District Not Recorded

The Department of Justice announced today that a federal criminal complaint has been filed in the Eastern District of Virginia charging defendants Abdelkader and Hnia Amal with immigration offenses in connection with allegations that they held a woman in their home as a domestic servant for three years.  The defendants were each charged with one count of alien harboring for commercial advantage and private financial gain. 

According to the complaint, the defendants, who are husband and wife, concealed, harbored and shielded from detection in their home in Alexandria, Va., a Moroccan national, identified in the complaint as Witness-1, from December 2007 until December 2010.  The complaint also alleges that Hnia Amal had the Moroccan national work for her commercial cleaning company, cleaning various residential and commercial properties.  As further alleged in the complaint, the defendants unlawfully brought the Moroccan national into the United States on a visa they procured based on false representations that the Moroccan national would be employed as a domestic servant for a different employer.  According to the complaint, the defendants allegedly benefitted financially by paying the Moroccan national only $9,000 for over three years of full-time work in their home and for Hnia Amal’s commercial cleaning company. 

If convicted, Abdelkader and Hnia Amal could face a statutory maximum sentence of 10 years in prison and a $250,000 fine.  A complaint is merely an accusation, and the defendants are presumed innocent unless proven guilty.

This case is being investigated by the FBI – Washington Field Office and the U.S. Department of State’s Diplomatic Security Service.  The case is being prosecuted by Special Assistant U.S. Attorney C. Alexandria Bogle of the Eastern District of Virginia and Trial Attorney Matthew Grady of the Civil Rights Division’s Human Trafficking Prosecution Unit.

Singapore-based ODFJELL ASIA II PTE LTD (ODFJELL) and one of its senior crew members pleaded guilty yesterday in federal court in Hartford, Conn., for violating the Act to Prevent Pollution from Ships (APPS), announced Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division Robert G. Dreher, United States Attorney Deirdre M. Daly and Rear Admiral Daniel B. Abel, Commander of the First Coast Guard District in Boston.

“The defendants violated environmental laws that protect our oceans, the world’s fisheries and marine life, from harmful pollution,” said Acting Assistant Attorney General Dreher.  “Today's conviction ensures they will be held accountable with a stiff criminal fine, contribute to conservation efforts in coastal areas of Long Island, and submit to strict monitoring.  We hope this sends a strong message to the shipping industry that committing environmental crimes at sea will not be tolerated.”

“Pollution of our waters will not be tolerated,” said U.S. Attorney Daly. “Shipping companies are on notice that violating American environment laws will result in federal prosecution and puts at risk their business interests in this country. Crew members who ignore these laws may also face incarceration. Although these illegal discharges of oily waste occurred in international waters, we are gratified that a quarter of the $1.2 million monetary penalty will fund improvements and protection of the Long Island Sound, a vital economic and recreational resource that contains many unique wildlife habitats.”

“The Coast Guard is committed to working with the maritime industry, and federal, state and local law enforcement partners, to protect the U.S. maritime environment from individuals who pollute our waters,” said Rear Admiral Abel. “When these violations occur, the Coast Guard will work with our partners to ensure that the violators are held accountable under the law.”

According to court documents and statements made in court, ODFJELL operated the M/T Bow Lind, a 577-foot, 26,327 gross ton petroleum/chemical tanker ship. On Nov. 6, 2012, the U.S. Coast Guard boarded the vessel in New Haven, Conn., to conduct an inspection. The inspection and subsequent criminal investigation revealed that three times between October 2011 and October 2012, while in international waters, the vessel discharged machinery space bilge water directly into the sea. At the direction of senior engineer Ramil Leuterio, crew members bypassed pollution prevention equipment that was in place to ensure that any discharged bilge water contain less than 15 parts per million of oil. The crew then concealed the illegal discharges by making misleading entries and omissions in the vessel’s oil record book.

According to several engine room crew members, Leuterio directed them to use a complex system to transfer the bilge water from the bilge holding tank to the sewage tank. From the sewage tank, the bilge water was dumped directly into the sea without passing through pollution prevention equipment. Once the bilge holding tank was emptied, Leuterio directed the lower ranking crew members to put clean fresh water and salt water into the tank. As the pollution prevention equipment automatically records the time it is being operated, Leuterio then processed the clean water through the prevention equipment, thereby creating an electronic record to account for the bilge water that had bypassed the equipment and been discharged directly overboard.

Under the terms of a binding plea agreement, if accepted by the court, ODFJELL will be placed on probation for a period of three years and pay a criminal penalty totaling $1.2 million, including $300,000 that will be directed to The National Fish and Wildlife Foundation to fund projects aimed at the preservation and restoration of the marine environment of Long Island Sound.

As a condition of probation, ODFJELL will implement an environmental management plan which will ensure that any ship operated by ODFJELL calling on a port of the United States complies with all maritime environmental requirements established under applicable international, flag state, and port state laws. The plan ensures that ODFJELL’s employees and the crew of any vessel operated by ODFJELL that calls on a United States port are properly trained in preventing maritime pollution. An independent monitor will report to the court regarding ODFJELL’s compliance with these obligations during the period of probation.

Leuterio, 42, a citizen of the Philippines, pleaded guilty yesterday to one count of violating APPS for his role in directing lower ranking crewmembers to make the illegal discharges and for failing to accurately maintain the vessel’s oil record book. He faces a maximum term of imprisonment of six years and a fine of up to $250,000.

U.S. District Judge Vanessa L. Bryant has scheduled sentencing for May 14, 2014.

This case was investigated by the U.S. Coast Guard Sector Long Island Sound, Coast Guard Investigative Service, and Coast Guard office of Investigations and Analysis (CG-INV). The case is being prosecuted by Trial Attorney Stephen Da Ponte in the Environmental Crimes Section of the Environment and Natural Resources Division of the Department of Justice and Assistant U.S. Attorney Paul H. McConnell from the U.S. Attorney's Office for the District of Connecticut.

The United States has asked a federal court in Dallas, Texas, to permanently bar Ricia Daniels and her company, Ricia’s Convenience Tax Service, from preparing federal tax returns for others, the Justice Department announced today. 

The complaint alleges that, through her business, Daniels understates her customers’ federal tax liabilities by reporting false or inflated personal and business expenses, reporting false or inflated education expenses and improperly claiming other tax credits.  According to the complaint, an Internal Revenue Service (IRS) investigation revealed that 97 out of 98 income tax returns prepared by Daniels and audited by the IRS resulted in understatements of her customers’ tax liabilities.  The government alleges that the tax harm caused by these understatements exceeds $500,000.     

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013 .  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the Justice Department website .   An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page .  If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Materials:

United States v. Ricia Daniels, et al.
Complaint for Permanent Injunction and Other Relief

Gordon D. McDonald, a former project manager for a prime contractor at two U.S. Environmental Protection Agency (EPA) Superfund sites in New Jersey, was sentenced today to serve 14 years in prison for participating in multiple bid-rigging, fraud and kickback schemes, the Department of Justice announced. The prison term, which takes into account the multiple crimes McDonald committed, represents the longest prison sentence ever imposed involving an antitrust crime.

In addition to the prison sentence, McDonald was sentenced in U.S. District Court for the District of New Jersey in Newark by Judge Susan D. Wigenton to pay a $50,000 fine. The court will order restitution at a later date.

After a two week jury trial, ending on Sept. 30, 2013, McDonald was convicted of engaging in separate bid-rigging, kickback and fraud conspiracies with three subcontractors at two New Jersey Superfund sites - Federal Creosote in Manville, N.J., and Diamond Alkali in Newark, in return for kickbacks of more than $1.5 million. He was also convicted of engaging in an international money laundering scheme, major fraud against the United States, committing two tax violations and obstruction of justice. The various conspiracies took place at different time periods from approximately December 2000 until approximately April 2007. McDonald was initially charged in an indictment returned on Aug. 31, 2009.

“Today’s sentencing reflects the seriousness of the crimes committed,” said Bill Baer, Assistant Attorney General in charge of the Justice Department’s Antitrust Division. “The prison sentence imposed by the court shows that if you engage in bid-rigging, fraud and kickback schemes your illegal actions will result in a longer prison sentence.”

According to evidence presented at trial, McDonald accepted kickbacks from sub-contractors in exchange for the award of sub-contracts at Federal Creosote. McDonald provided co-conspirators at Bennett Environmental Inc., a Canadian-based company that treats and disposes of contaminated soil, with bid prices of their competitors, which allowed them to submit the highest possible bid prices and still be awarded the sub-contracts.

McDonald also accepted kickbacks in exchange for the award of sub-contracts at the Federal Creosote and Diamond Alkali sites from the owner of JMJ Environmental Inc., a wastewater treatment and chemical supply company, and the co-owner of National Industrial Supply LLC, an industrial pipe supplier. He also participated in a conspiracy with the owner of JMJ and co-conspirators to rig bids and allocate sub-contracts for wastewater treatment supplies and services at Federal Creosote.

Including McDonald, nine individuals and three companies have pleaded guilty or been convicted of charges arising out of this investigation. More than $6 million in criminal fines and restitution have been imposed and six of the individuals have been sentenced to serve prison sentences ranging from five to 168 months. One individual was sentenced to six months home confinement and the remaining two were sentenced to pay criminal fines and restitution. An additional individual, John A. Bennett, a Canadian citizen, was also charged on Aug. 31, 2009, and is facing extradition to the United States.

The cleanup at Federal Creosote is partly funded by the EPA. An interagency agreement between the EPA and the Army Corps of Engineers designated that the Army Corps hire the prime contractors at Federal Creosote. According to a settlement with the EPA and the New Jersey Department of Environmental Protection, Tierra Solutions was required to fund remedial action and maintenance of Diamond Alkali. Tierra Solutions hired the prime contractor for the remedial action and maintenance of Diamond Alkali.

Today’s conviction is the result of an ongoing federal antitrust investigation being conducted by the Antitrust Division’s New York Office, the EPA Office of Inspector General and the Internal Revenue Service-Criminal Investigation. Anyone with information concerning bid rigging, kickbacks, tax offenses or fraud relating to subcontracts awarded at the Federal Creosote Superfund site or Diamond Alkali Superfund site should contact the Antitrust Division’s New York Office at 212-335-8000 or visit www.justice.gov/atr/contact/newcase.htm.

Attorney General Eric Holder announced today that President Obama’s FY 2015 Budget proposal for the Department of Justice calls for $173 million in targeted investments for criminal justice reform efforts.

These investments—such as increased funding for state and local prisoner reentry initiatives—are among the key highlights in the president’s overall $27.4 billion budget request for the Justice Department.  The FY 2015 request, which represents a $122 million increase over the FY 2014 enacted level, supports a range of federal law enforcement priorities, as well as the criminal justice priorities of state, local and tribal law enforcement partners.

“Each dollar spent on prevention and reentry has the potential to save several dollars in incarceration costs,” said Attorney General Eric Holder.  “These wise investments can help make our criminal justice system more effective and efficient.  Overall, this budget request shows our strong commitment to building upon the record of progress we have established in fulfilling the Justice Department’s most critical missions.”
 
In August 2013, the Attorney General introduced the “Smart on Crime” initiative—a package of reforms to the criminal justice system to help ensure that federal laws are enforced more fairly and more efficiently.  Among other reforms, the effort promotes diversion courts and other alternatives to incarceration for low-level drug offenders, and urges investment in reentry programs in order to reduce recidivism among formerly incarcerated individuals.

The President’s budget request seeks to put critical resources behind this effort.  Specifically, in addition to funds routinely provided for federal prisoner reentry efforts, the FY 2015 request:

• Requests $15 million for U.S. Attorneys, including prosecution prioritization, prevention and reentry work and promoting alternatives to incarceration such as the establishment of drug courts and veteran courts; • Sustains $15 million for the Bureau of Prisons to expand the Residential Drug Abuse Program at the federal level and $14 million provided in the FY 2014 appropriation to assist inmates with reentering society and reducing the population of individuals who return to prison after being released; • Requests $14 million in the Office of Justice Programs to expand the Residential Substance Abuse Treatment program at the state and local level; and 
• Requests $115 million for the Second Chance Act Grant program, through state and local assistance programs, to reduce recidivism and help ex-offenders return to productive lives.

Beyond criminal justice reform, the Department of Justice’s other key funding priorities include:

• $273 million to help meet the nation’s civil rights challenges--including an $8 million program increase; • $4 billion for national security--including a $15 million program increase; • $1.1 billion to protect Americans from gun violence--including $182 million to support the president’s “Now is the Time” gun safety initiative; • $722 million for cyber security--including $8 million in program increases; • $44 million for Mutual Legal Assistance Treaty responsibilities--including $24 million in increases to reform the process; • $681 million for financial fraud law enforcement-to maintain our current efforts; • $2.9 billion to support immigration law enforcement--including a $23 million program increase; • $8.5 billion to maintain and secure federal prisons and detention facilities; • $3 billion in mandatory and discretionary funds to maintain assistance to state, local and tribal law enforcement; and
• $1.2 billion in federal program offsets and rescissions.

In addition, the FY 2015 President’s Budget proposes additional discretionary investments for the department as part of the Administration’s Opportunity, Growth and Security Initiative.  The initiative includes targeted investments for state and local justice assistance grants, with additional resources for the Comprehensive School Safety Program, COPS Hiring Program, and new youth investments; funding for the Bureau of Prisons (BOP) to continue the process of bringing on-line newly completed and acquired prisons; and funding for improved capacity for financial fraud enforcement.

Below is an explanation of a few of the key highlights from President Obama’s FY 2015 budget request for the Department of Justice:   CIVIL RIGHTS

 The department’s mission includes upholding the civil and constitutional rights of all Americans, particularly the most vulnerable members of our society.  Accomplishing this requires necessary resources both to investigate and to litigate.  The department maintains substantial responsibilities with respect to enforcing the nation’s civil rights laws and protecting vulnerable populations.  The FY 2015 budget will support the department’s vigorous enforcement of federal civil rights laws – including those pertaining to human trafficking, hate crimes, police misconduct, fair housing, fair lending, disability rights and voting.  As such, the department’s FY 2015 budget requests $273 million to help meet the nation’s civil rights challenges.  The request includes $7.6 million in program increases for the Civil Rights Division and Community Relations Service.

For more information, view the Civil Rights Fact Sheet at www.justice.gov/jmd/2015factsheets/.

NATIONAL SECURITY

Defending our nation’s security from both internal and external threats remains the department’s highest priority.  The FY 2015 budget request provides a total of $4 billion to maintain critical counterterrorism and counterintelligence programs, and sustains recent increases for intelligence gathering and surveillance capabilities.

The Administration supports critical national security programs within the department, including those led by the FBI and the National Security Division (NSD).  In FY 2013, the FBI dedicated 4,500 agents to investigate more than 18,000 national security cases.  NSD has continued to carry out its primary functions to prevent acts of terrorism and espionage in the United States and to facilitate the collection of information regarding the activities of foreign agents and powers. 

In FY 2015, the department is investing an additional $15 million to fund the annual costs of the FBI’s new Terrorist Explosive Device Analytical Center (TEDAC) at Redstone Arsenal in Huntsville, Ala.  TEDAC is a forensic and technical laboratory dedicated to the mitigation and prevention of improvised explosive device attacks in the United States and abroad.  It has provided critical assistance to domestic and international cases, including last year’s Boston Marathon bombing.

For more information, view the National Security Fact Sheet at www.justice.gov/jmd/2015factsheets/.

GUN SAFETY

Gun violence has touched every state, county, city and town in America.  In 2013 the President introduced the “Now is the Time” initiative, which laid out a comprehensive plan to reduce gun violence and save lives.  The department is working to implement a number of these actions and requests a total of $1.1 billion in FY 2015 to address violent gun crimes, including $182 million to sustain the new investments provided in FY 2014. 

Specifically, the request provides $35 million in new resources in support of the president’s plan to ensure that those who are not eligible to purchase or possess guns are prevented from doing so.  This includes $13 million for the FBI to maintain improvements made in FY 2014 to the National Instant Criminal Background Check System (NICS) aimed at addressing the increasing volume of firearm background checks.  We are also taking a thorough look at our federal laws and our enforcement priorities to ensure that we are doing everything possible at the federal level to keep firearms away from traffickers and others prohibited by law from possessing firearms.  To this end, $22 million is also included for the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) to sustain critical firearms enforcement efforts funded in FY 2014.

And while most of the department’s efforts will be focused on keeping guns out of the wrong hands, we also want to help those on the ground prevent and mitigate violent situations when they do occur.  To this end, the grant program requests a total of $147 million including $55 million to incentivize states to provide criminal history and mental health records to the NICS; $75 million to continue the Comprehensive School Safety program, which provides critical resources for research and for pilot programs to augment school safety personnel and to determine the effectiveness of various school safety measures; $2 million to encourage the development of innovative gun safety technology; and $15 million for the VALOR Initiative, including training for active shooter situations. 

For more information, view Gun Safety Fact Sheet at www.justice.gov/jmd/2015factsheets/.

CYBERSECURITY

Investigating cybercrime and protecting our nation’s critical network infrastructure is a top priority of the department in an era when cyber-attacks and crimes are increasingly common, sophisticated, and dangerous.  The FY 2015 budget request provides a total of $722 million for the department’s cyber enforcement efforts and maintains recent increases for the National Security Division’s (NSD) prosecutorial efforts and the FBI’s Next Generation Cyber Initiative, which enhanced capabilities to combat cyber threats from individuals, organized groups and rogue actors.  The request also includes an increase of $3 million for the Criminal Division to enhance its investigative and prosecutorial capabilities; and $5 million to provide grants related to cybercrime and intellectual property enforcement.

The department has a unique and critical role in cyber security that emphasizes domestic mitigation of threats and involves countering these threats by investigating and prosecuting intrusion cases, gathering intelligence and providing legal and policy support to other departments.  The department is also responsible for establishing effective internal network defense and serving as a model for other departments and agencies.  

 We are committed to carrying out our role consistent with the Administration’s Executive Order 13636 on Improving Critical Infrastructure Cyber Security, which emphasizes intelligence and information sharing as well as the preservation of privacy, data confidentiality and civil liberties.  As part of this effort, the department continues to maintain and strengthen its cyber security environment to counter cyber threats, including insider threats, and to ensure personnel have unimpeded access to the IT systems, networks and data necessary to achieve their missions. 

For more information, view the Cyber Security Fact Sheet at www.justice.gov/jmd/2015factsheets/.

MUTUAL LEGAL ASSISTANCE TREATY (MLAT) REFORM

The department is leading an effort to update, improve and accelerate the processing of requests from foreign governments for evidence requested pursuant to Mutual Legal Assistance Treaties (MLAT).  Delays and difficulties in obtaining evidentiary records through the MLAT process is increasingly becoming a source of frustration for many of our foreign country partners.  The department is committed to honoring its obligations under these treaties, and as a result the FY 2015 budget request includes a total of $44 million to support MLAT responsibilities, including an increase of $24 million to centralize and improve the MLAT request process.
Over the past decade, the number of requests for assistance from foreign authorities handled by the Criminal Division’s (CRM) Office of International Affairs (OIA) has increased nearly 60 percent, and the number of requests for computer records has increased ten-fold.  While the workload has increased dramatically, U.S. Government resources, including personnel and technology, have not kept pace with this increased demand.  This MLAT reform is a cross-agency effort involving the Departments of Justice, State and Commerce.  Funds identified in the FY 2015 President’s Budget for improvements to the MLAT program will be coordinated across these departments and agencies as well as the commercial sector.  With these additional resources, the department will centralize the processing system and reduce its backlog and response time by half by the end of 2015. 

These resources are critical to supporting the President’s National Security Strategy, which recognizes the centrality of international mutual cooperation in criminal justice and counterterrorism matters, by building the “new framework for international cooperation” envisioned by that strategy. 

For more information, view the Mutual Legal Assistance Treaty Fact Sheet at www.justice.gov/jmd/2015factsheets/.

FINANCIAL FRAUD

 Investigating and prosecuting financial fraud continues to be a priority for the Obama Administration.  The FY 2015 budget request provides a total of $681 million for financial fraud enforcement and continues efforts to strengthen the department’s ability to pursue large-scale financial fraud investigations in order to ensure that Americans, their investments and our financial markets are protected.  The Administration’s Opportunity, Growth and Security Initiative includes additional resources for the department’s critical economic fraud enforcement efforts focused on financial institutions and the mortgage industry.

Ongoing efforts by the President’s Financial Fraud Enforcement Task Force (FFETF) are included in the department’s request.  Since its inception in FY 2010, FFETF has facilitated increased investigations and prosecution of financial fraud relating to the financial crisis and economic recovery efforts.  This includes securities and commodities fraud, investment scams and mortgage foreclosure schemes and a broad range of financial crimes, including cases being investigated and brought by the FFETF’s Residential Mortgage-Backed Securities Working Group.

For more information, view the Financial Fraud Fact Sheet at www.justice.gov/jmd/2015factsheets/.

IMMIGRATION

The department maintains substantial responsibilities with respect to immigration, including enforcement, detention, judicial functions, administrative hearings and litigation.  The department’s Executive Office for Immigration Review (EOIR) maintains a nationwide presence overseeing the immigration court and appeals process.  Combined with the Civil Division’s Office of Immigration Litigation, the department has a wide and important role in immigration enforcement.

  EOIR receives cases directly from the Department of Homeland Security (DHS) enforcement personnel, and EOIR’s caseload is increasing at unsustainable levels.  For example, EOIR’s immigration court caseload has continued to outpace department resources, increasing by 56 percent, from 229,000 to 358,000, between FY 2009 and FY 2013.

The FY 2015 budget request includes a $23 million investment to support immigration courts.  The budget supports an additional 35 Immigration Judge Teams and 15 Board of Immigration Appeals attorneys.  This will allow EOIR to address caseload increases emanating from DHS programs.  The additional funding will also enable EOIR to expand a pilot program initially funded in FY 2014 that provides counsel to vulnerable populations, such as unaccompanied alien children, and to expand the Legal Orientation Program that improves efficiencies in immigration court proceedings for detained aliens.

For more information, view the Immigration Fact Sheet at www.justice.gov/jmd/2015factsheets/.

PRISONS AND DETENTION

The department continues to prioritize the maintenance of secure, controlled detention and prison facilities, as well as investment in programs that can reduce recidivism.  The FY 2015 budget request provides $8.5 billion for prisons and detention.  Of this amount, $6.9 billion is requested for the Bureau of Prisons (BOP) and $1.6 billion is for the Federal Prisoner Detention (FPD) appropriation.  As part of the Opportunity, Growth and Security Initiative, the FY 2015 request also includes targeted investments to reduce prison overcrowding by providing the Bureau of Prisons resources to bring on-line newly completed or acquired prisons. 

Additionally, the budget request includes funding to support the Attorney General Holder’s Smart on Crime Initiative, which is intended to promote fundamental reforms to the criminal justice system that will ensure the fair enforcement of federal laws, improve public safety, reduce recidivism and successfully prepare inmates for their reentry into society.  Included are funds to sustain the investments made in FY 2014 for BOP’s reentry programs including the Residential Drug Abuse Program, Residential Reentry Centers and reentry-specific education programs.

For more information, view the Prisons and Detention Fact Sheet at www.justice.gov/jmd/2015factsheets/.

STATE, LOCAL AND TRIBAL LAW ENFORCEMENT

In total, the FY 2015 budget requests $3 billion in mandatory and discretionary funds for state, local and tribal law enforcement assistance.  These funds will allow the department to continue to support our state, local and tribal partners who fight violent crime, combat violence against women and support victim programs.  The FY 2015 request will bolster the department’s efforts to ensure that federal grant funding flows to evidence-based purposes and helps to advance knowledge of what works in state and local criminal justice.

The department is requesting $1.5 billion for the Office of Justice Programs’ (OJP) discretionary grants.  The request increases funding for an evaluation clearinghouse, an indigent defense initiative, and evidence-based competitive programs.  Funding is included to establish the Byrne Incentive Grants and Juvenile Justice Realignment Incentive grants; these programs will provide supplementary awards to states and localities using formula grant funds for evidence-based purposes.  The request also includes funding to address school safety and gun violence with resources to improve criminal history records information and to fund the comprehensive school safety program, which received funding initially in FY 2014. 
 
The FY 2015 budget request includes a total of $423 million for the Office on Violence Against Women (OVW), and continues the Administration’s strong commitment to providing federal leadership in developing the nation’s capacity to combat sexual assault and violence against women.  The request includes an increase of $9 million for Legal Assistance to Victims Programs, Campus Violence, Grants to Support Families in the Justice System and the Transitional Housing program.  These programs fund both proven and cutting-edge interventions to save lives, hold abusers accountable and rebuild families and communities.

 The request includes $274 million for Community Oriented Policing Services (COPS), which supports an increase of $71 million increase for COPS hiring and Tribal Law Enforcement programs.  These resources will fund officers and thereby support the efforts of state, local and tribal law enforcement agencies in meeting the challenge of keeping their communities safe.

For more information, view the State, Local and Tribal Law Enforcement Fact Sheet at www.justice.gov/jmd/2015factsheets/

The U.S. Department of Justice and the U.S. Attorney’s Office for the District of Connecticut announced that they have entered into a comprehensive settlement agreement with the Stamford Public School District in Stamford, Conn., that requires the district to provide language services and other supports to the more than 2,000 English Language Learner (ELL) students enrolled in the district’s 20 schools.  The agreement stems from the United States’ compliance review of the district’s ELL program under the Equal Educational Opportunities Act of 1974. 

The agreement requires the district to implement wide-ranging measures to ensure that ELL students have equal opportunities to succeed academically in its educational programs, beginning with the proper identification and placement of ELL students when they enroll in the system.  Among other requirements, the agreement requires the district to: provide language acquisition services to all ELL students until they reach the state’s English proficiency criteria; ensure that teachers of ELL students are qualified to provide these services; obtain adequate materials for ELL students; monitor students after they exit ELL services to ensure they are participating meaningfully and equally in general education classes; and make appropriate language services available for ELL students with disabilities. 

“Today, the Stamford Public Schools undertook a significant step toward ensuring the success of every student from the beginning of his or her school career in the district,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels.  “Faithful implementation of this settlement agreement will ensure that ELL students, like all district students, have access to qualified teachers, instruction designed to impart the necessary English language skills, and dedicated resources to meet ELL students’ particular learning needs.  We applaud the school district for working collaboratively with the United States to develop the comprehensive plan reflected in this agreement.” 

“By entering into this agreement, the Stamford public school system has reaffirmed its mission to provide all of our children with the equal opportunity to become productive citizens, regardless of their proficiency in English," said U.S. Attorney Deirdre M. Daly for the District of Connecticut.  "This settlement agreement creates a roadmap for all Connecticut schools that provides a comprehensive plan to effectively serve all students who are not yet proficient in English.  We thank Stamford for working with the Justice Department to achieve this positive and hopeful result."

The enforcement of the Equal Educational Opportunities Act is a top priority of the Civil Rights Division.  Additional information about the Civil Rights Division is available on the division’s website .

A federal grand jury in Boston has indicted George Fenzell for tax evasion and corruptly endeavoring to obstruct the Internal Revenue Service (IRS), the Justice Department and the IRS announced today following the unsealing of the indictment.  Fenzell, of Douglas, Mass., is a practicing dentist with offices in Shrewsbury, Mass., and Brookline, N.H. 

According to the indictment, from 1999 through 2012, Fenzell engaged in conduct intended to obstruct the IRS from computing, assessing and collecting his income taxes.  He stopped filing timely tax returns and allegedly tried to conceal his dental practice income in a variety of ways.  The indictment alleges that Fenzell used nominee entities, including River Valley Dental and Brookline Dental Associates Trust, to conceal his dental practice receipts.  The indictment also alleges that he used multiple bank accounts in three separate states, including commingled accounts maintained by third parties, to conceal his ownership of funds.  According to the indictment, Fenzell used nominees as trustees to make it appear as though other individuals owned and controlled his assets and income.  Finally, Fenzell allegedly falsified his delinquent 2006 and 2007 tax returns and made extensive use of cash in order to conceal his fraud.  

The indictment further alleges that in 2007, Fenzell, prompted in part by a Massachusetts Department of Revenue investigation, filed delinquent federal tax returns for tax years 2000 through 2005.  Those returns allegedly reported that he owed approximately $129,000 in federal income taxes for these years, which resulted in a total of more than $300,000 including interest and penalties.  According to the indictment, between 2007 and 2012, Fenzell allegedly sought to evade IRS collection by making his business receipts payable to nominee entities and by using nominee bank accounts in Florida and Rhode Island to divert and hide collectible income and assets.  The indictment also alleges that Fenzell failed to file his 2008 through 2011 tax returns at that time required by law, and used nominee entities and accounts in an effort to evade his taxes.

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.  If convicted, Fenzell faces a statutory maximum potential sentence of five years in prison for each count of tax evasion and a statutory maximum potential sentence of three years in prison for the count of corruptly endeavoring to obstruct the IRS.

This case was investigated by IRS-Criminal Investigation Special Agents.  It is being prosecuted by Assistant Chief John N. Kane Jr. and Trial Attorney Robert Kennedy of the Tax Division.           

WASHINGTON – El Departamento de Justicia de los EE.UU. y la Fiscalía Federal para el Distrito de Connecticut anunciaron que realizaron un acuerdo conciliatorio integral con el Distrito Escolar Público de Stamford en Stamford, Conn., que exige que el distrito ofrezca servicios idiomáticos y otros tipos de apoyo a más de 2,000 estudiantes Aprendices del Idioma Inglés [English Language Learner (ELL)] inscritos en las 20 escuelas del distrito. El acuerdo surge de la revisión de cumplimiento por parte de los Estados Unidos del programa de ELL del distrito bajo la Ley de Igualdad de Oportunidades Educativas de 1974.

El acuerdo requiere que el distrito implemente medidas de amplio alcance para asegurar que los estudiantes ELL tengan igualdad de oportunidades de tener éxito académico en sus programas educativos, comenzando con la identificación y colocación correctas de estudiantes ELL cuando se inscriben en el sistema. Entre otros requisitos, el acuerdo exige que el distrito: ofrezca servicios de aprendizaje del idioma a todos los estudiantes ELL hasta que cumplan con los criterios de conocimientos del inglés del estado; se asegure de que los maestros de estudiantes ELL estén cualificados para brindar estos servicios; obtenga materiales adecuados para estudiantes ELL; monitoree a los estudiantes después de que salgan de los servicios para ELL para asegurarse de que estén participando en las clases de educación general de manera significativa y equitativa; y ponga a disponibilidad de estudiantes ELL con discapacidades servicios idiomáticos adecuados.

"Hoy, las Escuelas Públicas de Stamford tomaron un paso significativo para garantizar el éxito de todos los estudiantes desde el comienzo de su carrera escolar en el distrito", dijo la Secretaria de Justicia Auxiliar Interina de la División de Derechos Civiles Jocelyn Samuels. "Una implementación fiel de este acuerdo conciliatorio asegurará que los estudiantes ELL, al igual que todos los estudiantes del distrito, tengan acceso a maestros cualificados, una enseñanza diseñada para impartir las destrezas necesarias del idioma inglés y recursos dedicados para satisfacer las necesidades particulares de aprendizaje de los estudiantes ELL. Felicitamos al distrito escolar por trabajar en colaboración con los Estados Unidos para desarrollar el plan integral reflejado en este acuerdo".

"Al firmar este acuerdo, el sistema escolar público de Stamford reafirmó su misión de brindarles a todos los niños igualdad de oportunidades para convertirse en ciudadanos productivos, sin importar si tienen conocimientos avanzados de inglés", dijo la Fiscal Federal Deirdre M. Daly del Distrito de Connecticut. "Este acuerdo conciliatorio crea un mapa a seguir para todas las escuelas de Connecticut que ofrece un plan integral para servir eficazmente a todos los estudiantes que todavía no tienen conocimientos avanzados de inglés. Agradecemos a Stamford por trabajar con el Departamento de Justicia para lograr este resultado positivo y esperanzador".

La coacción de la Ley de Igualdad de Oportunidades Educativas es una de las principales prioridades de la División de Derechos Civiles. Existe información adicional sobre la División de Derechos Civiles en el portal de la división website.

Saipan, CNMI – Annette Nakatsukas Basa, age 40, pleaded guilty on February 27, 2014, to sex trafficking of children.  The guilty plea was announced by United States Attorney for the Districts of Guam and the Northern Mariana Islands Alicia A.G. Limtiaco.  According to the plea agreement, Basa knowingly recruited, maintained, transported and provided a minor female for commercial sex acts.  Basa used her cell phone to arrange meetings between adult males and the minor female and then drove the minor to meeting locations for the purpose of having those adult males engage in sex acts with the minor.  Basa received money and methamphetamine in exchange for sex acts between those adult males and the minor female.

In July 2013, the CNMI Department of Public Safety received a video file from an anonymous source depicting an adult male and a minor female engaging in sexually explicit conduct.  The minor was later identified.  An investigation revealed that Basa had provided the minor female to the adult male for sex in exchange for methamphetamine.  Basa was arrested on a complaint on August 14, 2013.  On August 22, 2013, a federal grand jury returned an indictment against Basa charging her with two counts of sex trafficking of children in violation of 18 U.S.C. § 1591(a)(1).

Basa faces a minimum mandatory sentence of 10 years and a maximum of life in prison.  Chief District Judge Ramona V. Manglona scheduled sentencing for June 6, 2014, at 9:00 a.m.

This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  For more information about Project Safe Childhood, please visit www.justice.gov/psc.

United States Attorney Alicia A.G. Limtiaco commended the FBI and the CNMI Department of Public Safety for their assistance in the investigation.  The case was prosecuted by Assistant U.S. Attorneys Rami S. Badawy and Ross K. Naughton.

Today, the Justice Department released a new tool to help state and local courts assess and improve their language assistance services for limited English proficient (LEP) litigants, victims and witnesses who need access to court services.

With over 25 million LEP persons in the United States, the Language Access Planning and Technical Assistance Tool for Courts (Planning Tool) will be able to assist courthouses and administrative tribunals across the country to self-assess their court systems to determine how effectively they are providing language assistance services and how these services can be improved.  The Planning Tool prompts courts to examine their court rules, the quality and competency of interpretation and translation, the level of their engagement with LEP communities and the implementation of language access plans.  Courts also are encouraged to modify this tool for the particular needs and features of their court and court system. 

The tool was created by the Federal Coordination and Compliance Section (FCS) of the Civil Rights Division.  FCS enforces Title VI of the Civil Rights Act of 1964, under which it is illegal for federally assisted programs and activities to discriminate on the basis of national origin, which includes the failure to provide meaningful language access.  The Planning Tool gives courts a tailored checklist of recommended steps towards achieving equal access to justice for all.

“Providing meaningful access to court systems and proceedings is not only required by law, it is the right thing to do and it is in the best interests of the judicial system,” said Acting Assistant Attorney General for the Civil Rights Division Jocelyn Samuels.  “When language barriers remain in place, limited English proficient individuals are not provided a meaningful opportunity to participate in important matters, and the results can be catastrophic, which is why this Planning Tool is such a vital instrument for our judicial system.”

The Planning Tool was previously released for public comment and received numerous recommendations from individuals and organizations representing judges, court staff, attorneys, advocates and community groups, which have been incorporated into the final version.  For further information, please visit the Federal Coordination and Compliance website .  For additional LEP-related resources, please go to the Federal Interagency LEP website .

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

Clay Jarrad Kirkland, aka “Diesel,” 35, of Dallas, and David Orlando Roberts, aka, “Chopper,” 36, of Houston, pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity.

According to court documents, Kirkland, Roberts 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. Kirkland, Roberts 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 activities.

By pleading guilty to racketeering charges, Kirkland and Roberts 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.

At sentencing, scheduled for Oct. 7, 2014, Kirkland and Roberts each face a maximum penalty of life in prison.

Kirkland and Roberts are two of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. To date, 23 defendants have pleaded guilty.

This 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 of the Southern District of Texas.

Three Philippine nationals were sentenced in the Central District of California for illegally importing machine guns, sniper rifles, grenade launchers, a mortar launcher and military-grade ballistic vests into the United States, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

S ergio Syjuco, 27, Cesar Ubaldo, 28, and Arjyl Revereza, 27, each of Manila, the Republic of the Philippines, were found guilty by a federal jury on March 4, 2013, of conspiring to import military-grade weapons illegally into the United States and aiding and abetting the importation of those weapons. On February 26,Ubaldo was sentenced to serve 60 months in prison, followed by two years of supervised release, and Revereza was sentenced to serve 51 months in prison, followed by two years of supervised release. On Feb. 25, 2014, Syjuco was sentenced to serve 84 months in prison, followed by three years of supervised release, and ordered to pay a $15,000 fine.

According to information presented in court, the defendants conspired to sell high-powered military and assault weapons to a buyer interested in bringing weapons into the United States to arm drug dealers in Mexican drug cartels and Mexican Mafia gang members. Ubaldo met with a prospective weapons buyer, who was actually an undercover FBI agent, and offered to introduce the agent to suppliers of high-powered firearms. Ubaldo subsequently introduced the undercover agent to Syjuco, who supplied the weapons, and Revereza, who was a police officer in the Philippines Bureau of Customs who facilitated the movement of illegal weapons through Philippines customs and eventually into the United States. The weapons included a rocket propelled grenade launcher, a mortar launcher, a single-shot grenade launcher and 12 Bushmaster machine guns, as well as explosives including mortars and grenades. The defendants also illegally imported into the United States the highest level military body armor.

The weapons, which were tracked and safeguarded by the FBI during their shipment, landed on June 7, 2011, in Long Beach, Calif., where they were seized by the FBI.

The investigation was conducted by the FBI, Secret Service and the Philippine National Bureau of Investigation. Trial Attorney Margaret Vierbuchen of the Criminal Division’s Organized Crime and Gang Section (OCGS) and Assistant U.S. Attorney Kim Dammers, who is on detail to OCGS from the Northern District of Georgia, prosecuted the case.

Director of Public Affairs Brian Fallon released the following statement this morning:

“During his regular morning meeting with senior staff, the Attorney General began experiencing symptoms including faintness and shortness of breath. As a precaution, the Attorney General was taken to MedStar Washington Hospital Center to undergo further evaluation. He is currently resting comfortably and in good condition. He is alert and conversing with his doctors. Additional information will be provided as it becomes available.”

Director of Public Affairs Brian Fallon released the following statement this afternoon:

“The Attorney General has been discharged from MedStar Washington Hospital Center. He was taken there earlier today as a precaution, after experiencing lightheadedness and shortness of breath during a senior staff meeting at the Justice Department in Washington.
 
“The Attorney General arrived at the hospital at approximately 10:30 am, and was treated for an elevated heart rate. He received medication that quickly restored his heart rate to a normal level, and after successfully completing a full range of tests, doctors were satisfied that the Attorney General could be discharged.
 
“He departed the hospital at 1:15 pm. He walked out without any assistance, and has returned home, where he is resting comfortably.
 
“Several years ago, the Attorney General experienced similar symptoms, but in milder form that did not require serious medical attention.
 
“Throughout today, the Attorney General has remained alert and in good spirits. He appreciates the well wishes from so many friends and colleagues, and is grateful for the excellent care he received from the professionals at MedStar Washington Hospital Center.”

Compañía Sud Americana de Vapores S.A. (CSAV), a Chilean corporation, has agreed to plead guilty and to pay an $8.9 million criminal fine for its involvement in a conspiracy to fix prices, allocate customers and rig bids of international ocean shipping services for roll-on, roll-off cargo, such as cars and trucks, to and from the United States and elsewhere, the Department of Justice announced today.

According to a one-count felony charge filed today in U.S. District Court for the District of Maryland in Baltimore, CSAV engaged in a conspiracy to suppress and eliminate competition by allocating customers and routes, rigging bids and fixing prices for the sale of international ocean shipping services of roll-on, roll-off cargo to and from the United States and elsewhere, including the Port of Baltimore.  CSAV participated in the conspiracy from at least January 2000 to September 2012.  CSAV has also agreed to cooperate with the department’s ongoing antitrust investigation.  The plea agreement is subject to court approval.

Roll-on, roll-off cargo is non-containerized cargo that can be both rolled onto and rolled off of an ocean-going vessel.  Examples of this cargo include new and used cars and trucks, as well as construction, mining and agricultural equipment.

“Today’s charges are the first to be filed in the Antitrust Division’s investigation into bid rigging and price fixing of ocean shipping services,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Because of the growth in the automobile ocean shipping industry over the past 40 years, the conspiracy substantially affected interstate and foreign commerce.  Prosecuting international price-fixing conspiracies remains a top priority for the division."

According to the charge, CSAV and its co-conspirators carried out the conspiracy by, among other things, agreeing – during meetings and communications – on prices, allocating customers, agreeing to refrain from bidding against one another and exchanging customer pricing information.  The department said the companies then charged fees in accordance with those agreements for international ocean shipping services for certain roll-on, roll-off cargo to and from the United States and elsewhere at collusive and non-competitive prices.

CSAV is charged with price fixing in violation of the Sherman Act, which carries a maximum penalty of a $100 million criminal fine for corporations.  The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

Today’s charge is the result of an ongoing federal antitrust investigation into price fixing, bid rigging, and other anticompetitive conduct in the international ocean shipping industry, which is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the FBI’s Baltimore Field Office, along with assistance from the U.S. Customs and Border Protection, Office of Internal Affairs, Washington Field Office/Special Investigations Unit.   Anyone with information in connection with this investigation is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694, visit www.justice.gov/atr/contact/newcase.html, or call the FBI’s Baltimore Field Office at 410-265-8080.

Christopher B. Berg of Portola Valley, Calif., was sentenced yesterday to one year and one day in prison to be followed by three years supervised release, announced Assistant Attorney General for the Tax Division Kathryn Keneally and U.S. Attorney Melinda Haag for the Northern District of California. Prior to sentencing, Berg paid restitution to the Internal Revenue Service (IRS) of more than $250,000 as well as a penalty of $287,896 for failure to properly report his foreign account. Berg previously pleaded guilty to willfully failing to file the required report of foreign bank account for an account he controlled in 2005 at UBS in Switzerland that had a balance over $10,000.

According to court documents, Berg began working as a consultant in 1999. In 2000, Berg met with Beda Singenberger, a Swiss financial consultant, and a vice president of banking at UBS in San Francisco regarding setting up a bank account at UBS in Switzerland to shelter a portion of his consulting income from taxation. Beginning in 2001 and continuing through 2005, Berg used wire transfers to deposit $642,070 in earned income into UBS accounts. Berg used money in these Swiss UBS accounts to purchase a vehicle, to obtain cash while in Europe and to pay the balance on a Eurocard he used while traveling in Europe. Berg did not disclose the existence of his accounts at UBS in Switzerland to his certified public accountant, and also failed to disclose the income earned by these accounts or the consulting income deposited to the accounts. The tax harm associated with Berg’s conduct exceeded $250,000.  

The case was investigated by IRS-Criminal Investigation and prosecuted by Assistant Chiefs Elizabeth C. Hadden and Margaret Leigh Kessler of the Tax Division.

The owner of two Flint, Mich., adult day care centers was sentenced today for his leadership role in a $3.2 million Medicare fraud scheme.

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

Glenn English, 53, was sentenced by United States District Judge Victoria A. Roberts in the Eastern District of Michigan to serve 96 months in prison. In addition to his prison term, English was sentenced to serve three years of supervised release and was ordered to pay $988,529 in restitution.

On Oct. 18, 2013, English and co-defendant Richard Hogan were found guilty by a federal jury for their roles in organizing and directing a psychotherapy fraud scheme through New Century Adult Day Program Services LLC and New Century Adult Day Treatment Inc. (together, New Century). English was convicted of one count of conspiracy to commit health care fraud and seven counts of health care fraud, and Hogan was convicted of one count of conspiracy to commit health care fraud.

E vidence presented at trial showed that from 2009 through 2012, New Century operated as an adult day care center that billed Medicare for psychotherapy services. English was New Century’s owner and chief executive officer. New Century brought in mentally disabled residents of Flint-area adult foster care (AFC) homes, as well as people seeking narcotic drugs, and used their names to bill Medicare for psychotherapy that was not provided. English and his co-conspirators lured drug seekers to New Century with the promise that they could see a doctor there who would prescribe to them the narcotics they wanted if they signed up for the psychotherapy program. New Century used the signatures and Medicare information of these drug seekers and AFC residents to claim that it was providing them psychotherapy, when in fact it was not.

The evidence also showed that English directed New Century employees to fabricate patient records to give the false impression that psychotherapy was being provided. English also instructed New Century clients to pre-sign sign-in sheets for months at a time for dates they were not there, and used these signatures to claim to Medicare that these clients had been provided services.

The evidence at trial showed that in little more than two years, New Century submitted approximately $3.28 million in claims to Medicare for psychotherapy that was not provided. Medicare paid New Century $988,529 on these claims.

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. This case was prosecuted by Trial Attorneys William G. Kanellis and Henry P. Van Dyck of the Fraud Section, with assistance from Assistant Chief Catherine K. Dick.

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 .

Omnicare Inc., an Ohio-based long-term care pharmacy, has agreed to pay the government $4.19 million to settle allegations that it engaged in a kickback scheme in violation of the False Claims Act, the Justice Department announced today.  Omnicare provides pharmaceuticals and services to long-term care facilities and residents and other senior populations.

The settlement resolves allegations that Omnicare solicited and received kickbacks from the drug manufacturer Amgen Inc. in return for implementing “therapeutic interchange” programs that were designed to switch Medicaid beneficiaries from a competitor drug to Amgen’s product Aranesp.  The government alleged that the kickbacks took the form of performance-based rebates that were tied to market-share or volume thresholds, as well as grants, speaker fees, consulting services, data fees, dinners and travel. 

“Kickbacks are designed to influence decisions by health care providers, such as which drugs to prescribe,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Americans who rely on federal health care programs, particularly vulnerable patients in skilled nursing facilities, are entitled to feel confident that decisions about their medical care are not tainted by improper financial arrangements.”

“The District of South Carolina has devoted significant resources over the last three years to pursuing claims under the False Claims Act, and this settlement is the latest example of this office’s successful efforts,” said U.S. Attorney for the District of South Carolina William Nettles.  “I am very proud of the work this office has done in this area.”

This civil settlement resolves a lawsuit filed under the qui tam, or whistleblower, provision of the False Claims Act, which allows private citizens with knowledge of false claims to bring civil actions on behalf of the government and to share in any recovery.  The relator’s share in this case is $397,925. 

“Kickbacks corrode our federal health care programs,” said Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General, U.S. Department of Health and Human Services in the region covering South Carolina.  “OIG is committed to unveiling these illegal reciprocal relationships, and companies making or receiving such payments can expect serious consequences.”

The settlement with Omnicare Inc. was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office for the District of South Carolina and the U.S. Department of Health and Human Services Office of Inspector General. 

           
This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.

The claims settled by this agreement are allegations only; there has been no determination of liability.

The False Claims Act lawsuit was filed in the U.S. District Court for the District of South Carolina and is captioned United States ex rel. Kurnik v. Amgen Inc., et al. 

On Monday, March 3, 2014, at 2:00 p.m. EST, at an event marking World Wildlife Day, INTERPOL’s Environmental Security Sub-directorate will present an executive summary of two strategic law enforcement reports on wildlife crime: Assessment of Enforcement Responses to Tiger Crime and Elephant Poaching and Ivory in East Africa: Assessment for an Effective Law Enforcement Response.  In addition, representatives of the national wildlife trafficking task force will discuss efforts to eradicate the illegal wildlife trade and better protect the world’s most iconic species from the threat of extinction.

Acting Assistant Attorney General for the Environment and Natural Resources Division Robert G. DreherU.S. Fish and Wildlife Service Director Dan Ashe, and Deputy Assistant Secretary of State Brooke Darby of the State Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL) will join Benito Perez, Strategic and Operational Advisor of INTERPOL’s Environmental Security Sub-directorate at the event.
 

WHO:             Benito Perez, Strategic and Operational Advisor of INTERPOL’s Environment Security Sub-directorate

Robert G. Dreher, Acting Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division

Dan Ashe, Director of the U.S. Fish and Wildlife Service Director Deputy

Brooke Darby, Deputy Assistant Secretary of State for International Narcotics and Law Enforcement Affairs, U.S. Department of State

WHAT:           Officials will discuss joint efforts to combat wildlife crime and the importance of law enforcement engagement to

protect the world’s most iconic species from the threat of extinction.

WHEN:          Monday, March 3, 2014

                        2:00 p.m. EST

WHERE:       INTERPOL Washington

145 N Street NE

Washington, D.C.

                                    OPEN PRESS

NOTE: All media must present government-issued photo I.D. (such as a driver’s license) as well as valid media credentials. Media interested in attending should RSVP to Wyn Hornbuckle at [email protected] Press inquiries regarding logistics should be directed to [email protected] or 202-514-2007.

SACRAMENTO, Calif. — Un gran jurado federal acusó hoy a los hermanos Luis Cortez-Garcia, 44, y Emiliano Cortez-Garcia, 37, de Sacramento, de fabricar ilegalmente y vender armas de fuego, conspirar para fabricar ilegalmente y vender armas de fuego, y varios cargos cada uno relacionado con la posesión, fabricación ilegal y venta de rifles de cañón corto, ametralladoras y silenciadores, anunció el procurador federal del distrito oriental deCalifornia Benjamin B. Wagner; el agente especial encargado Joseph M. Riehl de la Oficina de Alcohol, Tabaco, Armas de Fuego y Explosivos; el agente especial asistente encargado de las Investigaciones de Seguridad Nacional Daniel Lane;  el jefe de la Oficina de Armas de Fuego del Departamento de Justicia de California Stephen Lindley. Ambos demandados estàn acusados de ser extranjeros en posesión de armas de fuego, y Emiliano Cortez-Garcia es también acusado de ser un criminal en posesión de armas de fuego.

Durante el curso de una investigación conjunta de la Oficina de Alcohol, Tabaco, Armas de Fuego y Explosivos de los Estados Unidos (ATF), los cuerpos de Seguridad de Inmigración y Aduanas (ICE) e Investigaciones de Seguridad Nacional (HSI) de los Estados Unidos y el Departamento de Justicia de California, Oficina de Armas de Fuego (BOF), los agentes clandestinos y al menos un condenado por delito grave les compraron armas de asalto fabricadas bajo pedido a los demandados. Estas armas de fuego no tenían ninguna marca del fabricante  ni números de serie, lo que las convierte en ilocalizables si se vieran implicadas en una actividad criminal. Las compras se hicieron en metàlico, sin chequeo de antecedentes, período de espera y sin completar la transacción de documentos requerida.

De acuerdo con las órdenes de registro abiertas hoy, Luis Cortez-Garcia y Emiliano Cortez-Garcia son parte de una red de individuos involucrados en la fabricación ilegal y venta de armas de fuego. El 9 de octubre de 2013, once lugares fueron registrados en Sacramento,  Sacramento Occidental, Antelope, Auburn, Ione, Placerville y Fresno. Durante esos registros, los agentes se apropiaron de 345 armas, incluyendo múltiples rifles de asalto totalmente automàticos, rifles ilegales de cañón corto y silenciadores.

“La conducta alegada en este caso implica la evasión sistemàtica de las leyes federales de armas de fuego, con ànimo de lucro, de un modo que creó una amenaza real a la seguridad pública”, dijo el procurador federal Wagner. “Las armas de fuego no registradas e ilocalizables creadas y vendidas por estos demandados incluyeron múltiples rifles de asalto del tipo AR-15, similares a las armas usadas en los tiroteos de Newtown, Connecticut y Aurora, Colorado. Nuestra investigación continua y esperamos acusar a màs personas implicadas en ventas comerciales similarmente peligrosas de armas ilegales.”

“La fabricación y venta de armas sin marcas es ilegal y presenta un grave peligro para nuestras comunidades”, dijo Riehl, agente especial encargado de ATF . “Estas armas de fuego sin marcas usadas en crímenes violentos son difíciles si no imposible de rastrear su origen a los autores de la ofensa.”

“Las regulaciones federales relacionadas con la fabricación, venta y exportación de armas de fuego estàn diseñadas para asegurar que las pistolas y otras armas no terminen en las manos de criminales u otras personas empeñadas en hacernos daño”, dijo Daniel Lane, agente especial ayudante encargado de las Investigaciones de Seguridad Nacional ICE en Sacramento. “Como este caso demuestra, HSI, junto con nuestros socios de las fuerzas de seguridad, estàn reunidos en el esfuerzo de identificar aquellos que buscan lucro eludiendo estas leyes sin importarles la seguridad pública.”

De acuerdo con nuestros registros, los demandados operaron varias tiendas en Sacramento y Fresno y fabricaron y vendieron pistolas y rifles estilo AR-15. Los demandados no tenían una licencia para fabricar ni vender armas de fuego. Màs aún, los demandados vendieron armas de fuego sin completar los informes requeridos de transacción de armas de fuego ATF o BOF ni someter al comprador a un chequeo de antecedentes o período de espera. Adicionalmente, como extranjeros ilegales y criminales, a los demandados les estaba prohibido poseer armas de fuego.

De acuerdo con la ley federal, una persona puede fabricar un arma de fuego para uso personal sin incluir un número de serie en el arma de fuego, siempre y cuando el arma de fuego no sea vendida o transferida a otra persona. De otro modo, para fabricar un arma de fuego se requiere una licencia de ATF. Un arma de fuego que se transfiere a otra persona debe llevar un número de serie.

La mayoría de las piezas de armas de fuego no estàn sujetas a la regulación de ATF y pueden comprarse y venderse sin reportar las ventas y sin requerir un chequeo de antecedentes. De acuerdo con los documentos del tribunal, los demandados y otros involucrados en el esquema vendieron las piezas necesarias para producir un arma de fuego. Las piezas incluían una pieza de metal fundida de un armazón inferior llamado un “blanco”, que ATF no la considera como arma de fuego. El blanco se convierte eventualmente en un armazón inferior usando una taladradora hidràulica o màquina automatizada que crea la forma y espacio necesarios para que el armazón inferior acepte las piezas que permitiràn el disparo de un proyectil. Estas piezas (por ej., el martillo, perno o palanca de cierre ART, y mecanismo de disparo) son las partes mecànicas internas que se combinan con un gatillo, aguja de percusión y otras piezas para formar un arma de fuego en funcionamiento. Una vez que el blanco es fresado para producir un completo armazón inferior, se le considera un arma de fuego por estatuto, incluso si no existe barril, mango ni gatillo, y està sujeto a regulación federal.

De acuerdo con la declaración jurada de orden de registro, una vez que un cliente compró las piezas del arma de fuego incluyendo un armazón inferior ‘blanco’, se le indicó ir a Emiliano Cortez-Garcia que operaba la taladradora hidràulica. Una vez que Emiliano Cortez-Garcia había completado de maquinar el armazón inferior, él o Luis Cortez-Garcia montarían el AR-15 completo. Los clientes pagaban en metàlico para recibir un arma de fuego completa  que no llevaba número de serie. No se completaron documentos de ATF ni chequeo de antecedentes. Durante el curso de la investigación, ATF llevó a cabo siete compras clandestinas de armas de fuego AR-15.

La investigación continúa. Ayer se ejecutaron otras órdenes de registro adicionales en tres lugares en Sacramento, Rancho Cordova y Orangevale. Se anticipa que seràn acusados otros demandados en conexión con la conducta bajo investigación.

Este caso es el producto de una investigación de ATF, HSI y el BOF del Departamento de Justicia de California, con la asistencia del Departamento de Policía de Sacramento, el Departamento del Alguacil del Condado de Sacramento y la Guardia Civil de Tràfico de California. El ayudante del procurador federal Justin Lee està procesando el caso.

SACRAMENTO, Calif. — Un gran jurado federal acusó hoy a los hermanos Luis Cortez-Garcia, 44, y Emiliano Cortez-Garcia, 37, de Sacramento, de fabricar ilegalmente y vender armas de fuego, conspirar para fabricar ilegalmente y vender armas de fuego, y varios cargos cada uno relacionado con la posesión, fabricación ilegal y venta de rifles de cañón corto, ametralladoras y silenciadores, anunció el procurador federal del distrito oriental deCalifornia Benjamin B. Wagner; el agente especial encargado Joseph M. Riehl de la Oficina de Alcohol, Tabaco, Armas de Fuego y Explosivos; el agente especial asistente encargado de las Investigaciones de Seguridad Nacional Daniel Lane;  el jefe de la Oficina de Armas de Fuego del Departamento de Justicia de California Stephen Lindley. Ambos demandados estàn acusados de ser extranjeros en posesión de armas de fuego, y Emiliano Cortez-Garcia es también acusado de ser un criminal en posesión de armas de fuego.

Durante el curso de una investigación conjunta de la Oficina de Alcohol, Tabaco, Armas de Fuego y Explosivos de los Estados Unidos (ATF), los cuerpos de Seguridad de Inmigración y Aduanas (ICE) e Investigaciones de Seguridad Nacional (HSI) de los Estados Unidos y el Departamento de Justicia de California, Oficina de Armas de Fuego (BOF), los agentes clandestinos y al menos un condenado por delito grave les compraron armas de asalto fabricadas bajo pedido a los demandados. Estas armas de fuego no tenían ninguna marca del fabricante  ni números de serie, lo que las convierte en ilocalizables si se vieran implicadas en una actividad criminal. Las compras se hicieron en metàlico, sin chequeo de antecedentes, período de espera y sin completar la transacción de documentos requerida.

De acuerdo con las órdenes de registro abiertas hoy, Luis Cortez-Garcia y Emiliano Cortez-Garcia son parte de una red de individuos involucrados en la fabricación ilegal y venta de armas de fuego. El 9 de octubre de 2013, once lugares fueron registrados en Sacramento,  Sacramento Occidental, Antelope, Auburn, Ione, Placerville y Fresno. Durante esos registros, los agentes se apropiaron de 345 armas, incluyendo múltiples rifles de asalto totalmente automàticos, rifles ilegales de cañón corto y silenciadores.

“La conducta alegada en este caso implica la evasión sistemàtica de las leyes federales de armas de fuego, con ànimo de lucro, de un modo que creó una amenaza real a la seguridad pública”, dijo el procurador federal Wagner. “Las armas de fuego no registradas e ilocalizables creadas y vendidas por estos demandados incluyeron múltiples rifles de asalto del tipo AR-15, similares a las armas usadas en los tiroteos de Newtown, Connecticut y Aurora, Colorado. Nuestra investigación continua y esperamos acusar a màs personas implicadas en ventas comerciales similarmente peligrosas de armas ilegales.”

“La fabricación y venta de armas sin marcas es ilegal y presenta un grave peligro para nuestras comunidades”, dijo Riehl, agente especial encargado de ATF . “Estas armas de fuego sin marcas usadas en crímenes violentos son difíciles si no imposible de rastrear su origen a los autores de la ofensa.”

“Las regulaciones federales relacionadas con la fabricación, venta y exportación de armas de fuego estàn diseñadas para asegurar que las pistolas y otras armas no terminen en las manos de criminales u otras personas empeñadas en hacernos daño”, dijo Daniel Lane, agente especial ayudante encargado de las Investigaciones de Seguridad Nacional ICE en Sacramento. “Como este caso demuestra, HSI, junto con nuestros socios de las fuerzas de seguridad, estàn reunidos en el esfuerzo de identificar aquellos que buscan lucro eludiendo estas leyes sin importarles la seguridad pública.”

De acuerdo con nuestros registros, los demandados operaron varias tiendas en Sacramento y Fresno y fabricaron y vendieron pistolas y rifles estilo AR-15. Los demandados no tenían una licencia para fabricar ni vender armas de fuego. Màs aún, los demandados vendieron armas de fuego sin completar los informes requeridos de transacción de armas de fuego ATF o BOF ni someter al comprador a un chequeo de antecedentes o período de espera. Adicionalmente, como extranjeros ilegales y criminales, a los demandados les estaba prohibido poseer armas de fuego.

De acuerdo con la ley federal, una persona puede fabricar un arma de fuego para uso personal sin incluir un número de serie en el arma de fuego, siempre y cuando el arma de fuego no sea vendida o transferida a otra persona. De otro modo, para fabricar un arma de fuego se requiere una licencia de ATF. Un arma de fuego que se transfiere a otra persona debe llevar un número de serie.

La mayoría de las piezas de armas de fuego no estàn sujetas a la regulación de ATF y pueden comprarse y venderse sin reportar las ventas y sin requerir un chequeo de antecedentes. De acuerdo con los documentos del tribunal, los demandados y otros involucrados en el esquema vendieron las piezas necesarias para producir un arma de fuego. Las piezas incluían una pieza de metal fundida de un armazón inferior llamado un “blanco”, que ATF no la considera como arma de fuego. El blanco se convierte eventualmente en un armazón inferior usando una taladradora hidràulica o màquina automatizada que crea la forma y espacio necesarios para que el armazón inferior acepte las piezas que permitiràn el disparo de un proyectil. Estas piezas (por ej., el martillo, perno o palanca de cierre ART, y mecanismo de disparo) son las partes mecànicas internas que se combinan con un gatillo, aguja de percusión y otras piezas para formar un arma de fuego en funcionamiento. Una vez que el blanco es fresado para producir un completo armazón inferior, se le considera un arma de fuego por estatuto, incluso si no existe barril, mango ni gatillo, y està sujeto a regulación federal.

De acuerdo con la declaración jurada de orden de registro, una vez que un cliente compró las piezas del arma de fuego incluyendo un armazón inferior ‘blanco’, se le indicó ir a Emiliano Cortez-Garcia que operaba la taladradora hidràulica. Una vez que Emiliano Cortez-Garcia había completado de maquinar el armazón inferior, él o Luis Cortez-Garcia montarían el AR-15 completo. Los clientes pagaban en metàlico para recibir un arma de fuego completa  que no llevaba número de serie. No se completaron documentos de ATF ni chequeo de antecedentes. Durante el curso de la investigación, ATF llevó a cabo siete compras clandestinas de armas de fuego AR-15.

La investigación continúa. Ayer se ejecutaron otras órdenes de registro adicionales en tres lugares en Sacramento, Rancho Cordova y Orangevale. Se anticipa que seràn acusados otros demandados en conexión con la conducta bajo investigación.

Este caso es el producto de una investigación de ATF, HSI y el BOF del Departamento de Justicia de California, con la asistencia del Departamento de Policía de Sacramento, el Departamento del Alguacil del Condado de Sacramento y la Guardia Civil de Tràfico de California. El ayudante del procurador federal Justin Lee està procesando el caso.

Tracy Mitchell, a resident of Phenix City, Ala., was indicted for her involvement in a stolen identity refund fraud scheme, 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 announced today following the unsealing of the indictment.

Mitchell is charged with eight counts of wire fraud and eight counts of aggravated identity theft.  According to the indictment, Mitchell worked at the hospital on the Fort Benning Army Base in Georgia, where she had access to the means of identification of military personnel, including soldiers who were deployed to Iraq and Afghanistan.  Mitchell stole the identities of military personnel and used those identities to file over 1,000 false tax returns from her home.  These false tax returns claimed over $2.2 million in fraudulent refunds. 

An indictment merely alleges that crimes have been committed, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, the defendant faces a statutory maximum potential sentence of 20 years in prison for each wire fraud count and a statutory mandatory two-year sentence for each aggravated identity theft count.  The defendant is also subject to fines, forfeiture and restitution if convicted.

The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation and the U.S. Army – Criminal Investigation Division.  Trial Attorney Michael Boteler of the Tax Division and Assistant U.S. Attorney Todd Brown are prosecuting the case. 

Related Materials:

United States v. Tracy Mitchell
Indictment

SACRAMENTO, Calif. — El juez de la procuradería federal del distrito oriental de California John A. Méndez sentenció a Fausto Díaz-Lozano, 45, de Sacramento, el martes 24 de febrero de 2014, a 17 años y medio de prisión por su participación en una conspiración para distribuir metanfetamina, anunció el ayudante del procurador federal del distrito oriental de California Benjamin B. Wagner.

De acuerdo con los documentos del tribunal y la evidencia del juicio, Díaz-Lozano era un miembro de confianza con conexiones de alto nivel con La Familia Michoacàn, un cartel mexicano de drogas. La evidencia en el juicio indicó que tenía relaciones con un “jefe” en la organización. Con una llamada telefónica, Díaz-Lozano fue capaz de modificar el àrea “autorizada” para un enorme centro de distribución y suministro controlado por el cartel en Gilroy. Antes de esa llamada al “jefe” en México, el centro estaba solamente autorizado a distribuir en el àrea de South Bay. Después de la llamada, el centro entregó directamente a Díaz-Lozano en Sacramento. De acuerdo con los documentos del tribunal, Díaz-Lozano también reclutó nuevos miembros y asociados para el cartel, haciendo ostentación de la crueldad de la organización en el proceso.

Cuando el centro de suministro de Gilroy fue registrado el 19 de agosto de 2010, los investigadores se apoderaron de màs de 610 libras de metanfetamina, 16 libras de cocaína, dos armas de fuego y los libros de contabilidad que detallaban la distribución de màs de 3,300 libras de metanfetamina en un período de cuatro a cinco meses. Aproximadamente 80 libras de la metanfetamina fueron analizadas por la DEA y se encontró que tenía una pureza del 98%.

El juez Méndez encontró que Díaz-Lozano dirigió a otros en conexión con esta conspiración internacional de drogas. También encontró que como miembro de la conspiración, Díaz-Lozano fue responsable de las drogas y pistolas encontradas en Gilroy.

Díaz-Lozano es el sexto demandado sentenciado en este caso. Héctor Salazar Borrayo, de Gilroy, fue sentenciado a 14 años y cuatro meses de prisión. Martín Solorio, de Sacramento, fue sentenciado a nueve años de prisión. Roberto Bermúdez-Ornelas, de Sacramento, fue sentenciado a tres años y tres meses de prisión. Sergio Murillo-Valencia fue sentenciado a 16 años de prisión. Fabiàn Figueroa-Ayala, de Gilroy, fue sentenciado a 12.5 años de prisión. Otros tres demandados fueron acusados en este caso. Las acusaciones son alegaciones; se les considera inocentes hasta y a menos que se demuestre su culpabilidad fuera de toda duda razonable.

Este caso fue el producto de una investigación de la Administración Federal Antinarcóticos, el Departamento del Alguacil del Condado de Sacramento y el Departamento de Justicia de California (Cal-MMET). El ayudante del procurador federal Michael M. Beckwith procesó el caso.

The United States has asked a federal court in McAllen, Texas, to permanently bar Melissa Alvarez and her companies, Best & Unique Income Services, Best & Unique Income Tax Melissa and Best & Unique Income Tax Services LLC, from preparing federal tax returns for others, the Justice Department announced today.

According to the complaint, Alvarez, who lives and does business in McAllen, has been preparing tax returns for customers that contain false, improper or inflated deductions or tax credits, such as the earned income tax credit.  Most of Alvarez’s customers allegedly reside in southern Texas.

In one example described in the complaint, Alvarez allegedly claimed business-expense deductions on tax returns for a customer who did not operate a business and without that customer’s knowledge. 

The complaint further alleges that the IRS examined returns that Alvarez prepared from the 2004 through 2012 tax-filing seasons, and 97 percent of those returns were found to have understated the tax liabilities of Alvarez’s customers.  According to the complaint, the IRS estimates that the total tax harm from Alvarez’s unlawful tax-preparation activities during that period could exceed $10 million.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013.  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the Justice Department website. An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found on this page If you believe that one of the enjoined persons or businesses may be violating an injunction, please contact the Tax Division with details.

Related Materials:

United States v. Melissa Alvarez, etc.
Complaint for Permanent Injunction

Attorney General Eric Holder and HHS Secretary Kathleen Sebelius today released the annual Health Care Fraud and Abuse Control (HCFAC) Program report showing that for every dollar spent on health care-related fraud and abuse investigations through this and other programs in the last three years, the government recovered $8.10.  This is the highest three-year average return on investment in the 17-year history of the HCFAC Program.

The government’s health care fraud prevention and enforcement efforts recovered a record-breaking $4.3 billion in taxpayer dollars in Fiscal Year (FY) 2013, up from $4.2 billion in FY 2012, from individuals and companies who attempted to defraud federal health programs serving seniors or who sought payments from taxpayers to which they were not entitled.  Over the last five years, the administration’s enforcement efforts have recovered $19.2 billion, up from $9.4 billion over the prior five-year period.  Since the inception of the program in1997, the HCFAC Program has returned more than $25.9 billion to the Medicare Trust Funds and treasury.

These recoveries, released today in the annual HCFAC Program report, demonstrate President Obama’s commitment to making the elimination of fraud, waste and abuse, particularly in health care, a top priority for the administration.  This is the fifth consecutive year that the program has increased recoveries over the past year, climbing from $2 billion in FY 2008 to over $4 billion every year since FY 2011.

The success of this joint Department of Justice and HHS effort was made possible in part by the Health Care Fraud Prevention and Enforcement Action Team (HEAT), created in 2009 to prevent fraud, waste and abuse in Medicare and Medicaid and to crack down on individuals and entities that are abusing the system and costing American taxpayers billions of dollars. 

“With these extraordinary recoveries, and the record-high rate of return on investment we’ve achieved on our comprehensive health care fraud enforcement efforts, we’re sending a strong message to those who would take advantage of their fellow citizens, target vulnerable populations, and commit fraud on federal health care programs,” said Attorney General Eric Holder.  “Thanks to initiatives like HEAT, our work to combat fraud has never been more cooperative or more effective.  And our unprecedented commitment to holding criminals accountable, and securing remarkable results for American taxpayers, is paying dividends.”
“These impressive recoveries for the American taxpayer are just one aspect of the comprehensive anti-fraud strategy we have implemented since the passage of the Affordable Care Act,” said HHS Secretary Sebelius.  “We’ve cracked down on tens of thousands health care providers suspected of Medicare fraud. New enrollment screening techniques are proving effective in preventing high risk providers from getting into the system, and the new computer analytics system that detects and stops fraudulent billing before money ever goes out the door is accomplishing positive results – all of which are adding to savings for the Medicare Trust Fund.”

The new authorities under the Affordable Care Act granted to HHS and the Centers for Medicare & Medicaid Services (CMS) were instrumental in clamping down on fraudulent activity in health care.  In FY 2013, CMS announced the first use of its temporary moratoria authority granted by the Affordable Care Act.  The action stopped enrollment of new home health or ambulance enrollments in three fraud hot spots around the country, allowing CMS and its law enforcement partners to remove bad actors from the program while blocking provider entry or re-entry into these already over-supplied markets.

The Justice Department and HHS have improved their coordination through HEAT and are currently operating Medicare Fraud Strike Force teams in nine areas across the country. The strike force teams use advanced data analysis techniques to identify high-billing levels in health care fraud hot spots so that interagency teams can target emerging or migrating schemes as well as chronic fraud by criminals masquerading as health care providers or suppliers. The Justice Department’s enforcement of the civil False Claims Act and the Federal Food, Drug and Cosmetic Act has produced similar record-breaking results.  These combined efforts coordinated under HEAT have expanded local partnerships and helped educate Medicare beneficiaries about how to protect themselves against fraud.  

In Fiscal Year 2013, the strike force secured records in the number of cases filed (137), individuals charged (345), guilty pleas secured (234) and jury trial convictions (46). Beyond these remarkable results, the defendants who were charged and sentenced are facing significant time in prison – an average of 52 months in prison for those sentenced in FY 2013, and an average of 47 months in prison for those sentenced since 2007.

In FY 2013, the Justice Department opened 1,013 new criminal health care fraud investigations involving 1,910 potential defendants, and a total of 718 defendants were convicted of health care fraud-related crimes during the year.  The department also opened 1,083 new civil health care fraud investigations.

The strike force coordinated a takedown in May 2013 that resulted in charges by eight strike force cities against 89 individuals, including doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $223 million in false billings. As a part of the May 2013 takedown, HHS also suspended or took other administrative action against 18 providers using authority under the health care law to suspend payments until an investigation is complete.

In March 2011, CMS began an ambitious project to revalidate all 1.5 million Medicare enrolled providers and suppliers under the Affordable Care Act screening requirements. As of September 2013, more than 535,000 providers were subject to the new screening requirements and over 225,000 lost the ability to bill Medicare due to the Affordable Care Act requirements and other proactive initiatives.  Since the Affordable Care Act, CMS has also revoked 14,663 providers and suppliers’ ability to bill the Medicare program. These providers were removed from the program because they had felony convictions, were not operational at the address CMS had on file, or were not in compliance with CMS rules.

HHS and the Justice Department are leading historic efforts with the private sector to bring innovation to the fight against health care fraud. In addition to real-time data and information exchanges with the private sector, CMS’ Program Integrity Command Center worked with the HHS Office of the Inspector General and the FBI to conduct 93 missions to detect, investigate, and reduce improper payments in FY 2013.

From May 2013 through August 2013, CMS led an outreach and education campaign targeted to specific communities where Medicare fraud is more prevalent.  This multimedia campaign included national television, radio, and print outreach and resulted in an increased awareness of how to detect and report Medicare fraud. 

To read today’s report visit http://oig.hhs.gov/publications/docs/hcfac/FY2013-hcfac.pdf

For previous years’ reports visit https://oig.hhs.gov/reports-and-publications/hcfac/index.asp

For more information on the joint DOJ-HHS Strike Force activities, visit: www.StopMedicareFraud.gov/.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division announced her departure from the department today, effective as of March 21, 2014.

“Over the past year, Mythili Raman has done an exemplary job of leading the Criminal Division during a pivotal time,” said Attorney General Eric Holder.  “Since she first joined the department as a Criminal Division trial attorney nearly two decades ago, and throughout her career both in the division and the Maryland U.S. Attorney’s Office, Mythili has proven herself as a tireless and talented prosecutor, and a fearless advocate for the United States.  From combating financial and health care fraud, to fighting foreign and domestic corruption, and safeguarding the American people from crime and drug-fueled violence, Mythili’s tenure as head of the Criminal Division has been defined by extraordinary achievements.  Her strong and steady leadership has made an enormous difference in the past year.  Although I wish her the best as she takes the next step in her career, I will sorely miss her sound judgment, her keen intellect, her close friendship, and her commitment to the work of the department.  I thank her, on behalf of the American people, for her years of dedicated service.”

“I feel so lucky to have started my department career as a trial attorney in the Criminal Division seventeen and a half years ago, and feel even more fortunate that this division has been my last home at the Justice Department,” said Acting Assistant Attorney General Raman. “The Criminal Division is an extraordinary institution, and it has been a singular privilege to lead it for the past year and to serve alongside the dedicated, talented, and simply excellent women and men who work every day to do justice. I will always be grateful to the Attorney General for giving me this opportunity to serve.”

During Raman’s tenure as Acting Assistant Attorney General, the division has obtained significant results in all areas of financial fraud enforcement. Under Raman’s leadership, the Criminal Division, working alongside the Antitrust Division, launched a wide-ranging investigation of the alleged manipulation of foreign exchange rates by multi-national banks around the world. In addition, the division continued aggressively to investigate the manipulation of the London InterBank Offered Rate (LIBOR), charging six individuals at two different financial institutions and reaching a criminal resolution with one financial institution that resulted in the second largest penalty assessed in the department’s ongoing, industry-wide LIBOR probe. The division further announced charges against or convictions of more than a dozen individuals for FCPA-relation violations, and secured three of the ten largest corporate FCPA resolutions in history. In addition, Raman oversaw a record-breaking year for health care fraud enforcement in the number of cases filed, individuals charged, guilty pleas secured and convictions obtained at trial.

Under Raman’s leadership, the division also made significant strides in money laundering enforcement, including bringing charges, with the U.S. Attorney’s Office in Manhattan, against Liberty Reserve, one of the world’s largest digital currency companies, and several of its principals, in the department’s largest-ever money laundering prosecution. The division also continued to emphasize public corruption enforcement, securing several convictions in a wide range of domestic public corruption cases throughout the country, including of former U.S. Congressman Richard Renzi of Arizona, and obtaining separate convictions of several individuals, including a former candidate for U.S. Congress, for violations of federal campaign finance laws.

During Raman’s tenure, the division has aggressively pursued cyber crime and intellectual property crimes, and is currently conducting the ongoing investigation of the data breach at Target. Among other prosecutions, the division, with the U.S. Attorney’s Office in Atlanta, secured the guilty plea of an international cybercriminal from Thailand who was responsible for distributing “Spy Eye” malware that infected 1.4 million computers around the world. The division also charged the first-ever copyright infringement cases involving counterfeit mobile device apps.

The division also continued to make great strides in the fight against violent crime, convicting several members of the Los Zetas cartel for the 2011 murder of an American law enforcement agent in Mexico and, just a few weeks ago, securing the conviction of a leader of the Barrio Azteca gang who was responsible for the murder of employees of a U.S. consulate in Mexico.

Raman joined the department as a trial attorney in the Criminal Division in 1996. In 1999, she joined the U.S. Attorney’s Office in Maryland where she served in a number of leadership positions, including Appellate Chief and Chief of the office’s southern division. She returned to the Criminal Division in 2008, serving first as acting Chief of Staff, and then as Principal Deputy Assistant Attorney General and Chief of Staff, until she was named Acting Assistant Attorney General of the Criminal Division on March 1, 2013.

Aaron H. Kelly, a United States Postal Service employee, was indicted yesterday in the U.S. District Court for the District of Maryland for four counts of mail fraud, two counts of bank fraud, one count of corruptly endeavoring to obstruct and impede the Internal Revenue Service (IRS) and two counts of aiding and assisting in the preparation of false tax returns, the Justice Department and IRS announced today following the unsealing of the indictment. 

According to the indictment, Kelly, a resident of Maryland, engaged in a scheme to defraud the IRS, the Thrift Saving Plan and the Educational Systems Federal Credit Union by sending fictitious financial instruments to fraudulently extinguish the taxes he owed to the United States as well as the debts he owed to the Thrift Savings Plan and the Federal Credit Union.  In addition, Kelly submitted two false tax returns to the IRS that requested millions of dollars in fraudulent refunds.

An indictment is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, Kelly faces a statutory maximum potential sentence of 20 years in prison for each mail fraud count, 30 years in prison for each bank fraud count and three years in prison for each of the tax-related counts.

This case was investigated by the Treasury Inspector General for Tax Administration and special agents of IRS - Criminal Investigation.  Trial Attorneys Ken Vert and Yael T. Epstein of the department’s Tax Division are prosecuting the case.

A Northern California real estate investor has agreed to plead guilty for his role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Northern California, the Department of Justice announced.

Felony charges were filed today in the U.S. District Court for the Northern District of California in Oakland against Charles Gonzales, of Alamo, Calif.  Including Gonzales, a total of 44 individuals have pleaded guilty or agreed to plead guilty as a result of the department’s ongoing antitrust investigations into bid rigging and fraud at public real estate foreclosure auctions in Northern California.

According to court documents, beginning as early as April 2009 until about October 2010, Gonzales conspired with others not to bid against one another, and instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in Alameda County, Calif.  Gonzales was also charged with conspiring to commit mail fraud by fraudulently acquiring title to selected Alameda County properties sold at public auctions and making and receiving payoffs and diverting money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.  The private auctions often took place at or near the courthouse steps where the public auctions were held.

“The Antitrust Division’s ongoing investigation has resulted in charges against 44 individuals for their roles in schemes that defraud distressed homeowners and lenders,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The division will continue to work with its law enforcement partners to vigorously protect competition at the local level.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain selected real estate offered at Alameda County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at the auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, the conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

“The symbolism of holding illegitimate and fraudulent private auctions near a courthouse is deplorable,” said David J. Johnson, FBI Special Agent in Charge of the San Francisco Field Office.  “The justice system will continue to prevail in this ongoing investigation pursuing bid rigging and fraud at public foreclosure auctions.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for the Sherman Act charges may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than $1 million.  A count of conspiracy to commit mail fraud carries a maximum sentence of 30 years in prison and a $1 million fine.  The government can also seek to forfeit the proceeds earned from participating in the conspiracy to commit mail fraud.

Today’s charges are the latest filed by the department in its ongoing investigation into bid rigging and fraud at public real estate foreclosure auctions in San Francisco, San Mateo, Contra Costa and Alameda counties, Calif.  These investigations are being conducted by the Antitrust Division’s San Francisco Office and the FBI’s San Francisco Office.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions should contact the Antitrust Division’s San Francisco Office at 415-934-5300, or call the FBI tip line at 415-553-7400.

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

**The fraud charge(s) referenced in this press release were subsequently dismissed on the government’s motion.**

The Civil Rights Division of the U.S. Department of Justice, the U.S. Attorney’s Office for the Eastern District of Michigan and the FBI announced today that they will not be pursuing federal criminal civil rights charges against the Saginaw Police Department (SPD) officers who shot and killed Milton Hall on July 1, 2012.  After a thorough investigation, federal authorities have determined that this tragic event does not present sufficient evidence of willful misconduct to lead to a federal criminal prosecution of the police officers involved.

The Civil Rights Division, the U.S. Attorney’s Office, and the FBI conducted an independent investigation that carefully considered all of the evidence.  During the investigation, prosecutors thoroughly reviewed the criminal investigation previously conducted by the Michigan State Police in conjunction with the Saginaw County Prosecutor’s Office and the Michigan Attorney General’s Office.  State authorities collected the physical evidence at the scene; photographed the scene; interviewed the two non-shooting SPD officers and dozens of eyewitnesses; acquired the patrol car dashcam and civilian videos of the incident; gathered the dispatch logs, 911 calls and other investigative materials related to the incident; obtained the involved officers’ police reports; and conducted a ballistics and autopsy examination.  At the conclusion of the state investigation, the Saginaw County Prosecutor and the Michigan Attorney General declined to prosecute any of the SPD officers involved in the incident.

In addition to reviewing the evidence previously collected, FBI agents interviewed a number of witnesses who had not been interviewed during the state investigation, including individuals whose names were provided to prosecutors by Hall’s family.

To pursue prosecution under Section 242 in the U.S. Code, the applicable criminal civil rights statute, the government would have to prove beyond a reasonable doubt that the SPD officers deprived Hall of his constitutional right to be free from an unreasonable use of force.  The government would also have to establish beyond a reasonable doubt that the officers acted willfully, that is, for the specific purpose of violating the law.  Law enforcement actions based on fear, panic, misperception or even poor judgment do not constitute willful conduct prosecutable under the statute. 

The evidence in this case shows that on July 1, 2012, SPD officers responded to the Riverview Plaza in Saginaw, Mich., after receiving a 911 call about a confrontation between a man, later identified as Hall, and a clerk at a Mobil gas station.  An SPD sergeant was the first officer to arrive at the scene, where she located Hall in the plaza’s parking lot and saw that he was carrying a knife with an approximately three-inch blade.  After encountering Hall and seeing that he was armed with a knife, the sergeant requested backup.  When the second officer arrived, Hall approached that officer’s patrol car and jabbed the hood of the vehicle with a knife.  The six remaining SPD officers on duty that day, including a K-9 officer and his dog, reported to the plaza, approached Hall and repeatedly ordered him to drop his knife.  Hall did not comply with the officers’ commands, and verbally responded that he would not put the knife down.  While the SPD officers came together on the scene, the K-9 officer and his dog approached and retreated from Hall several times.  During this time, Hall was intermittently shifting his feet and getting into and out of a crouching stance.  When Hall, with the knife still in his hand, moved toward the K-9 officer and his dog, six SPD officers fired at him and fatally wounded him.

Two SPD patrol car dashcams captured a video recording, with no audio, of much of the encounter between Hall and the SPD officers.  The dashcams on the other SPD patrol cars were either not operational or not activated during this incident.  Several civilians witnessed the incident and recorded portions of it on their cellular phones. 

After the shooting, all of the SPD officers at the scene wrote reports.  In these reports, the officers who discharged their weapons explained that they did so because they believed Hall posed an imminent threat to the officers’ safety.   

A fter a careful review of all of the evidence, experienced prosecutors from the Criminal Section of the Civil Rights Division and the United States Attorney’s Office for the Eastern District of Michigan have determined that t he evidence in this case is insufficient to prove , beyond a reasonable doubt, that the SPD officers willfully shot Hall for an unlawful purpose, rather than for their stated purpose of preventing Hall from harming SPD staff.  Even if the officers were mistaken in their assessment of the threat posed by Hall, this would not establish that the officers acted willfully, or with an unlawful intent, when using deadly force against Hall.  Accordingly , this tragic event does not present sufficient evidence of willful misconduct to give rise to a federal criminal prosecution of the police officers involved. 

Today, a federal jury in the U.S. District Court for the Eastern District of Oklahoma in Muskogee, Okla., convicted Raymond A. Barnes, 43, and Christopher A. Brown, 32, the former jail superintendent and assistant jail superintendent, respectively, of the Muskogee County Jail (MCJ) on multiple counts of civil rights offenses related to allegations of excessive force on inmates at MCJ on or between August 2009 and May 2011.  Brown was also convicted of making material false statements to the FBI.

Both Barnes and Brown were found guilty of conspiring to violate the rights of inmates housed at MCJ by assaulting inmates themselves or by directing other jailers employed by MCJ to do so.  Specifically, the defendants did or caused the following to be done: unjustifiably strike, assault, harm and physically punish inmates at MCJ who were restrained, compliant and not posing a physical threat; organize “meet and greets,” whereby jailers would scare, punish and harm incoming inmates from neighboring counties by throwing and slamming the handcuffed inmates to the ground upon their arrival at MCJ; threaten to fire MCJ employees if they reported abusive behavior directly to the sheriff or to outside law enforcement authorities; require and encourage MCJ jailers to write incident reports that falsely justified uses of force and contained misleading or inaccurate accounts of what had occurred when force was used; and perpetuate an environment within MCJ that allowed unlawful beatings and assaults against inmates to continue indefinitely and without consequence.

Both defendants were also convicted of violating the rights of an inmate identified as J.R. when MCJ jailers slammed and threw J.R. head-first to the ground while he was handcuffed.  Barnes was additionally convicted of violating the rights of a second inmate, G.T., for similar conduct.  Brown was acquitted of violating the rights of G.T.

In addition, Brown was convicted of one count of making material false statements to the FBI.  Brown falsely claimed that, during meet and greets, the incoming inmate was ordered out of the transport vehicle and then “gently placed” on the ground.  But in fact, Brown knew at the time of his statement to the FBI that during these meet and greets the MCJ jailers routinely threw and slammed inmates to the ground even though the inmates were restrained and posed no physical threat.

“Our Constitutional system of government requires this nation’s jailers to abide by the laws they enforce, and to protect the Constitutional rights of all persons in their custody,” said Acting Assistant Attorney General Jocelyn Samuels of the Civil Rights Division.  “Today’s verdict demonstrates that the Department of Justice will vigorously prosecute anyone who abuses their official power to harm the people in their custody.”

The defendants face a statutory maximum penalty of 10 years for each of the civil rights convictions.  Brown faces a statutory maximum penalty of five years for making material false statements to the FBI.

This case was investigated by the Muskogee Resident Agency of the Oklahoma City Division of the FBI and prosecuted by Trial Attorneys Fara Gold and Dana Mulhauser of the Civil Rights Division.

Diagnostic Imaging Group (DIG) has agreed to pay a total of $15.5 million to resolve allegations that its diagnostic testing facility falsely billed federal and state health care programs for tests that were not performed or not medically necessary and by paying kickbacks to physicians.  Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery, U.S. Attorney for the District of New Jersey Paul J. Fishman and U.S. Attorney for the Eastern District of New York Loretta E. Lynch announced the settlement today.

DIG has agreed to pay $13.65 million to the federal government and an additional total of $1.85 million to New York and New Jersey.  DIG operates a chain of diagnostic testing facilities through its subsidiary, Doshi Diagnostic Imaging Services, which is headquartered in Hicksville, N.Y.  DIG previously operated chains in New Jersey and Florida through subsidiaries Doshi Diagnostic Imaging Services of New Jersey and Signet Diagnostic Imaging Services.  

“When health care providers pay kickbacks and submit false claims to Medicare, they not only deplete the Medicare Trust Fund, they undermine the integrity of the health care system,” said Assistant Attorney General Delery.  “The Justice Department will relentlessly pursue those who misuse federal health care funds for their own profit.”  

“Health care providers who make decisions based on profit instead of medical need compromise patient safety and confidence,” said U.S. Attorney Fishman.  “Unnecessary tests and the payment of kickbacks also siphon precious resources from our health care system.  The settlement we’re announcing today is an appropriate response to these unacceptable practices.” 

The settlement announced today resolves allegations that DIG submitted claims to Medicare, as well as the New Jersey and New York Medicaid Programs, for 3D reconstructions of CT scans that were never performed or interpreted.  Additionally, DIG allegedly bundled certain tests on its order forms so that physicians could not order other tests without ordering the additional bundled tests, which were not medically necessary.  Today’s settlement also resolves allegations that DIG paid kickbacks to physicians for the referral of diagnostic tests.  According to the government, the kickbacks were in the form of payments that DIG made to physicians ostensibly to supervise patients who underwent nuclear stress testing.  These payments allegedly exceeded fair market value and were, in fact, intended to reward physicians for their referrals.     

“Patients deserve testing decisions based solely on medical need, not doctors’ pocketbooks,” said U.S. Attorney Lynch.  “We will continue to work with our federal and state law enforcement partners to investigate vigorously allegations of fraud on federal programs like Medicare and to pursue those who seek to fraudulently deplete the Medicare Trust Fund.” 

“Paying physicians for their referrals and submitting false claims to increase Medicare and Medicaid reimbursements – as was alleged in this case – simply cannot be tolerated,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson.  “Besides levying a hefty penalty, the settlement requires an independent organization to review Diagnostic Imaging Group’s claims for five years and to send reports to the government.”

The allegations resolved by today’s settlement were raised in three lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the government and to share in any recovery.  The three whistleblowers, Mark Novick, M.D., Rey Solano and Richard Steinman, M.D., will receive $ 1.5 million , $ 1.07 million and $ 209,250 , respectively, as part of today’s settlement. 

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.

This case was handled by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the District of New Jersey and the U.S. Attorney’s Office for the Eastern District of New York.  The settlement is the culmination of an investigation conducted jointly by special agents of the Department of Health and Human Services Office of Inspector General and the FBI with contributions from the Railroad Retirement Board.  

The claims settled by this agreement are allegations only, and there has been no determination of liability.  The three cases are captioned United States ex rel. Mark Novick, M.D. v. Doshi Diagnostic Imaging Services P.C. , Civil Action No. 09-4992 (D.N.J.), United States ex rel. Rey Solano v. Diagnostic Imaging Group et al., Civil Action No. 10-267 (D.N.J.) and United States ex rel. Richard Steinman, M.D. v. Diagnostic Imaging Group, et al., Civil Action No. 10-4161 (E.D.N.Y.). 

A civilian employee of the U.S. Navy posted at the Capodichino Navy Base near Naples, Italy, was arraigned yesterday in Norfolk, Va., for allegedly obtaining more than $360,000 in housing benefits that he was not entitled to receive.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and United States Attorney Nicholas A. Klinefeldt of the Southern District of Iowa made the announcement.

Steven William Ashton, 41, was charged in a seven-count indictment returned by a grand jury in the Southern District of Iowa on Feb. 19, 2014. He is charged with theft of government funds for obtaining more than $360,000 in housing benefits, called Living Quarters Assistance (LQA), to which he was not entitled. He is also charged with presenting a falsified lease and making false statements in an effort to justify those benefits when confronted by a federal agent from the Naval Criminal Investigative Service (NCIS).

According to court documents, from April 2004 to the present, Ashton has been employed by the Navy as the NATO and Host Nation Programs Manager for the regions of Europe, Africa and Southwest Asia, managing contracts and agreements among the Navy and other countries to support the United States’ military efforts. Because he lived off-base, he was entitled to an LQA allowance to reimburse him for his payments for rent and other housing expenses. But when he allegedly moved in with his future wife and stopped paying rent in November 2005, he continued receiving the rental subsidies even though he was no longer eligible for them. When confronted by an NCIS agent investigating the matter, Ashton allegedly forged a lease in 2013 with his father-in-law – who had died in 2007 – and provided the lease along with false explanations to the NCIS agent.

Ashton is also charged with creating and submitting to the U.S. Navy various fraudulent documents to obtain other benefits. According to the indictment, Ashton created false documents to obtain a Foreigners’ Permit of Stay from the Italian government that allowed him to travel in and out of Italy without a visa and to be tax exempt for wages earned in Italy. He also allegedly created false documents to obtain a Permanent Logistic Support letter that gave Ashton Navy benefits such as purchasing tax-free gas at a savings of more than 50 percent, and a Civilian Access Card that provided him free access to U.S. military facilities world-wide, including use of the tax-free military shopping facilities. In addition, Ashton used fraudulent U.S. Coast Guard documentation purporting to show that Ashton had the licenses needed to moor a boat at discounted rates in the Bay of Naples, which saved him more than $28,000 in mooring fees.

Ashton was arrested on the Navy base in Italy and flown to Norfolk for his initial appearance. A preliminary hearing is scheduled for March 4, 2014 in the Southern District of Iowa.

This case was investigated by the NCIS and the Air Force Office of Special Investigations. The case is being prosecuted by Director of Procurement Fraud Litigation Catherine Votaw of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Clifford Cronk of the Southern District of Iowa.

Three men have pleaded guilty in Brooklyn, N.Y., for their roles in a check cashing scheme designed to evade anti-money laundering reporting requirements, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and United States Attorney Loretta E. Lynch of the Eastern District of New York.

Robert Petrosyants, 32, and his twin brother Zhan Petrosyants, 32, both of Fort Lee, N.J., pleaded guilty today before United States District Judge Frederic Block at the federal courthouse in Brooklyn to conspiring to violate the Bank Secrecy Act by causing the filing of false Currency Transaction Reports (CTRs) for cash transactions in excess of $10,000.  On Feb. 21, 2014, Lasha Goletiani, 34, of Brooklyn, pleaded guilty to the same charge.  They each face a maximum penalty of five years in prison at sentencing, which will be determined at a later date.

According to court filings and facts presented during the plea proceedings, the Petrosyants twins operated medical billing companies, including DJR Capital Inc., formerly located at 45 Main Street in the DUMBO section of Brooklyn.  Those billing companies filed no-fault accident claims with insurance companies on behalf of medical clinics and equipment providers.  Upon receipt of payment from the insurance companies in settlement of the claims, the conspirators drew checks payable to a complex web of shell companies.  These shell companies appeared to be health care related but in fact did no legitimate business and were incorporated in the names of students who had received special short-term visas to study in the United States.  The checks were then cashed by Goletiani and Zhan Petrosyants at Belair Payroll Services Inc., a Flushing-based check cashing business.

Belair and its owner, Craig Panzera, pleaded guilty in November 2013 to failing to maintain an effective anti-money laundering program and agreed to forfeit over $3.2 million.

According to court documents, Goletiani and Zhan Petrosyants provided false names to Belair when cashing checks and caused Belair to file CTRs stating that the shell companies or their nominee owners received the cash.  Goletiani and Zhan Petrosyants received all of the cash from checks in the names of the shell companies.  At the time that many of these transactions occurred, the nominee shell company owners were not even in the country when Goletiani and Zhan Petrosyants were cashing checks in their names. 

Under the Bank Secrecy Act, financial institutions, including check cashers, are required to file a CTR with the Department of the Treasury for any transaction involving more than $10,000 in currency on a single day.  As part of the CTR, the check casher is required to verify and accurately record the name and address of the individual who conducted the currency transaction and the individual on whose behalf the transaction was conducted, as well as the amount and date of the transaction.   

Goletiani and Zhan Petrosyants pleaded guilty to a second superseding indictment filed on Nov. 6, 2013, charging them with conspiring to cause Belair to file false CTRs.  Robert Petrosyants pleaded guilty to a separate information charging the same conspiracy. 

The investigation was conducted by U.S. Immigration and Customs Enforcement, Homeland Security Investigations and the Internal Revenue Service, Criminal Investigation Division.  The case is being prosecuted by Trial Attorneys Kevin G. Mosley, J. Randall Warden and Claiborne Porter of the Money Laundering and Bank Integrity Unit of the Criminal Division’s Asset Forfeiture and Money Laundering Section, Trial Attorney Darrin McCullough of AFMLS’s Forfeiture Unit and Assistant U.S. Attorney Patricia Notopoulos of the Eastern District of New York.

The Money Laundering and Bank Integrity Unit investigates and prosecutes complex, multi-district and international criminal cases involving financial institutions and individuals who violate the money laundering statutes, the Bank Secrecy Act and other related statutes.  The unit’s prosecutions generally focus on three types of violators: financial institutions, including their officers, managers and employees, whose actions threaten the integrity of the individual institution or the wider financial system; professional money launderers and gatekeepers who provide their services to serious criminal organizations; and individuals and entities engaged in using the latest and most sophisticated money laundering techniques and tools.

Michael Edwards was sentenced today to serve two concurrent sentences of 36 months in prison followed by three years of supervised release, and ordered to pay restitution of $573,518 to the Internal Revenue Service (IRS), the Justice Department and IRS announced.  On Dec. 3, 2013, Edwards pleaded guilty to one count of corruptly endeavoring to obstruct the IRS and one count of wire fraud.  Both charges arise from Edwards’ operation of his tax return preparation business, Boston Financial Associates (BFA) and Edwards’ misappropriation of income tax refunds from two of his clients in 2009. 

According to court documents, Edwards admitted that he misled an IRS auditor reviewing one of his client’s 2007 and 2008 income tax returns by giving her false documentation that claimed to support the false entries on the returns.  Edwards misappropriated federal income tax refunds of $573,518 from one client and $202,143 from another client.  As of the sentencing date, Edwards has made restitution to one of his clients and was also ordered to pay restitution to the second client.

This case was investigated by IRS – Criminal Investigation and prosecuted by Senior Litigation Counsel Corey J. Smith of the Tax Division.

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

The Justice Department announced today that a federal district court judge in Jackson, Miss., approved a settlement of the department’s lawsuit against the original owners and developers of nine multifamily housing complexes located in Mississippi, Louisiana and Tennessee.  The complexes contain more than 800 ground-floor units that are required by the Fair Housing Act (FHA) to contain accessible features, and eight of the complexes contain leasing offices that are required by the Americans with Disabilities Act (ADA) to contain accessible features.  The lawsuit alleged that the defendants failed to include important accessible features at these properties.

Under the settlement, defendants The Bryan Company, Bryan Construction Company Inc., Steve Bryan, Mid-South Houston Partners, Mid-South Development LLC aka MSD LLC, The Vineyards Apartments LLC, Windsor Lake Apartment LP and Cypress Lake Development LLC must make extensive retrofits to meet FHA requirements.  These include reducing door threshold heights, replacing excessively sloped portions of sidewalks, installing new and properly sloped curb ramps, installing cane detection at stairwells, installing accessible door hardware and ensuring that there are a sufficient number of accessible parking spaces at the properties. 

“The Justice Department is deeply committed to ensuring equal access to housing for persons with disabilities,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “This comprehensive settlement will ensure that individuals with disabilities will have an equal opportunity to live in and visit these nine apartment complexes.”

“ The U.S. Attorney’s Office is committed to working with the Civil Rights Division to ensure that those who design and construct multi-family apartment complexes comply with the Fair Housing laws and the Americans with Disabilities Act ,” said U.S. Attorney Gregory K. Davis for the Southern District of Mississippi.  “This office remains vigilant in its efforts to eradicate discrimination and ensure that persons with disabilities have accessible accommodations in which to live.”

In May 2013, as part of the same lawsuit, the court approved a settlement resolving the department’s claims against nine architects and civil engineers who were involved with the properties.  Those defendants paid a total of $865,000 toward accessibility retrofits and $60,000 to compensate aggrieved persons harmed by the inaccessible conditions alleged in the lawsuit.  The following complexes will be retrofitted: Houston Levee Apartments in Cordova, Tenn.; The Vineyard at Castlewoods Apartments in Brandon, Miss.; Windsor Lake Apartments in Brandon, Miss.; Sutton Place Apartments in Horn Lake, Miss.; Twin Oaks Apartments in Hattiesburg, Miss.; Oak Hollow Apartments in Southaven, Miss.; Spring Lake Apartments in Jackson, Miss.; Cypress Lake Apartments in Baton Rouge, La.; and Pelican Pointe Apartments in Slidell, La. 

The FHA prohibits discrimination in housing on the basis of race, color, religion, sex, familial status, national origin, and disability.  Title III of the ADA requires, among other things, that public accommodations comply with specific requirements related to architectural standards to ensure accessible public and common use areas.  More information about the Civil Rights Division and the laws it enforces is available at the website.  Individuals who believe that they have been victims of housing discrimination can call the Housing Discrimination Tip Line at 1-800-896-7743, email the department or contact the U.S. Department of Housing and Urban Development at 1-800-669-9777.

Today, the Justice Department announced the results of its ongoing efforts to combat tax refund fraud that involves identity theft.  The Tax Division, in conjunction with the Internal Revenue Service (IRS) and U.S. Attorneys’ Offices (USAOs) nationwide, has prioritized the investigation and prosecution of individuals who engage in stolen identity refund fraud (SIRF).  According to the IRS, from 2008 through May 2012, the IRS identified more than 550,000 taxpayers who have had their identities stolen for the purpose of claiming false refunds in their names.  In fiscal year 2013, the department filed more than 580 indictments or informations charging more than 880 defendants with SIRF-related crimes.  

SIRF is the use of stolen or otherwise wrongfully acquired personal identification information to file a fraudulent claim with the IRS for a tax refund.  These crimes occur when a social security number, or list of numbers, is stolen or bought; a false tax return showing a refund due is filed electronically, usually at the beginning of filing season before the legitimate taxpayer has filed for the year; and the refund is loaded to a prepaid card, sent to a bank account or mailed to an address accessible by those involved in the scheme.

The actual implementation of SIRF schemes is often complex to carry out.  In an increasing number of cases, the identities are stolen or bought in one place; the returns are electronically filed from another location, often through difficult to trace Wi-Fi connections; refunds are directed to a distant location; checks are cashed in yet another location; and the currency then moves again.

“The Department of Justice is committed to constant vigilance in investigating and prosecuting SIRF crimes,” said Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division.  “Too often the victims of identity theft are the most vulnerable in our communities – those whose identities are stolen from medical services or nursing homes, or grieving families who learn that the identities of deceased loved ones have been fraudulently used – and all honest taxpayers are victims when wrongful refund claims are paid out.  We are determined to work with the IRS to stop this crime at the door, and to seek the conviction and punishment of these criminals.”

Some of the prosecutions from 2013 that resulted in significant prison sentences for SIRF crimes include:  

• Vernon Harrison a corrupt U.S. Postal Service mail carrier, was sentenced to serve 111 months in prison in October 2013.  According to court documents, tax refunds were placed on debit cards and mailed to addresses on Harrison’s postal route in Montgomery, Ala., which he then stole from the mail and provided to a co-conspirator in exchange for cash.  

• Lea’Tice Phillips worked for an Alabama state agency and had access to databases that contained personal identifying information.  As alleged in court documents, Phillips conspired with Antoinette Djonret and others to file false tax returns using identities stolen from the database.  In total, Djonret filed over 1,000 false tax returns that claimed over $1.7 million in fraudulent tax refunds.  Djonret was sentenced in February 2013 to serve 12 years in prison, and Phillips was sentenced in September 2013 to serve 94 months in prison.  

• Angela Myers operated “Angie’s Tax Service,” a tax preparation business located in Baton Rouge, La.  According to court documents, Myers electronically filed false claims for refunds using the names and social security numbers of identity theft victims, many of whom were nursing home patients.  Myers was sentenced to serve 132 months in prison in July 2013.  

• Leslie Brewster a tax return preparer from Durham, N.C., was sentenced to serve 70 months in prison.  According to court documents, Brewster was the manager of a branch office of a tax preparation franchise called Nothing But Taxes, and purchased personal identifying information to claim false dependents on tax returns she prepared for clients.  

• Quentin Collick and Deatrice Williams were sentenced in November 2013 to serve 85 and 51 months in prison, respectively.  Corey Thompson, a co-conspirator, was sentenced to serve 30 months in jail.  Williams worked for a debt collection company and stole the identities of a number of individuals, then provided the stolen information to Collick, her son-in-law.  Thompson worked as an independent contractor for a cable company installing cable and internet access for customers.  To conceal the filing of the false tax returns, Thompson used his specialized knowledge and equipment to shut down and hijack his customers' internet service, and, along with Collick, filed false tax returns using the customers' internet access.  Thompson and Collick then directed the fraudulent tax refunds to be placed on pre-paid debit cards.  

In 2014, the department has continued to pursue numerous prosecutions against SIRF criminals.  On Jan. 24, 2014, a jury convicted current and former corrections officers of identity theft and tax fraud; according to court documents and evidence presented at trial, the pair accessed a state prison database and used the stolen identity information to file false tax returns.  A check casher was sentenced to 37 months in prison on Jan. 16, 2014, for cashing refund checks in the names of individuals who did not authorize him to cash the checks, according to court documents.  A nursing home employee was convicted by a jury on Jan. 14, 2014, of conspiracy, aggravated identity theft and other SIRF-related crimes; according to court documents and the evidence presented at trial, she stole the identity information of nursing home patients and used that information to create false tax returns.  An Alabama man pleaded guilty on Jan. 13, 2014, for his role in a SIRF fraud.  According to court documents, he obtained stolen identities from an Alabama state employee, used those identities to file false tax returns, and recruited a bank employee to assist him in having the false tax refunds deposited into various bank accounts.  A social worker pleaded guilty on Jan. 10, 2014, to identity theft and tax fraud charges.  According to court documents, she illegally obtained the identifying information of her clients – minors and disabled adults who may have been abused or neglected – and sold that information to others who used the stolen identities to claim as false dependents on fraudulent tax returns they prepared.  

"We're fighting identity theft head-on at the IRS and making substantial progress with the help of the Justice Department and local law enforcement," said Commissioner John Koskinen for the IRS.  "We're stopping more identity theft before these fraudulent refunds go out the door.  The IRS initiated nearly 1,500 identity theft related criminal investigations last year, an increase of 66 percent over 2012.  Fighting fraud is an ongoing battle as identity thieves continue to create new ways of stealing personal information.  The IRS is continually reviewing our policies to strengthen our systems, minimize the incidence of identity theft and help victims.

The sentences imposed against those committing SIRF crimes are significant and reflect the seriousness of these crimes.  The Justice Department is committed to investigating and prosecuting tax refund fraud that involves identity theft, and will continue to work with the IRS, FBI, U.S. Secret Service, U.S. Postal Inspection Service, other federal law enforcement agencies as well as state and local law enforcement agencies to combat SIRF-related crimes.  Each U.S. Attorney’s Office has a point of contact to coordinate SIRF matters for its district.  

The IRS has taken steps to detect and prevent the fraud before it occurs.  For example, the IRS has designed new software filters to spot false returns before they are processed and before a refund is issued.  The IRS has also expanded efforts to place identity-theft indicators on taxpayer accounts to track and manage identity-theft incidents.  For information from the IRS on how to protect your identity and what to do if you are a victim of identity theft, please visit the IRS’s Identity Protection webpage.

More information on the department’s enforcement efforts is available on the Tax Division’s website, as are links to identity theft information and resources.

The Department of Justice announced today the filing of a lawsuit against the Missouri National Guard (MNG) alleging that the MNG violated the Uniformed Services Employment and Reemployment Rights Act (USERRA) by requiring its dual technician employees to resign from their civilian positions prior to active duty service in the U.S. Army Guard and Reserve.

According to the complaint, filed in the U.S. District Court for the Western District of Missouri, the MNG violated the USERRA rights of dual technician Kinata Holt by requiring her resignation, as a civilian dual technician, prior to her being called to active duty with the U.S. Army Guard and Reserve.  According to the complaint, by refusing to place Holt on furlough or leave of absence, the MNG’s resignation requirement denied her the benefit of 15 days of annual, paid military leave to which she would have been entitled as a dual technician.  USERRA not only prohibits employers from placing additional prerequisites on civilian employees before allowing them to serve in the military, but also mandates that employers place employees who depart for military leave on “furlough” or leave of absence status and not require them to quit their civilian jobs.

This lawsuit seeks, among other injunctive relief, a court order enjoining the MNG from requiring the resignation of civilian dual technicians from their civilian positions prior to service in the U.S. Army Guard and Reserve.  The suit also seeks monetary relief for those who were improperly denied military leave benefits as compensation for the damages that were incurred as a result of the USERRA violation.

“Employers have a legal obligation under USERRA to provide promised benefits to individuals who choose to serve in the military,” said Acting Assistant Attorney General Jocelyn Samuels for the Civil Rights Division.  “The Civil Rights Division is committed to protecting the rights of those who choose to serve their country through military service.” 

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.

Additional information about USERRA can be found on the Justice Department website’s Servicemember page and Employment Litigation Section page, as well as on the DOL website.

The government has asked a federal court in California to issue an injunction shutting down the importation and sales activities of four California companies and six individuals in connection with their imports of illegal children’s products containing, among other things, lead, phthalates and small parts inappropriate for children under age three.  Phthalates are a chemical plasticizer that make certain products flexible, and certain types of phthalates are banned from use in children’s toys and other child care products.  The Justice Department filed the injunction action in the Central District of California at the request of the Consumer Product Safety Commission (CPSC).

The defendant companies in the case are Toys Distribution Inc. dba TDI International, S&J Merchandise Inc., BLJ Apparel Inc. and All Season Sales Inc.  The defendant individuals are Loan Tuyet Thai, Lan My Lam, Paul Phuong, Cuc T. Thai, Tom Liu and Luan Luu.

“Companies cannot be allowed to import hazardous toys into the United States,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Parents have a right to feel confident that the toys their children play with are safe.”       

The CPSC determined through an investigation that the defendants imported various items into the United States in violation of the Consumer Product Safety Act (CPSA) and the Federal Hazardous Substances Act (FHSA).  The violative products that Toys Distribution Inc. imported included: motorized and “pull-back” toy cars with impermissible lead content and small parts hazards, numerous toy musical instruments with small parts hazards, dolls containing impermissible levels of lead and phthalates and rattles that failed to meet the infant rattle standards.  S & J Merchandise’s imports of violative products included numerous models of toy cars with impermissible lead content or small parts hazards, a toy telephone with small parts hazards and numerous different plastic dolls with impermissible phthalate levels.  The violative products imported by BLJ Apparel included children’s products and toys with illegal levels of total lead content, toys intended for children under three years of age that contained small parts and infant rattles that may cause choking or suffocation.  All Season Sales’ violative imports included a children’s kitchen set and police set that both exceeded the lead content limit.

The government also alleged that the defendants’ operations were associated with each other and that the companies share various personal or professional ties that make joining all the conduct into one lawsuit appropriate. 

 
“CPSC and our federal law enforcement partners are committed to keeping dangerous toys out of the marketplace all year long,” said CPSC Acting Chairman Robert Adler.  “Manufacturers, importers and retailers need to know that CPSC and the Justice Department are actively enforcing the Consumer Product Safety Improvement Act, a law that has strengthened the nation’s product safety net.”

 
Defendant companies S&J Merchandise Inc., BLJ Apparel Inc. and All Season Sales Inc., as well as defendant individuals Tom Liu and Luan Luu have agreed to settle the litigation and be bound by a Consent Decree of Permanent Injunction that enjoins them from committing violations of the CPSA and FHSA.  The proposed consent decree will be filed shortly with the court for judicial approval.  The lawsuit continues against the remaining defendants.

The case is being handled by Patrick Runkle, trial attorney with the Department of Justice’s Consumer Protection Branch, and the U.S. Attorney’s Office for the Central District of California on behalf of the Consumer Product Safety Commission.

A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.

A former employee of a Florida-based airline fuel supply service company pleaded guilty today to obstructing an investigation into fraud and anticompetitive conduct in the airline charter services industry, the Department of Justice announced.

Craig Perez, a former employee of Aviation Fuel International Inc. (AFI), pleaded guilty to a felony charge filed today in U.S. District Court for the Western District of Missouri in Kansas City.  The charge against Perez stems from the U.S. Department of Defense’s Office of the Inspector General’s Defense Criminal Investigative Service (DCIS)’s investigation into kickback payments made by AFI and its employees to Wayne Kepple, the former vice president of ground operations for Ryan International Airlines.

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

 
According to court documents, Perez worked for AFI from June 2007 until March 2008 and was vice president of services.  During that time, Kepple received kickback payments from AFI on aviation fuel, services and equipment sold by AFI to Ryan.  In November 2011, a federal agent with DCIS contacted Perez to interview him in relation to its investigation of AFI.  After speaking with the federal agent, and with full knowledge of the purpose of the interview, Perez knowingly destroyed relevant files from his laptop computer relating to his employment at AFI with the intent to impede, obstruct and influence the investigation of AFI and his involvement in that conduct.

 
“The Antitrust Division will hold accountable those who attempt to conceal their illegal actions and obstruct a government investigation ,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “Destroying evidence in an attempt to undermine a federal investigation is a crime the division takes very seriously.”

 
Perez is charged with obstruction of justice, which carries a maximum penalty of 20 years in prison and a $250,000 criminal fine for individuals.  He has agreed to cooperate in the ongoing investigation.

Today’s plea is the fifth to arise out of the Antitrust Division’s ongoing investigation into fraud and anticompetitive conduct in the airline charter services industry.  The other four individuals have been ordered to serve sentences ranging from 16 to 87 months in prison and to pay more than $580,000 in restitution.  A sixth individual, Sean Wagner, the owner and operator of AFI, and AFI itself were indicted on Aug. 13, 2013.

The investigation is being conducted by the Antitrust Division’s National Criminal Enforcement Section and the U.S. Department of Defense’s Office of Inspector General’s Defense Criminal Investigative Service, headed by Special Agent in Charge John F. Khin.  Anyone with information concerning anticompetitive conduct in the airline charter services industry is urged to call the Antitrust Division’s National Criminal Enforcement Section at 202-307-6694 or visit www.justice.gov/atr/contact/newcase.htm.

In a video message released today, Attorney General Eric Holder called on Congress to create a strong, national standard for quickly alerting consumers whose information may be compromised by cyberattacks. This legislation would strengthen the Justice Department's ability to combat crime, ensure individual privacy, and prevent identity theft, while also helping to bring cybercriminals to justice.

The complete text of the Attorney General’s weekly address is available below:

“Late last year, Target – the second-largest discount retailer in the United States – suffered a massive data breach that may have compromised the personal information of as many as 70 million people, in addition to credit and debit card information of up to 40 million customers.  The Department of Justice is currently investigating this breach, in close coordination with the U.S. Secret Service.  And we are moving aggressively to respond to hacking, cyberattacks, and other crimes that harm American consumers – and expose personal or financial information to those who would take advantage of their fellow citizens.

"As we’ve seen – especially in recent years – these crimes are becoming all too common.  And they have the potential to impact millions of Americans every year.  Just days after the Target breach was made public, another major retailer – Neiman Marcus – reported that it also suffered a suspected cyberattack during the holiday season.  And although Justice Department officials are working closely with the FBI and prosecutors across the country to bring cyber criminals to justice, it’s time for leaders in Washington to provide the tools we need to do even more: by requiring businesses to notify American consumers and law enforcement in the wake of significant data breaches.
               
“Today, I’m calling on Congress to create a strong, national standard for quickly alerting consumers whose information may be compromised.  This would empower the American people to protect themselves if they are at risk of identity theft.  It would enable law enforcement to better investigate these crimes – and hold compromised entities accountable when they fail to keep sensitive information safe.  And it would provide reasonable exemptions for harmless breaches, to avoid placing unnecessary burdens on businesses that do act responsibly.

“This legislation would strengthen the Justice Department’s ability to combat crime and ensure individual privacy – while bringing cybercriminals to justice.  My colleagues and I are eager to work with Members of Congress to refine and pass this important proposal.  And we will never stop working to protect the American people – using every tool and resource we can bring to bear.”
The full video is available at http://www.justice.gov/agwa.php

Today Mexican authorities announced the capture of Joaquin "Chapo" Guzman Loera, the alleged leader of the Sinaloa Cartel. The Sinaloa Cartel is designated a Significant Foreign Narcotics Trafficker by the U.S. Government.

Attorney General Holder stated:  "Today's apprehension of Joaquin "Chapo" Guzman Loera by Mexican authorities is a landmark achievement, and a victory for the citizens of both Mexico and the United States.  Guzman was one of the world's most wanted men and the alleged head of a drug-running empire that spans continents.  The criminal activity Guzman allegedly directed contributed to the death and destruction of millions of lives across the globe through drug addiction, violence, and corruption. We salute the Government of Mexico, and the professionalism and courage of the Mexican authorities, for this arrest.  We are pleased that we were able to work effectively with Mexico through the cooperative relationship that U.S. law enforcement agencies have with their Mexican counterparts.  We look forward to ongoing cooperation, and future successes."

Secretary of Homeland Security Johnson stated: "The operation led by the Mexican government overnight to capture Joaquin "Chapo" Guzman Loera is a significant victory and milestone in our common interest of combating drug trafficking, violence and illicit activity along our shared border. We congratulate our Mexican partners in this achievement and we will continue to work collaboratively with them to ensure a border region that is safe and secure, for the communities and citizens of both our nations."

An alleged general of the Aryan Brotherhood of Texas gang (ABT) and a fellow gang member pleaded guilty today to racketeering charges related to their membership in the ABT’s criminal enterprise, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas.

James Francis Sampsell, aka “Skitz,” 44, of Odessa, Texas, and Fredrick Michal Villarreal, aka, “Big Mike,” 35, of Houston, pleaded guilty before U.S. District Judge Sim Lake in the Southern District of Texas to one count of conspiracy to participate in racketeering activity.

According to court documents, Sampsell, Villarreal 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. Sampsell, Villarreal 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 activities.

By pleading guilty to racketeering charges, Sampsell and Villarreal 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.

At sentencing, scheduled for Oct. 7, 2014, Sampsell and Villarreal each face a maximum penalty of life in prison.

Sampsell and Villarreal are two of 36 defendants charged with conducting racketeering activity through the ABT criminal enterprise, among other charges. To date, 21 defendants have pleaded guilty.

This 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 of the Southern District of Texas.

Kidada Savage, 31, of Philadelphia, was sentenced today to life in prison for her role in the Oct. 9, 2004, firebombing that killed six members of a federal witness’s family. Savage is the sister of Kaboni Savage, who ordered the firebombing and who was sentenced to death for 12 counts of murder in aid of racketeering.

Acting Assistant Attorney General Mythili Raman for the Justice Department’s Criminal Division, United States Attorney Zane David Memeger of the Eastern District of Pennsylvania and Special Agent in Charge Edward J. Hanko of the FBI’s Philadelphia Division made the announcement.

Kidada Savage was convicted on May 13, 2013, of six counts of murder in aid of racketeering, all related to the firebombing of Eugene Coleman’s family home. Coleman was a federal witness at the time. Six people, including four children, were killed in the arson. Kaboni and Kidada Savage were also convicted of conspiracy to commit murder in aid of racketeering, retaliating against a witness by murder and using fire to commit a felony.

Kidada Savage acted as a go-between for her brother, who was in federal custody awaiting a drug trial, and Lamont Lewis, who committed the firebombing. Lewis pleaded guilty and is awaiting sentencing.  Robert Merritt and Steven Northington were also convicted in the case. Northington was sentenced to life; Merritt is awaiting sentencing.

The case was investigated by the FBI, the Internal Revenue Service – Criminal Investigation Division, the Philadelphia Police Department, the Philadelphia District Attorney’s Office and the Maple Shade Police Department in New Jersey. The United States Bureau of Prisons, United States Marshals Service and the Philadelphia / Camden High Intensity Drug Trafficking Area Task Force also assisted in the investigation.

The case was prosecuted by Trial Attorney Steve Mellin of the Criminal Division’s Capital Case Section and Assistant U.S. Attorneys David E. Troyer and John M. Gallagher.

Dr. Chang Ho Lee, 68, of Palisades Park, N.J., pleaded guilty today to health care fraud and agreed to forfeit more than $3.4 million in fraud proceeds.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta Lynch of the Eastern District of New York, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

According to court documents, Lee, who is a medical doctor, and two others recruited patients by offering free lunches and recreational classes and provided them with spa services, such as massages and facials, then falsely billed Medicare for more than $13 million using those patients’ Medicare numbers. Lee and the others billed Medicare for physical therapy, lesion removals and other services that were neither medically necessary nor provided. The scheme took place at three clinics: URI Medical Center and Sarang Medical PC in Flushing, N.Y., and 999 Medical Clinic in Brooklyn, N.Y. Lee received more than $3.4 million through the submission of the fraudulent claims.

Lee is scheduled to be sentenced by United States District Judge Raymond J. Dearie of the Eastern District of New York on June 13, 2014. At sentencing, he faces a maximum sentence of 10 years in prison and approximately $3.4 million in mandatory restitution.

The case was investigated by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The case is being prosecuted by Senior Trial Attorney Nicholas Acker and Trial Attorney Bryan D. Fields from the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

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

The United States filed a lawsuit today to bar Margaret Brown, a Detroit tax return preparer, from preparing federal tax returns for others, the Justice Depart ment announced.

According to the complaint, Brown prepared tax returns that falsely clai med business inco me, business expenses and education credits.  For exa mple, the co mplaint states that Brown prepared a tax return in 2011 that reported that the custo mer had a barber business with inco me of $9,673 and expenses of $124.  The custo mer did not have a barber business in 2011, according to the co mplaint, and had no idea where Brown obtained such infor mation.  In another exa mple listed in the co mplaint, Brown allegedly reported $4,000 in qualified education expenses on a custo mer’s 2011 tax return.  The co mplaint alleges that neither the custo mer nor her dependents attended college in 2011.

The complaint also alleges that for tax years 2010 and 2011, Brown failed to co mply with due-diligence require ments i mposed by federal law on tax preparers who claim the Earned Inco me Tax Credit on their custo mers’ tax returns.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013.  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the Justice Department website.  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found at this website.  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. Margaret Brown
Complaint for Permanent Injunction and Other Relief
 

Pharmaceutical company Endo Health Solutions Inc. and its subsidiary Endo Pharmaceuticals Inc. (Endo) have agreed to pay $192.7 million to resolve criminal and civil liability arising from Endo’s marketing of the prescription drug Lidoderm for uses not approved as safe and effective by the Food and Drug Administration (FDA), the Justice Department announced today. The resolution includes a deferred prosecution agreement and forfeiture totaling $20.8 million and civil false claims settlements with the federal government and the states and the District of Columbia totaling $171.9 million. Endo Pharmaceuticals Inc. is a Delaware corporation headquartered in Malvern, Pa.

 
“FDA’s drug approval process is designed to ensure that companies market their products for uses that are proven to be safe and effective,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “We will hold accountable those who circumvent that process in pursuit of financial gain.”

In a criminal information filed today in the Northern District of New York, the government charged that, between 2002 and 2006, Endo Pharmaceuticals Inc. introduced into interstate commerce Lidoderm that was misbranded under the Federal Food, Drug and Cosmetic Act (FDCA). The FDCA requires a company, such as Endo Pharmaceuticals Inc., to specify the intended uses of a product in its new drug application to the FDA. Once approved, a drug may not be introduced into interstate commerce for unapproved or “off-label” uses until the company receives FDA approval for the new intended uses. During the period of 2002 to 2006, Lidoderm was approved by the FDA only for the relief of pain associated with post-herpetic neuralgia (PHN), a complication of shingles. The information alleges that, during the relevant time period, the Lidoderm distributed nationwide by Endo Pharmaceuticals Inc. was misbranded because its labeling lacked adequate directions for use in the treatment of non-PHN related pain, including low back pain, diabetic neuropathy and carpal tunnel syndrome. These uses were intended by Endo Pharmaceuticals Inc. but never approved by the FDA. The information further alleges that certain Endo Pharmaceuticals Inc. sales managers provided instruction to certain sales representatives concerning how to expand sales conversations with doctors beyond PHN and encouraged promotion of Lidoderm in workers’ compensation clinics.

In a deferred prosecution agreement to resolve the charge, Endo Pharmaceuticals Inc. admitted that it intended that Lidoderm be used for unapproved indications and that it promoted Lidoderm to health care providers for those unapproved indications. Under the terms of the deferred prosecution agreement, Endo Pharmaceuticals Inc. will pay a total of $20.8 million in monetary penalties and forfeiture. Endo Pharmaceuticals Inc. further agreed to implement and maintain a number of enhanced compliance measures, including making publicly available the results of certain clinical trials and requiring an annual review and certification of its compliance efforts by the Chief Executive Officer of its parent company, Endo Health Solutions. The deferred prosecution agreement will not be final until accepted by the U.S. District Court for the Northern District of New York.

“The safety and efficacy of drugs must be shown by science, not sales pitches,” said U.S. Attorney for the Northern District of New York Richard S. Hartunian. “Drugs marketed for intended uses not approved by the FDA are misbranded because their labeling lacks adequate directions for those uses. This settlement emphasizes that public health is protected by labeling based on product performance, rather than profitability, and promotes enhanced efforts to ensure compliance with all requirements.”

In addition, Endo agreed to settle its potential civil liability in connection with its marketing of Lidoderm. The government alleged that, from March 1999 through December 2007, Endo caused false claims to be submitted to federal health care programs, including Medicaid, a jointly funded federal and state program, by promoting Lidoderm for unapproved uses, some of which were not medically accepted indications and, therefore, were not covered by the federal health care programs. Of the $171.9 million Endo has agreed to pay to resolve these civil claims, Endo will pay $137.7 million to the federal government and $34.2 million to the states and the District of Columbia.

“Off-label marketing can undermine the doctor-patient relationship and adversely influence the clear and honest judgment of doctors that their patients rely on and trust,” said U.S. Attorney for the Eastern District of Pennsylvania Zane D. Memeger. “Pharmaceutical companies have a legal obligation to promote their drugs for only FDA-approved uses. This obligation takes precedence over the company’s bottom line.”

“The settlement announced today demonstrates the government’s continued scrutiny of pharmaceutical companies that interfere with FDA’s mission of ensuring that drugs are safe and effective for the American public,” said Special Agent in Charge of the FDA’s Office of Criminal Investigations’ New York Field Office Mark Dragonetti.  “We will continue to work with our law enforcement partners to investigate and prosecute pharmaceutical companies that disregard the drug approval process and jeopardize the public health by engaging in the nationwide distribution of misbranded products.”

“Endo Pharmaceutical enriched themselves at the expense of the public,” said Special Agent in Charge Andrew W. Vale of the Albany Division of the Federal Bureau of Investigation. “Patients will search for drug therapies to assist in pain management, and they deserve the right to drugs approved for such use. The FBI will continue to work with our federal partners to investigate companies such as Endo Pharmaceuticals to ensure patients are safe.”

Also as part of the settlement, Endo Pharmaceuticals Inc. has agreed to enter into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General that requires Endo to implement measures designed to avoid or promptly detect conduct similar to that which gave rise to this resolution. Among other things, the CIA requires Endo to implement an internal risk assessment and mitigation program and requires numerous internal and external reviews of promotional and other practices. The CIA also requires key executives and individual board members to sign certifications about compliance, and it requires the company to publicly report information about its financial arrangements with physicians.

“By marketing Lidoderm for uses not covered by federal health care programs, Endo profited at the expense of taxpayers and could have put patients at risk,” said Inspector General of the U.S. Department of Health and Human Services Daniel R. Levinson. “Under our CIA, Endo agrees to promote its products legally, while board members and top executives are specifically held accountable for compliance.”

The civil settlement resolves three lawsuits pending in federal court in the Eastern District of Pennsylvania under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to bring civil actions on behalf of the government and to share in any recovery. The actions were filed by Peggy Ryan, a former Lidoderm sales representative, Max Weathersby, another former Lidoderm sales representative and Gursheel S. Dhillon, a physician. The whistleblowers’ share of the settlement has not been determined.

This settlement illustrates the government’s emphasis on combating health care fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced in May 2009 by Attorney General Eric Holder and Secretary of Health and Human Services Kathleen Sebelius.  The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation.  One of the most powerful tools in this effort is the False Claims Act.  Since January 2009, the Justice Department has recovered a total of more than $19 billion through False Claims Act cases, with more than $13.4 billion of that amount recovered in cases involving fraud against federal health care programs.

The civil settlement was handled by the U.S. Attorney’s Office for the Eastern District of Pennsylvania and the Civil Division’s Commercial Litigation Branch. The criminal case was handled by the U.S. Attorney’s Office for the Northern District of New York and the Civil Division’s Consumer Protection Branch. These matters were investigated by the Federal Bureau of Investigation, the Food and Drug Administration Office of Criminal Investigation, the Department of Health and Human Services Office of Inspector General Office of Investigations, the Defense Criminal Investigative Service of the Department of Defense, the U.S. Postal Service Office of Inspector General and the Office of Personnel Management Office of Inspector General with assistance from the Department of Health and Human Services Office of Counsel to the Inspector General and Office of General Counsel and Center for Medicare and Medicaid Services, the Food and Drug Administration’s Office of Chief Counsel and the National Association of Medicaid Fraud Control Units.

Except as to conduct admitted in connection with the deferred prosecution agreement, the claims settled by the civil agreement are allegations only, and there has been no determination of civil liability. The civil lawsuits are captioned United States ex rel. Ryan v. Endo Pharmaceuticals Inc., Civil Action No. 05-cv-3450, United States ex rel. Weathersby, et al. v. Endo Pharmaceuticals Inc., et al, Civil Action No. 10-cv-2039 and United States ex rel. Dhillon v. Endo Pharmaceuticals, Civil Action No. 11-cv-7767, all docketed in the Eastern District of Pennsylvania.

Two Florida men were sentenced today to serve 84 months in prison for defrauding thousands of homeowners in a $4 million nationwide home loan modification scheme.

Acting Assistant Attorney General Mythili Raman 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.

Christopher S. Godfrey, 44, of Delray Beach, Fla., and Dennis Fischer, 42, of Highland Beach, Fla., were 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 their prison term.

The defendants were convicted on Nov. 14, 2013, after a two-week trial, of one count of conspiracy, eight counts of wire fraud, eight counts of mail fraud and one count of misusing a government seal.

“These men stole millions of dollars from struggling Americans who had achieved the dream of home ownership and sought help to refinance their mortgages and save their homes from foreclosure,” said Acting Assistant Attorney General Raman.  “Today’s sentences should serve as a warning to anyone who exploits distressed homeowners and prevents them from getting the real help they need.”

“These convictions and sentences should send the message that those who prey on the most economically vulnerable among us to line their own pockets will be caught, convicted and given the long prison sentences they deserve,” said U.S. Attorney Ortiz.

“Scamming homeowners by selling for $400 to $2,000 what is a free application to TARP’s housing program is a despicable crime, and for their crimes, Godfrey and Fischer will each spend the next seven years in federal prison,” said Special Inspector General Romero.  “Godfrey and Fischer swindled homeowners out of more than $4 million, which they used for extravagant trips to Dubai and France, luxury shopping sprees, and to pay their own mortgages on waterfront homes in Florida beach communities.  SIGTARP and our law enforcement partners will put an end to scams that exploit TARP and bring swift justice to con men who perpetrate these scams.”

According to the evidence presented at trial, from January 2009 through May 2011, Godfrey, Fischer and their employees, operating under the name Home Owners Protection Economics Inc. (HOPE), made a series of misrepresentations to induce struggling homeowners to pay HOPE a $400 to $2,000 up-front fee in exchange for HOPE’s help obtaining federally funded home loan modifications. Among these misrepresentations were the claims 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 the trial evidence, 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.

Trial evidence also showed that the defendants claimed that they operated HOPE as a non-profit, when, in fact, they operated as a for-profit telemarketing fraud scheme. Godfrey and Fischer used funds that homeowners had paid into the purported non-profit’s bank account to pay for their trips to Dubai and the South of France, to shop at luxury stores, to pay for their pool service, and to pay the mortgages on their waterfront home and condominium. The remaining two defendants in the case, Vernell Burris Jr. and Brian Kelly, have pleaded guilty and will be sentenced on Feb. 25, 2014.

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.

Brice Johnson, 19, of Springtown, Texas, has been charged with willfully causing bodily injury to a person because of the actual or perceived sexual orientation of that person in a federal criminal complaint, the Justice Department’s Civil Rights Division, the U.S. Attorney’s Office for the Northern District of Texas and the FBI Dallas Division announced.  The complaint was filed on Feb. 12, 2014, in the U.S. District Court in Fort Worth, Texas. 

Johnson has been in state custody since his arrest on Sept. 10, 2013, and he made his initial appearance in federal court today.

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

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

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

A federal complaint is a written statement of the essential facts of the offenses being charged and must be made under oath before a magistrate judge.  The defendant is presumed innocent until proven guilty.  However, the statutory maximum penalty upon conviction for the offense as charged is 10 years in federal prison and a $250,000 fine.  The U.S. Attorney’s office has 30 days to present the matter to a grand jury for indictment, and an indictment could include other charges that increase the maximum penalty.

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

The Department of Justice filed a civil lawsuit today in the federal court in Nashville, Tenn., to stop Gilberto Cortes and his business, Mundo Hispano Services, from preparing federal tax returns.  According to the complaint, Cortes and his business have prepared more than 7,000 tax returns since 2010.

The complaint filed with the U.S. District Court in the Middle District of Tennessee alleges that Cortes understates his customers’ federal tax liabilities or generates larger than warranted refunds by improperly claiming the additional child tax credit on their income tax returns.  According to the complaint, thousands of Cortes’ customers have improperly claimed the additional child tax credit.  As a result, his customers have received, on average. over $2,300 in improper benefits per return.  In total, the complaint alleges that Cortes’ activities over the last three years have potentially cost the U.S. Treasury $12.8 million or more in lost income tax revenue.

Return preparer fraud is one of the IRS’ Dirty Dozen Tax Scams for 2013 .  The IRS has some tips on their website for choosing a tax preparer.  In the past decade, the Tax Division has obtained injunctions against hundreds of unscrupulous tax preparers.  Information about these cases is available on the Justice Department website .  An alphabetical listing of persons enjoined from preparing returns and promoting tax schemes can be found at this website .  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. Gilberto Cortes, etc.
Complaint

A Georgia real estate investor pleaded guilty today for her role in conspiracies to rig bids and commit mail fraud at public real estate foreclosure auctions in Georgia, the Department of Justice announced.

Felony charges were filed on Dec. 19, 2013, in the U.S. District Court for the Northern District of Georgia in Atlanta, against Amy James. According to court documents, from as early as Dec. 6, 2005, until at least Jan. 23, 2009, James conspired with others not to bid against one another, but instead to designate a winning bidder to obtain selected properties at public real estate foreclosure auctions in DeKalb County, Ga.  James was also charged with a conspiracy to commit mail fraud by fraudulently acquiring title to selected DeKalb County properties sold at public auctions and making and receiving payoffs and diverting money to co-conspirators that would have gone to mortgage holders and others by holding second, private auctions open only to members of the conspiracy.  The department said that the selected properties were then awarded to the conspirators who submitted the highest bids in the second, private auctions.

“Today’s guilty plea is the third in the Antitrust Division’s ongoing investigation into anticompetitive behavior at real estate foreclosure auctions in the state of Georgia,” said Bill Baer, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division.  “The Antitrust Division remains committed to holding accountable individuals who conspire to defraud distressed homeowners and lendersin Georgia and elsewhere.”

The department said that the primary purpose of the conspiracies was to suppress and restrain competition and to conceal payoffs in order to obtain real estate offered at DeKalb County public foreclosure auctions at non-competitive prices.  When real estate properties are sold at these auctions, the proceeds are used to pay off the mortgage and other debt attached to the property, with remaining proceeds, if any, paid to the homeowner.  According to court documents, the conspirators paid and received money that otherwise would have gone to pay off the mortgage and other holders of debt secured by the properties, and, in some cases, the defaulting homeowner.

“Today's guilty plea reflects the FBI's commitment toward enforcement of federal antitrust laws that are designed to provide a level playing field among businesses and individuals as they engage in competition for commerce,” said Ricky Maxwell, Acting Special Agent in Charge of the FBI’s Atlanta Field Office.  “The FBI will continue to work with its various law enforcement partners regarding these enforcement matters and asks that the public contact their nearest FBI field office regarding such unfair and illegal business practices.”

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals. The maximum fine for a Sherman Act charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine.  A count of conspiracy to commit mail fraud carries a maximum penalty of 20 years in prison and a fine of $250,000 for individuals.  The fine may be increased to twice the gross gain the conspirators derived from the crime or twice the gross loss caused to the victims of the crime.

The investigation is being conducted by Antitrust Division attorneys in Atlanta and the FBI’s Atlanta Division, with the assistance of the Atlanta Field Office of the Housing and Urban Development Office of Inspector General and the U.S. Attorney’s Office for the Northern District of Georgia.  Anyone with information concerning bid rigging or fraud related to public real estate foreclosure auctions in Georgia should contact Antitrust Division prosecutors in Atlanta at 404-331-7113, call the Antitrust Division’s Citizen Complaint Center at 1-888-647-3258 or visit www.justice.gov/atr/contact/newcase.htm.

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