressed support for ISIL, the affidavit alleges. Some of those documents, including travel plans and materials referencing ISIL and jihad, are described in the complaint affidavit.
Khan was initially approached by U.S. Customs and Border Protection officers and was later interviewed later by FBI agents at the airport.
Attempting to provide material support to a foreign terrorist organization carries a maximum penalty of 15 years in prison and a $250,000 fine. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.
The JTTF is comprised of Special Agents of the FBI, officers of the Chicago Police Department, and representatives from an additional 20 federal, state and local law enforcement agencies. The Justice Department’s National Security Division assisted in the investigation. U.S. Customs and Border Protection, U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), and the Illinois State Police also provided significant assistance.
The arrest and complaint were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The investigation is continuing, they said.
The government is being represented by Assistant U.S. Attorneys Matthew Hiller and Angel Krull.
The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Costa Rican Woman Pleads Guilty to Human Smuggling ConspiracyRead the Press Release
A citizen and resident of Costa Rica pleaded guilty today to conspiracy to smuggle more than 25 undocumented immigrants to the United States.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, and Special Agent in Charge Clark E. Settles of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations’ (HSI) Washington, D.C., Field Office made the announcement.
Mercedes Morera Roche, 49, was extradited to the United States from Panama on Aug. 21, 2014, to face charges for smuggling more than 25 undocumented immigrants from Cuba to the United States.
According to her plea agreement, Roche admitted that between 2004 and 2011, she was an organizer of a human smuggling network that provided instructions, fraudulent identity and travel documents, escorts, transport, safe house locations, and other assistance to facilitate the illicit travel of undocumented immigrants to the United States. Roche admitted that in some cases, she provided fraudulent passports so that undocumented immigrants could fly to the United States with the help of corrupt foreign airline and immigration officials. Roche directed the immigrants to destroy the fraudulent documents during the flights before landing at United States airports and instructed the immigrants about engaging with authorities at the airports. In other cases, Roche coordinated the smuggling of undocumented immigrants via land through Latin America and Mexico into the United States. Roche solicited payments of up to $10,000 for each undocumented immigrant.
Roche’s sentencing is scheduled on Dec. 11, 2014, before U.S. District Court Judge Ursula M. Ungaro of the Southern District of Florida.
The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.
The investigation was conducted by HSI’s Washington, D.C. Field Office with support from the Human Smuggling Trafficking Center and U.S. Customs and Border Protection’s National Targeting Center. Critical assistance was also provided by HSI’s Miami Field Office and the ICE Attaché Office in Panama. Extradition assistance was provided by the Criminal Division’s Office of International Affairs, Interpol Washington and the United States Marshals Service. The Justice Department is grateful for the significant assistance provided by the Panamanian Ministry of Foreign Affairs. This case is being prosecuted by Trial Attorney Michael Sheckels of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Robert Emery of the Southern District of Florida.
Attorney General Holder Calls Cuts to Early Voting a 'Step Backward' as Restrictions Take Effect in Ohio, ElsewhereRead the Press Release
On the heels of the Supreme Court’s decision late last month to allow Ohio’s new voting law to go into effect, Attorney General Eric Holder criticized the law’s restrictions on early voting, which he said were “heavily used” by African-American voters.
“It is a major step backward to allow these reductions to early voting to go into effect,” the Attorney General said in a video message posted on the Justice Department’s website. “Early voting is about much more than making it more convenient for people to exercise their civic responsibilities. It’s about preserving access and openness for every eligible voter, not just those who can afford to miss work or who can afford to pay for childcare.”
The Ohio law has been the subject of a lawsuit by civil rights groups and the Justice Department filed a brief in the case in July. A federal judge ruled that the law violated the Voting Rights Act and blocked it from taking effect. A federal appeals court judge upheld that ruling, but the Supreme Court disagreed and ruled the law should go into effect immediately. Absent the Court’s ruling, early voting would have begun in Ohio last Tuesday.
In North Carolina, the Justice Department has directly challenged a state law that cuts back on early voting and eliminates same-day registration. While no ruling on the merits has been issued yet in that case, the 4th Circuit Court of Appeals ruled last week to allow much of the law—including the reductions to early voting—to go into effect in the meantime.
The complete text of the Attorney General’s video message appears below.
“One of the Justice Department’s most solemn responsibilities is ensuring access to the ballot box for every eligible citizen. And over the last six years, my colleagues and I have taken robust action to protect the voting rights of all Americans – including communities that have been too long overlooked and too often underserved.
“Before the Shelby County case was wrongly decided, we successfully challenged efforts in Texas and Florida that would have disproportionately disenfranchised citizens of color in those states, and South Carolina had to make changes to its voting restrictions. It should not be lost on us that almost as soon as the Supreme Court decision in Shelby County was handed down, the state of Texas implemented a photo ID law that the courts had previously blocked, and that North Carolina implemented sweeping restrictions on voting rights. The Department of Justice has now been forced to challenge those discriminatory laws in court.
“Our work has taken us to other parts of our nation as well. We have worked to protect the voting rights of servicemembers, and to ensure accessible polling places throughout Indian Country and Alaska Native communities. And we have fought back against discriminatory redistricting proposals that may make it more difficult for many Americans to make their voices heard.
“Despite these efforts, in some places, we’ve continued to see troubling new measures that unnecessarily restrict the ability of particular Americans to participate in the democratic process. Ohio, for example, has imposed new restrictions that significantly reduce opportunities for early voting – opportunities that had in the past been heavily used by African-American voters.
“The early voting times targeted for cancellation – including weeknight and Sunday hours – previously provided critical opportunities for many people to get to the polls. In 2012, tens of thousands of Ohio voters cast their ballots during the voting days that Ohio has now eliminated. And studies suggest that these restrictions will disproportionately affect people with childcare responsibilities, hourly salaries, and reduced access to transportation – people who may have difficulty getting to the polls at any other time, and who are much more likely to be low-income or minority individuals.
“It is a major step backward to allow these reductions to early voting to go into effect. The public should be demanding the state officials who seek to impose these restrictions to justify—clearly, factually, and empirically—why they are necessary. Early voting is about much more than making it more convenient for people to exercise their civic responsibilities. It’s about preserving access and openness for every eligible voter, not just those who can afford to miss work or who can afford to pay for childcare. That’s why a number of states have expanded early voting in recent years. Throughout our nation’s history, we’ve repeatedly seen that there is simply no good reason – no good reason – to reduce voting access. Indeed, the arc of our nation’s history has, until recently, been to expand access to the ballot. Restricting voting hours in ways that would disproportionately impact minority communities is not only unnecessary and unwarranted – it is out of step with our history of continually expanding the franchise. It is contrary to our fundamental values of equality, opportunity, and inclusion. And it is an affront to millions who have marched, and fought, and too often died to make real America’s most basic promise. Three brave young men gave their lives in 1964, as did a courageous Detroit mother of five in 1965, so that others might be able to vote and be truly free. Are we now to turn our back on those ultimate sacrifices?
“We at the Department of Justice will never rest in our efforts to ensure the right to vote. Nor will I. And today, I’m calling on election officials and other public servants at every level across the country – men and women who are charged with upholding America’s highest ideals – to consider their responsibilities not to political constituencies, but to the country we all serve. To think about the deep unfairness of curtailing voting opportunities. And to reflect on their place in the history of this country to which they are potentially consigning themselves.
“In a great nation governed both by and for the people, our advances have always been of our own making. And going forward, it will be up to all of us to ensure that engagement in that democratic process remains the responsibility and the birthright of every American.”
The full video of the Attorney General’s message is available at http://www.justice.gov/agwa.php.
Readout of Justice Department Officials' Trip to Ferguson, MissouriRead the Press Release
Justice Department spokeswoman Dena Iverson released the following statement Friday regarding the just-completed, two-day visit to Ferguson, Missouri, by senior Justice Department officials:
“At the request of Attorney General Eric Holder, Department of Justice leadership traveled to Ferguson, Missouri, for meetings with the city and the community on Thursday and Friday. As part of the Civil Rights Division’s commitment to a thorough and fair investigation Acting Assistant Attorney General for Civil Rights Molly Moran and Deputy Assistant Attorney General Mark Kappelhoff met with Ferguson City and Ferguson Police Department leadership regarding the ongoing pattern and practice investigation into FPD and discussions included follow up on letters sent to Ferguson Police Chief Jackson regarding identification of officers and uniform requirements. Ronald Davis, Director of the Office Community Oriented Policing Service, and Rob Chapman, Deputy Director of COPS, also attended law enforcement leadership meetings in Ferguson and St. Louis County as part of COPS’s efforts to provide technical assistance to the police department on an ongoing basis.
“Moran, Davis and Kappelhoff were joined by the Community Relations Service during a meeting with community leaders regarding the pattern and practice investigation on Thursday. There will be additional opportunities for community members to meet with Civil Rights Division staff as part of the pattern and practice investigation in the near future.
“While in St. Louis the Civil Rights Division leadership also received an update from the FBI, Civil Rights Division and U.S. Attorney’s Office investigators on the continuing investigation into the shooting of Michael Brown.”
Northern California Real Estate Investor Agrees to Plead Guilty to Bid Rigging and Fraud at Public Foreclosure AuctionsRead the Press Release
A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.
Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Gernot Sebastian Zepernick of Concord, Calif. To date, 47 individuals have agreed to plead or have pleaded guilty, as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.
According to court documents, beginning as early as November 2008 until about January 2011, Zepernick conspired with others not to bid against one another, and instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Contra Costa County. Zepernick was also charged with conspiring to use the mail to carry out a scheme to fraudulently acquire title to selected Contra Costa County properties sold at public auctions, to make and receive payoffs, and to divert money to co-conspirators that would have otherwise gone to mortgage holders and other beneficiaries by holding second, private auctions open only to members of the conspiracy. The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions. The private auctions often took place at or near the courthouse steps where the public auctions were held.
“Collusion at the foreclosure auctions created an unfair playing field where the 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 corrupt the competitive process.”
The department said that the primary purpose of the conspiracies was to suppress and eliminate competition and to conceal payoffs in order to obtain selected real estate offered at Contra Costa County public foreclosure auctions at non-competitive prices. When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner. These conspirators paid and received money, according to the court documents, that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.
“These charges represent another significant success in our ongoing fight against the corrupt practices and illegal activities central to this long running bid-rigging scheme,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office. “The FBI will continue to aggressively investigate real estate-related frauds and other violations of federal law which victimize distressed homeowners and financial institutions through the exploitation of the housing crisis.”
A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victims if either amount is greater than $1 million. A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine. The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.
Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa, and Alameda counties, California. These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office. Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.
Today’s charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 93 U.S. Attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit www.StopFraud.gov.
**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**
Justice Department Settles Lawsuit Against Key Safety Systems, Inc. to Enforce Employment Rights of United States Army National Guard MemberRead the Press Release
The Justice Department’s Civil Rights Division and U. S. Attorney A. Lee Bentley III for the Middle District of Florida announced today that they reached an agreement with Key Safety Systems Inc. resolving claims that Key Safety Systems violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by demoting U.S. Army National Guard Member Ronald Collins Jr. following the announcement of his military deployment.
According to the complaint, filed in the United States District Court for the Middle District of Florida, in October 2012, Collins notified Key Safety Systems that he was being deployed in February 2013 for one year of military service. In December 2012, Collins was notified by Key Safety Systems that, effective immediately, he was being demoted, which resulted in a reduction in pay. According to the complaint, Collins had not been the subject of any disciplinary actions prior to the announcement of his impending deployment.
The complaint further alleged that, at the time of the demotion, Collins was not provided any basis underlying the decision to demote him. In January 2014, Collins returned from deployment and was returned to the position to which he had been demoted at Key Safety Systems. Collins submitted his letter of resignation to Key Safety Systems in February 2014.
USERRA protects the rights of uniformed servicemembers to retain their civilian employment following absences due to military service obligations, and provides that servicemembers shall not be discriminated against because of their military obligations.
“Congress enacted USERRA to protect our men and women in uniform,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “Mr. Collins, like many members of the National Guard and Reserve, was called upon by his country in a time of need and the Department of Justice strongly supports the rights of service members to reclaim their rightful positions in the workforce after they complete their military service.”
Under the terms of the settlement, which was filed as a consent decree simultaneously with the complaint, Key Safety Systems has agreed to pay $20,000 as back pay and liquidated damages to Collins.
“Members of the United States Army National Guard are often called to make many sacrifices, including spending months or years away from their jobs and families,” said U.S. Attorney Bentley. “When they are deployed in the service of our country, their employment rights must be protected. Our office and the entire Department of Justice are committed to ensuring that individuals do not lose their rights while they are protecting ours.”
This case stems from a referral by the U.S. Department of Labor (DOL), pursuant to an investigation by the DOL’s Veterans’ Employment and Training Service. The case is being handled by the Employment Litigation Section of the Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the Middle District of Florida, who work collaboratively with the DOL to protect the jobs and benefits of National Guard and Reserve servicemembers upon their return to civilian life.
The Justice Department’s Civil Rights Division has given a high priority to the enforcement of service members’ rights under USERRA. Additional information about USERRA can be found on the Justice Department’s websites at www.usdoj.gov/crt/emp and www.servicemembers.gov, as well as on the Labor Department’s website at www.dol.gov/vets/programs/userra/main.htm.
Justice Department Files Suit Against New Jersey Company for Adulterated and Misbranded Medical DevicesRead the Press Release
The Department of Justice announced today that the department, on behalf of the Food and Drug Administration (FDA), has filed suit in the U.S. District Court for the District of New Jersey against Pharmaceutical Innovations Inc. and Gilbert Buchalter, who is the company’s founder, owner, and chairman of the board.
According to the complaint, the defendants violated the Federal Food, Drug and Cosmetic Act (FDCA) by manufacturing and distributing adulterated and misbranded medical devices. The devices at issue are gels that hospitals and other caregivers use to take ultrasound scans. Under the FDCA, a device manufacturer must: comply with current good manufacturing practice requirements; obtain required premarket approval or clearance before distributing its devices and notify the FDA and follow-up on any reports of serious injuries or deaths associated with its devices. The government alleges that the company violated each of these requirements.
“This action furthers the FDA’s mission of ensuring that all medical devices sold to hospitals and other caregivers are produced in conformance with current good manufacturing practice requirements,” said Acting Assistant Attorney General for the Civil Division Joyce R. Branda. “Device manufacturers who undermine this mission will be held accountable.”
“Patients should be able to have confidence that the healthcare products they use are safe,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “Actions like the one we are taking here reinforce the law that manufacturers adhere to strict approval and production requirements. We are committed to stopping those who don’t.”
The complaint alleges that FDA inspections at Pharmaceutical Innovations’ Newark, New Jersey, facility have identified numerous and repeated deviations from current good manufacturing practices, including that the company has failed to show that it: validated its dry heat sterilization and dry heat treatment processes; routinely monitors its water systems to ensure that the water is suitable for manufacturing medical devices and routinely sanitizes the tubing and connections of its water systems to ensure objectionable microorganisms do not reside in the inner piping surface. The complaint further alleges that Pharmaceutical Innovations has not sought FDA approval or clearance for the new ultrasound gels it has brought into the market. As a result, according to the complaint, the defendants’ products are adulterated and misbranded devices under the FDCA.
The complaint alleges that, in February 2012, a Michigan hospital reported that it had traced infections among 16 surgical patients to a specific gel made by Pharmaceutical Innovations. However, the company failed to submit a medical device report to the FDA after becoming aware of these infections as required by law. FDA testing on samples of that gel identified bacterial contamination. The relevant lots of Pharmaceutical Innovations’ ultrasound gel were seized by the U.S. Marshals Service, following a seizure lawsuit filed by the United States.
The complaint alleges that, despite numerous warnings from FDA, the defendants have failed to bring their operations into compliance with the law. The Justice Department will seek a permanent injunction requiring the defendants to cease manufacturing, processing, packing, labeling, holding and distributing devices until they comply with the FDCA and applicable FDA regulations.
The FDA referred this matter to the Justice Department. The Consumer Protection Branch of the Civil Division filed this case on behalf of the United States.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
Department of Justice Will Not Challenge Proposed Cyber Intelligence Data-Sharing PlatformRead the Press Release
The Department of Justice announced today that it will not challenge a proposal by CyberPoint International LLC to offer a cyber intelligence data-sharing platform known as TruSTAR. The TruSTAR platform allows members to share threat and incident data along with attack information and develop remediation solutions to help define more effective strategies across industries to prevent successful cyber attacks.
The department’s position was stated in a business review letter to counsel for CyberPoint, from Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.
CyberPoint’s proposed information sharing system is designed to address shortfalls in conventional, legacy information sharing services, while operating within the framework set forth in the Department of Justice and Federal Trade Commission’s Antitrust Policy Statement on Sharing of Cybersecurity Information.[1] Assistant Attorney General Baer cited to the department’s April policy statement with the Federal Trade Commission to underscore that “the federal antitrust agencies recognize the important role that information sharing plays in securing the nation’s IT infrastructure.” He further said that “[t]he antitrust laws are not an impediment to legitimate private-sector initiatives to share specific information about cyber incidents and mitigation techniques in order to defend against cyber attacks.” In approving the proposed TruSTAR platform, he concluded that the operation of the TruSTAR platform, as proposed, would be unlikely to facilitate price or other competitive coordination.
CyberPoint is a privately held company that provides security products, services and solutions to commercial and government customers. The TruSTAR platform is designed to collect incident reports that include specific and highly technical cyber-threat information, including current attack actors, targets of attack, contextual information regarding threats, and remediation solutions. An important component of the TruSTAR platform is that members are able to submit incident reports with complete anonymity. The TruSTAR platform also provides a community forum for members to anonymously collaborate with their peers on cyber threats and techniques for responding to them. Before they are permitted to use the system, all members who participate in any aspect of information sharing on the TruSTAR platform must agree not to share competitively sensitive information.
Under the department’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves the right to challenge the proposed action under the antitrust laws if it produces anticompetitive effects.
A file containing the business review request and the department’s response may be examined in the Antitrust Documents Group of the Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., Suite 1010, Washington, D.C. 20530. After a 30-day waiting period, the documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure.
[1] See Department of Justice and Federal Trade Commission: Antitrust Policy Statement on Sharing of Cyber Security Information (April 10, 2014) (“DOJ and FTC Antitrust Policy Statement”).
Department of Justice Charges Six Defendants in Connection with Violent Sex Trafficking SchemeRead the Press Release
The Department of Justice announced today a second superseding indictment in a sex trafficking conspiracy charging six individuals for offenses related to their involvement in sex trafficking adult victims in New Orleans and elsewhere. Five defendants, Granville Robinson, aka “Bear” and “HB,” 25; Duane Phillips, aka “P-nut,” 28; Anthony Ellis, aka “Anthony Deshun Lloyd,” “Animal,” and “AD,” 25; Christopher Williams, aka “Gutter,” 29; and LaQuentin Brown, aka “Nino,” 32, all of Memphis, Tennessee, were charged with conspiring to commit sex trafficking by force, fraud, and coercion. A sixth defendant, Kanubhai Patel, aka “Mr. Kenny” and “Pop,” 73, of Kenner, Louisiana, was indicted for benefitting financially from participating in a sex trafficking venture.
According to the indictment, from January 2013, until Jan. 15, 2014, Robinson, Phillips, Ellis, Williams and Brown conspired to recruit, entice, harbor, transport, provide, obtain and maintain multiple adult women for prostitution, using force, threats of force, fraud and coercion to cause them to engage in commercial sex acts in New Orleans and elsewhere. In addition to being charged with sex trafficking conspiracy, defendants Robinson, Phillips and Williams are each charged with additional counts of sex trafficking by force, fraud and coercion and with transporting women in interstate commerce for the purpose of prostitution.
If convicted of sex trafficking conspiracy, defendants Robinson, Phillips, Ellis, Williams and Brown each face a statutory maximum sentence of life imprisonment, a $250,000 fine and a lifetime of supervised release. If convicted of transportation for prostitution, Robinson, Phillips and Williams each face a statutory maximum of ten years in prison, a $250,000 fine and 3 years supervised release.
If convicted of benefitting financially from participation in a sex trafficking venture, Patel faces a statutory maximum sentence of life imprisonment, a $250,000 fine and a lifetime of supervised release.
A seventh defendant who was previously charged in connection with the case, Zacchaeus Taylor, aka “Little Z,” “Little Zay,” and “Little 5,” 21, also of Memphis Tennessee, pleaded guilty on June 25, 2014, to sex trafficking, conspiring and transporting women across state lines for prostitution. He is currently awaiting sentencing.
An indictment is merely a charge and defendants are presumed innocent until proven guilty beyond a reasonable doubt.
This case was investigated jointly by agents from the New Orleans Field Offices of the FBI and ICE Homeland Security Investigations as well as the FBI’s Memphis Field Office. This case is being prosecuted by Special Litigation Counsel John Cotton Richmond and Trial Attorney Christine M. Siscaretti of the Civil Right Division’s Human Trafficking Prosecution Unit, and Assistant United States Attorney Julia K. Evans of the Eastern District of Louisiana.
Colombian Traffickers Plead Guilty to International Maritime Drug Trafficking ConspiracyRead the Press Release
Three Colombian citizens pleaded guilty today for conspiring to transport more than 1,000 kilograms of cocaine on board “go-fast boats” from the north coast of Colombia into international waters on vessels subject to the jurisdiction of the United States.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA) made the announcement.
Angel Javier Varon Castro, 43; Luis Delio Herrera Astudillo, 45; and Eusebio David Webster Archbold, 33, all Colombian nationals, pleaded guilty before U.S. District Judge Beryl A. Howell of the District of Columbia to one count of conspiracy to distribute cocaine and possess with intent to distribute cocaine on board a vessel subject to the jurisdiction of the United States. Sentencing is set for Jan. 9, 2015.
“Today’s guilty pleas highlight our successful and vigorous partnership with Colombian law enforcement as we work to halt the flow of drugs heading north from the coast of Colombia,” said Assistant Attorney General Caldwell. “These defendants and their drug trafficking partners used seagoing vessels to inject vast quantities of cocaine into international commerce. But while drug traffickers may believe they can operate on the high seas with impunity, today’s convictions prove otherwise. Working with our international partners, we will bring to justice those who would flood our ports and, ultimately, our communities with dangerous narcotics.”
“The arrests and guilty pleas of these three international drug smugglers are the direct result of the resolute partnership between the DEA and our Colombian law enforcement partners,” said DEA Administrator Leonhart. “This is another example of the fine work that DEA, prosecutors, and our partners around the globe accomplish every day.”
According to their plea agreements, the defendants worked for a drug-trafficking organization responsible for transporting cocaine aboard go-fast vessels leaving from the area of Cartagena, Colombia, to Central America, and traveling in international waters on vessels subject to the jurisdiction of the United States. During the investigation, pursuant to Colombian judicial authority, law enforcement recorded the defendants’ telephone conversations in which they planned the operation, including the use of two 40-foot go-fast vessels. These boats were later intercepted in February and April 2010 in international waters by the United States Coast Guard. Go-fast vessels are specially equipped speed boats designed to transport large quantities of narcotics.
This Organized Crime Drug Enforcement Task Force (OCDETF) case, called Operation Pacific Empire, is being investigated by DEA’s Cartagena Country Office, assisted by DEA’s offices in Miami and Puerto Rico. The Cartagena office worked in partnership with the Judicial Police of the Prosecutor General’s Office in Colombia (CTI) and the Colombian National Police.
The case is being prosecuted by Trial Attorneys Meredith Mills, Brad Price and Paul Laymon of the Criminal Division’s Narcotic and Dangerous Drug Section, with significant assistance from the Judicial Attachés in Bogotá, Colombia, the Criminal Division’s Office of International Affairs, and the Prosecutor General’s Office of the Republic of Colombia.
Caribbean-Based Investment Advisor and Attorney Sentenced for Using Offshore Accounts to Launder and Conceal FundsRead the Press Release
Eric St-Cyr, an investment advisor, and Patrick Poulin, an attorney, were sentenced today to serve 14 months in prison and three years of supervised release each for conspiring to launder monetary instruments, the Justice Department and Internal Revenue Service (IRS) announced.
Senior U.S. District Judge T.S. Ellis III imposed the sentences after considering the defendants’ substantial cooperation with ongoing government investigations. St-Cyr and Poulin, both Canadian citizens, along with Joshua Vandyk, a U.S. citizen, were indicted by a grand jury in the U.S. District Court for the Eastern District of Virginia on March 6, and the indictment was unsealed March 12 after the defendants were arrested in Miami. St-Cyr, 50, pleaded guilty on June 27 and Poulin, 41, pleaded guilty on July 11. Vandyk, 34, pleaded guilty on June 12 and was sentenced on Sept. 5 to serve 30 months in prison.
According to the plea agreements and statements of facts, Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud, specifically $2 million. Vandyk, St-Cyr and Poulin assisted undercover law enforcement agents posing as U.S. clients in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds’ owners. Vandyk and St-Cyr invested the laundered funds on the clients’ behalf and represented that the funds would not be reported to the U.S. government.
“The sentences imposed by the court today show that those who use offshore accounts and entities for money laundering and tax evasion will be punished,” said Deputy Assistant Attorney General Ronald A. Cimino for the Justice Department’s Tax Division. “This investigation, which lasted years, involved extensive undercover activity as well as cooperation from multiple foreign law enforcement agencies. The undercover IRS agents in this investigation went to Canada, the Turks and Caicos and the Cayman Islands to develop the evidence. These two defendants are cooperating with the IRS, and we anticipate that other investigations will develop from the information they have provided.”
“These defendants played a shell game by creating offshore entities designed to help their U.S. clients evade taxes and other legal requirements, and they used that same shell game to launder purported criminal proceeds,” said U.S. Attorney Dana J. Boente for the Eastern District of Virginia. “We are committed to working with our law enforcement partners to penetrate and combat these schemes wherever they occur.”
“Today’s sentencings close the door on a business built on skirting the law,” said Chief of IRS-Criminal Investigation Richard Weber. “This investigation reinforces our commitment to investigate and prosecute criminals worldwide who conduct illegal financial transactions, launder money or attempt to conceal the true source of their income in order to evade paying taxes. This should send a clear message to those involved in this type of crime—we will find you.”
According to court documents, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based there. St-Cyr was the founder and head of the investment firm, whose clientele included numerous U.S. citizens. Poulin, an attorney at a law firm based in Turks and Caicos, worked and resided in Canada as well as Turks and Caicos. His clientele also included numerous U.S. citizens. Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government, including the IRS. Vandyk and St-Cyr directed the undercover agents to create an offshore corporation with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with U.S. clients. Vandyk, St-Cyr and Poulin used the offshore entity to move money into the Cayman Islands and used Poulin as a nominee intermediary for the transactions.
According to court documents, Poulin established an offshore corporation called Zero Exposure Inc. for the undercover agents and served as a nominal board member in lieu of the clients. Poulin transferred approximately $200,000 that the defendants believed to be the proceeds of bank fraud from the offshore corporation to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside of the United States in the name of the offshore corporation. The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients. Clients were able to monitor their investments online through the use of anonymous, numeric passcodes. Upon request from the U.S. client, Vandyk and St-Cyr liquidated investments and transferred money, through Poulin, back to the United States. According to Vandyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion.
The case was investigated by special agents of the IRS-Criminal Investigation. Trial Attorney Todd Ellinwood and Assistant Chief Caryn Finley of the Tax Division and Assistant U.S. Attorney Kosta Stojilkovic for the Eastern District of Virginia are prosecuting the case. The Justice Department and the IRS would like to thank the Royal Canadian Mounted Police, the Royal Cayman Islands Police Service and the Royal Turks and Caicos Islands Police Force for their assistance in this investigation.
Additional information about the Tax Division and its enforcement efforts may be found at the division website.
U.S. Marshals Task Force Nabs Foreign FugitiveRead the Press Release
VALLEJO, Calif. – U.S. Marshal Don O’Keefe is proud to announce the arrest of Fermin Aguilar-Agueta, 26, a suspected MS-13 gang member, who is wanted in El Salvador for aggravated homicide.
Aguilar-Agueta is suspected by Salvadorian authorities of being involved in a drunken altercation between rival gang factions, which resulted in the shooting death of an individual in March 2007. He was formally charged with aggravated homicide in El Salvador in 2009. An Interpol Red Notice was issued by El Salvador in 2013 for Aguilar-Agueta initiating an international manhunt.
On September 22, Aguilar-Agueta was spotted in a vehicle by Concord Police Department officers during a routine traffic stop. Officers gathered information about him, as well as his associates, and forwarded the information to the U.S. Marshals Fugitive Task Force, which specializes in the apprehension of domestic and foreign fugitives.
The following day, based on the information from the Concord Police, and in coordination with Deputy U.S. Marshals at Interpol Washington, the U.S. National Central Bureau (USNCB), in Washington, D.C., the U.S. Marshals Service Pacific Southwest Regional Fugitive Task Force in the Bay Area, which consists of several federal, state, and local agencies, to include officers from Immigration and Customs Enforcement (ICE), were able to determine that Aguilar-Agueta was residing illegally in the U.S., and that he had no record of legal entry.
U.S. Marshals Task Force members located the vehicle associated with the traffic stop at the 1200 block of Georgia Street, Vallejo, CA, and established surveillance. Soon after, Aguilar-Agueta was spotted getting into the vehicle. A traffic stop was conducted and he was taken into custody without incident. Aguilar-Agueta is currently in immigration custody pending deportation.
To find more information on fugitives currently being sought by the U.S. Marshals in Northern California, or to submit an anonymous tip on the whereabouts of a fugitive, please visit: http://northerncaliforniamostwanted.org. The U.S. Marshals Service is the primary federal agency charged with conducting fugitive investigations throughout the country. The U.S. Marshals regularly works in concert with other federal, state, and local law enforcement agencies to seek out and arrest violent fugitives and sex offenders, and has established task forces throughout the nation to facilitate the apprehension of fugitives. aguilar_agueta_press_release.pdf
Shell Company Operator Pleads Guilty in Multi-Million Dollar Health Care Fraud and Money Laundering SchemeRead the Press Release
A Florida managing member of a shell company pleaded guilty today in federal court in Tampa for his role in a multi-million dollar health care fraud and money laundering scheme.
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, Acting 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, and Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office made the announcement.
Leonard Austin, 45, of Lake Worth, Florida, pleaded guilty in the U.S. District Court for the Middle District of Florida to conspiracy to commit money laundering of health care fraud proceeds. His sentencing date will be set at a later date by the court.
According to his plea agreement and factual proffer, from June 2010 through April 2014, Austin’s co-conspirators submitted $12 million in fraudulent claims to Medicare through three purported health clinics, Cornerstone Health Specialists of Lakeland, Florida, Summit Health Specialists P.L. of Tampa, Florida, and Coastal Health Specialists LLC of Lakeland and Melbourne, Florida. These fraudulent claims included claims resulting from illegal kickback arrangements and claims for radiology, audiology, neurology, and cardiology services that were never rendered. In fact, some of the services were purportedly provided to Medicare beneficiaries who actually had died before the supposed date of service. Medicare paid over $2,500,000 on the fraudulent claims.
Austin admitted that he and his co-conspirators attempted to conceal the funds by transferring funds through bank accounts for the clinics and Austin’s shell company, BONB LLC, aka BioScan, and other entities.
Four other defendants were indicted in this case on health care fraud and money laundering charges and are scheduled for a jury trial on April 6, 2015. An indictment is merely an accusation, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
This case is being investigated by HHS-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Middle District of Florida. This case is being prosecuted by 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.
Jeremiah Santos Isezaki Sentenced to 57 Months in PrisonRead the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Defendant JEREMIAH SANTOS ISEZAKI, age 30, was sentenced on October 1, 2014, in the District Court of Guam by Chief Judge Frances Tydingco-Gatewood.
Defendant Isezaki was sentenced to 57 months in prison with credit for time served. He will be placed on three years supervised release when he gets out of jail. Isezaki was assessed a $100 special assessment fee and ordered to perform 25 hours of community service.
On January 30, 2012, a Guam Police Department (GPD) officer attempted to pull over Isezaki for a traffic violation. Defendant Isezaki kept going which led to a high speed chase reaching speeds of up to 100 miles an hour. Defendant eventually ran off the road while driving his motorcycle and GPD officers arrested him. The officers recovered a Colt .45 1911 pistol. Defendant Isezaki was convicted by a jury on June 12, 2012.
Credit for the investigation is given to GPD together with and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The case was handled by Assistant U.S. Attorney Clyde Lemons.Former Deputy Director of the Largest State Agency in Arkansas Pleads Guilty to Bribery SchemeRead the Press Release
A former deputy director of the Arkansas Department of Human Services (ADHS), a multi-billion dollar state agency, pleaded guilty today for providing official assistance in exchange for bribes from the owner of two mental health companies.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and First Assistant United States Attorney Patrick C. Harris of the Eastern District of Arkansas made the announcement.
Steven B. Jones, 49, of Marion, Arkansas, pleaded guilty to a two-count information charging him with conspiracy and bribery concerning programs receiving federal funds. A sentencing hearing is scheduled for April 2, 2015, before U.S. District Judge Billy Roy Wilson of the Eastern District of Arkansas.
According to his plea agreement, Jones served as deputy director of ADHS from approximately April 2007 until July 2013. While serving in that capacity, Jones solicited and accepted multiple cash payments and other things of value from the owner of two businesses that provided inpatient and outpatient mental health services to juveniles. This individual provided the cash payments and other things of value to Jones through the use of two intermediaries, a local pastor and a former county probation officer and city councilman.
As part of his plea, Jones admitted that in return for the bribes, he provided official assistance, including providing internal ADHS information about the individual’s businesses. Jones further admitted that he and other members of the conspiracy concealed their dealings by, among other things, holding meetings at restaurants in Memphis, Tennessee, or rural Arkansas, where they would not be easily recognized; funneling the cash payments through the pastor’s church; providing the bribe payments in cash so that the transactions would not be easily traceable; and speaking in code during telephone conversations.
The case was investigated by the FBI’s Little Rock Field Office, and is being prosecuted by Trial Attorney Edward P. Sullivan of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Patricia S. Harris and Angela S. Jegley of the Eastern District of Arkansas.
Former Alabama State Employee Pleads Guilty to Stealing Identities from State Databases Used to Request over $7 Million in Tax RefundsRead the Press Release
Today, Tamika Floyd pleaded guilty to one count of conspiracy to defraud the United States and one count of aggravated identity theft for her involvement in a Stolen Identity Refund Fraud Scheme (SIRF), announced Deputy Assistant Attorney General Ronald A. Cimino for the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.
According to the court documents, between 2006 and 2014, Floyd worked at the State of Alabama Department of Public Health and the Alabama Department of Human Resources, both located in Opelika, Alabama. At both jobs, she had access to the identification information of individuals. Beginning in 2012, Floyd was approached to obtain names from her employer that would be used to file false tax returns. Floyd agreed to steal the names and in turn provided them to her co-conspirator. Most of the names stolen belonged to teenagers. Floyd’s co-conspirators used the names she provided to file more than 3,000 fraudulent federal income tax returns that claimed more than $7.5 million in refunds.
A sentencing date has not been scheduled.
The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation. Trial Attorney Michael Boteler of the Tax Division and Assistant U.S. Attorney Todd Brown for the Middle District of Alabama are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found at the division's website.
Foreign Subsidiary of Texas Oil Firm Pleads Guilty to Illegally Exporting Drilling Equipment to SyriaRead the Press Release
John P. Carlin, Assistant Attorney General for National Security, Ronald C. Machen Jr., U.S. Attorney for the District of Columbia, and Eric L. Hirschhorn, U.S. Department of Commerce Under Secretary for Industry and Security announced today that Robbins & Myers Belgium S.A., a wholly-owned subsidiary of Robbins & Myers Inc., pleaded guilty today to four counts of violating the International Emergency Economic Powers Act and the Export Administration Regulations.
The guilty plea stemmed from actions by Robbins & Myers Belgium that, in 2006, caused four illegal exports, reexports and/or transshipments of stators—important components of oil extraction equipment—that had made from steel that had been milled in the United States to a customer operating oil fields in Syria.
As part of its plea agreement Robbins & Myers Belgium agreed to pay a total of $1 million in criminal fines ($250,000 for each violation) and to serve a term of corporate probation. The gross proceeds received by Robbins & Myers Belgium for these four illegal exports was $31,716. As part of its plea agreement, Robbins & Myers Belgium has forfeited the entire $31,716 to the government. Robbins & Myers Belgium has also entered into a civil settlement with the Department of Commerce requiring the company to pay $600,000 in civil penalties.
Robbins & Myers Belgium entered the guilty plea this afternoon and was sentenced this afternoon in accordance with the terms of the plea agreement by the Honorable Judge Beryl A. Howell in U.S. District Court for the District of Columbia.
“This case shows that the United States will vigorously enforce its export laws against companies doing business with Syria, a state-sponsor of terrorism and home to one of the most brutal regimes on earth,” said U.S. Attorney Machen. “The Department of Justice will hit companies that do business with Syria where it hurts most: the bottom line. This company will pay fines, penalties, and forfeitures more than 50 times greater than the proceeds of its sales.”
“The significant civil and criminal penalties in this case show our resolve to pursue and prosecute those who flout our export control laws,” said Under Secretary of Commerce Hirschhorn. “We will continue to work in concert with our partner agencies to ensure that U.S. technology stays out of the wrong hands.”
According to court documents, in or about May 2006 an internal auditor with Robbins & Myers Inc. (the U.S. parent company of Robbins & Myers Belgium which was acquired by National Oilwell Varco in 2013) discovered that the company’s Belgian subsidiary had shipped stators made from U.S.-origin steel to a customer in Syria. The internal auditor informed senior management at Robbins & Myers Inc. of the shipments; management then confirmed that those shipments had occurred and that they were likely in violation of U.S. law which prohibited trade in U.S.-origin goods with Syria. Although the U.S.-based parent directed Robbins & Myers Belgium to stop such shipments, the subsidiary continued to make shipments of stators to Syria between August 2006 and October 2006. Following those illegal shipments, employees of the Belgian subsidiary attempted to hide documents related to those shipments from the government’s investigators.
In announcing the guilty plea and sentencing, U.S. Attorney Machen and Under Secretary Hirschhorn commended Special Agents Richard Jereski and Joseph Bankins, who worked under the direction of Special Agent in Charge Nasir Khan, as well as Attorney Advisor R. Elizabeth Abraham of the Department of Commerce's Bureau of Industry and Security. They also thanked Special Assistant U.S. Attorney John W. Borchert and the Counterespionage Section of the Justice Department's National Security Division for their roles in prosecuting this matter.
Alabama Tax Return Preparer Sentenced to Jail for Preparing False Tax Returns for ClientsRead the Press Release
An Alabama tax return preparer was sentenced to serve 36 months in prison for aiding in the preparation of false tax returns, the Justice Department and Internal Revenue Service (IRS) announced today.
Russell Burroughs was also ordered to pay restitution in the amount of $211,960.
According to court documents, during the 2008 through 2010 tax seasons, Burroughs owned and operated Computer Services, a tax return preparation business, located in Montgomery, Alabama. Burroughs admitted that he deliberately falsified information on client tax returns in order to illegally generate higher tax refunds. He intentionally included false items such as false business income and losses, false Schedule A deductions, false real estate rental losses, false education credits and false energy credits in order to inflate his client’s refunds. At his sentencing hearing, the court found that the tax loss associated with the false returns Burroughs filed exceeded $2.9 million.
This case was investigated by special agents of IRS - Criminal Investigation. Trial Attorneys Katherine Reinhart, Charles M. Edgar Jr. and Michael Boteler of the Justice Department’s Tax Division are prosecuting the case.
Justice Department Sues to Stop Tennessee Man from Preparing Tax ReturnsRead the Press Release
The United States filed a civil injunction suit against a Hixson, Tennessee, man to enjoin him from preparing federal income tax returns for others, the Justice Department announced today.
According to the complaint filed in the U.S. District Court for the Eastern District of Tennessee, Kevin Walker is alleged to have prepared federal income tax returns for his customers with fake businesses; reported false profits, losses and expenses; improperly claimed false employee business expenses and falsely claimed the Earned Income Tax Credit and education-related tax credits. According to the complaint, two returns prepared over a two-year period for one customer claimed bogus receipts, but no expenses, from a fictitious business so as to maximize tax refunds based on the Earned Income Tax Credit. As a result, the customer erroneously received income tax refunds of more than $6,000 for the two years. The Internal Revenue Service (IRS) estimates that Walker’s activities over the last five years have cost the U.S. Treasury as much as hundreds of thousands of dollars in lost income tax revenue.
Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Related Materials:
United States v. Kevin M. Walker
Complaint for Preliminary and Permanent InjunctionFormer FBI Special Agent and Co-Defendant Plead Guilty to Conspiracy, Bribery, and Obstruction of Justice SchemeRead the Press Release
A former FBI special agent and a conspirator pleaded guilty in the District of Utah yesterday and today to participating in a bribery scheme to obstruct a grand jury investigation in exchange for the promise of cash and multimillion dollar business contracts offered by a businessman under investigation.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Carlie Christensen of the District of Utah and Justice Department Inspector General Michael E. Horowitz made the announcement after the guilty pleas were accepted by U.S. District Judge Tena Campbell.
“No one is above the law, no matter what rank or badge a person might hold,” said Assistant Attorney General Caldwell. “Corruption by those entrusted to enforce the law strikes at the heart of our criminal justice system, and it will not be tolerated. This case lays bare a disgraceful attempt by a veteran FBI agent to get rich by thwarting an ongoing investigation. The Justice Department will fight corruption wherever we find it, even within the ranks of federal law enforcement.”
“These plea agreements demonstrate that Federal law enforcement officers who sell their badges for cash and frustrate the administration of justice will be held accountable for their actions,” said Inspector General Horowitz. “Department employees are held to the highest standards, and we cannot permit our criminal justice system to be stained by such bribery and corruption.”
“When a law enforcement officer violates his oath and the public’s trust by breaking the law, he must be held accountable,” said Acting U.S. Attorney Christensen. “In this case, former Agent Lustyik’s decision to enter into a conspiracy to obstruct a significant fraud investigation in Utah is a troubling reminder that corruption may exist even among those we entrust with protecting our citizens and upholding our laws.”
A 24-year veteran of the FBI, Robert Lustyik Jr., 51, of Sleepy Hollow, New York, pleaded guilty on Sept. 30, 2014, to an 11-count indictment charging him with conspiracy, eight counts of honest services wire fraud, obstruction of a grand jury proceeding, and obstruction of an agency proceeding. A childhood friend of Lustyik, Johannes Thaler, 50, of New Fairfield, Connecticut, pleaded guilty today to conspiracy to commit bribery, obstruction of a grand jury proceeding and obstruction of an agency proceeding. Sentencing is scheduled for Jan. 5, 2015.
In court documents and at the plea hearings, Lustyik and Thaler admitted that from October 2011 to September 2012, Lustyik, while employed as an FBI counterintelligence special agent, and Thaler conspired to use Lustyik’s official position to obstruct a criminal investigation into Michael Taylor, a businessman who owned and operated American International Security Corporation and was under investigation for paying kickbacks to obtain a series of contracts from the Department of Defense worth approximately $54 million. Taylor promised Lustyik and Thaler that in exchange for their help, he would provide them cash and multimillion dollar business contracts. Taylor told the two men: “I’ll make you guys more money than you can believe, provided they don’t think I’m a bad guy and put me in jail.”
Court documents state that Lustyik attempted to obstruct the investigation into Taylor by opening Taylor as an official FBI source in an effort to persuade the FBI, the Justice Department and the prosecutors and law enforcement agents investigating Taylor that Taylor’s usefulness as a source outweighed the government’s interest in prosecuting him. Lustyik also advocated on Taylor’s behalf directly to the prosecutors and law enforcement agents, urging them to use Taylor as a cooperating witness and emphasizing that indicting Taylor would threaten the nation’s security.
According to court documents, while Lustyik was obstructing the investigation into Taylor, Lustyik suggested that Thaler “blatantly” ask Taylor for money, emphasizing “he knows we are keeping him outta jail.” Lustyik explained to Thaler that on his upcoming trip to meet Taylor in Lebanon, “Taylor is gonna hand you cash in Lebanon,” “[l]ike 150 gs.” When Thaler asked Lustyik how he was supposed to bring that much cash back to the United States, Lustyik instructed him “[i]n your pants. Or wire it? They won’t stop 2 white guys at customs without a reason, [o]r I meet you at customs at JFK and cred you in.”
Court records state that during the conspiracy, Lustyik and Thaler acknowledged that Taylor was probably guilty, but they boasted about their success in using Lustyik’s official position to obstruct the investigation into Taylor, with Lustyik texting Thaler, “at this point IF he is indicted there is NO WAY he gets convicted even though he Prob did it.” During the conspiracy, Lustyik texted Thaler, “I think we are rich by Christmas!!” When Thaler asked why, Lustyik responded, “he [Taylor] is gonna be free!!!!!!!!”
Taylor pleaded guilty in the District of Utah to honest services wire fraud for his role in the scheme on Nov. 27, 2013. He is scheduled for sentencing on Jan. 5, 2015.
The investigation was conducted by Assistant Special Agent in Charge Tom Hopkins of the U.S. Department of Justice Office of Inspector General. The case is being prosecuted by Deputy Chief Peter Koski and Trial Attorney Maria Lerner of the Criminal Division’s Public Integrity Section, and Trial Attorney Ann Marie Blaylock of the Criminal Division’s Asset Forfeiture and Money Laundering Section. Scott Ferber of the Counterespionage Section of the National Security Division also assisted in the prosecution.
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Florida Man Sentenced to 27 Months in Prison for Attempting to Purchase 100 Stolen IdentitiesRead the Press Release
A Florida man was sentenced today to serve 27 months in prison for attempting to purchase sensitive, detailed personal identifying information, known as PII – including Social Security numbers and bank account numbers – to open credit card accounts and file fraudulent tax returns.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney John P. Kacavas of the District of New Hampshire made the announcement. U.S. District Judge Steven J. McAuliffe of the District of New Hampshire imposed the sentence.
Derric Theoc, 36, was indicted by a federal grand jury in July 2013 and pleaded guilty in June 2014 to one count of attempted access device fraud. In addition to his prison sentence, he was ordered to serve two years of supervised release.
In his guilty plea, Theoc admitted that, in April 2013, he attempted to purchase packages of personal identifying information for 100 people from an undercover United States Secret Service agent who was posing as a known, prolific vendor of personally identifiable information, Hieu Minh Ngo. Theoc had previously made multiple similar purchases from Ngo.
Ngo, a Vietnamese national, pleaded guilty on March 3, 2013, to wire fraud, identification fraud and fraud in connection with access devices and on Aug. 21, 2014, to a separate indictment to four counts of computer fraud. Sentencing is scheduled for Dec. 1, 2014. According to court documents, Ngo administered websites from 2007 through February 2013 that allowed more than 1,000 individuals from throughout the world to access databases containing personal identifying information and conduct more than 3 million queries to obtain a person’s date of birth, Social Security number and other information. He also sold or transferred more than 150,000 packages of personally identifiable information that would allow criminals to take over the identity of another person.
The packages of personal identifying information that Theoc attempted to purchase typically included a person’s name, address, date of birth, Social Security number, mother’s maiden name, driver’s license number, bank account number, bank routing number, email account, account password and place of work. Theoc further admitted that he attempted to purchase the information with the intent to obtain credit cards to make purchases or withdraw money and to file fraudulent tax returns in an effort to receive refunds to which he was not entitled.
The case is being investigated by the United States Secret Service. The case is being prosecuted by Senior Counsel Mysti Degani of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Arnold H. Huftalen of the District of New Hampshire.
Flakeboard Abandons Its Proposed Acquisition of SierraPineRead the Press Release
Flakeboard America Ltd. abandoned its plan to acquire one medium-density fiberboard (MDF) and two particleboard mills from SierraPine after the Department of Justice expressed concerns about the transaction’s likely anticompetitive effects in MDF. The department said that the transaction likely would have substantially lessened competition in the market for the production of MDF sold to customers in the west coast states of California, Oregon and Washington.
MDF is a manufactured wood product widely used in furniture, kitchen cabinets, and decorative mouldings. An increase in the price of MDF would likely result in significant harm to MDF consumers on the West Coast, the department said.
“This deal threatened to weaken competition and raise MDF prices for customers on the West Coast,” said Bill Baer, Assistant Attorney General of the Department of Justice’s Antitrust Division. “The companies’ decision to abandon the deal is a victory for consumers, who will continue to enjoy the benefits of MDF competition between Flakeboard and SierraPine.”
Flakeboard and SierraPine are two of only four significant suppliers of MDF to the West Coast. Both companies operate MDF mills in Oregon—Flakeboard in Eugene; SierraPine in Medford—and the nearest competing mill is several hundred miles away. For many customers, Flakeboard and SierraPine are the two closest sellers of MDF. The proposed merger would have given the combined firm a 58 percent market share for the thicker and denser grades of MDF that Flakeboard and SierraPine sell on the West Coast.
According to the department, the acquisition would have eliminated significant head-to-head competition between Flakeboard and SierraPine. In addition, by gaining control over SierraPine’s MDF mill, the department said that Flakeboard would have been in a better position to raise prices by restricting the amount of MDF available to the West Coast. The acquisition also would have enhanced the risk of coordination between Flakeboard and its few remaining rivals on output and prices, the department said.
Flakeboard is a Delaware corporation headquartered in Ontario, Canada. Flakeboard’s parent company is Celulosa Arauco y Constitución (Arauco), which is held by Inversiones Angelini y Compañia Limitada, a Chilean corporation headquartered in Santiago, Chile. In 2013, Flakeboard’s annual revenues from its MDF business were approximately $380 million. SierraPine is a California limited partnership headquartered in Roseville, California. In 2013, SierraPine’s annual revenues from its MDF business were approximately $70 million.
Five Army National Guard Officials and One Civilian Charged with BriberyRead the Press Release
Four retired and one active-duty Army National Guard officials and one civilian have been charged for their alleged participation in bribery schemes related to the awarding of millions of dollars of Army National Guard marketing, retention and recruitment contracts. Two of the retired Army National Guard officials and the civilian pleaded guilty for their roles in the schemes.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office, Special Agent in Charge Robert E. Craig Jr. of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office and Director Frank Robey of the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit (Army-CID) made the announcement.
“As captured by its motto, the Army National Guard is ‘always ready, always there’ for the American people,” said Assistant Attorney General Caldwell. “Unfortunately, today’s charges expose National Guard officials who were ‘always ready’ to pocket bribes and ‘always there’ to take kickbacks. In return, the charged officials allegedly subverted the open bidding process and illegally steered millions of taxpayer dollars to the bribe-payers through marketing and advertising contracts. Corruption should know no place in American government, but least of all in the military that so honorably serves our country. The Criminal Division is committed to rooting out corruption wherever we find it, including in the military, so that we can ensure that no one is putting the public’s trust up for sale.”
“These criminal charges and guilty pleas reflect our continued commitment to rooting out public corruption wherever it occurs,” said U.S. Attorney Boente. “The public contracting process should be one of integrity and fairness, and these cases should send a strong message that public corruption will be vigorously prosecuted in the military as well as other areas of government.”
“This investigation has sadly reminded us that even some members of our military are willing to trade on the trust their country placed in them to line their pockets with the profits of corrupt activities,” said U.S. Attorney Lynch. “We and our law enforcement partners will constantly guard against and root out such corruption wherever we find it.”
Charles Sines, 56, of Stafford, Virginia, a retired colonel from the United States Army National Guard; Wesley Russell, 48, of Albany, Indiana, a retired lieutenant colonel from the Indiana Army National Guard; and Jason Rappoccio, 39, of Hampton, South Carolina, an active-duty sergeant first class from the Army National Guard are charged with conspiracy to solicit bribes and the solicitation of bribes. Russell and Rappoccio allegedly asked for and received bribes, and Sines allegedly provided bribes.
Robert Porter, 50 of Columbia, Maryland, a retired colonel from the Army National Guard, and Timothy Bebus, 44, of Forest Lake, Minnesota, a retired sergeant major of the Minnesota Army National Guard and owner of Mil-Team Consulting and Solutions LLC, each pleaded guilty in the Eastern District of Virginia in September 2014 to conspiracy to commit bribery and bribery of a public official. Julianne Hubbell, 45, of Brooklyn Park, Minnesota, a civilian who partnered with her brother, Bebus, as the vice president of operations of Mil-Team, also pleaded guilty in September 2014 to conspiracy to commit bribery. Sentencing hearings for Bebus and Hubbell are scheduled for Jan. 23, 2015, and for Porter on Jan. 30, 2015.
“The alleged steering of large government contracts is offensive to active duty, reserve and retired members of the National Guard Bureau who took an oath to support and defend the Constitution,” said FBI Assistant Director in Charge McCabe. “It is also offensive to average American citizens who trust their government and its contractors to use taxpayer money wisely. We urge anyone who has knowledge of corruption and abuse in federal government contracting to contact the FBI.”
“The Department of Defense places special trust and confidence in its service members, particularly those in positions to influence the expenditure of taxpayer dollars,” said DCIS Special Agent in Charge Craig. “Guardsmen hold a unique position in our society, representing both their state and military service. The alleged behavior uncovered in this investigation was a disservice to both, but in no way typical of those honorable women and men that serve in our Army and Air National Guard. Identifying and investigating fraud and public corruption remains the highest of priorities for the Defense Criminal Investigative Service. Alongside our law enforcement partners, we will continue to aggressively pursue allegations of fraud impacting Department of Defense resources.”
“We have highly-trained, Army CID special agents who are extremely talented and very capable of rooting out this type of corruption within our ranks,” said Army-CID Director Robey. “People must realize, both in and out of uniform, that fraud will not be tolerated within the Army and Department of Defense, and greed cannot and will not trump duty and honor.”
As set forth in the indictments and other publicly-filed documents, the National Guard Bureau is a joint activity of the U.S. Department of Defense (DOD), state Army National Guard units and the Departments of the Army and Air Force. The National Guard Bureau, located in Arlington, Virginia, oversees the distribution of federal funding provided to the Army National Guard and its state units.
The DOD provides millions of dollars of federal funds to the Army National Guard for, among other things, advertising, marketing and sponsorships in order to recruit new members. The National Guard Bureau uses these funds to promote the Army National Guard by entering into advertising, marketing and sponsorship contracts. For example, through advertising, marketing and sponsorship contracts, the National Guard was an official sponsor of Dew Tour, Warrior Dash, and American Motorcycle Association Supercross’s events, where recruiters handed out promotional items and recruited new members. The National Guard also had a contract to sponsor Michael Jordan’s AMA Superbike team.
The National Guard Bureau can avoid a competitive bid process by awarding these federally-funded marketing contracts to Small Business Administration (SBA) certified 8(a) companies, which are minority-owned businesses. The National Guard Bureau also provides a portion of the federal funds to the state units to allocate.
The indictments allege that Sines and Rappoccio evaded the competitive bid process by using 8(a) companies to award contracts in exchange for bribes.
According to allegations in the indictment against him, Sines founded a company, Financial Solutions, after retiring from the Army National Guard as a colonel. Sines allegedly paid Porter, a then-active-duty colonel in the Army National Guard, a percentage of all contracts that Porter steered to Financial Solutions through 8(a) companies. As the director of the National Guard Bureau’s Guard Strength Directorate, Porter had substantial influence over the awarding of National Guard Bureau contracts, and allegedly steered approximately $4.5 million worth of contracts to Sines and Financial Solutions.
The indictment against Russell alleges that, while on active duty as a lieutenant colonel in the Indiana Army National Guard, Russell demanded 15 percent of all profits that a private marketing company would receive from state Army National Guard units. In return for his 15 percent cut of the profits, Russell allegedly promoted and encouraged state Army National Guard units to purchase the marketing company’s products.
The indictment against Rappoccio, an active-duty sergeant first class in the Army National Guard, alleges that Bebus and Hubbell paid Rappoccio a $30,000 bribe for steering a contract worth approximately $3.7 million to an 8(a) company chosen by Bebus. In pleading guilty, Bebus and Hubbell admitted to paying this bribe. In an effort to conceal the bribe payment, Bebus, Hubbell and others allegedly arranged for the payment of $6,000 in cash to Rappoccio, and the remaining $24,000 was allegedly routed from a business account controlled by Hubbell to an account controlled by Bebus and Hubbell’s brother-in-law, and then provided to Rappoccio in the form of a cashier’s check to Rappoccio’s wife.
An indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI’s Washington Field Office, with assistance from DCIS’s Mid-Atlantic Field Office and Army-CID’s Expeditionary Fraud Resident Agency’s Major Procurement Fraud Unit. The case is being prosecuted by Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section, Assistant U.S. Attorney Jonathan Fahey of the Eastern District of Virginia and Assistant U.S. Attorneys Marisa Seifan and Martin Coffey of the Eastern District of New York.
Allegations of bribery or corruption within the National Guard Bureau’s retention and recruitment contracting can be reported to the FBI’s Washington Field Office at (202) 278-2000 or the FBI’s Northern Virginia Public Corruption Hotline at (703) 686-6225.
Bebus Statement of Facts
Hubbell Statement of Facts
Porter Statement of Facts
Indictment - Sines 14cr325
Indictment - Russell 14cr324
Indictment - Rappoccio 14cr323
Detroit-Area Operator of Adult Day Care Center, Two Home Health Care Company Owners Convicted in $29 Million Medicare Fraud ConspiracyRead the Press Release
A federal jury in Detroit late yesterday convicted the operator of an adult day care center and two individuals who owned and operated a network of home health care companies for their participation in a $29 million Medicare fraud scheme.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations Detroit Office and Special Agent in Charge Jarod Koopman of the Internal Revenue Service – Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.
According to evidence presented at trial, Felicar Williams, 51, of Dearborn, Michigan, operated Haven Adult Day Care Center LLC (Haven), which purported to provide adult day care services for patients suffering from mental health disorders such as schizophrenia and dementia. At Williams’s direction, Haven billed Medicare for sophisticated mental health services purportedly provided by other, unlicensed staff members.
Evidence at trial also established that Abdul Malik Al-Jumail, 54, and his daughter, Jamella Al-Jumail, 25, both of Brownstown, Michigan, owned and operated a series of fraudulent home health care companies, including ABC Home Care Inc., Associates in Home Care Inc., Accessible Home Care Inc., Swift Home Care LLC, and Be Well Home Care LLC. The companies billed Medicare for home health services that were not needed or not provided. At the instruction of both Abdul Malik Al-Jumail and Jamella Al-Jumail, employees of the home health companies fabricated patient medical records to make it appear that the services were needed and provided.
According to evidence presented at trial, Abdul Malik Al-Jumail paid kickbacks to Williams to obtain billing information about patients at Haven. He then used the information to bill Medicare for home health care services that were never provided.
In addition, the evidence at trial showed that, on May 2, 2012, the day her father was arrested, Jamella Al-Jumail instructed an employee to retrieve falsified patient medical records from the company. Later that day, Jamella Al-Jumail and others helped burn the false records.
Haven and the various home health care companies billed Medicare for more than $29 million in the course of the conspiracy.
The defendants were charged in a superseding indictment on May 1, 2014. After the 12-week jury trial, Williams was found guilty of conspiracy to commit health care fraud and conspiracy to pay and receive health care kickbacks in relation to the sale of Medicare billing information to Abdul Malik Al-Jumail.
Abdul Malik Al-Jumail and Jamella Al-Jumail were each found guilty of conspiracy to commit health care fraud. Abdul Malik Al-Jumail was also found guilty of conspiracy to pay and receive health care kickbacks. Jamella Al-Jumail was also found guilty of destroying documents in connection with a federal investigation.
Carey Vigor, 61, a psychiatrist from Algonac, Michigan, was also charged in the indictment and was acquitted by the jury.
Sentencing has not yet been scheduled. Two other individuals charged in the indictment, Mohammed Sadiq and Philandis Thomas, are scheduled for trial in October 2014. One individual remains a fugitive.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
The case is being investigated by HHS-OIG, FBI and IRS-CI 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 Eastern District of Michigan. The case is being prosecuted by Trial Attorneys Patrick Hurford, Chris Cestaro and Brooke Harper 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 and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
Convicted Bomb Plotter Sentenced to 30 YearsRead the Press Release
PORTLAND, Oregon. – Mohamed Osman Mohamud, 23, who was convicted in 2013 of attempting to use a weapon of mass destruction (explosives) in connection with a plot to detonate a vehicle bomb at an annual Christmas tree lighting ceremony in Portland, was sentenced today to serve 30 years in prison, followed by a lifetime term of supervised release.
Mohamud, a naturalized U.S. citizen from Somalia and former resident of Corvallis, Oregon, was arrested on Nov. 26, 2010, after he attempted to detonate what he believed to be an explosives-laden van that was parked near the tree lighting ceremony in Portland. The arrest was the culmination of a long-term undercover operation, during which Mohamud was monitored closely for months as his bomb plot developed. The device was in fact inert, and the public was never in danger from the device.
At sentencing, United States District Court Judge Garr M. King, who presided over Mohamed’s 14-day trial, said “the intended crime was horrific,” and that the defendant, even though he was presented with options by undercover FBI employees, “never once expressed a change of heart.” King further noted that the Christmas tree ceremony was attended by up to 10,000 people, and that the defendant “wanted everyone to leave either dead or injured.” King said his sentence was necessary in view of the seriousness of the crime and to serve as deterrence to others who might consider similar acts.
“With today’s sentencing, Mohamed Osman Mohamud is being held accountable for his attempted use of what he believed to be a massive bomb to attack innocent civilians attending a public Christmas tree lighting ceremony in Portland,” said John P. Carlin, Assistant Attorney General for National Security. “The evidence clearly indicated that Mohamud was intent on killing as many people as possible with his attack. Fortunately, law enforcement was able to identify him as a threat, insert themselves in the place of a terrorist that Mohamud was trying to contact, and thwart Mohamud’s efforts to conduct an attack on our soil. This case highlights how the use of undercover operations against would-be terrorists allows us to engage and disrupt those who wish to commit horrific acts of violence against the innocent public. The many agents, analysts, and prosecutors who have worked on this case deserve great credit for their roles in protecting Portland from the threat posed by this defendant and ensuring that he was brought to justice.”
“This trial provided a rare glimpse into the techniques Al Qaeda employs to radicalize home-grown extremists,” said Amanda Marshall, U.S. Attorney for the District of Oregon. “With the sentencing today, the court has held this defendant accountable. I thank the dedicated professionals in the law enforcement and intelligence communities who were responsible for this successful outcome. I look forward to our continued work with Muslim communities in Oregon who are committed to ensuring that all young people are safe from extremists who seek to radicalize others to engage in violence.”
According to the trial evidence, in February 2009, Mohamud began communicating via e-mail with Samir Khan, a now-deceased al Qaeda terrorist who published Jihad Recollections, an online magazine that advocated violent jihad, and who also published Inspire, the official magazine of al-Qaeda in the Arabian Peninsula. Between February and August 2009, Mohamed exchanged approximately 150 emails with Khan. Mohamud wrote several articles for Jihad Recollections that were published under assumed names.
In August 2009, Mohamud was in email contact with Amro Al-Ali, a Saudi national who was in Yemen at the time and is today in custody in Saudi Arabia for terrorism offenses. Al-Ali sent Mohamud detailed e-mails designed to facilitate Mohamud’s travel to Yemen to train for violent jihad. In December 2009, while Al-Ali was in the northwest frontier province of Pakistan, Mohamud and Al-Ali discussed the possibility of Mohamud traveling to Pakistan to join Al-Ali in terrorist activities. Mohamud responded to Al-Ali in an e-mail: “yes, that would be wonderful, just tell me what I need to do.” Al-Ali referred Mohamud to a second associate overseas and provided Mohamud with a name and email address to facilitate the process.
In the following months, Mohamud made several unsuccessful attempts to contact Al-Ali’s associate. Ultimately, an FBI undercover operative contacted Mohamud via email under the guise of being an associate of Al-Ali’s. Mohamud and the FBI undercover operative agreed to meet in Portland in July 2010. At the meeting, Mohamud told the FBI undercover operative he had written articles that were published in Jihad Recollections. Mohamud also said that he wanted to become “operational.” Asked what he meant by “operational,” Mohamud said he wanted to put an explosion together, but needed help.
According to evidence presented at trial, at a meeting in August 2010, Mohamud told undercover FBI operatives he had been thinking of committing violent jihad since the age of 15. Mohamud then told the undercover FBI operatives that he had identified a potential target for a bomb: the annual Christmas tree lighting ceremony in Portland’s Pioneer Courthouse Square on Nov. 26, 2010. The undercover FBI operatives cautioned Mohamud several times about the seriousness of this plan, noting there would be many people at the event, including children, and emphasized that Mohamud could abandon his attack plans at any time with no shame. Mohamud indicated the deaths would be justified and that he would not mind carrying out a suicide attack on the crowd.
According to evidence presented at trial, in the ensuing months Mohamud continued to express his interest in carrying out the attack and worked on logistics. On Nov. 4, 2010, Mohamud and the undercover FBI operatives traveled to a remote location in Lincoln County, Oregon, where they detonated a bomb concealed in a backpack as a trial run for the upcoming attack. During the drive back to Corvallis, Mohamud was asked if was capable looking at all the bodies of those who would be killed during the explosion. In response, Mohamud noted, “I want whoever is attending that event to be, to leave either dead or injured.” Mohamud later recorded a video of himself, with the assistance of the undercover FBI operatives, in which he read a statement that offered his rationale for his bomb attack.
On Nov. 18, 2010, undercover FBI operatives picked up Mohamud to travel to Portland to finalize the details of the attack. On Nov. 26, 2010, just hours before the planned attack, Mohamud examined the 1,800 pound bomb in the van and remarked that it was “beautiful.” Later that day, Mohamud was arrested after he attempted to remotely detonate the inert vehicle bomb rked near the Christmas tree lighting ceremony
This case was investigated by the FBI, with assistance from the Oregon State Police, the Corvallis Police Department, the Lincoln County Sheriff’s Office and the Portland Police Bureau. The prosecution was handled by Assistant U.S. Attorneys Ethan D. Knight and Pamala Holsinger from the U.S. Attorney’s Office for the District of Oregon. Trial Attorney Jolie F. Zimmerman, from the Counterterrorism Section of the Justice Department’s National Security Division, assisted.
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14-1077
United States Hosts Global Alliance Against Child Sexual Abuse Online Ministerial ConferenceRead the Press Release
Today, United States Attorney General Eric Holder and European Union (EU) Commissioner for Home Affairs Cecilia Malmström welcomed high-level government officials representing over 30 members of the Global Alliance Against Child Sexual Abuse Online to a ministerial conference in Washington. The Global Alliance was launched by Attorney General Holder and Commissioner Malmström in December 2012 with the aim of uniting decision-makers all around the world to commit to more effectively identify and rescue child sexual abuse victims, investigate and prosecute online exploitation offenses, increase public awareness of the risks posed by children’s online activities, and reduce the amount of child sexual abuse images available online.
“Together, thanks to the hard work of the Global Alliance countries, this important, life-changing work has enabled us to intervene to rescue numerous child victims suffering at the hands of abusers; to arrest and prosecute those who did them harm; and to begin the long process of healing for each one of these survivors,” said Attorney General Holder. “I have no doubt that this work will continue – and be amplified – by the work we’re discussing today.”
The conference was divided into two sessions. The morning session featured global leaders and experts from the investigative, public policy, victim advocacy and legal arenas, who shared insight and experience from the cutting edge of combating online child exploitation. They addressed a variety of topics related to the shared policy targets of the Global Alliance, including: investigative tactics that enabled the takedown of a hidden, highly sophisticated global enterprise of distributors of child sexual abuse images; the latest technological and tactical breakthroughs in identifying previously unknown victims of child sexual abuse online; and novel approaches to partnering with the private sector to combat the online proliferation of child sexual abuse images. The afternoon ministerial session featured keynote speakers from law enforcement and from the private sector with deep experience in combating the online exploitation of children. In addition, ministerial or other high-level government officials from each nation in attendance highlighted notable accomplishments over the past two years related to the Alliance’s policy targets, as well as offering their vision for the Alliance’s future.
“The threat to young people posed by online sex predators is on the rise,” said Commissioner Malmström. “Challenges are constantly evolving. Every time a picture of an abused child is shown that child is being abused, over and over again. The global alliance shows our collective willingness to fight this hideous crime, something we can only do by working together. Our collective promises must become a reality.”
The states participating in the Alliance include Albania, Armenia, Australia, Austria, Belgium, Bosnia and Herzegovina, Bulgaria, Cambodia, Canada, Costa Rica, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Ghana, Greece, Hungary, Ireland, Israel, Italy, Japan, Kosovo, Latvia, Lithuania, Luxembourg, Malta, Mexico, Montenegro, the Netherlands, New Zealand, Nigeria, Norway, the Philippines, Poland, Portugal, the Republic of Korea, the Republic of Moldova, Romania, Serbia, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Thailand, Turkey, Ukraine, the United Kingdom and the United States.
Global Alliance: Greater Commitments for Better Results
At the conclusion of the conference, the 54 Alliance members endorsed a Ministerial Declaration that commits to addressing the transborder obstacles to identifying and rescuing victims of exploitation and to identifying and prosecuting offenders, by agreeing to pursue the following potential actions where and when possible, in full respect of due process and fundamental rights requirements:
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Enabling law enforcement among Global Alliance countries to gain timely access to electronic information and evidence held by Internet service providers and other repositories of electronic information that is material to the investigation and prosecution of child sexual abuse offenses through central authorities and other legally authorized channels, so that no nation becomes a safe haven for such information;
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Facilitating prompt and comprehensive exchange among law enforcement of information and evidence pertinent to child sexual abuse offenses featuring transborder offense conduct, victims, co-conspirators or evidence repositories;
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Enabling Internet service providers and other repositories of electronic information to provide information pertinent to the identification, apprehension, and ultimate prosecution of online child sexual abuse offenders to law enforcement pursuant to legal process in a manner and time frame consistent with reasonable investigative and prosecutorial demands; and
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Augmenting existing, collaborative and transborder efforts to identify and rescue victims of online child sexual abuse.
Background
The United States, through the Department of Justice, the Department of Homeland Security, the Postal Inspection Service and other government agencies, in collaboration with non-governmental organizations (NGOs), industry and international partners, has made progress in combating all forms of child sexual exploitation.
For example, this past March, the Department of Justice obtained a 30-year sentence against a United States citizen who served as an English teacher in China, using that position of authority to molest children under the age of 12 and to produce child pornography. In July, the department obtained a sentence of 120 years against a noncommissioned officer in the U.S. military who had drugged and sexually abused children, producing images and videos of that horrific abuse.
A recent U.S. operation targeting offenders exploiting children on a global scale secured convictions of 30 and 40 years, respectively, for Peter Truong and Mark Newton. Truong and Newton were residents of Queensland, Australia who brought their five-year-old son to the United States and France to meet with other men from various countries, so that these persons could record the sexual abuse of the minor victim. Over the course of this scheme to sexually exploit their son, Newton and Truong were also found to have engaged in a conspiracy to transport the child pornography produced during these encounters to individuals around the world, including individuals living in Florida, Virginia, and Indiana. It was this trafficking of materials that alerted United States Postal Inspectors and Indiana investigators to the case, launching the two year investigation of Newton, Truong, and the other men who conspired to abuse their son. Prosecutions of these other men are ongoing.
In addition, the U.S. Congress has funded the creation of state-level task forces, known as the Internet Crimes Against Children (ICAC) Task Forces, which help state and local agencies to develop successful, long-term responses to online child exploitation. These task forces are supported by the Department of Justice, not just with funding, but with training.
As threats to our children continue to evolve in every corner of the globe, the Department of Justice is committed to drawing upon the collective experience of every country, and the cooperation of every community, to protect our young citizens and to hold abusers accountable to the fullest extent of the law. For more information regarding the Justice Department’s efforts to combat child exploitation, please visit: http://www.justice.gov/criminal/ceos.
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Two Defendants Charged in Connection with Detroit-Area Home Health Kickback SchemeRead the Press Release
Two Detroit-area residents were arrested today on charges related to a Medicare fraud scheme in which they are alleged to have referred Medicare beneficiaries to home health care agencies in exchange for kickbacks.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office, and Acting Special Agent in Charge Jarod Koopman, of the Internal Revenue Service - Criminal Investigation (IRS-CI) Detroit Field Office, made the announcement.
Sophia Eggleston, 52, of Farmington Hills, Michigan, and Sekne Ali, 48, of Dearborn, Michigan, were charged in a four-count indictment, unsealed today, with conspiracy to violate the Anti-Kickback Statute and substantive violations of the Anti-Kickback Statute. The indictment alleges that both defendants recruited Medicare beneficiaries to two home health agencies in Oakland County, Michigan – Prestige Home Health Services Inc. and Royal Home Health Care Inc. – and were paid kickbacks for the patient referrals. Both agencies purported to provide in-home health care services to Medicare beneficiaries.
The charges contained in an indictment are merely accusations, and a defendant is presumed innocent unless and until proven guilty.
This case was investigated by the FBI, HHS-OIG and IRS-CI 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 Eastern District of Michigan. This case is being prosecuted by Trial Attorneys Niall M. O’Donnell and James P. McDonald of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 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.
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Six Defendants Charged for $6 Million Miami Home Health Care Fraud SchemeRead the Press Release
Six South Florida residents have been indicted for their alleged participation in a $6.2 million Medicare fraud scheme involving defunct home health care company Professional Medical Home Health LLC (Professional Home Health).
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Acting 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.
On Sept. 25, 2014, a federal grand jury in Miami returned a 14-count indictment charging Ernesto Fernandez, 48, Dennis Hernandez, 32, Jose Alvarez, 47, and Joel San Pedro, 44, all of Miami; Alina Hernandez, 38, of West Palm Beach; and Juan Valdes, 37, of Palm Springs, for their roles in defrauding Medicare and soliciting and receiving health care kickbacks.
According to allegations in the indictment, the defendants recruited patients for Professional Home Health, a Miami home health care agency. As part of the scheme, the defendants solicited and received kickbacks from the owners and operators of Professional Home Health in exchange for providing beneficiaries for home health services that were not medically necessary or not provided. The defendants and their co-conspirators also allegedly falsified patient documentation to support the fraudulent billing. From December 2008 through February 2014, Medicare paid Professional Home Health more than $6.2 million for these fraudulent home health care claims.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
Two other individuals have already pleaded guilty for their roles in the scheme. Annarella Garcia, an owner of Professional Home Health, pleaded guilty to one count of conspiracy to commit health care fraud, and on Aug. 26, 2014, she was sentenced to serve 70 months in prison and ordered to pay $6,257,142 in restitution. Annilet Dominguez, an administrator of Professional Home Health, pleaded guilty to one count of conspiracy to commit health care fraud and three counts of false statements related to health care matters. On Sept. 29, 2014, she was sentenced to serve 68 months in prison and ordered to pay $6,257,149 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 Attorneys Anne P. McNamara and A. Brendan Stewart 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 and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
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Ohio Landlord Agrees to End Discriminatory Housing PracticesRead the Press Release
The Justice Department today announced that a North Ridgeville, Ohio, landlord, Emil Bagi, and his management company, Ridgeway Management Ltd., have entered into a consent decree and have agreed pay $30,000 to resolve claims that they discriminated on the basis of race at the Ridge Plaza Apartments, a 36 unit apartment complex they own and operate in North Ridgeville, Ohio. The settlement must still be approved by the federal district court in the Northern District of Ohio.
According to documents filed along with the settlement agreement the department alleges that the defendants discriminated against African Americans by quoting higher rental and application fee rates to them than to white apartment seekers, and by refusing to show African Americans vacant units when they visited while showing such units to white apartment seekers who visited the complex. The complaint is based on evidence obtained by the department’s fair housing testing program. The department sent African-American and white testers posing as prospective renters to the complex and the African-American testers were quoted higher rents and application fees than the white testers. African-American testers were also told that they could not view a unit at that time, while similarly situated white testers were shown units. The department also alleges that since acquiring ownership of the property in 1995, the defendants have never leased a unit to an African-American tenant.
Under the terms of the settlement, the defendant wills establish a settlement fund of $20,000 to compensate persons harmed by the alleged discrimination and a $10,000 civil penalty to the United States. In addition, the defendants will establish non-discriminatory rental policies, obtain fair housing training, and submit to reporting and monitoring requirements for the three year term of the settlement.
“It is simply unacceptable for a landlord to make renting an apartment more difficult and more expensive because of a person’s race,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division.
“The Department of Justice is committed to enforcing the Fair Housing Act using every tool at our disposal,” said U.S. Attorney Steven M. Dettelbach for the Northern District of Ohio. “This landlord got caught by fair housing testers trying to charge higher rent to minority applicants. He failed the test miserably – and now he has to pay the price. Other landlords should keep that in mind when they are showing properties.”
Fighting illegal housing discrimination is a top priority of the Department of Justice. The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, disability and familial status. More information about the Civil Rights Division and the laws it enforces is available at www.justice.gov/crt. Individuals who believe that they may have been victims of housing discrimination at Ridge Plaza should contact the Justice Department at 1-800-896-7743 or by email at [email protected]. Persons who believe they have experienced housing discrimination elsewhere may contact the Justice Department or contact HUD at 1-800-669-9777 or through its website at http://portal.hud.gov/hudportal/HUD?src=/program_offices/fair_housing_equal_opp.
Michigan Home Health Agency Owner Charged in Connection with $2.6 Million Home Health Care SchemeRead the Press Release
An owner of a Detroit-area home health agency has been charged for her alleged role in a $2.6 million home health care scheme involving the payment of kickbacks to patient recruiters and physicians for the referral of Medicare beneficiaries.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office, and Special Agent in Charge Jarod Koopman of the Internal Revenue Service – Criminal Investigation (IRS-CI) Detroit Field Office made the announcement.
Rahmat Begum, 48, of Farmington Hills, Michigan, was charged in a six-count indictment, unsealed today, with conspiracy to commit wire fraud, false statements relating to health care matters, conspiracy to violate the Anti-Kickback Statute and money laundering.
According to allegations in the indictment, Begum co-owned and operated Empirical Home Health Care Inc., an Oakland County, Michigan, home health agency that purported to provide in-home health care services to Medicare beneficiaries. Begum allegedly paid kickbacks to patient recruiters and physicians for their referral of Medicare beneficiaries to Empirical Home Health Care. The indictment also alleges that Begum laundered the proceeds of the scheme through a company known as Focal Project Management Consulting.
According to the indictment, Medicare paid Empirical approximately $2,661,331 for false and fraudulent home health care claims where the referrals were obtained through the payment of kickbacks.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty.
This case was investigated by the FBI, HHS-OIG and IRS-CI and was brought as part of the Medicare Fraud Strike Force, under the supervision by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Trial Attorneys Niall M. O’Donnell and James McDonald of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 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.
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Miami Home Health Care Agency Owner Indicted in $8 Million Medicare Fraud SchemeRead the Press Release
The owner of a Miami home health care agency has been arrested in connection with an $8 million health care fraud scheme involving Acclaim Home Healthcare Inc.
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 Acting 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.
In an indictment returned on Sept. 25, 2014, and unsealed today, Orelvis Olivera, 45, of Miami, was charged with conspiracy to commit health care and wire fraud, conspiracy to pay and receive kickbacks and paying and receiving kickbacks in connection with a federal health care benefit program.
According to the indictment, Acclaim Home Health was a Miami-based home health care agency that purported to provide home health care and physical therapy services to Medicare beneficiaries. Olivera allegedly paid kickbacks to patient recruiters in return for the recruiters’ referral of Medicare beneficiaries to Acclaim Home Health. In addition, Olivera allegedly solicited and received kickbacks in return for referring Medicare beneficiaries to other Miami-based home health care agencies.
As alleged in the indictment, from May 2008 to June 2014, Acclaim Home Health billed Medicare approximately $8 million for fraudulent claims, and was paid approximately $7.3 million by Medicare for those claims.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The 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 Kelly Graves of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to: www.stopmedicarefraud.gov.
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Justice Department Settles Allegations of Disability-Based Housing Discrimination with West Virginia DeveloperRead the Press Release
The Justice Department announced today that developer Douglas Pauley and entities affiliated with him have agreed to pay $110,000 and make approximately $1.7 million in retrofits required to remove accessibility barriers at 30 apartment complexes, involving more than 750 units in West Virginia. The parties’ agreement will settle the United States’ claims that defendants had violated the Fair Housing Act and the Americans with Disabilities Act by building the complexes with a variety of features that made them inaccessible to persons with disabilities. The United States District Court for the Southern District of West Virginia approved the settlement yesterday.
Under the terms of the agreement, Pauley, as General Partner of 30 limited liability partnerships, must take extensive actions to make the complexes accessible to persons with disabilities, including wheelchair users. These corrective actions include replacing excessively sloped portions of sidewalks, installing properly sloped curb ramps to allow persons with disabilities to access the sidewalks from the parking areas, replacing cabinets in bathrooms and kitchens to provide sufficient room for wheelchair users, and reducing door threshold heights. In addition, defendants will pay $100,000 to establish a settlement fund for the purpose of compensating individuals with disabilities who have been impacted by the accessibility violations and $10,000 as a civil penalty.
“The Fair Housing Act protects the rights of persons with disabilities to have equal opportunities to enjoy the housing of their choice,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “And this comprehensive resolution will ensure equal access to persons with disabilities at 30 apartment complexes and will compensate those injured by the failure to provide accessible housing.”
“Housing is a fundamental human need, and it’s deeply unfair to deny persons with disabilities equal access to it,” said Booth Goodwin, United States Attorney for the Southern District of West Virginia. “Thanks to this case, the developer will be required to devote nearly $2 million to correcting and compensating for the harm that he and his companies have caused. That’s an important victory for West Virginians with disabilities.”
Individuals who are entitled to share in the settlement fund will be identified through a process established in the settlement. Notices of the settlement and a list of subject properties will be published in the Charleston Gazette. Persons who believe they were subjected to unlawful discrimination at one of those properties either when they lived there or considered living there should contact the Justice Department toll-free at 1-800-896-7743 mailbox # 9993 or e-mail the Justice Department at [email protected].
The federal Fair Housing Act prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin and disability. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt. Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Line at 1-800-896-7743, e-mail the Justice Department at [email protected], or contact HUD at 1-800-669-9777.
Justice Department Releases New Technical Assistance on the Voting Rights of People with DisabilitiesRead the Press Release
The Justice Department announced today it has published a new technical assistance publication about federal laws that protect the rights of voters with disabilities, including the Americans with Disabilities Act, the Voting Rights Act, the National Voter Registration Act and the Help America Vote Act. The publication, “The Americans with Disabilities Act & Other Federal Laws Protecting the Rights of Voters with Disabilities,” is intended to help election officials, poll workers and voters understand how the ADA and other federal laws ensure equality in the voting process for people with disabilities.
“The right to vote is the foundation upon which our country is built,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “For too long in our history, many people with disabilities have been excluded from exercising this fundamental right and have been prevented from being a full participant in our democracy. A number of federal civil rights laws, including the Americans with Disabilities Act and the Voting Rights Act, have been put in place to address fairness in the voting process for people with disabilities. The Justice Department is fully committed to enforcing these laws to ensure that voters with disabilities are no longer discriminated against in the election process.”
The publication provides guidance about how the federal disability rights laws apply to the election process, from registration to voting. The publication discusses the need for policies, procedures, and programs to be in place to ensure that voters with disabilities are not discriminated against or illegally excluded from voting. For example, the guidance discusses local governments’ obligations under the ADA to ensure polling places are physically accessible to voters with mobility disabilities, as well as their obligation to provide effective communication with voters who have vision and hearing disabilities. Voters with disabilities must be able to access their polling place like everyone else, and vote alongside their neighbors and friends.
The “The Americans with Disabilities Act & Other Federal Laws Protecting the Rights of Voters with Disabilities” publication may be found at http://www.ada.gov/ada_voting/ada_voting_ta.pdf or http://www.ada.gov/ada_voting/ada_voting_ta.htm. Those interested in finding out more about the ADA may call the Justice Department’s toll-free ADA information line at 1-800-514-0301 (V) or 1-800-514-0383 (TTY), or visit its ADA website at www.ada.gov. ADA complaints may be filed by email to [email protected].
Justice Department Files Lawsuit Alleging Disability-Based Discrimination by West Virginia DevelopersRead the Press Release
The Justice Department filed a lawsuit yesterday against West Virginia-based developer Biafora’s Incorporated (Biafora) and several affiliated companies, for violating the Fair Housing Act and the Americans with Disabilities Act (ADA). The lawsuit alleges that the defendants violated these laws when they designed and constructed twenty-three residential properties with barriers that make them inaccessible to persons with disabilities.
“For over two decades, the Fair Housing Act and ADA have required those who design and build multifamily housing complexes to make them accessible to persons with disabilities,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “Residential complexes built with steps but without ramps or other means of access deny Americans with disabilities the basic right to equal housing opportunities.”
“The United States Attorney’s Office is committed to working together with the Civil Rights Division to ensure that the rights of citizens with disabilities in the Northern District of West Virginia are fully protected,” said U.S. Attorney William J. Ihlenfeld for the Northern District of West Virginia. “It’s important that building developers in our district design and construct housing units which comply with the Fair Housing Act and the Americans with Disabilities Act.”
The suit, filed in U.S. District Court in Clarksburg, West Virginia, alleges that twenty-three properties located in Monongalia County, Harrison County, and Marion County, West Virginia, as well as in Greene County, Pennsylvania, have significant barriers, including steps leading to building entrances, non-existent or excessively sloped pedestrian routes from apartment units to site amenities (e.g., picnic areas, dumpsters, clubhouse/leasing offices), insufficient maneuvering space in bathrooms and kitchens, excessively high light switches and temperature controls and inaccessible parking.
The suit seeks a court order requiring the defendants to bring properties they have designed and constructed since 1991 into compliance with the Fair Housing Act and the ADA, as well as monetary damages for persons harmed by the lack of accessibility and civil penalties to the United States. The suit also names Biafora’s affiliates Falconcrest LLC, Five Star Holdings LLC, Metro Rentals LLC, Metro Rentals II LLC, RDR Properties LLC, RDR Properties II LLC, The Gables LLC, The Woodlands LLC, 3BT LLC and CMC Company LLC. Anyone with information about the inaccessible conditions at these properties should call the Justice Department at 1-800-896-7743, and follow the prompts to enter mailbox 998.
The federal Fair Housing Act prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status, and disability. Among other things, the Fair Housing Act requires all multifamily housing constructed after March 13, 1991, to have basic accessibility features, including accessible routes without steps to all ground floor units, and units accessible to wheelchair users and others with disabilities. More information about the Civil Rights Division and the laws it enforces is available at www.usdoj.gov/crt.
The complaint is an allegation of unlawful conduct. The allegations in the complaint must still be proven in federal court.
Government Settles False Claims Act Allegations Against Guam-Based Construction Company for $285,000Read the Press Release
ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that the United States of America, on behalf of the United States Environmental Protection Agency (“U.S. EPA”), secured $285,000 in settlement of a civil lawsuit against GRH Technologies Construction Co., Ltd. (“GRH”), and GRH’s Treasurer, Chen Pei SU (“SU”). The lawsuit alleged that GRH and SU committed a violation of the False Claims Act, 31 U.S.C. § 3729 et seq., when they submitted a fraudulent claim for reimbursement under a contract funded by the American Recovery and Reinvestment Act (“ARRA”) between Guam Waterworks Authority and GRH for services including leak detection, pipeline, location, mapping, leak control, and related training. GRH and SU submitted a claim for reimbursement of $117,912, which GRH and SU purport was used to purchase equipment from a Taiwan-based company. However, the check used to pay the Taiwan-based company was never negotiated and GRH and SU could not produce evidence that such payment was made. The lawsuit sought triple damages and civil penalties from GRH and SU.
The United States settled the False Claims Act lawsuit with GRH and SU for $285,000. Upon collecting the $285,000 in settlement funds, the United States dismissed its claims on August 8, 2014.
U.S. Attorney Alicia A.G. Limtiaco stated, “False claims to the United States government have
an effect on all its citizens and on the agencies that serve those citizens. They affect not only the particular agency to whom the specific act was committed, but in the aggregate they affect the overall vitality of government programs and contracts and detract from the millions of Americans who could benefit from those programs. The U.S. Attorney’s Office for the Districts of Guam and the Northern Mariana Islands and federal agencies in this region, most specifically in this case the U.S. Environmental Protection Agency, continue to aggressively enforce the False Claims Act against those that violate the public trust and misuse public funds.”This case was investigated by the U.S. EPA and prosecuted by Assistant U.S. Attorneys Mikel W. Schwab and Jessica F. Cruz.
Four Members of International Computer Hacking Ring Indicted for Stealing Gaming Technology, Apache Helicopter Training SoftwareRead the Press Release
Four members of an international computer hacking ring have been charged with breaking into computer networks of prominent technology companies and the U.S. Army and stealing more than $100 million in intellectual property and other proprietary data. Two of the charged members have already pleaded guilty. The alleged cyber theft included software and data related to the Xbox One gaming console and Xbox Live online gaming system; popular games such as “Call of Duty: Modern Warfare 3” and “Gears of War 3”; and proprietary software used to train military helicopter pilots.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Charles M. Oberly III of the District of Delaware and Special Agent in Charge Stephen E. Vogt of the FBI’s Baltimore Field Office made the announcement.
“As the indictment charges, the members of this international hacking ring stole trade secret data used in high-tech American products, ranging from software that trains U.S. soldiers to fly Apache helicopters to Xbox games that entertain millions around the world,” said Assistant Attorney General Caldwell. “The American economy is driven by innovation. But American innovation is only valuable when it can be protected. Today’s guilty pleas show that we will protect America’s intellectual property from hackers, whether they hack from here or from abroad.”
“Electronic breaking and entering of computer networks and the digital looting of identities and intellectual property have become much too common,” said U.S. Attorney Oberly. “These are not harmless crimes, and those who commit them should not believe they are safely beyond our reach.”
Nathan Leroux, 20, of Bowie, Maryland; Sanadodeh Nesheiwat, 28, of Washington, New Jersey; David Pokora, 22, of Mississauga, Ontario, Canada; and Austin Alcala, 18, of McCordsville, Indiana, were charged in an 18-count superseding indictment returned by a federal grand jury in the District of Delaware on April 23, 2014, and unsealed earlier today. The charges in the indictment include conspiracies to commit computer fraud, copyright infringement, wire fraud, mail fraud, identity theft and theft of trade secrets. The defendants are also charged with individual counts of aggravated identity theft, unauthorized computer access, copyright infringement and wire fraud.
Today, Pokora and Nesheiwat pleaded guilty to conspiracy to commit computer fraud and copyright infringement and are scheduled for sentencing on Jan. 13, 2015. Pokora was arrested on March 28, 2014, while attempting to enter the United States at the Lewiston, New York, Port of Entry. Pokora’s plea is believed to be the first conviction of a foreign-based individual for hacking into U.S. businesses to steal trade secret information.
According to the superseding indictment and other court records, from January 2011 to March 2014, the four men and others located in the United States and abroad allegedly hacked into the computer networks of Microsoft Corporation, Epic Games Inc., Valve Corporation, Zombie Studios and the U.S. Army. The defendants and others allegedly obtained access to the victims’ computer networks through methods including SQL injection and the use of stolen usernames and passwords of company employees and their software development partners. Once inside the victims’ computer networks, the conspirators accessed and stole unreleased software, software source code, trade secrets, copyrighted and pre-release works and other confidential and proprietary information. Members of the conspiracy also allegedly stole financial and other sensitive information relating to the companies – but not their customers – and certain employees of such companies.
Specifically, the data cyber-theft allegedly included source code, technical specifications and related information for Microsoft’s then-unreleased Xbox One gaming console; intellectual property and proprietary data related to Xbox Live, Microsoft’s online multi-player gaming and media-delivery system; Apache helicopter simulator software developed by Zombie Studios for the U.S. Army; a pre-release version of Epic’s video game, “Gears of War 3;” and a pre-release version of Activision’s video game, “Call of Duty: Modern Warfare 3.” The defendants also allegedly conspired to use, share and sell the stolen information.
The value of the intellectual property and other data that the defendants stole, as well as the costs associated with the victims’ responses to the conduct, is estimated to range between $100 million and $200 million. To date, the United States has seized over $620,000 in cash and other proceeds related to the charged conduct.
In addition to those charged in the United States, an Australian citizen has been charged under Australian law for his alleged role in the conspiracy.
An indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty in a court of law.
This case is being investigated by the FBI, with assistance from the Criminal Division’s Office of International Affairs, the U.S. Department of Homeland Security’s Homeland Security Investigations and Customs and Border Patrol, and the U.S. Postal Inspection Service. The investigation also has been coordinated with the Western Australia Police and the Peel Regional Police of Ontario, Canada.
The case is being prosecuted by Trial Attorney James Silver of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Edward J. McAndrew of the District of Delaware.
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Former Klansman Pleads Guilty to Federal Hate Crime for Cross BurningRead the Press Release
Timothy Flanagan, 33, pleaded guilty today in federal court in Nashville, Tennessee, for his role in the April 30, 2012, cross burning in front of an interracial family’s home in Minor Hill, Tennessee, the Department of Justice announced. Flanagan pleaded guilty to one count of conspiring with others to threaten, intimidate and interfere with an African-American man’s enjoyment of his housing rights, and one count of interfering with those housing rights.
Flanagan—a former member of the Church of the National Knights, a Ku Klux Klan affiliate—admitted during the plea hearing that on the night of April 30,2012, he and two other individuals devised a plan to burn a cross in the yard of an African American man in Minor Hill, Tennessee. Flanagan’s co-conspirator, Timothy Stafford, constructed a wooden cross in a workshop behind his house. Using Flanagan’s credit card, Stafford and co-conspirator Ivan “Rusty” London then purchased diesel-fuel with which to soak the cross. Flanagan and the other co-conspirators then drove the cross to the victim’s residence and upon arriving at the residence, Flanagan and London exited the truck. The cross was placed in the driveway leading up to the house and was ignited. The co-conspirators burned the cross with the purpose of intimidating the African-American male who resided at that residence.
Ivan “Rusty” London IV, 21, of Lexington, Kentucky, and Timothy Stafford, 41, of Minor Hill, Tennessee, previously pleaded guilty for their roles in the conspiracy, and are currently awaiting sentencing.
“Hate-motivated crimes will not be tolerated in our country,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “The Justice Department will vigorously prosecute individuals who violate the rights of others because of race.”
“There can be no tolerance for such acts of intimidation when innocent persons are targeted simply because of their race,” said U.S. Attorney David Rivera for the Middle District of Tennessee. “The U.S. Attorney’s Office and our law enforcement partners will work tirelessly to protect the civil rights of all persons and bring to justice, anyone who would attempt to impede the constitutionally protected right to liberty of any person.”
Timothy Flanagan faces up to 20 years in prison and fines up to $500,000. Timothy Stafford faces up to 10 years in prison and fines of up to $250,000. Ivan London faces up to 5 years in prison and fines of up to $250,000. Sentencing for Flanagan is set for January 8, 2015.
This case was investigated by the Columbia, Tennessee, Division of the FBI and is being prosecuted by Trial Attorney Jared Fishman of the Civil Rights Division and by Assistant U.S. Attorney Hal McDonough of the Middle District of Tennessee.
Federal Court Shuts Down Florida Tax Return PreparerRead the Press Release
The U.S. District Court for the Southern District of Florida permanently barred Marvel Angelita Ebanks, a tax preparer who prepared returns in Palm Beach County, Florida, and her company, Marvelous Enterprises Inc., from preparing federal tax returns for others, the Justice Department announced today. A final judgment of permanent injunction was entered against Ebanks and her company by the court today.
The complaint alleged that Ebanks and her company prepared federal income tax returns for customers that claimed ficticious business expenses. In addition, Ebanks and her company prepared returns that claimed false or inflated education credits and child care credits, and other deductions and/or credits in order to unlawfully understate tax liabilities and generate larger than warranted refunds. Pursuant to the final judgment of permanent injunction, Ebanks and her company are permanently enjoined from preparing or assisting in the preparation or filing of federal tax returns and amended returns.
Return-preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2014. The IRS has some tips on their website for choosing a tax preparer. In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent tax preparers. Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page. If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.
Detroit-Area Doctor and Three Others Indicted for Their Alleged Roles in $7 Million Health Care Fraud SchemeRead the Press Release
Four defendants, including a Detroit-area physician, were charged in a superseding indictment with a $7 million health care fraud conspiracy. Fifteen defendants have now been charged in this case, including seven who have pleaded guilty for their conduct.
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 (HHS-OIG) Chicago Regional Office made the announcement.
The eight-count superseding indictment, unsealed today, charges defendants Dr. Kutub Mesiwala, 63, of Bloomfield Hills, Michigan, Jaweed Mohammed, 34, of Orland Park, Illinois, Mohammad Zubair Khan, 27, of West Bloomfield, Michigan, and Tousif Khan, 42, of Ypsilanti, Michigan, in connection with Medicare fraud involving unnecessary home health care and therapy services.
According to allegations in the indictment, Advance Home Health Care Services Inc. (Advance Home Health) and Perfect Home Health Care LLP (Perfect Home Health) purported to provide home health care and physical therapy services to eligible Medicare beneficiaries in the Detroit metropolitan area.
Dr. Mesiwala allegedly received kickbacks to refer Medicare beneficiaries to Advance Home Health and to falsely certify that the beneficiaries required home health care. Patient recruiters and office staff, including Tousif Khan, allegedly paid cash kickbacks to Medicare beneficiaries in exchange for their signing blank physical therapy records. Jaweed Mohammed, Mohammed Zubair Khan, and other co-conspirators then allegedly used those pre-signed blank physical therapy records to fabricate patient records for Advance Home Health and Perfect Home Health. Those records were used to support claims to Medicare when, in fact, no services were rendered.
The superseding indictment charges all four defendants with conspiracy to commit health care fraud, and charges Dr. Mesiwala and Tousif Khan with conspiracy to pay or receive health care kickbacks. It also charges Mohammad Zubair Khan, Jaweed Mohammed, and Tousif Khan with destruction of documents with the intent to obstruct the investigation. Additionally, Dr. Mesiwala was charged with two counts of health care fraud in relation to claims for reimbursement submitted to Medicare for visiting physician services that he purportedly rendered to patients in their Michigan homes while he was allegedly out of the country.
Between February 2009 and November 2013, Medicare paid Advance Home Health and Perfect Home Health more than $7 million as a result of these allegedly false and fraudulent claims. Fifteen defendants have been charged with participating in the health care fraud and kickback conspiracies, and seven of those defendants have entered guilty pleas. One of those defendants, Dr. Adelina Herrero, was sentenced by U.S. District Judge Paul D. Borman of the Eastern District of Michigan on Aug. 18, 2014, to three years in prison and ordered to pay $1,321,372 in restitution.
An indictment is merely an allegation, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
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 the U.S. Attorney’s Office for the Eastern District of Michigan. This case is being prosecuted by Trial Attorneys Patrick J. Hurford and Katharine A. Wagner and Special Trial Attorney Katie R. Fink 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.
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Department of Justice Enters into Five Agreements to Ensure Small Businesses Provide People with Disabilities Access to Neighborhood Goods and ServicesRead the Press Release
The Justice Department today announced five settlement agreements under the Americans with Disabilities Act (ADA) to make businesses in upstate New York and Corpus Christi, Texas, accessible to people with disabilities.
The settlements are with Hamilton Initiative in Hamilton, New York; Glenwood Plaza in Oneida, New York; Alliance NY in Cazenovia, New York, Subway of Cazenovia in Cazenovia, New York, and Water Street Seafood Company in Corpus Christi, Texas. These businesses, including a strip mall and several restaurants, were investigated in conjunction with the department’s Project Civic Access, a Civil Rights Division initiative to ensure that cities, towns and counties throughout the country comply with the ADA. The investigation revealed that each business had made alterations after the effective date of the ADA, but had failed to make the altered areas accessible.
At each business, certain architectural elements were inaccessible to people with disabilities. All five businesses worked cooperatively with the department after architectural barriers to access were identified. The department and each business agreed to remedy the barriers in compliance with the 2010 ADA Standards for Accessible Design (2010 Standards) within certain timelines. Details on each settlement follow:
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Hamilton Initiative owns and leases property to an eatery called the No. 10 Tavern.Under the agreement, the exterior entrance and restrooms will be modified to comply with the 2010 standards.
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Glenwood Plaza is a strip mall in Oneida, New York.Under the agreement, the parking lot at the strip mall will be modified to include the required accessible parking spaces, compliant signage and access aisles.
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Two settlement agreements were entered regarding Subway of Cazenovia sandwich shop. Alliance NY owns and leases property to Subway of Cazenovia and has agreed to renovate the exterior entrance to the restaurant to make it accessible to persons with mobility impairments.Subway of Cazenovia is the operator of the sandwich shop and has agreed to make modifications to the restroom in compliance with the 2010 Standards.
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Water Street Seafood Company is a restaurant that has already started correcting accessibility barriers at its exterior entrance and restrooms.Under the agreement, the restaurant will continue its modifications to make the restaurant compliant with the 2010 standards.
“The Civil Rights Division of the Justice Department is committed to the full and fair enforcement of the Americans with Disabilities Act,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “While it is important to have equal access to larger venues such as hospitals and stadiums, it is equally important that people with disabilities be able to enjoy all types of goods and services in their own neighborhood. When a business alters its space, it is critical that those alterations be made accessible so that people with disabilities can enjoy access to restaurants and businesses and be fully integrated in their communities.”
The ADA protects individuals with disabilities from discrimination by public accommodations, such as restaurants and shopping malls, and requires that when such entities make alterations, they must do so accessibly to the maximum extent feasible. In addition, businesses have an ongoing obligation to remove architectural barriers to make their businesses accessible to persons with disabilities to the extent it is readily achievable to do so. It is “readily achievable” to remove an accessibility barrier if it is easily accomplishable without much difficulty or expense. The Department of Justice and Small Business Administration have provided an ADA Guide for Small Businesses describing these obligations, as well as tax credits and deductions available, at http://www.ada.gov//smbustxt.htm. People interested in finding out more about the ADA or this agreement can call the Justice Department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY), or access its ADA Web site at www.ada.gov.
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Toyoda Gosei Co. Ltd. Agrees to Plead Guilty for Fixing Prices and Rigging Bids on Automobile Parts Installed in U.S. CarsRead the Press Release
Toyoda Gosei Co. Ltd., an automotive parts manufacturer based in Aichi, Japan, has agreed to plead guilty and to pay a $26 million criminal fine for its role in conspiracies to fix prices and rig bids for automotive hoses, airbags and steering wheels sold to automobile manufacturers, the Department of Justice announced today.
According to a two-count felony charge filed today in the U.S. District Court for the Northern District of Ohio in Toledo, Toyoda Gosei conspired to fix the prices of certain automotive hoses sold to Toyota Motor Corp. and certain of its subsidiaries, affiliates and suppliers (collectively Toyota), in the United States; and conspired to fix the prices of automotive airbags and steering wheels sold to Toyota and Fuji Heavy Industries Ltd. and certain of its subsidiaries, affiliates and suppliers, and certain of their subsidiaries, affiliates and suppliers (collectively Subaru), in the United States and elsewhere. In addition to the criminal fine, Toyoda Gosei has agreed to cooperate in the department’s ongoing investigation. The plea agreement will be subject to court approval.
“When purchasing an automobile, American consumers should feel confident that the sticker price is based on fair market costs to manufacture the vehicle,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The Antitrust Division will continue to prosecute cases in the auto parts industry to ensure fair and competitive prices are maintained.”
Toyoda Gosei and its co–conspirators, according to the charges, conspired through meetings and conversations in which they discussed and agreed upon bids and price quotations to be submitted to certain automakers and to allocate the supply of the products to those automakers. In furtherance of the agreements, Toyoda Gosei sold certain automotive hoses at noncompetitive prices to Toyota in the United States, and sold airbags and steering wheels at noncompetitive prices to Toyota and Subaru in the United States and elsewhere. Toyoda Gosei’s involvement in the automotive hoses conspiracy lasted from at least as early as February 2004 until at least September 2010 and its involvement in the automotive airbags and steering wheels conspiracy lasted from at least as early as September 2003 until at least September 2010.
Toyoda Gosei manufactures and sells a variety of automotive parts, including certain automotive hoses, airbags and steering wheels. The charges against Toyoda Gosei are the latest in the department’s ongoing investigation into anticompetitive conduct in the automotive parts industry. These are the first charges filed relating to automotive hoses sold to automobile manufacturers.
To date, 43 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry. Twenty-nine companies, including Toyoda Gosei, have pleaded guilty or agreed to plead guilty and have agreed to pay a total of nearly $2.4 billion in fines.
Toyoda Gosei is charged with price fixing and bid rigging in violation of the Sherman Act, which carries a maximum penalty for corporations of $100 million for each violation. 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 charge was brought by the Antitrust Division’s Chicago Office and the FBI’s Cleveland Field Office, Lima Resident Agency, with the assistance of the FBI headquarters’ International Corruption Unit and the U.S. Attorney’s Office for the Northern District of Ohio. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 1-888-647–3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Cleveland Field Office at 216-522-1400.
Pakistani Man Indicted for Selling 'StealthGenie' Spyware AppRead the Press Release
A Pakistani man has been indicted in the Eastern District of Virginia for allegedly conspiring to advertise and sell StealthGenie, a spyware application (app) that could monitor calls, texts, videos and other communications on mobile phones without detection. This marks the first-ever criminal case concerning the advertisement and sale of a mobile device spyware app.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia and Assistant Director in Charge Andrew McCabe of the FBI’s Washington Field Office made the announcement.
“Selling spyware is not just reprehensible, it’s a crime,” said Assistant Attorney General Caldwell. “Apps like StealthGenie are expressly designed for use by stalkers and domestic abusers who want to know every detail of a victim’s personal life – all without the victim’s knowledge. The Criminal Division is committed to cracking down on those who seek to profit from technology designed and used to commit brazen invasions of individual privacy.”
“StealthGenie has little use beyond invading a victim’s privacy” said U.S. Attorney Boente. “Advertising and selling spyware technology is a criminal offense, and such conduct will be aggressively pursued by this office and our law enforcement partners.”
“This application allegedly equips potential stalkers and criminals with a means to invade an individual’s confidential communications,” said FBI Assistant Director in Charge McCabe. “They do this not by breaking into their homes or offices, but by physically installing spyware on unwitting victim’s phones and illegally tracking an individual’s every move. As technology continues to evolve, the FBI will investigate and bring to justice those who use illegal means to monitor and track individuals without their knowledge.”
According to allegations in the indictment, Hammad Akbar, 31, of Lahore, Pakistan, is the chief executive officer of InvoCode Pvt Ltd, the company that advertises and sells StealthGenie online. Akbar and his co-conspirators allegedly created the spyware, which could intercept communications to and from mobile phones, including Apple’s iPhone, Google’s Android, and Blackberry Limited’s Blackberry. StealthGenie was undetectable by most users and was advertised as being untraceable.
Akbar was charged in the indictment with conspiracy, sale of a surreptitious interception device, advertisement of a known interception device and advertising a device as a surreptitious interception device. He was arrested in Los Angeles on Sept. 27, 2014, and is expected to appear before a magistrate judge in the Central District of California later today.
StealthGenie was hosted at a data center in Ashburn, Virginia. On Sept. 26, 2014, a federal judge in the Eastern District of Virginia issued a temporary restraining order authorizing the FBI to temporarily disable the website hosting StealthGenie.
The indictment alleges that StealthGenie’s capabilities included the following: it recorded all incoming/outgoing voice calls; it intercepted calls on the phone to be monitored while they take place; it allowed the purchaser to call the phone and activate it at any time to monitor all surrounding conversations within a 15-foot radius; and it allowed the purchaser to monitor the user’s incoming and outgoing e-mail messages and SMS messages, incoming voicemail messages, address book, calendar, photographs, and videos. All of these functions were enabled without the knowledge of the user of the phone.
Akbar and his co-conspirators allegedly programmed StealthGenie to synchronize communications intercepted by the app with the customer’s account so that the customer could review intercepted communications almost immediately from any computer with access to the Internet. To install the app, a purchaser needed to obtain physical control over the phone to be monitored for only a few minutes. The purchaser could then review communications intercepted from the monitored phone without ever again having physical control over the phone. Akbar and others alleged designed SteathGenie to be undetectable to users of the phone.
According to allegations in the indictment, the business plan for the development, sale and advertisement of StealthGenie stated that the target population for the marketing of the app was “[s]pousal cheat: Husband/Wife of (sic) boyfriend/girlfriend suspecting their other half of cheating or any other suspicious behaviour or if they just want to monitor them.” Language and testimonials on the StealthGenie website focused significantly on potential purchasers who did not have any ownership interest in the mobile phone to be monitored, including those suspecting a spouse or romantic partner of infidelity. The indictment alleges that Akbar and his co-conspirators fabricated the testimonials.
An indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty in a court of law.
This case is being investigated by the FBI’s Washington Field Office, and prosecuted by Trial Attorneys William A. Hall Jr. and Peter V. Roman of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Jay V. Prabhu of the Eastern District of Virginia.
The FBI has made available a document for individuals with questions concerning StealthGenie. It may be found at http://www.ic3.gov/media/2014/140930.aspx.
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Justice Department Settles with Private Montessori School to Prevent Disability DiscriminationRead the Press Release
The Justice Department announced today that it has reached an agreement with Milwaukee Montessori School, a private day school serving over 400 children from 18 months old through eighth grade, to remedy alleged violations of the Americans with Disabilities Act (ADA). The agreement resolves allegations by the department that the school failed to accommodate and then impermissibly disenrolled a young child whose disability caused him to stumble and fall more frequently than his peers. The agreement is being filed as a consent decree along with a complaint in the U.S. District Court for the Eastern District of Wisconsin, and must be approved by the court.
Under the agreement, the school will adopt a disability nondiscrimination policy, including procedures for prompt handling of requests to reasonably modify school policies for children with disabilities. The school will train teachers, administrators, and board members on ADA requirements and report to the department on its compliance with the agreement. In addition, the school will pay $50,000 in compensatory damages to the child identified in the complaint and his parents, and will pay a civil penalty of $5,000 to the United States.
“It is illegal under the ADA to discriminate against children with disabilities,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “Just like public schools, private schools must make reasonable modifications of policies to permit children with disabilities to participate fully in their programs. This agreement ensures that children will not be denied quality educational opportunities based on their disabilities.”
“This is a most important, meaningful, and effective action by the leadership of the Milwaukee Montessori School to ensure compliance with the ADA,” said James L. Santelle, U.S. Attorney for the Eastern District of Wisconsin. “The agreement that we are announcing today reflects the school’s commitment and that of the Justice Department to ensure the full accessibility and opportunity promises of the law in the private educational setting.”
Title III of the ADA requires public accommodations, including private schools such as Milwaukee Montessori School, to provide individuals with disabilities equal access to goods, services, privileges, accommodations, facilities, advantages and accommodations. For more information about the ADA, call the Department’s toll-free ADA Information Line at 800-514-0301 (TDD 800-514-0383) or access the ADA website at www.ada.gov.
Department of Justice Launches National Violence Reduction NetworkRead the Press Release
Attorney General Eric Holder and Assistant Attorney General Karol V. Mason for the Office of Justice Programs today launched the Violence Reduction Network (VRN), a national comprehensive approach to reduce violent crime in communities around the country. The Justice Department’s ability to provide intensive training and cutting-edge technical assistance will give local officials and law enforcement executives in each of the partner communities the support they need to advance anti-violence strategies.
“This new ‘all-hands’ approach to curbing endemic violence is founded on the recognition that our efforts are most effective when all criminal justice leaders stand united,” said Attorney General Holder. “It’s predicated on the notion that – although violent crime is in some ways a fundamentally local problem – it is not one that any community can meet in isolation.”
The Violence Reduction Network will help localities access a broad spectrum of Justice Department resources – empowering the federal government to strengthen partnerships and collaboratively tackle persistent challenges caused by violent crime. The partnering cities announced today are Camden, New Jersey; Chicago, Illinois; Detroit, Michigan; Oakland/Richmond, California; and Wilmington, Delaware.
The VRN summit’s agenda is dedicated to collaborative working sessions analyzing each city’s violence challenges and discussing the variety of department resources available to address the issues. Following the summit, the department will work with police chiefs and city leaders, along with leading criminal justice researchers and practitioners, to develop effective approaches to accomplishing each city’s violence reduction strategies.
“Through our partnerships with local leaders and practitioners and the wide range of resources we have available to address America’s public safety challenges, the Department of Justice is putting its full support behind violence reduction efforts in these five cities,” said Assistant Attorney General Mason. “I am eager to begin working with each of the sites and to help define a way forward to safer, healthier communities.”
Even with reports of national violent crime decreasing, in too many communities, crime rates have remained unacceptably high, particularly in areas where social ills like poverty, unemployment, and a lack of opportunity lead to tragic circumstances in which systemic violence can easily take root.
The launch of VRN is a result of the Obama administration’s continuing efforts to address violence in communities across the country. Nearly a year ago, President Obama convened a meeting at the White House with 18 mayors to discuss strategies for reducing youth violence. Following that meeting, Attorney General Holder sat down with mayors and police chiefs to talk about how the federal government can better support local efforts.
Representatives from VRN partner federal agencies include the Federal Bureau of Investigation, the Bureau of Alcohol, Tobacco and Firearms, the United States Marshals Service, the Drug Enforcement Administration, the Executive Office of the United States Attorneys, the Community Oriented Policing Services Office, the Office on Violence Against Women and the Office of Justice Programs.
Attorney General Holder Announces Latest Effort to Strengthen Community Policing with Approximately $124 Million Hiring Grant to Local Law EnforcementRead the Press Release
Attorney General Eric Holder and Director Ron Davis of the Office of Community Oriented Policing Services (COPS) today announced the department's latest effort to strengthen community policing through hiring grants that will fund nearly 950 officers at 215 law enforcement agencies in cities and communities across the country. This year’s $124 million in awards place a special emphasis on increasing community policing, bolstering crime reduction, and making the streets of America safer.
“These targeted investments will help to address acute needs – such as high rates of violent crime – funding 75 percent of the salary and benefits of every newly-hired or re-hired officer for three full years,” said Attorney General Holder. “The impact of this critical support will extend far beyond the creation and preservation of law enforcement jobs. It will strengthen relationships between these officers and the communities they serve, improve public safety and keep law enforcement officers on the beat.”
“The COPS Office is pleased to assist local law enforcement agencies throughout the country in addressing their most critical public safety issues,” said Director Davis. “Funding from this year’s program will allow many cities and counties to focus newly sworn personnel on issues related to violent crime, property crime and school safety.”
The COPS Hiring Program offers grants to state, local and tribal law enforcement agencies to hire or rehire community policing officers. The program provides up to 75 percent of the approved entry-level salaries and fringe benefits of full-time officers for a 36-month grant period, with a minimum 25 percent local cash match requirement and a maximum federal share of $125,000 per officer position.
Grantees for the 2014 hiring program were selected based on their proposed community policing strategies, fiscal need and violent crime rates.
To date, the COPS Office has funded more than 125,000 officers serving over 13,000 state, local and tribal law enforcement agencies, in jurisdictions both large and small. More than 700,000 people – including government leaders, community members and police officials – have received training through COPS-funded organizations. Since its inception in 1994, the COPS Office has provided roughly $14 billion to put additional officers on the streets, to provide technical assistance and training, to enhance crime fighting technology and to support cutting-edge crime prevention initiatives.
For the entire list of grantees and additional information about the 2014 COPS Hiring Program, visit the COPS website at www.cops.usdoj.gov.
Administrator Sentenced to 68 Months in Prison for Role in $6 Million Miami Home Health Care Fraud SchemeRead the Press Release
An administrator of a Miami home health care company, Professional Medical Home Health LLC, was sentenced to serve 68 months in prison and ordered to pay $6,257,142 million in restitution today for her participation in a $6 million health care 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 Acting 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. U.S. District Judge Federico A. Moreno of the Southern District of Florida imposed the sentence.
According to court documents, Annilet Dominguez, 28, of Hialeah, Florida, was an administrator at Professional Home Health. Dominguez and her co-conspirators paid kickbacks to patient recruiters in return for providing patients to Professional Home Health. Dominguez and her co-conspirators falsified patient documentation to make it appear that beneficiaries qualified for and received home health care services, when, in fact, many of the beneficiaries did not actually qualify for or receive such services. Dominguez and her co-conspirators then caused the submission of false claims to Medicare for services that were not medically necessary or not provided.
From December 2008 through February 2014, Medicare paid Professional Home Health approximately $6.25 million for fraudulent claims for home health care services.
On June 25, 2014, Dominguez pleaded guilty to one count of conspiracy to commit health care fraud and three counts of making false statements related to health care matters. On Aug. 26, 2014, co-defendant Annarella Garcia was sentenced to serve 70 months in prison and ordered to pay $6,257,142 million in restitution.
The 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 Attorneys Anne P. McNamara and A. Brendan Stewart 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.
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