District Not Recorded
The source did not name an office we could identify. These records remain unassigned rather than guessed.
Justice Department Concludes That Los Angeles County Jails System Has Made Progress, but Serious Deficiencies ContinueRead the Press Release
The Justice Department today released its latest compliance assessment of mental health services at the Los Angeles County Jails based on a memorandum of agreement (MOA) designed to protect the constitutional rights of prisoners with serious mental illness at the jails. The department concluded that, despite progress in some areas of the MOA, the county of Los Angeles fails to provide sufficient suicide prevention practices to protect prisoners from self-harm. The department also found that other serious deficiencies in the mental health care delivery system remain and combine with inadequate supervision and deplorable environmental conditions to deprive prisoners of constitutionally-required mental health care.
The Los Angeles County Jails system is the largest jail system in the country, housing approximately 19,000 pre-sentenced and sentenced prisoners in seven facilities throughout the county. The Los Angeles Sheriff’s Department operates the jails system and supports the delivery of mental health services within the jails by the county’s Department of Mental Health. In 2002, the department entered into the MOA with the county to resolve a long-standing civil investigation into conditions of confinement at the jails under the Civil Rights of Institutionalized Persons Act (CRIPA). The MOA gives the department access to personnel, documents and prisoners to evaluate the county’s compliance with the MOA. The department is assisted by expert consultants in correctional mental health care and suicide prevention, and provides ongoing technical assistance as part of its monitoring activities. The county has cooperated fully and openly with the department.
The comprehensive assessment released today confirms that certain conditions and practices have not been remedied under the MOA and continue to violate the constitutional rights of prisoners with mental illness. There have been 15 completed suicides at the jails in less than 30 months and the department concluded that some of the deaths may have been preventable with proper suicide prevention practices. The department’s assessment also reveals widespread lapses with regard to basic supervision of prisoners at risk; deficient mental health care for prisoners with clearly demonstrated needs; deplorable environmental conditions, most acutely at Men’s Central Jail; and a suicide review process that often includes inaccurate information and fails to remedy evident and repeated problems in order to prevent similar incidents in the future.
At the same time, the department’s assessment reveals that the county has achieved substantial compliance with certain aspects of the MOA. For example, the county has implemented nearly all provisions related to mental health screening at intake, developed a robust electronic medical records system, increased the number of clinical and support staff and ensured that custodial staff receive initial and ongoing training in the identification and custodial care of prisoners with mental illness. The county has demonstrated a sustained level of acceptable performance and improvement in these areas, which will no longer be subject to evaluation under the MOA.
“The Los Angeles County Jails have an obligation to provide conditions of confinement that do not offend the Constitution and to take reasonable measures to protect inmates from harm,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “Although the county has consulted with the Justice Department for years, our latest assessment reveals serious deficiencies that require further corrective action. We are hopeful that county officials will continue their long-standing cooperation to ensure that sustainable reforms are implemented fully.”
The department intends to enter into discussions with county officials from the Los Angeles County Sheriff’s Department and the county’s Department of Mental Health to address the results of the evaluation. The department expects that those MOA requirements that are in substantial compliance will terminate and no longer be subject to monitoring. The department will propose additional corrective action in the form of a court-enforceable agreement to address the remaining areas with serious deficiencies that violate prisoners’ constitutional rights. The department’s compliance letter includes a comprehensive list of recommended remedial measures that are designed to ensure adequate mental health treatment, supervision, suicide prevention and conditions of confinement for prisoners throughout the jails.
The challenges that the county faces in providing constitutionally adequate mental health services at the jail are driven in part by a rapid increase in the number of prisoners who are seriously mentally ill. The county has begun to take steps to expand diversion programs that will provide community supervision and treatment in a manner consistent with public safety. The department applauds these efforts.
CRIPA was enacted in 1980 to eradicate egregious and harmful conditions that result in a pattern or practice of civil rights violations in jails, prisons, juvenile justice facilities and other public institutions. CRIPA authorizes the department to investigate and, if necessary, initiate a civil action to guarantee the federal and constitutional rights of institutionalized persons.
The MOA is enforced by the Special Litigation Section of the Civil Rights Division and the U.S. Attorney’s Office for the Central District of California, Civil Division. A copy of the MOA can be obtained on the department's website and additional information about the Civil Rights Division’s enforcement activities under CRIPA can be found at the division website .
Justice Department and CNCS Announce New Partnership to Enhance Immigration Courts and Provide Critical Legal Assistance to Unaccompanied MinorsRead the Press Release
WASHINGTON - The Corporation for National and Community Service (CNCS), which administers AmeriCorps, and the Department of Justice today announced "justice AmeriCorps," a strategic partnership to increase national service opportunities while enhancing the effective and efficient adjudication of immigration proceedings involving certain children who have crossed the U.S. Border without a parent or legal guardian.
The interagency agreement reflects the spirit of a Presidential Memorandum issued on July 15, 2013 that established the Task Force on Expanding National Service. The Task Force calls on federal agency leaders to identify ways to address some of the nation's most pressing challenges by expanding national service.
"With the launch of justice AmeriCorps, we're taking a historic step to strengthen our justice system and protect the rights of the most vulnerable members of society," said Attorney General Eric Holder. "How we treat those in need, particularly young people who must appear in immigration proceedings - many of whom are fleeing violence, persecution, abuse, or trafficking - goes to the core of who we are as a nation. Through this program, we reaffirm our allegiance to the values that have always shaped our pursuit of justice. We empower new generations of aspiring attorneys and paralegals to serve their country and stand on the front lines of this fight. And we bolster both the efficacy and the efficiency of our immigration courts."
"Young immigrant children entering the U.S., often under dangerous circumstances, represent some of the most vulnerable individuals who interact with our immigration system," said Wendy Spencer, CEO of the Corporation for National and Community Service. "AmeriCorps members will provide critical support for these children, many of whom are escaping abuse, persecution, or violence. The justice AmeriCorps partnership responds to a direct call from Congress, and reflects how national service can be a part of the solution to some of the most challenging issues facing our country today."
The partnership, known as "justice AmeriCorps," is a grant program that will enroll approximately 100 lawyers and paralegals as AmeriCorps members to provide legal services to the most vulnerable of these children, responding to Congress' direction to DOJ's Executive Office for Immigration Review "to better serve vulnerable populations such as children and improve court efficiency through pilot efforts aimed at improving legal representation." In addition, DOJ officials believe the AmeriCorps members will help identify unaccompanied immigrant children who have been victims of human trafficking or abuse to assist in the investigation and prosecution of those who perpetrate such crimes on those children.
- EOIR -
The Corporation for National and Community Service is a federal agency that engages more than five million Americans in service through its AmeriCorps, Senior Corps, Social Innovation Fund, and other programs, and leads President's national call to service initiative, United We Serve. For more information, visit nationalservice.gov.
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
Campaign Worker Pleads Guilty to Buying Votes<br /> in a Donna, Texas School Board ElectionRead the Press Release
A campaign worker pleaded guilty today for paying voters to vote in the November 2012 school board election in Donna, Texas, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Guadalupe Escamilla, 72, of Weslaco, Texas, pleaded guilty to one count of vote-buying before Chief U.S. District Judge Ricardo Hinojosa in the Southern District of Texas, McAllen Division. Sentencing is scheduled for Aug. 29, 2014.
According to a factual statement read during the plea hearing, a general election was held on Nov. 6, 2012, in Donna for the presidential election, as well as various state, county and local offices, including the Donna School Board. Escamilla assisted in the campaign to elect candidates to the Donna School Board. In the course of that work, Escamilla knowingly and willfully paid and offered to pay voters for voting in this election. In addition, she indicated during the plea hearing that at least two candidates gave her money to pay to voters for voting in the election.
Two other campaign workers, Rebecca Gonzalez, 44, and Diana Balderas Castaneda, 48, of Donna, Texas, have pleaded guilty to the same charge. Gonzalez is scheduled to be sentenced on Sept. 16, 2014 and Castaneda is scheduled to be sentenced on July 25, 2014.
This case was investigated by the FBI. The case is being prosecuted by Trial Attorneys Monique Abrishami and Jennifer Blackwell of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Leo J. Leo of the Southern District of Texas.Associate Attorney General Tony West to Visit AlaskaRead the Press Release
Associate Attorney General Tony West will visit Alaska next week to discuss the Department of Justice’s efforts to protect civil rights and strengthen public safety in American Indian and Alaska Native communities. He will deliver remarks at the National Congress of American Indians Mid-Year Conference in Anchorage, Alaska, on MONDAY, JUNE 9, 2014, at 10:20 a.m. AKDT .
Associate Attorney General West will also deliver opening remarks at the fourth and final publ ic h earing of the Advisory Committee of the Attorney General’s Task Force on A merican Ind ian and Ala ska Native Child ren Exposed to Vio lence in Anchorage on WEDNESDAY, JUNE 11, 2014, at 1:00 p.m. AKDT . For more infor mation on the Attorney General’s Task Force and the Adv isory Co m mittee, plea se visi t: the department website .
Monday, June 9, 2014
10:20 a.m. AKDT/ Associate Attorney General Tony West will deliver remarks at the
2:20 p.m. EDT National Congress of American Indians Mid-Year Conference.
Dena'ina Civic and Convention Center
600 West Seventh Avenue
Anchorage, Alaska
OPEN PRESS
NOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials. Media inquiries regarding logistics should be directed to Sarah Beccio at 410-371-5551 or via email
Wednesday, June 11, 2014
1:00 p.m. AKDT/ Associate Attorney General Tony West will deliver remarks at the
5:00 p.m. EDT Opening of the Task Force Hearing on American Indian and Alaska Native Children’s Exposure to Violence
Sheraton Hotel
Howard Rock Ballroom
401 East Sixth Avenue
Anchorage, Alaska
OPEN PRESS
NOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials. Media inquiries regarding logistics should be directed to Wyn Hornbuckle at 202-514-2007 or via email
Justice Department Reaches Settlement with Florida State UniversityRead the Press Release
The Department of Justice announced today that it has reached a settlement with the Florida State University Board of Trustees, acting for and on behalf of Florida State University (FSU), in Tallahassee, Florida. The settlement agreement resolves an investigation and compliance review of the FSU Police Department by the Justice Department under Title I of the Americans with Disabilities Act (ADA) and its implementing regulations. The investigation found that the FSU Police Department’s online application form asked questions about a past or present disability and other medical conditions in violation of the ADA. The ADA does not permit employers to inquire whether an applicant is an individual with a disability or as to the nature of such disability before making a conditional offer of employment.
Under the settlement, FSU agrees to ensure that its hiring policies do not discriminate against any applicant on the basis of disability, including by:
· not conducting any medical examination or making any disability-related inquiry of a job applicant before a conditional offer of employment has been made;
· after making a conditional offer of employment, limiting the scope of medical examinations or disability-related inquiries to what is necessary to either confirm the job applicant’s ability to perform job-related functions, with or without a reasonable accommodation; or whether the applicant poses a direct threat to the health or safety of the applicant or others;
· maintaining the medical or disability-related information of an applicant or employee in separate, confidential medical files;
· training employees who make hiring or personnel decisions within the FSU Police Department on ADA regulations; and
· ensuring that the FSU Police Department website, including its employment opportunities website and its mobile applications, conform to the Web Content Accessibility Guidelines 2.0 Level AA Success Criteria and other Conformance Requirements (WCAG 2.0 AA). The WCAG 2.0 AA is available online .
“This agreement ensures that people with disabilities will have an equal opportunity to compete for jobs in the FSU Police Department,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Justice Department is committed to knocking down employment barriers for people with disabilities, and we commend the FSU for its cooperation and continuing efforts to improve accessibility for all job applicants.”
People interested in finding out more about the ADA or this agreement can call the department’s toll-free ADA Information Line at 1-800-514-0301 or 1-800-514-0383 (TTY), or visit the ADA website
Georgia Man Pleads Guilty to Federal Chargesfor Discharging Waste into Potomac RiverRead the Press Release
Patrick Brightwell, 48, of Bogart, Georgia, pleaded guilty today to federal charges that he orchestrated the discharge of waste into the Potomac River at East Potomac Park from 2009 through 2011, during the same period he managed the company hired by the National Park Service to clean out the storm water sewer system on the National Mall.
The guilty plea was announced by Acting Assistant Attorney General Sam Hirsch of the Justice Department’s Environment and Natural Resources Division; U.S. Attorney for the District of Columbia Ronald C. Machen Jr.; Special Agent in Charge David G. McLeod Jr. of the Environmental Protection Agency’s criminal enforcement program for the Middle Atlantic States; and Acting Chief Robert D. MacLean of the United States Park Police.
Brightwell pleaded guilty in the U.S. District Court for the District of Columbia to one count of violating the Clean Water Act by knowingly discharging a pollutant without a permit and one count of presenting false claims to the United States. The Honorable James E. Boasberg scheduled sentencing for September 3, 2014. Under federal sentencing guidelines, Brightwell faces a likely range of 46 to 57 months in prison and a fine of up to $75,000. Brightwell also has agreed to pay $270,667 in restitution to the National Park Service, representing the losses for the work that was not properly performed. He also must pay a forfeiture money judgment totaling $230,899.
An eight-count indictment of Brightwell was unsealed following his arrest in Georgia on Dec. 5, 2013. The remaining charges will be dismissed as part of the guilty plea.
“While he was supposed to be helping to keep the National Mall – a treasure of our national park system – clean and free of trash, Brightwell was actually directing the dumping of debris and wastewater into the Potomac River,” said Acting Assistant Attorney General Hirsch. “He now faces a stiff penalty for his callous and egregious violation of the Clean Water Act.”
“Patrick Brightwell harmed the U.S. taxpayer and our nation’s capital by directing his workers to dump waste in the Potomac River,” said U.S. Attorney Machen. “Instead of fulfilling a contract to take waste from the National Mall to a disposal facility, Brightwell polluted our water by telling his employees to cut corners regardless of the damage to our environment. The prison time that Brightwell now faces is an indication of how serious we are about enforcing the Clean Water Act.”
“The defendant dumped untreated wastewater and debris into one of our nation’s most treasured rivers, the Potomac,” said Special Agent in Charge McLeod. “Businesses and their contractors who flout the nation's environmental laws will be held accountable. EPA and its partner agencies are committed to vigorously working together to protect the public from this type of illegal and dangerous action.”
“The guilty pleas in this case shall serve as a reminder that environmental crimes will not be tolerated by the National Park Service, law enforcement, the criminal justice system, and the community," said Acting Chief MacLean. “I applaud the collaborative efforts of every agency involved as a testament to the inherent dedication to protecting our nation's natural resources.”
According to a statement of offense signed by the government and defendant, from in or about 2007 through 2011, Brightwell was a manager of a company that had a contract with the National Park Service to clean the storm water sewer system on the National Mall. The contract required that waste removed from the Mall’s storm drains and oil-water separators be disposed of at a proper disposal facility in compliance with District of Columbia regulations and federal law.
Brightwell hired employees and subcontractors to perform work under the contract and oversaw their work from 2008 to 2011. To clean the structures, Brightwell and his company used a vacuum truck, a vehicle designed to gather, store, and transport such waste. When the storage compartment in the vacuum truck became full, workers would have to discharge waste from the truck prior to continuing the cleaning.
In 2009, 2010 and 2011, according to the statement of offense, Brightwell directed his employees and subcontractors to discharge waste from the vacuum truck at a storm drain near a parking lot in East Potomac Park, across Ohio Drive from the Potomac River. Brightwell concealed these discharges from the National Park Service and police. Workers also discharged waste at a manhole near Fort McNair in the District of Columbia.
During this period, Brightwell continued to invoice the National Park Service for cleaning services, but concealed and did not disclose that the waste was not being properly disposed, as required by the contract. From 2009 through 2011, Brightwell’s company received approximately $406,000 in payments from the National Park Service related to the contract.
According to the statement of offense, the employees and subcontractors illegally dumped waste at the parking lot approximately two-thirds of the time, and dumped the waste at a proper disposal facility in Fort Washington, Maryland, about one-third of the time.
The subcontractor, B&P Environmental LLC, and a B&P employee working on June 6, 2011, both pleaded guilty in November 2014 to violations of the Clean Water Act before the U.S. District Court. As part of their pleas, both the company and employee agreed to cooperate with the government’s investigation. Both the company and employee are awaiting sentencing.
The case was investigated by Special Agent S. Christopher Michael of the EPA and Detective Jon Crichfield of the U.S. Park Police and supported by Environmental Protection Specialists Jerry Crutchley and Justin Young. It is being prosecuted by Senior Trial Attorney Lana Pettus of the Department of Justice’s Environmental Crimes Section and Assistant U.S. Attorney Jonathan P. Hooks of the U.S. Attorney’s Office for the District of Columbia. Assistance was provided by Paralegal Specialist Ashleigh Nye of DOJ’s Environmental Crimes Section and Paralegal Specialists Krishawn Graham and Donna Galindo of the U.S. Attorney’s Office.Former Top Executive of Japanese Automotive Parts <br /> Manufacturer Indicted for Role in Conspiracy to Fix PricesRead the Press Release
A Detroit federal grand jury returned a one-count indictment against a former top executive of a Japanese manufacturer of automotive parts for his participation in a conspiracy to fix prices of seatbelts, the Department of Justice announced today.
The indictment, filed today in the U.S. District Court for the Eastern District of Michigan, charges Gikou Nakajima, a former executive at Takata Corp., with participating in a conspiracy to suppress and eliminate competition in the automotive parts industry by agreeing to rig bids for, and to fix, stabilize and maintain the prices of, seatbelts sold to Toyota Motor Corp., Honda Motor Company Ltd., Nissan Motor Co. Ltd., Mazda Motor Corp., Fuji Heavy Industries Ltd. – more commonly known by its brand name, Subaru – and/or certain of their subsidiaries, for installation in vehicles sold in the United States and elsewhere. Nakajima served as director of customer relations division at Takata, the highest-level global sales executive at the company, from June 2005 until at least June 2009.
“Today’s indictment demonstrates that the Antitrust Division continues to hold accountable executives who collude with their competitors,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division will not tolerate executives participating in – and directing their subordinates to participate in – conspiracies to raise the prices on automotive parts that are essential to the safety of U.S. consumers.”
The indictment alleges, among other things, that from at least as early as September 2005 and continuing until June 2009, Nakajima and others attended meetings with co-conspirators and reached collusive agreements to rig bids, allocate the supply and fix the prices of seatbelts sold to the automobile manufacturers. It alleges that Nakajima participated directly in the conspiratorial conduct, and that he directed, authorized and consented to his subordinates’ participation.
Takata is a Tokyo-based manufacturer of automotive parts, including seatbelts. Takata supplies automotive parts to automobile manufacturers in the United States, in part, through its U.S. subsidiary, TK Holdings Inc., located in Auburn Hills, Michigan. Takata pleaded guilty on Dec. 5, 2013, for its involvement in the conspiracy, and was sentenced to pay criminal fine of $71.3 million. Four other executives from Takata have pleaded guilty and have been sentenced to serve time in a U.S. prison and to pay criminal fines for their roles in the conspiracy.
Including Nakajima, 35 individuals have been charged in the government’s ongoing investigation into price fixing and bid rigging in the auto parts industry, 24 of whom have pleaded guilty or agreed to plead guilty. Of those, 22 have been sentenced to serve prison terms ranging from a year and one day to two years. Additionally, 27 companies have pleaded guilty or agreed to plead guilty and have agreed to pay a total of more than $2.3 billion in fines.
Nakajima is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine 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 indictment is the result of an ongoing federal antitrust investigation into price fixing, bid rigging and other anticompetitive conduct in the automotive parts industry, which is being conducted by four of the Antitrust Division’s criminal enforcement sections and the FBI. Today’s charge was brought by the Antitrust Division’s Washington Criminal I Section and the FBI’s Detroit Field Office, with the assistance of the FBI headquarters’ International Corruption Unit. Anyone with information on price fixing, bid rigging and other anticompetitive conduct related to other products in the automotive parts industry should contact the Antitrust Division’s Citizen Complaint Center at 888-647-3258, visit www.justice.gov/atr/contact/newcase.html or call the FBI’s Detroit Field Office at 313-965-2323.
EOIR's Office of the Chief Administrative Hearing Officer Announces Electronic Filing Pilot ProgramRead the Press Release
The Office of the Chief Administrative Hearing Officer (OCAHO), Executive Office for Immigration Review (EOIR), has launched a voluntary pilot program to test an electronic filing system in cases filed with OCAHO under 8 U.S.C. § 1324a and § 1324b. The pilot program will be in effect from May 30, 2014, until November 26, 2014. Parties who enroll in the pilot program with respect to a particular case within these dates will be permitted to continue utilizing electronic filing throughout the pendency of that case.
See more information about the Office of the Chief Administrative Hearing Officer Electronic Filing Pilot Program by visiting http://go.usa.gov/8wEP.
- EOIR -
The Executive Office for Immigration Review (EOIR) is an agency within the Department of Justice. Under delegated authority from the Attorney General, immigration judges and the Board of Immigration Appeals interpret and adjudicate immigration cases according to United States immigration laws. EOIR’s immigration judges conduct administrative court proceedings in immigration courts located throughout the nation. They determine whether foreign-born individuals—whom the Department of Homeland Security charges with violating immigration law—should be ordered removed from the United States or should be granted relief from removal and be permitted to remain in this country. The Board of Immigration Appeals primarily reviews appeals of decisions by immigration judges. EOIR’s Office of the Chief Administrative Hearing Officer adjudicates immigration-related employment cases. EOIR is committed to ensuring fairness in all of the cases it adjudicates.
District Court Approves Selection of Arnaldo Claudio as Technical Compliance Advisor to Oversee Critical Reforms of Puerto Rico Police DepartmentRead the Press Release
Today, U.S. District Judge Gustavo A. Gelpí approved the selection of Arnaldo Claudio to serve as Technical Compliance Advisor (TCA), overseeing the implementation of sweeping civil rights reforms under the Agreement for Sustainable Reform of the Puerto Rico Police Department. The agreement resolved a civil action filed by the Department of Justice in 2012 to protect individuals from the use of excessive force, unconstitutional searches and seizures and discriminatory policing by officers of the Puerto Rico Police Department (PRPD). According to the order of appointment, Claudio will begin his term on June 6, 2014.
Under the agreement, the department and the Commonwealth of Puerto Rico agreed to jointly select a TCA to assist the court and the public in determining whether critical reforms are implemented fully and in a timely manner. The reforms cover 11 core areas, including use of force, searches and seizures, bias-free policing, recruitment, promotions, training, supervision, discipline, community engagement and information technology. The TCA will serve a vital role in promoting compliance and the sustainability of reforms. The TCA will also provide substantive expertise and technical assistance to guide PRPD in its implementation efforts and assures the public that PRPD’s progress is evaluated in a reliable, independent and transparent manner.
The department and the commonwealth selected Claudio after an exhaustive review of potential candidates based on numerous objective factors. These factors included relevant experience with institutional reform, subject-matter expertise, Spanish language proficiency, impartiality, an ability to interact effectively with diverse communities and a strong commitment to civil rights and effective policing. Claudio’s proven record of outstanding performance and achievement demonstrate that he possesses the necessary skills and abilities to effectively carry out the TCA’s duties.
Claudio has the Spanish language proficiency that is contemplated by the agreement and is necessary to communicate effectively in Puerto Rico. He is firmly committed to meaningful community engagement and maintaining a consistent presence in Puerto Rico throughout the reform process. His exceptional work with police departments and criminal justice systems in the United States and around the world will assist in promoting compliance with critical structural and systemic reforms that are necessary to restoring public confidence and achieving effective and constitutional policing in Puerto Rico.
Claudio was born and raised in Puerto Rico. He attended the University of Puerto Rico and was commissioned a Second Lieutenant in the U.S. Army Military Police Corps. He earned a Master of Science Degree in Education from Jacksonville State University and is a graduate of the Inter-American Defense College. During his 30 years of military service, Claudio has held numerous highly sensitive positions culminating as Chief of Staff and Chief of Police of Joint Force Headquarters for the National Capital Region in Washington, D.C. In his current position as Interagency Program Director of the Joint Force Headquarters National Capital Region, he coordinates directly with local, state and federal law enforcement agencies and other national security partners. He also leads critical relationships with governmental and non-governmental agencies to ensure regional safety and security. Many of Claudio’s assignments have allowed him to work closely with police agencies and communities domestically, such as Washington, D.C. and Hawaii, and abroad, including Peru, Bolivia, Colombia and El Salvador. He served as Provost Marshal and Chief of Police of the Multinational Coalition Forces in Iraq, working tirelessly to promote democratic policing and human rights. He also served as Chief of Staff and Operations with the Peace Corps where he oversaw volunteer recruitment, selection and placement. Claudio’s remarkable skill, performance and dedication have been recognized with numerous military and civilian awards and decorations.
“Mr. Claudio’s extraordinary career and service to our nation has been marked by an unwavering commitment to basic principles of human dignity and safety for all people, both here and abroad,” said Associate Attorney General Tony West. “He now brings his exceptional skill and talent home to Puerto Rico to embark in the critical task of transforming the second largest law enforcement agency in the country into a modern, professional agency that serves and protects all residents with respect and fairness.”
“Reforming the Puerto Rico Police Department will take a collaborative and sustained effort over the course of many years, and Mr. Claudio has enthusiastically embraced that challenge to help restore public confidence and public safety to the people of Puerto Rico,” said Acting Assistant Attorney General Jocelyn Samuels for the department’s Civil Rights Division. “We look forward to working closely with Mr. Claudio, the court, the commonwealth government, police officers and all of the communities that make up Puerto Rico to ensure the full implementation of fundamental civil rights reforms.”
In the coming days and weeks, the department will work with the commonwealth to assist the TCA in building a cohesive team of subject-matter experts to oversee all areas of the agreement and to engage broadly with PRPD and the community. With the start of his term, Claudio will work to evaluate PRPD’s efforts over the last year and will oversee the development of action plans that will guide implementation during the initial capacity-building phase of the agreement. The TCA’s assessments will include a thorough review of PRPD’s policies, training curricula, standard operating procedures, plans, protocols and other operational documents related to the agreement. The TCA will also assess whether the implementation of the agreement results in constitutional policing, increased community trust and the professional treatment of individuals by PRPD officers. To this end, the TCA will engage with a broad cross-section of community stakeholders, including representatives of civic and community organizations, minority communities, lesbian, gay, bisexual, transgender communities, student and labor groups, civil rights organizations, women’s advocacy groups and police officers to ensure they have a voice in the reform process.
District Judge Gelpí entered the agreement as an order in July 2013, following extensive negotiations and a thorough investigation by the Civil Rights Division. The investigation focused on allegations of use of excessive force, unconstitutional searches and seizures and discriminatory policing by officers of the PRPD. The department issued findings of violations and serious deficiencies in September 2011 and filed a civil action to remedy the violations in December 2012. The case was brought under the Violent Crime Control and Law Enforcement Act of 1994, which authorizes the Attorney General to file suit against government authorities to eliminate a pattern or practice of misconduct by state and local law enforcement officers.
A copy of the complaint, the final agreement and the September 2011 findings letter can be found at the department website Additional information about the Civil Rights Division and its enforcement of civil rights laws involving law enforcement agencies can be found on the division website .
Detroit Tax Preparer, Previously Convicted on Tax Charges, Found Guilty of Failing to Appear at 2013 Bond HearingRead the Press Release
The Justice Department, the Internal Revenue Service (IRS) and the Treasury Inspector General for Tax Administration (TIGTA) announced that Matthew Bender, of Detroit, was convicted yesterday following a jury trial in the U.S. District Court for the Eastern District of Michigan of failing to appear at a bond hearing on July 2, 2013. The bond hearing had been set to adjudicate Bender's noncompliance with the conditions of his pretrial release on federal tax charges.
The evidence at trial showed that Bender attended a family reunion in Ohio and flew to Texas in the summer of 2013 after a warrant was issued for his arrest. Bender was apprehended by the U.S. Marshals Service on Aug. 13, 2013.
Bender was previously convicted by another Detroit jury in March 2014 of obstructing the IRS and nine counts of aiding and assisting in the preparation of false federal income tax returns. According to court documents and evidence produced at the March 2014 trial, Bender prepared over 3,000 tax returns between 2006 and 2011 and earned over $500,000 in tax preparation fees. However, Bender failed to report his own income to the IRS, either by filing false tax returns for himself or by failing to file his own tax returns at all. The evidence showed that Bender caused his customer’s tax refunds to be inflated by placing false deductions on their returns.
Following the most recent conviction, Bender remains detained pending sentencing for his convictions.
The case was investigated by special agents of IRS–Criminal Investigation and TIGTA. Trial Attorneys Kenneth Vert and Jeffrey McLellan for the Justice Department’s Tax Division prosecuted the case.
Certified Public Accountant Associated with Cadillac Ranch Restaurants Pleads Guilty to Tax ChargesRead the Press Release
Larry Couchot, 59, a certified public accountant (CPA) from Dayton, Ohio, who is the president and part owner of an accounting firm in Centerville, Ohio, and prepared the tax returns of businessmen associated with Cadillac Ranch restaurants, pleaded guilty today to tax charges, the Justice Department and Internal Revenue Service (IRS) announced.
According to documents filed with the court, Couchot admitted that for tax years 2006 through 2010, he assisted in the preparation of false individual income tax returns for a group of individuals associated with the Cadillac Ranch restaurants, which caused a tax loss of over $191,000 to the IRS. On May 15, 2014, Jon Field from Dublin, Ohio, along with Eric Schilder, of Marion, Ohio, and Paul Butler, also from Dublin, pleaded guilty to tax charges related to Cadillac Ranch.
According to documents filed with the court, during the period 2006 through 2010, Couchot was aware that these individuals used a substantial amount of company funds to pay for personal expenses, including payments for their personal cars, car insurance, country club dues, personal credit card charges and their individual income tax liabilities. Couchot also admitted that he was aware that one individual used company funds to pay for other personal expenses, including lawn services, repairs and maintenance to personal residences, granite counter tops and TV and audio systems.
Couchot admitted that he prepared false federal income tax returns that failed to report these items as income on two individuals’ income tax returns. Couchot pleaded guilty to aiding and assisting in the preparation of a false income tax return for the year 2009 for Jon Field and to preparing a false income tax return for Eric Schilder for the year 2007, which reported only $68,000 of income. In contrast, the business records of the company indicated Schilder earned over $129,000 in income in that year. Couchot admitted that after the false return was filed with the IRS on behalf of Schilder, he created a false summary that he retained in his records to support the false income reported on that return.
At sentencing, Couchot faces a statutory maximum sentence of three years in prison, a $250,000 fine and one year of supervised release for each of the two charges.
The case was investigated by IRS-Criminal Investigation, and is being prosecuted by Trial Attorney Richard M. Rolwing and Senior Litigation Counsel John E. Sullivan of the Justice Department’s Tax Division. Additional information about the Tax Division and its enforcement efforts can be found at the division website Additional information about tax fraud schemes can be found on the IRS-Criminal Investigation website
Former Army National Guard Soldier Pleads Guilty to Bribery and Defrauding the U.S. Army National Guard BureauRead the Press Release
A former soldier in the U.S. Army National Guard pleaded guilty to bribery and fraud on the U.S. Army National Guard Bureau, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.
Former Specialist Christopher Renfro, 26, of Houston, Texas pleaded guilty today to two counts of wire fraud and one count of aggravated identity theft. Previously, on March 24, 2014, Renfro pleaded guilty to one count of conspiracy and one count of bribery in connection with the same scheme.
According to court documents, former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to obtain fraudulent recruiting bonuses. To date, the investigation has led to charges against 25 individuals, 23 of whom have pleaded guilty.
According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. (Docupak) to administer the Guard Recruiting Assistance Program (G-RAP). The G-RAP was a recruiting program that offered monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard. Through this program, a participating soldier could receive up to $2,000 in bonus payments for referring another individual to join the Army National Guard. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account. To participate in the program, soldiers were required to create online recruiting assistant accounts.
Renfro admitted that between approximately February 2008 and August 2011, he paid former Sergeant First Class Michael Rambaran for the personal identifying information of potential Army National Guard soldiers. Renfro further admitted that he used the personal information for these potential soldiers to obtain fraudulent bonuses by falsely claiming that he was responsible for referring these soldiers to join the Army National Guard.
Renfro is scheduled to be sentenced on Jan. 9, 2015 before U.S. District Judge Lee H. Rosenthal of the Southern District of Texas.
Rambaran pleaded guilty on March 25, 2014 to one count of conspiracy, one count of bribery, and one count of aggravated identity theft. He is scheduled to be sentenced on Jan. 9, 2015 before U.S. District Judge Rosenthal in Houston.
This case is being investigated by the San Antonio Fraud Resident Agency of Army CID’s Major Procurement Fraud Unit. This case is being prosecuted by Trial Attorneys Sean F. Mulryne, Heidi Boutros Gesch, and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas.Department of Justice and Federal Trade Commission Announce Agenda for June 23, 2014, Joint Agency Workshop on Conditional Pricing PracticesRead the Press Release
The Department of Justice and the Federal Trade Commission (FTC) have issued the agenda for their joint public workshop, which will be held on June 23, 2014, to explore the economic and legal analysis of conditional pricing practices among firms in a supply chain. Announced in early May, the workshop will focus on conditional pricing arrangements – practices in which prices are explicitly or effectively contingent on commitments to purchase or sell a specified share or volume of a single product or a mix of multiple products – such as loyalty or bundled pricing.
A principal goal of the workshop will be to advance the economic understanding of the potential harms and benefits of conditional pricing practices and to reexamine their treatment under the antitrust laws. As detailed in the press release first announcing the event, participants will focus primarily on: 1) Economic Learning, and 2) Law and Policy Issues related to conditional pricing practices.
The Department of Justice and the FTC are interested in receiving comments on conditional pricing practices, and will accept written submissions from the public from now through Aug. 22, 2014, 60 days after the event. Interested parties may submit public comments online. Submitted comments will be made publicly available on the Department of Justice and FTC websites.
The all-day workshop is free and open to the public. Individuals are encouraged, but not required, to register in advance for the workshop by sending an email to [email protected], Please include “RSVP” in the subject line. Seating will be on a first-come, first-serve basis. It will take place at the FTC’s new satellite conference center, Constitution Center, 400 Seventh Street, SW, Washington, DC 20024.
Reasonable accommodations for people with disabilities are available upon request. Requests should be submitted by e-mail to [email protected] , or by calling Lara Kittelson at 202-326-3388. Requests should be made in advance. Please include a detailed description of the accommodation needed and provide contact information.Conspiracy Charge Filed <br /> Against Former Convergex TraderRead the Press Release
A former trader for ConvergEx Global Markets Limited (CGM Limited) — a former securities broker-dealer registered in Bermuda — has been charged in the District of New Jersey with conspiracy to commit wire fraud.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office and Inspector in Charge Philip R. Bartlett from the U.S. Postal Inspection Service (USPIS) made the announcement.
Craig Marshall, 47, of Bermuda, was charged under seal by criminal complaint on May 27, 2014, and he made his initial appearance this morning.
On Dec. 18, 2013, Jonathan Daspin, the head trader at CGM Limited, Thomas Lekargeren, a sales trader at a different ConvergEx subsidiary, and CGM Limited all pleaded guilty to conspiracy to commit securities and wire fraud before U.S. District Judge Jose Linares in the District of New Jersey. On the same day, CGM Limited’s parent company, ConvergEx Group LLC, entered into a deferred prosecution agreement. Collectively, the two ConvergEx entities paid $43.8 million in criminal penalties and restitution.
According to the charges, certain ConvergEx Group broker-dealers regularly routed securities orders to CGM Limited in Bermuda so that it could take a mark-up (an additional amount paid for the purchase of a security) or mark-down (a reduction of the amount received for the sale of a security) when executing the orders. ConvergEx employees referred to such mark-ups and mark-downs as “spread,” “trading profits,” or “TP.”
Also according to charges, to hide the fact that spread had been taken on trades, Marshall, Daspin, Lekargeren, and other employees at ConvergEx Group subsidiaries in Bermuda, New York and London created and sent false transaction reports to clients with fabricated details regarding the execution of orders, including the number of shares involved in a trade, the time at which a trade was executed and the price at which shares were either purchased or sold. After sending certain clients these false reports, the conspirators took a total of $5,171,394 in spread from them.
The charges allege that Marshall, along with Daspin and other conspirators, created and sent a false transaction report to a client on or around June 25, 2007, and created and sent an additional false transaction report to another client on Aug. 11, 2009.
The charges in the complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
The case is being investigated by the FBI’s Washington Field Office and the Washington, D.C., and New York offices of the U.S. Postal Inspection Service. The case is being prosecuted by Trial Attorneys Justin Goodyear, Jason Linder and Patrick Pericak of the Criminal Division’s Fraud Section. Fraud Section Assistant Chief Robert Zink and former Trial Attorney Charles Reed also assisted with the investigation.
The department appreciates the assistance of the U.S. Securities and Exchange Commission and the United States Attorney’s Office for the District of New Jersey.Two Federal Inmates Sentenced to Death for MurderRead the Press Release
Two inmates of the U.S. Medical Center for Federal Prisoners in Springfield, Missouri, who were convicted by a federal jury for murdering another inmate at the facility were sentenced to death late yesterday.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and United States Attorney Tammy Dickinson of the Western District of Missouri made the announcement.
“Two federal inmates senselessly killed another inmate, and today, they have been brought to justice,” said Assistant Attorney General Caldwell. “The Justice Department is committed to ensuring the safety and security of all Bureau of Prisons employees and inmates.”
“Achieving justice sometimes requires us to ask our citizens to make the most difficult sentencing decisions,” said U.S. Attorney Dickinson. “We appreciate their patience and commitment throughout trial. The defendants’ conduct strikes at the heart of our justice system, which depends upon the safety and security of our penal institutions. Mr. Castro was targeted for murder, in part, because he intervened to help a Bureau of Prisons employee as he was being attacked by another inmate.”
Wesley Paul Coonce Jr., 34, and Charles Michael Hall, 43, who are both inmates at the U.S. Medical Center for Federal Prisoners, were found guilty on May 7, 2014, of one count of murder in the first degree. Coonce was also found guilty of one count of murder by an inmate serving a life sentence. The trial began on April 28, 2014, before U.S. District Judge Gary A. Fenner of the Western District of Missouri.
The evidence presented at trial demonstrated that another inmate at the prison medical center, Victor Castro-Rodriguez, 51, was found dead on the floor of his cell on Jan. 26, 2010, and had been murdered by Coonce and Hall. At the time of the murder, Coonce was serving a life sentence for a kidnapping and carjacking that involved the brutal rape of a young woman, and Hall was serving a combined 194-month sentence from the District of Maine for making threatening communications against a federal judge and a federal prosecutor.
This case was investigated by the FBI and the Bureau of Prisons and it was prosecuted by Assistant U.S. Attorney Randall D. Eggert and Trial Attorney James D. Peterson of the Capital Case Section of the U.S. Department of Justice’s Criminal Division.Texas Woman Allegedly Prepares Tax Returns Claiming False Deductions and CreditsRead the Press Release
The U.S. District Court for the Southern District of Texas in McAllen, Texas, permanently barred Maria I. Cantu from preparing federal tax returns for others, the Justice Department announced today. Cantu, a tax preparer in McAllen, agreed to the civil injunction order.
The order also requires Cantu to turn over to the United States a list of all persons for whom she prepared federal tax returns or claims for a refund for tax years 2010 through 2012, and to notify these customers of the permanent injunction against her. The order authorizes the United States to monitor Cantu’s compliance with the terms of the order.
The complaint alleged that Cantu prepared returns that contained false, improper or inflated deductions or tax credits, such as the earned income tax credit. The complaint also alleged that these activities led to her clients filing returns which unlawfully understated income tax liabilities and overstated refunds.Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013 . 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.
Massachusetts Man Pleads Guilty to Importing and Selling Counterfeit Intergrated Circuits from China and Hong KongRead the Press Release
Peter Picone, 41, of Methuen, Massachusetts, pleaded guilty today in U.S. District Court in Hartford, Connecticut to importing thousands of counterfeit integrated circuits (ICs) from China and Hong Kong and then reselling them to U.S. customers, including contractors supplying them to the U.S. Navy for use in nuclear submarines.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Deirdre M. Daly for the District of Connecticut made the announcement.
Picone pleaded guilty before U.S. Magistrate Judge Donna Martinez of the District of Connecticut to an indictment charging him with conspiracy to traffic in counterfeit military goods. As part of a plea agreement with the government, Picone agreed to a forfeiture money judgment of $70,050 and the forfeiture of 12,960 counterfeit ICs seized during the execution of a search warrant at his business and residence. Sentencing was set for Aug. 22, 2014.
According to court filings, from 2007 through 2012, Picone conspired with his suppliers in China and Hong Kong to sell millions of dollars’ worth of ICs bearing the counterfeit marks of approximately 35 major electronics manufacturers, including Motorola, Xilinx and National Semiconductor. Picone sold counterfeit ICs to contractors knowing that they would be supplied to the United States Navy for use in nuclear submarines.
Many of Picone’s customers specified in their orders that they would not accept anything but new ICs that were not from China, but Picone told them that the ICs were new and manufactured in Europe. Testing by the Navy and one of its contractors revealed that in fact the ICs purchased from Picone had been resurfaced to change the date code and to affix counterfeit marks, all in order to hide their true pedigree. Federal agents searched Picone’s business and residence on April 24, 2012, and recovered 12,960 counterfeit ICs.
This is the second conviction ever on a charge of trafficking in counterfeit military goods, a relatively new provision in the U.S. Criminal Code that was enacted as part of the National Defense Authorization Act of 2011.
The case was investigated by the Defense Criminal Investigative Service, the Naval Criminal Investigative Service and Homeland Security Investigations. The case is being prosecuted by Trial Attorney Kendra Ervin and Senior Counsel Evan Williams of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), Special Assistant U.S. Attorney Carol Sipperly of the District of Connecticut, Trial Attorney Anna Kaminska of the Criminal Division’s Fraud Section, and Trial Attorney Kristen Warden of the Criminal Division’s Asset Forfeiture and Money Laundering Section. Significant assistance was provided by the CCIPS Cybercrime Lab.
Los Angeles Physician Indicted <br /> in $33 Million Medicare Fraud SchemeRead the Press Release
A Los Angeles physician was indicted today for a $33 million scheme to defraud Medicare, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) for the Los Angeles Region and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office.
Robert A. Glazer, 67, of Los Angeles, California, was indicted in the Central District of California and charged with one count of conspiracy to commit health care fraud.
According to court documents, Glazer operated a medical clinic located in Los Angeles. From approximately January 2006 through May 2014, Glazer allegedly billed Medicare for services that were not medically necessary, and at times were not provided to the Medicare beneficiaries. In addition, Glazer allegedly signed prescriptions, certifications, and other medical documents for medically unnecessary home health services, hospice services, and power wheelchairs and other durable medical equipment (DME). Glazer’s co-conspirators then sold the prescriptions and certifications to DME supply companies, home health agencies, and other providers, knowing that the prescriptions and certifications were fraudulent. Based on these fraudulent prescriptions and certifications, the DME supply companies, home health agencies, and other providers then allegedly submitted false and fraudulent claims to Medicare.
As further alleged in court documents, from approximately January 2006 through May 2014, fraudulent prescriptions and certifications from Glazer were responsible for approximately $33,484,779 in false and fraudulent claims to Medicare, and Medicare paid approximately $22,056,332 on those claims.
The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case is being prosecuted by Trial Attorneys Fred Medick and Blanca Quintero 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 1,900 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 HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .Justice Department Announces Investigation of Detention Center in Hinds County, MississippiRead the Press Release
The Justice Department announced today that it is opening a pattern or practice investigation of Hinds County Detention Center including both the Hinds County facility in Raymond, Mississippi, and the Jackson Detention Center, in Jackson, Mississippi. The investigation will focus on whether Hinds County protects prisoners from harm at the hands of other prisoners and staff. Attorneys for the County Board and the Sheriff were notified on June 2, 2014. They pledged cooperation with the investigation
The department opened the investigation pursuant to the Civil Rights of Institutionalized Persons Act. The investigation will include a comprehensive review of policies, procedures, and records, as well as interviews with county officials, jail administrators, staff, and current and former inmates. The Justice Department will also reach out to other stakeholders, including members of the community and groups with knowledge of conditions in the two facilities.
“Our investigation will focus on whether Hinds County protects prisoners from the harm that can result from prisoner on prisoner violence and the improper use of force,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division. “We have not prejudged this matter, and will seek cooperation from county officials and other stakeholders during the course of the investigation.”
“The Office of the United States Attorney for the Southern District of Mississippi will work diligently with the Civil Rights Division to ensure that the investigation into the detention center is one that will ultimately yield results that are helpful to the citizenry of the Southern District of Mississippi, and specifically, Hinds County,” said Gregory K. Davis, United States Attorney for the Southern District of Mississippi.Individuals who have allegations about unlawful conditions in the Jail are encouraged to contact the Justice Department by phone at (202) 514-6255, by email at [email protected] or by mail at:
U.S. Department of Justice
Civil Rights Division
Special Litigation Section
950 Pennsylvania Avenue N.W.
Washington, D.C. 20530
(202) 514-6255For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt.
John Charles Mccluskey Sentenced to Life in Prison<br /> for Carjacking and Murdering Oklahoma CoupleRead the Press Release
John Charles McCluskey, 49, was sentenced this morning by U.S. District Judge Judith C. Herrera of the District of New Mexico to serve life in prison followed by a consecutive term of 2,820 months (235 years) in prison for carjacking and murdering a retired couple from Oklahoma in August 2010.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Damon P. Martinez of the District of New Mexico, Special Agent in Charge Carol K.O. Lee of the FBI’s Albuquerque Division and New Mexico State Police Chief Pete N. Kassetas made the announcement.
McCluskey and his co-defendants, Tracy Allen Province, 46, and Casslyn Mae Welch, 47, were charged with numerous capital offenses in an indictment arising out of the Aug. 2, 2010, carjacking and murders of Gary and Linda Haas, both 61, in Quay County, New Mexico. On Jan. 20, 2012, Province and Welch entered guilty pleas to crimes arising out of the carjacking and murder of Mr. and Mrs. Haas, and agreed to testify during McCluskey’s capital trial. Yesterday, Province was sentenced to five consecutive terms of life imprisonment without the possibility of release as required by his plea agreement and Welch was sentenced to 40 years in prison.
On Oct. 7, 2013, McCluskey was found guilty on all counts of the indictment after an eight-week trial, and later was found eligible for the death penalty on Nov. 5, 2013, following a three-week proceeding. McCluskey’s capital trial concluded on Dec. 11, 2013, when the jury said it was unable to reach a unanimous verdict on the death penalty, thus requiring that McCluskey be sentenced to life in prison.
“With the help of his conspirators, John Charles McCluskey mercilessly killed two innocent victims and burned their bodies as he fled law enforcement after escaping from prison,” said Assistant Attorney General Caldwell. “Our thoughts are with those whose lives were changed forever by these heinous crimes.”
“Today’s sentencing hearing brings to a close a case that focused on an exceptionally violent episode in the summer of 2010, during which John Charles McCluskey and Tracy Allen Province escaped from prison with help from Casslyn Mae Welch, committed multiple kidnappings during their interstate flight from justice, and mercilessly killed two innocent victims to eliminate them as witnesses,” said U.S. Attorney Martinez. “While the sentences imposed on McCluskey and his co-conspirators cannot restore the loss of Gary and Linda Haas, I hope that they bring some measure of comfort and closure to their families and friends and I commend the prosecutors and investigators who worked tirelessly to seek justice for Gary and Linda Haas.”
The evidence presented during McCluskey’s capital trial established that, on July 30, 2010, McCluskey and Province escaped from an Arizona state prison with Welch’s aid. On Aug. 2, 2010, McCluskey, Province and Welch carjacked Mr. and Mrs. Haas and their pickup truck and camping trailer at a rest stop off Interstate 40 in Quay County. McCluskey shot and killed Mr. and Mrs. Haas in the trailer in a remote location east of Tucumcari, New Mexico. The three associates then drove the Haases’ truck and trailer to a remote area in Guadalupe County, New Mexico, where they unhitched, burned and abandoned the trailer with the Haases’ remains still inside. On Aug. 4, 2010, the New Mexico State Police discovered the burned remains of Mr. and Mrs. Haas in the trailer. Province was arrested in Wyoming on Aug. 9, 2010, and McCluskey and Welch were arrested in Arizona on Aug. 19, 2010, following a nationwide, multi-agency manhunt.
“The rationale behind violent crimes like the ones committed against the Haases may be hard to understand, but our message today is crystal clear: the FBI and its partners will vigorously investigate and prosecute those who show such a callous disregard for innocent lives,” said FBI Special Agent in Charge Lee. “I am proud of the hard work of the FBI investigators and support personnel who worked on this case, alongside the federal prosecutors, victim/witness specialists, the New Mexico State Police and U.S. Marshals Service.”
“The conviction of John McCluskey and subsequent sentence of life in prison, without the chance of parole, is one that will make the community safer not only for the citizens we serve but also for the law enforcement officers who are sworn to protect them,” said New Mexico Police Chief Kassetas. “McCluskey was and is a criminal predator who has no respect for the basic rights and liberties that we as a society value so greatly. I can only hope that he is kept in a maximum level incarceration facility that will eliminate his ability to cause harm to anyone while he serves out his life sentence. I again want to thank the FBI, U.S. Attorney's Office and all the other New Mexico and Arizona law enforcement agencies that assisted with the Haas murder investigation, and with the capture and prosecution of McCluskey.”
The case was investigated by Albuquerque and Phoenix Divisions of the FBI and the New Mexico State Police. It was prosecuted by Trial Attorney Michael S. Warbel of the Criminal Division’s Capital Case Section and Assistant U.S. Attorney Linda Mott and former Assistant U.S. Attorney Gregory J. Fouratt of the District of New Mexico, with assistance from Kristopher N. Houghton, a contract attorney employed by the U.S. Attorney’s Office.Iowa Company and Top Executives Plead Guilty in Connection with Distribution of Adulterated EggsRead the Press Release
Quality Egg LLC (Quality Egg), Austin “Jack” DeCoster and Peter DeCoster pleaded guilty today in federal court in Sioux City, Iowa, in connection with the distribution of adulterated eggs in interstate commerce. As part of their plea agreements, the company and the two individuals admitted the company’s shell eggs were adulterated in that they contained a poisonous and deleterious substance, Salmonella Enteriditis, that may have rendered the eggs injurious to health.
Assistant Attorney General Stuart F. Delery of the Justice Department’s Civil Division and U.S. Attorney Kevin W. Techau of the Northern District of Iowa made the announcement.
Quality Egg, an egg production company with operations in Wright County, Iowa, pleaded guilty to one count of bribery of a public official, one count of introducing a misbranded food into interstate commerce with intent to defraud, and one count of introducing adulterated food into interstate commerce. Austin “Jack” DeCoster, 79, of Turner, Maine, and Peter DeCoster, 51, of Clarion, Iowa, each pled guilty to one count of introducing adulterated food into interstate commerce.
As part of its plea agreement, Quality Egg acknowledged that, on at least two occasions in 2010, its employees gave a cash bribe to an Inspector of the U.S. Department of Agriculture (USDA). The USDA Inspector’s job responsibilities included inspecting shell eggs at one or more of Quality Egg’s production facilities in Iowa. Quality Egg admitted its employees provided the bribe to the USDA Inspector (now deceased) in an attempt to corruptly influence the inspector to exercise his authority to release pallets of retained eggs for sale without re-processing the eggs as required by law and USDA standards. The eggs had been retained or “red tagged” for failing to meet minimum USDA quality grade standards.
On Sept. 12, 2012, former Quality Egg employee Tony Wasmund, 63, pleaded guilty to one count of conspiracy to bribe a public official, sell restricted eggs with intent to defraud, introduce misbranded food into interstate commerce with intent to defraud and mislead. Wasmund is scheduled to be sentenced before United States District Court Judge Mark W. Bennett of the Northern District of Iowa on Sept. 12, 2014.
Quality Egg also pleaded guilty to introducing misbranded eggs into interstate commerce with the intent to defraud. As part of its plea agreement, Quality Egg admitted that, beginning no later than January 2006 and continuing through Aug. 12, 2010, its employees affixed labels to egg shipments that indicated false expiration dates with the intent to mislead state regulators and retail egg customers regarding the true age of the eggs. Quality Egg acknowledged that there were a number of ways that the company mislabeled older eggs with newer processing and expiration dates prior to shipping the eggs to customers in California, Arizona and other states. Sometimes Quality Egg personnel did not put any processing or corresponding expiration dates on the eggs when they were processed. The eggs would be kept in storage for several days or up to several weeks. Then, just prior to shipping the eggs, Quality Egg personnel labeled the eggs with processing dates that were false.
As part of its plea agreement to the charge of introducing adulterated eggs into interstate commerce, Quality Egg admitted that, between about the beginning of 2010 and in or about August 2010, the company sold shell eggs that were adulterated in that they contained a poisonous and deleterious substance, Salmonella Enteriditis. The company acknowledged that it produced, processed, held, and packed the contaminated eggs in Iowa and sold and caused the distribution of the eggs to buyers in states other than Iowa.
Austin “Jack” DeCoster and Peter DeCoster each pleaded guilty to one count of introducing adulterated eggs into interstate commerce.
As part of his plea agreement, Austin “Jack” DeCoster admitted that he was the trustee of a trust that owned Quality Egg (also doing business as Wright County Egg, and Environ), and he exercised substantial control over the operations of Quality Egg and related entities and assets in Iowa. Austin “Jack” DeCoster acknowledged that he was the person ultimately responsible for the operations of Quality Egg and the various egg facilities in Iowa associated with Quality Egg.
Peter DeCoster, as part of his plea agreement, admitted that was the Chief Operating Officer of Quality Egg, and he exercised some control over the production and distribution of shell eggs by Quality Egg and related entities and assets in Iowa. Peter DeCoster acknowledged he was one of the persons responsible for running the operations of Quality Egg and the various egg facilities in Iowa associated with Quality Egg.
Both Austin “Jack” DeCoster and Peter DeCoster admitted that between about the beginning of 2010 and in or about August 2010, Quality Egg introduced and caused to be introduced into interstate commerce shell eggs that were adulterated, in that they contained a poisonous and deleterious substance, Salmonella Enteriditis.
Sentencing will be set before Judge Mark W. Bennett after presentence reports are prepared. Austin “Jack” DeCoster and Peter DeCoster remain free on bail pending sentencing.
On the bribery count, Quality Egg faces a sentence of probation for at least one and up to five years and a fine equal to the greater of three times the monetary equivalent of the thing of value given, offered, or promised as part of the offense, or $500,000. Quality Egg also agreed to forfeit a money judgment of $10,000 representing proceeds of the bribery offense.
On the introducing misbranded eggs into interstate commerce with the intent to defraud count, Quality Egg faces a maximum sentence of probation for at least one and up to five years and a fine equal to the greater of twice the gross gain resulting from the offense, twice the gross loss resulting from the offense, or $500,000.
On the introducing adulterated eggs in interstate commerce count, Quality Egg faces a sentence of probation for up to five years and a fine equal to the greater of twice the gross gain resulting from the offense, twice the gross loss resulting from the offense, or $100,000.
Austin “Jack” DeCoster and Peter DeCoster each face a maximum sentence of up to one year imprisonment or a term of probation of not more than five years; a fine equal to the greater of twice the gross gain or the gross loss resulting from the offense, or $100,000; and a term of supervised release after any imprisonment for up to one year.
The case is being prosecuted by Trial Attorneys Lisa Hsiao and Christopher Parisi of the Consumer Protection Branch of the Justice Department’s Civil Division and Assistant U.S. Attorney Peter Deegan of the Northern District of Iowa. They were assisted by Associate Chief Counsel Michael Varrone of the Food and Drug Division, Office of General Counsel, Department of Health and Human Services. The case was investigated by the Food and Drug Administration’s Office of Criminal Investigations, the United States Department of Agriculture Office of Inspector General, and the FBI.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 14-CR-3024.Former Alabama Corrections Officers Sentenced for Identity Theft and Tax FraudRead the Press Release
Bryant Thompson was sentenced today to serve 120 months in prison and Quincy Walton was sentenced to serve 84 months in prison for their roles in a stolen identity refund fraud scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama. Thompson and Walton, both former Alabama corrections officers, were convicted of conspiracy to defraud the United States following a week-long jury trial in January 2014. Thompson was also convicted of seven counts of wire fraud and seven counts of aggravated identity theft, and Walton was also convicted of one count of aggravated identity theft. In addition to their prison sentences Thompson and Walton have been ordered to pay $176,114 in restitution.
According to evidence introduced at trial, Thompson was assigned to the shift clerk position at an Alabama state prison, which gave him access to the personal identifying information of every inmate in the custody of the Alabama Department of Corrections, past and present. Thompson and Walton, his former co-worker, used information stolen from the databases to file false federal income tax returns in the names and Social Security numbers of inmates.
According to the evidence introduced at trial, the investigation revealed that several internet protocol (IP) addresses were used to file the fraudulent tax returns, including one IP address directly assigned to Thompson’s residence at the time certain tax returns were filed. Circumstantial evidence tied both Thompson and Walton to the other IP addresses.
Also according to the evidence introduced at trial, the two directed the stolen tax refunds onto prepaid debit cards and requested other refunds in the form of U.S. Treasury checks. Evidence showed that the cards and checks were mailed to several addresses associated with Thompson and Walton in Montgomery and Prattville, Alabama, and that several of the checks were cashed at a local retail store by Walton’s uncle and by a local check casher. During this time, Thompson purchased a new paint job and new rims for his SUV and later purchased a BMW.
According to evidence from the sentencing, altogether Thompson and Walton filed over 180 false tax returns claiming over $750,000 in tax refunds. The IRS was able to identify many of the returns as fraudulent when filed and did not pay the refunds claimed, but was defrauded into issuing a total of $176,114 in improper refunds.
The case was investigated by IRS-Criminal Investigation and was prosecuted by Trial Attorneys Jason Poole and Alexander Effendi of the Tax Division, with the assistance of the U.S. Attorney’s Office for the Middle District of Alabama.
More information about the Tax Division and its enforcement efforts against stolen identity/refund crimes may be found at www.justice.gov/tax.U.S. Leads Multi-National Action Against “Gameover Zeus” Botnet and “Cryptolocker” Ransomware, Charges Botnet AdministratorRead the Press Release
The Justice Department today announced a multi-national effort to disrupt the Gameover Zeus Botnet – a global network of infected victim computers used by cyber criminals to steal millions of dollars from businesses and consumers – and unsealed criminal charges in Pittsburgh, Pennsylvania, and Omaha, Nebraska, against an administrator of the botnet. In a separate action, U.S. and foreign law enforcement officials worked together to seize computer servers central to the malicious software or “malware” known as Cryptolocker, a form of “ransomware” that encrypts the files on victims’ computers until they pay a ransom.
Deputy Attorney General James M. Cole, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, FBI Executive Assistant Director Robert Anderson Jr., U.S. Attorney David J. Hickton of the Western District of Pennsylvania, U.S. Attorney Deborah R. Gilg of the District of Nebraska, and Department of Homeland Security’s (DHS) Deputy Under Secretary Dr. Phyllis Schneck made the announcement.
Victims of Gameover Zeus may use the following website created by DHS’s Computer Emergency Readiness Team (US-CERT) for assistance in removing the malware: https://www.us-cert.gov/gameoverzeus .
“This operation disrupted a global botnet that had stolen millions from businesses and consumers as well as a complex ransomware scheme that secretly encrypted hard drives and then demanded payments for giving users access to their own files and data,” said Deputy Attorney General Cole. “We succeeded in disabling Gameover Zeus and Cryptolocker only because we blended innovative legal and technical tactics with traditional law enforcement tools and developed strong working relationships with private industry experts and law enforcement counterparts in more than 10 countries around the world.”
“These schemes were highly sophisticated and immensely lucrative, and the cyber criminals did not make them easy to reach or disrupt,” said Assistant Attorney General Caldwell. “But under the leadership of the Justice Department, U.S. law enforcement, foreign partners in more than 10 different countries and numerous private sector partners joined together to disrupt both these schemes. Through these court-authorized operations, we have started to repair the damage the cyber criminals have caused over the past few years, we are helping victims regain control of their own computers, and we are protecting future potential victims from attack.”
“Gameover Zeus is the most sophisticated botnet the FBI and our allies have ever attempted to disrupt,” said FBI Executive Assistant Director Anderson. “The efforts announced today are a direct result of the effective relationships we have with our partners in the private sector, international law enforcement, and within the U.S. government.”
“The borderless, insidious nature of computer hacking and cybertheft requires us to be bold and imaginative,” said U.S. Attorney Hickton. “We take this action on behalf of hundreds of thousands of computer users who were unwittingly infected and victimized.”
“The sophisticated computer malware targeting of U.S. victims by a global criminal enterprise demonstrates the grave threat of cybercrime to our citizens,” said U.S. Attorney Gilg. “We are grateful for the outstanding collaboration of our international and U.S. law enforcement partners in this successful investigation.”
“The FBI has demonstrated great leadership in continuing to help combat cyber crime, and our international and private sector partners have made enormous contributions as well,” said Deputy Under Secretary Schneck. “This collective effort reflects our ‘whole-of-government’ approach to cybersecurity. DHS is proud to support our partners in helping to identify compromised computers, sharing that information rapidly, and developing useful information and mitigation strategies to help the owners of hacked systems.”
Gameover Zeus Administrator Charged
A federal grand jury in Pittsburgh unsealed a 14-count indictment against Evgeniy Mikhailovich Bogachev, 30, of Anapa, Russian Federation, charging him with conspiracy, computer hacking, wire fraud, bank fraud and money laundering in connection with his alleged role as an administrator of the Gameover Zeus botnet. Bogachev was also charged by criminal complaint in Omaha with conspiracy to commit bank fraud related to his alleged involvement in the operation of a prior variant of Zeus malware known as “Jabber Zeus.”
In a separate civil injunction application filed by the United States in federal court in Pittsburgh, Bogachev is identified as a leader of a tightly knit gang of cyber criminals based in Russia and Ukraine that is responsible for the development and operation of both the Gameover Zeus and Cryptolocker schemes. An investigation led in Washington, D.C., identified the Gameover Zeus network as a common distribution mechanism for Cryptolocker. Unsolicited emails containing an infected file purporting to be a voicemail or shipping confirmation are also widely used to distribute Cryptolocker. When opened, those attachments infect victims’ computers. Bogachev is alleged in the civil filing to be an administrator of both Gameover Zeus and Cryptolocker. The injunction filing further alleges that Bogachev is linked to the well-known online nicknames “Slavik” and “Pollingsoon,” among others. The criminal complaint filed in Omaha alleges that Bogachev also used “Lucky12345,” a well-known online moniker previously the subject of criminal charges in September 2012 that were unsealed in Omaha on April 11, 2014.
Disruption of Gameover Zeus Botnet
Gameover Zeus, also known as “Peer-to-Peer Zeus,” is an extremely sophisticated type of malware designed to steal banking and other credentials from the computers it infects. Unknown to their rightful owners, the infected computers also secretly become part of a global network of compromised computers known as a “botnet,” a powerful online tool that cyber criminals can use for numerous criminal purposes besides stealing confidential information from the infected machines themselves. Gameover Zeus, which first emerged around September 2011, is the latest version of Zeus malware that began appearing at least as early as 2007. Gameover Zeus’s decentralized, peer-to-peer structure differentiates it from earlier Zeus variants. Security researchers estimate that between 500,000 and 1 million computers worldwide are infected with Gameover Zeus, and that approximately 25 percent of the infected computers are located in the United States. The principal purpose of the botnet is to capture banking credentials from infected computers. Those credentials are then used to initiate or re-direct wire transfers to accounts overseas that are controlled by cyber criminals. The FBI estimates that Gameover Zeus is responsible for more than $100 million in losses.
The Gameover Zeus botnet operates silently on victim computers by directing those computers to reach out to receive commands from other computers in the botnet and to funnel stolen banking credentials back to the criminals who control the botnet. For this reason, in addition to the criminal charges announced today, the United States obtained civil and criminal court orders in federal court in Pittsburgh authorizing measures to redirect the automated requests by victim computers for additional instructions away from the criminal operators to substitute servers established pursuant to court order. The order authorizes the FBI to obtain the Internet Protocol addresses of the victim computers reaching out to the substitute servers and to provide that information to US-CERT to distribute to other countries’ CERTS and private industry to assist victims in removing the Gameover Zeus malware from their computers. At no point during the operation did the FBI or law enforcement access the content of any of the victims' computers or electronic communications.
Besides the United States, law enforcement from the Australian Federal Police; the National Police of the Netherlands National High Tech Crime Unit; European Cybercrime Centre (EC3); Germany’s Bundeskriminalamt; France’s Police Judiciare; Italy’s Polizia Postale e delle Comunicazioni; Japan’s National Police Agency; Luxembourg’s Police Grand Ducale; New Zealand Police; the Royal Canadian Mounted Police; Ukraine’s Ministry of Internal Affairs – Division for Combating Cyber Crime; and the United Kingdom’s National Crime Agency participated in the operation. The Defense Criminal Investigative Service of the U.S. Department of Defense also participated in the investigation.
Invaluable technical assistance was provided by Dell SecureWorks and CrowdStrike. Numerous other companies also provided assistance, including facilitating efforts by victims to remediate the damage to their computers inflicted by Gameover Zeus. These companies include Microsoft Corporation, Abuse.ch, Afilias, F-Secure, Level 3 Communications, McAfee, Neustar, Shadowserver, Anubis Networks, Symantec, Heimdal Security, Sophos and Trend Micro.
The DHS National Cybersecurity and Communications Integration Center (NCCIC), which houses the US-CERT, plays a key role in triaging and collaboratively responding to the threat by providing technical assistance to information system operators, disseminating timely mitigation strategies to known victims, and sharing actionable information to the broader community to help prevent further infections.
Disruption of Cryptolocker
In addition to the disruption operation against Gameover Zeus, the Justice Department led a separate multi-national action to disrupt the malware known as Cryptolocker (sometimes written as “CryptoLocker”), which began appearing about September 2013 and is also a highly sophisticated malware that uses cryptographic key pairs to encrypt the computer files of its victims. Victims are forced to pay hundreds of dollars and often as much as $700 or more to receive the key necessary to unlock their files. If the victim does not pay the ransom, it is impossible to recover their files.
Security researchers estimate that, as of April 2014, Cryptolocker had infected more than 234,000 computers, with approximately half of those in the United States. One estimate indicates that more than $27 million in ransom payments were made in just the first two months since Cryptolocker emerged.
The law enforcement actions against Cryptolocker are the result of an ongoing criminal investigation by the FBI’s Washington Field Office, in coordination with law enforcement counterparts from Canada, Germany, Luxembourg, the Netherlands, United Kingdom and Ukraine.
Companies such as Dell SecureWorks and Deloitte Cyber Risk Services also assisted in the operation against Cryptolocker, as did Carnegie Mellon University and the Georgia Institute of Technology (Georgia Tech). The joint effort aided the FBI in identifying and seizing computer servers acting as command and control hubs for the Cryptolocker malware.
The FBI’s Omaha and Pittsburgh Field Offices led both malware disruptions and conducted the investigation of Bogachev. The prosecution in Pittsburgh is being handled by Assistant U.S. Attorney Shardul Desai of the Western District of Pennsylvania, and the prosecution in Omaha by Trial Attorney William A. Hall of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Steven Russell of the District of Nebraska. The civil action to disrupt the Gameover Zeus botnet and Cryptolocker malware is led by Trial Attorneys Ethan Arenson and David Aaron of CCIPS and Assistant U.S. Attorney Michael A. Comber of the Western District of Pennsylvania.
The Criminal Division’s Office of International Affairs provided significant assistance throughout the criminal and civil investigations.
The details contained in the indictment, criminal complaint and related pleadings are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Anyone claiming an interest in any of the property seized or actions enjoined pursuant to the court orders described in this release is advised to visit the following website for notice of the full contents of the orders: http://www.justice.gov/opa/gameover-zeus.html .Massachusetts Man Charged with <br /> Computer Hacking and Credit Card TheftRead the Press Release
A Massachusetts man was charged today with allegedly hacking into computer networks around the country – including networks belonging to law enforcement agencies, a local police department and a local college – to obtain highly sensitive law enforcement data and alter academic records. He also obtained stolen credit, debit and payment card numbers.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney Carmen M. Ortiz of the District of Massachusetts, Special Agent in Charge Vincent Lisi of the FBI’s Boston Division and Colonel Timothy P. Alben of the Massachusetts State Police made the announcement.
Cameron Lacroix, 25, of New Bedford, Massachusetts, was charged by a criminal information with two counts of computer intrusion and one count of access device fraud.
According to allegations in the information, b etween May 2011 and May 2013, Lacroix allegedly obtained and possessed payment card data for more than 14,000 unique account holders. For some of these account holders, Lacroix also obtained other personally identifiable information, including the account holders’ full names, addresses, dates of births, social security account numbers, email addresses, bank account and routing numbers, as well as listings of merchandise the account holders had ordered.
In September 2012, Lacroix allegedly hacked into a computer server operated by a local Massachusetts police department and accessed an e-mail account belonging to the chief of police. From August 2012 through November 2012, Lacroix is accused of repeatedly hacking into law enforcement computer servers containing sensitive information including police reports, intelligence reports, arrest warrants, and sex offender information. Lacroix is also accused of using stolen credentials to access and change information in the servers of Bristol Community College on multiple occasions between September 2012 and December 2013.
The case was investigated by the FBI Boston Division Cyber Task Force. The case is being prosecuted by Senior Trial Attorney Mona Sedky from the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam Bookbinder of the District of Massachusetts. The Department of Justice and the U.S. Attorney’s Office would like to thank Bristol Community College for its cooperation during this investigation.Justice Department to Monitor Elections <br /> in California and New MexicoRead the Press Release
The Justice Department announced today that it will monitor elections on June 3, 2014, in Alameda and Napa Counties, California, and Cibola County, N.M., to ensure compliance with the Voting Rights Act and other federal voting rights statutes. The Voting Rights Act prohibits discrimination in the election process on the basis of race, color or membership in a minority language group.
In Alameda County, the department will assign federal observers from the U.S. Office of Personnel Management (OPM) to monitor polling place activities based on a court order. The observers will watch and record activities during voting hours at polling locations in this jurisdiction, and Civil Rights Division attorneys will coordinate the federal activities and maintain contact with local election officials.
In addition, department personnel will monitor polling place activities in Napa and Cibola Counties. Civil Rights Division attorneys will coordinate federal activities and maintain contact with local election officials.
Each year, the department deploys federal observers from OPM and departmental staff to monitor elections across the country. To file complaints about discriminatory voting practices, including acts of harassment or intimidation, voters may call the Voting Section of the Civil Rights Division at 1-800-253-3931.
Visit this website for more information about the Voting Rights Act and other federal voting laws.Former Utah Certified Public Accountant Convicted of Filing False Claims for Tax Refunds <br /> Totaling More Than $8 Million and Presenting a $300 Million Fictitious Financial InstrumentRead the Press Release
Dick Reid Jenkins, of Heber City, Utah, was convicted today, in U.S. District Court for the District of Utah, of eighteen counts of filing false claims for income tax refunds and one count of presenting a fictitious financial instrument, the Justice Department and Internal Revenue Service (IRS) announced. Jenkins was charged by a superseding indictment on June 26, 2013. He is scheduled to be sentenced before U.S. District Judge Clark Waddoups on Sept. 9, 2014.According to court documents and evidence presented at trial, Jenkins filed a false 2007 individual income tax return for himself in September 2008 which claimed an income tax refund of $402,920. In October 2008, Jenkins filed a false amended 2004 individual income tax return which claimed an income tax refund of $434,261. Both false claims were based on the use of a false IRS Form 1099-OID, Original Issue Discount. The IRS listed this scheme as one of its “ Dirty Dozen ” worst tax scams each year from 2009 through 2014.
According to court documents and evidence presented at trial, in addition to his own false returns, Jenkins caused sixteen false federal individual income tax returns to be filed on behalf of other individuals from September 2008 through February 2009. These false tax returns also used false IRS Forms 1099-OID and claimed federal income tax refunds totaling $8,407,623. On June 30, 2008, Jenkins passed and presented a false and fictitious financial instrument to the U.S. Department of the Treasury in the amount of $300,000,000. Jenkins was licensed by the state of Utah as a Certified Public Accountant at the time his criminal conduct occurred.
Jenkins faces a statutory maximum penalty of 25 years in prison and a fine of up to $250,000 for passing and presenting a fictitious obligation to the United States. Jenkins also faces a maximum penalty of five years in prison and a fine of up to $250,000 or twice the gross gain or loss caused by the defendant for each count of presenting false, fictitious, and fraudulent claims to the United States.
Kathryn Keneally, Assistant Attorney General of the Department of Justice Tax Division, commended the special agents of IRS - Criminal Investigation who investigated the case, and Trial Attorneys Stuart Wexler and Michael Romano of the Tax Division, who prosecuted the case.
Former CEO and CFO of Arthrocare Corporation Convicted for Orchestrating $400 Million Securities Fraud SchemeRead the Press Release
A federal jury today convicted the former chief executive officer and the former chief financial officer of ArthroCare Corporation, a publicly traded medical device company based in Austin, Texas, for orchestrating a fraud scheme that resulted in shareholder losses of over $400 million.
Principal Deputy Assistant Attorney General Marshall L. Miller and Special Agent in Charge Christopher Combs of the FBI’s San Antonio Field Office made the announcement.
“These corporate executives cooked the books to prop up their stock, and when the truth came out investors lost more than $400 million,” said Principal Deputy Assistant Attorney General Miller. “Today’s convictions are the first step in holding them accountable for undermining our financial markets for their own personal gain.”
“This case demonstrates the FBI’s commitment to unraveling elaborate and complex fraud schemes leaving no financial stone unturned,” said FBI SAC Combs. “Those who abuse their position of trust to illegally enrich themselves, at the expense of shareholders and members of the investing public, will be held accountable for their actions.”
After a four-week trial, a jury in the Western District of Texas found the former CEO, Michael Baker, 55, guilty of conspiracy to commit wire and securities fraud, wire fraud, securities fraud and false statements. Michael Gluk, 56, the former CFO, was found guilty of conspiracy to commit wire and securities fraud, wire fraud and securities fraud. Baker and Gluk were charged in a superseding indictment returned on April 1, 2014.
Evidence at trial demonstrated that Baker and Gluk, along with their co-conspirators, masterminded and executed a scheme to artificially inflate sales and revenue through a series of end-of-quarter transactions involving several of ArthroCare’s distributors beginning in 2005 and continuing until 2009. Co-conspirators John Raffle and David Applegate, both former senior vice presidents of ArthroCare, pleaded guilty to multiple felonies in 2013 in connection with their participation in the scheme.
Baker, Gluk and other ArthroCare employees determined the type and amount of product to be shipped to distributors based on ArthroCare’s need to meet Wall Street analyst forecasts, rather than distributors’ actual orders. Baker, Gluk and others then caused ArthroCare to “park” millions of dollars’ worth of ArthroCare’s medical devices at its distributors at the end of each relevant quarter. ArthroCare then reported these shipments as sales in its quarterly and annual filings at the time of the shipment, enabling the company to meet or exceed internal and external earnings forecasts.
Evidence at trial further showed that ArthroCare’s distributors agreed to accept shipment of millions of dollars of products in exchange for special conditions, including substantial, upfront cash commissions, extended payment terms and the ability to return products, allowing ArthroCare to falsely inflate its revenue by tens of millions of dollars.
Baker, Gluk and others used DiscoCare, a privately owned Delaware corporation, as one of the distributors to cover shortfalls in ArthroCare’s revenue. Evidence at trial showed that, at Baker and Gluk’s direction, ArthroCare shipped product to DiscoCare that far exceeded DiscoCare’s needs.
Baker, Gluk and others lied to investors and analysts about ArthroCare's relationships with its distributors, including DiscoCare. Baker and Gluk caused ArthroCare to acquire DiscoCare specifically to conceal from the investing public the nature and financial significance of ArthroCare’s relationship with DiscoCare.
Evidence at trial also established that Baker lied when he was deposed by the U.S. Securities and Exchange Commission in November 2009 about the DiscoCare relationship.
Between December 2005 and February 2009, ArthroCare’s shareholders held more than 25 million shares of ArthroCare stock. On July 21, 2008, after ArthroCare announced publicly that it would be restating its previously reported financial results from the third quarter 2006 through the first quarter 2008 to reflect the results of an internal investigation, the price of ArthroCare shares dropped from $40.03 to $23.21 per share. The drop in ArthroCare’s share price caused an immediate loss in shareholder value of more than $400 million.
Following today’s verdict, U.S. District Judge Sam Sparks remanded Baker into custody. A sentencing date for Baker and Gluk has not yet been scheduled.
This case was investigated by the FBI’s San Antonio Field Office. The case is being prosecuted by Deputy Chief Benjamin D. Singer and Trial Attorneys Henry P. Van Dyck and William S.W. Chang of the Criminal Division’s Fraud Section. The Department appreciates the substantial assistance of the U.S. Securities and Exchange Commission.Deputy Attorney General, Federal Law Enforcement Officials to Hold News Conference on Cyber Fraud AnnouncementRead the Press Release
Deputy Attorney General James M. Cole, Assistant Attorney General Leslie R. Caldwell of the Criminal Division, U.S. Attorney for Western District of Pennsylvania David Hickton, FBI Executive Associate Director Robert Anderson and Deputy Under Secretary Dr. Phyllis Schneck of the Department of Homeland Security will hold a news conference TODAY, MONDAY, JUNE 2, 2014, at 12:00 p.m. EDT, to announce criminal charges and two global cyber fraud disruptions.WHO: DeputyAttorney General James M. Cole
Assistant Attorney General Leslie R. Caldwell of the Criminal Division
U.S. Attorney for Western District of Pennsylvania David Hickton
FBI Executive Associate Director Robert Anderson
Deputy Under Secretary Dr. Phyllis Schneck
WHAT: Press conference to announce cyber fraud charges and disruptions.
WHEN: TODAY, 12:00 p.m. EDT, JUNE 2, 2014
WHERE: Department of Justice
7th Floor Conference Room
950 Pennsylvania Ave., N.W.
Washington, D.C.
OPEN PRESS
NOTE: All media must present government-issued photo I.D. (such as driver’s license) as well as valid media credentials. Media must enter the department at the visitor’s entrance on Constitution Avenue between 9th and 10th Streets. Media may begin arriving at 11:00 a.m. EDT and cameras must be pre-set by 11:45 a.m. EDT. Press inquiries regarding logistics should be directed to the Office of Public Affairs at 202-514-2007 or email [email protected] .
Former Anderson, California, Police Officer <br /> Pleads Guilty to Civil Rights Offense<br /> for Sexually Assaulting WomanRead the Press Release
Former Anderson, California, Police Officer Bryan Robert Benson pleaded guilty today in federal court to a civil rights offense for sexually assaulting a woman while transporting her to jail, announced the Justice Department and the U.S. Attorney’s Office for the Eastern District of California.
Benson, 29, pleaded guilty to one felony count of deprivation of rights under color of law. According to the factual basis in a plea agreement filed with the court today, Benson transported the victim, to the Shasta County Jail after she was arrested for driving under the influence on May 29, 2010. Before arriving at the jail, Benson pulled into a parking lot. There, he falsely reported by police radio to dispatch that he had arrived at the jail when, in fact, he had not. Benson got out of the car, opened the passenger side door of the car, removed the victim from the passenger seat, and led her to the back of the police car. Benson pulled down the victim’s shorts and underwear and engaged in intercourse with her against the police car without her consent. The offense resulted in bodily injury to the victim, including physical pain and bruising.
Sentencing is scheduled for Aug. 15, 2014. Benson and the government agreed in the plea agreement that the Court should sentence Benson to five years in prison. Benson also faces a fine of up to $250,000.
“In sexually assaulting a woman in his custody, the defendant betrayed his oath to uphold the law, violated the trust placed in him by society, and, most regrettably, caused untold harm to the victim,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The department will continue to hold such offenders accountable.”
“Members of the public have a right and an expectation that they can look to the police for help and safety,” said U.S. Attorney Benjamin B. Wagner for the Eastern District of California.. “When a police officer abuses that trust for his own criminal purposes, he violates his duty to protect the public, undermines the effectiveness of his fellow officers, and subverts the rule of law.”This case is being investigated by the Federal Bureau of Investigation. The case is being prosecuted by Trial Attorney Chiraag Bains from the Justice Department’s Civil Rights Division and Assistant U.S. Attorney Matthew G. Morris for the Eastern District of California.
Federal Inmate Sentenced to Life in Prison for the Murder of a U.S. Correctional OfficerRead the Press Release
WASHINGTON – Federal inmate James Ninete Leon Guerrero, 48, of Guam, was sentenced today to serve life in prison for the murder of United States Correctional Officer Jose Rivera, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Benjamin Wagner of the Eastern District of California. Guerrero was sentenced by U.S. District Judge Phillip Pro of the District of Nevada.
According to court documents, Guerrero aided and abetted co-defendant Jose Cabrera Sablan in the stabbing death of Officer Rivera. On June 20, 2008, as Officer Rivera was on duty and conducting his daily count in the United States Penitentiary in Atwater, California, Sablan attacked him with an eight-inch homemade shank. Officer Rivera tried to flee, but was knocked backwards by Sablan and tackled by Guerrero. Guerrero held Rivera down as Sablan stabbed him with the shank in excess of 20 times. Officer Rivera was 22 years old at the time of his death and was a United States Navy veteran.
Sablan and Guerrero were indicted for murder on Aug. 14, 2008. Sablan’s case is set for trial on April 6, 2015, and the government will be seeking the death penalty if he is convicted.
The charges against Sablan are merely accusations and he is presumed innocent unless and until proven guilty beyond a reasonable doubt.
The investigation was conducted by the Bureau of Prisons and the FBI. The case is being prosecuted by Trial Attorney Bonnie Hannan of the Capital Case Section of the Criminal Division and Assistant U.S. Attorney Duce Rice of the Eastern District of California.
DEA Employee and Contractor Husband Plead Guilty to<br /> False Statements in Kidnapping HoaxRead the Press Release
Nydia L. Perez and John A. Soto, both 44, of Haymarket, Virginia, pleaded guilty to one count of making false statements to law enforcement officials in federal court on Friday, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Assistant Director for International Operations John Boles of the FBI.
According to the plea agreement, in December 2013, Perez, an employee of the Drug Enforcement Administration, and her husband Soto, a private contractor in the United States Embassy in Bogotá, Colombia, designed and executed a hoax with the intention of defrauding the United States Embassy in Bogotá. As part of the hoax, Perez and Soto fabricated a plot to kidnap minors who are United States citizens.
According to court filings, Perez and Soto sent, through electronic mail and courier services, information about a purported threat to the safety of minor United States citizens in Bogotá. Perez and Soto added detailed descriptions of the targeted United States citizens, including information about their whereabouts and daily routines. Perez and Soto included photographs of the citizens in order to enhance the seriousness of the threat, and attempted to implicate innocent individuals in the kidnapping plot. Perez and Soto made numerous false representations to law enforcement and security officials in furtherance of the fabricated kidnapping plot.
Sentencing before U.S. District Judge Amy Berman-Jackson is scheduled for Aug. 21, 2014.
The investigation was conducted by the FBI Legal Attaché in Bogotá and the Extra-Territorial Squad of the FBI Miami Field Office. Also participating in the investigation were the DEA, the U.S. Embassy Bogota Regional Security Office, and the U.S. Embassy Bogota Force Protection Detail. The Department is grateful for the assistance of the Colombia National Police Directorate of Anti-Kidnapping and Anti-Extortion.
The case is being prosecuted by Trial Attorney Justin Weitz of the Criminal Division’s Public Integrity Section.Seattle Man Pleads Guilty to Voter Intimidation and Identification Fraud <br /> for Letters Sent to Florida Residents in Conjunction with the <br /> 2012 Federal ElectionsRead the Press Release
James Webb Baker Jr., 58, of Seattle, pleaded guilty today to one count of voter intimidation and one count of identification fraud in the U.S. District Court for the Middle District of Florida. Prior to the 2012 federal elections, Baker created and sent 200 fake voter eligibility letters to Republican Party donors across Florida that questioned the recipients’ citizenship status. During the plea hearing, Baker admitted that he intended the letters to look as if they were written by county elections officials and that his purpose in sending the letters was to intimidate the recipients and interfere with their right to vote.According to the evidence presented in court proceedings and documents, in October 2012, Baker read about the efforts of the Florida Governor and the Florida Secretary of State to remove the names of voters from the official Florida county lists of eligible voters. Angered by what he believed to be an attempt to suppress voter turnout, specifically of Hispanic voters who would vote for candidates of the Democratic Party, Baker created “false” or “copycat” voter eligibility letters of the actual letters sent by county officials. Baker sent his letters, which questioned the recipient’s eligibility to vote, to 200 Republican Party donors. The letters required the recipients to complete a voter eligibility form within 15 days or else their name would be removed from the voter registration rolls. Baker inserted a line of text in bold stating that a nonregistered voter who casts a vote may be subject to criminal sanctions.
The letters looked almost identical to official county Supervisor of Elections letters, and included the county official’s name, letterhead, address and contact information. During the plea proceedings, Baker admitted to making several changes to the original official letters in order to stress the threats that the recipients would lose their right to vote and/or be imprisoned if they did not first document their citizenship and right to vote in person to the registrar.
“Protecting the right to vote is one of the department’s top priorities,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “The Civil Rights Division is strongly committed to comprehensive and vigorous enforcement of laws that protect the rights of every American to vote free from intimidation, coercion, or threats.”
“My office is committed to aggressively protecting the integrity of the election process,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida. “Each citizen must be able to vote without intimidation or discrimination and to have that vote counted. It is imperative that those who have specific information about intimidation, discrimination or election fraud make that information available immediately to my office, the FBI or the Civil Rights Division.”
“This joint investigative effort is yet another example of the fortitude and commitment of our collective agencies to protect our citizen’s individual and constitutional rights,” said FBI Special Agent in Charge Paul Wysopal for the FBI Tampa Field Office.
“This case was complex,” said Florida Department of Law Enforcement Commissioner Gerald Bailey. “It required the expertise and dedication of FDLE Executive Investigations, crime lab analysts and intelligence analysts. Their efforts led to the identification and conviction of Baker. My thanks to each of them.”
“Using the U.S. Mail to threaten or intimidate voters will not be tolerated,” said Inspector in Charge Brad Kleinknecht with the Seattle Division of the U.S. Postal Inspection Service. “The Postal Inspection Service, along with its law enforcement partners, will continue to investigate all cases of this nature to ensure the U.S. Mail continues to play a key role our nation's election process.”This case was investigated by the FBI, U.S. Postal Inspection Service and the Florida Department of Law Enforcement. It is being prosecuted by Special Litigation Counsel Mark Blumburg and Trial Attorney William E. Nolan of the Civil Rights Division, and Assistant U.S. Attorney Robert A. Mosakowski of the U.S. Attorney’s Office for the Middle District of Florida.
Puerto Rico Superior Court Judge and Local Businessman Indicted on Conspiracy and Federal Programs Bribery ChargesRead the Press Release
A current Puerto Rico Superior Court Judge and Puerto Rico businessman were charged with orchestrating a criminal scheme in which the businessman paid bribes to the judge presiding over the criminal case against the businessman according to an indictment unsealed today.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Rosa Emilia Rodríguez-Vélez of the District of Puerto Rico, and Special Agent in Charge Carlos Cases of the FBI’s San Juan Division made the announcement.
“The outcome of a criminal case should be determined by the evidence and the law, not by paid-for bias,” said Assistant Attorney General Caldwell. “When citizens can’t have faith in the very people who are sworn to uphold the law, confidence in the entire system is shaken. We are committed to restoring that faith by rooting out corruption wherever it may be found.”
“A fair and impartial criminal justice system is one of the cornerstones of our democracy,” said U.S. Attorney Rodríguez-Vélez. “Judges, in particular, are expected to protect the public’s trust in the fairness of the judicial system. Investigations such as the one leading to today’s indictment are crucial to deter corrupt officials influenced by greed from breaking their oath to uphold the rule of law. This case should serve as a strong warning to those who might consider similar behavior. No one is above the law and everyone is accountable for their misdeeds.”
“Rogue justice as the one allegedly imparted by Judge Manuel Acevedo-Hernández will not be tolerated by the FBI,” said Special Agent in Charge Cases. “The FBI will continue vigorously to investigate allegations of corruption at all levels.”
The indictment, returned yesterday by a federal grand jury in the District of Puerto Rico and unsealed today, charges Manuel Acevedo-Hernandez, 62, and Lutgardo Acevedo-Lopez, 39, with conspiracy to commit federal programs bribery. Acevedo-Hernandez was also charged with receipt of a bribe by an agent of an organization receiving federal funds, and Acevedo-Lopez was charged with paying a bribe to an agent of an organization receiving federal funds.
According to the indictment,Acevedo-Hernandez, a Supervisory Superior Court Judge in the Aguadilla judicial region of Puerto Rico, allegedly accepted bribes from AcevedoLopez and others, knowing that the payments were made so that Acevedo-Hernandez would use his official position as a Superior Court judge for Acevedo-Lopez’s benefit. In particular, Acevedo-Hernandez presided over a criminal trial of Acevedo-Lopez and acquitted Acevedo-Lopez of all charges pending against him, including vehicular homicide. In exchange for the acquittal, Acevedo-Lopez, through an intermediary, bribed Acevedo-Hernandez by paying taxes owed by Acevedo-Hernandez, paying for construction of a garage, and providing him with a motorcycle, clothing and accessories, including cufflinks and a watch.
The charges contained in the indictment are merely accusations. The defendants are presumed innocent unless and until proven guilty.
The case is being investigated by the FBI’s San Juan Division and is being prosecuted by Trial Attorney Peter Mason of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorneys Timothy Henwood and Jose Capo of the District of Puerto Rico.
Citizens of Puerto Rico who have allegations of public corruption are encouraged to contact the FBI’s San Juan Division at (787) 754-6000.Nevada Man Pleads Guilty to Tax Refund Fraud Using False Home Buyer CreditsRead the Press Release
Assistant Attorney General Kathryn Keneally for the Tax Division and U.S. Attorney Daniel G. Bogden for the District of Nevada announced today that Damon Boswell of Las Vegas pleaded guilty to conspiracy to submit false federal income tax returns. Boswell was indicted on May 21, 2013.According to the court documents, from April 2009 to May 2009, Boswell and Cheryl Ramos conspired to defraud the United States by assisting in the filing of federal tax returns that falsely claimed refunds based on the First-Time Home Buyers Credit. Ramos pleaded guilty on Jan. 24, 2013, and is awaiting sentencing. Boswell obtained personal identifying information from individuals by falsely telling them that if they had not filed their 2008 federal income tax returns and did not owe back taxes, they were entitled to receive “Obama Stimulus” money. Boswell used the personal information, including names, dates of birth and Social Security numbers, to file federal income tax returns for tax year 2008 claiming refunds to which the individuals were not entitled. The individuals did not authorize Boswell or anyone else to file or cause the filing of these tax returns in their names. Boswell retained up to 71 percent of the proceeds as a “fee” for arranging taxpayers’ receipt of the money.
Boswell faces a statutory potential maximum prison term of 10 years and a maximum fine of $250,000. His sentencing is scheduled for Sept. 15, 2014.
Assistant Attorney General Keneally and U.S. Attorney Bogden thanked special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Christina Brown and Trial Attorney Sonia M. Owens for the Tax Division, who prosecuted the case.Nevada Man Pleads Guilty to Tax Refund Fraud Using False Home Buyer CreditsRead the Press Release
WASHINGTON – Assistant Attorney General Kathryn Keneally for the Tax Division and U.S. Attorney Daniel G. Bogden for the District of Nevada announced today that Damon Boswell of Las Vegas pleaded guilty to conspiracy to submit false federal income tax returns. Boswell was indicted on May 21, 2013.
According to the court documents, from April 2009 to May 2009, Boswell and Cheryl Ramos conspired to defraud the United States by assisting in the filing of federal tax returns that falsely claimed refunds based on the First-Time Home Buyers Credit. Ramos pleaded guilty on Jan. 24, 2013, and is awaiting sentencing. Boswell obtained personal identifying information from individuals by falsely telling them that if they had not filed their 2008 federal income tax returns and did not owe back taxes, they were entitled to receive "Obama Stimulus" money. Boswell used the personal information, including names, dates of birth and Social Security numbers, to file federal income tax returns for tax year 2008 claiming refunds to which the individuals were not entitled. The individuals did not authorize Boswell or anyone else to file or cause the filing of these tax returns in their names. Boswell retained up to 71 percent of the proceeds as a "fee" for arranging taxpayers' receipt of the money.
Boswell faces a statutory potential maximum prison term of 10 years and a maximum fine of $250,000. His sentencing is scheduled for Sept. 15, 2014.
Assistant Attorney General Keneally and U.S. Attorney Bogden thanked special agents of IRS-Criminal Investigation, who investigated the case, and Assistant U.S. Attorney Christina Brown and Trial Attorney Sonia M. Owens for the Tax Division, who prosecuted the case.
Government Files Complaint Against CA Inc. <br /> for False Claims on GSA ContractRead the Press Release
The government has filed a complaint against CA Inc. (CA) for violations of the False Claims Act in connection with a General Services Administration (GSA) contract, the Justice Department announced today. CA manufactures and sells information technology products and is headquartered in Islandia, New York.
“We expect companies that do business with the government to comply with their contractual obligations,” said Assistant Attorney General of the Justice Department’s Civil Division Stuart F. Delery. “As this case demonstrates, we will take action against those who seek to abuse the government’s procurement process.”
“Too many federal contractors think they can get away with overcharging the government,” said U.S. Attorney for the District of Columbia Ronald C. Machen Jr. “Our complaint alleges that CA broke its promise to give the government the same prices it was giving commercial customers. We look forward to vigorously pressing these claims in court and recovering every dollar that is owed to the American taxpayer.”
In September 2002, CA entered into a GSA contract to provide software licenses, software maintenance, training and consulting services to various government agencies. The government’s complaint alleges that, since at least 2006, CA knowingly overcharged the government for software licenses and maintenance in various ways. For example, the government alleges that CA provided incomplete and inaccurate information to GSA contracting officers during negotiation of contract extensions. At the time CA negotiated these extensions, applicable regulations and contract provisions required CA to fully and accurately disclose how it conducted business in the commercial marketplace, so GSA could use that information to negotiate a fair price for government customers. The government also alleges that CA failed to truthfully update its discounting practices during the life of the GSA contract. CA repeatedly certified to GSA that its discounting policies and practices had not changed, when in fact its discounts to commercial customers had increased.
The government’s complaint also alleges that, since 2002, CA failed to apply properly the contract’s price reduction clause. The contract required CA to monitor discounts to certain commercial customers, compare these discounts to the discounts given to the government and, if the commercial discounts were higher, pass on those higher discounts to the government. The government alleges that CA failed to make those comparisons or, when it did make such comparisons, failed to do so correctly, resulting in the government overpaying for CA’s information technology.
CA’s contract is a Multiple Award Schedule (MAS) contract. Under the MAS program, GSA pre-negotiates prices and contract terms for subsequent orders by federal agencies. Agencies that purchase under CA’s contract include the Department of Defense, the Department of Energy, the Department of Health and Human Services and the Department of Labor.
“Companies doing business with the federal government on a GSA schedule must disclose current, accurate, and complete commercial discounts, so that GSA can get the best prices on behalf of American taxpayers,” said GSA Acting Inspector General Robert C. Erickson. “We will continue to investigate all allegations indicating that the federal government may have been overcharged by a contractor.”
Some of the allegations that are the subject of the government’s complaint were filed in a lawsuit originally brought by Dani Shemesh, a former employee of CA Israel Ltd., under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private parties to sue on behalf of the government and to share in any recovery. The Act also authorizes the government to intervene and assume primary responsibility for litigating the lawsuit, as the government has done in this case. The government had previously notified the court that it intended to join in Shemesh’s lawsuit and file its own complaint.
This investigation reflects a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Columbia and the GSA’s Office of Inspector General.
The qui tam case is captioned United States ex rel. Dani Shemesh v. CA Inc., No. 09-1600 (D.D.C.). The complaint filed by the government contains allegations only; there has been no determination of liability.# # #
Two Individuals Plead Guilty to Conspiring to Launder Bribes Received in AfghanistanRead the Press Release
Two individuals have pleaded guilty for their roles in a scheme to launder approximately $250,000 in bribes received from Afghan contractors in Afghanistan.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney for the Western District of Tennessee Edward L. Stanton III and United States Attorney for the Eastern District of Tennessee William C. Killian made the announcement.
Jimmy W. Dennis, 44, formerly of Clarksville, Tennessee, and a former First Sergeant with the U.S. Army, pleaded guilty before U.S. District Court Judge Samuel H. May Jr. of the Western District of Tennessee to conspiracy to launder approximately $250,000 in bribe payments he received from Afghan contractors in Afghanistan. Sentencing is scheduled for Sept. 4, 2014.
James C. Pittman, 45, of Rossville, Georgia, pleaded guilty last Thursday before U.S. Magistrate Judge William B. Carter of the Eastern District of Tennessee for his role in this conspiracy. Sentencing is scheduled for Sept. 8, 2014.
According to pleadings filed at the time of the guilty pleas, from March 2008 through March 2009, Dennis was an Army Sergeant assigned as a paying agent in the Humanitarian Aid Yard (HA Yard) at Bagram Air Field, Afghanistan. Dennis was a member of the team in the HA Yard that purchased supplies from local Afghan vendors for distribution as part of the Commander’s Emergency Response Program for urgent humanitarian relief requirements in Afghanistan. Dennis and a partner entered into an agreement to steer contracts to certain Afghan vendors in return for approximately $250,000 in cash bribes.
Further according to court pleadings, Dennis smuggled the bribe money back to the United States hidden in packages addressed to his wife, his father and a former Army friend, Pittman. Dennis sent $80,000 to $100,000 to his father from Afghanistan in packages that contained toy “jingle trucks,” colorfully decorated trucks or buses in Afghanistan and Pakistan. Dennis hid the money in the rear compartment of the toy trucks. Dennis also shipped a hope chest to his father containing approximately $100,000 in cash in a concealed compartment.
Also according to court documents, while on leave, Dennis met with Pittman, advised him that he had obtained money through kickbacks, and asked him for help laundering the funds. Pittman, owner of a landscaping business, agreed to “run through his company” these bribery proceeds. After returning to Afghanistan, Dennis sent approximately $60,000 to Pittman contained in toy jingle trucks. Dennis also arranged for his father to send approximately $20,000 to Pittman, who returned it in the form of purported salary checks from Pittman’s company.
These matters are being investigated by the Special Inspector General for Afghanistan Reconstruction, the FBI, the Army Criminal Investigative Division, the Defense Criminal Investigative Service, and the Air Force Office of Special Investigation. The prosecution is being handled by Trial Attorney Daniel Butler of the Criminal Division and Assistant U.S. Attorneys Frederick Godwin of the Western District of Tennessee and James Brooks of the Eastern District of Tennessee.Statement by Attorney General Holder <br /> on the Passing of Maya AngelouRead the Press Release
Attorney General Eric Holder today issued the following statement on the passing of Maya Angelou:
“I was deeply saddened to learn of the passing of Maya Angelou, a true national treasure whom I have admired greatly for many, many years.
“Dr. Angelou was much more than a literary genius, a chronicler of Jim Crow, and a witness to history. Through her extraordinary work, she captured the tenacity of the human spirit and spoke of harsh realities in the most evocative, moving, and lyrical of ways. Over the course of a career spanning some of the most tumultuous decades of the last century, she taught us how to rise above ‘a past that’s rooted in pain.’ She gave voice to a people too often shut out of America’s public discourse. She displayed remarkable courage in the face of tremendous adversity. And she inspired generations to overcome life’s greatest challenges – through her extensive writings, her performances, her advocacy, her educational work, and her principled activism.
“For my family and me, Maya Angelou will always be much more than a great American and an icon in world literature. She is the namesake of one of my daughters, who met her as a young girl and celebrated her twenty-first birthday just one day before the elder Maya was lost to us. Although our hearts are filled with grief at the news of her passing – a sorrow made all the more acute by the knowledge that we shall not see her like again – she will continue to be a source of strength and inspiration. She will endure in the singular body of work she leaves behind. And she will live on in the shining example that guides our steps forward and fuels the work that remains.
“We have lost a legend, a trailblazer in the truest sense, and one of the guiding lights of the 20th century. Yet despite our heartache and our pain, Maya Angelou will always be with us. Her voice will continue to console, to challenge, and to inspire us. We bid her farewell today. But we know that, even now, ‘into a daybreak that’s wondrously clear,’ still she rises.”
Ringleader of International Rhino Smuggling ConspiracySentenced in New Jersey to 70 Months in Prisonfor Wildlife Trafficking CrimesRead the Press Release
Zhifei Li, the owner of an antique business in China, was sentenced today to serve 70 months in prison for heading an illegal wildlife smuggling conspiracy in which 30 rhinoceros horns and numerous objects made from rhino horn and elephant ivory worth more than $4.5 million were smuggled from the United States to China.
The sentence – one of the longest sentences to be imposed in the United States for a wildlife smuggling offense – was announced by Sam Hirsch, the Acting Assistant Attorney General for the Environment and Natural Resources Division of the Department of Justice; Paul J. Fishman, U.S. Attorney for the District of New Jersey; Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida; and Dan Ashe, Director of the U.S. Fish and Wildlife Service (USFWS).
Li, 30, of Shandong, China, the owner of Overseas Treasure Finding in Shandong, previously pleaded guilty before U.S. District Judge Esther Salas to a total of 11 counts: one count of conspiracy to smuggle and violate the Lacey Act; seven counts of smuggling; one count of illegal wildlife trafficking in violation of the Lacey Act; and two counts of making false wildlife documents. Judge Salas also imposed the sentence today in Newark federal court.
“Li was the ringleader of a criminal enterprise that spanned the globe and profited from an illegal trade that is pushing endangered animals toward extinction,” said Sam Hirsch, Acting Assistant Attorney General for the Environment and Natural Resources Division. “As this case clearly demonstrates, rhino trafficking is increasingly organized, well financed, and a threat to the rule of law. The United States is resolved to bring wildlife traffickers to justice.”
“The multibillion-dollar illegal wildlife market is supplied by animal poaching of unthinkable brutality and fed by those willing to profit from such cruelty,” said U.S. Attorney Fishman. “Zhifei Li appropriately faces 70 months in prison for orchestrating schemes worth millions of dollars and for violating laws meant to protect the most vulnerable species.”
“Wild populations of rhinos are being slaughtered at appalling rates due to the greed and indifference of criminals like Li and his accomplices,” said U.S. Fish and Wildlife Service Director Dan Ashe. “The sentence handed down today serves notice to other organized trafficking and poaching rings that their crimes will not go unpunished. We will relentlessly work across the U.S. government and with the international law enforcement community to destroy these networks, while strengthening protections for rhinos in the wild and reducing demand for horn in consumer countries.”
Li was arrested in Florida in January 2013, shortly after arriving in the country, on federal charges brought under seal in New Jersey. Before he was arrested, he purchased two endangered black rhinoceros horns from an undercover USFWS agent in a Miami Beach hotel room for $59,000 while attending an antique show. Li was arrested as part of “Operation Crash” – a nationwide effort led by the USFWS and the Justice Department to investigate and prosecute those involved in the black market trade of rhinoceros horns and other protected species.
In papers filed in Newark federal court, Li admitted that he was the “boss” of three antique dealers in the United States whom he paid to help obtain wildlife items and smuggle them to him via Hong Kong. One of those individuals was Qiang Wang, aka “Jeffrey Wang,” who was sentenced to 37 months in prison on Dec. 5, 2013, in the Southern District of New York . Li played a leadership and organizational role in the smuggling conspiracy by arranging for financing to pay for the wildlife, purchasing and negotiating prices, directing how to smuggle the items out of the United States, and getting the assistance of additional collaborators in Hong Kong to receive the goods and smuggle them to him in mainland China.
Rhinoceros are an herbivore species of prehistoric origin and one of the largest remaining mega-fauna on earth. They have no known predators other than humans. All species of rhinoceros are protected under United States and international law. Since 1976, trade in rhinoceros horn has been regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (known as CITES), a treaty signed by over 170 countries around the world to protect fish, wildlife and plants that are or may become imperiled due to the demands of international markets.
In pleading guilty, Li admitted that he sold 30 smuggled, raw rhinoceros horns worth approximately $3 million – approximately $17,500 per pound – to factories in China where raw rhinoceros horns are carved into fake antiques known as Zuo Jiu (which means “to make it as old” in Mandarin). In China, there is a centuries old tradition of drinking from an intricately carved “libation cup” made from a rhinoceros horn. Owning or drinking from such a cup is believed by some to bring good health, and true antiques are highly prized by collectors. The escalating value of such items has resulted in an increased demand for rhinoceros horn that has helped fuel a thriving black market, including recently carved fake antiques.
In addition to the prison term, Judge Salas ordered Li to serve two years of supervised release and to forfeit $3.5 million in proceeds of his criminal activity as well as several Asian artifacts. Various ivory objects seized by the USFWS as part of the investigation have also been surrendered.
The investigation is continuing and is being handled by the U.S. Fish & Wildlife Service’s Office of Law Enforcement, the U.S. Attorney’s Office for the District of New Jersey, the U.S. Attorney’s Office for the Southern District of Florida and the Justice Department’s Environmental Crimes Section.
The government is represented by Assistant U.S. Attorneys Kathleen P. O’Leary and Barbara Ward of the New Jersey U.S. Attorney’s Office Criminal Division and Asset Forfeiture and Money Laundering Unit, Assistant U.S. Attorney Thomas Watts-FitzGerald of the U.S. Attorney’s Office for the Southern District of Florida and Senior Counsel Richard A. Udell of the Justice Department’s Environmental Crimes Section of the Environment and Natural Resources Division.
Additional information, including a detailed joint factual statement and photo exhibits can be found here: http://go.usa.gov/8nYYPhiladelphia La Cosa Nostra Soldier <br /> Sentenced to Serve 27 Months in PrisonRead the Press Release
Eric Esposito was sentenced today to serve 27 months in prison for conducting an illegal gambling business on behalf of the Philadelphia La Cosa Nostra Family, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania and Edward J. Hanko, Special Agent in Charge of the FBI’s Philadelphia Division .
Esposito, 43, of Philadelphia, was sentenced by U.S. District Judge Eduardo C. Robreno in the Eastern District of Pennsylvania. In addition to his prison term, Esposito was sentenced to serve three years of supervised release and ordered to pay a fine of $4,000.
On Feb. 21, 2014, after a week-long trial, a jury convicted Esposito of conducting an illegal gambling business involving the use of video poker machines at a private social club known as the “First Ward Republican Club” in South Philadelphia. According to evidence presented at trial, as a fully initiated mob soldier, Esposito worked in concert with other mob members to carry out this illegal gambling business on behalf of the Philadelphia La Cosa Nostra Family.
A total of 13 leaders, members and associates of the Philadelphia La Cosa Nostra Family have pleaded guilty or been convicted by a jury as part of this case. To date, 12 defendants, including Esposito, have been sentenced, and one is awaiting sentencing.
The case is being prosecuted by Trial Attorney John S. Han of the Criminal Division’s Organized Crime and Gang Section and Assistant U.S. Attorneys Frank A. Labor III and Suzanne B. Ercole of the Eastern District of Pennsylvania. Valuable prosecutorial assistance was provided by the Pennsylvania Office of the Attorney General.
The case was investigated by the FBI, the Internal Revenue Service-Criminal Investigations, the Pennsylvania State Police, the New Jersey State Police, the Philadelphia Police Department, U.S. Department of Labor’s Office of Inspector General Office of Labor Racketeering and Fraud Investigations and the U.S. Department of Labor’s Employee Benefits Security Administration. Additional assistance was provided by the New Jersey Department of Corrections.Minnesota-Based Medtronic Inc. to Pay $9.9 Million<br /> to Resolve Claims That Company Paid Kickbacks to PhysiciansRead the Press Release
Medtronic Inc., of Fridley, Minnesota, has agreed to pay the United States $9.9 million to resolve allegations under the False Claims Act that the company used various types of payments to induce physicians to implant pacemakers and defibrillators manufactured and sold by Medtronic, the Justice Department announced today.
“Improper financial incentives have the potential to compromise physician medical judgment,” said Assistant Attorney General Stuart F. Delery of the Justice Department’s Civil Division. “This case demonstrates the Department of Justice’s commitment to pursue medical device manufacturers that use improper financial relationships to influence physician decision-making.”
The United States alleged that Medtronic caused false claims to be submitted to Medicare and Medicaid by using multiple types of illegal kickbacks to induce physicians to implant Medtronic pacemakers and defibrillators. Specifically, Medtronic allegedly induced physicians to use its products by: 1) paying implanting physicians to speak at events intended to increase the flow of referral business; 2) developing marketing/business development plans for physicians at no cost; and 3) providing tickets to sporting events. The United States alleged that Medtronic paid the remuneration to persuade the physicians to continue using Medtronic products or to convert their business from a competitor’s products.
“Decisions about devices used to treat cardiac rhythmic disease should be based on the best interests of the patient, not on whether the manufacturer is going to pay a kickback,” said U.S. Attorney Benjamin Wagner of the Eastern District of California. “These sorts of improper financial incentives not only undermine the integrity of medical decisions, they also waste taxpayer funds and are unfair to competitors who are trying to play by the rules.”
“As this settlement indicates, health care executives who try to boost profits by paying kickbacks to doctors will instead pay the government for their improper conduct,” said Special Agent in Charge Ivan Negroni of the U.S. Department of Health and Human Services Office of Inspector General’s San Francisco Office. “We will continue to work with the Department of Justice to root out illegal, wasteful business arrangements.”
The settlement announced today stems from a whistleblower complaint filed by a former employee of Medtronic, Adolfo Schroeder, pursuant to the qui tam provisions of the False Claims Act, which permit private persons to bring a lawsuit on behalf of the United States and to share in the proceeds of the suit. Schroeder will receive approximately $1.73 million.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19.2 billion through False Claims Act cases, with more than $13.7 billion of that amount recovered in cases involving fraud against federal health care programs.
The settlement with Medtronic Inc. was the result of a coordinated effort among the Department of Justice’s Civil Division; the U.S. Attorney’s Office for the Eastern District of California; and the Office of Inspector General of the U.S. Department of Health and Human Services.
The lawsuit is captioned United States ex rel. Schroeder v. Medtronic, Inc., No. 2:09-cv-0279 WBS EJB (E.D. Cal.). The claims settled by this agreement are allegations only, and there has been no determination of liability.King’s Daughters Medical Center to Pay Nearly $41 Million <br /> to Resolve Allegations of False Billing <br /> for Unnecessary Cardiac Procedures and KickbacksRead the Press Release
Ashland Hospital Corp. d/b/a King’s Daughters Medical Center (KDMC) has agreed to pay $40.9 million to resolve allegations that it submitted false claims to the Medicare and Kentucky Medicaid programs for medically unnecessary coronary stents and diagnostic catheterizations and had prohibited financial relationships with physicians referring patients to the hospital, the Justice Department announced today.
Assistant Attorney General Stuart F. Delery of the Justice Department’s Civil Division, U.S. Attorney Kerry Harvey for the Eastern District of Kentucky and Special Agent in Charge Derrick L. Jackson at the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Kentucky region made the announcement.
“Hospitals that place their financial interests above the well-being of their patients will be held accountable,” said Assistant Attorney General Delery. “ The Department of Justice will not tolerate those who abuse federal health care programs and put the beneficiaries of these programs at risk by providing medically unnecessary care.”
The government alleged that, between 2006 and 2011, KDMC billed for numerous unnecessary coronary stents and diagnostic catheterizations performed by KDMC physicians on Medicare and Medicaid patients who did not need them. The government also alleged that the physicians falsified medical records in order to justify these unnecessary procedures, which allegedly generated millions of dollars in Medicare and Kentucky Medicaid reimbursements for KDMC.
“The conduct alleged in this matter is unacceptable, victimizing both taxpayers and patients,” said U.S. Attorney Harvey. “Treatment decisions motivated by financial gain undermine public confidence in our health care system and threaten vital federal programs upon which so many of our citizens rely. We will not relent in our efforts to protect the public from the sort of systematic misconduct alleged in this case.”
The settlement also resolves allegations that KDMC violated the Stark Law by paying certain cardiologists salaries that were unreasonably high and in excess of fair market value. The Stark Law is designed to limit the influence of money on physicians’ medical decision-making by prohibiting financial relationships between hospitals and referring physicians, unless these relationships meet certain designated exceptions.
In connection with this settlement, KDMC has agreed to enter into a Corporate Integrity Agreement with HHS-OIG, which obligates the hospital to undertake substantial internal compliance reforms and to commit to a third-party review of its claims to federal health care programs for the next five years.
“Medically unnecessary procedures can cause serious health issues, cost the taxpayers millions of dollars each year and drain the Medicare Trust Fund,” said Special Agent in Charge Jackson. “The OIG will continue to protect beneficiaries and hold health care providers accountable for improper claims.”
“This type of alleged conduct deceives individuals when they are seeking medical treatment and are vulnerable,” said Special Agent in Charge Perrye K. Turner of the FBI’s Louisville Field Division. “The level of funds involved in this matter is staggering. This money has been stolen from the patients and the taxpayers.”
The Commonwealth of Kentucky will receive approximately $1,018,380, which represents the state’s share of the recovered Medicaid funds. The Medicaid program is funded jointly by the federal and state governments.
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.
The investigation was conducted by the FBI, the HHS-OIG, the Kentucky Office of Attorney General, Medicaid Fraud and Abuse Control Unit, the Commercial Litigation Branch of the Department of Justice’s Civil Division and the U.S. Attorney’s Office for the Eastern District of Kentucky. The claims settled by this agreement are allegations only, and there has been no determination of liability.Ex-Casino Owner, Nevada Businessman and Former National Football League Player Found Guilty in Massive Tax Fraud SchemeRead the Press Release
A Las Vegas jury returned guilty verdicts yesterday against Alan Rodrigues, a former casino owner from Henderson, Nevada, Weston Coolidge, a former businessman from Las Vegas, and Joseph Prokop, a former National Football League punter from Upland, California, for conspiracy and fraud related to their promotion of a fraudulent tax product through the now-defunct National Audit Defense Network (NADN), the Justice Department and Internal Revenue Service (IRS) announced today. The guilty verdicts came after a six week trial before U.S. District Court Judge Miranda Du in the District of Nevada.
All defendants were convicted of one count of conspiracy to defraud the IRS and four counts of mail fraud. Rodrigues and Coolidge were additionally convicted of 15 counts of aiding in the preparation of false tax returns, while Prokop was convicted of 13 counts of aiding in the preparation of false tax returns. During the conspiracy, Rodrigues was NADN’s general manager, Coolidge was NADN’s owner and president and Prokop was the national marketing director of Oryan Management and Financial Services. Oryan, which was operated out of Upland, created the fraudulent tax product, called Tax Break 2000, and paid NADN a commission to sell Tax Break 2000.
“This jury verdict sends a message to those who promote fraudulent tax products like Tax Break 2000 – you do so at the risk of prosecution, prison time and substantial penalties,” said Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division. “Prosecuting individuals who market fraudulent tax schemes has been and always will be our priority.”
According to court documents and evidence presented at trial, NADN began selling Tax Break 2000 in early 2001. Tax Break 2000 purported to be a shopping website that the defendants fraudulently said would allow customers to claim legitimate income tax credits and deductions by making the website accessible to the disabled. The defendants chose the sale price for the modifications, $10,475, solely to maximize the fraudulent income tax credits and deductions. To further the scheme, the defendants produced false IRS forms creating the appearance of fictitious commission income and prepared false tax returns on their customers’ behalf that improperly claimed the tax credits and deductions. According to evidence presented at trial, the intended tax loss based on the purported tax benefits was approximately $100 million due to the scheme.
On April 13, 2004, the department’s Tax Division filed a complaint seeking to enjoin, among others, NADN, Rodrigues, Coolidge and Prokop from selling fraudulent tax schemes, including Tax Break 2000. NADN ceased operations in May 2004, and in June 2004, a federal bankruptcy court in Las Vegas entered a permanent injunction against NADN. Prokop was also enjoined in June 2004, after consenting to entry of a permanent injunction. In April 2005, Rodrigues and Coolidge both consented to permanent injunctions.
The case was investigated by IRS - Criminal Investigation. Trial Attorneys Timothy J. Stockwell and Katherine L. Wong of the Tax Division are prosecuting the case, with litigation assistance from Larry Garland and the U.S. Attorney’s Office for the District of Nevada.
Department of Justice Announces 48 States and Territories Have Committed to Ending Prison RapeRead the Press Release
Deputy Attorney General James M. Cole and Principal Deputy Assistant Attorney General for Justice Programs Mary Lou Leary announced today that the vast majority of U.S. states and territories have informed the Department of Justice that they intend to take steps to reduce sexual assaults in prisons, in accordance with federal law.
Under the Prison Rape Elimination Act (PREA), which was passed in 2003 with unanimous support from both parties of Congress, Fiscal Year 2014 is the first year that states and territories may have certain federal grant funds withheld unless they demonstrate an intention to comply with the law. Of the 56 jurisdictions that are subject to PREA – the 50 states, the 5 territories and the District of Columbia – 48 are in compliance or have submitted assurances to the department committing to spending five percent of certain federal grant funds to come into compliance. This translates to a compliance rate of 85 percent.
“No one should be subjected to sexual abuse while in the custody of our justice system,” said Deputy Attorney General Cole. “It serves as a violation of fundamental rights, an attack on human dignity and runs contrary to everything we stand for as a nation. Based on these certifications and assurances, and other correspondence submitted by the governors, it is clear that addressing the issue of sexual abuse in confinement facilities is a high nationwide priority.”
“We are witnessing a major change in the culture of our nation's criminal justice systems. The discussion is no longer whether sexual victimization in correctional facilities is a problem, or even where the problem might be most serious,” said Principal Deputy Assistant Attorney General Leary. “An overwhelming majority of states and territories has committed to preventing, identifying and addressing this serious travesty against human dignity anywhere it occurs.”
An estimated four percent of state and federal prison inmates and just over three percent of jail inmates reported experiencing one or more incidents of sexual victimization by another inmate or a facility staff member within the previous 12 months. Among youth in state juvenile facilities and state contract facilities that rate increases to an estimated nine and a half percent in the previous 12 months. The National PREA Standards create policies and practices to ensure a zero tolerance for sexual assault in prisons and corrections facilities by preventing, detecting and responding to sexual abuse.
Two states, New Hampshire and New Jersey, have certified that they are in full compliance with PREA. Understanding that the standards could take a number of years to fully implement, the statute allows a governor whose state or territory is not yet in full compliance to submit an assurance to the department that not less than five percent of certain department grant funds will be used solely for the purpose of enabling the state or territory to achieve and certify full compliance with the standards in future years. This year 46 jurisdictions submitted an assurance. The eight states or territories that are unwilling to commit the five percent of federal grant funds to implementation of the National PREA Standards are subject to the loss of five percent of certain department grant funds that they would otherwise receive.
The submitted assurances by governors or heads of territories is required by the PREA statute. The PREA standards took effect on Aug. 20, 2012. The standards apply to Justice Department, state, and local confinement facilities, including adult prisons and jails, juvenile facilities, police lockups, and community corrections facilities. The standards reflect careful consideration of all public input, including over 2,000 public comments, as well as detailed analysis of anticipated benefits and costs, in light of PREA’s requirement that the standards not “impose substantial additional costs compared to the costs presently expended by federal, state and local prison authorities.”
To assist states and localities with the implementation of the National PREA Standards, the department, through the Bureau of Justice Assistance, funded the National PREA Resource Center which provides training and technical assistance, as well as serving as a single-stop resource for leading research and tools for all those in the field working to implement the National PREA Standards. The department has also funded over $23 million in grants to support state and local jurisdictions in creating zero-tolerance cultures for sexual abuse in confinement facilities. For more information on the National PREA Standards as well and what assistance is available to states visit www.prearesourcecenter.org.
Connecticut Man Who Used Offshore Accounts Sentenced to Prison for Tax Evasion and ConspiracyRead the Press Release
John Cote, formerly of Danielson, Connecticut, was sentenced today to serve 46 months in prison by U.S. District Judge Vanessa Bryant, the Justice Department and the Internal Revenue Service (IRS) announced. Cote was convicted in January 2014 of four counts of tax evasion along with conspiracy to defraud the IRS following a jury trial in the U.S. District Court for the District of Connecticut sitting in Hartford. Cote was also ordered to pay restitution of $222,691 and to serve three years of supervised release following his release from prison.
According to court documents and evidence produced at trial, Cote did not file a timely or valid tax return for the years 1995 through 2009, despite earning income from his work as a consultant in the high-technology welding industry. The evidence introduced at trial showed that Cote and his wife responded to IRS efforts to assess and collect taxes by concealing income and assets from the government, and by submitting obstructive letters and other documents, including false criminal complaints against IRS employees. Starting in 1998, Cote caused the companies for which he worked to pay his compensation to nominee entities, sometimes through accounts in Costa Rica and Sweden. Cote also used a nominee entity in his wife’s name to conceal income and assets from the IRS and in 2003, Cote's wife conveyed their personal residence to this entity.
The case was investigated by special agents of IRS – Criminal Investigation. Trial Attorneys Jennifer Laraia, Melissa Siskind and Jeffrey McLellan of the Tax Division prosecuted the case. Assistant Attorney General Kathryn Keneally of the Tax Division commended the special agents and the prosecutors, and thanked U.S. Attorney Deirdre M. Daly for the District of Connecticut and her office for their assistance.
Florida Man Pleads Guilty to Filing False Claim with Internal Revenue Service for Tax RefundRead the Press Release
WASHINGTON – Bradley Bowman, a resident of Lighthouse Point, Florida, pleaded guilty to one count of filing a false claim for a tax refund with the Internal Revenue Service (IRS), Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney Wifredo Ferrer for the Southern District of Florida announced today. Bowman was indicted on March 25, 2014.
According to court documents, in 2009, Bowman submitted to the IRS a false individual income false tax return for tax year 2005 that fraudulently claimed a refund of $299,024. Bowman engaged Penny Jones, who is currently serving a 12 year sentence in a related case, to create this false return. Bowman attached false Forms 1099-OID to the return which fraudulently claimed that he had income of $447,036, and he also falsely claimed that all of this income was withheld to satisfy his income tax liabilities. Sentencing is set for Aug. 7, 2014, where Bowman faces a statutory maximum sentence of five years in prison, followed by up to three years of supervised release.
The case was investigated by Special Agents of the IRS-Criminal Investigation. The case is being prosecuted by Trial Attorney Greg Bailey of the Tax Division and Assistant U.S. Attorney Bertha Mitrani for the Southern District of Florida.
Additional information about the Tax Division and its enforcement efforts may be found at the division website.
Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division Announced Her Departure from the Department Today, Effective as of June 5, 2014Read the Press Release
Kathryn Keneally, Assistant Attorney General for the Tax Division, will leave her post at the Department of Justice effective June 5, 2014, she announced today.
“Over the past two years, Kathryn Keneally has provided exemplary leadership to the Justice Department's Tax Division, setting a standard of excellence, integrity and professionalism that will guide and challenge those who carry the division’s important work into the future,” said Attorney General Eric Holder. “As a result of her determined efforts, her exceptional judgment, and the tireless work of her colleagues across the division -- and their partners nationwide -- the Tax Division has secured historic gains in our fight to protect the American people from tax fraud and financial misconduct and to hold accountable any individual, bank or other institution that violates our tax laws. Although I wish her the best as she seeks new challenges and opportunities, I will miss her wise counsel and her tireless commitment to the mission we share. I thank her for her service to the American people.”
“I have been very fortunate to work every day with the talented and extraordinary women and men of the Tax Division, who are dedicated to ensuring that our nation’s tax laws are enforced fairly and consistently,” said Assistant Attorney General Keneally. “I have benefited from the strong relationship between the division and the Internal Revenue Service, which shares our commitment to tax enforcement and voluntary tax compliance. I am grateful for the leadership and support of the Attorney General, the Deputy Attorney General and the Associate Attorney General. I will always be grateful to the President for giving me this opportunity to serve.”
During Keneally’s tenure as Assistant Attorney General, the division has obtained significant results in all areas of tax enforcement.
Under Keneally’s leadership, the division broadened its enforcement against the use of foreign bank accounts to evade U.S. taxes. In August 2013, as a result of Keneally’s efforts, the department announced a unique program to allow Swiss banks to cooperate and to resolve past wrongdoing. Through this program, which has the support of the government of Switzerland, over 100 banks that were not previously under investigation have come forward to provide valuable law enforcement information. In January 2013, Wegelin, the oldest bank in Switzerland, pleaded guilty to felony tax charges. In May 2014, the department announced a guilty plea by Credit Suisse, the second-largest bank in Switzerland. The plea included the highest ever payment in a criminal tax case. Keneally worked directly with the bank’s regulators to facilitate simultaneous enforcement action against Credit Suisse. The division’s enforcement efforts have expanded to include investigations and charges against banks, bankers, professional advisors and accountholders for using secret bank accounts in countries around the globe.
During Keneally’s tenure, the division has also focused on forcefully combating stolen identity refund fraud. In September 2012, the division announced new procedures to respond to this increasing criminal threat, and to strengthen coordination among the division, the U.S. Attorneys’ Offices and federal and local law enforcement. Prosecutions led by division attorneys have resulted in significant convictions and lengthy sentences, and have helped turn the tide in this law enforcement challenge.
The division has also continued to enjoy favorable outcomes in over 95 percent of all civil and criminal cases litigated by the division. These efforts have included a robust injunction program to stop fraudulent return preparers and scheme promoters, continued successful litigation against abusive tax shelters, civil and criminal actions to enforce employment tax laws and core mission litigation to enforce tax law, collect taxes and prosecute those who would cheat on their obligations. Under Keneally’s leadership, the division has undertaken a more comprehensive approach to civil and criminal tax enforcement.
Keneally was sworn in as the Assistant Attorney General for the Tax Division on April 6, 2012. Before joining the department, she practiced law in New York City, representing individuals and businesses before the Internal Revenue Service and the Department of Justice in criminal and civil tax cases. She also appeared and tried cases in the federal district and appellate courts, and in the U.S. Tax Court. Keneally also served as the chair of the ABA Section of Taxation's Committees on Civil and Criminal Tax Penalties and Standards of Tax Practice, and was a vice chair of the Section of Taxation. She will be returning to her home in New York.
Navy Military Sealift Command Official and Businessman Charged with BriberyRead the Press Release
Scott B. Miserendino, Sr., 55, a former government contractor who performed work for the United States Navy Military Sealift Command , and Timothy S. Miller, 57, a businessman whose company sought contracting business from the Military Sealift Command, were indicted today on charges including conspiracy and bribery.
Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Acting U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service Mid-Atlantic Field Office (DCIS), Acting Executive Assistant Director Charles T. May Jr. of the Naval Criminal Investigative Service (NCIS) Atlantic Operations and Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office made the announcement.
A federal grand jury in the Eastern District of Virginia returned a six-count indictment today that charges Miserendino with one count of conspiracy to commit bribery, one count of bribery, one count of conspiracy to commit obstruction of criminal investigations and to commit tampering with a witness, and one count of obstruction of criminal investigations. The indictment charges Miller with one count of conspiracy to commit bribery and two counts of bribery of a public official.
According to the indictment, Miserendino was a government contractor at the Military Sealift Command, the leading provider of transportation for the United States Navy. The indictment alleges that Miserendino worked closely with another Military Sealift Command official, Kenny E. Toy, in managing telecommunications projects and in influencing the award of United States government contracts, subcontracts, and task orders.
The indictment alleges that Miserendino solicited and accepted bribes, in the form of cash, a flat screen plasma television, a wine refrigerator, and other items, in exchange for providing favorable treatment to two companies in connection with United States government contracts.
Between March 2005 and 2007, Miserendino allegedly accepted cash payments of approximately $3,000 per month from agents of Company A, a corporation that sought contracting business from the Military Sealift Command. In total, Miserendino accepted approximately $100,000 in bribes from Company A’s agents.
In addition, the indictment alleges that, in February 2009, Miller and his business partner Dwayne A. Hardman established Company B, a government contracting corporation located in Chesapeake, Virginia, to provide support to the Military Sealift Command on various telecommunications projects. Shortly thereafter, in May 2009, Miller and Hardman allegedly paid cash bribes totaling $50,000 to Miserendino and Toy in exchange for favorable treatment in connection with U.S. government contracts, subcontracts, and task orders.
In addition, as alleged in the indictment, Miserendino obstructed justice and tampered with a witness by causing $85,000 to be paid to Hardman in an attempt to prevent or delay him from reporting the bribery scheme to law enforcement authorities.
Prior to this indictment, five other individuals pleaded guilty in connection with the bribery scheme. On Feb. 12, 2014, Kenny E. Toy, former Afloat Programs Manager for the Military Sealift Command N6 Command, Control, Communication and Computer Systems Directorate, pleaded guilty to bribery and admitted to receiving more than $100,000 in cash bribes in exchange for providing favorable treatment to two companies in connection with U.S. government contracts. On Feb. 18, 2014, Dwayne A. Hardman, Miller’s business partner, pleaded guilty to bribery and admitted to providing more than $140,000 in cash bribes to Toy and Miserendino. On Feb. 19, 2014, Michael P. McPhail pleaded guilty to conspiracy to commit bribery and agreed to forfeit $57,000. On March 5, 2014, Roderic J. Smith pleaded guilty to conspiracy to commit bribery and agreed to forfeit $175,000. On April 4, 2014, Adam C. White pleaded guilty to conspiracy to commit bribery and agreed to forfeit $57,000.
The case was investigated by the DCIS, NCIS and the FBI. The case is being prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stephen W. Haynie of the Eastern District of Virginia.
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.Justice Department Files Lawsuit Alleging Disability-Based Discrimination by Mississippi DeveloperRead the Press Release
The Justice Department filed a lawsuit today against Mississippi-based developer Dawn Properties Inc. (Dawn) and its affiliated companies for violating the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA). The lawsuit alleges that the defendants violated these laws when they designed and constructed five or more 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 Jocelyn Samuels for the Justice Department’s Civil Rights Division. “When residential complexes are built with steps but without ramps or other means of access for wheelchair users, Americans with disabilities are denied the basic right to equal housing opportunities.”
“When a developer fails to comply with the Fair Housing Act and the Americans with Disabilities Act, it deprives those with disabilities of their fundamental right to live and raise families in the environment of their choosing,” said U.S. Attorney Gregory K. Davis for the Southern District of Mississippi.
The suit, filed in the U.S. District Court in Gulfport, Mississippi, alleges that The Lexington (Ridgeland, Mississippi), The Beach Club (Long Beach, Mississippi), The Belmont (Hattiesburg, Mississippi), Grand Biscayne (Biloxi, Mississippi) and Inn by the Sea (Pass Christian, Mississippi) have significant barriers, including steps leading to building entrances, non-existent or excessively sloped pedestrian routes from apartment units to site amenities (such as playgrounds, picnic areas and clubhouses or leasing offices), insufficient maneuvering space for wheelchairs in bathrooms and kitchens, excessively high light switches and environmental 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 FHA 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 Dawn’s affiliates Southern Cross Construction Company Inc., Ridgeland Construction One LLC, The Beach Club LLC, The Beach Club II LLC, The Belmont of Lamar LLC, Grand Biscayne Apts. LLC and Seainn LLC, as well as the current owners of the complexes who are necessary parties to the litigation. 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 997.
The federal FHA prohibits discrimination in housing based on race, color, religion, national origin, sex, familial status, and disability. Among other things, the FHA 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 the division website .
The complaint is an allegation of unlawful conduct. The allegations in the complaint must still be proven in federal court .
Former Employee of U.S. Contractor Pleads Guilty to Fraud SchemeRead the Press Release
A former employee of a U.S. contractor pleaded guilty today to conspiracy to defraud the United States in connection with a contract to provide reconstruction-related services in Afghanistan.
Acting Assistant Attorney General David O’Neil of the Justice Department’s Criminal Division and United States Attorney for the Middle District of Florida A. Lee Bentley made the announcement.
Alan D. Simmons pleaded guilty today before U.S. Magistrate Judge Patricia D. Barksdale in the Middle District of Florida.
According to court documents, Simmons worked in Afghanistan as a training program coordinator for PAE Inc. PAE had a contract with the United States Department of State to train and supply uniforms to Afghan correctional officers. Simmons was responsible for providing information to others at PAE as to the number and types of uniforms that were to be ordered and provided to the Afghan correctional officers upon their completion of the training program.
As alleged in court documents, Simmons and others created a company, Aminzian Logistics Services (Aminzian), ostensibly to provide uniforms to PAE as a subcontractor. In fact, Aminzian would submit false and fraudulent invoices to PAE seeking payment for goods that were not in fact provided. After Aminzian was paid, Simmons and his co-conspirators split the proceeds. The United States reimbursed PAE for its payments to Aminzian and incurred a loss of over $120,000.
The case was investigated by the Department of State Office of Inspector General and the Special Inspector General for Afghanistan Reconstruction (SIGAR). This case was prosecuted by Special Trial Attorney Mark H. Dubester, on detail from SIGAR, and Assistant U.S. Attorney Kevin C. Frein of the Middle District of Florida.