District Not Recorded

A former owner and operator of a Florida-based airline fuel supply service company was sentenced today to serve 50 months in prison for participating in a scheme to defraud Illinois-based Ryan International Airlines, the Department of Justice announced.

 

Sean E. Wagner, the former owner and operator of Aviation Fuel International Inc. (AFI), was sentenced in the U.S. District Court for the Southern District of Florida in West Palm Beach to serve 50 months in prison and to pay $202,856 in restitution.  On Aug. 13, 2013, a grand jury returned an indictment against Wagner and AFI, charging them for their roles in a conspiracy to defraud Ryan. On March 6, 2014, Wagner pleaded guilty to one count of conspiracy to commit honest services wire fraud.   According to court documents, from at least as early as December 2005 through at least August 2009, Wagner and others at AFI made kickback payments to Wayne Kepple, a former vice president of ground operations for Ryan, totaling more than $200,000 in the form of checks, wire transfers, cash and gift cards in exchange for awarding business to AFI.  The charges against AFI were dismissed on Feb. 21, 2014.

 
Ryan provided air passenger and cargo services for corporations, private individuals and the U.S. government – including the U.S. Department of Defense and the U.S. Department of Homeland Security.

 
“Awarding government contracts in exchange for payoffs is a crime the Antitrust Division takes seriously,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Today’s sentence reaffirms the division’s commitment to vigorously prosecute individuals who engage in this behavior.”

 

“This sentencing highlights the continuing commitment of the DCIS to thoroughly investigate and bring to justice any companies or individuals who engage in fraudulent and corrupt practices that undermine the integrity of Department of Defense procurement programs,” said John F. Khin, Special Agent in Charge of the Defense Criminal Investigative Service Southeast Field Office.

 

As a result of the ongoing investigation, five individuals, including Wagner, have pleaded guilty and have been ordered to serve sentences ranging from 16 to 87 months in prison and to pay more than $780,000 in restitution.  An additional individual has pleaded guilty to obstructing the investigation and is currently awaiting sentencing. 

The investigation is being conducted by the Antitrust Division’s Washington Criminal I office and the U.S. Department of Defense’s Office of Inspector General’s Defense Criminal Investigative Service, with assistance from the U.S. Attorney’s Office for the Southern District of Florida.  Anyone with information concerning anticompetitive conduct in the airline charter services industry is urged to call the Antitrust Division’s Washington Criminal I office at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.htm.

U.S. District Judge James K. Bredar sentenced Reginald Martin, formerly an officer at Roxbury Correctional Institution (RCI) in Hagerstown, Maryland, to serve 12 months and one day in prison for his role in the assault of inmate Kenneth Davis.  RCI officers from three different shifts assaulted Davis in March 2008, in retaliation for a prior incident in which Davis struck an officer.  

Martin pleaded guilty on Jan. 9, 2014, to a deprivation of rights under color of law.  According to court documents filed in connection with his guilty plea, Martin acknowledged that he witnessed other RCI officers unlawfully assaulting Davis and that he failed to intervene and stop the assault.  Martin also admitted that this assault on March 9, 2008, was consistent with practices at RCI, where officers would use force to punish inmates who had engaged in misconduct.  Finally, Martin admitted that he and other officers tried to cover up their involvement in the assault of Davis.

“Every person in America has the right to be free from cruel and unusual punishment,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “The Justice Department will continue to protect this right by prosecuting correctional officers who violate the rights of inmates.”

 

To date, 16 current or former officers at RCI have been convicted in connection with the series of assaults that Davis suffered on March 8-9, 2008.  Lanny Harris, Philip Mayo, Jeremy McCusker, Walter Steele, Robert Harvey, Keith Morris, Dustin Norris, Ryan Lohr, Tyson Hinckle, Michael Morgan and Josh Hummerhave already been sentenced by U.S. District Judge Bredar.

 

The case was investigated by the Frederick Resident Agency of the FBI, and prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Sanjay Patel of the Civil Rights Division, with the assistance of Assistant U.S. Attorney Michael Cunningham of the U.S. Attorney’s Office for the District of Maryland.

Steven Joshua Dinkle, 28, former Exalted Cyclops of the Ozark, Alabama, chapter of the International Keystone Knights of the Ku Klux Klan (KKK), was sentenced today by Chief U.S. District Judge W. Keith Watkins to serve 24 months in prison to be followed by three years of supervised release for his role in a cross burning in 2009, announced the Justice Department and the U.S. Attorney’s Office for the Middle District of Alabama.

On Feb. 3, 2014, Dinkle pleaded guilty to hate crime and obstruction of justice charges related to the cross burning.  Specifically, he pleaded guilty to one count of conspiracy to violate housing rights, one count of criminal interference with the right to fair housing and two counts of obstruction of justice. 

According to documents filed with the court, Dinkle and one of his KKK recruits, Thomas Windell Smith, met at Dinkle’s home on May 8, 2009, and decided to burn a cross in a local African-American neighborhood.  Dinkle constructed a wooden cross about six feet tall, wrapped jeans and a towel around it to make it more flammable and loaded it into Smith’s truck.  Around 8:00 p.m., Dinkle and Smith drove to the African-American neighborhood in Ozark.  Dinkle unloaded the cross at the entrance to the community and dug a hole in the ground.  He poured fuel on the cross, stood it up in the hole in view of several houses and set it on fire.  Dinkle and Smith then drove away.

During sentencing, Chief U.S. District Judge Watkins said that it was clear that the purpose of Dinkle’s conduct was “to terrorize people in the community” and that his “message was one of intimidation and violence.”

When questioned by local investigators, Dinkle falsely denied his involvement in the incident and said that he had resigned his office and withdrawn from the KKK months before the cross burning.  When approached by the FBI, Dinkle again lied and told a special agent that he had been at home with his girlfriend when the cross burning occurred.  He further claimed that he did not know a person who was, in fact, one of his superiors in the KKK at the time of the cross burning. 

During the plea hearing, Dinkle admitted that in burning the cross, he intended to scare and intimidate residents of the African-American community by threatening the use of force against them.  He further admitted that he burned the cross because of the victims’ race and color and because they were occupying homes in that area.

“Defendant Dinkle chose to burn the cross at the very entrance to an African-American neighborhood so that anyone coming or going would see the fiery cross,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “He intended to intimidate the community’s residents in their own homes and neighborhood.  There is no place for such conduct in our society and the department will continue to prosecute these violent acts of hate.”

“It is sad that, in this day and age, people are still filled with such hate,” said U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.  “To act on such hate and burn a cross turns that hate into a crime which should not, and will not, be tolerated.  Prosecuting these type crimes will continue to be a priority of my office.”

Dinkle’s co-conspirator, Smith, pleaded guilty to one count of conspiracy to violate housing rights in December 2013, and he is scheduled to be sentenced on Aug. 19, 2014.  Dinkle’s mother, Pamela Morris, is charged with two counts of perjury arising out of the investigation into the cross burning.  Her trial is scheduled to begin Aug. 4, 2014.

This case was investigated by the FBI with the assistance of the Dale County Sheriff’s Office and the Ozark Police Department.  The case is being prosecuted by Assistant U.S. Attorney Jerusha T. Adams of the Middle District of Alabama and Trial Attorney Chiraag Bains of the Civil Rights Division.

ALICIA A.G. LIMTIACO, United States Attorney for Guam and the Northern Mariana Islands, announced that MICHAEL SAN NICOLAS SANTOS, aged 54, was sentenced today in the District Court of Guam, to serve 18 months in federal prison followed by three years of supervised release for transmitting bomb threats in interstate commerce.  Defendant was also ordered to pay a $100 special assessment fee and total restitution of $2,389.48 for distribution in part to Pho Saigon Restaurant, the Judiciary of Guam and the Guam Police Department.

Defendant pled guilty on November 14, 2013, to the offense of Maliciously Conveying False Information by Telephone in violation of 18 U.S.C. § 844(e).  On the mornings of September 26, 2013, October 10, 2013, and October 29, 2013, the defendant called the Guam Emergency 911 Center and stated to the effect that there was a bomb going to explode in the Dededo Mall.  On the last phone call, the defendant threatened and stated, “There is a bomb going down in Dededo Mall right now.  It is going to be going off.  Get those people out of the building.  In Dededo Mall right now.”

On the morning of each of the calls, the defendant purchased a new prepaid cellular phone and/or SIM card in the Mobil gas stations in Ysengsong Road, Dededo, and Route 16. The defendant made the September 26, 2013 and October 10, 2013 bomb threats from a park across the street from the Dededo Mall.  On the morning of October 29, 2013, federal law enforcement agents surveilled the defendant when he left his Yigo residence.  He was observed buying a prepaid cellular phone in the Mobil gas station in Route 16 in the vicinity of the Guam Revenue & Taxation building, driving around the park directly across the street from the Dededo Mall, and driving up Carnation Road and Villagomez Road where he made the third bomb threat. Special Agents from the Federal Bureau of Investigation (“FBI”) arrested the defendant later that morning when he returned to the Dededo Mall.  The defendant told them, among other things, that he called in the bomb threats on those days to avoid attending a small claims court hearing in the Small Claims Division, Superior Court of Guam, Northern Court Satellite which is located in the Dededo Mall.

The Dededo Mall also accommodates one restaurant, several food concession stands and retail businesses.

U.S. Attorney Limtiaco states, “All bomb threats are taken seriously.  To ensure the public's safety and security, law enforcement agencies will use their resources to determine the validity of each bomb threat. Offenders will be held accountable and prosecuted.”

The investigation was conducted by the FBI Joint Terrorism Task Force-Pacific (comprised of the FBI, Guam Police Department, U.S. Coast Guard Investigative Service), Guam Police Department, Guam Fire Department, Judiciary Courts of Guam Marshals Office, Guam Homeland Security/Office of Civil Defense, U.S. Navy Explosive Ordnance Disposal Mobile Unit 5, Detachment Marianas and the Department of Defense Joint Region Marianas. The case was handled by Assistant U.S. Attorney Marivic David.

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that ANTONETTE ELATICO PARR (“PARR”) was sentenced on Monday, May 12, 2014, by Chief Judge Frances Tydingco-Gatewood, in the District Court of Guam, to 21months incarceration, and three years of supervised release.

Co-defendants David Taimanglo Quichocho, Jr. and Dominica Bato Quichocho both pled guilty in December, 2012 to Conspiracy to Distribute Methamphetamine Hydrochloride in violation of Title 21 U.S.C. Section 841(a)(1). Defendant David Taimanglo Quichocho, Jr. ordered over five grams of methamphetamine hydrochloride from his sister, PARR, a California resident.  PARR concealed small amounts of methamphetamine hydrochloride in letters sent via First Class mail to Guam.   The letters containing the drug were picked up by David Taimanglo Quichocho, Jr. or his spouse, Dominica Bato Quichocho.  Notably, the letters, each containing approximately 1.88 grams of the drug were detected and intercepted by the United States Postal Investigative Service.

U.S. Attorney Limtiaco thanks the United States Postal Investigative Service for their thoroughness and vigilance in detecting drugs which are being mailed to Guam through the United States Postal System.

The investigation was conducted by the United States Postal Investigative Service.  The case was handled by Assistant U.S. Attorney Rosetta San Nicolas.

Jonathan Lynn Henery, 28, and Beau Edward Hansen, 30, both of Boise, Idaho, were indicted May 13, 2014, on federal hate crime charges for their racially motivated assault of an African-American man, the Justice Department’s Civil Rights Division and U.S. Attorney Wendy J. Olson for the District of Idaho announced.  An initial appearance date has not been set.

The indictment alleges that on or about Oct. 20, 2013, both men willfully caused bodily injury to an African American man based on the victim’s actual and perceived race and color.

The charge of hate crime based on race is a violation of the Matthew Shepard and James Byrd Jr. Hate Crime Prevention Act signed into law by President Barack Obama in 2009.  A violation of that statute is punishable by up to 10 years in prison, a maximum fine of $250,000 and up to three years of supervised release.

The case was investigated by the FBI and the Boise City Police Department.  The case is being jointly prosecuted by the U.S. Attorney’s Office for the District of Idaho and the Justice Department’s Civil Rights Division.

An indictment is a means of charging a person with criminal activity.  The person is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

A federal grand jury returned a two count indictment against Brice Johnson, 19, of Springtown, Texas, charging him with willfully causing bodily injury to a person because of the actual or perceived sexual orientation of that person and with kidnapping, the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office of the Northern District of Texas and the FBI Dallas Division announced today.

On Feb. 19, 2014, a federal criminal complaint was unsealed charging Johnson with a hate crime.  The indictment charges Johnson with the same hate crime offense and further charges that Johnson’s actions included kidnapping.

According to the affidavit filed with the criminal complaint, in the early morning hours of Sept. 2, 2013, the adult male victim, identified as A.K., connected with Johnson through the cell phone application for MeetMe.com.  A.K.’s MeetMe.com page indicated he was a gay man, while Johnson’s page indicated he was not gay.  During their chat communications, Johnson said that he was interested in engaging in sexual activity with A.K. and he invited A.K. to his home.   Johnson gave A.K. his cell phone number and address and they exchanged text messages planning their sexual activity.

After A.K. showed up at the house, Johnson severely beat him, then put him into the trunk of A.K.’s car and drove him to a friend’s house.  Based on ligature marks on A.K.’s wrists, it appears that he was bound while he was in the trunk of the car.  Individuals at the home told Johnson to take A.K. to the hospital or they would call the police, and Johnson eventually drove A.K. to an Emergency Medical Services station in Springtown. 

A.K. was hospitalized for 10 days in Fort Worth, and he was diagnosed and treated for multiple skull and facial fractures.  The investigation revealed that on the night of the incident, Johnson saved A.K.’s cell phone number using a gay slur as a contact name and Johnson later stated that he was playing a prank on A.K. because of A.K.’s sexual orientation, again using a gay slur when referring to A.K.  According to the affidavit, A.K. said that he had no physical contact with Johnson prior to the attack.  

An indictment merely establishes probable cause and Johnson is presumed innocent unless proven guilty.  Each count carries a maximum statutory sentence of life in prison and a $250,000 fine. 

The investigation is being conducted by the FBI, the Springtown Police Department and the Parker County Sheriff’s Office.  The case is being prosecuted by Assistant U.S. Attorney Cara Foos Pierce and Trial Attorney Saeed Mody of the Civil Rights Division.

The owner and operator of a Tennessee salvage and demolition company, A&E Salvage Inc., pleaded guilty today in federal court in Greeneville, Tennessee, for conspiring to violate the Clean Air Act.

Mark Sawyer pleaded guilty before U.S. District Court Judge Greer for the Eastern District of Tennessee to one criminal felony count for conspiring to violate the Clean Air Act’s “work practice standards” salient to the proper wetting, stripping, bagging and disposal of asbestos. According to the charges, Sawyer, along with other co-conspirators, engaged in a multi-year scheme in which substantial amounts of regulated asbestos containing materials were improperly removed from components of the former Liberty Fibers Plant or were illegally left in place during demolition.

Sawyer faces up to five years in prison and a fine of up to $250,000 or twice the gross gain or loss to the victims.  Sawyer is the last of five charged co-defendants to plead guilty.  Sawyer, Eric Gruenberg, Nick Smith, Armida DiSanti and Milto DiSanti are due to be sentenced on Nov. 19, 2014.

Asbestos has been determined to cause lung cancer, asbestosis and mesothelioma, an invariably fatal disease.  The Environmental Protection Agency has determined that there is no safe level of exposure to asbestos.

This case was investigated by Special Agents of the Environmental Protection Agency’s Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Morris of the U.S. Attorney’s Office for the Eastern District of Tennessee and Senior Trial Attorney Todd W. Gleason of the Environmental Crimes Section of the Justice Department’s Environment and Natural Resources Division. 

 

 

WASHINGTON—Today, the Department of Justice and Office of the Director of National Intelligence released, in redacted form, a previously classified series of Foreign Intelligence Surveillance Court filings and orders from 2009-2010 concerning the collection of bulk telephony metadata under Section 215 of the USA Patriot Act. These documents relate to a robust interaction that occurred between the Department of Justice and a telecommunications service provider that included the provider’s review of prior FISC applications, orders and opinions, regarding lawful compliance with those orders. 

Motion to Unseal Records (Jan. 7, 2010) including prior FISC applications, orders and opinions, for the purpose of disclosing and discussing with the recipient the Section 215 order.

Joint Motion for Enlargement of Time (Jan. 8, 2010) allowed under FISC rules for the recipient if the Section 215 secondary order to file a petition challenging that order pursuant to 50 U.S.C. § 1861(f), filed by the government and the recipient of the secondary order.

FISC Order Granting Enlargement of Time (Jan. 8. 2010).

FISC Order Granting Motion to Unseal Records (Jan. 8, 2010).

Motion for Amended Secondary Order (Jan. 11, 2010) requesting that the FISC amend a secondary order to the recipient to expressly incorporate the findings of the FISC in three specific respects as described in the motion. This motion was granted Jan. 12, 2010, when the court issued an amended secondary order in the form proposed by the government.

Attorney General Eric Holder issued the following statement today on the planned departure of Deputy Director of Public Affairs Gina Talamona, who will begin work as the Communications Director of the Securities and Exchange Commission next month:

 
“For 27 years, Gina Talamona has been a tremendous asset to the Department of Justice and an exceptionally dedicated public servant. She’s been the backbone of our dedicated Office of Public Affairs team, providing leadership and sound guidance to Attorneys General and other leaders from administrations of both parties. Although I join my colleagues in congratulating Gina on her important new role at the Securities and Exchange Commission – and wish her nothing but the best – I will miss her wise counsel, her sense of humor, and her considerable contributions on behalf of the American people. She is a dear friend upon whom I have relied during all my time at the Department.”

Today, Attorney General Eric Holder met with campus leadership from eight Washington, D.C.-area colleges and universities: American University; Catholic University of America; Gallaudet University; Georgetown University; George Washington University; Howard University; Trinity University; and University of the District of Columbia, to discuss how administrations are addressing sexual assault on campus.

In recognition of the 20th anniversary of the Violence Against Women Act, the department’s Office of Violence Against Women (OVW) launched a campus tour from April 23-May 1 for Sexual Assault Awareness Month.  Senior officials from the Departments of Justice and Education visited 11 campuses across the country, including public and private universities, community colleges, historically black colleges, and faith-based and tribal-affiliated institutions.

During today’s discussion, convened at the Department of Justice, officials shared lessons learned and feedback from the campus tour.  Campus leaders shared their achievements and challenges in implementing effective prevention and intervention strategies and responses to address sexual assault, including student engagement, public education efforts, strong collaborations and a focus on campus culture. Justice officials also encouraged school leaders to take advantage of the assistance being provided by the government.  Department of Justice campus assistance includes specialized training for school officials and guidance on how to improve their investigative and adjudicative protocols.

President Obama and Vice President Biden took an unprecedented step this year in the Administration’s effort to address campus sexual assault by establishing the “White House Task Force to Protect Students from Sexual Assault.”  The Task Force was charged with sharing best practices, and increasing transparency, enforcement, public awareness and interagency coordination to prevent violence and support survivors.  At the end of April, the Task Force issued their first report, reflecting what they had heard in the many listening sessions that were held this year, and what the government can do in the short-term to better partner with academic institutions.

Since 1999, OVW has funded approximately 400 campus-based projects, totaling more than $139 million, to address domestic violence, dating violence, sexual assault and stalking on campuses.

Associate Attorney General Tony West, Acting Assistant Attorney General for Civil Rights Jocelyn Samuels, and OVW Principal Deputy Director Bea Hanson, as well as the Department of Education’s Jamienne Studley, Deputy Under Secretary of Education, and Seth Galanter, Principal Deputy Assistant Secretary, Office for Civil Rights, also participated in today’s meeting.  The roundtable discussion was organized in partnership with the DC Coalition Against Domestic Violence (DCCADV) University Leadership Initiative.

A patient recruiter who participated in a Medicare fraud scheme that totaled almost $14.5 million was sentenced in Detroit yesterday to serve 86 months in prison.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade, Special Agent in Charge Paul M. Abbate of the FBI’s Detroit Field Office and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) Chicago Regional Office made the announcement.

Richard Shannon, 41, was sentenced by U.S. District Judge Denise Page Hood in the Eastern District of Michigan. In addition to his prison term, Shannon was sentenced to serve three years of supervised release and was ordered to pay more than $1.6 million in restitution, jointly and severally with his co-defendants.

On Oct. 26, 2012, Shannon, a patient recruiter for a network of fraudulent home health care companies, was found guilty at trial of one count of conspiracy to commit health care fraud.

According to evidence presented at trial, Shannon and his co-conspirators caused the submission of false and fraudulent claims to Medicare through All American and Patient Choice, two Oak Park-based home health care companies, which purported to provide skilled nursing and physical therapy services to Medicare beneficiaries in the greater Detroit area.

The evidence showed that Shannon acted as a patient recruiter, paying Medicare beneficiaries to sign blank documents for physical therapy services that were never provided and/or medically unnecessary. The owners of Patient Choice and All American then paid physicians to sign referrals and other therapy documents necessary to bill Medicare. Physical therapists and physical therapist assistants would then create fake medical records using the blank, pre-signed forms obtained by Shannon and other patient recruiters to make it appear as if physical therapy services had actually been rendered.

Shannon recruited destitute beneficiaries from housing projects and soup kitchens in the Detroit area, obtaining their patient information in exchange for cash and promises of prescription narcotics prescribed by co-conspirator physicians.

This case was investigated by the FBI, HHS-OIG and the Internal Revenue Service and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case was prosecuted by Deputy Chief Gejaa Gobena, Assistant Chief Catherine Dick and Trial Attorney Niall O’Donnell of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged almost 1,900 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, has removed over 17,000 providers from the Medicare program since 2011.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .

 

Jeffrey Wayne Scott, 48, of Wilmington, North Carolina, pleaded guilty to tax evasion in Raleigh, North Carolina, the Justice Department and Internal Revenue Service (IRS) announced today.  Scott was indicted on Nov. 25, 2013, for five counts of personal income tax evasion and one count of filing a false corporate tax return.  He pleaded guilty to one count of willfully attempting to evade his personal income tax for tax year 2007.

 

According to court documents and court proceedings, Scott has owned and operated Greenville Loop Seafood (GLS), a seafood distribution company located in Wilmington, since 1995.  For tax years 2006 through 2010, Scott and his wife filed joint individual income tax returns.  Scott provided his return preparer with handwritten summaries of gross receipts and categorized expense items for the wholesale and retail fish distribution businesses as well as tax documents provided by financial institutions.  Scott, under penalty of perjury, reported that his taxable income for these five years ranged between $23,934 and $92,999, and paid only $91,800 in federal income taxes for this time period.  During these five years, however, the Scotts spent far in excess of this reported taxable income on personal expenditures.

 

According to court documents and court proceedings, between 2006 and 2010, the Scotts paid for nearly all of their living expenses with checks from GLS.  This included, among other things, utilities, insurance premiums, landscaping, home improvements, school fees and a country club membership.  They also purchased five vehicles totaling more than $200,000, a $100,000 boat and a $2.1 million waterfront home.  Scott also made a monthly transfer of $10,000 from GLS’ business account into a personal brokerage account.  After the purchase of their home in June 2009, Scott stopped transferring funds to the brokerage account, but instead used funds from GLS’ business account to pay the mortgage and related expenses.  Through a bank deposit and expenditure analysis, the IRS calculated that Scott failed to report taxable income for these five years in excess of $1,151,642 and owed at least $390,678 in additional taxes.  For the 2007 tax year, Scott failed to report $328,754 in taxable income with an additional tax due and owing of $113,967.

 

­­­­­­­­­­­­­­­­­­According to court documents and court proceedings, when first contacted by IRS-Criminal Investigation agents in June 2011, Scott falsely stated that he was letting friends stay in his second home rent free.  Furthermore, despite being aware that he was under criminal investigation, in November 2012, Scott filed a false 2011 GLS corporate income tax return claiming the painting of his personal residence, repair work by a plumber at his personal residence, and health bills related to his family dog as business expenses.

 

Chief U.S. District Judge James C. Dever III scheduled the sentencing for the term of court to begin Aug. 18, 2014.  Scott faces a statutory maximum prison term of five years and a maximum fine of $250,000.

 

This case was investigated by special agents of IRS-Criminal Investigation.  Assistant U.S. Attorney Susan B. Menzer and Trial Attorney Todd A. Ellinwood of the Justice Department’s Tax Division are prosecuting the case.

 

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

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WASHINGTON – Jeffrey Wayne Scott, 48, of Wilmington, North Carolina, pleaded guilty to tax evasion in Raleigh, North Carolina, the Justice Department and Internal Revenue Service (IRS) announced today. Scott was indicted on Nov. 25, 2013, for five counts of personal income tax evasion and one count of filing a false corporate tax return. He pleaded guilty to one count of willfully attempting to evade his personal income tax for tax year 2007.

According to court documents and court proceedings, Scott has owned and operated Greenville Loop Seafood (GLS), a seafood distribution company located in Wilmington, since 1995. For tax years 2006 through 2010, Scott and his wife filed joint individual income tax returns. Scott provided his return preparer with handwritten summaries of gross receipts and categorized expense items for the wholesale and retail fish distribution businesses as well as tax documents provided by financial institutions. Scott, under penalty of perjury, reported that his taxable income for these five years ranged between $23,934 and $92,999, and paid only $91,800 in federal income taxes for this time period. During these five years, however, the Scotts spent far in excess of this reported taxable income on personal expenditures.

According to court documents and court proceedings, between 2006 and 2010, the Scotts paid for nearly all of their living expenses with checks from GLS. This included, among other things, utilities, insurance premiums, landscaping, home improvements, school fees and a country club membership. They also purchased five vehicles totaling more than $200,000, a $100,000 boat and a $2.1 million waterfront home. Scott also made a monthly transfer of $10,000 from GLS' business account into a personal brokerage account. After the purchase of their home in June 2009, Scott stopped transferring funds to the brokerage account, but instead used funds from GLS' business account to pay the mortgage and related expenses. Through a bank deposit and expenditure analysis, the IRS calculated that Scott failed to report taxable income for these five years in excess of $1,151,642 and owed at least $390,678 in additional taxes. For the 2007 tax year, Scott failed to report $328,754 in taxable income with an additional tax due and owing of $113,967.

According to court documents and court proceedings, when first contacted by IRS-Criminal Investigation agents in June 2011, Scott falsely stated that he was letting friends stay in his second home rent free. Furthermore, despite being aware that he was under criminal investigation, in November 2012, Scott filed a false 2011 GLS corporate income tax return claiming the painting of his personal residence, repair work by a plumber at his personal residence, and health bills related to his family dog as business expenses.

Chief U.S. District Judge James C. Dever III scheduled the term of court to begin Aug. 18, 2014. Scott faces a statutory maximum prison term of five years and a maximum fine of $250,000.

This case was investigated by special agents of IRS-Criminal Investigation. Assistant U.S. Attorney Susan B. Menzer and Trial Attorney Todd A. Ellinwood of the Justice Department's Tax Division are prosecuting the case.

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

Louisiana-Pacific Corp. (LP) abandoned its plan to acquire Ainsworth Lumber Co. Ltd., its close competitor in the sale of a type of manufactured wood-based panel called oriented strand board (OSB), after the Department of Justice expressed concerns about the transaction’s likely anticompetitive effects.  The department said that the transaction likely would have substantially lessened competition in the market for the production of OSB sold to customers in the Pacific Northwest and Upper Midwest regions of the United States.

 
According to the department, OSB is widely used in the construction and remodeling of homes and other buildings.  An increase in the price of OSB would likely result in significant harm to consumers in the Pacific Northwest and Upper Midwest by making it more expensive to purchase or remodel homes, the department said.

 

“The companies’ decision to abandon the transaction, which would likely have resulted in less competition and higher OSB prices, is a win for customers in the Pacific Northwest and the Upper Midwest,” said Renata B. Hesse, Deputy Assistant Attorney General of the Department of Justice’s Antitrust Division.  “As a result of the abandonment of this transaction, consumers will continue to benefit from Ainsworth’s presence as an independent competitive force in the OSB industry.”

 
LP and Ainsworth are two of only four principal producers selling OSB into the Pacific Northwest, and two of only three principal producers selling OSB into the Upper Midwest.  The proposed merger would have given the combined firm a 63 percent market share in the Pacific Northwest region of the United States and a 55 percent market share in the Upper Midwest. 

 
According to the department, the merger would have allowed LP to substantially increase its market share by acquiring one of the largest suppliers of OSB in the Pacific Northwest and Upper Midwest, while also eliminating the significant head-to-head competition between LP and Ainsworth in these regions, thereby enabling LP to better target its customers in these areas for price increases.  By gaining control over Ainsworth’s mills, LP would have been in a better position to restrict the amount of OSB supply available in these regions, and to coordinate output and price decisions with its few remaining principal competitors, driving prices above competitive levels.

 
During the course of its investigation of the transaction, the department’s Antitrust Division closely coordinated its investigation of the transaction with the merger review conducted by Canada’s Competition Bureau. 

 
“Cooperation among competition agencies around the world enables our agencies to more efficiently and effectively achieve our shared goals of enhancing competition and protecting consumers,” said Deputy Assistant Attorney General Hesse.  “The Antitrust Division and the Canadian Competition Bureau have a long history of working closely together, as reflected by the recent issuance of best practices for coordinating, among the Antitrust Division, the Canadian Competition Bureau and the Federal Trade Commission, the review of mergers affecting both the United States and Canada.”

 

LP is a Delaware corporation with headquarters in Nashville, Tennessee. In 2013, LP had net sales of $2.1 billion, with $1.1 billion coming from its OSB business.  Ainsworth is a Canadian corporation with its headquarters in Vancouver, British Columbia.  In 2013, Ainsworth had sales of $488 million CAD, all of which came from OSB production.

           

A California man pleaded guilty today in the District of Massachusetts for his role in a conspiracy to hack into the computerized cash registers of a number of Subway restaurants to fraudulently obtain more than $40,000 in gift cards.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Resident Agent in Charge Holly Fraumeni of the U.S. Secret Service in Manchester, New Hampshire, made the announcement.

Shahin Abdollahi, aka Sean Holdt, 46, of Lake Elsinore, California, pleaded guilty before U.S. District Judge Richard G. Stearns to one count of conspiracy to commit computer intrusion and wire fraud and one count of wire fraud. Sentencing is scheduled for Aug. 6, 2014. Abdollahi, along with his co-conspirator, Jeffrey Wilkinson, 37, of Rialto, California, was indicted on March 6, 2013. Wilkinson pleaded guilty on Feb. 27, 2014, and is scheduled for sentencing on May 28, 2014.

Prosecutors informed the court that had the case proceeded to trial, the government would have proven that Abdollahi owned Subway franchises in Southern California from 2005 to 2008 and later operated a California company called “POS Doctor,” which sold and installed point-of-sale (POS) computer systems to Subway restaurant franchises around the country.  POS systems are a type of computerized checkout register that allows merchants to manage customer purchases made by credit, debit and gift cards.

Beginning in approximately 2011, Abdollahi and Wilkinson conspired to remotely hack into POS systems in Subway restaurant franchises around the country.  Members of the conspiracy hacked into at least 13 Subway POS systems that Abdollahi sold through POS Doctor and fraudulently added at least $40,000 in value to Subway gift cards.  Abdollahi and Wilkinson used the fraudulent gift cards to make purchases at Subway, and Wilkinson also sold fraudulent gift cards to others using eBay and Craigslist.

The case is being investigated by the U.S. Secret Service. The case is being prosecuted by Senior Trial Attorney Mona Sedky of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Adam J. Bookbinder of the District of Massachusetts.

 

The Justice Department’s Civil Division announced today that Electrolux Home Products Inc. (Electrolux), of Charlotte, North Carolina, has agreed to pay a civil penalty of $750,000 to settle allegations that it knowingly failed to report immediately to the U.S. Consumer Product Safety Commission (CPSC) a safety hazard associated with certain wall ovens sold to consumers.  Electrolux has also agreed to establish and maintain a compliance program with internal recordkeeping and monitoring systems to keep track of information about product safety hazards.

 
“Manufacturers and distributors of consumer products are required to report product defects and hazards to the Consumer Product Safety Commission immediately and there are penalties for those who fail to do so,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “We will continue to work with our partners at the CPSC to ensure that they can act promptly to protect consumers from injuries.”        

 
In a complaint filed on behalf of the CPSC in U.S. District Court for the Southern District of Georgia, the United States alleged that Electrolux became aware of incidents in which gas could build up in the oven during broiling and escape and ignite, causing burn and fire hazards to consumers.  Electrolux imported and distributed approximately 7,800 of the Kenmore ovens that were sold by Sears and other stores throughout the United States.

 
“CPSC will vigorously enforce the immediate reporting requirement found in the Consumer Product Safety Act,” said CPSC Acting Chairman Bob Adler.  “The federal reporting rules are aimed at protecting the safety of the American public.  Delay in reporting of product defects and hazards by manufacturers, distributors or retailers can result in civil penalties and other measures designed to ensure consumer safety.”

 
Under the Consumer Product Safety Act (CPSA), manufacturers, distributors, and retailers are required to report product hazards to the CPSC.  A knowing violation of the CPSA subjects a firm to civil penalties.  The United States alleged that between February 2006 and November 2007, Electrolux knew of 22 consumer reports of flames shooting out of the oven when the broiler was on.  The incidents resulted in consumer injuries ranging from singed hair to facial burns.  The United States alleged that Electrolux failed to immediately report hazards with the oven, despite the fact that Frigidaire Canada, Electrolux’s sister company, identified the defective and hazardous nature of the ovens in January 2005 and implemented a design change to fix the defect in March 2006. 

 
“Public safety is a paramount concern,” said United States Attorney, Southern District of Georgia Edward J. Tarver.  “The United States Attorney’s Office must and will continue to work together with the CPSC to protect consumers.”

During the relevant time period, Electrolux’s principal place of business was in Augusta, Georgia.  A recall of the ovens was announced in 2008.  In agreeing to settle this matter, Electrolux has not admitted that it knowingly violated the CPSA.

 
The matter is being handled by the Department of Justice’s Consumer Protection Branch and the U.S. Attorney’s Office for the Southern District of Georgia, on behalf of the Consumer Product Safety Commission.

 

Titanium Metals Corporation (TIMET), one of the world’s largest producers of titanium parts for jet engines, has agreed to pay a record $13.75 million civil penalty and perform an extensive investigation and cleanup of potential contamination stemming primarily from the unauthorized manufacture and disposal of PCBs (polychlorinated biphenyls) at its manufacturing facility in Henderson, Nevada, the Department of Justice and the U.S. Environmental Protection Agency (EPA) announced today.

The penalty is the largest ever imposed for violations of the Toxic Substances Control Act (TSCA) at a single facility. TIMET will pay an additional $250,000 for violations related to illegal disposal of hazardous process wastewater, in violation of the Resource Conservation and Recovery Act (RCRA).

Under the settlement, EPA expects that the settlement will result in the removal of approximately 84,000 pounds of PCB-contaminated waste from the environment each year, and will prevent the improper disposal of 56 million pounds of hazardous waste each year.

“This settlement holds TIMET fully accountable for the period of its unauthorized manufacture and handling of harmful PCBs at the Henderson facility,” said Robert G. Dreher, Acting Assistant Attorney General for the Environment and Natural Resources Division. “It will also result in substantial environmental cleanup and protection for the benefit of residents of the area , now and in the future .”

“This record penalty reflects EPA’s commitment to protect communities by reducing pollution from the mineral sector,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s settlement ensures TIMET complies with the law and takes important steps to build transparency in the investigation and remediation of this facility.”

In addition to paying the penalty and performing the investigation and cleanup, the settlement requires TIMET to electronically submit monitoring data biannually to EPA for three years showing that it is appropriately managing any PCBs it generates. TIMET has also agreed to allow the Nevada Division of Environmental Protection (NDEP) to make public TIMET’s EPA-approved work plans and completed work reports through a dedicated website.

The company has already spent approximately $6 million on investigation, site cleanup and compliance measures to address the potential contamination. This work has included extensive sampling; draining and relining of a surface impoundment; analyzing the extent of PCB contamination in its solid waste landfill; removing PCB waste from that landfill; and decontaminating processing equipment. In addition, TIMET estimates that it will spend at least $1 million to complete the work required by the settlement.

TIMET processes titanium from rutile ore at its 108-acre manufacturing facility at the Black Mountain Industrial (BMI) Complex in Henderson. This process generates hazardous waste and PCBs. In the complaint, the government alleged that EPA inspections conducted in 2005, 2006 and 2008 revealed that TIMET had been unlawfully manufacturing PCBs as a by-product of its titanium manufacturing process, without an exclusion from TSCA’s ban. The 2008 EPA inspection also revealed that the company had disposed of PCB-contaminated waste in a solid waste landfill and a trench at the plant. The complaint further alleges that, on several occasions during 2005 and 2007, the company had unlawfully disposed of acidic, corrosive hazardous process wastewater into an unpermitted surface impoundment at the facility, in violation of RCRA.

Since 2007, the company has been working with EPA to bring the facility into compliance. TIMET has taken steps to reduce significantly the amount of PCBs it generates, manage appropriately the PCBs it does generate, and TIMET already has corrected the other regulatory violations cited in the complaint. TIMET is now in the process of documenting that it qualifies for an exclusion from TSCA’s ban on the manufacture of PCBs. As a part of that process, TIMET will provide required documentation to certify to EPA that it is in compliance with TSCA requirements governing the manufacture and disposal of PCBs.

TIMET was purchased by Precision Castparts Corporation in 2012. Both companies have worked with EPA to achieve compliance and to clean up the operations. The EPA and NDEP will continue to oversee multiple cleanup efforts at the facility and in the BMI Complex.

PCBs are human-made organic chemicals that were widely used in paints, construction materials, plastics, and electrical equipment prior to 1978. PCBs, which are probable carcinogens, have been banned in the United States for the last 30 years, except for specific uses authorized by regulations. When released into the environment, PCBs can persist for decades because they do not break down through natural processes. Exposure to PCBs has been demonstrated to cause cancer, as well as a variety of other adverse health effects on the immune system, reproductive system, nervous system, and endocrine system.

This settlement is part of EPA’s nationwide enforcement initiative to reduce pollution from mineral processing operations. Because mining and mineral processing facilities have the potential to generate large volumes of toxic and hazardous waste, the agency’s goal is to reduce the risk to human health and the environment by ensuring wastes from these facilities are properly managed.

TIMET, headquartered near Philadelphia, has been supplying nearly one-fifth of the world’s titanium demand since 1950. The company’s Henderson plant, which has been in operation since 1950, is one of the largest industrial facilities in the state. TIMET is a wholly-owned subsidiary of Precision Castparts Corporation, a worldwide manufacturer of complex metal components and products based in Portland, Oregon.

The consent decree, lodged in the U.S. District Court for the District of Nevada, is subject to a 30-day public comment period and approval by the federal court. The consent decree can be viewed at www.justice.gov/enrd/Consent_Decrees.html .

For more information on the settlement: http://www2.epa.gov/enforcement/timet-settlement

 

# # #
 

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that RAMACHANDRAN VADIVELLO aka VICRAAMA SARADA aka VIC RAMA (“VIC RAMA”), was sentenced today in the District Court of Guam by Chief Judge Frances Tydingco-Gatewood, to six months home confinement followed by five years probation.  VIC RAMA was also ordered to pay restitution to the victims in this case in the amount of $117,197.29.

Defendant VIC RAMA pled guilty on March 26, 2013, to the offenses of Mail Fraud, in violation of 18 U.S.C. § 1341, Visa Fraud, in violation of 18 U.S.C. § 1546(a), and Conspiracy to Commit Money Laundering, in violation of 18 U.S.C. § 371.

Defendant VIC RAMA is the owner of Transrama Guam, Inc., a construction company on Guam.   VIC RAMA petitioned the Guam Department of Labor to hire ten (10) highly skilled H-2B alien workers from Malaysia and Indonesia.  VIC RAMA misrepresented to the Guam Department of Labor that the H-2B alien workers would work as heavy equipment mechanics and carpenters on Guam, and that they would be paid the prevailing wage rates.  Based on VIC RAMA’S representations, the Department of Labor and the Governor of Guam approved the employment of the H-2B workers.  The U.S. Department of Homeland Security, U.S. Citizenship and Immigration Services then issued visas permitting the H-2B workers entry to work on Guam for one year.

Rather than employing the H-2B alien workers as heavy equipment mechanics and carpenters, VIC RAMA assigned the workers to perform manual labor which included irrigation work, landscaping and painting at the Leo Palace Resort.  VIC RAMA also withheld full salaries from the alien workers and farmed the workers out to another local construction company, in violation of the terms of their admission to Guam.

U.S. Attorney Limtiaco states, “The U.S. Attorney’s Office is committed to holding accountable those defendants who attempt to erode the public’s trust in our government.   Cases involving the abuse of H-2B alien workers and the H-2B approval process, are frauds committed against both local and federal government agencies.  The U.S. Attorney’s Office will prosecute these cases and will make all efforts to restore the victim’s losses.”

The investigation was conducted by Special Agents with the U.S. Department of Homeland Security, Homeland Security Investigations, and the Internal Revenue Service – Criminal Investigation Section.  The case was handled by Assistant U.S. Attorney Rosetta SanNicolas.

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that DAVID QUICHOCHO UNCANGCO, JR., was sentenced today by Chief Judge Frances Tydingco-Gatewood in the District Court of Guam, to 117 months incarceration followed by five years of supervised release.  Defendant was also ordered to pay restitution to Submarina California Subs and Imma Mart.

Defendant UNCANGCO pled guilty on December 11, 2013, to the offenses of Hobbs Act Robbery in violation of Title 18 U.S.C. § 1951, and to Use of a Firearm During a Crime of Violence, in violation of Title 18 U.S.C. § 924(c)(1)(a).

On July 10, 2012, UNCANGCO entered Imma Mart, a retail store in Yigo, Guam.  He pointed a silver Smith and Wesson .38 caliber revolver at the cashier and demanded money.  The cashier handed over approximately $100 in cash to UNCANGCO who then fled the store.  The robbery was captured on video surveillance.

Three days later, UNCANGCO approached a cashier at the Submarina California Subs store in Hagatña.  He pointed a Smith and Wesson .38 caliber firearm at the cashier and demanded money.   UNCANGCO forcibly took a Bank of Guam money bag containing approximately $1,200 cash and receipts from the cashier.  Defendant then fled the scene in a Toyota pickup truck.

Law enforcement recovered the Smith and Wesson .38 caliber firearm, fifty rounds of .38 caliber ammunition and the Bank of Guam money bag from the Toyota pickup truck.

U.S. Attorney Limtiaco states, “The use of firearms to commit violent crimes places innocent civilians and the community at great risk of harm.  People who use firearms to commit crimes of violence will face aggressive prosecution and will receive significant jail time.”

U.S. Attorney Limtiaco noted that this prosecution is part of the U.S. Department of Justice’s Project Safe Neighborhood (PSN) Initiative, a nationwide commitment to aggressively prosecute defendants who engage in violent crime, drug distribution and gang involvement. The investigation was conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Guam Police Department. The case was handled by Assistant U.S. Attorney Rosetta San Nicolas.

ALICIA A.G. LIMTIACO, United States Attorney for the Districts of Guam and the Northern Mariana Islands, announced that Defendant BRIAN LEON GUERRERO, age 25, from Tamuning, was sentenced on May 13, 2014, in the District Court of Guam by Chief Judge Ramona Manglona, for the offense of Dealing in Counterfeit United States Obligations and Securities, for his role in passing a counterfeit fifty dollar bill on October 24, 2013.  LEON GUERRERO was sentenced to a three-year probationary period, and ordered to get substance abuse treatment and obtain a high school diploma or GED.  Defendant was also ordered to pay $500 restitution, a $100 special assessment fee, and to perform 200 hours of community service. Three co-defendants remain to be sentenced.

Credit for the investigation of this case is given to the U.S. Secret Service, Guam Police Department and the Micronesia Mall Security.  The case was prosecuted by Assistant U.S. Attorney Clyde Lemons.

WASHINGTON—Speaking in a video message posted on the Justice Department’s website, Attorney General Eric Holder on Wednesday called for an end to the excessive use of solitary confinement for youth that suffer from mental illness.  Attorney General Holder said the practices can have lasting, substantial effects on young people that could result in self-harm or, in some cases, even suicide. 

“Solitary confinement can be dangerous, and a serious impediment to the ability of juveniles to succeed once released,” Attorney General Holder said.  “At a minimum, we must work to curb the overreliance on seclusion of youth with disabilities.”
As a result of these unhealthy practices that violate the Violent Crime Control and Law Enforcement Act and the Civil Rights of Institutionalized Persons Act (CRIPA), the Justice Department’s Civil Rights Division sought a federal court order temporarily restraining the Ohio Department of Youth Services (DYS) from unlawfully secluding boys with mental health needs in its juvenile correctional facilities.

Last February, the Civil Rights Division also took the rare but necessary step of filing a statement of interest addressing the use of excessive reliance on solitary confinement for disabled youth in Contra Costa County, California.  Young people in these detention centers, including those with disabilities, were allegedly held in solitary confinement for up to 23 hours a day, often with no human interaction at all.

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

“Across the country, far too many juvenile detention centers see isolation and solitary confinement as an appropriate way to handle challenging youth, in particular youth with disabilities.  But solitary confinement can be dangerous, and a serious impediment to the ability of juveniles to succeed once released.

“In a study released last year by the Office of Juvenile Justice and Delinquency Prevention, 47 percent of juvenile detention centers reported locking youth in some type of isolation for more than four hours at a time.  We have received reports of young people who have been held in solitary confinement for up to 23 hours a day, often with no human interaction at all.  In some cases, children were held in small rooms with windows that were barely the width of their own hands.

“This is, to say the least, excessive.  And these episodes are all too common.

“This practice is particularly detrimental to young people with disabilities – who are at increased risk under these circumstances of negative effects including self-harm and even suicide.  In fact, one national study found that half of the victims of suicides in juvenile facilities were in isolation at the time they took their own lives, and 62 percent of victims had a history of solitary confinement. 

“Let me be clear, there may be times when it becomes necessary to remove a detained juvenile from others in order to protect staff, other inmates, or the juvenile himself from harm.  However, this action should be taken only in a limited way where there is a valid reason to do so, and for a limited amount of time; isolated juveniles must be closely monitored, and every attempt must be made to continue educational and mental health programming while the youth is in isolation. 
“At a minimum, we must work to curb the overreliance on seclusion of youth with disabilities.  And at the Department of Justice, we are committed to working with states to do this going forward.

“We must ensure in all circumstances – and particularly when it comes to our young people – that incarceration is used to rehabilitate, and not merely to warehouse and forget.  Our nationwide effort to end the unnecessary or excessive seclusion of youth with disabilities will not be completed solely with one settlement or court filing.  But as a department, we are dedicated – and as Attorney General, I am committed – to doing everything possible to ensure the effectiveness and integrity of our criminal and juvenile justice system.  In the days ahead, we will continue to make good on our commitment to the best practices of law enforcement and the highest ideals of our nation.”

The full video message is available at http://www.justice.gov/agwa.php. 

Attorney General Eric Holder and Department of Health and Human Services (HHS) Secretary Kathleen Sebelius announced today that a nationwide takedown by Medicare Fraud Strike Force operations in six cities has resulted in charges against 90 individuals, including 27 doctors, nurses and other medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $260 million in false billings.

Attorney General Holder and Secretary Sebelius were joined in the announcement by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, FBI Assistant Director Joseph Campbell, U.S. Department of Health and Human Services (HHS) Inspector General Daniel R. Levinson and Deputy Administrator and Director of the Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity Shantanu Agrawal.

This coordinated takedown is the seventh national Medicare fraud takedown in Strike Force history. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since their inception in March 2007, Strike Force operations in nine locations have charged almost 1,900 defendants who collectively have falsely billed the Medicare program for almost $6 billion.  In addition, CMS, working in conjunction with HHS-OIG, has suspended enrollments of high-risk providers in five Strike force locations and has removed over 17,000 providers from the Medicare program since 2011.

The joint Department of Justice and HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. Almost 400 law enforcement agents from the FBI, HHS-OIG, multiple Medicaid Fraud Control Units and other federal, state and local law enforcement agencies participated in the takedown.

“Medicare is a sacred compact with our nation’s seniors, and to protect it, we must remain aggressive in combating fraud,” said Attorney General Holder. “This nationwide Medicare Strike Force takedown represents another important step forward in our ongoing fight to safeguard taxpayer resources and to ensure the integrity of essential health care programs. Department of Justice will not tolerate these activities.  And we will continue working alongside the Department of Health and Human Services – as well as federal, state, and local partners – to use every appropriate tool and available resource to find, stop, and punish those who seek to take advantage of their fellow citizens.”

“The Affordable Care Act has given us additional tools to preserve Medicare and protect the tens of millions of Americans who rely on it each day,” said Secretary Sebelius.  “By expanding our authority to suspend Medicare payments and reimbursements when fraud is suspected, the law allows us to better preserve the system and save taxpayer dollars.  Today we’re sending a strong, clear message to anyone seeking to defraud Medicare: You will get caught and you will pay the price. We will protect a sacred trust and an earned guarantee.”

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to commit health care fraud, violations of the anti-kickback statutes and money laundering. The charges are based on a variety of alleged fraud schemes involving various medical treatments and services, including home health care, mental health services, psychotherapy, physical and occupational therapy, durable medical equipment and pharmacy fraud.

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and often never provided. In many cases, court documents allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare for services that were medically unnecessary or never performed. Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of conspiring to submit approximately $260 million in fraudulent billings.

“Today, across the nation, scores of defendants were arrested for engaging in hundreds of millions of dollars in health care fraud,” said Acting Assistant Attorney General O’Neil.  “Among the defendants charged were 27 medical professionals, including 16 doctors. The crimes charged represent the face of health care fraud today – doctors billing for services that were never rendered, supply companies providing motorized wheelchairs that were never needed, recruiters paying kickbacks to get Medicare billing numbers of patients.  The fraud was rampant, it was brazen, and it permeated every part of the Medicare system.  But law enforcement continues to strike back.  Using cutting-edge, data-driven investigative techniques, we are bringing fraudsters to justice and saving the American taxpayers billions of dollars.  Overall, since its inception, the Department of Justice’s Medicare Fraud Strike Force has charged nearly 1,900 individuals involved in approximately $6 billion of fraud.  We are committed to using every tool at our disposal to prevent, deter, and prosecute health care fraud.”

“We all feel the effects of health care fraud,” said FBI Assistant Director Campbell.  “It leads to higher health care costs and makes it harder for seniors and those who are ill to get the care they need.  The FBI and our law enforcement partners are committed to preventing and prosecuting health care fraud at all levels.  But we need the public’s help.  Take the time to be aware of fraud and call law enforcement if you see anything suspicious included in the billings to your insurance, Medicare, or Medicaid or have any unusual encounters with health care providers.  We can work together to ensure your hard-earned dollars are used to care for the sick and not to line the pockets of criminals.”

“ Today's arrests demonstrate the effectiveness of our Strike Forces in combating Medicare and Medicaid fraud,” said HHS Inspector General Levinson.  “Through seamless teamwork, our agents and law enforcement partners bring lawbreakers to justice, protect beneficiaries and recover stolen taxpayer funds.”

“ Fraud can inflict real harm on Medicare beneficiaries and CMS is committed to working with our law enforcement partners to get criminals behind bars and out of the Medicare program as swiftly as possible,” said CMS Program Integrity Deputy Administrator Agrawal. “Today’s actions represent further consequences for bad actors, many of whom CMS had already stopped paying, or even kicked out of the program. Fundamentally, this is about protecting the well-being of our beneficiaries and the investment of taxpayer dollars.”

In Miami, a total of 50 defendants were charged today and yesterday for their alleged participation in various fraud schemes involving approximately $65.5 million in false billings for home health care and mental health services, and pharmacy fraud. In one case, two defendants were charged in connection with a $23 million pharmacy kickback and laundering scheme. Court documents allege that the defendants solicited kickbacks from a pharmacy owner for Medicare beneficiary information, which was used to bill for drugs that were never dispensed. The kickbacks were concealed as bi-weekly payments under a sham services contract and were laundered through shell entities owned by the defendants.

Eleven individuals were charged by the Houston Medicare Strike Force. Five Houston-area physicians were charged with conspiring to bill Medicare for medically unnecessary home health services. According to court documents, the defendant doctors were paid by two co-conspirators to sign off on home health care services that were not necessary and often never provided.

Eight defendants were charged in Los Angeles for their roles in schemes to defraud Medicare of approximately $32 million. In one case, a doctor was charged for causing almost $24 million in losses to Medicare through his own fraudulent billing and referrals for durable medical equipment, including over 1,000 expensive power wheelchairs, and home health services that were not medically necessary and frequently not provided.

In Detroit, seven defendants were charged for their roles in fraud schemes involving approximately $30 million in false claims for medically unnecessary services, including home health services, psychotherapy and infusion therapy. In one case, four individuals, including a doctor, were charged in a sophisticated $28 million fraud scheme, where the physician billed for expensive tests, physical therapy and injections that were not necessary and not provided. Court documents allege that when the physician’s billings raised red flags, he was put on payment review by Medicare. He was allegedly able to continue his scheme and evade detection by continuing to bill using the billing information of other Medicare providers, sometimes without their knowledge.

In Tampa, Florida, seven individuals were charged in a variety of schemes, ranging from fraudulent physical therapy billings to a scheme involving millions of dollars in physician services and tests that never occurred . In one case, five individuals were charged for their alleged roles in a $12 million health care fraud and money laundering scheme that involved billing Medicare using names of beneficiaries from Miami-Dade County for services purportedly provided in Tampa area clinics, 280 miles away.  The defendants then allegedly laundered the proceeds through a number of transactions involving several shell entities.

In Brooklyn, New York, the Strike Force announced an indictment against Syed Imran Ahmed, M.D., in connection with his alleged $85 million scheme involving billings for surgeries that never occurred; Dr. Ahmed had been arrested last month and charged by complaint. Dr. Ahmed has charged with health care fraud and making false statements. In addition, the Brooklyn Strike Force charged six other individuals, including a physician and two billers who allegedly concocted a $14.4 million scheme in which they recruited elderly Medicare beneficiaries and billed Medicare for medically unnecessary vitamin infusions, diagnostic tests and physical and occupational therapy supposedly provided to these patients.

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, the Eastern District of Michigan, the Eastern District of New York, the Southern District of Texas, the Central District of California, the Middle District of Louisiana, the Northern District of Illinois and the Middle District of Florida; and agents from the FBI, HHS-OIG and state Medicaid Fraud Control Units.

A complaint or indictment is merely an accusation, and defendants are presumed innocent unless and until proven guilty.

To learn more about HEAT, go to: www.stopmedicarefraud.gov .

Court documents associated with this press release are available at: http://www.justice.gov/opa/mfsf-pc-2014. html

 

Officials from the Justice Department, Health and Human Services and other law enforcement partners will hold a press conference TODAY, TUESDAY, MAY 13, 2014, at 2:00 p.m. EDT, to announce Medicare Fraud Strike Force law enforcement actions in Miami and throughout the nation.

WHO:             David A. O’Neil, Acting Assistant Attorney General of the Criminal

Division

Wifredo A. Ferrer, U.S. Attorney for the Southern District of Florida

Tyler Smith, Assistant Inspector General of the HHS Office of Inspector General (HHS-OIG)

George Piro, Special Agent in Charge for FBI’s Miami Division

Shantanu Agrawal M.D., Deputy Administrator and Director for Centers for Medicare & Medicaid Services (CMS) Center for Program Integrity

James Mann, Deputy Director of the Medicaid Fraud Control Unit for the Florida Attorney General’s Office

 

WHAT:          Press conference announcing Medicare Fraud Strike Force actions

 

WHEN:          TODAY, TUESDAY, MAY 13, 2014

              2:00 p.m. EDT

 

WHERE:        United States Attorney’s Office

Southern District of Florida

Second Floor, Media Room

99 N.E. 4th Street

Miami FL 33132                                                                 

                        OPEN PRESS

 

NOTE:  All media must present government-issued photo I.D. (such as driver’s license) as well as valid media credentials. Press inquiries regarding logistics should be directed to Annette Castillo at (305) 961-9100.

 

The Department of Justice today announced the federal government’s first lawsuit filed against owners and servicers of student loans for violating the rights of servicemembers eligible for benefits and protections under the Servicemembers Civil Relief Act (SCRA).  The United States’ complaint alleges that three defendants, collectively known as Sallie Mae, engaged in a nationwide pattern or practice, dating as far back as 2005, of violating the SCRA by failing to provide members of the military the six percent interest rate cap to which they were entitled.  The three defendants are Sallie Mae Inc. (now known as Navient Solutions Inc.), SLM DE Corporation (now known as Navient DE Corporation), and Sallie Mae Bank.  The complaint further alleges that defendants Sallie Mae Inc. and SLM DE Corporation also violated the SCRA by improperly obtaining default judgments against servicemembers. 

In addition to the complaint, the department filed a proposed settlement of the lawsuit which will require Sallie Mae to pay $60 million to compensate servicemembers for the alleged SCRA violations.  The department estimates that about 60,000 servicemembers will receive compensation under the settlement.  The settlement and complaint have been filed in the U.S. District Court for the District of Delaware and the settlement is pending approval in that court.

 

The proposed settlement covers the entire portfolio of student loans serviced by, or on behalf of, Sallie Mae.  This includes private student loans, direct Department of Education loans and student loans that originated under the Federal Family Education Loan Program.  The proposed settlement is far-reaching, with certain sevicemembers to be compensated for violations of the SCRA that occurred almost a decade ago.

 

In addition to the $60 million in compensation, the proposed settlement contains several other key provisions to ensure that servicemembers are protected going forward.  Sallie Mae must request that all three major credit bureaus delete negative credit history entries caused by the interest rate overcharges and improper default judgments.  Going forward, Sallie Mae is required to streamline the process by which servicemembers may notify Sallie Mae of their eligibility for SCRA benefits.  The revised process will include an SCRA online intake form for servicemembers, and the availability of customer service representatives specially trained on the rights of those in military service.  It also requires Sallie Mae to pay the United States a civil penalty of $55,000. 

 

“Federal law protects our servicemembers from having to repay loans under terms that are unaffordable or unfair,” said Attorney General Eric Holder.  “That is the least we owe our brave servicemembers who make such great sacrifices for us.  But as alleged, the student lender Sallie Mae sidestepped this requirement by charging excessive rates to borrowers who filed documents proving they were members of the U.S. military.  By requiring Sallie Mae to compensate its victims, we are sending a clear message to all lenders and servicers who would deprive our servicemembers of the basic benefits and protections to which they are entitled: this type of conduct is more than just inappropriate; it is inexcusable.  And it will not be tolerated.”

 

“Our men and women in uniform who are called to active duty should not be subjected to additional red tape to receive the benefits they’re entitled to for serving their country,” said U.S. Education Secretary Arne Duncan.  “What's more, every student who has taken out a federal student loan should have the peace of mind that the department's servicers are following the law and treating all borrowers fairly.  Federal student loans are a critical part of helping every American find the clearest path to the middle class through a higher education, so we must do everything we can to ensure quality customer service for every borrower.”

 

“Our brave men and women in the military should not have to worry about receiving the benefits the SCRA provides,” said Jocelyn Samuels, Acting Assistant Attorney General for the Civil Rights Division.  “The Justice Department continues to enforce vigorously the laws that protect service members while they do their difficult and necessary work.”

 

“I applaud the work of the Department of Justice and all the agencies whose joint cooperation made this settlement possible,” said U.S. Attorney Charles M. Oberly III for the District of Delaware.  “The least we can do for our brave men and women who sacrifice so much to preserve our freedom is to see that they are afforded the benefits they are lawfully entitled to.”

 

 The department’s settlement is the result of a joint effort with the Department of Education, the Federal Deposit Insurance Corporation (FDIC), and the Consumer Financial Protection Bureau (CFPB).  The department’s investigation of Sallie Mae was the result of a referral of servicemember complaints from the CFPB’s Office of Servicemember Affairs, headed by Holly Petraeus.  The Department of Justice worked closely with the Department of Education during the investigation to ensure that aggrieved servicemembers with federally owned and federally guaranteed student loans would be fully compensated, and be able to receive the SCRA benefit of a reduced six percent interest rate through a streamlined process going forward.  In addition, the FDIC today announced its own important settlement with Sallie Mae in an effort to ensure protections for those who protect this country.

 

The settlement provides for an independent administrator to locate victims and distribute payments of compensation at no cost to borrowers whom the department identifies as victims.  The department will make a public announcement and post information on its website once more details about the compensation process become available.  Borrowers who are eligible for compensation from the settlement will be contacted by the administrator, and do not need to contact the department at this time. 

 

The department’s recent SCRA enforcement actions include negotiated agreements with the nation’s five largest home mortgage loan servicers as part of the National Mortgage Settlement, a historic agreement between the United States, 49 state attorneys general, the District of Columbia and the five servicers.  The department has also obtained major settlements against other lenders and servicers for conducting improper mortgage foreclosures and auto repossessions and for failing to grant the six percent interest rate benefit to SCRA-protected servicemembers.

 

The Civil Rights Division is the component within the Department of Justice authorized to enforce the SCRA.  This federal law provides protections for active duty servicemembers in areas such as evictions, rental agreements, security deposits, prepaid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments.  For more information about SCRA enforcement by the Justice Department, please visit www.servicemembers.gov or call 1-800-896-7743.

Late yesterday, a federal jury in the Northern District of Texas convicted a physician and a home health agency manager for their participation in a $3 million Medicare fraud conspiracy.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Sarah R. Saldaña of the Northern District of Texas, Special Agent in Charge Diego Rodriguez of the FBI Dallas Division and Special Agent in Charge Mike Fields of the Dallas office of the Health and Human Services Office of Inspector General (HHS-OIG) Office of Investigations made the announcement.

Joseph Megwa, M.D., and Ebolose Eghobor, R.N., were convicted of one count of conspiracy to commit health care fraud, and Megwa was convicted of three substantive counts of health care fraud. Eghobor was acquitted of the three substantive health care fraud counts brought against him. The home health care charges related to a scheme involving PTM Healthcare Services Inc. (PTM), which was owned and operated by Ferguson Ikhile, R.N. Ikhile pleaded guilty in 2013 to conspiracy to commit health care fraud.

According to evidence presented at trial, from approximately 2006 to 2011, PTM recruited Medicare beneficiaries so that PTM could bill Medicare for unnecessary home health services. Ikhile, Eghobor and others then prepared fraudulent medical records that made it appear that the beneficiaries needed home health services. In exchange for cash payments, Megwa, who owned and operated Raphem Medical Practice P.A., falsely certified that the beneficiaries needed home health services and that the services otherwise qualified for payment under Medicare.

Megwa was also convicted of four counts of making false statements related to a health care benefit program based on his submission of false claims to Medicare for home visits or house calls to patients that he never actually made.

The investigation was led by the FBI, HHS-OIG and the Medicaid Fraud Control Unit of the Office of the Texas State Attorney General and was brought by the Medicare Fraud Strike Force, a joint effort of the U.S. Attorney’s Office for the Northern District of Texas and the Criminal Division’s Fraud Section. The case was prosecuted by Deputy Chief Jeffrey A. Goldberg and Trial Attorney Allan J. Medina 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 more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

 

Attorney General Eric Holder and Secretary of Education Arne Duncan will hold a press conference to announce a major law enforcement action to protect military servicemembers from unfair lending practices. TODAY, TUESDAY, MAY 13, 2014, at 1:15 P.M. EDT.

 

WHO:                Attorney General Eric Holder           

                                 Secretary of Education Arne Duncan

           

WHAT:               Press conference to announce law enforcement action to protect military servicemembers from unfair lending practices.

 

WHEN:                   TODAY, TUESDAY, MAY 13, 2014

                                                1:15 p.m. EDT

 

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 by 12:55 p.m. EDT. Media may begin arriving at 12:15 p.m. EDT and cameras must be pre-set by 12:55 p.m. EDT. Press inquiries regarding logistics should be directed to the Office of Public Affairs at 202-514-2007 or email [email protected].

Three individuals who pleaded guilty to conspiracy to commit mail fraud in connection with operating a series of fraudulent business opportunity companies were sentenced in the United States District Court for the Southern District of Florida.  Robert Gallo (aka Bobby Pace, Vincent Pastone, Joe Barone, Bobby Marino, Anthony Russo), of Coconut Creek, Fla., and Mitchell Berman (aka Brian Griffin), of Boca Raton, Fla., were sentenced on Friday to 120 months and 78 months imprisonment, respectively.  Steven Axelrod (aka Michael Hutton), of Wellington, Fla., was sentenced to 15 months imprisonment.  

 

“These sentences reflect the Department of Justice’s continued commitment to protecting consumers from fraud schemes,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “Those who violate court orders and who seek to deprive innocent, hardworking Americans of their hard-earned money will be held accountable.”

 

The defendants operated a series of fraudulent companies that sold coffee display rack business opportunities.  These business opportunities, as advertised by the defendants to potential purchasers, consisted of the following:  bags of coffee, display racks in which to place the coffee, profitable locations for the display racks, assistance in placing the display racks in profitable locations, and other customer services.

 

Berman and Gallo, with Axelrod as salesman, operated the first company in approximately 1999, leading to a December 2000 federal court order barring Berman, the company, and its successors from misrepresenting profits, locations, and other aspects of business opportunities.  Over the course of the next twelve years, beginning in August 2000 and continuing through October 2011, the defendants opened and closed five more iterations of the same company: Selective Services Business, Best Gourmet Coffee, Cambridge Coffee, Royal Gourmet Coffee, and South Beach Coffee.  They sold business opportunities for a minimum of approximately $10,000.  In order to evade detection, all the defendants used aliases and gave out false addresses for the companies.  According to the indictment, Berman and Gallo also avoided listing their own names on corporate and promotional documents, and instead paid people who did not work at the companies to be titular presidents.  They operated each company for six months to a year, shutting down when purchasers began complaining, only to reopen again after a period of time.  

 

In selling these business opportunities, all three defendants made numerous false statements to potential purchasers of the business opportunities to induce them to buy.  Among the misrepresentations are that purchasers would likely earn substantial profits, that prior purchasers of the business opportunities were earning substantial profits, that purchasers would be given lucrative “commercial accounts,” and that the company would provide assistance in establishing and maintaining the business.  According to the indictment, purchasers made little to no money on their investments, were unable to find profitable locations or accounts, and were not provided the support promised by defendants.  In making misrepresentations to potential purchasers, Berman was also violating a 2000 federal court order.

 

The matter was handled by the Department of Justice’s Consumer Protection Branch with the investigative efforts of the Postal Inspection Service.  The case was prosecuted by Trial Attorneys Cindy Cho and Christopher Parisi of the Consumer Protection Branch of the Civil Division of the Department of Justice.  

WASHINGTON – Samuel K. Crocker, the U.S. Trustee for Kentucky and Tennessee (Region 8), has been designated by Attorney General Eric Holder also to serve as the U.S. Trustee for Kansas, Oklahoma and New Mexico (Region 20) for an interim period beginning today, the Executive Office for U.S. Trustees announced today. He replaces Richard A. Wieland, who has served as U.S. Trustee for Region 20 since January 2008.

Mr. Crocker was appointed as Region 8 U.S. Trustee in July 2011. Prior to that appointment, he was engaged in the private practice of law in Nashville, Tennessee, for more than 25 years. During that time he also served on the panel of chapter 7 trustees in the Middle District of Tennessee and as a trustee in numerous chapter 11 cases. Mr. Crocker has argued cases before the Fifth, Sixth and Eleventh Circuit Courts of Appeal. As an authority on consumer bankruptcy and trustee-related matters, he has written extensively and spoken frequently at bankruptcy seminars and training programs around the country and advises the U.S. Trustee Program (USTP) on national policy on those matters. Mr. Crocker received his law degree from the University of Mississippi School of Law in Oxford, Mississippi, and his Bachelor of Arts degree from Vanderbilt University in Nashville.

The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 93 field office locations. Region 20 is headquartered in Wichita, Kansas, with additional offices in Oklahoma City and Albuquerque, New Mexico.

Contact:

Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411

A former private security guard was sentenced in the District of Puerto Rico today for his role in providing armed security for a drug transaction.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodriguez-Velez of the District of Puerto Rico and Special Agent in Charge Carlos Cases of the FBI’s San Juan Field Office made the announcement.

Ricardo Amaro-Santiago, 41, of Guaynabo, Puerto Rico, was sentenced to serve 15 years in prison by U.S. District Judge Gustavo A. Gelpi.

Amaro-Santiago was charged in an indictment unsealed on Oct. 6, 2010, along with 89 law enforcement officers in Puerto Rico and 44 other individuals, as part of the FBI undercover operation known as Guard Shack.

According to the indictment and information presented in court, in May 2010, Amaro-Santiago provided security for what he believed was an illegal drug deal, but which in fact was part of the undercover FBI operation. Amaro-Santiago was employed as a private security guard but posed as a Puerto Rico police officer during the transaction. Amaro-Santiago was brought into the scheme by a co-defendant who was a police officer in Puerto Rico. In return for the security he provided, Amaro-Santiago received a cash payment of $1,000, which the court today ordered that he forfeit as part of his sentence.

The case was investigated by the FBI and was prosecuted by Trial Attorneys Marquest J. Meeks and Tracee Plowell of the Public Integrity Section in the Justice Department’s Criminal Division and the U.S. Attorney’s Office for the District of Puerto Rico.

 

WASHINGTON – Patrick S. Layng, the U.S. Trustee for the Northern District of Illinois and the Eastern and Western Districts of Wisconsin (Region 11), has been designated by Attorney General Eric Holder also to serve as the U.S. Trustee for Colorado, Utah and Wyoming (Region 19) for an interim period beginning today, the Executive Office for U.S. Trustees announced today. He replaces Richard A. Wieland, who has served as interim U.S. Trustee in the region since July 2011.

Mr. Layng was appointed as Region 11 U.S. Trustee in December 2010. Prior to that appointment, he served as a Regional Criminal Coordinator for the U.S. Trustee Program (USTP) for six years, an Assistant U.S. Attorney in the Northern District of Illinois for more than 14 years, and a law clerk to the Honorable Stanley J. Roszkowski, U.S. District Court, Northern District of Illinois (retired). During his career, Mr. Layng has tried approximately 40 federal criminal trials and argued 14 cases before the U.S. Court of Appeals for the Seventh Circuit. While serving in the USTP, he has also led multi-regional trial teams in complex civil cases involving improper actions by major financial institutions and professional firms. Mr. Layng received his law degree cum laude from the University of Illinois Urbana-Champaign Law School and his undergraduate degree magna cum laude from the University of Illinois Urbana-Champaign College of Commerce.

The U.S. Trustee Program is the component of the Justice Department that protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. The USTP has 21 regions and 93 field office locations. Region 19 is headquartered in Denver with additional offices in Salt Lake City and Cheyenne, Wyoming.

Contact:

Jane Limprecht, Public Information Officer
Executive Office for U.S. Trustees
(202) 305-7411

A Minnesota man who worked at Kadena Air Force Base in Okinawa, Japan, was indicted today in the District of Minnesota on charges of sexual abuse, production of child pornography and possession of child pornography.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Andrew M. Luger of the District of Minnesota, Executive Assistant Director John F. Wagner of the Naval Criminal Investigative Service’s (NCIS) Pacific Operations and Special Agent in Charge J. Chris Warrener of the FBI’s Minneapolis Field Office made the announcement.

According to the indictment, Ricky Isiah Sherwood, 18, of White Bear Lake, Minnesota, an employee on Kadena Air Force Base and a dependent of a military member, sexually assaulted a minor on the base on or about Feb. 11, 2014, and filmed parts of the assault using his cellular phone.

The Military Extraterritorial Jurisdiction Act gives U.S. federal courts jurisdiction over felonies committed abroad by certain persons employed by or accompanying the U.S. Military.

On May 7, 2014, Sherwood was arrested on a complaint at Kadena Air Force Base and made an initial appearance via telephone before Magistrate Judge Tony Leung in the District of Minnesota. The court ordered that Sherwood be detained and removed from Japan to the United States.

This case is being investigated by the NCIS and the FBI. This case is being prosecuted by Trial Attorney Ann Marie Ursini of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Katharine Buzicky of the District of Minnesota.

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

 

The Justice Department announced today that it will monitor elections on May 13, 2014, in Colfax and Douglas Counties, Nebraska, 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 Colfax 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 Douglas County.  A Civil Rights Division attorney 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.

Sybil Marshall Coles, 45, of Pamplin, Virginia, was sentenced today to serve five years in prisonfor aggravated identity theft and preparing a false tax return, announced Assistant Attorney General Kathryn Keneally for the Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia and Attorney General of Virginia Mark R. Herring.  On Jan. 28, 2014, Coles pleaded guilty to a two count criminal information.  Coles was also ordered to one year of supervised release and to pay $949,273 in restitution.

 

According to court documents and evidence from her sentencing, Coles was an employee at the Virginia Department of Social Services in Nottoway County.  From both her work and personal computers, Coles prepared and filed at least 222 false federal income tax returns claiming false refunds based on fictitious itemized deduction expenses and fictitious Schedule C businesses that reported losses, among other items, which resulted in a tax loss to the U.S. Treasury of at least $949,000.  Coles also prepared and filed false Commonwealth of Virginia tax returns. 

 

According to court documents, Coles used family members and friends to recruit individuals for whom she prepared tax returns.  She also prepared returns for herself, family members, friends and colleagues.  Coles used bank accounts in the name of another family member to conceal the activities and proceeds of the false return scheme.  As part of the scheme, Coles stole identities of taxpayers for whom she had prepared returns and used their information on other returns to claim fictitious childcare expenses.  In addition, after the criminal investigation began, Coles asked certain individuals to tell Internal Revenue Service (IRS) investigators that someone else prepared their tax returns.

 

The case was prosecuted by Tax Division Trial Attorney and Special Assistant U.S. Attorney Rebecca Perlmutter and Assistant Attorney General and Special Assistant U.S. Attorney Michael Jagels.  IRS-Criminal Investigation in Richmond, Virginia, investigated the case.      

A former New York-based tax liens company executive pleaded guilty today for his role in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of tax liens, the Department of Justice announced.

 
Vinaya K. Jessani, of New York City, entered a guilty plea in the U.S. District Court for the District of New Jersey in Newark to felony charges filed today. Under the plea agreement, Jessani has agreed to cooperate with the department’s ongoing investigation.

 
According to the charge, from at least as early as 1994 until as late as February 2009, Jessani, a former senior vice president who supervised the purchasing of municipal tax liens at auctions in New Jersey for the company he worked for, participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to, and instructing others to, allocate among certain bidders which liens each would bid on. The department said that Jessani and those under his supervision submitted bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

           
“Today’s guilty plea demonstrates the Antitrust Division’s continuing effort to prosecute those who manipulate the competitive process in order to harm home and property owners,” said Brent Snyder, Deputy Assistant Attorney General for the Antitrust Division’s criminal enforcement program. “The division will continue to be vigilant in rooting out conspiracies that harm already distressed property owners.”

 
The department said that the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates. When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes. If the taxes remain unpaid after a waiting period, the lien may be sold at auction. New Jersey state law requires that investors bid on the interest rate delinquent property owners will pay upon redemption. By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent. If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.

 
According to court documents, the conspiracy permitted the conspirators to purchase tax liens with limited competition and each conspirator was able to obtain liens which earned a higher interest rate. Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

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

 

Today’s plea is the 15th guilty plea resulting from an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions. Including Jessani, 12 individuals and three companies have pleaded guilty. Additionally, four individuals and two entities have been indicted for their roles in the conspiracy to rig bids at tax lien auctions.

 

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

This ongoing investigation is being conducted by the Antitrust Division’s New York Office and the FBI’s Atlantic City, N.J., office.  Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.

The Department of Justice Civil Rights Division today released its accomplishments report for 2013.  This report supplements the division’s first accomplishments report , issued last year, on the division’s work during the first four years of Attorney General Eric Holder’s leadership.  In the division’s 57th year, its substantial caseload reflects the persistence of civil rights challenges that create barriers to equality and freedom.  But in 2013, the division continued to set new records for numbers of cases and to reach first-of-their-kind agreements in a number of areas.  Through its enforcement efforts, the division works to fight discrimination and protect the civil and constitutional rights of people across the country.  

The division’s 2013 accomplishments report highlights its work to advance three core principles: expanding opportunity for all, safeguarding the fundamental infrastructure of democracy and protecting the most vulnerable among us.

 

“Last year, the Civil Rights Division worked to safeguard the most fundamental rights of American democracy, to extend the promise of equality and opportunity, and to advance the cause of justice that has defined this country since its earliest days,” said Attorney General Holder.  “I commend the dedicated men and women of the Civil Rights Division for their leadership on these critical efforts.  Their work is exemplary and in many cases groundbreaking.  It goes to the heart of who we are as a nation and as a people.  And that’s why it continues to be a top priority for this Department of Justice: because we are, and will always be, firmly committed to overcoming persistent threats as well as new challenges in order to ensure equal justice under law.”

 

“Over the course of 2013, the Civil Rights Division continued the impressive track record it initiated during the first four years of Attorney General Holder’s leadership,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “But for all that the division has accomplished, much work remains.  The division remains committed to meeting the next generation of civil rights challenges and to combating discrimination in all its forms.  We look forward to an even more productive 2014.”   

Expanding opportunity for all

 

The division’s efforts to ensure equal access to education, housing, consumer credit and employment continue to set new records and to pioneer new models for bringing equal opportunity to all.  For example, working with the Consumer Finance Protection Bureau, the division reached its largest ever auto lending settlement when Ally Bank and Financial Inc. agreed to pay $98 million for pricing discrimination in its automobile lending practices.  The settlement provided $80 million in direct relief to African-American, Hispanic and Asian/Pacific Islander borrowers who were charged higher interest rate markups on auto loans than white borrowers.  The division has obtained more than $800 million in monetary relief in fair lending settlements since the unit was founded in 2010.

 

Ahead of this year’s 60th anniversary of the landmark Supreme Court decision Brown v. Board of Education, in 2013, the division launched new tools and entered into agreements to address racial disparities in education systems across the country.  After an investigation into disciplinary practices in the Meridian, Mississippi, public school system, the division found that black students frequently received far harsher disciplinary consequences, including arrests and incarceration, than white students for comparable and often minor misbehavior.  The department entered into a landmark settlement with the Meridian school system that will create a discipline system that treats all students equally regardless of race.  Also, to help all school districts administer discipline fairly and consistently, the division, along with the Department of Education, issued a groundbreaking joint discipline guidance for schools to prevent and address racial discrimination in school discipline.  This guidance, along with its additional technical assistance material, provides important information on the means by which schools can act to dismantle the school-to-prison pipeline.

 

The division continues its efforts to eliminate unnecessary segregation of persons with disabilities and to ensure that individuals with intellectual and developmental disabilities are given the opportunity to participate fully in their communities, in accordance with the Supreme Court’s decision in Olmstead v. L.C.  In 2013, the division investigated Training Thru Placement (TTP), one of the largest facility-based employment service providers in Rhode Island, and a sheltered workshop in a Providence high school.  The division found that workers with intellectual and developmental disabilities typically remained at TTP for decades, earning sub-minimum wages, and that the high school workshop acted as a pipeline to TTP.  The department’s investigation found that the workers with disabilities at TTP were not in the most integrated setting appropriate for them; rather, they were capable of working in real jobs with supports and participating in activities in the community.  The division entered into an interim agreement with the state of Rhode Island and the Providence Public School District regarding TTP and the school-based workshop and expanded its investigation to all state-funded employment and day facilities to address the rights of people with disabilities to receive state employment and daytime services in the broader community, rather than in segregated sheltered workshops and facility-based day programs.  Since 2009, the division’s Olmstead enforcement work has helped protect the rights of more than 46,000 people with disabilities.

 

T he division also continues to aggressively enforce the Uniformed Services Employment and Reemployment Rights Act (USERRA), ensuring that servicemembers returning from active duty are not penalized by their civilian employers.  The division’s USERRA program is critically important because USERRA cases typically involve small amounts of back pay; without the division’s help, many servicemembers would not be able to find or afford private attorneys to take their cases.  In Forsyth County, North Carolina, for example, the division reached an agreement to vindicate the employment rights of an Army National Guard soldier who was discharged from his job as a sheriff without cause less than a year after completing a deployment to Iraq.

 

Finally, the division collected a record in civil penalties, nearly $900,000, through its enforcement of the Immigration and Nationality Act (INA), which prohibits citizenship status and national origin discrimination in hiring, firing or recruitment or referral for a fee, document abuse and retaliation or intimidation.  The division also collected more in back pay than in any year in the past 10 years and settled major cases involving discriminatory documentary practices by Macy’s and Centerplate.  

Safeguarding the fundamental infrastructure of democracy  

In the wake of the Supreme Court’s decision in Shelby County v. Holder, the division continues to use all of the tools still available in the Voting Rights Act (VRA) to ensure that all Americans can cast a ballot free from racial discrimination.  In 2013, the department filed three complaints under the VRA to protect the rights of minority voters in Texas and North Carolina to challenge discriminatory voting laws; each of these challenges alleges that these state laws were enacted with discriminatory intent.

 

The division also expanded its record number of agreements with law enforcement agencies by entering into model agreements with the University of Montana Office of Public Safety and the Missoula Police Department to ensure that police services are delivered without discrimination, that sex crimes are fully and adequately investigated and that victims are treated fairly and with respect after an investigation found systemic failures to protect women victims of sexual assault. 

 

During Fiscal Year 2013, the division’s Courts Language Access Initiative worked with the court systems in 17 states to ensure that individuals are not denied access to important court proceedings because of their national origin and their limited English proficiency.  Access to state courts is critically important.  Whether cases involve child custody, domestic violence, foreclosure, wage claims or criminal prosecution, the stakes are too high in the courtroom context for parties or witnesses to be effectively excluded from participation.                                                   

Protecting the most vulnerable among us

 

The division prosecutes crimes to ensure protections for some of the most vulnerable populations in the country: those who are abused and trafficked for sex work or labor; those who are attacked out of hate due to the color of their skin, where they worship or who they love.  The division and its partners in the U.S. Attorneys’ Offices across the country filed 141 federal criminal civil rights cases, obtaining convictions of 166 defendants, in Fiscal Year 2013 –more than in any previous year in the division’s history.

 

For example, the division convicted 23 defendants on federal hate crimes charges – building on the division’s record in Fiscal Years 2009-2012, in which the division convicted 74 percent more individuals than in the preceding four years.  The division’s Appellate Section also defended the constitutionality of the Matthew Shepard and James Byrd Jr. Hate Crime Prevention Act in court.  Through its Human Trafficking Prosecution Unit, the division and its partners in the U.S. Attorneys’ Offices also brought 71 human trafficking cases, the most in the history of the division.  The division also brought 53 cases involving sex trafficking, a 55 percent increase over the previous year, and obtained convictions of 90 individuals for trafficking crimes.  

 

The division also works to develop policy and legislative proposals to close the gaps in our nation’s civil rights protections.  This year, the division provided technical assistance on numerous legislative initiatives, including the reauthorization of the Violence Against Women Act and the Employment Non-Discrimination Act.

 

For more information about the Civil Rights Division, visit the division website.

James M. Cole, the Deputy Attorney General of the Department of Justice, Kathryn Keneally, the Assistant Attorney General for the Tax Division of the Department of Justice, Preet Bharara, the United States Attorney for the Southern District of New York, and Richard Weber, the Chief of the Internal Revenue Service, Criminal Investigation (IRS-CI), announced today that swisspartners Investment Network AG, a Swiss-based asset management firm, and three of its wholly-owned subsidiaries (collectively, the Swisspartners Group), entered into a non-prosecution agreement (NPA) with the U.S. Attorney’s Office for the Southern District of New York and agreed to pay $4.4 million to the United States. The NPA was entered into based on, among other things, the Swisspartners Group’s remedial measures, voluntary self-reporting and extraordinary cooperation, including its voluntary production of approximately 110 client files for non-compliant U.S.-taxpayer clients, and provides that the Swisspartners Group will not be criminally prosecuted for assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts from in or about 2001 through in or about 2011. The NPA requires the Swisspartners Group to forfeit $3.5 million to the United States, representing certain fees that it earned by assisting its U.S. taxpayer-clients in opening and maintaining these undeclared accounts, and to pay $900,000 in restitution to the IRS, representing the approximate amount of unpaid taxes arising from the tax evasion by the Swisspartners Group’s U.S. taxpayer-clients. The NPA applies only to the four specific entities that are party to it and does not apply to any other subsidiaries of swisspartners Investment Network AG or any individuals.

“The extraordinary cooperation of Swisspartners has enabled us to identify U.S. tax cheats who have hidden behind phony offshore trusts and foundations,” said Deputy Attorney General Cole . “In this and other cases around the world, we will continue to provide substantial credit for prompt and full cooperation.”

“As today’s announcement shows, we receive information about U.S. taxpayers with undisclosed accounts from many sources, some of which are not public,” said Assistant Attorney General Keneally. “For many accountholders, the time to come forward voluntarily to avoid criminal prosecution has run out.”

“This office will continue to work aggressively to hold accountable not only those U.S. taxpayers who evade their tax obligations by hiding money overseas, but also those abroad who make such tax evasion possible,” said U.S. Attorney Bharara. “For its wrongdoing in assisting U.S. taxpayers to open and maintain undeclared accounts overseas, the Swisspartners Group is being made to pay $4.4 million in forfeiture and restitution. Swisspartners avoided criminal charges as a direct result of its decision to self-report its misconduct at a time when it was not even under investigation and its extraordinary cooperation, including its decision to turn over voluntarily the files and identities of U.S. taxpayer clients it helped hide money from the IRS. The case serves as a clear example of the benefits that can be obtained from early and complete cooperation with federal law enforcement.”

“I am very pleased that we have successfully concluded negotiations with the Swisspartners Group,” said IRS-CI Chief Weber . “In making amends, the Swisspartners Group has turned over 110 account files relating to U.S. taxpayer-clients who maintained undeclared assets overseas. This agreement marks yet another significant step forward in combating offshore tax evasion. Anyone who is hiding money or assets offshore with the intent of committing tax evasion will be found and prosecuted. It's not a matter of ‘if,’ it's a matter of ‘when."

The NPA was entered into between the U.S. Attorney’s Office, on the one hand, and swisspartners Investment Network AG and the following three wholly-owned subsidiaries on the other: swisspartners Wealth Management AG, a Zurich-based company that establishes and manages entities such as foundations and trusts; swisspartners Insurance Company SPC Ltd., a Cayman Islands-based life insurance carrier that offers life insurance and annuity products; and swisspartners Versicherung AG, a Liechtenstein-based insurance carrier that offers a variety of insurance and annuity products.

The NPA recognizes that, beginning in 2008, the Swisspartners Group voluntarily implemented a series of remedial measures to stop assisting U.S. taxpayers in evading federal income taxes. The NPA further recognizes that in 2012, at a time when it was neither a subject nor target of any investigation by the U.S. Department of Justice, the Swisspartners Group self-reported its conduct concerning U.S. taxpayer-clients to the Department of Justice. Additionally, the NPA recognizes the extraordinary cooperation of the Swisspartners Group, including its voluntary production of client files for 110 non-compliant U.S. taxpayers that included the identities of those U.S. taxpayers.

As part of the NPA, the Swisspartners Group admitted various facts concerning its wrongful conduct and the remedial measures that it took to cease that conduct. Specifically, the Swisspartners Group admitted that it knew certain U.S. taxpayers were maintaining undeclared foreign bank accounts with the assistance of the Swisspartners Group in order to evade their U.S. tax obligations, in violation of U.S. law. The Swisspartners Group acknowledged that it helped certain U.S. taxpayer-clients conceal from the IRS their beneficial ownership of undeclared assets maintained in foreign bank accounts by, among other things, creating sham foundations and other sham entities that served as the nominal account holders; placing accounts or insurance policies in the names of non-U.S. nationals; facilitating the transportation of large amounts of cash into the United States on behalf of U.S. taxpayer-clients; and arranging for the bulk deposit of cash at Swiss depository financial institutions on behalf of U.S. taxpayer-clients.

As part of the NPA, the Swisspartners Group has agreed to forfeit $3.5 million to the United States, representing certain fees it obtained in exchange for services that it provided to U.S. taxpayers with undeclared foreign bank accounts from in or about 2001 through in or about 2011. In connection with this forfeiture, the Swisspartners Group has agreed not to contest a civil forfeiture action filed by the United States. That action was filed on May 9, 2014, in the U.S. District Court for the Southern District of New York and assigned to U.S. District Judge Gregory H. Woods.

The department entered into the NPA based on factors including:

 
·          the Swisspartners Group’s voluntary implementation of various remedial measures beginning in or about May 2008; ·          the Swisspartners Group’s voluntary self-reporting of its criminal conduct at a time when it was neither a subject nor target of any investigation by the U.S. Department of Justice; ·          the Swisspartners Group’s voluntary and extraordinary cooperation, including its voluntary production of account files that include the identities of U.S. taxpayer-clients; ·          the Swisspartners Group’s willingness to continue to cooperate to the extent permitted by applicable law; and

·          the Swisspartners Group’s representation, based on an investigation by outside counsel, the results of which have been shared with the U.S. Attorney’s Office and the Tax Division, that the misconduct under investigation did not, and does not, extend beyond that described in the Statement of Facts.

The NPA requires the Swisspartners Group to continue to cooperate with the United States for at least three years from the date of the agreement. In the event that the Swisspartners Group violates the NPA, the U.S. Attorney’s Office may prosecute the Swisspartners Group.

 

Josh Hummer, formerly a sergeant at Roxbury Correctional Institution (RCI) in Hagerstown, Maryland, was sentenced today to serve 12 months and a day in prison for obstruction of justice. Previously, on Jan. 31, 2014, a federal jury found Hummer guilty of providing false and misleading information to state investigators tasked with conducting an inquiry into a series of staff assaults against an inmate, Kenneth Davis, at RCI.

 

Evidence presented at trial showed that Hummer, 41, of Chambersburg, Pennsylvania, was on duty as a sergeant at RCI on the morning of March 9, 2008, when officers assaulted Davis inside a cell. On April 3, 2008, Hummer lied to a Maryland State Police detective about that assault.

 

Sixteen former RCI officers have been convicted in connection with the series of assaults against Davis. Through those guilty pleas, the defendants have admitted that officers from three different shifts, including Hummer’s, assaulted Davis in retaliation for a prior incident in which Davis had hit an officer. As a result of these beatings, Davis suffered broken bones in his face, ribs and back.

 

“The vast majority of correctional supervisors serve their communities with honor and integrity,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division. “When a supervisor at a correctional facility tries to cover up a staff assault of an inmate, however, the Department of Justice will do its utmost to hold him accountable.”

 

This case was investigated by the Frederick Resident Agency of the FBI, and prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorneys Sanjay Patel and Christine Siscaretti, with the support of Assistant U.S. Attorney Michael Cunningham of U.S. Attorney’s Office for the District of Maryland.

 

The former co-chief executive officer (CEO) of PetroTiger Ltd. – a British Virgin Islands oil and gas company with operations in Colombia and offices in New Jersey – was indicted today for his role in a scheme to pay bribes to foreign government officials in violation of the Foreign Corrupt Practices Act (FCPA) and to defraud PetroTiger.

Acting Principal Deputy Assistant Attorney General Marshall Miller of the Justice Department’s Criminal Division, U.S. Attorney Paul J. Fishman of the District of New Jersey and Special Agent in Charge Aaron T. Ford of the FBI’s Newark Division made the announcement.

Joseph Sigelman, 43, of Miami and the Philippines, was indicted today by a federal grand jury in the District of New Jersey and charged with conspiracy to violate the FCPA and to commit wire fraud, conspiracy to launder money, and substantive FCPA and money laundering violations. Gregory Weisman, 42, of Moorestown, New Jersey, the former general counsel of PetroTiger, pleaded guilty on Nov. 8, 2013, to conspiracy to violate the FCPA and to commit wire fraud. Sigelman’s co-CEO, Knut Hammarskjold, 42, of Greenville, South Carolina, pleaded guilty to the same charge on Feb. 18, 2014.

According to court records, Sigelman and others allegedly paid bribes to an official in Colombia in exchange for the official’s assistance in securing approval for an oil services contract worth roughly $39 million. To conceal the bribes, they first attempted to make the payments to a bank account in the name of the foreign official’s wife for purported consulting services she did not perform. Sigelman and Hammarskjold provided Weisman invoices, including her bank account information. The conspirators made the payments directly to the official’s bank account when attempts to transfer the money to his wife’s account failed. Sigelman and his conspirators then took steps to conceal the bribe payments from PetroTiger’s board members.

In addition, court documents allege that Sigelman and others attempted to secure kickback payments while negotiating an acquisition of another company on behalf of PetroTiger, including on behalf of several members of PetroTiger’s board of directors who were helping to fund the acquisition. In exchange for negotiating more favorable terms for the owners of the target company, two of the owners agreed to kick back to the conspirators a portion of the increased purchase price. To conceal the kickback payments, Sigelman and others had the payments deposited into Sigelman’s bank account in the Philippines, created a “side letter” to falsely justify the payments and used the code name “Manila Split” to refer to the payments amongst themselves.

Sigelman and Hammarskjold were charged by sealed complaints filed in the District of New Jersey on Nov. 8, 2013. Hammarskjold was arrested Nov. 20, 2013, at Newark Liberty International Airport. Sigelman was arrested on Jan. 3, 2014, in the Philippines. The charges against Sigelman, Hammarskjold and Weisman were unsealed on Jan. 6, 2014.

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

The case was brought to the attention of the department through a voluntary disclosure by PetroTiger, which cooperated with the department’s investigation. The department has worked closely with and has received significant assistance from its law enforcement counterparts in the Republic of Colombia and greatly appreciates their assistance in this matter. The department also thanks the Republic of the Philippines, including the Bureau of Immigration, and the Republic of Panama for their assistance in this matter. Significant assistance was also provided by the Criminal Division’s Office of International Affairs.

The case is being investigated by the FBI’s Newark Division. The case is being prosecuted by Assistant Chief Daniel S. Kahn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Zach Intrater of the District of New Jersey.

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

 

Dr. Patricia Lynn Hough, of Englewood, Florida, was sentenced today to serve two years in prison and three years supervised release by U.S. District Court Judge John Steele in Fort Myers, Florida, for conspiring to defraud the Internal Revenue Service (IRS) by concealing millions of dollars in assets and income in offshore bank accounts at UBS and other foreign banks, and for filing false individual income tax returns which failed to report the existence of those foreign accounts or the income earned in those accounts, the Justice Department and the IRS announced. Hough was also ordered to pay $15,518,382 in restitution and $42,732.27 for the costs of prosecution . Hough was convicted by a jury on Oct. 24, 2013.

 
According to court documents and court proceedings, Hough owned two Caribbean-based medical schools, Saba University School of Medicine located in Saba, Netherlands Antilles, and Medical University of the Americas located in Nevis, West Indies. Hough conspired to defraud the IRS with her husband, Dr. David Fredrick, who is awaiting trial. They carried out the conspiracy by creating and using nominee entities, including a foundation, and by using undeclared accounts in their names and the names of nominee entities at UBS and other foreign banks to conceal assets and income from the IRS. Both schools and the associated real estate were sold on April 3, 2007, for more than $35 million, all of which was deposited into undeclared accounts in the names of the nominee entities. The majority of the proceeds from the sale were not reported to the IRS on their tax returns and no tax was paid. In total, between 2003 and 2008, Hough and Fredrick failed to pay more than $15 million in taxes.

 
The evidence at trial further proved that Hough and Fredrick used emails, telephone calls and in-person meetings to instruct Swiss bankers and asset managers to make investments and transfer funds from their undeclared accounts at UBS. The evidence also established that Hough and Fredrick caused funds from the undeclared accounts in the names of the medical schools to be transferred to undeclared accounts in their individual names or in the names of nominee entities. Hough and her husband then used the funds in their undeclared accounts to purchase an airplane, two homes in North Carolina and a condominium in Sarasota, Florida.

 
Hough was also convicted of three counts of filing false tax returns for 2005, 2007 and 2008. The evidence at trial showed that Hough filed false tax returns that substantially understated her total income because she failed to report substantial interest and investment income and because she failed to report her half of the proceeds from the sale of the medical schools in 2007. In addition, Hough failed to report that she had an interest in, or signature or other authority over, bank, securities or other financial accounts located in foreign countries.

 
U.S. citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such accounts on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens must file a Report of Foreign Bank and Financial Accounts (FBAR) with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.

 
“The Justice Department is committed to investigating and prosecuting those who continue to evade taxes by hiding income and assets in undisclosed offshore bank accounts,” said Assistant Attorney General Kathryn Keneally for the Tax Division. “As this sentence shows, those who fail to come into compliance risk high penalties and jail.”

 
“Those who use nominee entities to conceal their assets and income in offshore accounts should realize by now that no bank offering such services will be a safe haven from the IRS,” said Chief of IRS-Criminal Investigation Richard Weber. “Regardless of wealth, everyone must pay taxes on all of their income, not just the amount they choose to report. It is more important that the American people feel confident that everyone is playing by the same rules and paying their taxes. Today, Dr. Hough has been held accountable for using an intricate network of financial transactions to evade her tax obligation.”

 

This case was prosecuted by Trial Attorneys Caryn Finley and Leigh Kessler of the Tax Division and was investigated by IRS – Criminal Investigation. Assistant Attorney General Keneally thanks them for their work, and also thanks the U.S. Attorney’s Office for the Middle District of Florida, Fort Myers Division, for their assistance and support in the prosecution.

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

The United States has filed a complaint under the False Claims Act against Stevens-Henager College, Inc. and its owner, The Center for Excellence in Higher Education, for illegally compensating recruiters, the Department of Justice announced today.  Stevens-Henager operates a chain of for-profit colleges in Idaho and Utah. 

 

“Congress has made clear that colleges should not pay improper incentives to admissions recruiters,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “The Department of Justice and the Department of Education are working together to combat unlawful recruitment practices that can harm students and result in the waste of taxpayer funds.” 

 

In its complaint, the government alleged that the college falsely certified compliance with provisions of federal law that prohibit a university from paying incentive-based compensation to its admissions recruiters based on the number of students they recruit.  Congress enacted the prohibition on such incentive compensation to curtail the enrollment of unqualified students, high student loan default rates, and the waste of student loans and grant funds.

 

The claims alleged by the United States were initiated by a whistleblower lawsuit filed by two former Stevens-Henager employees under the False Claims Act, which allows private citizens to file suit over false claims on behalf of the government.  The act provides for the recovery of triple damages and penalties, and allows the government to intervene and take over the allegations, as it has done in this case.  The whistleblower is entitled to a share of any recovery obtained in the lawsuit. 

 

“Fighting fraud and protecting federal tax dollars from abuse is a priority for this office,” said U.S. Attorney Wendy Olson for the District of Idaho. “The False Claims Act is an important tool for doing just that. Whistleblowers are necessary to our ongoing efforts to combat fraud, waste and abuse.”

 
This matter was investigated by the Commercial Litigation Branch of the Justice Department’s Civil Division, the U.S. Attorney’s Office for the District of Idaho, and the Department of Education, Office of Inspector General.  The case is captioned United States ex rel. Brooks v. Stevens-Henager College, Inc., et al., Case No. 1:13-CV-00009-BLW (D. Id.).  The claims asserted are allegations only, and there has been no determination of liability.

A commercial real estate developer pleaded guilty for his role in a $50 million securities fraud scheme, announced Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California.

Bradley Holcom, 55, entered his plea before United States District Judge Cathy Ann Bencivengo in San Diego, admitting that he committed wire fraud in connection with the sale of approximately $50 million worth of promissory notes which he sold to investors located throughout the United States.

According to court documents, Holcom solicited investors to provide funds for commercial and residential development through an investment program he operated called the Trust Deed Investment Program. Holcom falsely told investors who purchased notes through the Trust Deed Investment Program that they would receive a lien on a specific piece of property he was developing and that the lien would enable them to take priority over any other potential liens or interests in the property.

However, Holcom admitted that he never provided investors with a lien in the property he was purportedly developing and instead conveyed to investors a lesser interest that did not allow them to foreclose on the property to protect their investment. In addition, while he promised investors that their purported lien would be in first position, he subsequently solicited investments for properties that he knew were already encumbered by first position liens. Holcom also sold properties that were supposedly serving as security for investors without informing investors that the property they had financed for development was sold. In 2008 and 2009, he continued to solicit investors for new funds by making misrepresentations about his true financial condition and the manner in which he was using investor money.

As part of his plea, Holcom admitted that his conduct caused approximately $50 million in losses to over 50 victims. Sentencing is scheduled for July 25, 2014.

This case was investigated by the FBI’s Phoenix Division – Yuma Resident Agency. The case is being prosecuted by Trial Attorney Henry P. Van Dyck and Deputy Chief Daniel Braun of the Criminal Division’s Fraud Section and by Assistant United States Attorney Mark Pletcher of the United States Attorney’s Office for the Southern District of California. The Department appreciates the substantial assistance of the U.S. Securities and Exchange Commission.

The former e xecutive director of the Legislature of the Virgin Islands was indicted today by a federal grand jury in the Virgin Islands for accepting bribes and engaging in extortion in the award of contracts with the Legislature, announced Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and U.S. Attorney Ronald W. Sharpe for the District of the Virgin Islands.

The indictment charges Louis “Lolo” Willis, 56, of St. Thomas, Virgin Islands, with three counts of federal programs bribery and three counts of extortion under color of official right.

According to the indictment, Willis was the executive director of the Legislature between 2009 and 2012. One of his responsibilities included oversight of the renovation of the Legislature building, which included awarding and entering into contracts on behalf of the Legislature. These contracts included contracts for general construction, air-conditioning services and carpentry, which were not publicly bid. Willis was also responsible for paying the contractors for their work. As alleged in the indictment, Willis accepted payments, including, among other things, thousands of dollars in cash, from three contractors in exchange for using his official position to secure contracting work for the contractors and to ensure they received payment upon completion.

An indictment is merely an accusation, and a defendant is presumed innocent unless proven guilty in a court of law.

This case was investigated by the FBI’s San Juan Division, the Office of the Virgin Islands Inspector General and the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Trial Attorneys Peter Mason and Jennifer Blackwell of the Criminal Division’s Public Integrity Section and First Assistant U.S. Attorney Thomas Anderson of the District of the Virgin Islands.

 

WASHINGTON - El Secretario de Justicia de los Estados Unidos Eric Holder y el Secretario Arne Duncan anunciaron hoy la emisión de una orientación actualizada para ayudar a las escuelas públicas primarias y secundarias a garantizar que los procesos de matriculación sean compatibles con la ley y cumplir con su obligación de brindar acceso igualitario a la educación a todos los niños, independientemente de su procedencia.

En 2011, los Departamentos de Justicia y Educación emitieron una orientación para ayudar a las escuelas a comprender sus responsabilidades bajo el fallo de la Corte Suprema en Plyler contra Doe y las leyes federales de derechos civiles de brindar acceso igualitario a la educación a todos los niños, independientemente de su situación inmigratoria o la de sus padres. Hoy, los departamentos están emitiendo importantes actualizaciones a dicha orientación, la que incluye ejemplos de prácticas de matriculación permitidas, así como ejemplos de los tipos de información que no pueden usarse como base para denegar el ingreso de un estudiante a la escuela.

Los documentos de orientación actualizados—los que incluyen una carta orientativa a los estados y los distritos escolares y una hoja informativa y un documento de preguntas y respuestas—destacan la necesidad de flexibilidad al aceptar documentos de los padres para probar la edad de un menor y probar que el menor vive en el área de servicio de una escuela. También brindan ejemplos específicos de los tipos de documentos que muchas escuelas han aceptado. Los documentos orientativos recuerdan a las escuelas que no pueden exigir ciertos documentos—tales como una licencia de conducir de un padre o una madre, emitida por el estado—cuando dicha exigencia impediría la matriculación de un estudiante debido a la situación inmigratoria de su padre o madre.

"Los distritos de escuelas públicas tienen la obligación de matricular a los alumnos independientemente de su situación inmigratoria y sin discriminar debido a raza, color u origen nacional", señaló el Secretario de Justicia de los Estados Unidos Eric Holder. "El Departamento de Justicia hará todo lo posible para garantizar que las escuelas cumplan con esta obligación. Haremos valer la ley para asegurar que la puerta de la escuela permanezca abierta para todos".

"Queremos garantizar que cada líder escolar comprenda las exigencias legales según la Constitución y las leyes federales, y esperamos que esta actualización corrija algunos conceptos erróneos", indicó el Secretario Arne Duncan. "El mensaje es claro: permitan que todos los niños que viven en su distrito se inscriban en sus escuelas públicas".

En los tres años desde la emisión original de la orientación en 2011, los departamentos vienen trabajando en conjunto con los estados y los distritos escolares en todo el país para lograr el cumplimiento de acuerdo con Plyler y las leyes federales de derechos civiles que prohíben la discriminación debido a raza, color y origen nacional.

Los cambios importantes anunciados hoy brindarán a los distritos herramientas adicionales y la orientación práctica necesarias para asegurar que la puerta de la escuela esté abierta para todos los estudiantes, y que menores indocumentados y menores pertenecientes a familias inmigrantes ya no enfrenten barreras para la matriculación en la escuela y para su camino hacia un futuro mejor.

WASHINGTON—Attorney General Eric Holder and Secretary Arne Duncan today announced updated guidance to assist public elementary and secondary schools to ensure enrollment processes are consistent with the law and fulfill their obligation to provide all children –  no matter their background –  equal access to an education. 

In 2011, the Departments of Justice and Education issued guidance to help schools understand their responsibilities under the Supreme Court’s decision in Plyler v. Doe and federal civil rights laws to provide all children with equal access to an education regardless of their or their parents’ immigration status. Today, the departments are issuing important updates to that guidance, including examples of permissible enrollment practices, as well as examples of the types of information that may not be used as a basis for denying a student entrance to school.   

The updated guidance documents— including a guidance letter to states and school districts and a fact sheet and Q and A document—emphasize the need for flexibility in accepting documents from parents to prove a child’s age and to show that a child resides within a school’s attendance area.  They also provide specific examples of the types of documents that many schools have accepted.  And the guidance documents remind schools that they may not require certain documents – such as a parent’s state-issued driver’s license – where such a requirement would prevent a student from enrolling because of his or her parent’s immigration status.

“Public school districts have an obligation to enroll students regardless of immigration status and without discrimination on the basis of race, color, or national origin,” said Attorney General Eric Holder.  “The Justice Department will do everything it can to make sure schools meet this obligation.  We will vigilantly enforce the law to ensure the schoolhouse door remains open to all.”

“We want to be sure every school leader understands the legal requirements under the Constitution and federal laws, and it is our hope that this update will address some of the misperceptions out there,” said Secretary Arne Duncan.  “The message here is clear: let all children who live in your district enroll in your public schools.”

In the three years since the guidance was initially issued in 2011, the departments have worked collaboratively with states and school districts across the country to meet their obligations under Plyler and federal civil rights laws that prohibit discrimination on the basis of race, color and national origin. 

The important changes announced today will provide districts with the additional tools and practical guidance needed to make sure the schoolhouse door is open to all students and that undocumented children and children from immigrant families no longer face barriers to enrollment in school and starting down the path to a better future.

All updated guidance material from today’s call will be available in both Spanish and English at http://www.justice.gov/crt/about/edu/documents/plyler.php

Robert C. Sathre was sentenced today to serve 36 months in federal prison for tax evasion by U.S. District Judge Alan B. Johnson in Cheyenne, Wyoming, the Justice Department and Internal Revenue Service (IRS) announced.  Sathre was also ordered to pay $3,113,882 in restitution to the IRS and to serve three years of supervised release.  Sathre pleaded guilty on Feb. 26, 2014, to willfully evading the payment of his 1995 and 1996 tax liability.

 

According to court documents and proceedings, Sathre sold a Minnesota business and received installment payments in 1995 and 1996 of more than $3 million.  Sathre concealed his income by filing a 1995 tax return in which he reported only $64,928 in total income.  Sathre then purchased land and set up another business, a gas station and convenience store in Sheridan, Wyoming, known as the Rock Stop.

 

According to court documents and proceedings, Sathre concealed assets by opening a foreign bank account in the Caribbean island of Nevis and by using purported trusts.  In a 10 month period spanning from 2005 through 2006, Sathre sent over $500,000 to the account in Nevis to keep the funds out of reach from the IRS.  When Sathre sold the Rock Stop in 2007, he wired over $1,250,000 from the sale proceeds to the trust account of a Wyoming law firm.  He later directed the law firm to wire $900,000 from the trust account to his account at the Bank of Nevis.  Sathre also provided a false declaration and false promissory note to the Bank of Nevis to conceal the source of this transfer and obtained a debit card linked to the foreign account to access funds locally.  In addition, Sathre provided the Bank of Sheridan with an IRS form on which he falsely claimed that he was neither a citizen nor a resident of the United States.

 

This case was investigated by special agents of IRS – Criminal Investigation.  Trial Attorneys Ellen Quattrucci and Ignacio Perez de la Cruz of the Justice Department’s Tax Division prosecuted the case.

Zdenko Jakiša, 45, of Forest Lake, Minnesota, was arrested today on immigration fraud charges for failing to disclose multiple crimes committed in Bosnia-Herzegovina and his military service during the armed conflict there in the 1990s.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, United States Attorney Andrew M. Luger of the District of Minnesota, Special Agent in Charge J. Michael Netherland of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) St. Paul and Acting Special Agent in Charge Jane Rhodes-Wolfe of the FBI’s Minneapolis Field Office made the announcement.

Jakiša made an initial appearance today in the District of Minnesota and is scheduled for a detention hearing on May 12, 2014.

According to the indictment unsealed today, Jakiša, a former member of the armed forces of the Croatian Defense Council in Bosnia-Herzegovina, committed immigration fraud by providing false and fraudulent information about his military service during the Bosnian conflict, his criminal record in Bosnia-Herzegovina and his commission of crimes of moral turpitude.

Records from Bosnia and Bosnian witnesses indicate that Jakisa committed numerous crimes in Bosnia-Herzegovina, which he did not disclose during his refugee or green card applications. Such crimes include the murder of an elderly Bosnian Serb woman and the kidnapping, robbery and assault of a Bosnian Muslim man in September 1993.

The case is being investigated jointly by HSI St. Paul and the FBI’s Minneapolis Field Office. ICE’s Human Rights Violators and War Crimes Center provided the lead in this investigation. The Criminal Division’s Office of International Affairs and their counterparts at the Prosecutor’s Office of Bosnia and Herzegovina provided valuable assistance.

The case is being prosecuted by Senior Trial Attorney Matthew C. Singer from the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Nate Petterson of the District of Minnesota.

Members of the public who have information about former human rights violators in the United States are urged to contact U.S. law enforcement through the Human Rights and Special Prosecutions Section at [email protected] , toll-free at 1-800-813-5863, the HSI tip line at 1-866-DHS-2-ICE, or to complete its online tip form at www.ice.gov/exec/forms/hsi-tips/tips.asp . To learn more about the assistance available to victims in these cases, the public should contact HSI’s confidential victim-witness toll-free number at 1-866-872-4973. Tips may be provided anonymously.

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

 

The Justice Department reached an agreement today with Master Klean Janitorial, a company based in Denver, resolving claims that the company engaged in a pattern or practice of discriminatory documentary requests based on citizenship status in violation of the Immigration and Nationality Act (INA).

 

The department’s investigation was initiated based on a referral from U.S. Citizenship and Immigration Services.  The investigation found that Master Klean Janitorial subjected work-authorized non-U.S. citizen new hires to unlawful demands for specific documentation issued by the U.S. Department of Homeland Security in order to verify their employment eligibility, while U.S. citizens were permitted to present their choice of documentation.  The INA’s anti-discrimination provision prohibits employers from placing additional documentary burdens on work-authorized employees during the hiring and employment eligibility verification process based on their citizenship status or national origin.  This practice is commonly known as document abuse. 

 

Under the settlement agreement, Master Klean Janitorial will pay $75,000 in civil penalties to the United States, undergo training on the anti-discrimination provision of the INA, revise its employment eligibility verification policies and be subject to monitoring of its employment eligibility verification practices for one year.

 

“The Department of Justice is committed to eliminating discriminatory hurdles for work-authorized non-U.S. citizens in the employment eligibility verification process,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “I am pleased that Master Klean Janitorial has worked cooperatively with the department to reach an amicable resolution.”  

The Office of Special Counsel for Immigration-Related Unfair Employment Practices (OSC) is responsible for enforcing the anti-discrimination provision of the INA.  The statute prohibits, among other things, citizenship status and national origin discrimination in hiring, firing or recruitment or referral for a fee, document abuse and retaliation or intimidation

For more information about protections against employment discrimination under immigration laws or how to sign up for a free webinar, call OSC’s worker hotline at 1-800-255-7688 (1-800-237-2515, TTY for hearing impaired), call OSC’s employer hotline at 1-800-255-8155 (1-800-237-2515, TTY for hearing impaired) or visit the OSC website at www.justice.gov/crt/about/osc .  

 

Applicants or employees who believe they were subjected to different documentary requirements or discrimination based on their citizenship status, immigration status or national origin in hiring, firing or recruitment or referral should contact the worker hotline above for assistance.

WASHINGTON - El Departamento de Justicia llegó a un acuerdo hoy con Master Klean Janitorial, una empresa con sede en Denver, en el cual se resuelven los reclamos de que la empresa cometió un patrón o práctica de peticiones discriminatorias para documentos basado en el estado de ciudadanía en violación de la Ley de Inmigración y Nacionalidad (INA por sus siglas en inglés).

La investigación del departamento se inició basada en una referencia del Servicio de Ciudadanía e Inmigración de los Estados Unidos. La investigación concluyó que Master Klean Janitorial sometió a los nuevos empleados que no eran ciudadanos estadounidenses, pero que contaban con autorización de trabajo, a exigencias ilegales de presentar documentos específicos emitidos por el Departamento de Seguridad Nacional para verificar su elegibilidad de empleo, mientras que a los ciudadanos estadounidenses se les permitía presentar los documentos de su elección. La provisión anti-discriminación de la INA prohíbe que los empleadores impongan cargas documentales adicionales a los empleados con autorización de trabajo durante el proceso de contratación y verificación de elegibilidad de empleo con base a su estado de ciudadanía u origen nacional. Esta práctica es comúnmente conocida como abuso de documento.

Conforme al acuerdo de resolución, Master Klean Janitorial pagará $75,000 en sanciones civiles a los Estados Unidos, participará en adiestramiento sobre la provision anti-discriminación de la INA, revisará sus políticas de verificación de elegibilidad de empleo, y estará sujeto a un período de monitoreo de sus prácticas de verificación de elegibilidad de empleo por un año.

"El Departamento de Justicia se compromete a eliminar obstáculos discriminatorios para aquellas personas con autorización de trabajo que no tienen ciudadanía estadounidense durante el proceso de verificación de elegibilidad de empleo," expresó la Sub-Procuradora General Interina para la División de Derechos Civiles, Jocelyn Samuels. "Estoy satisfecha que Master Klean Janitorial haya trabajado cooperativamente con el departamento para llegar a una solución amigable."

La Oficina del Consejero Especial para Prácticas Injustas en el Empleo Relacionadas con Inmigración (OSC por sus siglas en inglés) es responsable de exigir el cumplimiento de la provisión anti-discriminación de la INA. La ley prohíbe, entre otras cosas, la discriminación con base al estado de ciudadanía y origen nacional en la contratación, despido o reclutamiento o referencia por comisión; abuso de documento; y represalias o intimidación. Para más información sobre las protecciones contra la discriminación en el empleo conforme a las leyes de inmigración o para registrarse para un seminario de internet gratis, llame a la línea directa para trabajadores de la OSC al 1-800-255-7688 (1-800-237-2515, TTY para las personas con dificultades auditivas, llame a la línea directa para empleadores de la OSC al 1-800-255-8155 (1-800-237-2515, TTY) para las personas con dificultades auditivas, o visite el sitio web a www.justice.gov/crt/about/osc.

Los solicitantes o trabajadores que creen que han sido sometidos a requisitos documentales distintos o discriminación basada en su estado de cuidadanía, estado migratorio u origen nacional, en la contratación, despido, o reclutamiento o referencia, deben comunicarse con la línea directa para trabajadores indicada previamente para recibir ayuda.

The Department of Justice announced today that Abdelkader and Hnia Amal pleaded guilty to one count of alien harboring in the U.S. District Court for the Eastern District of Virginia.  The guilty plea stemmed from evidence that Abdelkader and Hnia Amal unlawfully brought a woman into the United States from Morocco and then kept the woman in their home as a domestic servant for three years.   

 

According to court records, the defendants, who are husband and wife, concealed, harbored and shielded from detection a Moroccan national, identified in court records as F.H., in their home in Alexandria, Virginia, from December 2007 until December 2010.  F.H. served as a domestic servant within the home of the defendants.  Hnia Amal also had F.H. work for her commercial cleaning company, cleaning various residential and commercial properties. 

 

The Amals unlawfully brought F.H. into the United States on a visa they procured based on false representations that F.H. would be employed as a domestic servant for a different employer.  After the defendants unlawfully smuggled F.H. into the United States in December 2007, they did not pay her a salary.  Instead, the defendants made two down payments towards an apartment in Morocco on F.H.’s behalf.  The two payments, made in October 2010 and January 2011, were roughly equivalent to $8,500, and represented only about a quarter of the total apartment cost.  Moreover, while Hnia Amal’s cleaning company received money for the work that F.H. performed, F.H. did not receive any pay for her work on behalf of Hnia Amal’s cleaning company.  

 

According to the statement of facts entered with Abdelkader Amal’s plea agreement, Amal previously held an A-1 diplomatic visa as a military official in the Moroccan embassy in Washington, D.C.  After Amal retired in 2003 as the defense supply attaché, he was no longer eligible to sponsor individuals for domestic employment under an A-3 visa.

           

The defendants face a statutory maximum sentence of five years in prison and a fine of up to $250,000 when they are sentenced on July 11, 2014.  As part of the plea agreement, the defendants also agreed to pay at least $52,700 in restitution to F.H.  In determining the actual sentence, the court will consider the U.S. Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

                                                                                             

The case was jointly investigated by the FBI and the U.S. Department of State’s Diplomatic Security Service.  The case was jointly prosecuted by Special Assistant U.S. Attorney C. Alexandria Bogle of the Eastern District of Virginia and Trial Attorney Matthew T. Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.