District Not Recorded

The owners of Alpha Ambulance Inc. (Alpha), a now-defunct Los Angeles-area ambulance transportation company, have been sentenced in connection with a Medicare fraud scheme.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office made the announcement.

Aleksey Muratov, aka Russ Muratov, 32, and Alex Kapri, aka Alex Kapriyelov or Alexander Kapriyelov, 56, were sentenced by U.S. District Court Judge Audrey B. Collins in the Central District of California to serve 108 months and 75 months in prison, respectively. Both Kapri and Muratov pleaded guilty on Oct. 28, 2013, to conspiracy to commit health care fraud.

Muratov and Kapri were owners and operators of Alpha, which specialized in the provision of non-emergency ambulance transportation services to Medicare-eligible beneficiaries, primarily dialysis patients.

According to court documents, Muratov and Kapri knowingly provided non-emergency ambulance transportation to Medicare beneficiaries whose medical condition at that time did not require ambulance transportation. With Kapri’s knowledge, Muratov and others at Alpha instructed certain Alpha employees to conceal the Medicare beneficiaries’ medical conditions by altering required documents for Medicare reimbursement and creating fraudulent justifications for the transportation. The defendants caused Alpha to submit claims to Medicare that were fraudulent because the transportation was not medically necessary.

Additionally, as the defendants were submitting these false claims, Medicare notified Alpha that the company would be subject to a Medicare audit. In response, Muratov instructed Alpha employees – with Kapri’s knowledge – to alter specific documents that would be submitted to Medicare in response to the audit and create false justifications for transportation of the beneficiaries identified.

From at least June 2008 through at least July 2012, Alpha submitted more than $49 million in claims for ambulance transportation. As a result, Medicare paid Alpha more than $13 million for these claims, many of which were fraudulent.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case was prosecuted by Trial Attorneys Blanca Quintero and Alexander F. Porter and Assistant Chief O. Benton Curtis III of the Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 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, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

Baptist Health System Inc. (Baptist Health), the parent company for a network of affiliated hospitals and medical providers in the Jacksonville, Florida, area, has agreed to pay $2.5 million to settle allegations that its subsidiaries violated the False Claims Act by submitting claims to federal health care programs for medically unnecessary services and drugs, the Department of Justice announced today.  The alleged misconduct involved Medicare, Medicaid, TRICARE and the Federal Employee Health Benefits Program. 

“Providers that bill for unnecessary services and drugs contribute to the soaring cost of health care,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Providers must deal fairly and honestly with federal health care programs, and the Justice Department will investigate aggressively and hold accountable those who do not.” 

This settlement resolves allegations that, from September 2009 to October 2011, two neurologists in the Baptist Health network misdiagnosed patients with various neurological disorders, such as multiple sclerosis, which caused Baptist Health to bill for medically unnecessary services.  Although Baptist Health placed one of the physicians at issue on administrative leave in October 2011, it did not disclose any misdiagnoses to the government until September 2012.

“This settlement sends a clear message that health care fraud will not be tolerated in our district, particularly when there is the potential for harm to patients,” said U.S. Attorney A. Lee Bentley III for the Middle District of Florida.

The improper conduct at issue in this case included Medicaid patients.  Medicaid is funded jointly by the states and the federal government.  The state of Florida, which paid for some of the Medicaid claims at issue, will receive $19,024 of the settlement amount.

“ Health care providers will not be permitted to provide patients unnecessary medical services and drugs and then pocket the improper payments they receive as a result,” said Acting Special Agent in Charge Brian Martens, U.S. Department of Health and Human Services Office of Inspector General.  “Our agency is dedicated to investigating health care fraud schemes that divert scarce taxpayer funds meant to provide for legitimate patient care.”

The government’s investigation was initiated by a qui tam, or whistleblower, lawsuit filed under the False Claims Act by Verchetta Wells, a former Baptist Health employee.  The act allows private citizens to file suit for false claims on behalf of the government and to share in the government’s recovery.  Wells will receive $424,155.

“These health care providers did not only violate the laws of the United States - they violated the trust placed in them by their patients,” said Inspector General of the U.S. Office of Personnel Management Patrick E. McFarland.  “Federal employees deserve health care providers, including hospitals, that meet the highest standards of ethical and professional behavior.  Today's settlement reminds all providers that they must observe those standards and reflects the commitment of federal law enforcement organizations to pursue improper and illegal conduct that may put the health and well-being of their patients at risk.”

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19.1 billion through False Claims Act cases, with more than $13.6 billion of that amount recovered in cases involving fraud against federal health care programs.

This settlement is the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Middle District of Florida, the U.S. Department of Health and Human Services Office of Inspector General, the Defense Health Agency Program Integrity Office and the Office of Personnel Management Office of Inspector General.

The claims resolved by this settlement are allegations only, and there has been no determination of liability.  The lawsuit against Baptist Health was filed in the U.S. District Court for the Middle District of Florida and is captioned United States ex rel. Wells v. Baptist Health System Inc. et al.

Today, the Justice Department’s Civil Rights Division and the U.S. Attorney’s Office for the Middle District of Georgia announced that Jason Stacks, a former Lowndes County Sheriff’s Office (LCSO) Deputy, pleaded guilty to conspiring to use his law enforcement authority to unlawfully detain and take money from motorists.   

In connection with his plea, Stacks admitted that he conspired with two civilians to subject Hispanic motorists to unlawful traffic stops so that the conspirators could demand the motorists pay money in order to avoid arrest and/or deportation.  On Aug. 16, 2013, Stacks, while acting as a LCSO Deputy, unlawfully detained at least four motorists.  One of the motorists, identified in the plea documents by the initials T.C., was unlawfully detained by Stacks and then approached by Stacks’s two Spanish-speaking co-conspirators, who explained to T.C. that he would be sent to jail or deported if he did not pay $500.  When T.C. responded that he did not have $500 in his car, the co-conspirators drove T.C. to his residence and took $300 in cash from him.  Stacks and the two co-conspirators divided the $300 among them.

“Mr. Stacks admitted that he conspired to use his badge to unlawfully detain and take money from motorists,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “The Justice Department will continue to vigorously prosecute officers who seek to profit from the violation of civil rights.”

“Today’s guilty plea is another example of the zero tolerance the Department of Justice has for law enforcement officers who violate individuals’ civil rights,” said U.S. Attorney Michael J. Moore for the Middle District of Georgia. 

This case has been investigated by the FBI, with assistance from the Lowndes County Sheriff’s Office.  The matter is being prosecuted by Special Litigation Counsel Forrest Christian and Trial Attorney Risa Berkower of the Civil Rights Division, with the assistance of the U.S. Attorney’s Office for the Middle District of Georgia. 

The Department of Justice and the Federal Trade Commission (FTC) will hold a joint public workshop on June 23, 2014, to explore the economic and legal analysis of conditional pricing practices among firms in a supply chain.  The workshop will focus on conditional pricing arrangements – practices in which prices are explicitly or effectively contingent on commitments to purchase or sell a specified share or volume of a single product or a mix of multiple products – such as loyalty or bundled pricing.

A principal goal of the workshop will be to advance the economic understanding of the potential harms and benefits of conditional pricing practices and to reexamine their treatment under the antitrust laws.

Conditional pricing practices, similar to other distribution strategies, may have anticompetitive effects and efficiency benefits.  For example, if a loyalty or share discount induces buyers to make most or all of their purchases from the seller, under some circumstances it might deprive the seller’s rivals of sufficient access to efficient distribution or production and facilitate the seller’s exercise of market power. Similarly, bundled pricing can deny rivals that do not produce all of the products in the bundle efficiencies of scale or scope.  Supporters of such arrangements contend, however, that as long as these practices involve prices that are above some measure of cost, they are likely to reflect beneficial price competition, and that restraining their use will inhibit robust competition.

The legal treatment of conditional pricing practices has traditionally fallen into two categories.  The first focuses on pricing and applies various forms of a price-cost test.  The second examines whether a particular pricing practice reduces competition by raising the costs of rival firms or otherwise impeding their ability or incentives to expand or achieve efficiencies.  These effects on competition could be comparable to those resulting from other distribution practices, such as exclusive dealing or tying.

Economic Learning.  Workshop participants will examine both theoretical and empirical economic learning regarding these arrangements and consider many questions, including:

• What are the economic theories of harm and benefit?
• What do the economic and business-strategy literatures tell us about how and with what frequency firms employ conditional pricing practices?
• Under what circumstances are the various conditional pricing strategies likely to lead to competitive harm?
• In what settings might conditional pricing practices allow firms to realize efficiencies?
• To what degree might less-restrictive alternatives enable firms to achieve those same efficiencies?

Law and Policy Issues. Participants also will consider how to integrate the economic learning with the relevant legal standards. To that end, the workshop will explore the current legal standards in the United States and abroad and will consider a number of questions, including:

• How has the treatment of various conditional pricing practices evolved in the courts?
• To what extent do the standards articulated in judicial decisions align—or fail to align—with the relevant theories of competitive harm and benefit?
• What are the practical challenges of proof that the courts and litigants have confronted when attempting to apply the different legal standards?
• Do price-cost tests provide certainty and predictability to firms?
• How do price-cost tests compare to other alternative tests?
• Under the various standards, how might misalignment with theory and challenges of proof threaten to under-deter harmful practices or over-deter beneficial conduct?
• How do the various legal standards, if at all, affect primary conduct?
• What legal standards should the courts and antitrust agencies apply to the various conditional pricing strategies and theories of competitive harm?

The Department of Justice and the FTC are interested in receiving comments on conditional pricing practices and will accept written submissions from now through Aug. 22, 2014, 60 days after the event. Interested parties may submit public comments to https://ftcpublic.commentworks.com/ftc/conditionalpricingworkshop.  Submitted comments will be made publicly available on the Department of Justice and FTC websites.

The all-day workshop is free and open to the public. Individuals are encouraged, but not required, to register in advance for the workshop by sending an email to [email protected]. Please include “RSVP” in the subject line. Seating will be on a first-come, first-serve basis.

Reasonable accommodations for people with disabilities are available upon request. Requests should be submitted by e-mail to [email protected] or by calling Lara Kittelson at 202-326-3388. Requests should be made in advance. Please include a detailed description of the accommodation needed and provide contact information.

The workshop will take place at the FTC’s new satellite conference center, Constitution Center, 400 Seventh Street, S.W., Washington, D.C. 20024.  A workshop agenda and list of speakers will be published in advance of the workshop.  

Press contacts:

Department of Justice

Office of Public Affairs

Gina Talamona

202-514-2007

Federal Trade Commission

Office of Public Affairs

Mitch Katz

202-326-2161

Staff contacts:

Department of Justice

Antitrust Division, Office of Legal Policy

Robert Potter

202-514-2512

Federal Trade Commission

Douglas Hilleboe, Office of Planning Policy

202-326-2155

Andrea Zach, Bureau of Competition

202-326-2184

FRESNO, California. — Se reveló hoy una segunda acusación sustitutiva añadiendo 19 cargos incluyendo conspiración de delincuencia organizada e intento de asesinato contra tres demandados por su supuesta participación en la violenta pandilla Nuestra Familia, anunciaron David A. O’Neil, ayudante interino del procurador general de la División Criminal del Departamento de Justicia y Benjamin B. Wagner, procurador federal.

“Este caso tan complejo identificó la red que se extiende màs allà de los canales de distribución de drogas de la pandilla y reveló una estructura de mando que dirige actos de violencia para conseguir y mantener el control de sus miembros, independientemente de si los miembros pasean por las calles de Modesto o estàn encarcelados”, dijo Todd Irinaga, el agente especial supervisor de la oficina del FBI en Modesto. “Los cargos de hoy demuestran la eficacia del enfoque de una Fuerza de Tarea de Combate contra el Tràfico de Drogas y el Crimen Organizado (OCDETF), integrada por agencias y jurisdicciones múltiples para desmantelar organizaciones de tràfico de drogas que amenazan la seguridad y calidad de vida en nuestras comunidades”.

Gary Anthony Romero, 48, de Stockton, y Joe Anthony Félix, 34, de Modesto, fueron acusados inicialmente de conspiración para distribuir y poseer metanfetaminas con intenciones de distribuir ante un gran jurado federal en Fresno. La acusación sustitutiva, devuelta bajo sello el 30 de abril de 2014, incluye todos los presuntos cargos en la acusación original, así como nuevos cargos contra ellos. También fue acusado Jesús Gómez Félix, 30, de Modesto.

Jesús Félix fue arrestado hoy e hizo su primera comparecencia ante el tribunal federal en Fresno. Romero y Joe Félix fueron procesados hoy por los cargos en Fresno. Han estado bajo custodia federal desde marzo de 2013.

De acuerdo con la acusación sustitutiva, Nuestra Familia es una pandilla en prisión que se formó originalmente en el sistema estatal de prisiones de California en la década de 1960. Los líderes de Nuestra Familia controlan y dirigen las actividades criminales de la pandilla, tanto dentro como fuera del sistema de prisiones.

De acuerdo con la acusación sustitutiva, Romero ha sido miembro de Nuestra Familia durante unos 20 años y ha alcanzado uno de los niveles màs altos de autoridad en Nuestra Familia. Presuntamente ordenó que se cometieran varios delitos para el beneficio de la pandilla en el Condado Stanislaus, incluyendo intentos de asesinato, asaltos, robos y tràfico de drogas. Romero està acusado de conspiración de delincuencia organizada; seis cargos de intento de asesinato y seis cargos de asalto con un arma peligrosa, todos en apoyo de la delincuencia organizada; un cargo de usar y descargar un arma de fuego durante un delito de violencia y un cargo de conspiración para distribuir metanfetaminas.

Joe Félix llegó a ser un líder de Nuestra Familia en el Condado Stanislaus en 2012 y presuntamente ordenó a miembros de la pandilla que cometieran asesinatos y traficaran en drogas en Modesto. Joe Félix es acusado de conspiración de delincuencia organizada; un cargo de intento de asesinato, un cargo de conspiración para cometer un asesinato, y un cargo de asalto con un arma peligrosa, todos en apoyo de la delincuencia organizada; un cargo de usar y descargar un arma de fuego durante un delito de violencia; y un cargo de conspiración para distribuir metanfetaminas.

Jesús Félix està acusado con un cargo de asalto con un arma peligrosa resultando en lesión corporal grave en apoyo de la delincuencia organizada y un cargo de usar y descargar un arma de fuego durante un delito de violencia.

Este caso fue investigado por el Fuerza de Tarea contra el efecto de las pandillas en Central Valley, bajo la Iniciativa de Calles Seguras del FBI, con la asistencia de la Oficina del Fiscal del Condado de Stanislaus, la Oficina del Alguacil del Condado de Stanislaus, el Departamento de Policía de Modesto, Departamento de Policía de Ceres, la Patrulla de Carreteras de California, el Departamento de Correcciones y Rehabilitación de California, la Oficina de Prisiones y el Departamento de Libertad Condicional del Condado de Stanislaus.

El caso està siendo procesado por el abogado criminalista Louis A. Crisóstomo de la Sección de Delincuencia Organizada y Pandillas de la División Criminal y por Kimberly A. Sànchez y Laurel J. Montoya, ayudantes del procurador federal para el Distrito Oriental de California.

Los cargos contenidos en la acusación son meramente acusaciones, y se presume que los demandados son inocentes a menos y hasta que se pruebe que son culpables. Si se les condena, cada demandado contempla una condena estatutaria màxima de cadena perpetua y una multa de $250,000. Cualquier sentencia, sin embargo, serà determinada a discreción del tribunal después de considerar cualquier factor estatutario aplicable y las Directrices Federales de Sentencias, que toman en consideración un número de variables.

The United States has asked the U.S. District Court for the Southern District of Florida in Miami to stop Lazaro Jesus Toyos, Shirley Ester Almazan, Dilma Toyos Garcia and Daniel Almazan, and their companies L. Toyos Tax Service Inc., Toyos Garcia Tax Service Inc., Toyos Tax Service Inc. and Total Income Tax Services from preparing federal income tax returns for others, the Justice Department announced today.

Lazaro Toyos became a paid tax return preparer in 1979 as an adjunct to his insurance business.  In the years that followed, he was joined in the business by his daughters, Dilma Garcia and Shirley Almazan, and Almazan’s husband, Daniel Almazan.  Since 2008, these defendants have prepared over 17,000 tax returns for customers.  The complaint alleges that the defendants prepare returns that unlawfully understate income tax liabilities and overstate refunds by fabricating and/or exaggerating deductions and tax credits that their clients are not eligible to take.  These alleged practices include fabricating business losses for non-existent businesses, falsely claiming the First Time Homebuyer Credit for taxpayers who did not actually purchase a home and falsely claiming American Opportunity Credits for taxpayers who did not incur education expenses or go to college.  Altogether, the complaint alleges that loss to the U.S. Treasury from the defendants’ activities may be in the millions of dollars.

In the past decade, the Justice Department’s Tax Division has obtained more than 500 injunctions to stop tax fraud promoters and tax return preparers.  Information about these cases is available on the Justice Department website .  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page .  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

The U.S. Justice Department’s Civil Rights Division and U.S. Attorney Dana J. Boente for the Eastern District of Virginia announced today that they had reached an agreement with Penske Truck Leasing Co. resolving claims that Penske violated the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) by failing to properly reemploy and then terminating U.S. Air Force Reserve Member William Mann following his return from required military training with his reserve unit.

According to the complaint, filed in the U.S. District Court for the Eastern District of Virginia, Mann was honorably discharged as a Staff Sergeant in 2011 from the U.S. Air Force after serving with the 512 Mortuary Affairs Squadron at Dover Air Force Base.  During his service, Mann suffered a service-related injury.  Immediately upon his discharge, Mann notified Penske of his ability to return to work with some medical limitations.  The complaint alleged that Penske refused to reemploy Mann, instead placing him on short term leave.  In October 2011, while Mann was on short-term leave, he informed Penske that he would need more time to fully recover from his injuries.  Two months later, Penske terminated Mann’s employment.

USERRA protects the rights of members of the uniformed services to retain their civilian employment following absences due to military service obligations, and expressly requires employers to accommodate injured servicemembers when they return from military service.

“Congress enacted USERRA to protect our men and women in uniform from experiencing the kind of injustice experienced by Mr. Mann,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “The Justice Department is committed to vigorously enforcing federal laws that protect the employment rights of our servicemembers.”

Under the terms of the settlement, which was filed as a consent decree simultaneously with the complaint, Penske has agreed to pay $85,000 in lost wages to Mann. 

“Members of the Air Force Reserve sacrifice time away from their jobs to serve their country,” said U.S. Attorney Boente.  “When servicemembers are injured in relation to their service, USERRA ensures that they are not discriminated against and that their employment rights are protected.”

This case stems from a referral by the U.S. Department of Labor (DOL) following an investigation by the DOL’s Veterans’ Employment and Training Service.  The case is being handled by the Employment Litigation Section of the Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of Virginia, who work collaboratively with the DOL to protect the jobs and benefits of National Guard and Reserve servicemembers upon their return to civilian life.

Additional information about USERRA can be found on the Justice Department website and the division website, as well as on the DOL’s website.

Related Materials:

Signed Consent Decree

The Justice Department announced today the filing of a lawsuit against the state of Hawaii and the state of Hawaii Department of Transportation Airports Division (HDOT-Airports) alleging that the defendants discriminated against former employee Sherry Valmoja by subjecting her to sexual harassment in violation of Title VII of the Civil Rights Act of 1964.  According to the complaint, Valmoja complained to the defendants about the harassment and was then subjected to retaliation, also in violation of Title VII.  Title VII is a federal statute that prohibits discrimination on the basis of race, color, national origin, sex and religion, and prohibits retaliation against an employee who opposes an unlawful employment practice or against an employee who has made a charge or participated in an investigation, proceeding or hearing under the act.

The complaint, filed in the U.S. District Court for the District of Hawaii, alleges that during Valmoja’s employment as a law enforcement canine handler, she was subjected to sexual harassment in the form of lewd and unwelcome comments.  Valmoja also suffered intimidation by a co-worker.  The complaint also alleges that the unwelcome conduct and intimidation began as early as 2009, when both Valmoja and her co-worker were employed by a private company contracted to the defendants; after both Valmoja and the co-worker became employed by the state of Hawaii, the harassment and intimidation continued until Valmoja’s ultimate termination in 2012. 

The suit further alleges that the co-worker confronted Valmoja about her prior sexual harassment complaints and intimidated her after canine handler services were transferred to Hawaii.  Despite timely complaints by Valmoja about her co-worker’s conduct, the defendants failed to take reasonable steps to remedy the harassment.  Instead, the defendants implemented an employment schedule that brought Valmoja and her harasser into close contact.  When Valmoja objected to the continued harassment and retaliation by other HDOT-Airports employees, including managers, her employment was terminated.

Through this lawsuit, the United States seeks declaratory and injunctive relief requiring the defendants to develop and implement policies preventing their employees from being subjected to sexual harassment sex and retaliation.  In addition, the United States seeks monetary damages for Valmoja as compensation for the employers’ discriminatory actions. 

“ The Justice Department is committed to the vigorous enforcement of all federal civil rights laws under its jurisdiction, including Title VII’s prohibition against sexual harassment and retaliation in the workplace ,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “This lawsuit should send a clear message that the department will take necessary action to eliminate and remedy the effects of unlawful sexual harassment in our public sector workplaces .”

Valmoja originally filed her sexual harassment and retaliation charges against HDOT-Airports with the Honolulu Field Office of the Equal Employment Opportunity Commission (EEOC), which investigated the matters, determined that there was reasonable cause to believe that discrimination had occurred based upon sex and retaliation and referred the matters to the Department of Justice.  This lawsuit is brought by the department as a result of a project designed to ensure vigorous enforcement of Title VII against state and local governmental employers by enhancing cooperation between the EEOC and the Civil Rights Division.

“ Sex discrimination and retaliation in the workplace continue to be problematic -- they're a factor in 32 and 43 percent, respectively, of all EEOC charges filed in Hawaii,” said Director Timothy Riera for the EEOC’s Honolulu Local Office.  “The EEOC is pleased to partner with the Department of Justice to ensure that employers appropriately address sex discrimination and promote work environments where employees are free to complain without fear of retribution.”

More information about Title VII and other federal employment laws is available at the division’s Employment Litigation Section website .  The continued enforcement of Title VII is a priority of the Civil Rights Division.  Additional information about the Civil Rights Division of the Department of Justice is available on the division website

The EEOC enforces federal laws prohibiting employment discrimination. Further information about the EEOC is available on its website

A second superseding indictment was unsealed today adding 19 counts including racketeering conspiracy and attempted murder against three defendants for their alleged participation in the violent Nuestra Familia gang, Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and U.S. Attorney Benjamin B. Wagner announced.

Gary Anthony Romero, 48, of Stockton, Calif., and Joe Anthony Felix, 34, of Modesto, Calif., were first charged with conspiracy to distribute and possess with intent to distribute methamphetamine by a federal grand jury in Fresno, Calif. The superseding indictment, returned under seal on April 30, 2014, includes all of the charges alleged in the original indictment, as well as new charges against them. A new defendant, Jesus Gomez Felix, 30, of Modesto, was also charged.

Jesus Felix was arrested today. Romero and Joe Felix have been in federal custody since March 2013. Jesus Felix will make his initial appearance in federal court in Fresno today, and Romero and Joe Felix were arraigned on the charges today in Fresno.

According to the superseding indictment, Nuestra Familia is a prison gang that originally formed in the California state prison system in the 1960s. Nuestra Familia leaders control and direct the gang’s criminal activities both inside and outside of the prison system.

According to the superseding indictment, Romero has been a member of Nuestra Familia for about 20 years and has reached one of the highest levels of authority in Nuestra Familia. He allegedly ordered various crimes to be committed for the benefit of the gang in Stanislaus County, including attempted murders, assaults, robberies and drug dealing. Romero is charged with racketeering conspiracy; six counts of attempted murder and six counts of assault with a dangerous weapon, all in aid of racketeering; one count of using and brandishing a firearm during a crime of violence; one count of conspiracy to commit robbery; and one count of conspiracy to distribute methamphetamine.

Joe Felix became a Nuestra Familia leader in Stanislaus County in 2012 and allegedly ordered members of the gang to commit murder and deal drugs in Modesto. Joe Felix is charged with racketeering conspiracy; one count of attempted murder, one count of conspiracy to commit murder, and one count of assault with a dangerous weapon, all in aid of racketeering; one count of using and discharging a firearm during a crime of violence; and one count of conspiracy to distribute methamphetamine.

Jesus Felix is charged with one count of assault with a dangerous weapon resulting in serious bodily injury in aid of racketeering and one count of using and discharging a firearm during a crime of violence.

This case was investigated by the Central Valley Gang Impact Task Force under the FBI’s Safe Streets Initiative, with the assistance of the Stanislaus County District Attorney’s Office, Stanislaus County Sheriff’s Office, Modesto Police Department, Ceres Police Department, the California Highway Patrol, the California Department of Corrections and Rehabilitation, the Bureau of Prisons and the Stanislaus County Probation Department.

The case is being prosecuted by Trial Attorney Louis A. Crisostomo of the Criminal Division’s Organized Crime and Gang Section and Assistant United States Attorneys Kimberly A. Sanchez and Laurel J. Montoya of the Eastern District of California.

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

A federal court in Chicago permanently barred Barbara L. Garrett from preparing tax returns for others or working for any business that prepares tax returns for others, the Justice Department announced today.  The court’s injunction, filed in the U.S. District Court for the Northern District of Illinois, also requires Garrett to contact and provide a copy of the injunction order to every customer for whom she prepared a tax return since 2011.  Garrett agreed to the permanent injunction, which was entered against her by the court on April 30, 2014.

The complaint alleged that Garrett, while working at multiple Chicago-area tax preparation businesses, including Instant Tax Service, Preferred Financial and Income Tax Solutions, claimed fraudulent deductions and credits on her customers’ federal tax returns.  Examples cited in the complaint include returns prepared by Garrett for customers that falsely claimed thousands of dollars in bogus deductions from entirely fake businesses.

Return preparer fraud is one of the IRS' Internal Revenue Service's Dirty Dozen Tax Scams for 2014 .  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Tax Division has obtained injunctions against hundreds of fraudulent tax preparers.  Information about these cases is available on the Justice Department website .  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page .  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Materials:

United States v. Barbara L. Garrett
Complaint for Permanent Injunction and Other Relief
Order
Amended Final Judgment of Permanent Injunction

A campaign worker pleaded guilty today for paying voters to vote in the November 2012 school board election in Donna, Texas, announced Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

Diana Balderas Castaneda, 48, of Donna, pleaded guilty to one count of vote-buying before U.S. District Judge Ricardo Hinojosa in the Southern District of Texas. Sentencing has been scheduled for July 25, 2014.

According to a factual statement read during the plea hearing, a general election was held on Nov. 6, 2012, in Donna for the presidential election, as well as various state, county and local offices, including the Donna School Board. Balderas assisted in the campaign to elect four candidates to the Donna School Board. In the course of that work, Balderas knowingly and willfully paid and offered to pay voters for voting in this election. In addition, at least two campaign managers paid voters in her presence.

Another campaign worker, Rebecca Gonzalez, 44, also of Donna, pleaded guilty to the same charge before U.S. District Judge Randy Crane in the Southern District of Texas on Feb. 14, 2014. She is scheduled for sentencing on Sept. 16, 2014.

This case was investigated by the FBI. Trial Attorneys Monique Abrishami and Jennifer Blackwell of the Public Integrity Section in the Justice Department’s Criminal Division and Assistant U.S. Attorney Leo J. Leo of the Southern District of Texas are prosecuting the case.

Two alleged members of the Almighty Imperial Gangsters Nation have been indicted for their alleged roles in a 2007 murder in the Southern District of Florida.

 
Acting Assistant Attorney David A. O’Neil of the Criminal Division and Special Agent in Charge George L. Piro of the FBI’s Miami Field Office made the announcement.

 
The indictment returned by a federal grand jury on May 1, 2014, and unsealed today in the Southern District of Florida charges Jose Herrera, aka “Spyro,” 27, and Leonel Carrera, aka “Leo,” 25, both of Miami, with murder in aid of racketeering activity.  Herrera and Carrera were both arrested this morning.

 
The indictment alleges that Herrera and Carrera participated in the murder of Hockynson Sanchez, aka “Jaxx,” on Nov. 20, 2007, for the purpose of maintaining and increasing their position in the Almighty Imperial Gangsters Nation.

 
According to the indictment, the Almighty Imperial Gangsters Nation is a nationally known organized street gang that originated in the northwest side of Chicago and spread to other regions of the United States, including South Florida. Members and associates of the Almighty Imperial Gangers Nation allegedly engaged in acts of violence, including murder, attempted murder, aggravated battery and aggravated assault, as well as narcotics distribution and other criminal activities.

 
This case is being investigated by the FBI field offices in Miami, Chicago and Merrillville, Ind., along with the Miami-Dade Police Department, the City of Miami Police Department, the Chicago Police Department, the Franklin Park, Illinois, Police Department and the East Chicago Police Department.  The United States Attorney’s Office for the Northern District of Indiana, the State Attorney’s Offices of Miami-Dade and Broward Counties, the Florida Department of Correction and the Broward County Sheriff’s Office assisted with this case.

 
The case is being prosecuted by Joseph A. Cooley and Rebecca A. Staton of the Criminal Division’s Organized Crime and Gang Section, as well as the Forfeiture Section of the United States Attorney’s Office for the Southern District of Florida.

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

Two Aryan Brotherhood of Texas (ABT) gang members pleaded guilty this week to racketeering charges related to their membership in the ABT’s criminal enterprise, announced Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

 
Kelley Ray Elley, of Austin, Texas, pleaded guilty today before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity.  Jamie Grant Loveall, aka “Dutch,” of Houston, pleaded guilty to the same charge on May 1, 2014.

 
According to court documents, Elley, Loveall and other ABT gang members and associates agreed to commit multiple acts of murder, robbery, arson, kidnapping and narcotics trafficking on behalf of the ABT gang.  Elley, Loveall and numerous ABT gang members met on a regular basis at various locations throughout Texas to report on gang-related business, collect dues, commit disciplinary assaults against fellow gang members and discuss acts of violence against rival gang members, among other things.  

By pleading guilty to racketeering charges, Elley and Loveall admitted to being members of the ABT criminal enterprise.

According to the superseding indictment, the ABT was established in the early 1980s within the Texas prison system.  The gang modeled itself after and adopted many of the precepts and writings of the Aryan Brotherhood, a California-based prison gang that was formed in the California prison system during the 1960s.  According to the superseding indictment, the ABT was primarily concerned with the protection of white inmates and white supremacy/separatism.   Over time, the ABT expanded its criminal enterprise to include illegal activities for profit.

Court documents allege that the ABT enforced its rules and promoted discipline among its members, prospects and associates through murder, attempted murder, conspiracy to murder, arson, assault, robbery and threats against those who violated the rules or posed a threat to the enterprise.  Members, and oftentimes associates, were required to follow the orders of higher-ranking members, often referred to as “direct orders.”

According to the superseding indictment, in order to be considered for ABT membership, a person must be sponsored by another gang member.  Once sponsored, a prospective member must serve an unspecified term, during which he is referred to as a prospect, while his conduct is observed by the members of the ABT.

 
Loveall and Elley are both scheduled to be sentenced on Oct. 7, 2014.  Each faces a maximum penalty of life in prison.

 
Loveall and Elley are two of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges.  To date, 26 defendants have pleaded guilty.  

                                                 
This Organized Crime Drug Enforcement Task Force (OCDETF) case is being investigated by a multi-agency task force consisting of the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Drug Enforcement Administration; FBI; U.S. Marshals Service; Federal Bureau of Prisons; U.S. Immigration and Customs Enforcement Homeland Security Investigations; Texas Rangers; Texas Department of Public Safety; Montgomery County, Texas, Sheriff’s Office; Houston Police Department-Gang Division; Texas Department of Criminal Justice – Office of Inspector General; Harris County, Texas, Sheriff’s Office; Atascosa County, Texas, Sheriff’s Office; Orange County, Texas, Sheriff’s Office; Waller County, Texas, Sheriff’s Office; Alvin, Texas, Police Department; Carrollton, Texas, Police Department; Mesquite, Texas, Police Department; Montgomery County District Attorney’s Office; and the Atascosa County District Attorney’s Office.

The case is being prosecuted by the Criminal Division’s Organized Crime and Gang Section and the U.S. Attorney’s Office for the Southern District of Texas.

The Department of Justice announced today that it has reached a settlement with eBay Inc. that prevents the company from entering into or maintaining agreements with other companies restraining employee recruitment and hiring.

The department’s Antitrust Division filed the proposed settlement in the U.S. District Court for the Northern District of California in San Jose. If approved by the court, the settlement would resolve the department’s competitive concerns and the original lawsuit filed on Nov. 16, 2012.

 
In its lawsuit, the department alleged that senior executives and directors of eBay and Intuit entered into an agreement, beginning no later than 2006, that prevented each firm from recruiting employees from the other and that prohibited eBay from hiring Intuit employees that approached eBay.

In the high technology sector, employees with advanced or specialized skills are highly valued and sought after. Companies often heavily recruit and hire experienced and capable employees of other technology firms, offering significantly better job opportunities or pay. The agreement between eBay and Intuit diminished important competition between the firms to attract highly skilled technical and other employees to the detriment of affected employees who had less access to better job opportunities and higher pay.

 
“eBay’s agreement with Intuit served no purpose but to limit competition between the two firms for employees, distorting the labor market and causing employees to lose opportunities for better jobs and higher pay,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division. “The proposed settlement resolves the department’s antitrust concerns and ensures that eBay will not engage in similar conduct in the future.”

Previously, in denying eBay’s motion to dismiss the case, the district court found that the agreement alleged by the department, if proven, would constitute a naked horizontal market allocation agreement that was manifestly anticompetitive and lacking in any redeeming virtue, and thus could be found per se unlawful.

The proposed settlement would prohibit eBay from entering or maintaining anticompetitive agreements relating to employee hiring and retention for five years. It would broadly prohibit eBay from entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, hiring or otherwise competing for employees. eBay will also implement compliance measures tailored to these practices. Intuit is already subject to a similar consent decree, and for that reason was not a defendant in this case.

 
Today, the California Attorney General’s Office also filed a settlement in its related case, The People of the State of California v. eBay Inc., based on the same facts alleged in the department’s complaint.

  
This case and the proposed settlement arose out of a series of Antitrust Division investigations into employee recruitment practices at a number of high tech companies. In September 2010, the Antitrust Division filed a civil antitrust lawsuit against six high tech firms– Adobe Systems Inc., Apple Inc., Google Inc., Intel Corporation, Intuit Inc. and Pixar–for antitrust violations arising from “no cold call” agreements. In December 2010, the Antitrust Division filed a civil antitrust lawsuit against Lucasfilm Ltd. alleging antitrust violations involving similar activities restraining competition for employees. In both cases, settlements were filed at the same time the lawsuits were filed resolving the department’s competitive concerns. Today’s proposed settlement with eBay is substantially the same as the court-approved settlements in the two prior cases.

eBay Inc. is a Delaware corporation with its principal place of business in San Jose, Calif.

The proposed settlement, along with the department’s competitive impact statement, will be published in The Federal Register, as required by the Antitrust Procedures and Penalties Act. Any person may submit written comments concerning the proposed settlement within 60 days of its publication to James J. Tierney, Chief, Networks & Technology Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street N.W., Suite 7100, Washington D.C. 20530. At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.

A federal judge in California has permanently barred Michael I. Turner, of San Diego, from preparing federal tax returns for others, the Justice Department announced today.

In the complaint, filed in August 2013, the government alleged that Turner has prepared returns since at least 2004 but failed to sign or affix a Preparer Tax Identification Number to many of the returns that he has prepared.  The complaint also alleged that Turner entered bogus deductions on his customers’ returns, primarily on the Schedule A, Itemized Deductions, in order to claim larger refunds for those customers.  Further, the government alleged that when the Internal Revenue Service (IRS) audited Turner’s customers, he provided the customers with false documents in an attempt to assist them in falsely substantiating charitable contributions and employee expenses that they did not incur.  Turner pleaded guilty to filing a false tax return in 2013.    

In addition to barring Turner from preparing returns, the court’s civil injunction order bars Turner from serving as a representative on behalf of any person or entity before the IRS, and from owning, managing, controlling, working for or volunteering for a tax return preparation business.  In consenting to the injunction, Turner did not admit to the government’s allegations.

In the past decade, the Justice Department's Tax Division has obtained more than 500 injunctions to stop tax fraud promoters and tax return preparers.  Information about these cases is available on the Justice Department   website .  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on   this page .  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the   Tax Division with details.

Related Materials:

United States v. Michael I. Turner
Complaint for Permanent Injunction and Other Relief
Order of Permanent Injunction

Jeremy Heath Higgins was indicted for threatening an African-American man at a Quinton, Alabama, restaurant, and for threatening another person who ordered Higgins to leave the restaurant due to his behavior, Acting Assistant Attorney General Jocelyn Samuels for the Justice Department’s Civil Rights Division and U.S. Attorney Joyce Vance for the Northern District of Alabama announced today.  

Higgins, 28, was charged in a three count indictment returned yesterday by a federal grand jury in the U.S. District Court for the Northern District of Alabama.  The indictment charges him with one felony count and two misdemeanor counts of interference with a federally-protected activity.  The indictment alleges that on June 14, 2013, Higgins approached and threatened an African-American man at the Alabama Rose Steakhouse because the man was present at the restaurant with a white woman.  According to the indictment, another person ordered Higgins to leave the premises of the restaurant because of Higgins’ behavior toward the African-American man, after which Higgins allegedly shouted a threat to burn down the restaurant.  The indictment further alleges that Higgins threatened the person who had ordered him to leave the restaurant by painting graffiti on the restaurant’s exterior and fence.    

If convicted of the felony count of the indictment, Higgins could face a maximum sentence of 10 years in prison and a $250,000 fine.  For each of the misdemeanor charges, Higgins could face a maximum sentence of one year in prison and a $200,000 fine.  

This case is being investigated by the FBI and is being prosecuted by Assistant U.S. Attorney Robin B. Mark of the Northern District of Alabama and Trial Attorney David Reese of the Justice Department’s Civil Rights Division.

An indictment is merely an accusation, and the defendant is presumed innocent unless proven guilty.  

Josef Dörig, 72, of Switzerland, pleaded guilty today to conspiring to defraud the Internal Revenue Service (IRS) in connection with his work as the owner of a trust company in Switzerland.  Deputy Attorney General James Cole, Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division, U.S. Attorney Dana J. Boente for the Eastern District of Virginia and IRS-Criminal Investigation Chief Richard Weber made the announcement after the plea was accepted by U.S. District Judge Gerald Bruce Lee.  Dörig was charged in a one count superseding indictment on July 21, 2011.  Sentencing is set for Aug. 8, 2014, and Dörig faces a statutory maximum sentence of five years in prison.

“Today’s plea further pulls back the curtain on efforts by Swiss banks to help U.S. taxpayers evade taxes through the use of sham trusts and foundations,” said Deputy Attorney General Cole.  “Rest assured, the days of bank secrecy for U.S. tax cheats in Switzerland – and around the world – are numbered.”

“This plea sends a strong message to those who use or help others use offshore bank accounts to evade U.S. taxes,” said Assistant Attorney General Keneally.  “We are receiving information from a variety of sources and are committed to investigating and prosecuting this wrongdoing.”

“We will continue to investigate and prosecute banks and individuals who assist U.S. citizens in the evasion of income taxes with overseas accounts,” said U.S. Attorney Boente.  “The doors are quickly closing on this illegal activity.”

“Assisting American taxpayers to evade their tax obligations with the use of secret bank accounts held in sham entities violates the law, and we will find those who are doing it,” said Chief of IRS-Criminal Investigation Richard Weber.  “IRS-CI will pursue those who use anonymous offshore accounts to avoid paying their fair share.  IRS Criminal Investigation is proud to have shared our hallmark expertise in following the money trail in this and other increasingly sophisticated criminal schemes.”

In a statement of facts filed with the plea agreement, Dörig admitted that between 1997 and 2011, while owning and operating a trust company, he engaged in a wide-ranging conspiracy to aid and assist U.S. customers in evading their income taxes by concealing assets and income in secret bank accounts held in the names of sham entities at a financial institution referred to in the superseding indictment as International Bank (IB), one of the biggest banks in Switzerland and one of the largest wealth managers in the world.

According to the statement of facts, from 1972 to 1996, Dörig worked for a subsidiary of IB.  The subsidiary formed, managed and maintained nominee tax haven entities.  Individuals concealed their assets by holding their accounts at IB in the names of these tax haven entities.  During this time, the subsidiary managed and maintained over 100 sham entities for U.S. taxpayers committing tax evasion.

Also included in the statement of facts, in 1997, executives at the subsidiary devised a plan to spin off all of these sham entities into a new trust company, Dörig Partner AG, to be owned and operated by Dörig, who was then an employee of the subsidiary.  Dörig was required to make his best efforts to keep the existing accounts at IB open and to ensure that any clients referred to him by IB would open new accounts at that institution.

According to the statement of facts, IB promoted Dörig Partner as a provider of various entity structures.  The phone list used in IB’s New York representative office identified Dörig Partner as an external trust expert.  Dörig Partner also sublet space from IB in an office tower where a private bank owned by IB was the major tenant.

As part of the conspiracy, Dörig traveled to the United States to introduce himself to new clients he had obtained as part of the spin-off.  In the following years, he traveled to the United States with bankers from IB, including his co-defendants Markus Walder, Marco Parenti-Adami and Michele Bergantino, to meet with existing and prospective clients who already had undeclared accounts at IB but had been identified by the IB’s bankers as potential candidates for the use of a structure.

According to the statement of facts, although Dörig ostensibly controlled both the structure and the account at IB, in practice, many of the U.S. taxpayers with undeclared accounts controlled the assets in those accounts by dealing directly with IB bankers, often without either the knowledge or consent of Dörig.

According to the statement of facts, in 2008, IB ordered Dörig Partner to close accounts for the structures they managed.  Dörig turned to an asset manager at a financial services firm in Zurich for assistance.  The financial services firm maintained a master account in its own name at a private bank in Gibraltar, and then opened sub-accounts for Dörig’s clients at that bank to which Dörig transferred the funds from the clients’ undeclared accounts at IB.  The financial services firm provided the Gibraltar bank only with the number associated with each sub-account and did not inform the bank of any information regarding the owners of the assets in the sub-accounts. 

This case is being investigated by IRS-Criminal Investigation.  Assistant U.S. Attorney Mark D. Lytle and Trial Attorneys Mark F. Daly and Nanette L. Davis of the Tax Division are prosecuting the case.

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

Related Materials:

United States v. Josef Dörig
Statement of Facts

Assistant Attorney General for the Tax Division Kathryn Keneally, U.S. Attorney Sanford C. Coats for the Western District of Oklahoma, and the Internal Revenue Service (IRS) announced today that Larry Douglas Friesen pleaded guilty to three counts of willfully failing to pay employment taxes.

On March 21, 2014, a criminal information was filed in federal district court that alleged Friesen willfully failed to pay over to the IRS the federal income taxes and the Federal Insurance Contributions Act (FICA) taxes due and owing during three tax quarters in the 2007 calendar year.  According to the criminal information, Friesen, who was the owner of the Law Office of Doug Friesen, deducted and collected federal income taxes and FICA taxes from his employees’ paychecks but failed to pay these taxes to the IRS.

Under the terms of the plea agreement, Friesen agreed to pay restitution in the amount of $320,000 to the IRS.  Friesen faces a statutory maximum penalty of one year in prison per count, one year of supervised release per count and a maximum fine of $100,000 per count.  A sentencing hearing will be set by the court in approximately 90 days.

The case was investigated by Special Agents from IRS-Criminal Investigation and prosecuted by Trial Attorneys Christopher Maietta and Sonia Owens of the Tax Division, with valuable support from the U.S. Attorney’s Office for the Western District of Oklahoma.

A federal jury in Detroit today convicted a physical therapist, physical therapy assistant and unlicensed doctor for their participation in a nearly $15 million Medicare fraud scheme.

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

Shahzad Mirza, 43, a physical therapist; Jigar Patel, 30, a physical therapy assistant; and Srinivas Reddy, 38, a foreign medical school graduate without a license to practice medicine were each found guilty of one count of conspiracy to commit health care fraud in connection with a scheme perpetrated from approximately July 2008 through September 2011 at Detroit area companies Physicians Choice Home Health Care LLC (Physicians Choice), Quantum Home Care Inc. (Quantum), First Care Home Health Care LLC (First Care), Moonlite Home Care Inc. (Moonlite) and Phoenix Visiting Physicians.  In addition, Mirza and Patel were each found guilty of two counts of health care fraud in connection with the submission of false claims to Medicare for home health services, and Reddy was found guilty of three counts of health care fraud in connection with the submission of false claims to Medicare for home health services and physician home visits.  Patel was found guilty of one count of money laundering in connection with his laundering of the proceeds of the fraud through his company MI Healthcare Staffing.

The defendants were charged in a superseding indictment returned Feb. 6, 2012.  Three other individuals charged in the indictment remain fugitives.

According to evidence presented at trial, Physicians Choice, Quantum, First Care and Moonlite operated a fraudulent scheme to bill Medicare for home health care services that were never provided.  The home health care companies paid kickbacks to recruiters who in turn paid Medicare beneficiaries cash and promised them access to narcotic prescriptions.  The conspirators created the company Phoenix Visiting Physicians, which employed unlicensed individuals, including Reddy, to visit patients and provide them with narcotic prescriptions as well as obtain the information necessary to fill out paperwork to refer them for medically unnecessary home health care services. 

Evidence presented at trial showed that beneficiaries pre-signed medical paperwork that was provided to Patel and other physical therapist assistants to fill in with false information purporting to show that the care was provided, when it was not.  Patel, registered physical therapist Mirza and others would sign this paperwork as though they had provided services.  In the course of the conspiracy, Patel incorporated his own staffing company, MI Healthcare Staffing, through which he laundered proceeds of the fraud from home health care companies and a shell company owned and operated by his co-conspirators.

Physicians Choice and the related companies were paid nearly $15 million in the course of the conspiracy.

Sentencing for all three defendants has not yet been scheduled. 

The investigation was led by the FBI and HHS-OIG, and was brought by the Medicare Fraud Strike Force, a joint effort of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan.  The case was prosecuted by Assistant Chief Catherine K. Dick and Trial Attorneys Matthew C. Thuesen and Rohan A. Virginkar of the Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 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.

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

Shokrollah Baravarian, of Beverly Hills, California, was charged today in the U.S. District Court for the Central District of California with conspiracy to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced.

According to the indictment, Baravarian, a former senior vice president at the Los Angeles branch of a bank headquartered in Tel Aviv, Israel, conspired to conceal the existence of undeclared accounts owned and controlled by U.S. customers in Israel.  The indictment alleges that these accounts were concealed from the IRS by opening them under pseudonyms, code names and the names of nominee entities set up in the British Virgin Islands and the island of Nevis.

“This charge results from an ongoing and extensive investigation into the use of undeclared bank accounts in Israel, and demonstrates the department’s determination to find and prosecute those who help U.S. taxpayers evade taxes through offshore accounts located anywhere in the world,” said Deputy Attorney General James M. Cole.

“IRS-Criminal Investigation and Tax Division prosecutors have been investigating the use of undeclared bank accounts globally, and charges have been brought against not only the U.S. taxpayers with undeclared Israeli bank accounts but also those who facilitate the hiding of assets and income abroad,” said Assistant Attorney General Kathryn Keneally for the Tax Division.  “Whether it be Israel, Switzerland, the Caribbean or elsewhere, the Justice Department is finding the hiding places and is committed to prosecuting tax cheats.”

“The defendant assisted others to hide the true ownership of offshore bank accounts through the use of code names and nominee entities,” said Chief of IRS-Criminal Investigation Richard Weber.  “Our special agents unraveled the complex financial transactions used to disguise the funds in the undeclared accounts.  Those who help others commit tax evasion risk prosecution and substantial monetary penalties.”

The indictment further alleges that Baravarian assisted U.S. customers in secretly accessing the funds in their undeclared accounts by obtaining back-to-back loans from the Los Angeles branch of the bank.  According to the indictment, a back-to-back loan was a loan that was secured by funds in an undeclared account in Israel and issued by the Los Angeles branch to a U.S. customer.  Baravarian is alleged to have helped conceal the fact that U.S. customers were using their own funds as collateral by purposely not keeping copies of loan-related documents in the files at the Los Angeles branch.  These documents included Israeli account information and pledge agreements used to secure the loans.  As detailed in the indictment, some U.S. customers obtained back-to-back loans from the Los Angeles branch by transferring funds to Israel from other foreign countries, including Switzerland and China.

The indictment further alleges that a banker in Israel would periodically travel to Los Angeles and meet with U.S. customers to discuss their account statements.  Prior to making these trips, the banker would redact the names of the U.S. customers reflected on the account statements.

Baravarian is the latest in a series of defendants charged in the U.S. District Court for the Central District of California with conspiring to defraud the United States in connection with using undeclared bank accounts in Israel to obtain back-to-back loans in the United States.

U.S. citizens and residents 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 account on Schedule B, Part III, of their individual income tax returns and on a Report of Foreign Bank and Financial Reports filed with the U.S. Treasury.

If convicted, Baravarian faces a potential maximum prison term of five years and a maximum fine of $250,000.  The charge contained in the indictment is only an allegation. The defendant is presumed innocent and it is the government’s burden to prove guilt beyond a reasonable doubt.

The case was investigated by special agents of IRS-Criminal Investigation.  Senior Litigation Counsel John E. Sullivan and Assistant Chief Elizabeth C. Hadden of the Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Sandra R. Brown, Chief of the Tax Division of the U.S. Attorney’s Office for the Central District of California.

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

Li Fangwei, who is more commonly known by his alias “Karl Lee,” is charged with violating the International Emergency Economic Powers Act (IEEPA) by using United States-based financial institutions to engage in millions of dollars of U.S. dollar transactions in violation of economic sanctions that prohibited such financial transactions. In addition, Li Fangwei is also charged with conspiring to commit wire fraud and bank fraud, a money laundering conspiracy, two separate violations of IEEPA and two separate substantive counts of wire fraud, in connection with such illicit transactions. Li Fangwei, a national of the People’s Republic of China, is a fugitive.

The announcement was made today by Assistant Attorney General John P. Carlin of the Justice Department’s National Security Division, Preet Bharara, U.S. Attorney for the Southern District of New York, George C. Venizelos, Assistant Director in Charge for the FBI’s New York Field Office.

“ These charges are an important part of the ‘ all tools’ approach our government is taking against Li Fangwei to shut down and deny him the profit from his proliferation activities,” said Assistant Attorney General Carlin. “This case is an outstanding example of multiple agencies working together to focus various enforcement efforts on the significant threat to our national security posed by such proliferation networks.”

“As alleged, Li Fangwei has used subterfuge and deceit to continue to evade U.S. sanctions that had been imposed because of his illicit trade in prohibited materials with Iran,” said U.S. Attorney Bharara. “Previously having been exposed as a violator of those sanctions, Li spun a web of front companies to carry out prohibited transactions essentially in disguise. He now stands charged with serious crimes, and millions of his dollars have been seized. It is the hope of this Office not only that Li’s banned commerce cease once and for all, but that he be apprehended and brought before the bar of American justice.”

“Whether motivated by greed or otherwise, Li Fangwei allegedly ignored sanctions imposed by the United States Government and hid behind front companies he developed to engage in a series of illegal transactions, including attempts to acquire ‘dual use’ items on behalf of Iran-based entities,” said Director in Charge Venizelos. “IEEPA makes it a crime to willfully violate U.S. sanctions on designated countries such as Iran. Individuals and companies who evade U.S. sanctions and misuse our banking system to further their illegal activity not only undermine the integrity of our financial markets but also threaten U.S. National Security interests. The FBI is committed to ensuring that strategically important goods and technology, particularly those that could be used in the production or delivery of weapons of mass destruction, do not end up in the wrong hands.”

According to the superseding indictment previously filed in Manhattan federal court and other court documents: Li Fangwei controls a large network of industrial companies based in eastern China, one of which is LIMMT Economic and Trade Company Ltd. (LIMMT). Over the years, Li Fangwei’s companies have done millions of dollars of business with Iran. This business has included selling to Iranian entities various metallurgical goods and related components that are banned for transfer to Iran by, among others, the United Nations, because the items are controlled by the Nuclear Supplier’s Group (a multinational group that maintains “control lists,” which identify nuclear-related dual-use equipment, material and technology). Li Fangwei has been, among other things, a long-time supplier to Iran’s Defense Industries Organization and Iran’s Aerospace Industries Organization. In addition, Li Fangwei has been a principal contributor to Iran’s ballistic missile program, through China-based entities that have been sanctioned by the United States.

In light of his supply of restricted items to Iran, the United States has imposed targeted sanctions on both Li Fangwei and LIMMT. Specifically, the United States Department of the Treasury’s Office of Foreign Asset Controls (OFAC) publicly added LIMMT (in 2006) and Li Fangwei (in 2009) to its List of Specially Designated Nationals and Blocked Persons (SDN List). By virtue of their inclusion on the SDN List, Li Fangwei and LIMMT were effectively precluded from conducting any business within the United States without first obtaining a license or authorization from OFAC. Neither Li Fangwei nor LIMMT has sought such a license or authorization.

The above-referenced restrictions have forced Li Fangwei to operate much of his business covertly. In response to United States sanctions, Li Fangwei has built an outsized network of China-based front companies to conceal his continuing participation, and LIMMT’s continuing participation, in sanctioned activities. The front companies are listed in Exhibit A to the superseding indictment. As shown in Exhibit A, many of those front companies have used the same address as LIMMT, or a close variant thereof.

During the period from 2006 through to the present, Li Fangwei has used front companies to engage in more than 165 separate U.S. dollar transactions, with a total value in excess of approximately $8.5 million dollars. Included in those illicit transactions have been transactions involving sales to U.S. companies and sales of merchandise by Li Fangwei to Iran-based companies utilizing the U.S. financial system. Li Fangwei also attempted to acquire on behalf of Iran-based entities so-called “dual use” items from the United States, China and other countries that could be used in the production of weapons of mass destruction and/or devices used to deliver weapons of mass destruction.

Additionally, the U.S. Attorney’s Office and the FBI announced the seizure of over $6,895,000 in funds attributable to the Li Fangwei front companies, and the filing of a civil complaint seeking the forfeiture of those funds to the United States. The seized funds are substitutes for money held by Li Fangwei’s front companies at banks in China, and were seized from accounts at U.S. banks held in the name of foreign banks used by these front companies to conduct U.S. currency transactions (the correspondent accounts). The funds were seized pursuant to seizure warrants issued on Dec. 18, 2013, and April 25, 2014. The $6,895,000 represents funds used by the Li Fangwei front companies to engage in transactions that violate the U.S. sanctions laws and thus are subject to forfeiture. There are no allegations of wrongdoing by the U.S. or foreign banks that maintain these accounts. Because the funds used in those transactions are held in banks overseas, the United States is unable to seize the funds directly. However, pursuant to U.S. law, the United States can seize funds located in a bank’s correspondent accounts in the United States if there is probable cause to believe that funds subject to forfeiture are on deposit with that bank overseas. Based on this provision and others, the seizure warrants were executed. These funds were transferred to a seized asset account maintained by the United States Marshals Service pending resolution of the forfeiture action.

Based on information developed in the course of the FBI’s investigation into Li Fangwei that forms the basis of the superseding indictment, OFAC today is adding eight additional front companies used by Li Fangwei to its List of Specially Designated Nationals and Blocked Persons.

Finally, the United States Department of Commerce announced today the addition of nine China-based suppliers of Li Fangwei to its Entity List.

The Superseding Indictment charges Li Fangwei with seven separate offenses:

·          Count One: Conspiracy to violate the International Emergency Economic Powers Act;

·          Counts Two and Three: Substantive violations of the International Emergency Economic Powers Act;

·          Count Four: Money laundering conspiracy;

·          Count Five: Conspiracy to commit wire fraud and bank fraud; and

·          Counts Six and Seven: Wire fraud.

If convicted, Li Fangwei faces a maximum sentence of 20 years in prison on each of Counts One through Four and Counts Six and Seven, and 30 years in prison on Count Five. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.

Additional efforts directed at Li Fangwei and his network were announced today by the U.S. Department of State’s Transnational Organized Crime Rewards Program, Department of Treasury and the Department of Commerce.

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

Oneike Mickhale Barnett, a Jamaican citizen, was sentenced today in Ft. Lauderdale, Fla., in connection with his role in a fraudulent lottery scheme based in Jamaica that targeted victims in the United States, the Justice Department announced.  Barnett was sentenced by U.S. District Court Judge William J. Zloch to serve 60 months in prison and 5 years supervised release.  Barnett also was ordered to pay $94,456 in restitution.

Barnett’s prosecution is part of the Department of Justice’s effort, working with federal and local law enforcement, to combat fraudulent foreign lottery schemes preying on American citizens.  According to the U.S. Postal Inspection Service, Americans have lost tens of millions of dollars to fraudulent foreign lotteries and sweepstakes. 

“This sentence sends a strong message that the American justice system will not stand by while criminals defraud unsuspecting Americans of their savings,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “The Department of Justice will use all available means to hold these international criminals accountable.” 

Barnett was arrested in Orlando, Fla., in August 2013, following his indictment by a federal grand jury in Ft. Lauderdale on Aug. 9, 2012.  Barnett pleaded guilty on Feb. 28, 2014, to conspiracy to commit wire fraud.  As part of his guilty plea, Barnett acknowledged that had the case gone to trial, the United States government would have proved beyond a reasonable doubt that, from 2008 through 2012, he was a member of a conspiracy in which elderly victims were informed that they had won a large amount of money in a lottery and were induced to pay bogus fees in advance of receiving their purported lottery winnings.  In an effort to convince the victims that the lottery winnings were real, the conspirators sent them written and electronic communications discussing their purported lottery winnings which claimed to be from a genuine sweepstakes company, and from federal agencies, including the Internal Revenue Service and the Federal Reserve.

 
“As international fraudsters focus their criminal schemes on Americans, we will do all we can to prosecute and deter such criminal activity,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida.  “ We will continue to bring international fraudsters to justice in the United States.” 

 
Also as part of his guilty plea, Barnett acknowledged that the government would have proved beyond a reasonable doubt that he knew the claims of lottery winnings were completely fabricated and he, along with his co-conspirators, kept the victims’ money for their own benefit without paying any lottery winnings.

                 
Assistant Attorney General Delery and U.S. Attorney Ferrer commended the investigative efforts of the U.S. Postal Inspection Service, Homeland Security Investigations, and the U.S. Marshals Service.  The case was prosecuted by Assistant U.S. Attorney Bertha Mitrani and Consumer Protection Branch, Civil Division Assistant Director Jeffrey Steger and Trial Attorney Kathryn Drenning.

Dr. Dayo Obebe of Muscogee County, Georgia, was sentenced today to serve 12 months and one day in prison for tax evasion and ordered to pay $189,661 in restitution, announced Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.  Obebe pleaded guilty to one count of tax evasion on Feb. 6, 2014.

According to court documents, Obebe is a dentist licensed in Georgia and Alabama, where he operated the Moon Road Cosmetic & Family Dentistry in Columbus, Georgia, and the Brent Dental Dentistry in Brent, Alabama.  In 2004, Obebe began intentionally concealing money he earned from patients who paid with credit cards from his accountants and the Internal Revenue Service (IRS) by placing credit card payments into a separate bank account from cash and check receipts.  Consequently, Obebe intentionally underreported his total income from the dental practices on his 2004, 2005 and 2006 federal income tax returns by more than $500,000 and falsely claimed a tax refund.

According to court documents, during an IRS audit of Obebe’s tax return, he lied to the IRS revenue agent conducting the audit when he stated that the dental practices did not accept credit cards as a form of payment for dental services when, in fact, the dental practice did accept credit cards.  In total, Obebe evaded paying over $185,000 in taxes to the IRS on his 2004, 2005 and 2006 federal income tax returns.

The case was investigated by special agents of IRS - Criminal Investigation and Trial Attorney Charles Edgar for the Tax Division prosecuted the case.

More information about the Tax Division and its enforcement efforts can be found at the division website.

Charmaine Anne King was sentenced today in connection with her role in a fraudulent international lottery scheme that targeted U.S. citizens, the Justice Department announced.  King was sentenced by U.S. District Court Judge K. Michael Moore in Miami to serve 57 months in prison and 5 years supervised release.  A hearing on restitution has been scheduled for June 5, 2014.  King was convicted by a federal jury in Miami on Feb. 5, 2014, of one count of conspiracy, three counts of mail fraud, and two counts of wire fraud. 

 
King’s prosecution is part of the Department of Justice’s effort, working with federal and local law enforcement, to combat international lottery fraud schemes preying on American citizens.  According to the U.S. Postal Inspection Service, Americans have lost tens of millions of dollars to fraudulent foreign lotteries. 

 
“The Justice Department will continue to hold criminals accountable for fraudulent lottery schemes,” said Stuart F. Delery, Assistant Attorney General for the Justice Department’s Civil Division.  “This illegal conduct creates significant financial harm to people throughout the country, and we will continue to investigate and prosecute such crime, and bring those responsible to justice.” 

 
A federal grand jury in Miami returned an indictment against King and co-conspirator Althea Angela Peart on Oct. 31, 2013.  Judge Moore adopted a report and recommendation accepting Peart’s guilty plea on Feb. 4, 2014, and on March 20, 2014, he sentenced Peart to 33 months’ incarceration.  As part of her plea agreement, Peart acknowledged that a co-conspirator, believed to be located in Canada, mailed letters to elderly victims in the United States falsely informing the victims that they had won more than a million dollars in a lottery.  These letters purported to be from an actual sweepstakes company in the United States.

 
“International lottery fraudsters have cheated Americans out of tens of millions of dollars,” said Wifredo Ferrer, U.S. Attorney for the Southern District of Florida.  “In this particular scheme, the fraudsters convinced the victims to deposit counterfeit checks into their bank accounts in order to pay fees to collect their purported lottery winnings.  After the victims sent the money to King, the counterfeit cashier’s checks bounced and they lost their money.  Such fraud will not be tolerated.  Together with federal and local law enforcement, we are working to put an end to this type of scheme.” 

 
The evidence at King’s trial showed that a co-conspirator sent fraudulent lottery letters to the victims and included counterfeit cashier’s checks made out to the victims for thousands of dollars.  These letters instructed victims to call “claims agents” who were actually co-conspirators, and when the victims called the purported claims agents, the agents informed the victims that they had to pay several thousand dollars in fees in order to collect their purported lottery winnings.  The claims agents told the victims to deposit the cashier’s checks in the victims’ bank accounts in order to purportedly cover the money they had to pay.  The co-conspirators instructed the victims on how to send and wire this money to King and others.  The cashier’s checks that victims received from the fraudulent lottery had no value.  The evidence demonstrated that after the victims sent money to King, the counterfeit cashier’s checks bounced.  Victims never received any lottery winnings.

 
Evidence presented at trial showed that King kept a percentage of the money she received from victims and sent the rest of the money to a co-conspirator.  King continued to participate in this scheme even after the U.S. Postal Inspection Service verbally informed her that she was participating in unlawful activity, and after she later signed a Cease and Desist Order requiring that she stop receiving money from victims of fraud.  The order that King signed described the lottery related activity that the U.S. Postal Inspection Service explained was unlawful.

Assistant Attorney General Delery commended the investigative efforts of the U.S. Postal Inspection Service, Homeland Security Investigations, and the U.S. Marshals Service.  The case is being prosecuted by Assistant Director Jeffrey Steger and Trial Attorney Kathryn Drenning with the Department of Justice’s Civil Division, Consumer Protection Branch.

A federal jury convicted certified public accountant Jeffery Deshon Applewhite, aka Jeffrey Donald Mason, a resident of Los Angeles County, California, of 20 counts of aiding and assisting the preparation and presentation of false tax returns late yesterday, announced Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division, U.S. Attorney Melinda Haag for the Northern District of California and Internal Revenue Service (IRS)-Criminal Investigation Special Agent in Charge José M. Martinez.  Applewhite was not convicted on five charges of identity fraud.

The evidence presented during the five day trial before U.S. District Court Judge Jeffrey S. White showed that Applewhite, who owned and operated tax preparation businesses in Los Angeles and Oakland, California, prepared false and fraudulent income tax returns for clients during the years 2006 through 2011 on which he fabricated deductible expenses, including gifts to charity,  and other expenses.  Applewhite also fraudulently included residential energy credits and education credits to which his clients were not entitled on tax returns he prepared.  Applewhite prepared and filed false returns using the names Jeffery Deshon Applewhite and Jeffrey Donald Mason, and used the name and tax preparer identification number of another tax return preparer.

Applewhite’s sentencing hearing is scheduled for Aug. 5, 2014, before Judge White in Oakland.  The maximum statutory penalty for each count of aiding and assisting the preparation of false tax returns is three years in prison and a fine of $250,000. 

The case was investigated by Special Agents from IRS - Criminal Investigation .  Assistant U.S. Attorney Cynthia Stier and Trial Attorney Sonia Owens of the Tax Division are prosecuting the case.

More information about the Tax Division and its enforcement efforts can be found at the division website

Perry Sylvester Jackson, 28, of Marysville, Calif., was sentenced today by U.S. District Court Judge John A. Mendez to serve 70 months in prison for violating the Matthew Shepard and James Byrd Jr. Hate Crimes Prevention Act in a 2011 racially motivated attack against a white man and an African-American woman in Marysville.  Jackson, who previously pleaded guilty on Dec. 17, 2013, was also ordered to serve three years of supervised release following his prison sentence and to pay restitution in the amount of $175.  Co-defendant Billy James Hammett, who also pleaded guilty, was sentenced on March 25, 2014, to serve 87 months in prison and three years of supervised release, as well as to pay $175 in restitution.  Anthony Merrell Tyler, 33, also pleaded guilty and is awaiting sentencing.

According to documents filed with the court, around 10:45 p.m. on April 18, 2011, a white man and an African-American woman parked their car at a convenience store in Marysville.  Shortly afterward, the three defendants attacked the man and woman based on race.  After calling the male victim a “[racial slur]-lover,” Jackson, who has the words “white power” tattooed on his legs, punched him twice in the head through the open passenger window.  At the same time, Hammett kicked the woman in the chest.  A few seconds later, Tyler smashed the car’s windshield with a crowbar.  As the attack continued, the woman managed to take refuge inside the convenience store.  All three assailants then descended upon the male victim and began attacking him in the parking lot.  He sustained abrasions on his right forearm and knees, while the woman suffered bruising to her chest.  At the end of the incident, Tyler used a racial slur to refer to an African-American witness.

Tyler is scheduled to be sentenced on July 8, 2014, where he faces a statutory maximum sentence of 10 years in prison and a fine of up to $250,000. 

This case was investigated by the FBI.  The case is being prosecuted by U.S. Attorney Benjamin B. Wagner for the Eastern District of California and Trial Attorney Chiraag Bains of the Justice Department’s Civil Rights Division.

Harvey James was sentenced today to serve 110 months in prison for his role in a stolen identity refund fraud scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.  James previously pleaded guilty to one count of mail fraud and one count of aggravated identity theft on Oct. 25, 2013.  James was also ordered to serve three years of supervised release and to pay $618,042 in restitution.

Between January 2010 and 2012, James and his sister, Jacqueline Slaton, obtained stolen identities from various individuals, including one person who had access to inmate information from the Alabama Department of Corrections.  James and others used those inmate names to file federal and state tax returns that claimed fraudulent refunds.  James directed some of the false refunds to prepaid debit cards, and directed others to be issued in the form of a Treasury check.  Vernon Harrison, a U.S. Postal Service employee, provided James with addresses from his postal route, which were used as mailing addresses for the fraudulent prepaid debit cards and state tax refund checks.  Harrison collected the debit cards and checks and provided them to another individual, who in turn gave them to James and Slaton.  In total, James filed over 1,000 federal and state income tax returns that claimed over $1 million in fraudulent tax refunds.  Slaton was sentenced to serve 70 months in jail, and Harrison was sentenced to serve 111 months in jail.

The case was investigated by Special Agents of the IRS - Criminal Investigation.  Trial Attorneys Jason H. Poole and Michael Boteler of the Justice Department’s Tax Division and Assistant U.S. Attorney Todd Brown prosecuted the case.

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

A high-level international meeting to support the Government of Ukraine in recovering stolen assets begins tomorrow in London. The gathering is a landmark for Ukraine in underscoring the rule of law and international cooperation. The international community and the Government of Ukraine are united in their commitment and determination in returning stolen assets to the people of Ukraine.

The Ukraine Forum on Asset Recovery (UFAR) is jointly organized by the United Kingdom and the United States of America in support of efforts by the Government of Ukraine to recover stolen assets. Asset recovery is essential in stopping those who have stolen assets from benefitting from their crimes, and in sending a strong message that there can be no impunity for those who carry out such illegal actions. The two-day meeting brings together representatives of key international financial centers and international organizations to bolster collective action, foster direct exchange between practitioners and plan practical steps towards this goal. Key objectives include:

• Reaffirming the political commitment of the international community in tracing and recovering stolen assets; • Facilitating international cooperation for the early tracing of such assets; • Enabling  sharing of best practices, lessons learned and available tools; • Addressing ways of tracing assets hidden behind complex corporate structures; • Facilitating networking and trust-building among practitioners across jurisdictions; and
• Identifying specific capacity building needs for Ukraine.

Senior government officials alongside policy makers, judicial experts, prosecutors, financial intelligence analysts, and regulators are participating in UFAR. Bilateral meetings between Ukrainian officials and other delegations will be an important feature of UFAR in helping to identify concrete actions to be taken to advance asset recovery.

Attorney General Eric Holder of the United States, which is jointly organizing UFAR, emphasized the importance of asset recovery in bringing justice and in mobilizing against corruption.

“This community of nations stands united in our determination to support Ukrainian leaders and citizens as they combat corruption and strive to ensure the stability, the independence, and the national sovereignty of a strong and free Ukraine. 

“We know that the costs of corruption can be immense and long-lasting.  That is why, within days of the fall of President Yanukovych’s regime, the U.S. Department of Justice had a response team on the ground in Kyiv to assess the needs of Ukraine’s investigation into any stolen assets belonging to its people; to provide assistance with document review and preservation; and to help initiate and coordinate any and all efforts required by further investigations. 

“The United States will never stop fighting alongside Ukraine and its partners to ensure accountability, to strengthen transnational cooperation, and to meet instability with resolve – and robust diplomacy.”

In hosting UFAR in London, the British Home Secretary, the Right Hon. Theresa May MP, stressed the importance of the international community’s role in assisting Ukraine.

“By taking urgent and immediate steps to provide political and economic stability, the UK, US and wider international community has already demonstrated a strong commitment to the people of Ukraine. This forum provides a further opportunity to show our ongoing support.

“Building on our expertise in the field of asset recovery, it will also provide practical leadership and assistance to the Ukrainian government as they identify and recover assets looted under the Yanukovych regime and introduce political and economic reform.

“The message is clear - we are making it harder than ever for corrupt regimes or individuals around the world to move, hide and profit from the proceeds of their crime.”

Dante Phearse, 33, has entered a plea of guilty to calling in a bomb threat to Congregation Beth Israel, a synagogue in Houston.  The announcement is being made jointly by the Department of Justice’s Civil Rights Division and the U.S. Attorney’s Office for the Southern District of Texas.  

Phearse pleaded guilty to the civil rights violation of threatening to bomb a synagogue and to making a telephone bomb threat.  As part of his plea, he admitted that on April 30, 2013, he willfully obstructed members of Congregation Beth Israel from enjoying the free exercise of their religious beliefs by threat of force with an explosive device.  Phearse also admitted to using an instrument of interstate commerce to communicate a threat to kill and injure people and to destroy a building by means of an explosive device.  

As a result of the above threats, the school at Congregation Beth Israel was closed for a day and extra security was hired to guard the synagogue and school, thus obstructing the synagogues’ members in the enjoyment of the free exercise of their religious beliefs.

U.S. District Judge Kenneth M. Hoyt accepted the plea today and has sentencing for July 7, 2014.  At that time, Phearse faces a sentence of up to 20 years in federal prison for the civil rights violation and a maximum sentence of 10 years for making bomb threats over the telephone.   

The FBI investigated the case with the assistance of the Houston Police Department. Civil Rights Division Trial Attorneys Nicholas Murphy and Saeed Mody and Assistant U.S. Attorneys Ruben Perez and Joe Magliolo are prosecuting in cooperation with the Harris County District Attorney’s Office.

A Dominican national was sentenced today for his role in trafficking the identities and corresponding identity documents of Puerto Rican U.S. citizens.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Rosa E. Rodríguez-Vélez of the District of Puerto Rico, Principal Deputy Assistant Secretary Thomas S. Winkowski of U.S. Immigration and Customs Enforcement (ICE), Chief Postal Inspector Guy J. Cottrell of the U.S. Postal Inspection Service (USPIS), Director Gregory B. Starr of the U.S. State Department’s Diplomatic Security Service (DSS) and Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI) made the announcement.

Jorge Luis “Daniel” Mendez, 38, a Dominican national formerly of San Juan, Puerto Rico, was sentenced to serve 75 months in prison, followed by three years of supervised release, and ordered to forfeit $422,793 in illegal proceeds by U.S. District Judge Juan M. Pérez-Giménez in the District of Puerto Rico. The defendant is illegally within the United States and the government will seek his deportation following the service of his prison sentence.

On Dec. 3, 2013, Mendez pleaded guilty to one count of conspiracy to commit identification fraud, one count of conspiracy to commit human smuggling for financial gain and three counts of aggravated identity theft. To date, 53 individuals have been charged for their roles in the identity trafficking scheme. All 49 arrested defendants have pleaded guilty and 45 defendants have been sentenced.

According to court documents, individuals located in the Savarona area of Caguas, Puerto Rico, obtained Puerto Rican identities and corresponding identity documents. Other conspirators located in various cities throughout the United States solicited customers and sold Social Security cards and corresponding Puerto Rico birth certificates for prices ranging from $700 to $2,500 per set. The identity brokers in the United States ordered the identity documents from the document suppliers in Savarona on behalf of their customers by making coded telephone calls. The conspirators were charged with using text messages, money transfer services and express, priority or regular U.S. mail to complete their illicit transactions.

The court documents indicate that some of the conspirators assumed a Puerto Rican identity themselves and used that identity in connection with the trafficking operation. Their customers generally obtained the identity documents to assume the identity of Puerto Rican U.S. citizens and to obtain additional identification documents, such as legitimate state driver’s licenses. Some customers obtained the documents to commit financial fraud and attempted to obtain a U.S. passport.

Mendez was a supplier of Puerto Rican identity documents who operated in San Juan and provided Puerto Rican identities to brokers in Massachusetts and Pennsylvania, knowing that the identities would be sold to undocumented aliens who would then pose as U.S. citizens. Court documents show that Mendez was a manager and supervisor in the conspiracy.

Various identity brokers were operating in Rockford, DeKalb and Aurora, Ill.; Seymour, Columbus and Indianapolis, Ind.; Hartford, Conn.; Clewiston, Fla.; Lilburn and Norcross, Ga.; Salisbury, Md.; Columbus and Fairfield, Ohio; Dorchester, Lawrence, Salem and Worcester, Mass.; Grand Rapids, Mich.; Nebraska City, Neb.; Elizabeth, N.J.; Burlington and Hickory, N.C.; Hazelton and Philadelphia, Pa.; Houston; Abingdon and Albertville, Ala.; and Providence, R.I.

The charges are the result of Operation Island Express, an ongoing, nationally coordinated investigation led by the ICE Homeland Security Investigations’ (ICE-HSI) Chicago Office and USPIS, DSS and IRS-CI offices in Chicago, in coordination with the ICE-HSI San Juan Office and the DSS Resident Office in Puerto Rico. The Illinois Secretary of State Police; Elgin, Ill., Police Department; Seymour, Ind., Police Department; and Indiana State Police provided substantial assistance. The ICE-HSI Assistant Attaché office in the Dominican Republic and International Organized Crime Intelligence and Operations Center (IOC-2) as well as various ICE, USPIS, DSS and IRS-CI offices around the country provided invaluable support.

The case is being prosecuted by Trial Attorneys James S. Yoon, Hope S. Olds, Courtney B. Schaefer and Christina Giffin of the Criminal Division’s Human Rights and Special Prosecutions Section, with the assistance of the Criminal Division’s Asset Forfeiture and Money Laundering Section and the support of the U.S. Attorney’s Office for the District of Puerto Rico. The U.S. Attorney’s Offices in the Northern District of Illinois, Southern District of Indiana, District of Connecticut, District of Massachusetts, District of Nebraska, Middle District of North Carolina, Southern District of Ohio, Middle District of Pennsylvania, District of Rhode Island, Southern District of Texas and Western District of Virginia provided substantial assistance.

Potential victims and the public may obtain information about the case at: www.justice.gov/criminal/vns/caseup/beltrerj.html . Anyone who believes their identity may have been compromised in relation to this investigation may contact the ICE toll-free hotline at 1-866-DHS-2ICE (1-866-347-2423) and its online tip form at www.ice.gov/tipline . Anyone who may have information about particular crimes in this case should also report them to the ICE tip line or website.

Anyone who believes that they have been a victim of identity theft, or wants information about preventing identity theft, may obtain helpful information and complaint forms on various government websites including the Federal Trade Commission ID Theft Website, www.ftc.gov/idtheft . Additional resources regarding identity theft can be found at www.ojp.usdoj.gov/ovc/pubs/ID_theft/idtheft.html ; www.ssa.gov/pubs/10064.html ; www.fbi.gov/about-us/investigate/cyber/identity_theft ; and www.irs.gov/privacy/article/0,,id=186436,00.html .

Noting that African-American and Hispanic males are arrested at disproportionately high rates, U.S. Attorney General Eric Holder said Monday that the Justice Department will seek to collect data about stops, searches and arrests as part of a larger effort to analyze and reduce the possible effect of bias within the criminal justice system.

Attorney General Holder said the project grew out of President Obama’s call, issued last July following the verdict in the Trayvon Martin case, for the Justice Department to seek to reduce tensions between law enforcement and minority communities.

“Racial disparities contribute to tension in our nation generally and within communities of color specifically, and tend to breed resentment towards law enforcement that is counterproductive to the goal of reducing crime,” Attorney General Holder said. “Of course, to be successful in reducing both the experience and the perception of bias, we must have verifiable data about the problem.  As a key part of this initiative, we will work with grant recipients and local law enforcement to collect data about stops and searches, arrests, and case outcomes in order to help assess the impact of possible bias.”

The data collection is one part of the Department’s new National Center for Building Community Trust and Justice. It will be funded through $4.75 million in competitively awarded grants. The grant recipients will be named later this year.
 
        The complete text of the Attorney General’s video message is below:

“A recent study reported that half of African-American men have been arrested at least once by age 23.  Overall, black men were 6 times, and Latino men were 2.5 times, more likely to be imprisoned than white men in 2012.
 
“This overrepresentation of young men of color in our criminal justice system is a problem we must confront—not only as an issue of individual responsibility but also as one of fundamental fairness, and as an issue of effective law enforcement.  Racial disparities contribute to tension in our nation generally and within communities of color specifically, and tend to breed resentment towards law enforcement that is counterproductive to the goal of reducing crime.
 
“We know – from research and from experience – that when people are treated fairly by police and other justice system agencies they are more likely to accept decisions by the authorities and obey the law in the future, even when they are penalized by criminal sanctions. 
 
“Last July, following the verdict in the case involving the shooting death of Trayvon Martin, President Obama spoke out about the need to promote better understanding between law enforcement and young men of color.  He specifically directed the Justice Department to work closely with state and local law enforcement agencies to develop training and other innovative tools that can help to reduce discord and restore trust.
 
“We are heeding the President’s call.  This month, the Justice Department is launching a new initiative – the National Center for Building Community Trust and Justice – to analyze and reduce the effect of racial bias within the criminal justice system.  The Center will be funded through an initial competitive grant award totaling $4.75 million and is jointly supported by the Justice Department’s Office of Justice Programs, the COPS Office, the Civil Rights Division, the Office on Violence Against Women, and the Community Relations Service.  This effort will encompass a broad range of areas in which fairness and trust can come into question–from stops and searches to wrongful convictions.
 
“Of course, to be successful in reducing both the experience and the perception of bias, we must have verifiable data about the problem.  As a key part of this initiative, we will work with grant recipients and local law enforcement to collect data about stops and searches, arrests, and case outcomes in order to help assess the impact of possible bias.  We will conduct this research while simultaneously implementing strategies in five initial pilot sites with the goal of reducing the role of bias and building confidence in the justice system among young people of color.  This work will likely include anti-gang and mentoring projects intended to empower young African-American and Latino males and break the vicious cycle of poverty, incarceration, and crime that destroys too many promising futures each and every day. 
 
“Through partnerships with community organizations and local agencies, the Center will build on the work of the Department’s Smart on Crime initiative to help expand opportunity in neighborhoods that are too often characterized by distress and distrust; to reduce bias and discord; and – ultimately – to relegate the era of animosity and suspicion to the past.
 
“Of course, I realize that progress will not come easily, and the changes we seek will not take hold overnight.  But the Justice Department is firmly committed to the goal of opening doors to cooperation and trust that will ultimately lead to safer and healthier communities.
 
“The Department of Justice is integrally involved in the President’s initiative, “My Brother’s Keeper,” a plan to make sure that every young man of color who is willing to work hard and play by the rules has the chance to reach his full potential.  By creating more opportunities for young men of color we can send the message that our country is stronger when all Americans are doing well.
 
“As our nation’s Attorney General, and as a father of three, I am personally dedicated to doing everything possible to reduce crime, to strengthen our communities, and to provide the support and assistance that all of our young people need – and that they deserve.”

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

A soldier in the Texas Army National Guard pleaded guilty today for his role in a bribery and fraud scheme that caused more than $30,000 in losses to the U.S. National Guard Bureau, announced Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

Sergeant First Class Zaunmine O. Duncan, 38, formerly of Austin, Texas, pleaded guilty to one count of conspiracy, one count of bribery and one count of aggravated identity theft. The case against Duncan arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to illegally obtain fraudulent recruiting bonuses. To date, the investigation has led to charges against 25 individuals, 23 of whom have pleaded guilty.

According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. (Docupak), to administer the Guard Recruiting Assistance Program (G-RAP). The G-RAP was a recruiting program that offered monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard. Through this program, a participating soldier could receive bonus payments for referring another individual to join the Army National Guard. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account. To participate in the program, soldiers were required to create online recruiting assistant accounts.

Duncan admitted that between approximately February 2008 and August 2010, while he was a recruiter for the National Guard, he obtained the names and Social Security numbers of potential soldiers and provided them to recruiting assistants, including co-conspirators Elisha Ceja, Annika Chambers, Kimberly Hartgraves and Lashae Hawkins, so that these recruiting assistants could use the information to obtain fraudulent recruiting bonuses by falsely claiming that they were responsible for referring these potential soldiers to join the Army National Guard, when they were not. In exchange for the information, Duncan admitted that he personally received a total of at least approximately $24,500 in payments from Ceja, Chambers, Hartgraves and Hawkins.

Duncan is scheduled to be sentenced on Aug. 28, 2014, before U.S. District Judge Lee H. Rosenthal in Houston.

Co-conspirators Ceja, Chambers, Hartgraves and Hawkins have all pleaded guilty to conspiracy and bribery in connection to this scheme. Hartgraves is scheduled to be sentenced on June 24, 2014. Ceja, Chambers and Hawkins are each scheduled to be sentenced on June 26, 2014. All of these sentencing hearings are set before U.S. District Judge Rosenthal in Houston.

The cases are being investigated by special agents from the San Antonio Fraud Resident Agency of Army CID’s Major Procurement Fraud Unit. This case is being prosecuted by Trial Attorneys Sean F. Mulryne, Heidi Boutros Gesch and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas.

Habtom Merhay, a national of Eritrea and a citizen of the United Kingdom, made his initial appearance today in Washington, D.C., federal court to face human smuggling charges for his role in smuggling primarily Eritrean and Ethiopian undocumented migrants from Dubai, United Arab Emirates, through South and Central America and Mexico into the United States.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Ronald C. Machen Jr. of the District of Columbia and Acting Special Agent in Charge Katrina W. Berger of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) made the announcement.

Merhay, 47, arrived in the United States on April 25, 2014, and made his initial appearance today before U.S. Magistrate Judge Deborah A. Robinson in the District of Columbia. He was indicted under seal in the District of Columbia in 2012, and the charges were unsealed today. Merhay has been in the custody of Moroccan authorities pending extradition since his arrest in Marrakech, Morocco, in August 2013.

The indictment charges Merhay with one count of conspiracy to bring undocumented migrants to the United States for profit and 15 counts of unlawfully bringing an undocumented migrant to the United States for profit. Court documents allege that Merhay operated with a network of smugglers in Africa, the United Arab Emirates, South and Central America, Mexico and elsewhere to coordinate and implement arrangements, including providing fraudulent identity and travel documents, for undocumented migrants to travel through Latin America and ultimately into the United States without authorization. For up to $15,000, Merhay arranged for individual undocumented migrants to travel from points in Africa to a house or apartment in Dubai, where he provided travel documents, tickets and instructions for meeting other smugglers while on the way to the United States. Merhay coordinated the migrants’ air travel to South America, where they would meet with Merhay’s associates, who would direct or guide them across the various country borders. The undocumented migrants then met with other smugglers associated with Merhay and were further guided north to Mexico and then into the United States, sometimes by crossing the Rio Grande River by raft.

The investigation was conducted under the Extraterritorial Criminal Travel Strike Force (ECT) program, a joint partnership between the Justice Department’s Criminal Division and ICE-HSI. The ECT program focuses on human smuggling networks that may present particular national security or public safety risks or present grave humanitarian concerns. ECT has dedicated investigative, intelligence and prosecutorial resources. ECT coordinates and receives assistance from other U.S. government agencies and foreign law enforcement authorities.

The investigation was conducted by HSI Washington.  This case is being prosecuted by Trial Attorney Jay Bauer of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Frederick Yette of the District of Columbia.  The extradition was handled by Dan E. Stigall of the Criminal Division’s Office of International Affairs.

The Department of Justice and HSI expressed their appreciation for the significant assistance provided by the Moroccan Ministry of Justice.

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

The Justice Department’s Office on Violence Against Women (OVW) today announced the release of two grant solicitations to launch a new $3 million special initiative for the Bakken Region.  Located in western North Dakota and eastern Montana, the Bakken region has experienced rapid growth in oil and gas production in recent years.  It has also seen increases in population and crime.  OVW’s Bakken Region Initiative will support the expansion of services to victims of sexual assault, domestic violence and stalking as well as aid the local criminal justice system in responding to these crimes.

 
“Over the past five years, we have made great strides in protecting women from violence in Indian country,” said Associate Attorney General Tony West.  “We will continue to partner with tribal and local law enforcement and service providers, and together we will help strengthen public safety in the Bakken communities with resources like these grants.”

 
Supported by funding from OVW’s Rural Sexual Assault, Domestic Violence, Dating Violence and Stalking Grant Assistance Program (Rural Program), the OVW Bakken Region Initiative will support projects that are designed to address the unique challenges faced by victims, responders and service providers within this rural region.  The Bakken Region Initiative was developed through a collaborative process resulting from OVW’s July 2013 fact-finding trip to the region, during which OVW leadership met with local and tribal advocates and law enforcement, tribal leaders, the U.S. Attorney, FBI agents and victim service staff.  In response, OVW developed two solicitations, the Violence Against Women Bakken Region Initiative: Tribal Special Assistant U.S. Attorney (Bakken Region Tribal SAUSA Initiative) and the Violence Against Women Bakken Region Initiative: Enhanced Response to Victims (Bakken Region Enhanced Response to Victims Initiative).  Together, these grants will create dedicated resources to increase local and tribal capacity to prosecute crimes of violence against women and provide services to victims of sexual assault, domestic violence and stalking.

 
“Local and tribal victim service providers have been overwhelmed with the increase in domestic violence and sexual assault victims coming forward and needing help,” said Bea Hanson, OVW’s Principal Deputy Director.  “These targeted funds will enable the community to assist more victims and support the growing population in the Bakken Region.” 

The Bakken Region Tribal SAUSA Initiative will support the salary, travel and training costs of a Tribal SAUSA for the Assiniboine and Sioux Tribes of the Fort Peck Indian Reservation in Montana and a Tribal SAUSA for the Three Affiliated Tribes of the Fort Berthold Indian Reservation in North Dakota.  The Tribal SAUSAs, who will be cross-designated to bring cases in both tribal and federal courts, will work in collaboration with the U.S. Attorneys’ Offices in the Districts of Montana and North Dakota.  These prosecutors will maintain an active violence against women crimes caseload in tribal and federal courts, while also helping to promote higher quality investigations, improved training and better inter-governmental communication.

The Bakken Region Enhanced Response to Victims Initiative will fund state domestic violence and sexual assault coalitions, as well as local and tribal victim service providers responding to the increased demand for domestic violence and sexual assault victim services.  Funding and technical assistance will also help those working to prevent violence and support survivors of sexual assault, domestic violence, dating violence and stalking. 

The solicitations are non-competitive special initiative announcements, and applications for both solicitations are due by May 28, 2014.

Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division made the following statement today after the U.S. District Court for the District of Columbia found the department’s settlement involving US Airways Group Inc. and American Airlines’ parent corporation, AMR Corp., to be in the public interest:

 
“We’re pleased that the court agreed that the department’s remedy will enhance system-wide competition in the airline industry.  By increasing the presence of low cost carriers at key constrained airports across the country–through significant divestitures of slots at Ronald Reagan Washington National and New York LaGuardia International and gates at five other important airports–consumers will have more choices to fly at more competitive airfares.  History has shown that when low cost carriers have entered the market, consumers benefit.  With the settlement, the department is requiring an unprecedented number of divestitures in this industry that will provide enhanced competition across the nation.” 

Background

 
On Aug. 13, 2013, the department, six state attorneys general and the District of Columbia filed an antitrust lawsuit against US Airways and American alleging that US Airway’s $11 billion acquisition of American would have substantially lessened competition for commercial air travel in local markets throughout the United States.  The department alleged that the transaction would result in passengers paying higher airfares and receiving less service.  In addition, the department alleged that the transaction would entrench the merged airline as the dominant carrier at Reagan National, where it would control 69 percent of take-off and landing slots, thus effectively foreclosing entry or expansion by competing airlines.

 
On Nov. 12, 2013, the department announced its settlement requiring US Airways and American’s parent corporation, AMR Corp. to divest slots and gates at key constrained airports across the country to low cost carrier airlines (LCCs) in order to enhance system-wide competition in the airline industry.

The settlement requires US Airways and American to divest slots, gates and ground facilities at key airports around the country.  Specifically, the settlement requires the companies to divest or transfer to low cost carrier purchasers approved by the department:

• All 104 air carrier slots (i.e. slots not reserved for use only by smaller, commuter planes) at Reagan National and rights and interest in other facilities at the airport necessary to support the use of the slots;
• Thirty-four slots at LaGuardia and rights and interest in other facilities at the airport necessary to support the use of the slots; and
• Rights and interests to two airport gates and associated ground facilities at each of  Boston Logan, Chicago O’Hare, Dallas Love Field, Los Angeles International and Miami International.

Thus far, slots at Reagan National were divested to Southwest Airlines, JetBlue and Virgin America.  At LaGuardia, slots were divested to Southwest Airlines and Virgin America.  The divestiture process for the gates at the other airports is ongoing.

The International Competition Network (ICN) adopted new recommended practices for predatory pricing analysis and competition assessment, and approved new work product on international merger enforcement cooperation, confidentiality protections during investigations, leniency policy and digital evidence gathering, the Department of Justice announced today.

 
The 13th annual ICN conference, hosted by the Moroccan Competition Council, was held on April 23-25, 2014, in Marrakesh, Morocco. More than 500 delegates from 90 jurisdictions participated, including competition experts from international organizations and the legal, business, consumer and academic communities. Assistant Attorney General Bill Baer of the Department of Justice’s Antitrust Division and Federal Trade Commission (FTC) Chairwoman Edith Ramirez led the U.S. delegation.  The conference showcased the achievements of ICN working groups on cartels, competition advocacy, competition agency effectiveness, mergers and unilateral conduct.

 
The Department of Justice co-chairs the Cartel Working Group, which addressed the challenges of cartel enforcement, including prevention, detection, investigation and sanctioning of cartel conduct. The working group showcased revised work product focusing on the implementation of effective leniency policy and digital evidence gathering. Assistant Attorney General Baer spoke on a panel about effective cartel enforcement, highlighting the Antitrust Division’s digital evidence gathering techniques.

 
“Gathering the world’s antitrust enforcers together to discuss and share ideas on the most effective ways to combat cartel and civil anticompetitive behavior is critical to ensuring that the global marketplace remains open and competitive benefiting consumers and businesses,” said Assistant Attorney General Baer. “It is important to stay nimble and take advantage of new technology, such as the digital evidence gathering tools being used by many antitrust enforcement agencies.”

FTC Chairwoman Ramirez participated in the Merger Working Group’s plenary discussion of international cooperation in merger cases, the subject of a multi-year study by the working group. The Chairwoman highlighted that, “Our experience demonstrates that international cooperation is essential to ensure effective and consistent merger review. The ICN is a uniquely valuable forum in which to advance the coordination and sound analysis of the increasing volume of cross-border transactions.”

 
The Merger Working Group presented a report detailing agencies’ experiences with international enforcement cooperation that will inform the development of ICN guidance on effective cooperation. This initiative furthers the working group’s mission to promote the adoption of best practices in the design and operation of merger review laws.

 
To further the Unilateral Conduct Working Group’s mission to promote convergence toward sound enforcement of laws governing conduct by firms with substantial market power, the working group presented new recommended practices for predatory pricing investigations at the conference. Deputy Assistant Attorney General Renata B. Hesse of the department’s Antitrust Division participated in the working group’s plenary discussion of how agencies characterize and pursue unilateral conduct enforcement.

 
The Agency Effectiveness Working Group, co-chaired by the FTC, addresses competition agency strategy, planning, operations, and investigative tools and procedures. An ongoing working group project on agency investigative process aims to identify investigative procedures that promote fair and informed enforcement actions. Paul O’Brien, International Counsel at the FTC, moderated a plenary session on agency procedures focused on investigative transparency and engagement. This year, the working group also produced a report on confidentiality protections that underscored common approaches to these practices.

 
The Advocacy Working Group presented a set of recommended practices on competition assessment, the exercise of evaluating the effects on competition of a proposed or existing law, regulation or policy. The ICN recommendations extend and complement work by the Organisation for Economic Co-operation and Development (OECD) in its Competition Assessment Toolkit, and advance the working group’s goal to promote the development of practical tools and guidance to improve the effectiveness of competition agencies’ competition advocacy activities.

 
The Moroccan Competition Council led a special project devoted to the treatment of state-owned enterprises under competition law.

 
The ICN was created in October 2001, when the Department of Justice and the FTC joined antitrust agencies from 13 other jurisdictions to increase understanding of competition policy and promote convergence toward best practices around the world.  The ICN now comprises 128 member agencies from 115 jurisdictions.

More resources are available on the ICN website.

WASHINGTON—On January 3, 2014, the Director of National Intelligence declassified and disclosed publically that the U.S. government had filed an application with the Foreign Intelligence Surveillance Court seeking renewal of the authority to collect telephony metadata in bulk, and that, the FISC renewed that authority. The Office of the Director National Intelligence also announced that the Administration was undertaking a declassification review of the FISC's January 3 primary order. On February 12, 2014, and following a declassification review by the Executive Branch, the FISC released in redacted form the previously classified January 3 primary order it had issued in Docket Number BR 14-01, along with a number of other documents.

On January 22, 2014, following service of a Section 215 production order issued to it by the FISC in Docket Number BR 14-01, a provider petitioned the Court to "vacate, modify, or reaffirm" the production order in light of the Memorandum Opinion issued by the United States District Court for the District of Columbia in Klayman, et al., v. Obama, et al., No. 13-cv-0851 on December 16, 2013. That Memorandum Opinion held, in the context of ruling on a motion for preliminary injunction, that the plaintiffs were likely to succeed on their claim that the NSA Section 215 program authorized by orders of the FISC violated the Fourth Amendment.

On March 20, 2014, the FISC issued an Opinion and Order addressing the provider's petition. The FISC held that the district court's opinion in Klayman was unpersuasive, concluded that it provided no basis for vacating the production order, and held that Smith v. Maryland, 442 U.S. 735 (1979) is the controlling precedent. Accordingly, the FISC reaffirmed its production order and directed continued compliance on the part of the provider.

Following the completion of FISC-ordered declassification reviews by the Executive Branch, today the FISC released in redacted form the previously classified January 22, 2014, provider petition; a January 23, 2014, Scheduling Order; a February 12, 2014, Response of the United States to the provider petition; a March 20, 2014, Opinion and Order signed by the Honorable Rosemary M. Collyer, and an April 11, 2014, order. These documents are available at the FISC's website, www.uscourts.gov and on the Department of Justice’s website, www.justice.gov.
S, OPINIONS AND ORDERS REGARDING COLLECTION UNDER SECTION 501 OF THE FOREIGN INTELLIGENCE SURVEILLANCE ACT

Related Materials:

BR14-01 Opinion and Order
BR14-01 Order Regarding Unsealing
BR14-01 Order
BR14-01 Petition
BR14-01 Response
BR14-01 Scheduling Order

Nakia Jackson, of Montgomery, Alabama, was sentenced to serve 87 months in prison today for conspiring to defraud the United States and one count of aggravated identity theft for his role in a stolen identity refund fraud scheme, announced Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division, U.S. Attorney George L. Beck Jr. for the Middle District of Alabama and the Internal Revenue Service (IRS).

According to court documents, between January 2009 and March 2011, Jackson obtained stolen identities from an Alabama state employee and used those identities to file false tax returns.  Jackson recruited a bank employee, LaQuanta Clayton, to assist him in depositing the false income tax refunds into various bank accounts.  He obtained permission from several individuals to use their bank accounts to receive false refunds and when a false refund was deposited, Jackson would direct the individuals to withdraw the money and give the money to him.  In total, Jackson filed over 100 false tax returns and requested over $400,000 in refunds.  

In addition, Jackson was ordered to serve three years of supervised release and pay $212,856 in restitution.

IRS-Criminal Investigation agents investigated this case and Trial Attorneys Charles M. Edgar Jr. and Michael Boteler for the Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case.

More information about the Tax Division and its enforcement efforts can be found at the division website.

The Department of Justice filed a civil forfeiture complaint in the U.S. District Court for the Central District of California seeking to recover more than $700,000 in alleged corruption proceeds of Chun Doo-hwan, the former president of the Republic of Korea.

These monies were seized in February 2014 from the sale of a house located in Newport Beach, Calif., which President Chun’s son, Chun Jae Yong, had purchased in 2005 with proceeds allegedly traceable to his father’s corruption. The United States is working with the Republic of Korea’s Supreme Prosecutor’s Office, the Ministry of Justice and the Seoul Central District Prosecutor’s Office to forfeit these corruption proceeds.

The announcement was made by Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Division and Assistant Director John G. Connolly of U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) Office of International Affairs.

“While serving as Korea’s president, Chun Doo-hwan betrayed the Korean people by taking over $200 million in bribes, some of which his family members then illegally laundered into the United States,” said Acting Assistant Attorney General O’Neil. “Through the department’s Kleptocracy Initiative, we are making crystal clear that the United States will not tolerate the use of its financial system by corrupt foreign officials – or their relatives – to harbor their ill-gotten gains.”

“The U.S. will not be a safe repository for assets misappropriated by corrupt foreign leaders,” said FBI Assistant Director in Charge Lewis.  “The FBI is committed to working with foreign and domestic partners to identify and return those assets to the legitimate owners, in this case the people of the Republic of Korea.”

“This most recent seizure is part of an ongoing effort by HSI to identify and seize illegal assets in the United States obtained by corrupt foreign leaders who use our country as a safe haven to conceal the illicit proceeds of their crimes,” said HSI Assistant Director Connolly. “HSI special agents in our 67 offices in 48 countries will continue to work with our domestic offices as well as international law enforcement partners to hold these individuals accountable by denying them the enjoyment of their ill-gotten gains.”

As alleged in the forfeiture complaint, President Chun was convicted in Korea in 1997 of receiving more than $200 million in bribes from Korean businesses and companies. President Chun and his relatives laundered some of these corruption proceeds through a web of nominees and shell companies in both Korea and the United States.

Through close cooperation between U.S. and Korean law enforcement and prosecution authorities, the $721,951 sought for forfeiture was identified and seized when President Chun’s relatives sold a home in Newport Beach that previously had been purchased with the laundered proceeds of President Chun’s corruption.

This case was brought under the Kleptocracy Asset Recovery Initiative by a team of dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, return those proceeds to benefit the people harmed by these acts of corruption and abuse of office. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to [email protected] .

The investigation was conducted jointly by the FBI’s Kleptocracy Program of the International Corruption Unit within the Criminal Investigation Division and the West Covina Resident Agency of the Los Angeles Division and HSI Attaché Seoul, with assistance from HSI Miami. The case is being prosecuted by Trial Attorney Woo S. Lee of the Criminal Division’s Asset Forfeiture and Money Laundering Section, with substantial support from the Criminal Division’s Office of International Affairs.

The owner of a Louisiana pharmacy pleaded guilty today for directing a $2.2 million Medicare fraud scheme to repackage and redistribute prescription medications.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, Interim U.S. Attorney J. Walter Green of the Middle District of Louisiana, Special Agent in Charge Mike Fields of the Dallas Region of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG), Special Agent in Charge Michael Anderson of the FBI’s New Orleans Division and Louisiana State Attorney General James Buddy Caldwell made the announcement.

Mona Patrice Carter, 47, pleaded guilty before U.S. District Judge James J. Brady of the Middle District of Louisiana to one count of health care fraud. Sentencing will be determined at a later date.

Carter admitted that she owned and operated Community Pharmacy 1, a Baton Rouge pharmacy. From 2007 through December 2013, Carter paid employees of Community Pharmacy clients, including nursing homes and mental health facilities, to collect and return unused prescription drugs. When these drugs were returned to Community Pharmacy, Carter directed her employees to re-package them. Community Pharmacy then re-distributed these drugs as if they were new and billed Medicare as if they were being distributed for the first time – effectively billing Medicare twice for the same medications.

Carter admitted that from January 2008 through February 2013, she caused $2,245,515 in fraudulent billings to Medicare for prescription medications.

The case was investigated by HHS-OIG, the FBI, and the Medicaid Fraud Control Unit of the Louisiana State Attorney General’s Office and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section. This case is being prosecuted by Trial Attorney William G. Kanellis 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, are taking steps to increase accountability and decrease the presence of fraudulent providers.

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

A federal grand jury returned a two-count indictment against John W. Ng, 58, of Albuquerque, New Mexico, charging him with hate crime offenses related to anti-Semitic threats he made against a Jewish woman who owns and operates the Nosh Jewish Delicatessen and Bakery in Albuquerque.  

Ng was arrested by the FBI on March 7, 2014, based on a criminal complaint alleging that he interfered with the victim’s federally protected rights by threatening the victim and interfering with her business because of her religion and because she owned a Jewish restaurant.  According to the indictment, on Jan. 22, 2014, and Feb. 8, 2014, Ng allegedly posted threatening, anti-Semitic notes on the door of the victim’s business.  One of the notes allegedly read, “TO: The [racial slur] who should die.”  Another allegedly read, “FROM:  The one you scarred for life scumbags [;] TO: The [racial slur] who will die like rats.”  

Ng was arrested by the FBI on March 7, 2014.  He remains in federal custody pending completion of a psychiatric competency and dangerousness examination.  

An indictment merely establishes probable cause, and Ng is presumed innocent unless proven guilty.  Each count carries a maximum statutory penalty of one year in prison.

This matter was investigated by the Albuquerque Division of the FBI and is being prosecuted by Assistant U.S. Attorney Holland S. Kastrin of the U.S. Attorney’s Office for the District of New Mexico and Trial Attorney Angie Cha of the U.S. Department of Justice’s Civil Rights Division.

A Maryland man was sentenced today to serve one year and a day in prison for defrauding thousands of homeowners in a $4 million nationwide home loan modification scheme.

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 Special Inspector General for the Troubled Asset Relief Program (SIGTARP) Christy Romero made the announcement.

Brian Kelly, 37, of Forest Hill, was sentenced by U.S. District Court Judge Rya W. Zobel of the District of Massachusetts and ordered to serve three years of supervised release following his prison term. Restitution will be determined at a later date.

Kelly pleaded guilty on May 2, 2013, to one count of conspiracy, nine counts of mail fraud and nine counts of wire fraud.

According to court records, Kelly and others, operating under the name Home Owners Protection Economics Inc. (HOPE), made a series of misrepresentations to induce struggling homeowners to pay HOPE $400 to $2,000 in up-front fees in exchange for HOPE’s help obtaining federally funded home loan modifications. Kelly was one of HOPE’s more successful salespeople, receiving approximately $24,000 after arranging fraudulent home loan modifications totaling approximately $180,000.

Also according to court documents, the conspirators misrepresented that, with HOPE’s assistance, the homeowner was guaranteed to receive a loan modification under the Home Affordable Modification Program (HAMP), which is part of the Troubled Asset Relief Program (TARP) and is a federally funded mortgage-assistance program. For example, the defendants routinely claimed that the homeowner had already been approved for a loan modification, provided phony “approval codes,” quoted new (and wholly fictitious) mortgage terms and due dates, touted their 98 percent past success rate and claimed that they were “underwriters” or were otherwise affiliated with the homeowners’ mortgage companies. HOPE also claimed that it would offer homeowners refunds in the unlikely event that they did not receive a loan modification.

According to court documents, in exchange for the up-front fees, HOPE sent its customers, including homeowners in Massachusetts, a do-it-yourself application package, which was virtually identical to the application that the government provides free of charge. The HOPE customers had no advantage in the application process, and, in fact, most of their applications were denied. Through these misrepresentations, HOPE was able to persuade thousands of homeowners to pay more than $4 million in fees.

Two co-defendants, Christopher S. Godfrey, 44, of Delray Beach, Fla., and Dennis Fischer, 42, of Highland Beach, Fla., were convicted after trial and were each sentenced on Feb. 20, 2014, to serve 84 months in prison. A third co-defendant, Vernell Burris, Jr., 54, of Coconut Creek, Fla, pleaded guilty and was sentenced on Feb. 25, 2014, to serve a year and a day in prison.

The case was investigated by SIGTARP and 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 Bookbinder in the District of Massachusetts’s Computer Crimes Unit.

The Department of Justice and Bazaarvoice Inc. have agreed on a remedy that will address Bazaarvoice’s illegal acquisition of PowerReviews Inc. by requiring Bazaarvoice to divest the assets it acquired from PowerReviews and adhere to other requirements to fully restore competition in the provision of online product ratings and reviews platforms.

 
On Jan. 8, 2014, the U.S. District Court for the Northern District of California in San Francisco ruled that Bazaarvoice violated Section 7 of the Clayton Act when it acquired PowerReviews, its only serious competitor.  Today’s proposed remedy, if approved by the court, will resolve the department’s competitive concerns associated with Bazaarvoice’s acquisition of PowerReviews.

 
“As a result of today’s agreement, Bazaarvoice will remedy the harm caused by its unlawful acquisition of PowerReviews,” said Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division.  “In addition, Bazaarvoice has agreed to meaningful additional measures that will allow a divestiture buyer to quickly achieve the competitive position that PowerReviews would have occupied today, absent the unlawful transaction.”

 
The proposed remedy requires Bazaarvoice to sell all of the PowerReviews assets to a divestiture buyer and contains other provisions to compensate for the deterioration of PowerReviews’ competitive position that occurred as a result of the transaction.  Under the terms of the agreement, Bazaarvoice is required to provide syndication services to the divestiture buyer for four years, allowing the divestiture buyer to build its customer base and develop its own syndication network.  Bazaarvoice is required to waive breach of contract claims against its customers, allowing them to switch to the divestiture buyer without penalty.  Bazaarvoice is also required to waive trade-secret restrictions for any of its employees who are hired by the divestiture buyer, enabling the buyer to leverage Bazaarvoice’s post-merger research and development efforts.  

 
Additionally, the agreement provides for the appointment of a trustee to oversee the divestiture process and to monitor Bazaarvoice’s compliance with its other obligations under the proposed remedy. 

 
Bazaarvoice’s acquisition of PowerReviews was not required to be reported under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, which requires companies to notify and provide information to the department and the Federal Trade Commission before consummating certain acquisitions.  The department began its investigation shortly after the transaction closed.

 
On Jan. 10, 2013, the department filed a civil antitrust lawsuit in the U.S. District Court for the Northern District of California in San Francisco against Bazaarvoice.  The department alleged that Bazaarvoice’s June 2012 acquisition of PowerReviews eliminated the company’s only significant rival, in violation of the antitrust laws. 

 
The department’s trial against Bazaarvoice, conducted by Judge William H. Orrick III, began on Sept. 23, 2013.  The trial lasted three weeks, with closing arguments taking place on Oct. 15, 2013.  On Jan. 8, 2014, the court found that Bazaarvoice violated Section 7 of the Clayton Act by acquiring its primary rival, PowerReviews.

The proposed remedy, along with the department’s competitive impact statement, will be published in the Federal Register, consistent with the requirements of the Antitrust Procedures and Penalties Act.  Any person may submit written comments concerning the proposed remedy within 60-days of its publication to James J. Tierney, Chief, Networks & Technology Enforcement Section, Antitrust Division, U.S. Department of Justice, 450 Fifth Street, N.W., 7th Floor, Washington, D.C. 20530.  These comments will be published either in the Federal Register or, with the permission of the court, will be posted electronically on the department’s website.  At the conclusion of the 60-day comment period, the court may enter the final judgment upon a finding that it serves the public interest.

The Justice Department reached an agreement today with Mexico Foods LLC, aka El Rancho Corp., a supermarket chain based in Garland, Texas, resolving claims that the company engaged in discrimination during the employment eligibility verification process in violation of the Immigration and Nationality Act (INA).

The department’s investigation was initiated based on a referral from the U.S. Citizenship and Immigration Services.  The investigation revealed that El Rancho required lawful permanent residents to present a new employment eligibility document after being hired when their Permanent Resident cards expired, even though the Form I-9 and E-Verify rules prohibit this practice because lawful permanent residents have permanent work authorization in the United States, even after their Permanent Resident cards expire.  The investigation also uncovered evidence that El Rancho routinely requested a specific work authority document from lawful permanent residents during the initial employment eligibility verification process even though under the law employees are allowed to choose what documents to present.  The department found that El Rancho’s discriminatory practices were based on employees’ citizenship status.       

Under the settlement agreement, El Rancho must pay $43,000 in civil penalties, undergo training on the antidiscrimination provision of the INA and submit to monitoring for a period of 18 months, during which the department may review the company’s employment eligibility verification practices. 

“The Justice Department is committed to ensuring that work-authorized immigrants do not face discrimination in employment,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “We applaud El Rancho for cooperating with the department and taking immediate action to correct its employment eligibility verification practices.”

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 .  This matter was handled by OSC Trial Attorney Richard Crespo and OSC Equal Opportunity Specialist Joann Sazama.  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 based on their citizenship status, immigration status or national origin, 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.

The Department of Justice today announced that Joseph F. Klimavicz will become its new chief information officer (CIO), arriving in late May. Klimavicz will provide leadership and oversight of the department’s information technology programs and services in support of the department’s technology-intensive law enforcement mission.

Klimavicz will replace Luke McCormack, who left the department in November 2013. Kevin Deeley, deputy CIO, has served as acting CIO since McCormack’s departure. Deeley will continue to serve as deputy CIO.

“Joe has the leadership and technical skills needed to oversee the Justice Department’s information management and technology programs,” said Deputy Attorney General James M. Cole. “Joe is well positioned to lead the department’s efforts to continue to enhance our cyber security protections and our law enforcement sharing programs. As acting CIO, Kevin has ensured that the department’s overall information technology efforts have remained on track and that our cyber security programs have remained strong. I want to thank him for his leadership during this time of transition.”

The Office of the CIO provides strategic direction, management services and oversight to cross-component information technology efforts, and provides IT infrastructure services such as telecommunications, desktop and data center services and IT security.

Prior to joining the department, Klimavicz was the CIO of the National Oceanic and Atmospheric Administration (NOAA) at the Department of Commerce since January 2007. In that capacity, he was responsible for all aspects of the acquisition, management and use of NOAA’s information technology resources, to include NOAA’s high performance computing and communications infrastructure. During his tenure at NOAA, he strengthened the agency’s cyber security posture, consolidated and expanded high performance computing and modernized a variety of business systems.

Klimavicz served as deputy CIO for the National Geospatial-Intelligence Agency from December 2003 to January 2007. While there, he managed the design, implementation and operation of the information technology infrastructure. Klimavicz has served in various roles in the Department of Defense, including director of the Enterprise Services Office and Chief, Infrastructure Operations and Support Division for the National Imagery and Mapping Agency.

He received a U.S. Presidential Rank Award for Distinguished Executive Service for his outstanding efforts in information technology in 2012. Klimavicz received Bachelor of Science and Master of Engineering degrees from Virginia Polytechnic Institute and State University in 1983 and 1988, respectively.

A former executive of a rubber hose manufacturer, who was extradited from Germany in early April 2014, today pleaded guilty and was sentenced to serve two years in prison for participating in a conspiracy to rig bids, fix prices and allocate market shares of marine hose sold in the United States and elsewhere, the Department of Justice announced. 

Romano Pisciotti, an Italian national and a former manager of Parker ITR Srl’s Oil & Gas Business Unit, pleaded guilty in the U.S. District Court for the Southern District of Florida in Ft. Lauderdale, to a one-count felony indictment that was filed under seal on Aug. 26, 2010, and unsealed on Aug. 5, 2013.

Pisciotti was extradited from Germany on April 3, 2014, in the first successfully litigated extradition on an antitrust charge.  Pisciotti was arrested in Germany on June 17, 2013, and made his initial appearance in U.S. District court on April 4, 2014.  Pisciotti will serve a total of two years in prison with credit for the nine months and 16 days he was held in the custody of the German government pending his extradition.  He has also agreed to pay a $50,000 criminal fine. 

“Today’s guilty plea demonstrates the Antitrust Division’s ability to bring to justice those who violate antitrust laws, even when they attempt to avoid prosecution by remaining in foreign jurisdictions,” said Assistant Attorney General Bill Baer in charge of the Department of Justice’s Antitrust Division.  “The Antitrust Division and its law enforcement partners will continue to protect consumers from cartels that affect the domestic and international economy.”

 
Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities.  During the conspiracy, the cartel affected prices for hundreds of millions of dollars in sales of marine hose and related products sold worldwide.

According to the indictment, Pisciotti carried out the conspiracy by agreeing during meetings, conversations and communications to allocate shares of the marine hose market among the conspirators; use a price list for marine hose in order to implement the conspiracy; and not compete for customers with other marine hose sellers either by not submitting prices or bids or by submitting intentionally high prices or bids, all in accordance with the agreements reached among the conspiring companies.  As part of the conspiracy, Pisciotti and his conspirators provided information received from customers in the United States and elsewhere about upcoming marine hose jobs to another co-conspirator who served as a coordinator of the conspiracy.  The coordinator acted as a clearinghouse for bidding information that was shared among the conspirators, and was paid by the manufacturers for coordinating the conspiracy.  Pisciotti recruited at least two individuals from other marine hose firms to participate in the conspiracy.  The department said the conspiracy began at least as early as 1999 and continued until at least May 2007.  Pisciotti was charged with participating in the conspiracy from at least as early as 1999 until at least November 2006.

           
As a result of the department’s ongoing marine hose investigation, five companies – Parker ITR; Bridgestone Corp. of Japan; Manuli SPa of Italy’s Florida subsidiary; Trelleborg of France; and Dunlop Marine and Oil Ltd., of the United Kingdom – and eight other individuals have pleaded guilty and have been sentenced to serve prison terms ranging from 12 months and one day to 30 months.  An additional individual was sentenced to serve six months home confinement.  Indicted fugitive Uwe Bangert, a German national formerly associated with Dunlop Marine and Oil Ltd., remains at large.

The investigation is being conducted by the Antitrust Division’s Washington Criminal I Section, the Defense Criminal Investigative Service (DCIS) of the Department of Defense’s Office of Inspector General, the U.S. Navy Criminal Investigative Service and the FBI.  The U.S. Marshals Service and other law enforcement agencies from multiple foreign jurisdictions are also investigating or assisting in the ongoing matter. The Criminal Division’s Office of International Affairs and the U.S. Attorney’s Office for the Southern District of Florida provided assistance.

Anyone with information concerning bid rigging or other anticompetitive conduct in the marine products industry is urged to call the Antitrust Division’s Washington Criminal I Section at 202-307-6694.

Velma I. Salinas-Nix and Kenneth H. Nix, of Boerne, Texas, were sentenced today to serve 20 months in prison and 30 months in prison, respectively, for filing false tax returns and making false statements to the U.S. Army by filing false financial ethics disclosure forms, the Justice Department announced.  On Jan. 22, 2014, Kenneth Nix pleaded guilty to one count of filing a false federal income tax return.  The next day, Velma Salinas-Nix pleaded guilty to one count of filing a false tax return and one count of making false statements.  The Nixes were each ordered to pay $153,248 in restitution.

According to court documents, Velma Salinas-Nix was a senior civilian official of the U.S. Department of the Army.  During the relevant period, she was the Deputy Director and Alternate Principal Assistant Responsible for Contracting (Deputy PARC) for ACA - Americas (also known as the 410th Contracting Support Brigade) in San Antonio with influence over and responsibility for the disbursement of millions of dollars in Army funds for the procurement of goods and services.  Previously, she was the Chief of Contracting for the Chicago District for the U.S. Army Corps of Engineers.  During parts of 2004 and 2005, Kenneth Nix also worked for the Army as the Chief of Contracting for the U.S. Military Group in Bogota, Colombia, and during parts of 2008 and 2009, as Chief of Staff of the Mission and Installation Contracting Command in San Antonio. 

According to court documents, from 2000 through at least 2009, Kenneth Nix had a working relationship with Person A, the president and CEO of Company A, a federal contractor.  During this period, Kenneth Nix received at least $500,000 in gross income for federal contracting related work he performed.  Kenneth Nix directed that he be kept off Company A’s books and he received payment in multiple forms, including cash, blank money orders, checks, home improvements of the couple’s residences, paid housing and parking, plumbing supplies and use of a debit card.  Most of the income was deposited into joint bank accounts the Nixes controlled.  In at least two instances, Velma Salinas-Nix deposited blank money orders that her husband received from Company A for $25,000 each into her bank account.  In order to conceal the true source of the money orders, she falsely wrote the name and initials of her mother in the remitter field. 

According to court documents, the Nixes also received gifts of substantial value from Person A between 2000 and 2009, knowing that Person A and Company A had received and were seeking Army contracts and that Kenneth Nix worked for Company A.  These gifts included, among other things, a Rolex watch, a pearl bracelet, a trip for the Nixes to Panama with Person A, custom architectural drawings and a $5,000 Home Depot gift card.  In October 2009, Velma Salinas-Nix participated in a voluntary interview with federal agents, during which she knowingly provided false information by denying her husband’s receipt of income from Company A, the existence of large money orders provided by Company A and her receipt of gifts from Person A during the relevant period.

According to court documents, from 2004 through 2009, Velma Salinas-Nix also willfully signed and submitted materially false financial ethics disclosure forms, known as Office of Government Ethics Forms 450 (OGE-450 Form), to the Army.  She knowingly omitted all of the income and gifts from Company A and Person A on these forms.  In 2004 and 2009, Kenneth Nix willfully signed and submitted materially false OGE-450 Forms to the Army on which he knowingly omitted all income from Company A.  Both Nixes provided non-public Army contracting information to Company A and awarded Company A with contracts from their Army positions.  For tax years 2000 through 2004, and 2006 through 2008, the Nixes willfully filed false joint federal income tax returns omitting all income Kenneth Nix received from Company A.

The case was investigated by the Department of the Army-Criminal Investigation Division, IRS-Criminal Investigation, the FBI and the Defense Criminal Investigative Service.  Trial Attorney Rebecca Perlmutter for the Tax Division and Trial Attorneys Mary Strimel and Richard A. Hellings for the Antitrust Division are prosecuting the case.

WASHINGTON – El Departamento de Justicia llegó a un acuerdo hoy con Mexico Foods, LLC, alias El Rancho Corp., una cadena de supermercados con sede en Garland, Texas, por medio de cual se resuelven acusaciones de que la compañía incurrió en discriminación durante el proceso de verificación de elegibilidad de empleo en violación de La Ley de Inmigración y Nacionalidad (INA por sus siglas en inglés).

La investigación del departamento fue iniciada basado en una remisión del Servicio de Ciudadanía e Inmigración de los Estados Unidos (USCIS por su siglas en inglés). La investigación reveló que El Rancho requería que los residentes permanentes legales presentaran un nuevo documento de elegibilidad de empleo después de haber sido contratados cuando se les vencían sus Tarjetas de Residentes Permanentes, aunque esta práctica está prohibida conforme con las reglas del Formulario I-9 y de E-Verify porque los residentes permanentes legales cuentan con autorización de trabajo permanente en los Estados Unidos, aun cuando se les vencen sus tarjetas de residencia. La investigación también descubrió evidencia que El Rancho rutinariamente les solicitaba un documento específico de autorización de trabajo a los residentes permanentes legales durante el proceso inicial de verificación de elegibilidad de empleo, a pesar de que bajo la ley empleados tienen el derecho de escoger cual documento van presentar. El departamento encontró que las prácticas discriminatorias de El Rancho se basaban en el estatus de ciudadanía de los empleados.

Según este acuerdo, El Rancho debe pagar $43,000 en sanciones civiles, participar en adiestramiento sobre la provisión antidiscriminatoria del INA, y estar sujeto a un período de monitoreo de 18 meses, durante el cuál el departamento pudiera revisar las prácticas de verificación de elegibilidad de empleo de la compañía.

"El Departamento de Justicia está comprometido en garantizar que los inmigrantes que tienen autorización de trabajo no enfrenten barreras discriminatorias en el empleo," dijo Sub-Procuradora General Interina, Jocelyn Samuels, para la Divsión de Derechos Civiles. "Aplaudimos a El Rancho por su cooperación con el departamento y por tomar acción inmediata para corregir sus prácticas de verificación de elegibilidad de empleo."

La Oficina del Consejero Especial para Prácticas Injustas Relacionadas es responsable de exigir el cumplimiento con la provisión anti-discriminación de la INA. La ley prohíbe, entre otras cosas, discriminación a base del estatus the cuidadania u origen nacional durante la contratación, despido, o el reclutamiento o la referencia por comisión, abuso de documentos, y represalias. Este asunto fue manejado por Abogado de OSC Richard Crespo e Investigadora de OSC Joann Sazama. Para más información sobre las protecciones contra discriminación en el empleo bajo las leyes de inmigración o como registrarse para un seminario virtual gratis, llame a la línea directa de OSC para trabajadores al 1-800-255-7688 (1-800-237-2515, TTY para personas con discapacidad auditiva), llame a la línea directa de OSC para empleadores al 1-800-255-8155 (1-800-237-2515, TTY para personas con discapacidad auditiva), o visite el sitio de internet a www.justice.gov/crt/about/osc.

Los solicitantes o empleados que consideren que fueron sujetos a diferentes requisitos de verificación a base de su estatus de ciudadanía, estatus migratorio, u origen nacional, o discriminación por estatus de ciudadanía, estatus migratorio, u origen nacional con relación a la contratación, el despido y el reclutamiento o la referencia por comisión, deberán comunicarse a la línea dedicada a los trabajadores anteriormente citada para poderlos ayudar.

Arturo Gallegos Castrellon, aka “Benny,” “Farmero,” “51,” “Guero,” “Pecas,” “Tury,” and “86,” 35, of Chihuahua, Mexico, the Barrio Azteca Lieutenant who ordered the March 2010 murders of a U.S. Consulate employee, her husband and the husband of another U.S. Consulate employee, was sentenced today to serve life in prison.

Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division, U.S. Attorney Robert Pitman for the Western District of Texas, Special Agent in Charge Douglas E. Lindquist of the FBI’s El Paso Division and Administrator Michele M. Leonhart of the U.S. Drug Enforcement Administration (DEA) made the announcement.

“ Arturo Gallegos Castrellon led the teams of assassins who carried out the U.S. Consulate shootings in March 2010 and ruthlessly murdered nearly 1,600 others as part of a cartel conflict over a drug trafficking route from Mexico into the United States,” said Acting Assistant Attorney General O’Neil. “His gang of killers terrorized and victimized men and women on both sides of the border, but thanks to the hard work of our law enforcement partners he will now spend the rest of his life in prison for his crimes.”

“I cannot overstate the significance of this victory in our ongoing efforts to end the depredations of the cartels operating along our Southern border,” said U.S. Attorney Pitman.  “This prosecution has called to account Arturo Gallegos Castrellon for the senseless murders he orchestrated in Ciudad Juarez and elsewhere and demonstrates our commitment to ending the murder and mayhem he and the cartels have fomented.”

“The DEA is committed to ensuring cold-blooded criminals, like Arturo Gallegos Castrellon, who murder innocent victims, traffic huge amounts of drugs worldwide, and incite violence are taken off the street and remain behind bars,” said DEA Administrator Michele M. Leonhart.  “Castrellon’s conviction and life sentence is a clear sign that the DEA, along with our law enforcement partners, will not tolerate those who attack Americans abroad and is committed to upholding the rule of law, protecting our citizens, and bringing to justice the world’s worst criminals.”

Today’s sentence was imposed by U.S. District Judge Kathleen Cardone in the Western District of Texas. In addition, Judge Cardone ordered Gallegos Castrellon to pay $998,840 in restitution and $785,500 in forfeiture.

After his extradition from Mexico on June 28, 2012, a federal jury found Gallegos Castrellon guilty of six counts of murder and conspiracies to commit racketeering, narcotics trafficking, narcotics importation, murder in a foreign country and money laundering.

Evidence at trial proved that Gallegos Castrellon was a leader in the Barrio Azteca (BA), a violent street and prison gang that began in the late 1980s and expanded into a transnational criminal organization. The BA formed an alliance with “La Linea,” part of the Juarez Drug Cartel, which is also known as the Vincente Carrillo Fuentes Drug Cartel (VCF). The purpose of the BA-La Linea alliance was to battle the Sinaloa Cartel and its allies for control of the drug trafficking route through Juarez, Chihuahua, Mexico. The drug route through Juarez, known as the Juarez Plaza, is important to drug trafficking organizations because it is a principal illicit drug trafficking route into the United States.

Evidence at trial also proved that Gallegos Castrellon was in charge of BA teams of assassins, which he helped create and supervised in 2008 through 2010. His teams killed up to 800 persons between January and August 2010, reaching a total of nearly 1,600 in a multi-year period.

Trial evidence also proved that Gallegos Castrellon ordered the March 13, 2010, triple homicide in Juarez, Chihuahua, Mexico, of U.S. Consulate employee Leslie Enriquez, her husband Arthur Redelfs, and Jorge Salcido Ceniceros, the husband of another U.S. Consulate employee.

A total of 35 defendants were charged in the third superseding indictment and are alleged to have committed various criminal acts, including the 2010 Juarez Consulate murders, as well as racketeering, narcotics distribution and importation, retaliation against persons providing information to U.S. law enforcement, extortion, money laundering, murder and obstruction of justice.  Of the 35 defendants charged, 26 have been convicted, one committed suicide before the conclusion of his trial, and two remain fugitives, including Eduardo Ravelo, an FBI Top Ten Most Wanted Fugitive.

The case was investigated by the FBI’s El Paso Field Office, Albuquerque Field Office (Las Cruces Resident Agency), DEA Juarez, and DEA El Paso. Special assistance was provided by the Bureau of Alcohol, Tobacco, Firearms and Explosives; Immigration and Customs Enforcement; the U.S. Marshals Service; U.S. Customs and Border Protection; the Federal Bureau of Prisons; the U.S. Diplomatic Security Service; the Texas Department of Public Safety; the Texas Department of Criminal Justice; the El Paso Police Department; the El Paso County Sheriff’s Office; the El Paso Independent School District Police Department; the Texas Alcohol and Beverage Commission; the New Mexico State Police; the Dona Ana County, N.M., Sheriff’s Office; the Las Cruces, N.M., Police Department; the Southern New Mexico Correctional Facility and the Otero County Prison Facility New Mexico.

The case is being prosecuted by Trial Attorney Joseph A. Cooley of the Criminal Division’s Organized Crime and Gang Section, Trial Attorney Brian Skaret of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney John Gibson of the U.S. Attorney’s Office of the Western District of Texas - El Paso Division. Valuable assistance was provided by the Criminal Division’s Offices of International Affairs and Enforcement Operations.

Ivory Bolen, of Dothan, Alabama, was sentenced to serve 42 months in prison today to be followed by three years of supervised release for committing stolen identity refund fraud (SIRF) crimes, announced Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division and U.S. Attorney George L. Beck Jr. for the Middle District of Alabama.  Bolen previously pleaded guilty to wire fraud and aggravated identity theft. 

According to the plea agreement, between January 2012 and June 2013, Bolen was involved in SIRF crimes, the use of stolen identities to steal money from the Internal Revenue Service (IRS) by filing fraudulent tax returns claiming refunds in the victims’ names.  She admitted that she obtained stolen identities from various sources, including the Social Security Death Index and jail records, and to filing fraudulent tax returns using those stolen identities from public WiFi hotspots in the Dothan area.  Bolen had the fraudulently obtained refunds deposited onto prepaid debit cards and recruited individuals from a homeless shelter to cash out the cards for her in an effort to avoid surveillance.  In her plea agreement, Bolen also admitted to possessing hundreds of stolen identities in Tampa, Florida.  Altogether, the false tax returns filed by Bolen fraudulently claimed more than $800,000 in refunds.  Many of the returns were detected as fraudulent by the IRS and stopped.  However, Bolen successfully defrauded the IRS into paying over $200,000 in illegitimate refunds, and was ordered to pay $209,243 in restitution to the IRS.   

This case was investigated by special agents of the IRS-Criminal Investigation and by the Tampa Police Department.  Trial Attorneys Jason Poole and Charles Edgar of the Tax Division are prosecuting the case with the assistance of Assistant U.S. Attorney Todd Brown and the U.S. Attorney’s Office for the Middle District of Alabama. 

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